NASDAQ: OCFC 1 OceanFirst Financial Corp. OceanFirst Financial Corp. John John R. R. Garbarino Garbarino – – Chairman, Chairman, CEO CEO Vito R. Nardelli – Vito R. Nardelli – President, COO President, COO Michael Michael J. J. Fitzpatrick Fitzpatrick – – Executive Executive Vice Vice President, President, CFO CFO INVESTOR PRESENTATION INVESTOR PRESENTATION FEBRUARY 8, 2012 FEBRUARY 8, 2012 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. Built additional capital through 2011 with retained earnings and completion of a follow-on common stock offering in November 2009. 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, repurchasing 62.4% of IPO shares through 2006. Announced 5% share repurchase plan, October 31, 2011 to begin the redeployment of excess capital built since 2008. Repurchased 165,154 shares during the fourth quarter of 2011. |
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 - $2.3 billion in assets and 24 branch offices Market Cap $269 million (as of February 3, 2012) Core deposit funded – 84.2% 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%) Director and Proxy Officer Stock Ownership Guidelines As of the March 9, 2011 proxy record date. Name Position # of Years in Banking # of Years at OCFC John R. Garbarino Chairman, Chief Executive Officer 40 40 Vito R. Nardelli President, Chief Operating Officer 37 7 Michael J. Fitzpatrick Executive Vice President, Chief Financial Officer 30 19 |
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 Solid core operating earnings of $0.30 per share for the quarter and $1.14 for the year Net income of $20.7 million and total revenue of $92.6 million for 2011 both set a record for the Company During the fourth quarter of 2011, the Company changed its charge-off policy to recognize the charge-off when the loan is deemed uncollectible rather than when the foreclosure process is complete. The additional charge-off relating to the change in policy was $5.7 million, all of which was previously specifically reserved for by the Company Deposits grew $42.1 million for the year, or 2.5%. Core deposits (i.e., all deposits excluding time deposits) comprise 84.2% of total deposits Strong capital position – tangible common equity of 9.4% of assets Return on average stockholders’ equity was 10.1% for the quarter and 9.9% for the year Tangible book value continues to grow, increasing $0.15 for the quarter and 8.6% for the year to $11.61 5% Stock Repurchase Plan announced October 31, 2011. Repurchased 165,154 shares in the fourth quarter Highlights – Highlights – Fourth Quarter and Year 2011 Fourth Quarter and Year 2011 |
NASDAQ: OCFC 8 Increasing Primary Market Deposit Share Increasing Primary Market Deposit Share June 30, 2011 # of Dep. In Mkt. Mkt. Shr. Rank Institution Branches ($000) (%) Ocean County, NJ 1 Hudson City Bancorp Inc. (NJ) 14 2,696,041 20.61 2 TD Bank National Association (Canada) 21 1,863,624 14.25 3 Wells Fargo Bank NA (CA) 27 1,851,107 14.15 4 OceanFirst Financial Corp. (NJ) 18 1,404,686 10.74 5 Banco Santander S.A. (Spain) 25 1,314,909 10.05 6 Bank of America Corp. (NC) 22 1,149,747 8.79 7 Investors Bancorp Inc. (MHC) (NJ) 7 658,090 5.03 8 PNC Financial Services Group (PA) 14 418,878 3.20 9 Manasquan Savings Bank (NJ) 3 244,826 1.87 10 Sun Bancorp Inc. (NJ) 5 214,876 1.64 Total For Institutions In Market 199 13,078,903 Source: FDIC Deposit market share increased from 10.02% to 10.74% |
NASDAQ: OCFC 9 Interest Bearing Demand Deposits, 29.8% Non-Interest Bearing Demand Deposits, 8.4% Jumbo Time Deposits(1), 10.4% Retail Time Deposits, 29.1% MMDA & Savings, 22.3% 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, 55.2% Non-Interest Bearing Demand Deposits, 8.3% Jumbo Time Deposits(1), 4.5% Retail Time Deposits, 11.3% MMDA & Savings, 20.7% (1) Jumbo CDs have a balance of $100,000 or greater. December 31, 2006 December 31, 2011 December 31, 1996 |
NASDAQ: OCFC 10 Commercial & Industrial, 2.9% Commercial R.E., 29.0% Consumer & Other(1), 12.1% Residential R.E., 56.0% 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, 2.8% Commercial R.E., 17.8% Consumer & Other(1), 10.6% Residential R.E., 68.8% (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, 2006 December 31, 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. 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 2008 2009 2010 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. Increase due to one large loan relationship totaling $6.4 million recently converted to a TDR. |
