Oceanfirst Financial Corp. · NASDAQ:OCFC
Oceanfirst Financial — Investor Presentation (November 2018)
35 slides from Oceanfirst Financial's investor presentation, Nov 1, 2018
Slide 1: OceanFirst Financial Corp. Investor Presentation November 2018
. . . OceanFirst Financial Corp. Investor Presentation November 2018
Slide 2: Forward Looking Statements
I N V E S T O R P R E S E N T A T I O N . . . Forward Looking Statements In addition to historical information, this presentation contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 which are based on certain assumptions and describe
Slide 3: About OceanFirst Financial Corp.
. . . About OceanFirst Financial Corp. 3
Slide 4: OceanFirst Financial Corp.
I N V E S T O R P R E S E N T A T I O N . . . OceanFirst Financial Corp. • NASDAQ: OCFC • Market Cap: $1.2 billion1 • Bank Holding Company with National Bank Subsidiary • Founded in 1902 • Asset Value of $7.6 billion • 59 Full-Service Branches in Central and Southern New Jersey Headquarters OceanFir
Slide 5: Investment Thesis
I N V E S T O R P R E S E N T A T I O N . . . Investment Thesis • Low-Cost and Durable Deposit Base • Cost of deposits is one of the lowest in the state of New Jersey at 39 basis points, increasing slowly in response to rising rate environment • Strength of Assets • Strong and diversified balance sh
Slide 6: Commitment to Execution
I N V E S T O R P R E S E N T A T I O N . . . Commitment to Execution Our Recent Accomplishments... …Lead to Our Path Forward • Four Acquisitions Closed in Three Years • Local to Regional Scale • Capital Bank of New Jersey Acquisition • Increased Investment in Direct Announced October 2018; Expected
Slide 7: Our Business
© OceanFinst Our Business
Slide 8: Third Quarter 2018 Highlights
I N V E S T O R P R E S E N T A T I O N . . . Third Quarter 2018 Highlights Financial Highlights Operational Highlights • Core Net Income of $25.7 million • Acquisition of Sun Bancorp, Inc. • Up 72% y/y completed on January 31, 2018 with • Core Diluted EPS of $0.53 full integration completed in Q2 2
Slide 9: Net Interest Margin
I N V E S T O R P R E S E N T A T I O N . . . Net Interest Margin Operational Highlights Net Interest Margin (2) 3.90 • Cost of deposits increased only 3.80 3.78 4 bps from 2Q18 to 3Q18 3.70 • Non-interest bearing deposits 3.60 are 21% of average balance of 3.50 3.48 (1) total deposits 3.40 Percenta
Slide 10: Deposit Growth with Branch Consolidation
I N V E S T O R P R E S E N T A T I O N . . . Deposit Growth with Branch Consolidation Total Deposits Per Branch Strength and Durability of Low-Cost 7,000 125 Deposit Position AverageDeposits Per Branch ($ Millions) • Target average branch size above 6,000 100 $100 million • Deploying Video Teller M
Slide 11: Loan Composition Emphasizes Commercial
I N V E S T O R P R E S E N T A T I O N . . . Loan Composition Emphasizes Commercial Total Loans Outstanding Loans by Customer Segment - 2018 2014* 2015* 44% 2016* 56% 2017* 2018** Commercial Consumer Consumer Commercial $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 (in millions) Residential Home Equ
Slide 12: Conservative CRE Portfolio Reflects Strategic Execution
I N V E S T O R P R E S E N T A T I O N . . . Conservative CRE Portfolio Reflects Strategic Execution CRE to Total Risk Based Capital 0 100 200 300 400 500 600 700 800 900 Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Capacity to grow Investor Peer 7 CRE by $126 million while Peer 8 remaining under 300%
Slide 13: Generating Consistent & Attractive Returns
