 OceanFirst Financial Corp.
OceanFirst Financial Corp.
INVESTOR PRESENTATION
INVESTOR PRESENTATION
FEBRUARY/MARCH
FEBRUARY/MARCH
2014
2014
Exhibit 99.1
NASDAQ: OCFC
1 |
 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
2 |
 112
Years of Growth and Capital Management 112 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. 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.
Rebuilt
capital
from
6.05%
to
9.53%
through
the
Great
Recession
with
retained
earnings
and
completion
of
a
follow-on
common
stock
offering
in
November
2009.
Since
late
2011
utilized
share
repurchases
to
again
strategically
redeploy
surplus
capital
until
growth
prospects
improved.
While
301,766
shares
remain
available
for
repurchase
under
current
authorization,
recent
growth
initiatives
have
yielded
positive
results
and
curtailed
repurchase
activity.
NASDAQ: OCFC
3 |
 Community Bank serving the Central
Jersey
Shore
-
$2.2
billion
in
assets
and 23 branch offices
Market Cap $300.4 million
Core deposits –
87.5%
of total deposits
Locally
originated
loan
portfolio
-
no
SNCs
Residential and commercial
real estate mortgages
C&I loans and lines
Consumer equity loans and lines
Corporate Profile
Corporate Profile
Note: See Appendix 1 for Market Demographic information.
Philadelphia
New York
Ocean
Burlington
Morris
Sussex
Atlantic
Salem
Warren
Monmouth
Hunterdon
Cumberland
Bergen
Mercer
Somerset
Middlesex
Gloucester
Camden
Passaic
Cape May
Essex
Union
Hudson
NASDAQ: OCFC
4 |
 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
43
43
Christopher D. Maher
*President, Chief Operating Officer
26
1
Michael J. Fitzpatrick
Executive Vice President, Chief Financial Officer
32
21
Joseph R. Iantosca
*Executive Vice President, Chief Administrative Officer
36
10
Joseph J. Lebel III
*Executive Vice President, Chief Lending Officer
30
8
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
5 |
 Our
Strategy Our Strategy
Positioned as the leading Community Bank in attractive Central Jersey
Shore market –
developing the franchise, growing revenue and
creating additional value for 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 community
banks lacking the scale to remain independent
NASDAQ: OCFC
6 |
 Significant Primary Market Deposit Share
Significant Primary Market Deposit Share
Competing
Favorably
Against
Banking
Behemoths
Source: FDIC Summary of Deposits, June 30, 2013
(1)
Pending acquisition by M&T Bank (NY)
NASDAQ: OCFC
7
# 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 |
 Strategic Deposit Composition Transition
Strategic Deposit Composition Transition
Time
Deposits
0%
20%
40%
60%
80%
100%
Dec 1996
Dec 2008
Dec 2013
Time Deposits
Time Deposits
MMDA & Savings
MMDA & Savings
MMDA & Savings
Interest Checking
Interest Checking
Interest
Checking
Non-
Interest
Checking
Non-
Interest
Checking
NASDAQ: OCFC
8 |
 Strategic Loan Composition Transition
Strategic Loan Composition Transition
C&I
Residential R.E.
Residential R.E.
Residential R.E.
Investment
CRE
Investment CRE
Investment
CRE
Consumer &
Other
Consumer &
Other
C&I
Owner-Occupied
CRE
Owner-
Occupied
CRE
Consumer &
Other
Dec 2013
Dec 2008
Dec 1996
0%
20%
40%
60%
80%
100%
NASDAQ: OCFC
9 |
 NASDAQ: OCFC
10
Consolidated two branches and restructured FHLB Advances improving
operating margins into future periods
Excluding strategic restructuring charges, core earnings per share of
$0.30 resulting in a 9.5% ROE & 0.85% ROA
Increased net interest margin to 3.38%, from 3.20% in linked quarter
through restructuring and commercial loan growth
Grew commercial loan portfolio by $26.4 million, 18.8% annualized
Strong capital position –
tangible common equity of 9.5% of assets
Highlights –
Highlights –
Fourth Quarter 2013
Fourth Quarter 2013 |
 NASDAQ: OCFC
11 Stabilized
NPL’s in a Diversified Portfolio Stabilized NPL’s in a Diversified
Portfolio Data as of December 31.
(1)
Increase attributable to Superstorm Sandy.
Exposure Primarily in Lower Risk Residential
(1)
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
2009
2010
2011
2012
2013
Residential
Consumer
Commercial Real Estate
Commercial |
 Prudently Provisioning for Credit Costs
Prudently Provisioning for Credit Costs
(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.
12/31/09
12/31/10
12/31/11
(1)
12/31/12
(2)
12/31/13
NASDAQ: OCFC
12
$0
$1
$2
$3
$4
$5
$6
$7
$8
$9
$10
Net Charge-Offs
Provision for Loan Losses |
    Net
Interest Margin Net Interest Margin
Increasing After Stabilizing Close to Historical Levels
Historical Average Net Interest Margin (3.28%)
NASDAQ: OCFC
13
0.00%
0.50%
1.00%
2.00%
2.50%
3.00%
3.50%
4.00%
1996
1998
2000
2002
2004
2006
2008
2010
2012
1.50% |
 Diversified Streams of Non-Interest Income
Diversified Streams of Non-Interest Income
2011
Non-Interest Income excludes gain/loss from other real estate operations, gain
on sale of equity securities and provision for repurchased loans.
