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| 8-K - FORM 8-K - OCEANFIRST FINANCIAL CORP | d550137d8k.htm |
 NASDAQ: OCFC
1
OceanFirst Financial Corp.
OceanFirst Financial Corp.
INVESTOR PRESENTATION
INVESTOR PRESENTATION
JUNE 2013
JUNE 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 through the Great Recession with
retained earnings and completion of a follow-on common stock
offering in November 2009. OceanFirst issued stock for the first time in 1996
and over the ensuing 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. 2011 and 2012 share repurchase plans begin the redeployment of the
excess capital rebuilt since 2008. Under the current authorization,
580,444 shares remain available for repurchase. |
 NASDAQ: OCFC
4
Community Bank serving the Central
Jersey Shore -
$2.3 billion in assets
and 25 branch offices
Market Cap $253.8 million (as of
June 3, 2013)
Core deposit funded –
87.5%
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
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
Substantial
insider
ownership
of
27.3%
–
aligned
with
shareholders’
interest
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
41
41
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
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
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
On the watch for roll-up opportunities presented by in-market
“regulatory fatigued”
competitors |
 NASDAQ: OCFC
7
Earnings per share of $0.26 -
adversely impacted by extraordinary loan
repurchase reserve activity
Tangible book value continues to grow, increasing to $12.43
Strong capital position –
tangible common equity of 9.5% of assets
Returning Excess Capital –
254,340 shares repurchased in quarter
Grew core deposits (i.e. all deposits excluding time deposits)
$29.5 million, now comprising 87.5% of total deposits
Credit quality stabilizing with NPL’s (excluding the increase caused by
Sandy) decreasing $406,000 from December 31, 2012
Highlights –
Highlights –
First Quarter 2013
First Quarter 2013 |
 NASDAQ: OCFC
8
Substantial Primary Market Deposit Share
Substantial Primary Market Deposit Share
June 30, 2012
# of
Dep. In Mkt.
Mkt. Shr.
Rank
Institution
Branches
($000)
(%)
Ocean County, NJ
1
Hudson City Bancorp Inc. (NJ)
14
2,610,613
18.65
2
Wells Fargo Bank NA (CA)
26
2,360,712
16.87
3
TD Bank, National Association (Canada)
21
2,149,131
15.36
4
OceanFirst Financial Corp. (NJ)
19
1,477,780
10.56
5
Banco Santander S.A. (Spain)
25
1,321,262
9.44
6
Bank of America Corp. (NC)
22
1,161,899
8.30
7
Investors Bancorp Inc. (MHC) (NJ)
8
654,369
4.68
8
PNC Financial Services Group (PA)
14
436,177
3.12
9
Manasquan Savings Bank (NJ)
3
252,922
1.81
10
JPMorgan Chase Bank, National Association (OH)
10
230,732
1.65
Total For Institutions In Market
200
13,996,221
Source: FDIC |
 NASDAQ: OCFC
9
Strategic Deposit Composition Transition
Strategic Deposit Composition Transition |
 NASDAQ: OCFC
10
Strategic Loan Composition Transition
Strategic Loan Composition Transition |
 NASDAQ: OCFC
11
Stabilized NPL’s in a Diversified Portfolio
Stabilized NPL’s in a Diversified Portfolio
Non-performing loan (“NPL”).
Data as of December 31, unless otherwise noted.
(A)
Increase traced to superstorm Sandy.
Exposure Concentrated in Lower Risk One-to-Four Family
|
 NASDAQ: OCFC
12
Prudently Provisioning for Credit Costs
Prudently Provisioning for Credit Costs
(1)
Increase in charge-offs was primarily 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 through 2011 was $5.7 million, all of which was
previously specifically reserved for by the Company.
(A)
Increase traced to superstorm Sandy. |
 NASDAQ: OCFC
13
Net Interest Margin
Net Interest Margin
Remaining Under Pressure in Low Interest Rate Environment
|
 NASDAQ: OCFC
14
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.
