![]() NASDAQ: OCFC 1 OceanFirst Financial Corp. OceanFirst Financial Corp. INVESTOR PRESENTATION INVESTOR PRESENTATION NOVEMBER/DECEMBER NOVEMBER/DECEMBER 2013 2013 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 expressions 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 its subsidiaries include, but are not limited to, changes in interest rates, general economic conditions, levels of unemployment in the Bank’s lending area, real estate market values in the Bank’s lending area, the level of prepayments on loans and mortgage-backed securities, 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, 2012 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 3 111 Years of Growth and Capital Management 111 Years of Growth and Capital Management 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. Rebuilt capital from 6.05% to 9.57% through the Great Recession with retained earnings and completion of a follow-on common stock offering in November 2009. Demutualized in 1996 and over the ensuing 11 years generated value for shareholders, largely through the successful implementation and execution of our community bank model, and the strategic repurchase of 62.4% of original IPO shares. Since late 2011 utilized share repurchases to again strategically redeploy surplus capital until growth prospects improved. Under the current authorization, 301,766 shares remain available for repurchase. |
![]() NASDAQ: OCFC 4 Community Bank serving the Central Jersey Shore - $2.3 billion in assets and 25 branch offices Two branches ( ) to be consolidated into local offices in 4Q Market Cap $315.2 million Core deposits – 88.0% of total deposits Locally originated loan portfolio - no SNCs Residential and commercial mortgages Consumer equity loans and lines C&I loans and lines Corporate Profile Corporate Profile Note: See Appendix 1 for Market Demographic information. ! ( Ocean Burlington Morris Sussex Atlantic Salem Warren Monmouth Hunterdon Cumberland Bergen Mercer Somerset Middlesex Gloucester Camden Passaic Cape May Essex Union Hudson Philadelphia New York |
![]() NASDAQ: OCFC 5 Experienced Executive Management Team Experienced Executive Management Team OceanFirst Bank ESOP 10.5% Directors & Senior Executive Officers 9.7% (CEO 5.7%) Director and Proxy Officer Stock Ownership Guidelines OceanFirst Foundation 7.1% As of the March 12, 2013 proxy record date. Name Position # of Years in Banking # of Years at OCFC John R. Garbarino Chairman, Chief Executive Officer 42 42 Christopher D. Maher President, Chief Operating Officer 25 - Michael J. Fitzpatrick Executive Vice President, Chief Financial Officer 31 20 Joseph R. Iantosca *Executive Vice President, Chief Administrative Officer 35 9 Joseph J. Lebel III *Executive Vice President, Chief Lending Officer 29 7 Substantial insider ownership of 27.3% – aligned with shareholders’ interests Succession planning refreshed in 2013 – new President recruited and 2 new Executive Vice Presidents promoted* |
![]() NASDAQ: OCFC 6 Our Strategy Our Strategy Positioned as the leading Community Bank in attractive Central Jersey Shore market – growing revenue and creating additional value for our shareholders Strategically focused on revenue growth in commercial lending, trust and asset management, and Bankcard services Guarding credit quality in ALL business cycles Growing diversified streams of non-interest income to decrease reliance on Net Interest Margin (NIM) On the watch for roll-up opportunities presented by local “regulatory fatigued” community banks |
![]() NASDAQ: OCFC 7 Significant Primary Market Deposit Share Significant Primary Market Deposit Share Competing Favorably Against Banking Behemoths June 30, 2013 # of Dep. In Mkt. Mkt. Shr. Rank Institution Branches ($000) (%) Ocean County, NJ 1 TD Bank, National Association (Canada) 21 2,460,349 16.88 2 Hudson City Bancorp Inc. (NJ) (1) 14 2,415,792 16.57 3 Wells Fargo Bank NA (CA) 26 2,315,657 15.89 4 OceanFirst Financial Corp. (NJ) 20 1,488,197 10.21 5 Banco Santander S.A. (Spain) 23 1,438,132 9.87 6 Bank of America Corp. (NC) 17 1,292,963 8.87 Total For Institutions In Market 192 14,577,615 Source: FDIC Summary of Deposits (1) Pending acquisition by M&T Bank (NY) |
