Exhibit 99.1
OceanFirst Financial Corp.
INVESTOR PRESENTATION
JUNE 2004
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OceanFirst Financial Corp.
This presentation contains certain forward-looking statements 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”, or similar expressions. 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 the subsidiaries include, but are not limited to, changes in interest rates, general economic conditions, legislative/regulatory changes, monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board, 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 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.
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OceanFirst Financial Today
Holding company for the 102 year old financial services firm serving the community banking needs of the attractive central Jersey Shore growth market between the major metropolitan areas of New York City and Philadelphia
$1.8 Billion in Assets -17 OceanFirst Bank offices within a tightly defined market area
Focusing on community bank deposit and lending products delivered to both business and consumer markets
Transitioning the Bank’s balance sheet to reduce a historical over-reliance on CD funding and residential mortgage portfolio lending
Columbia Equities, Ltd. – wholly owned mortgage banking subsidiary headquartered in Westchester and Suffolk Counties, New York
Growing non-interest income through maturation of recent initiatives and continued product line expansion
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Six Solid Years of Growth
At December 31
2003 1997 CAGR
Total Loans $1,432,927,000 $ 794,316,000 10.3%
Core Deposits 756,363,000 322,324,000 15.3%
Year Ended December 31
2003 1997 CAGR
Earnings Per Share $1.53 $.59 17.2%
Annual Dividend per Share .80 .27 19.9%
Return on Equity 14.84% 6.00% 16.3%
Fees and Services Charges $7,860,000 $1,376,000 33.7%
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Total Shareholder Return
Average annual total shareholder return for the period from 12/31/96 to 12/31/03
25% 20% 15% 10% 5% 0%
6.8%
19.7%
21.8%
Nasdaq US Market
SNL Thrift Index
OceanFirst
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Business Plan 2004-2006
Focus on de novo branch and core account development with business and consumer products appealing to a broad customer base
Market commercial lending services to local businesses, supplanting residential mortgage portfolio growth
Grow non-interest revenue through the continued development of Trust and Asset Management services and the mortgage banking opportunities for Columbia Equities, Ltd.
Deliver all financial services within the Bank’s defined market under the strong sales, service and credit cultures
Emphasize the Bank’s unique position as the largest and oldest financial services institution headquartered in-market
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Recent Management Reorganization
Completed in May 2004 to facilitate market share growth in the consolidating market
Organize by function rather than product line – sales and administrative responsibilities separated
Chief Sales Officer – Vito R. Nardelli
Thirty years of retail banking experience with Marine Midland, Chase, First Union, Dime Savings Bank and Trust Company of NJ
Chief Administrative Officer – Joseph R. Iantosca
Over 18 years experience in retail banking and banking systems technology, most recently as National Vice President at BISYS Banking Solutions
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Ocean County Deposit Market Share
Bank
# of Branches
Total Deposits (000)
Average Size (000)
Market Share %
Fleet Bank 41 $ 1,540,929 $ 37,584 14.6
Commerce 16 $ 1,425,535 $ 89,096 13.5
Wachovia/First Union 35 $ 1,343,235 $ 38,378 12.7
Hudson City Savings 12 $ 1,332,592 $ 111,049 12.6
Sovereign 31 $ 1,194,630 $ 38,536 11.3
OceanFirst 14 $ 990,588 $ 70,756 9.4
Investors 5 $ 431,445 $ 86,289 4.1
SI Bank 6 $ 369,646 $ 61,608 3.5
*Source: Sheshunoff—data as of June 30, 2003
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The Changing Deposit Mix
December 31, 1997
March 31, 2004
Savings & MMDA 24%
Checking 9%
CD’s 67%
2006 Goal
Savings & MMDA 36%
CD’s 33%
Checking 31%
Savings & MMDA 35%
CD’s 25%
Checking 40%
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Loan Portfolio Growth
Residential Lending Market Leader
Bank is among the leading residential mortgage originators in Monmouth and Ocean Counties *
$476 million originated in 2003 through the Bank’s retail sales force
An additional $557 million originated by Columbia Equities, Ltd.
Commercial Lending Growth Continues
$100 million in high quality loan commitments in 2003
Receivables of $258 million at year-end, a 17% portfolio increase
Joint Residential/Commercial Loan Production Office planned for Red Bank, Monmouth County, in 3Q 04 capitalizing on dislocations from market consolidation
* Source: Experian Marketrac
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The Changing Loan Portfolio Mix
December 31, 1997
March 31, 2004
2006 Goal
Consumer 6%
Commercial 4%
Residential 90%
Commercial 18%
Consumer 6%
Residential 76%
Consumer 7%
Commercial 25%
Residential 68%
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Non-Interest Income as a % of Revenue
December 31, 1997
Non-Interest Income 6%
Net Interest Income 94%
2006 Goal
Non-Interest Income 25%
December 31, 2003
Net Interest Income 75%
Non-Interest Income 30%
Net Interest Income 70%
Excluding gain (loss) on sales of securities.
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Retail Branch In-Market Growth
Successful de novo branching with emphasis on Core Deposit generation in-market
From 1996 through 1Q 04, 9 branches were opened with an average Core Deposit mix of 84%
Additional branch activity in our growth market
Concordia branch enlarged and relocated within existing shopping center (3Q 04)
Little Egg Harbor branch scheduled to open (4Q 04)
Whiting branch to be relocated to a more convenient, prominent location (2Q 05)
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Capital Management
Successfully delivering on our 1996 IPO Business Plan
Historical Recap
Repurchase of 15.0 million shares, 55% of shares originally issued
Eleventh repurchase program for 10% of outstanding shares announced October 2003
100% stock dividend – 5/98; 50% stock dividend – 5/02
Quarterly cash dividend increases totaling 200% since the initial dividend in 1997
Currently, a 3.6% yield and approximate 50% payout of current earnings
Wholesale leverage strategy conservatively targeted and managed since 1996 to provide additional net interest income at modest additional interest rate risk
Effective leverage of core capital from 20.8% in 1996 to 7.8% in first quarter 2004, without ill conceived acquisitions or geographic market expansion
Prospective
Capital leverage to 6.5%—7%
Balance sheet expansion driven by commercial loan and core deposit growth
Continued share repurchases
Aggressive cash dividend payout ratios
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Capital Management and Return on Average Equity (ROE)
Excess capital gradually being leveraged to help build ROE
Millions $
250 200 150 100 50 0
Percent
16 14 12 10 8 6 4 2 0
1997 1998 1999 2000 2001 2002 2003
Capital
ROE
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Building Additional Shareholder Value
In the long run, we think the following factors undoubtedly create value for the long term OCFC investor
Management Reorganization
Organize by function rather than product line
Hire of two experienced bankers to fill restructured positions of Chief Sales Officer and Chief Administrative Officer
EPS Growth
Restore double digit EPS growth for 2005 – 2006
(Compound Annual EPS growth of 17.2% over the past six years – 1997 – 2003)
Prudent additional capital leverage
Targeting desired levels of approximately 6.5%—7% by 2006
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Building Additional Shareholder Value (cont’d.)
Effective risk management
Outsourced internal audit function to Deloitte Touche
Created position of Chief Risk Officer in June 2003
Net charge-offs amounted to approximately 3 basis points of average net loans from 1999 through 2003
Interest Rate Risk controlled in transitional environment
Franchise value enhancement
Successful community banking and financial services delivery in a most attractive Central Jersey Shore market
Columbia Equities initiatives in an opportunity-rich market
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