OceanFirst Financial (OCFC) 8-K Results of Operations and Financial Condition

NASDAQ: OCFC

1

OceanFirst Financial Corp.

OceanFirst Financial Corp.

John R. Garbarino, Chairman, President & CEO

John R. Garbarino, Chairman, President & CEO

Michael J. Fitzpatrick, Executive Vice President & CFO

Michael J. Fitzpatrick, Executive Vice President & CFO

INVESTOR PRESENTATION

INVESTOR PRESENTATION

NOVEMBER 2007

NOVEMBER 2007

Exhibit 99.1

Exhibit 99.1

NASDAQ: OCFC

2

OceanFirst Financial Corp.

OceanFirst Financial Corp.

This

presentation

contains

certain

forward-looking

statements

which

are

based

on

certain

assumptions

and

describe

future

plans,

strategies

and

expectations

of

the

Company.

These

forward-looking

statements

are

generally

identified

by

use

of

the

words

“believe”,

“expect”,

“intend”,

“anticipate”,

“estimate”,

“project”,

or

similar

expressions.

The

Company’s

ability

to

predict

results

or

the

actual

effect

of

future

plans

or

strategies

is

inherently

uncertain.

Factors

which

could

have

a

material

adverse

effect

on

the

operations

of

the

Company

and

the

subsidiaries

include,

but

are

not

limited

to,

changes

in

interest

rates,

general

economic

conditions,

legislative/regulatory

changes,

monetary

and

fiscal

policies

of

the

U.S.

Government,

including

policies

of

the

U.S.

Treasury

and

the

Board

of

Governors

of

the

Federal

Reserve

System,

the

quality

or

composition

of

the

loan

or

investment

portfolios,

demand

for

loan

products,

deposit

flows,

competition,

demand

for

financial

services

in

the

Company’s

market

area

and

accounting

principles

and

guidelines.

These

risks

and

uncertainties

should

be

considered

in

evaluating

forward-looking

statements

and

undue

reliance

should

not

be

placed

on

such

statements.

The

Company

does

not

undertake

–

and

specifically

disclaims

any

obligation

–

to

publicly

release

the

result

of

any

revisions

which

may

be

made

to

any

forward-looking

statements

to

reflect

events

or

circumstances

after

the

date

of

such

statements

or

to

reflect

the

occurrence

of

anticipated

or

unanticipated

events.

NASDAQ: OCFC

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OceanFirst Financial Today

OceanFirst Financial Today

Holding Company for the 105 year old financial services firm serving

the community banking needs of the attractive Central New Jersey

Shore growth market between the major metropolitan areas of New

York City and Philadelphia

$1.9 Billion in Assets –

20

OceanFirst Bank branches within a tightly

defined market area and 2 satellite loan production offices

Emerging from an unfortunate foray into wholesale nonprime

mortgage banking –

Columbia Home Loans (CHL)

Transitioning the Bank’s balance sheet to reduce a historical over-

reliance on CD funding and residential mortgage portfolio lending

Growing fee and service charge income through maturity of new

business lines and continual product line expansion

Responding to the Economic Environment, Governance, Compliance

& Risk Management challenges of the day

NASDAQ: OCFC

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Attractive Market Area

Attractive Market Area

NASDAQ: OCFC

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Ocean County –

Ocean County –

Fastest Growing County in NJ

Fastest Growing County in NJ

558,000 people in Ocean County in 2005

•

9.3% increase since 2000

•

Outpacing NJ (3.6% increase)

•

Outpacing US (5.3% increase)

$52,065 Ocean County median household income in 2005

•

12.1% increase since 2000

83% Home Ownership in Ocean County

•

Outpacing NJ (65%)

•

Outpacing US (66%)

Source: US Census Bureau

NASDAQ: OCFC

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Ocean County Deposit Market Share

Ocean County Deposit Market Share

Total

# of 

Deposits

Market

Bank

Branches

(000)

Share %

Commerce

20

$1,753,891

14.9

Wachovia

28

$1,729,790

14.7

Hudson City Savings

12

$1,687,719

14.3

Sovereign

26

$1,445,889

12.3

OceanFirst

16

$1,184,539

10.1

Bank of America

28

$1,049,874

8.9

Source:  FDIC –

Data as of June 30, 2007

NASDAQ: OCFC

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Growth Opportunities in Market

Growth Opportunities in Market

New Branches Committed

Monmouth

Freehold

Wall

Ocean

Bayville

Toms River

Waretown

Headquarters

NASDAQ: OCFC

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Ten Years Delivering Shareholder Value