![]() NASDAQ: OCFC 8 Strategic Deposit Composition Transition Strategic Deposit Composition Transition |
![]() NASDAQ: OCFC 9 Strategic Loan Composition Transition Strategic Loan Composition Transition |
![]() NASDAQ: OCFC 10 Earnings per share of $0.29 – 9.2% ROE Net interest margin stabilized at 3.20%, from 3.21% in linked quarter Grew commercial loan portfolio by $18.5 million, 13.6% annualized Credit quality improving with NPL’s decreasing $4.3 million Strong capital position – tangible common equity of 9.4% of assets Returning Excess Capital – 533,018 shares repurchased YTD Announced fourth quarter consolidation of two branches and restructure of FHLB Advances Highlights – Highlights – Third Quarter 2013 Third Quarter 2013 |
![]() NASDAQ: OCFC 11 Stabilized NPL’s in a Diversified Portfolio Stabilized NPL’s in a Diversified Portfolio Data as of December 31, unless otherwise noted. (1) Increase attributable to Superstorm Sandy. 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 2009 2010 2011 2012 9/30/2013 Residential Consumer Commercial Real Estate and Construction Commercial Exposure Primarily in Lower Risk Residential $2.7M Sandy Impact (1) |
![]() NASDAQ: OCFC 12 Prudently Provisioning for Credit Costs Prudently Provisioning for Credit Costs $0 $1 $2 $3 $4 $5 $6 $7 $8 $9 $10 Recoveries Residential & Consumer C/O's Commercial C/O's Provision for Loan Losses (1) Spike in charge-offs was due to a change in 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 through 2011 was $5.7 million, all of which had been previously specifically reserved. (2) Increase attributable to Superstorm Sandy. $1.8M Sandy Provision (2) 12/31/09 12/31/10 12/31/11 (1) 12/31/12 9/30/13 (Annualized) |
![]() NASDAQ: OCFC 13 Net Interest Margin Net Interest Margin Stabilizing at Historical Levels 2013 Quarterly Trend Historical Average Net Interest Margin (3.28%) |
![]() 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% 0.90% 1996 9/30/13 (Annualized) Fees and Service Charges Gain on Sale of Loans BOLI Other BankCard Services Investment Services Trust Non-Interest Income excludes gain/loss from other real estate operations, gain on sale of equity securities and provision for repurchased loans. $2.5M $18.3M Targeted Growth Areas |
![]() NASDAQ: OCFC 15 Generating Consistent Attractive Returns Generating Consistent Attractive Returns 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 2009 2010 2011 2012 9/30/13 (Annualized) Return on Equity Return on Assets 0.0% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40% |
![]() NASDAQ: OCFC 16 Challenge Today is to Grow Revenue Challenge Today is to Grow Revenue Build Shareholder Value Build Shareholder Value Target growth within existing market – increasing share Continuing Strategic Execution Initiated a restructure of $159 million in FHLB Advances in Q4, incurring a charge of $0.16 per share to improve Net Interest Margin and reduce sensitivity to further rate increases Rationalizing Branch Network Expanded presence in Monmouth County with opening of Red Bank Financial Solutions Center 14 Denovos since 2000; opportunity for additional growth Consolidating two overlapping branches in Q4; reinvesting cost savings to support revenue growth Opportunity to meet extraordinary loan demand from Superstorm Sandy recovery Growing and diversifying non-interest income streams; reducing reliance on NIM Assessing opportunistic roll-up of local community banks Strategic share repurchases safely deploy surplus capital in the short term Financial performance develops value proposition for shareholders and preserves the right to remain independent |
![]() NASDAQ: OCFC 17 (1) Peers include: DCOM, FFIC, FLIC, HVB, LBAI, ORIT, PGC, RCKB, SNBC, SUBK, UVSP and WSFS Note:Financial data as of the most recent period available; market data as of November 8, 2013. Source: Sandler O’Neill. Peer Valuation Metrics Peer Valuation Metrics OCFC Peers (1) Valuation Price / Tang. Book Value 147% 147% Price / LQA EPS 15.6x 16.4x Price / Estimated EPS 17.7x 17.2x Cash Dividend Yield 2.6% 2.6% |
