OceanFirst Financial Corp, a Toms River-based bank, on Wednesday said it will buy the parent of Ocean City Home Bank for $145.6 million, building on OceanFirst’s South Jersey buying spree after it swallowed up Cape Bank earlier this year.
The deal, which will likely close at the end of this year or in the first few months of 2017, will make OceanFirst Bank New Jersey’s No. 4 bank by deposits, according to a press release.
The newly combined bank will have $4 billion in loans, $4 billion in deposits and 61 branches from Middletown to Cape May. It was not clear whether there would be branch closures or layoffs as a result of the deal.
This slide from OceanFirst's presentation to investors shows the location of the combined banks' branches.
OceanFirst Chief Executive Christopher Maher told investors that the company will be analyzing branch locations with Ocean City Home Bank executives’ help. “We have not made any decisions about which branches will be the best to continue,” he said.
More broadly, OceanFirst’s Maher said he is upbeat on the South Jersey market. “We continue to be favorably impressed with the overall market in South Jersey,” he said, adding that in terms of population and deposits, the South Jersey region is on a par with the state of Connecticut. “We think there’s a lot more to Southern Jersey than Atlantic City.”
Ocean City Home Bank’s low exposure to the gambling industry and its “pristine” asset quality – thanks to its conservative lending – made it an attractive purchase, according to a presentation OceanFirst made to investors.
Shares in Ocean Shore Holding Co, the parents of Ocean City Home Bank, jumped about 25 percent in morning trading, from a Tuesday close of $16.99. The purchase price of about $22.47 a share represented a 32-percent premium to Tuesday’s closing price.
OceanFirst will pay for the purchase with cash and stock, according to the press release.