NASDAQ: OCFC 1 OceanFirst Financial Corp. OceanFirst Financial Corp. John John R. R. Garbarino Garbarino - - Chairman, Chairman, CEO CEO Michael Michael J. J. Fitzpatrick Fitzpatrick - - Executive Executive Vice Vice President, President, CFO CFO KEEFE, BRUYETTE & WOODS KEEFE, BRUYETTE & WOODS COMMUNITY BANK COMMUNITY BANK INVESTOR CONFERENCE INVESTOR CONFERENCE AUGUST 2, 2011 AUGUST 2, 2011 Exhibit 99.1 |
NASDAQ: OCFC 2 OceanFirst Financial Corp. OceanFirst Financial Corp. Forward Looking Statements: This presentation contains certain forward-looking statements within the meaning of the Private Securities Reform Act of 1995, 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”, “will”, “should”, “may”, “view”, “opportunity”, “potential”, or similar expressions or expression of confidence. 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, levels of unemployment in the Bank’s lending area, 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 are further discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 and its subsequent securities filings and 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 3 Our 109-Year History Our 109-Year History Founded in Point Pleasant, NJ, in 1902, OceanFirst has grown from a small one-town savings and loan to a full-service community bank serving the Central New Jersey shore. Completed a follow-on common stock offering in November 2009 with part of the $54.2 million proceeds used on December 30 to redeem the Preferred Stock investment made by the U.S. Treasury. OceanFirst demutualized and issued stock for the first time in 1996 and since then has succeeded as a public company in generating value for our shareholders. |
NASDAQ: OCFC 4 # # # # # ! ( ! ( ! ( ! ( ! ( ! ( ! ( ! ( ! ( ! ( ! ( ! ( ! ( ! ( ! ( ! ( ! ( ! ( ! ( ! ( ! ( ! ( ! ( Ocean Burlington Morris Sussex Atlantic Salem Warren Monmouth Hunterdon Cumberland Bergen Mercer Somerset Middlesex Gloucester Camden Passaic Cape May Essex Union Hudson Community Bank serving the Central Jersey Shore - $2.2 billion in assets and 23 branch offices Market Cap $254 million (as of July 26, 2011) Core deposit funded – 84.0% of total deposits Locally originated loan portfolio with no brokered loans Residential and commercial mortgages Consumer equity loans and lines C&I loans and lines Corporate Profile Corporate Profile Philadelphia New York Note: See Appendix 1 for Market Demographic information. |
NASDAQ: OCFC 5 Experienced Executive Management Team Experienced Executive Management Team Insider ownership of 27.5% is substantial – aligned with shareholders OceanFirst Bank ESOP 10.3% OceanFirst Foundation 7.1% Directors & Senior Executive Officers 10.1% (CEO 5.3%) As of the March 9, 2011 proxy record date. 30 37 40 # of Years in Banking 7 President, Chief Operating Officer Vito R. Nardelli 19 Executive Vice President, Chief Financial Officer Michael J. Fitzpatrick 40 Chairman, Chief Executive Officer John R. Garbarino # of Years at OCFC Position Name |
NASDAQ: OCFC 6 Our Strategy Our Strategy Positioned as the leading Community Bank alternative in attractive Central Jersey Shore market – growing revenue and creating additional value for our shareholders Offering a full range of consumer and commercial banking products generating diversified income streams Guarding credit quality in ALL business cycles Transitioning the balance sheet with emphasis on core deposit funding and commercial lending growth Ready for roll-up opportunities presented by smaller, in-market “regulatory fatigued” competitors |
NASDAQ: OCFC 7 Diluted earnings per share increased 3.7% to $0.28 Return on average stockholders’ equity was 9.9% The net interest margin expanded 7 bps to 3.67% Core deposits (i.e., all deposits excluding time deposits) now comprise 84.0% of total deposits Capital position strengthened, as tangible common equity increased to 9.5% of assets Tangible book value grew 39¢ to $11.32 with increasing earnings and Other Comprehensive Income Highlights – Highlights – Second Quarter 2011 Second Quarter 2011 |