Ten Years Delivering Shareholder Value

Average Annual/Total

Shareholder Return

(1996 –

2006)

15.6%

Note:  Data as of 9/30/06 prior to adverse effects of CHL nonprime mortgage

banking write-offs

25.8%

25.8%

$10,313,000

$10,313,000

$1,376,000

$1,376,000

Fee and Service Charge Income

Fee and Service Charge Income

10.2%

10.2%

14.1%

14.1%

6.0%

6.0%

ROE

ROE

13.2%

13.2%

.80

.80

.27

.27

Annual Dividend

Annual Dividend

11.9%

11.9%

$1.58

$1.58

$.59

$.59

EPS

EPS

CAGR

CAGR

Last 12 Months

Last 12 Months

Sept. 30, 2006

Sept. 30, 2006

Year Ended

Year Ended

Dec. 31, 1997

Dec. 31, 1997

10.3%

10.3%

825,158,000

825,158,000

317,070,000

317,070,000

Core Deposits

Core Deposits

9.8%

9.8%

$1,714,760,000

$1,714,760,000

$690,306,000

$690,306,000

Total Loans

Total Loans

CAGR

CAGR

9/30/2006

9/30/2006

12/31/1996

12/31/1996

NASDAQ: OCFC

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CHL –

CHL –

Nonprime Lending Meltdown

Nonprime Lending Meltdown

-

Exposure Covered $404.9 Million

$  10.7 Million

Loss on Sale and Market Writedown

on Nonprime

Loans –

2007

$  13.4 Million

Total Provision for Repurchased Loans –

2006 and 2007

$    2.8 Million

Reserve for Repurchased Loans at September 30, 2007

$618,000

Repurchase Requests Outstanding at September 30, 2007

$66.3 Million

Loans Repurchased and Retained

$  2.1 Million

Loans Repurchased and Resold

$12.2 Million

Individual Settlements

$  6.4 Million

Comprehensive Settlements

$45.6 Million

$  66.3 Million

Repurchase Requests Received and Resolved:

$480.2 Million

Loans Sold –

1/1/06 –

6/30/07

NASDAQ: OCFC

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Mortgage Banking Cyclicality –

Mortgage Banking Cyclicality –

Ends Disastrously

Ends Disastrously

CHL Quarterly EPS Contribution

-0.80

-0.70

-0.60

-0.50

-0.40

-0.30

-0.20

-0.10

0.00

0.10

1

2

3

4

1

2

3

4

1

2

3

4

1

2

3

4

1

2

3

4

1

2

3

4

1

2

3

2001

2002

2003

2004

2005

2006

2007

NASDAQ: OCFC

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Core Bank –

Core Bank –

Earnings Stabilized

Earnings Stabilized

Quarterly EPS –

Without CHL

0.41

0.37

0.39

0.41

0.40

0.38

0.36

0.38

0.25

0.39

0.36

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

0.45

0.50

1

2

3

4

1

2

3

4

1

2

3

2006

2007

(1)

(1)

Net of CHL $.06/share Goodwill write-off on Bank’s financial statements

2005

NASDAQ: OCFC

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0

500

1000

1500

2000

2500

Total Assets

2007 Balance Sheet Has Contracted

2007 Balance Sheet Has Contracted

At December 31, unless otherwise indicated.

NASDAQ: OCFC

13

0

200

400

600

800

1000

1200

1400

1600

Core Deposits

CD's

2007 Deposit Runoff

2007 Deposit Runoff

At December 31, unless otherwise indicated.  Core deposits include all deposits other

than certificates.

NASDAQ: OCFC

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2007 Loan Portfolio Mix

2007 Loan Portfolio Mix

At December 31 unless otherwise indicated.

0

200

400

600

800

1000

1200

1400

1600

1800

2000

Commercial

Mortgage and Consumer

NASDAQ: OCFC

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In this Environment……Managing Carefully

In this Environment……Managing Carefully

Recovering from CHL shutdown

Enterprise-wide Risk Management matures

Exercise discipline/restraint in growth initiatives

Take what the market gives without forcing growth

Issue Tier II Capital to support share repurchases

NASDAQ: OCFC

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Current External Challenges

Current External Challenges

Yield curve –

economic uncertainty

Aggressive CD pricing dominating consumer choice

Margin pressure from depositor preference shift

Credit market turmoil intensifying

Tenuous credit quality –

looming real estate recession???