NASDAQ: OCFC 12 Prudently Provisioning for Growing Credit Costs Prudently Provisioning for Growing Credit Costs $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 $9,000 $10,000 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 12/31/11 (1) (1) Increase in charge-offs for 2011 was due to a change in the Company’s charge-off policy to recognize the charge-off when the loan is deemed uncollectible rather than when the foreclosure process is complete. The additional charge-off relating to the change in policy was $5.7 million, all of which was previously specifically reserved for by the Company. |
NASDAQ: OCFC 13 Net Interest Margin Net Interest Margin Stabilizing, Under Pressure in Low Interest Rate Environment 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 2011 Fees and Service Charges Gain on Sale of Loans Merchant Services Trust Investment Services BOLI Other Non-Interest Income excludes loss from other real estate operations and other-than-temporary impairment on equity securities. |
NASDAQ: OCFC 15 Earning Attractive Return on Equity Earning Attractive Return on Equity 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 2008 2009 2010 2011 (1) Secondary capital raise restrained ROE (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 Thirteen 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 Recently announced share repurchase plan safely begins deployment of excess capital in the interim 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, HVB, KRNY, LBAI, PBNY, PGC, RCKB, STL, SUBK, and TRST Note: Financial data as of the most recent period available; market data as of February 3, 2012. Source: Sandler O’Neill. Attractive Valuation Metrics Attractive Valuation Metrics OCFC Peers (1) Valuation Price / Tang. Book Value 123% 136% Price / LQA EPS 11.9x 13.5x Price / Estimated EPS 11.8x 13.8x Cash Dividend Yield 3.36% 3.00% |
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 valuations |
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 Ocean Monmouth Middlesex New Jersey National Number of Offices 18 4 1 % of OceanFirst Deposits 84.9 11.8 3.3 Market Rank 4 16 33 Market Share (%) 10.7 1.1 0.3 Population 578,728 649,429 794,605 Projected 2010-2015 Population Growth (%) 4.0 2.0 1.8 1.2 3.8 Median Household Income ($) 60,936 82,974 78,561 72,519 54,442 Projected 2010-2015 Median Household Income Growth (%) 15.5 14.3 17.5 14.7 12.4 Deposit data as of June 30, 2011; 24 th office opened in 4Q11. Demographic data as of June 30, 2010. Source: SNL Financial |
NASDAQ: OCFC 21 One-to-Four Family Loans Average size of mortgage loans $183,000 Interest-only loans - Amount $54.9 million - Percent of total one-to-four family loans 6.2% - Weighted average loan-to-value ratio (using original appraisal) 66% Stated income loans - Amount $54.1 million - Percent of total one-to-four family loans 6.1% Portfolio weighted average loan-to-value ratio (using original appraisal) 57% 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 year ended December 31, 2011 61% Average FICO score 747 Average FICO score of loans originated for the year ended December 31, 2010 764 Average FICO score of loans originated for the year ended December 31, 2011 764 Percent of jumbo loans at origination 45.5% Percent of loans outside the New York/New Jersey market 5.5% Percent of loans outside Ocean/Monmouth Counties 38.5% Percent of loans for second homes 7.7% APPENDIX 2 Residential Portfolio Metrics Residential Portfolio Metrics As of December 31, 2011, unless otherwise noted. |
NASDAQ: OCFC 22 Commercial Real Estate Average size of commercial real estate loans $757,000 Largest commercial real estate loan $18.1 million (Secured by local university dormitory housing) Commercial Loans Average size of commercial loan $185,000 Largest commercial loan $3.5 million APPENDIX 2 (Cont’d) Commercial Portfolio Metrics Commercial Portfolio Metrics As of December 31, 2011. |
NASDAQ: OCFC 23 Commercial Portfolio Segmentation Commercial Portfolio Segmentation Construction, 8.9% Retail Trade, 4.0% Public Administration, 5.1% Miscellaneous, 7.2% Healthcare, 5.9% Accommodations/ Food Services, 6.0% Wholesale Trade, 6.5% Arts/Entertainment/ Recreation, 8.2% Manufacturing, 4.9% Real Estate Investment, 34.7% Educational Services, 4.4% Other Services, 4.2% Total Commercial Loan Exposure by Industry Concentration Real Estate Investment by Property Concentration Office, 34.1% Multi-Family, 8.1% One-to-Four Family, 5.4% Miscellaneous, 11.3% Retail Store, 7.1% Industrial/ Warehouse, 20.3% Shopping Center, 13.7% As of December 31, 2011. APPENDIX 2 (Cont’d) |