NASDAQ: OCFC 8 Increasing Primary Market Deposit Share Increasing Primary Market Deposit Share June 30, 2010 # of Dep. In Mkt. Mkt. Shr. Rank Institution Branches ($000) (%) Ocean County, NJ 1 Hudson City Bancorp Inc. (NJ) 13 2,773,130 21.66 2 Wells Fargo & Co. (CA) 27 1,810,777 14.14 3 TD Bank National Association (Canada) 20 1,776,218 13.87 4 OceanFirst Financial Corp. (NJ) 18 1,282,436 10.02 5 Banco Santander S.A. (Spain) 25 1,254,237 9.80 6 Bank of America Corp. (NC) 23 1,234,572 9.64 7 Investors Bancorp Inc. (MHC) (NJ) 7 637,788 4.98 8 PNC Financial Services Group (PA) 12 420,227 3.28 9 Sun Bancorp Inc. (NJ) 6 235,558 1.84 10 Manasquan Savings Bank (NJ) 3 225,540 1.76 Total For Institutions In Market 191 12,803,921 Source: FDIC Moving from 6 th to 4 th in Last Year |
NASDAQ: OCFC 9 Interest Bearing Demand Deposits, 28.2% Non-Interest Bearing Demand Deposits, 8.9% Jumbo Time Deposits(1), 8.1% Retail Time Deposits, 27.7% MMDA & Savings, 27.1% Deposit Composition Transition Deposit Composition Transition Interest Bearing Demand Deposits, 7.6% Non-Interest Bearing Demand Deposits, 0.7% Jumbo Time Deposits(1), 4.7% Retail Time Deposits, 61.4% MMDA & Savings, 25.6% Interest Bearing Demand Deposits, 54.4% Non-Interest Bearing Demand Deposits, 8.8% Jumbo Time Deposits(1), 4.8% Retail Time Deposits, 11.2% MMDA & Savings, 20.8% (1) Jumbo CDs have a balance of $100,000 or greater. December 31, 2005 June 30, 2011 December 31, 1996 |
NASDAQ: OCFC 10 Commercial & Industrial, 3.3% Commercial R.E., 28.7% Consumer & Other(1), 12.1% Residential R.E., 55.9% Loan Composition Transition Loan Composition Transition Commercial & Industrial, 0.4% Commercial R.E., 4.3% Consumer & Other(1), 5.7% Residential R.E., 89.6% Commercial & Industrial, 3.8% Commercial R.E., 17.8% Consumer & Other(1), 8.6% Residential R.E., 69.8% (1) Consumer and other loans primarily consist of home equity lines and loans. Note: See Appendix 2 for specific portfolio metrics and commercial portfolio segmentation. December 31, 2005 June 30, 2011 December 31, 1996 |
NASDAQ: OCFC 11 NPL’s in a Diversified Portfolio NPL’s in a Diversified Portfolio Non-performing loan (“NPL”). Data as of December 31 unless otherwise indicated. 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 2008 2009 2010 6/30/2011 Residential - Primary Bank delivery channel Consumer Commercial Real Estate and Construction Commercial Exposure Concentrated in Lower Risk One-to-Four Family NPL’s originated by alternative Bank delivery channels. |
NASDAQ: OCFC 12 Provision for Loan Losses Exceed Charge-Offs Provision for Loan Losses Exceed Charge-Offs Building ALLL $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 $9,000 Charge-Offs - One-to-Four Family Charge-Offs - Consumer Charge-Offs - Commercial Real Estate Charge-Offs - Commercial Provision for Loan Losses 12/31/08 12/31/09 12/31/10 6/30/11 |
NASDAQ: OCFC 13 Net Interest Margin Net Interest Margin Off Cyclical High But Expanded in Q1 and Q2 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 2008 2009 2010 2011 2011 |
NASDAQ: OCFC 14 Diversified Streams of Non-Interest Income Diversified Streams of Non-Interest Income 2011 0.00% 0.10% 0.20% 0.30% 0.40% 0.50% 0.60% 0.70% 0.80% 1996 6/30/2011 (Annualized) Fees and Service Charges Gain on Sale of Loans BOLI Other Merchant Services Investment Services Trust Non-Interest Income excludes gain (loss) from other real estate operations. |
NASDAQ: OCFC 15 Delivering Double-Digit Return on Equity Delivering Double-Digit Return on Equity 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 2008 2009 2010 2011 (Annualized) (1) Secondary capital raise (1) |
NASDAQ: OCFC 16 Challenge Today is to Grow Revenue Challenge Today is to Grow Revenue Build Shareholder Value Build Shareholder Value Business Plan targets growth within existing footprint – increasing market share Twelve de novo branches since 2000 have performed well – still present room for additional growth Non-interest income streams have been diversified, more important as additional margin expansion may prove troublesome Assessing opportunistic roll-up of community banks in market Financial performance to Plan builds value and preserves the right to remain independent |