NASDAQ: OCFC

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Three Year Business Plan Imperatives

Three Year Business Plan Imperatives

Focus on disciplined de novo branch and core account

development to support the margin, drive asset/revenue growth

Target commercial lending as the focus of portfolio growth,  

further improving the loan portfolio mix

Grow non-interest income, a key driver of top-line revenue,

through re-adjustment and maturation of business initiatives

Improve operating efficiency through both revenue enhancement  

and expense control following the shuttering of CHL

Deliver all financial services within the Bank’s existing geographic

market under the strong sales, service and credit cultures

•

Capitalizing on the unique advantage of being the local community

service minded alternative to mega-banks

A challenging return to double-digit EPS growth rates

NASDAQ: OCFC

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Targets Need to Reset

Targets Need to Reset

Commercial & Consumer Loan Mix

34%

38%

Revenue Mix (percent of total revenue)

•

Fee and Service Charge

17%       

20%

Balance Sheet transformation will drive goal of EPS growth

Current

2010

Core Deposit Mix

64%

70%

NASDAQ: OCFC

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Core Deposit Funding

Core Deposit Funding

20 Branches within a tightly defined footprint provide

significant presence, market share

TD Banknorth/Commerce removes toughest retail competitor

Disciplined de novo branching and core deposit generation

•

Over 11 years, 12 branches were opened with an average core

deposit mix of 70%

Recent branch activity in our growth market

•

2006

–

Branches in Barnegat and Little Egg Harbor

–

Whiting branch successfully relocated

•

2007

–

New branches in Freehold and Bayville delayed to early 2008

•

2008

–

Waretown and Wall’s second office

NASDAQ: OCFC

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Non-Interest Income Initiatives

Non-Interest Income Initiatives

Largest reverse mortgage originator headquartered in NJ,

one of a handful of select, nationwide FNMA seller/servicers

•

Generating $1.2 million in fee income in 2007 and growing rapidly

in fertile market

Trust Department revenues continue to grow

•

$1.3 million in 2007

•

$158 million assets under management

Internalizing the sale of non-insured alternative investment

products currently outsourced to third party provider

•

$1.1 million in 2007

NASDAQ: OCFC

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Credit Risk Supported by Portfolio Composition

Credit Risk Supported by Portfolio Composition

Commercial Lending

•

Diversified, low risk $364 million portfolio

Commercial real estate -

87%    $537,000 average

C & I -

13%

$127,000 average

Only 7 large relationships, $7 to $12 million exposures

Limited exposure to residential construction lending

•

No large, speculative subdivisions

Strong credit quality indicators through 3Q 07

•

Non-performing loans total $9.2 million (54 bps of total loans receivable)

$4.2 million consists of loans written down following 2007 market retreat

•

Net charge-offs of only $76,000 YTD

•

Net charge-offs averaged only 3 bps of net loans over past 10 years

NASDAQ: OCFC

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0

2000

4000

6000

8000

10000

12000

14000

16000

18000

0

5

10

15

20

25

Cumulative Repurchases

Capital Ratio

Capital

ratios

are

as

of

December

31

unless

otherwise

indicated.

Share

repurchases are for the year ended December 31 unless otherwise indicated.

Share Repurchase Plans –

Share Repurchase Plans –

Capital Leveraged

Capital Leveraged

NASDAQ: OCFC

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Repurchase Program Supporting EPS Growth

Repurchase Program Supporting EPS Growth

Repurchased 17.0 million shares in total; 62% of original issue

Current authority for repurchase of 489,000 shares

Current program funded through the issuance of Tier II Capital

•

$5.0 million of subordinated debt issued in 2005

•

$12.5 million of trust preferred securities issued during 2006

•

$10.0 million of trust preferred securities issued during 2007

•

Potential for issuance of additional $10.0 million

NASDAQ: OCFC

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Building Additional Shareholder Value

Building Additional Shareholder Value

In the long run, we hope you agree the following

undoubtedly create value for the long term OCFC investor:

•

Maturing Enterprise-wide Risk Management commitment

rebuilds OceanFirst credibility to effectively manage risk

•

Lower risk, streamlined business plan to deliver earnings

growth in an improving economic environment

•

Attractive cash dividend and potential share repurchases 

proactively manage capital and support EPS

•

Franchise Value is enhanced in a most attractive               

Central New Jersey Shore Market

•

Strong Total Shareholder Returns are restored for the

OCFC investor

NASDAQ: OCFC

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Thank you for your

Thank you for your

interest in

interest in

OceanFirst

OceanFirst

Financial Corp.

Financial Corp.