![]() NASDAQ: OCFC 18 Why OCFC…? Why OCFC…? Fundamental franchise value – superior market demographics Crisis tested management team Sandy response and experience Substantial insider ownership – aligned with shareholders’ interests Succession planning refreshed – 2013 Attractive deposit mix and market share Conservative credit culture and profile Solid financial performance – developing shareholder value Strong balance sheet and capital base Strategic restructuring in Q4; reinvesting cost savings in support of revenue growth |
![]() 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 20 5 1 % of OceanFirst Deposits 86.6 10.3 3.1 Market Rank 4 18 36 Market Share (%) 10.2 0.9 0.2 Population 577,000 635,000 816,000 Projected 2012-2017 Population Growth (%) 1.6 1.0 2.1 1.2 3.5 Median Household Income ($) 59,000 81,000 77,000 67,000 50,000 Projected 2012-2017 Median Household Income Growth (%) 22.6 14.0 13.1 18.9 13.4 Deposit data as of June 30, 2013. Demographic data as of December 31, 2012. Source: SNL Financial |
![]() NASDAQ: OCFC 21 One-to-Four Family (1-4) Average size of mortgage loans $189,000 Interest-only loans $33.0 million - % of total 1-4 family loans 4.2% - Weighted average loan-to-value ratio (using original or most recent appraisal) 61% Stated income loans $40.4 million - % of total 1-4 family loans 5.1% Portfolio weighted average loan-to-value ratio (using original or most recent appraisal) 56% - Originated for the nine months ended September 30, 2013 61% Portfolio average FICO score 748 - Loans originated for the nine months ended September 30, 2013 764 % of loans outside the New York/New Jersey market 4.3% % of loans outside Ocean/Monmouth Counties 32.0% % of loans exceeding agency conforming amounts 44.3% % of loans for second homes 7.8% APPENDIX 2 Residential Portfolio Metrics Residential Portfolio Metrics As of September 30, 2013, unless otherwise noted. |
![]() NASDAQ: OCFC 22 APPENDIX 2 (Cont’d) Commercial Portfolio Metrics Commercial Portfolio Metrics As of September 30, 2013. (1) Combined commercial relationships total 389. Commercial Real Estate (CRE) Total portfolio (1) $497.5 million Average size of CRE loans $797,000 Largest CRE loan $16.0 million (Secured by local university dormitory housing) Current Pipeline $33.6 million Weighted Average Yield 3.93% Weighted Average Repricing Term 4.2 years Commercial Loans Total portfolio (1) $65.6 million Average size of commercial loan $266,000 Largest commercial loan $4.4 million Current Pipeline $4.8 million Weighted Average Yield 4.21% Weighted Average Repricing Term 1.6 years |
![]() NASDAQ: OCFC 23 Commercial Portfolio Segmentation Commercial Portfolio Segmentation Total Commercial Loan Exposure by Industry Classification Real Estate Investment by Property Classification As of September 30, 2013. APPENDIX 2 (Cont’d) Diversified portfolio provides protection against industry- specific credit events. |
![]() NASDAQ: OCFC 24 Impact of Superstorm Sandy Impact of Superstorm Sandy APPENDIX 3 Residential Loan Portfolio: March 31, 2013 June 30, 2013 September 30, 2013 Loan Status: Balance Balance Borrowers Balance Total loans impacted $ 30.1 $ 30.1 124 $ 30.1 Loans repaid or brought current (19.4) (24.0) 110 (26.9) Less Borrower performing on repayment plan (4.5) - - - Remaining delinquencies $ 6.2 $ 6.1 14 $ 3.2 Using conservative assumptions, specific impairments total $471,000 at September 30, 2013. These impairments are covered by a year-end provision of $1.8 million related to the adverse impact of Sandy and expectation of increasing levels of non-performing loans in the recovery period. Commercial Loan Portfolio: No commercial credit issues attributable to Superstorm Sandy. All commercial borrowers have demonstrated an ability to meet obligations. CONSERVATIVE CREDIT UNDERWRITING AND ACTIVE PORTFOLIO MANAGEMENT COMBINED TO PROTECT THE BALANCE SHEET FROM THE IMPACT OF A MEGA-STORM |