NASDAQ: OCFC 17 (1) Peers include: ALNC, CNBC, DCOM, FFIC, FLIC, HUVL, KRNY, LBAI, PBNY, PGC, RCKB, STBC, STL, SUBK, and TRST Note: Financial data as of the most recent period available; market data as of July 26, 2011. Source: Sandler O’Neill. Attractive Valuation Metrics Attractive Valuation Metrics OCFC Peers (1) 3.56% 11.0x 12.0x 119% Valuation Price / Tang. Book Value 150% Price / LQA EPS 13.6x Price / Estimated EPS 11.9x Cash Dividend Yield 3.07% |
NASDAQ: OCFC 18 Why OCFC…? Why OCFC…? Fundamental franchise value – superior market demographics Experienced management team with substantial insider ownership – aligned with shareholders Increasing deposit market share Conservative credit culture and profile Solid financial performance – developing shareholder value Strong balance sheet and capital base Attractive current valuation |
NASDAQ: OCFC 19 THANK YOU THANK YOU FOR YOUR INTEREST IN FOR YOUR INTEREST IN OCEANFIRST FINANCIAL CORP. OCEANFIRST FINANCIAL CORP. |
NASDAQ: OCFC 20 Market Demographics Market Demographics APPENDIX 1 1 4 18 Number of Offices 12.4 14.7 17.5 14.3 15.5 Projected 2010-2015 Median Household Income Growth (%) 54,442 72,519 78,561 82,974 60,936 Median Household Income ($) 3.8 1.2 1.8 2.0 4.0 Projected 2010-2015 Population Growth (%) 794,605 649,429 578,728 Population 0.2 1.1 10.0 Market Share (%) 34 17 4 Market Rank 3.3 13.4 83.3 % of OceanFirst Deposits National New Jersey Middlesex Monmouth Ocean Deposit data as of June 30, 2010. Demographic data as of June 30, 2010. Source: SNL Financial |
NASDAQ: OCFC 21 One-to-Four Family Loans Average size of mortgage loans $185,000 Interest-only loans - Amount $69.5 million - Percent of total one-to-four family loans 7.5% - Weighted average loan-to-value ratio (using original appraisal) 68% Stated income loans - Amount $57.6 million - Percent of total one-to-four family loans 6.2% Portfolio weighted average loan-to-value ratio (using original appraisal) 59% Weighted average loan-to-value ratio of loans originated for the year ended December 31, 2010 60% Weighted average loan-to-value ratio of loans originated for the six months ended June 30, 2011 62% Average FICO score 746 Average FICO score of loans originated for the year ended December 31, 2010 764 Average FICO score of loans originated for the six months ended June 30, 2011 758 Percent of jumbo loans at origination 45.5% Percent of loans outside the New York/New Jersey market 5.6% Percent of loans outside Ocean/Monmouth Counties 39% Percent of loans for second homes 7.7% APPENDIX 2 Residential Portfolio Metrics Residential Portfolio Metrics As of June 30, 2011, unless otherwise noted. |
NASDAQ: OCFC 22 Commercial Real Estate Average size of commercial real estate loans $751,000 Largest commercial real estate loan $19.8 million (Secured by local university dormitory housing) Commercial Loans Average size of commercial loan $218,000 Largest commercial loan $3.8 million APPENDIX 2 (Cont’d) Commercial Portfolio Metrics Commercial Portfolio Metrics As of June 30, 2011. |
NASDAQ: OCFC 23 Commercial Portfolio Segmentation Commercial Portfolio Segmentation Construction, 9.5% Retail Trade, 4.1% Public Administration, 4.6% Miscellaneous, 8.4% Healthcare, 5.6% Accommodations/ Food Services, 6.1% Wholesale Trade, 6.7% Arts/Entertainment/ Recreation, 8.3% Manufacturing, 4.9% Real Estate Investment, 33.3% Educational Services, 4.0% Other Services, 4.5% Total Commercial Loan Exposure by Industry Concentration Real Estate Investment by Property Concentration Office, 37.6% Multi-Family, 8.5% One-to-Four Family, 5.8% Miscellaneous, 8.4% Retail Store, 7.9% Industrial/ Warehouse, 21.1% Shopping Center, 10.7% As of June 30, 2011. APPENDIX 2 (Cont’d) |