$2.5M
$18.1M
Targeted
Growth
Areas
0.00%
0.10%
0.20%
0.30%
0.40%
0.50%
0.60%
0.70%
0.80%
0.90%
1996
2013
Fees and Service Charges
Gain on Sale of Loans
BOLI
Other
BankCard Services
Investment Services
Trust
NASDAQ: OCFC
14 |
 NASDAQ: OCFC
15
Generating Consistent Attractive Returns
Generating Consistent Attractive Returns
0.0%
0.20%
0.40%
0.60%
0.80%
1.00%
1.20%
1.40%
(1)
(1)
Excludes
after-tax
impact
of
$3.1
million
in
non-recurring
charges
related
to
strategic
advance
restructuring
and
branch
consolidation.
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
2009
2010
2011
2012
2013
Return on Equity
Return on Assets |
 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 $0.16 per share to improve Net Interest Margin and reduce sensitivity to
further rate increases Rationalizing Branch Network
Expanded presence in Monmouth County with opening of Red Bank Financial Solutions
Center 14 Denovos since 2000; opportunity for additional growth
Consolidating two overlapping branches in Q4; reinvesting cost savings to support
revenue growth Growing and diversifying non-interest income streams;
reducing reliance on NIM Assessing opportunistic roll-up of local
community banks Financial performance develops value proposition for
shareholders and preserves the right to remain independent
NASDAQ: OCFC
16 |
 Why
OCFC…? Why OCFC…?
Fundamental
franchise
value
–
superior
market
demographics
Crisis tested management team
Sandy response and experience
Substantial
insider
ownership
–
aligned
with
shareholders’
interests
Succession
planning
refreshed
–
2013
Attractive deposit mix and market share
Conservative credit culture and profile
Solid financial performance –
developing shareholder value
Strong balance sheet and capital base
Strategic 2013 restructuring; reinvesting cost savings in support of revenue
growth
NASDAQ: OCFC
17 |
 THANK YOU
FOR YOUR INTEREST IN
OCEANFIRST FINANCIAL CORP.
THANK YOU
FOR YOUR INTEREST IN
OCEANFIRST FINANCIAL CORP.
NASDAQ: OCFC
18 |
 Market Demographics
Market Demographics
APPENDIX
1
Ocean
Monmouth
Middlesex
New Jersey
National
Number of Offices
20
5
1
% of OceanFirst Deposits
86.6
10.3
3.1
Market Rank
4
18
36
Market Share (%)
10.2
0.9
0.2
Population
577,000
635,000
816,000
Projected 2012-2017
Population Growth (%)
1.6
1.0
2.1
1.2
3.5
Median Household Income ($)
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
19 |
 APPENDIX 2
Residential Portfolio Metrics
Residential Portfolio Metrics
As
of
December
31,
2013,
unless
otherwise
noted.
Total Portfolio
$782.2 million
% of Total Loan Portfolio
49.8%
Average size of mortgage loans
$188,000
Interest-only loans
$28.8 million
- % of total 1-4 family loans
3.7%
- Weighted average loan-to-value ratio
(using original or most recent appraisal) 61%
Stated income loans
$36.6 million
- % of total 1-4 family
loans 4.7%
Portfolio weighted average loan-to-value ratio (using original or most recent appraisal)
56%
- Loans originated during 2013
60%
Portfolio average FICO score
748
- Loans originated during 2013
761
% of loans outside the New York/New Jersey market
3.9%
% of loans outside Ocean/Monmouth Counties
31.1%
% of loans exceeding agency conforming amounts
44.5%
% of loans for second homes
8.1%
Residential
Real
Estate
NASDAQ: OCFC
20 |
 NASDAQ: OCFC
21
APPENDIX 2
(Cont’d)
Commercial Portfolio Metrics
Commercial Portfolio Metrics
As of December 31, 2013.
(1)
Combined commercial relationships total 405.
Commercial Real Estate (CRE)
Total portfolio
(1)
$528.9 million
% of Total Loan Portfolio
33.6%
Average size of CRE loans
$819,000
Largest CRE loan
$15.8 million
(Secured by local university dormitory housing)
Current Pipeline
$46.2 million
Weighted Average Yield
4.50%
Weighted Average Repricing Term
5.8 years
Commercial Loans
Total portfolio
(1)
$60.5 million
% of Total Loan Portfolio
3.8%
Average size of commercial loan
$258,000
Largest commercial loan
$4.2 million
Current Pipeline
$12.8 million
Weighted Average Yield
3.97%
Weighted Average Repricing Term
0.3 years |
 Commercial Portfolio Segmentation
Commercial Portfolio Segmentation
Total Commercial Loan Exposure
by Industry Classification
Real Estate Investment by
Property Classification
As of December 31, 2013.
APPENDIX 2
(Cont’d)
Diversified portfolio provides
protection against industry-
specific credit events.
Office, 31.5%
Commercial
Development, 8.8%
Shopping Center, 10.5%
Retail Store, 10.2%
Multi-Family, 2.8%
Miscellaneous, 15.0%
Land,
2.0%
Industrial/
Warehouse, 12.3%
Residential
Development, 6.9%
Real Estate
Investment, 35.5%
Construction, 7.6%
Retail Trade, 3.1%
Wholesale Trade,
5.8%
Healthcare, 7.4%
Accommodations/
Food Services, 7.9%
Other Services, 3.8%
Arts/Entertainment/
Recreation, 8.3%
Manufacturing, 3.8%
Educational Services,
4.0%
Public
Administration, 6.7%
Miscellaneous, 6.1%
NASDAQ: OCFC
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