OCEANFIRST FINANCIAL CORP - FORM 8-K - EX-99.2

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EX-99.1 - EX-99.1 - OCEANFIRST FINANCIAL CORP	d761991dex991.htm
8-K - FORM 8-K - OCEANFIRST FINANCIAL CORP	d761991d8k.htm

OceanFirst Financial Corp.

INVESTOR PRESENTATION

JULY 2014

Exhibit 99.2

NASDAQ: OCFC

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, future natural disasters and increases to flood insurance premiums, the level of prepayments on

loans

and

mortgage-backed

securities,

legislative/

regulatory

changes,

monetary

and

fiscal

policies

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, 2013 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 -

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

NASDAQ: OCFC

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.

Rebuilt capital from 6.05% to 9.27% 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, the Company has utilized share repurchases to again strategically redeploy

surplus capital until growth prospects improved. Current repurchase authorization for

867,923 shares in place until growth initiatives mature.

Community Bank serving the Central

Jersey Shore -

$2.3 billion in assets and

23 branch offices

Market Cap $275 million

Core deposits –

87.4%

of total deposits

Locally

originated

loan

portfolio

SNCs

Residential and commercial

real estate mortgages

C&I loans and lines

Consumer equity loans and lines

Corporate Profile

Note: See Appendix 1 for Market Demographic information.

Philadelphia

New York

Morris

Sussex

Warren

Hunterdon

Bergen

Somerset

Passaic

Essex

Union

Hudson

Ocean

Burlington

Atlantic

Salem

Monmouth

Cumberland

Mercer

Middlesex

Gloucester

Camden

Cape May

NASDAQ: OCFC

Experienced Executive Management Team

Substantial insider ownership of 27.4% –

aligned

with

shareholders’

interests

OceanFirst Bank ESOP 10.5%

Directors & Senior Executive Officers 9.8% (CEO 5.7%)

Director and Proxy Officer Stock Ownership Guidelines

OceanFirst Foundation 7.1%

As of the March 11, 2014 proxy

record date.

Name

Position

# of Years in

Banking

# of Years

at OCFC

John R. Garbarino

Chairman, Chief Executive Officer

Christopher D. Maher

President, Chief Operating Officer

Michael J. Fitzpatrick

Executive Vice President, Chief Financial Officer

Joseph R. Iantosca

Executive Vice President, Chief Administrative Officer

Joseph J. Lebel III

Executive Vice President, Chief Lending Officer

Succession planning affirmed –

Christopher D. Maher named as successor

CEO effective January 1, 2015

NASDAQ: OCFC

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, wealth

management, and bankcard services

Guarding

credit

quality

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 or desire to remain independent

NASDAQ: OCFC

NASDAQ: OCFC

Significant

Primary Market Deposit Share

Competing

Favorably

Against

Banking

Behemoths

# of

Dep. In Mkt.

Mkt. Shr.

Rank

Institution

Branches

($000)

(%)

Ocean County, NJ

TD Bank, National Association (Canada)

2,460,349

16.88

Hudson

City

Bancorp

Inc.

(NJ)

(1)

2,415,792

16.57

Wells Fargo Bank NA (CA)

2,315,657

15.89

OceanFirst Financial Corp. (NJ)

1,488,197

10.21

Banco Santander S.A. (Spain)

1,438,132

9.87

Bank of America Corp. (NC)

1,292,963

8.87

Total For Institutions In Market

192

14,577,615

Source: FDIC Summary of Deposits, June 30, 2013

(1)

Pending acquisition by M&T Bank (NY)

Strategic Deposit Composition Transition

Time

Deposits

20%

40%

60%

80%

100%

Dec 1996

Dec 2008

June 2014

Time Deposits

MMDA & Savings

Interest Checking

Interest

Checking

Interest

Checking

Non

Interest

Checking

Non-

NASDAQ: OCFC

Strategic Loan Composition Transition

C&I

NASDAQ: OCFC

20%

40%

60%

80%

100%

Dec 1996

Dec 2008

June 2014

Residential R.E.

