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

Vito R. Nardelli, Executive Vice President & COO

Vito R. Nardelli, Executive Vice President & COO

Michael J. Fitzpatrick, Executive Vice President & CFO

Michael J. Fitzpatrick, Executive Vice President & CFO

KBW

KBW

COMMUNITY BANK

COMMUNITY BANK

INVESTOR CONFERENCE

INVESTOR CONFERENCE

JULY 30, 2008

JULY 30, 2008

Exhibit 99.1

NASDAQ: OCFC

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OceanFirst

OceanFirst

Financial Corp.

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 106 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 –

22

OceanFirst Bank branches within a tightly

defined market area and 1 satellite loan production office

Emerging from a foray into wholesale nonprime mortgage banking –

through our former subsidiary, Columbia Home Loans (CHL)

Returning to the lower risk, streamlined Community Bank business

plan as the local alternative to the mega banks

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 product line expansion

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

562,000 people in Ocean County in 2006

•

9.4% increase since 2000

•

Outpacing NJ (3.6% increase)

•

Outpacing US (5.3% increase)

$54,820 Ocean County median household income in 2006

•

12.7% 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 (TD Bank)

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

Wall (2    Office)

2009

Ocean

Bayville

October 2008

Toms River (2

Office)

2009

Toms River Headquarters

nd

nd

NASDAQ: OCFC

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CHL –

CHL –

Nonprime Lending Exit

Nonprime Lending Exit

-

-

Covering 93.1% ($447.2 million) of Total Exposure

Covering 93.1% ($447.2 million) of Total Exposure

$  23.6 Million

$  23.6 Million

Total Provision Made and Losses Taken on

Total Provision Made and Losses Taken on

Non-Prime

Sold

Loans

to

date

(Pre-Tax)

$    1.7 Million

$    1.7 Million

Reserve for Repurchased Loans at June 30, 2008

Reserve for Repurchased Loans at June 30, 2008

$    2.4 Million

$    2.4 Million

Repurchase Requests Outstanding at June 30, 2008

Repurchase Requests Outstanding at June 30, 2008

Loans Retained in Portfolio

Loans Retained in Portfolio

$  2.4 Million

Loans Repurchased and Resold

Loans Repurchased and Resold

$13.4 Million

$13.4 Million

Negotiated Settlements

Negotiated Settlements

$53.3 Million

$53.3 Million

$  69.1 Million

$  69.1 Million

Repurchase Requests Received and Resolved:

Repurchase Requests Received and Resolved:

$480.2 Million

$480.2 Million

Loans

Loans

Sold

Sold

–

–

1/1/06

1/1/06

–

–

6/30/07

6/30/07

NASDAQ: OCFC

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In this Environment……Managing Conservatively

In this Environment……Managing Conservatively

Recovering from CHL shutdown

•

Lingering expenses remain

Enterprise-wide Risk Management matures

•

New CRO recruited July, 2008

Exercise discipline/restraint in growth initiatives

•

Conserving precious capital

Take what the market gives, without forcing growth

•

Looking at opportunities created by turmoil

NASDAQ: OCFC

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0

500

1000

1500

2000

2500

2007/2008 Balance Sheet Has Contracted

Helping Manage Capital Ratios

At December 31, unless otherwise indicated

NASDAQ: OCFC

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0

200

400

600

800

1000

1200

1400

1600

Core Deposits

CD's

CD’s Have Been Allowed To Runoff

CD’s Have Been Allowed To Runoff

At December 31, unless otherwise indicated. 

Core deposits include all deposits other than certificates.

Core Deposits Increase to 68.8% of Total

NASDAQ: OCFC

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Residential Mortgage Portfolio Has Declined

Residential Mortgage Portfolio Has Declined

0

200

400

600

800

1000

1200

1400

1600

1800

2000

Consumer

Commercial

Residential Mortgage

At December 31, unless otherwise indicated.

Commercial

and

Consumer Grow Modestly

NASDAQ: OCFC

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Current External Challenges

Current External Challenges

Looming recession/return of inflation?

•

Uncertainty of next Fed moves

Aggressive CD pricing pervading the market

•

Pressuring costs to fund growth

Credit market turmoil continues

•

Another round of mark to market impairments?