I N V E S T O R P R E S E N T A T I O N . . . Generating Consistent & Attractive Returns 16.0% 1.50% 1.35% 14.0% 1.20% 12.0% 1.05% 10.0% Return on Assets 0.90% 8.0% 0.75% 0.60% 6.0% 0.45% 4.0% 0.30% 2.0% 0.15% Return on Tangible Common Equity on Tangible Return 0.0% 0.00% 1 1 1 2014 2015 2016 2017 Q
Slide 14: Credit Metrics Reflect Conservative Culture
I N V E S T O R P R E S E N T A T I O N . . . Credit Metrics Reflect Conservative Culture Non-Performing Loans by Source (Percent of Loans Receivable) NET CHARGE-OFFS 0.15%(1) 0.07% 0.15% 0.10% 0.05% (Annualized) 1.20% 1.06% 1.00% 0.91% 0.80% 0.60% 0.52% 0.40% 0.35% 0.35% 0.20% Performing Loans as P
Slide 15: Our Strategy
© OceanFinst Our Strategy 20e6m
Slide 16: Asset Growth Supplemented by Strategic M&A
I N V E S T O R P R E S E N T A T I O N . . . Asset Growth Supplemented by Strategic M&A Opportunistic Acquisitions of Local Community Banks Target Closing Date Transaction Value Total Assets Colonial American Bank July 31, 2015 $ 12 million $ 142 million Cape Bancorp May 2, 2016 $196 million $1,518
Slide 17: New Jersey Expansion Opportunities
I N V E S T O R P R E S E N T A T I O N . . . New Jersey Expansion Opportunities • New Jersey is a strong market (1) • Statewide Total Population of 8.9 million • Most densely populated state • 11th most populous state • Median household income of $72,000 • Significant opportunities for acquisitions
Slide 18: Regional Opportunities for M&A
I N V E S T O R P R E S E N T A T I O N . . . Regional Opportunities for M&A Philadelphia Area New York City Metro Area • 4 Banks with Assets Between $400M and $1B • 6 Banks with Assets Between $400M and $1B • 11 Banks with Assets Between $1B and $10B • 6 Banks with Assets Between $1B and $10B New J
Slide 19: Data Driven Digital Strategy
I N V E S T O R P R E S E N T A T I O N . . . Data Driven Digital Strategy Mobile Apps Online Banking 90- Digital Services 90-Day Active Day Active Up 44% • Online Banking, Mobile & Tablet Up 57% y/y y/y Apps • Biometric ID verification • Remote Check Deposit Monthly Bills • Bill Pay Mobile Deposits
Slide 20: Organic Digital Banking Initiatives
I N V E S T O R P R E S E N T A T I O N . . . Organic Digital Banking Initiatives • Hybrid robo-advisor product offered • Spending (checking) account designed by our partner RIA, NestEgg for digitally focused customers • Replacing prior third-party • Features aligned with Best-In-Class, broker/deale
Slide 21: Protecting Our Clients with Cyber Security
I N V E S T O R P R E S E N T A T I O N . . . Protecting Our Clients with Cyber Security • Remains current with evolving industry-wide standards • Real-time analytical tools in place for fraud protection and firewall security • Use of top tier, neural-based, real-time debit card fraud analytics • Qu
Slide 22: Strategic Capital Allocation Generates Shareholder Returns
I N V E S T O R P R E S E N T A T I O N . . . Strategic Capital Allocation Generates Shareholder Returns Returned Capital to Shareholders • Stable & competitive dividend $30 • 87th consecutive quarter $25 • Historical Payout Ratio of 30% to 40% Annualized $20 • Increased quarterly cash dividend by $
Slide 23: An Experienced Management Team
I N V E S T O R P R E S E N T A T I O N . . . An Experienced Management Team Years at Executive Title Selected Experience OceanFirst Chairman, President, Patriot National Bancorp Christopher D. Maher 5 Chief Executive Officer Dime Community Bancshares Executive Vice President, Michael J. Fitzpatrick
Slide 24: OceanFirst Foundation: Serving Our Communities