Investment

CRE

Investment CRE

Investment

CRE

Consumer &

Other

Consumer

& Other

Consumer &

Other

C&I

Owner-

Occupied CRE

Owner-

Occupied

CRE

Grew commercial loan portfolio $35.3 million, 22.9% annualized

Earnings per share of $0.30, 9.5% ROE & 0.90% ROA

Net interest margin stable at 3.35%, above historical average

New 5% common stock repurchase plan put in place

Tangible common equity of 9.3% of assets

Highlights

–

Second Quarter 2014

NASDAQ: OCFC

Highlights –

Risk Management

NASDAQ: OCFC

Interest Rate Risk Management

Extended

$110

million

FHLB

advances

into

–

year

terms

$64 million of retail checking migrated to non-interest bearing

Retail and commercial checking growth replacing more price

sensitive government deposits

Asset Quality Improvements

Non-performing loans decreased by 10% or $4.6 million to

$40.7 million at June 30, 2014

Quarterly charge-offs decreased 48% from the linked quarter

92% of residential NPLs relate to loans originated before 2009

Stabilized NPL’s in a Diversified Portfolio

Data as of December 31, unless otherwise indicated.

(1)

Increase attributable to Superstorm Sandy.

Exposure

Primarily

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

6/30/2014

Residential

Consumer

Commercial Real Estate

Commercial

NASDAQ: OCFC

Prudently Provisioning for Credit Costs

$10

Net Charge-Offs

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.

12/31/09

12/31/10

12/31/11

(1)

12/31/12

(2)

12/31/13

6/30/14

(Annualized)

NASDAQ: OCFC

Net

Interest Margin

Stabilizing

Historical

Levels

Quarterly

Trend

Historical Average Net Interest Margin (3.28%)

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

1996

1998

2000

2002

2004

2006

2008

2010

2012

2013

2014

NASDAQ: OCFC

Diversified Streams of Non-Interest Income

2011

Non-Interest Income excludes gain/loss from other real estate operations, gain on sale of securities and provision for

repurchased loans.

$2.5M

$17.0M

Targeted

Growth

Areas

NASDAQ: OCFC

0.00%

0.10%

0.20%

0.30%

0.40%

0.50%

0.60%

0.70%

0.80%

0.90%

Fees and Service Charges

Gain on Sale of Loans

BOLI

Other

BankCard Services

Investment Services

Wealth Management

1996

6/30/14 (Annualized)

Generating Consistent Attractive Returns

0.0%

0.20%

0.40%

0.60%

0.80%

1.00%

1.20%

1.40%

(1)

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

2009

2010

2011

2012

2013

6/30/2014

(Annualized)

Return on Equity

Return on Assets

NASDAQ: OCFC

Excludes after-tax impact of $3.1 million in non-recurring charges related to strategic advance restructuring and branch

consolidation.

Prudently Managing Excess Capital in Near Term

Note:

Stock

Repurchases

–

$14.74

Average

Cost

per

Cash

Dividends

Stock Repurchases

$0.0

$5.0

$10.0

$15.0

$20.0

$25.0

2011

2012

2013

2014 (Six Months)

NASDAQ: OCFC

Target growth within existing market –

increasing share

Commercial loans increase at double digit growth rate for four consecutive quarters

Superstorm Sandy recovery providing market opportunity*

Continuing Strategic Execution

FHLB Advances restructured in fourth quarter 2013

Rationalizing Branch Network and Residential Lending, reinvesting cost saves supporting growth

Diversifying and strengthening 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

Challenge Today is to Grow Revenue

Build Shareholder Value

*Note: See Appendix 4.

NASDAQ: OCFC

Consolidated two overlapping branches at the end of 2013

Reduced residential lending overhead to improve efficiency

Fundamental

franchise

value

–

superior

market

demographics

Seasoned and effective management team

Sandy response and experience

Substantial

insider

ownership

–

aligned

with

shareholders’

interests

Succession

planning

affirmed

–

2014

Attractive deposit mix and market share

Conservative credit culture and profile

Solid

financial

performance

–

developing

shareholder

value

Strong balance sheet and capital base

NASDAQ: OCFC

Why OCFC…?