|
 NASDAQ: OCFC
15
Generating Attractive Returns
Generating Attractive Returns |
 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
Fourteen de novo branches since 2000 have performed well –
still present
opportunity for additional growth
Expanding presence in Monmouth County with the Red Bank Financial
Solutions Center opened in May
Opportunity to meet extraordinary loan demand –
Sandy recovery
Non-interest income streams have been diversified, ever more important
as margin remains under pressure
Assessing opportunistic roll-up of community banks in market
Share repurchases safely return excess capital in the short term
Financial performance to Plan builds value and preserves the right to
remain independent |
 NASDAQ: OCFC
17
(1)
Peers include: DCOM, FFIC, FLIC, HVB, LBAI, ORIT, PBNY, PGC, RCKB, SNBC,
SUBK, UVSP and WSFS Note:Financial data as of the most recent period
available; market data as of June 3, 2013. Source: Sandler
O’Neill. Attractive Valuation Metrics
Attractive Valuation Metrics
OCFC
Peers
(1)
Valuation
Price / Tang. Book Value
116%
133%
Price / LQA EPS
13.8x
15.6x
Price / Estimated EPS
13.3x
14.2x
Cash Dividend Yield
3.3%
2.9% |
 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
Succession planning refreshed
Attractive deposit mix and market share
Conservative credit culture and profile
Solid
financial
performance
–
developing
shareholder
value
Strong balance sheet and capital base
Attractive current valuations |
 |
 NASDAQ: OCFC
20
Market Demographics
Market Demographics
APPENDIX 1
Ocean
Monmouth
Middlesex
New Jersey
National
Number of Offices
19
4
1
% of OceanFirst Deposits
85.7
11.1
3.2
Market Rank
4
18
34
Market Share (%)
10.6
1.0
0.2
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, 2012.
Demographic data as of June 30, 2010.
Source: SNL Financial |
 NASDAQ: OCFC
21
One-to-Four Family (1-4)
Average size of mortgage loans
$185,000
Interest-only loans - Amount
$35.3 million
- % of total 1-4 family loans
4.4%
- Weighted average loan-to-value ratio
(using original or most recent appraisal) 74%
Stated income loans - Amount
$45.6 million
- % of total 1-4 family
loans 5.7%
Portfolio weighted average loan-to-value ratio (using original or most recent appraisal)
56%
- Originated for the three months ended March
31, 2013 61%
- Originated for the year ended December 31,
2012 59%
Average FICO score
748
- Loans originated for the three months ended
March 31, 2013 767
- Loans originated for the year ended December
31, 2012 767
% of loans outside the New York/New Jersey market
4.7%
% of loans outside Ocean/Monmouth Counties
34.2%
% of jumbo loans at time of origination
43.8%
% of loans for second homes
7.6%
APPENDIX 2
Residential Portfolio Metrics
Residential Portfolio Metrics
As of March 31, 2013, unless
otherwise noted. |
 NASDAQ: OCFC
22
Commercial Real Estate (CRE)
Total portfolio
(1)
$470.5 million
Average size of CRE loans
$770,000
Largest CRE loan
$16.2 million
(Secured by local university dormitory housing)
Commercial Loans
Total portfolio
(1)
$63.7 million
Average size of commercial loan
$258,000
Largest commercial loan
$4.7 million
(1)
Commercial portfolio relationships total 382, excluding small business loans.
APPENDIX 2
(Cont’d)
Commercial Portfolio Metrics
Commercial Portfolio Metrics
As of March 31, 2013. |
 NASDAQ: OCFC
23
Commercial Portfolio Segmentation
Commercial Portfolio Segmentation
Real Estate
Investment, 32.0%
Arts/Entertainment/
Recreation, 7.4%
Other Services, 4.0%
Retail Trade, 3.8%
Public
Administration, 6.5%
Miscellaneous, 6.1%
Manufacturing, 4.3%
Educational Services,
4.7%
Accommodations/
Food Services, 7.8%
Healthcare, 9.9%
Wholesale Trade,
6.4%
Construction, 7.1%
Total Commercial Loan Exposure
by Industry Concentration
Real Estate Investment by
Property Concentration
Office, 34.6%
Shopping Center, 9.1%
Retail Store, 8.0%
Multi-Family, 3.5%
Miscellaneous, 14.2%
Commercial
Development, 10.4%
Industrial/
Warehouse, 13.6%
Residential
Development, 6.6%
As of March 31, 2013.
APPENDIX 2
(Cont’d) |
 NASDAQ: OCFC
24
Impact of Superstorm Sandy
Impact of Superstorm Sandy
APPENDIX 3
Residential loans as of March 31, 2013:
Borrowers impacted by the storm
124
Principal Balance
$30.1 million
Average Loan Size
$243,000
Loan Status:
Borrowers
Balance (000’s)
Loans repaid or brought current
80
$19,421
Temporary repayment plan agreed to under which the borrower is performing
18
4,494
Loan is 30-89 days delinquent
8
1,705
Loan is 90 days or more delinquent
18
4,469
Total
124
$30,089
Using conservative assumptions, specific impairments total $326,000. 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 loans as of March 31, 2013:
No adverse impact. |