I N V E S T O R P R E S E N T A T I O N . . . OceanFirst Foundation: Serving Our Communities • Over $36 million has been granted to organizations serving OceanFirst’s market • Provided $500,000 in grants dedicated to assisting our neighbors after Superstorm Sandy devastated the Jersey Shore in 2012
Slide 25: Investment Thesis
I N V E S T O R P R E S E N T A T I O N . . . Investment Thesis • Low-Cost and Durable Deposit Base • Cost of deposits is one of the lowest in the state of New Jersey at 39 basis points, increasing slowly in response to rising rate environment • Strength of Assets • Strong and diversified balance sh
Slide 26: Investor Relations Inquiries
. . . Investor Relations Inquiries Jill A. Hewitt Senior Vice President, Director of Investor Relations & Corporate Communications jhewitt@oceanfirst.com (732) 240-4500, ext. 7513 26
Slide 27: Appendix
© OceanFirst Appendix > 0 0 OF
Slide 28: Colonial American Bank Acquisition
I N V E S T O R P R E S E N T A T I O N . . . Colonial American Bank Acquisition • 100% Stock deal, valued at $11.9 million • In-Market acquisition supports growth objective in towns of Middletown and Shrewsbury, NJ Supports Retail • Favorable financial terms (adjusted for DTA realization Expansion
Slide 29: Cape Bancorp Acquisition
I N V E S T O R P R E S E N T A T I O N . . . Cape Bancorp Acquisition • 85% stock and 15% cash, valued at $196 million • Favorable financial terms (1) • Price/Tangible Book Value of 139% • Price/Core Deposit Premium of 4.4% • Expected accretion to GAAP EPS of 17% in 2017 • Expected tangible book va
Slide 30: Ocean Shore Holding Co. Acquisition
I N V E S T O R P R E S E N T A T I O N . . . Ocean Shore Holding Co. Acquisition • Reinforces OceanFirst as the preeminent New Jersey based community banking franchise operating throughout central and southern New Jersey • 80% stock and 20% cash, valued at $181 million • Favorable financial terms(1
Slide 31: Sun Bancorp, Inc. Acquisition
I N V E S T O R P R E S E N T A T I O N . . . Sun Bancorp, Inc. Acquisition • Strengthens and expands OceanFirst franchise into more demographically attractive Central New Jersey, Philadelphia and New York city metro markets • 85% stock and 15% cash, valued at $475 million • Favorable financial term
Slide 32: Capital Bank of New Jersey Pending Acquisition
I N V E S T O R P R E S E N T A T I O N . . . Capital Bank of New Jersey Pending Acquisition • Deepens OceanFirst’s market position in Southern NJ and the greater metro Philadelphia area • 100% stock, valued at $80 million • Favorable financial terms (1) • Price/Tangible Book Value of 172% • Price/C
Slide 33: OceanFirst Milestones – Years of Growth
I N V E S T O R P R E S E N T A T I O N . . . OceanFirst Milestones – 116 Years of Growth IPO to Mutual Depositors Created OceanFirst Colonial American Foundation Bank Acquired Established Commercial LPO Founded, Established Adopted National Trust and Asset Expansion into Point Pleasant, NJ Commerci
Slide 34: Favorable Competitive Position
I N V E S T O R P R E S E N T A T I O N . . . Favorable Competitive Position Community Banks serving Mega Banks OceanFirst Bank Central & Southern NJ # of Branches Dep. In Mkt. # of Dep. In Mkt. Dep. In Mkt. Institution ($000) Institution # of Branches Branches ($000) ($000) 59 5,852,183 TD Bank (Ca
Slide 35: Commercial Portfolio Segmentation
I N V E S T O R P R E S E N T A T I O N . . . Commercial Portfolio Segmentation Total Commercial Loan Exposure by Real Estate Investment by Industry Classification Property Classification Professional Transportation & Public Motel Miscellaneous Office Scientific & Warehousing Administration 7.5% 22.
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