NASDAQ: OCFC

THANK YOU

FOR YOUR INTEREST IN

OCEANFIRST FINANCIAL CORP.

Market Demographics

APPENDIX 1

Ocean

Monmouth

Middlesex

New Jersey

National

Number of Offices

% of OceanFirst Deposits

86.6

10.3

3.1

Market Rank

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

Residential Portfolio Metrics

Total Portfolio

$812.9 million

% of Total Loan Portfolio

48.8%

Average size of mortgage loans

$191,000

Interest-only loans

$22.2 million

- % of total 1-4 family loans

2.8%

- Weighted average loan-to-value ratio (using original or most recent appraisal)

59%

Stated income loans

$34.7 million

- % of total 1-4 family loans

4.4%

Portfolio weighted average loan-to-value ratio (using original or most recent appraisal)

56%

- Loans originated during 2014

62%

Portfolio average FICO score

748

- Loans originated during 2014

765

% of loans outside the New York/New Jersey market

3.8%

% of loans outside Ocean/Monmouth Counties

30.1%

% of loans exceeding agency conforming amounts

45.5%

% of loans for second homes

8.5%

APPENDIX 2

As of June 30, 2014, unless

otherwise noted.

NASDAQ: OCFC

Residential

Real

Estate

APPENDIX 3

Commercial Portfolio Metrics

As of June 30, 2014.

(1)

Combined commercial relationships (excluding small business) total 420.

Commercial Real Estate

(CRE)

Total portfolio

(1)

$577.1

million

% of Total Loan Portfolio

34.6%

Average size of CRE loans

$841,000

Largest CRE loan

$14.6

million

(Secured by local university dormitory housing)

Current

Pipeline

$59.1

million

Weighted Average Yield

4.35%

Weighted Average Repricing Term

5.5

years

Commercial

Loans

Total portfolio

(1)

$75.2

million

% of Total Loan Portfolio

4.5%

Average size of commercial loan

$286,000

Largest commercial loan

$3.9

million

Current Pipeline

$10.5

million

Weighted Average Yield

3.77%

Weighted Average Repricing Term

1 month

NASDAQ: OCFC

Commercial Portfolio Segmentation

Total Commercial Loan Exposure

by Industry Classification

Real Estate Investment by

Property Classification

As of June 30, 2014.

APPENDIX 3

(Cont’d)

Diversified portfolio provides

protection against industry-

specific credit events.

Real Estate

Investment, 37.5%

Construction, 7.3%

Retail Trade, 3.2%

Wholesale Trade, 5.6%

Healthcare, 7.6%

Accommodations/

Food Services, 7.1%

Other Services, 3.2%

Arts/Entertainment/

Recreation, 7.5%

Manufacturing, 4.1%

Educational Services,

3.7%

Public Administration,

7.1%

Miscellaneous, 6.1%

Office, 36.0%

Industrial/

Warehouse, 13.4%

Residential

Development, 5.1%

Land,

1.8%

Commercial

Development, 10.2%

Shopping Center, 10.2%

Retail Store, 9.6%

Multi-Family, 2.5%

Miscellaneous, 11.2%

NASDAQ: OCFC

Superstorm Sandy Recovery

* Construction lending has been driven by owner-occupied projects resulting from storm damage

APPENDIX 4

NASDAQ: OCFC

Loan Portfolio Performed Well

Net Charge-offs related to Superstorm Sandy total a modest $424,000

Damage Estimate ( FEMA 2012):

50,103 structures damaged were located in Monmouth and Ocean County

3,033 structures classified as major damage or totally destroyed

Multi-Year Recovery Horizon

4,307 Homes demolished in Monmouth and Ocean in 2013; 59% of New Jersey total

Toms River specifically

$23.6 million in consumer originated/committed in first half of 2014; $16.4 million cumulative undrawn

$6.9 million in commercial originated/committed in first half of 2014; $24.7 million cumulative undrawn

$16.7 million pipeline

422 permits for $64.5 million issued in the first six months of 2014

1,108 homes demolished in 2013 (of 30,235 Single Family Homes)

Construction Lending*

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