Tenuous credit quality –

real estate valuations

•

Residential hit –

can CRE be far behind?

NASDAQ: OCFC

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Three Year Business Plan Imperatives

Three Year Business Plan Imperatives

A challenging return to double-digit EPS growth rates

Conserve Bank capital in uncertain environment, preserving the

capacity to provide liquidity for holding company operations

Focus on disciplined core account development and commercial

lending in pursuit of longer term portfolio mix targets

Develop non-interest income as a key driver of revenue

Improve operating efficiency through both revenue growth and

expense control, following the shuttering of CHL

Capitalize on being the local community service minded

alternative to mega-banks, particularly:

•

TD Bank

•

Sovereign

•

Wachovia

NASDAQ: OCFC

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Longer Term Targets Need to Reset

Longer Term Targets Need to Reset

2Q

2Q 08

2010

Bank Core Capital

7.8%

7.0% min

Bank Risk Based Capital                 

12.7%

12.0% min

Core Deposit Mix

69.0%

72.0%

Commercial & Consumer Loan Mix

35.0%

38.0%

Revenue Mix (percent of total revenue)

•

Fee and Service Charge   

16.0%

20.0%

NASDAQ: OCFC

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2

3

4

5

6

7

8

9

10

11

12

13

14

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

Risk Based

Core

Bank Regulatory Capital Levels are Strengthened

Bank Regulatory Capital Levels are Strengthened

Internal Capital Floors are 7% and 12% in this environment.

2006

2007

2008

Well-

Capitalized

Well-

Capitalized

Floor

Floor

NASDAQ: OCFC

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NASDAQ: OCFC

NASDAQ: OCFC

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-0.50

-0.40

-0.30

-0.20

-0.10

0.00

0.10

0.20

0.30

0.40

0.50

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

0

0.5

1

1.5

2

2.5

3

3.5

Earnings Per Share

Net Interest Margin

Note:

Second

quarter

2008

reflects

operating

earnings

per

share

excluding

the

effect

of

an

other

than

temporary

impairment

for

$0.06

per

share.

Earnings and Net Interest Margin Have Rebounded

Earnings and Net Interest Margin Have Rebounded

2006

2007

2008

NASDAQ: OCFC

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Core Deposit Funding

Core Deposit Funding

22 Branches within a tightly defined footprint provide

significant presence, market share

TD Bank/Commerce removes toughest retail competitor -

other banks’

adverse publicity continues

Disciplined de novo branching and core deposit generation

•

Over 12 years, 14 branches have opened with an average core

deposit mix of 73%

Recent branch activity in our growth market

•

2008 new branches in Freehold and Waretown

•

2008 –

2009 -

3 additional offices committed

Opportunities for de novo bank acquisitions

NASDAQ: OCFC

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Credit Risk Constrained by Portfolio Characteristics

Credit Risk Constrained by Portfolio Characteristics

Commercial Lending

•

Diversified, low risk $365 million portfolio

Commercial real estate -

85%    $533,000 average

$533,000 average

C & I -

15%

$135,000 average

$135,000 average

Only 7 large relationships, $7 to $13.1 million exposures

Negligible exposure to residential construction lending

•

No large, speculative subdivisions

Strong credit quality indicators through 2Q 08

•

Non-performing loans total $14.4 million (87 bps of total loans receivable)

Includes $5.3 million of loans aggressively written down

following wholesale mortgage banking shutdown

•

Net charge-offs of only $470,000 for 2007 (3 bps) and

$324,000 (4 bps annualized) for first half of 2008

•

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

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

•

Projecting $1.2 million in 2008

Trust Department revenues continue to grow

•

Projecting $1.4 million in 2008

•

$126 million assets under management (12/31/07)

Increasing revenue from sale of alternative investment

products

•

Projecting $1.4 million in 2008

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:

•

Lower risk, streamlined business plan without the mortgage

bank subsidiary, delivering quality earnings stream

•

Maturing Enterprise-wide Risk Management commitment

rebuilds OceanFirst credibility to effectively manage risk

•

Attractive cash dividend and conservatively managed capital

•

Franchise Value is enhanced in Central New Jersey Shore        

Growth 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.