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| 8-K - FORM 8-K - OCEANFIRST FINANCIAL CORP | d627789d8k.htm |
 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 |