The $ 186 million acquisition will increase OceanFirst’s assets by 17%, for a post-merger total of nearly $ 13.4 billion as of September 30. These assets include $ 9.3 billion in loans and $ 11.2 billion in deposits. Once the deal is closed, it is expected to result in an increase in earnings per share of around 10% in 2023.
The merger has been approved by the board of directors of OceanFirst and Partners, but is subject to regulatory and shareholder approval. Pending approval, the transaction is expected to close in the first half of 2022.
The key to this agreement lies in Partner’s 18 banks through three subsidiaries: Bank of Delmarva (Maryland and Delaware), Virginia Partners (Virginia) and Liberty bell Bank (Philadelphia / South Jersey area). Banks renamed as OceanFirst would accelerate the financial institution’s growth plans in the Baltimore and Washington, DC areas.
“We have been looking at the geographic area for a long time as we expand around the Cape May, NJ market including the Philadelphia and DC area, and when this opportunity presented itself it made sense.” OceanFirst CEO Christopher Maher told the Delaware Business Times. “The partners were looking to diversify and take a step into technology, and when the conversations started earlier this year, the more it made sense to strike a deal.”
OceanFirst has about $ 19 million in commercial loans outstanding in Baltimore, according to the Baltimore Business Journal, and the acquisition of Partners will give it its first physical location in Maryland. Over the past seven years, OceanFirst has acquired seven banks and consolidated its presence from Boston to DC
Meanwhile, the 125-year-old Bank of Delmarva established Virginia Partners in 2008. They have a total of $ 1.11 billion in loans, a 46% increase since 2017, according to a presentation to investors at ‘OceanFirst. Bank of Delmarva represents $ 693 million in loans on the Delmarva peninsula.
“We are delighted to partner with OceanFirst in this merger,” Partners President and COO John Breda said in a prepared statement. “As a member of a larger and more diverse institution, our employees will have additional opportunities to grow and develop, our clients will have better access to extensive banking services and our shareholders should benefit from our increased profitability, our liquidity and our increased market capitalization. “
Looking to the future, Maher told the Delaware Business Times he believes OceanFirst’s arrival in Delaware and Maryland will bring digital innovation fueled by the ever-growing desire to do daily business remotely.
“Our mobile transactions increased 15% to 20% last year and we can directly link that to the COVID pandemic and the interest in doing business remotely,” he said.
OceanFirst has also used other services that more local banks may not have at this point, such as e-wallets, low-investment ETFs, and Nest Egg, an artificial intelligence-based investment tool. .
Earlier this year, OceanFirst announced the closure of 20 of its 58 branches, a move spurred by more online banking customers, Maher noted. Online account openings exceeded average branch openings by 700% over those opened at a branch, and Maher expects this to continue to accelerate with video banking options.
OceanFirst introduced its first video kiosk in Jackson Township, NJ, in 2014, when the technology department had seven employees. Today, the company operates 40 machines and has multiplied its digital workforce by 12.
“It’s interesting how ubiquitous video has become, whether you’re calling a meeting or going Skype with your grandmother,” Maher said. “The South Delaware market is similar to the Jersey Shore market in that they both have a strong retiree community, which is where we are seeing growth in the use of video. We have completed over 250,000 transactions since we introduced the video kiosk.
With over 1,000 employees, OceanFirst will work with employees of partner-affiliated banks to continue working at OceanFirst, pending regulatory approvals. The merger is expected to save 40% of partners’ spending bases, according to the company’s investor report.
Maher said he expected most customer-facing employees to be offered the option of staying at OceanFirst. In its previous acquisitions, around 70% of employees remained at OceanFirst after the merger.
“We have not planned many layoffs, but we need to reassess our staff. We expect a small reduction in the workforce based on attrition, and we are working hard to minimize it, ”said Maher. “We currently have 65 vacancies even without the acquisition, and we will endeavor to match our employees to any vacant positions available.”