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OceanFirst Financial Corp. and Partners Bancorp Announce Merger Agreement
November 8, 2021
Source: GlobeNewswire
Accelerates OceanFirst’s Strategic Expansion into Attractive Baltimore / Washington D.C. Region and Adds High-Growth, Commercial-Oriented Franchise with Stable Deposit Base
RED BANK, N.J. and SALISBURY, Md., Nov. 04, 2021 (GLOBE NEWSWIRE) -- OceanFirst Financial Corp. (NASDAQ:OCFC) (“OceanFirst”), parent company of OceanFirst Bank N.A. (“OceanFirst Bank”), and Partners Bancorp (NASDAQ: PTRS) (“Partners”), parent company of The Bank of Delmarva (and its division, Liberty Bell Bank), headquartered in Seaford, Delaware, and Virginia Partners Bank (and its division Maryland Partners Bank), headquartered in Fredericksburg, Virginia, jointly announced today that they have entered into a definitive agreement and plan of merger pursuant to which Partners will merge into OceanFirst, with OceanFirst surviving. Upon completion of the Partners merger, The Bank of Delmarva and Virginia Partners Bank will each successively merge into OceanFirst Bank, with OceanFirst Bank surviving each bank merger. Based on OceanFirst’s closing stock price on November 3, 2021 of $23.21, the transaction is valued at approximately $10.38 per Partners common share, or approximately $186 million in the aggregate.
Based on September 30, 2021 results and the impact of purchase accounting, the combined company is expected to have, pro forma, approximately $13.5 billion in assets, $9.3 billion in loans and $11.2 billion in deposits. The proposed acquisition of Partners would expand OceanFirst’s footprint into Delaware, Maryland, Virginia and the Washington D.C. metro area. The transaction is expected to result in approximately 10% earnings per share accretion in 2023 (the first full year of fully phased-in synergies).
Partners is the multi-bank holding company that owns The Bank of Delmarva and Virginia Partners Bank. At September 30, 2021, Partners had $1.64 billion in assets, $1.11 billion in loans, $1.44 billion in deposits, and $139.5 million in stockholders’ equity.
Under the terms of the merger agreement, which has been approved by the Boards of Directors of both companies, in exchange for each share of Partners common stock, Partners stockholders may elect to receive $10.00 in cash or 0.4512 shares of OceanFirst common stock. The merger agreement provides that only up to 40% of Partners common stock will be exchanged for cash and the remaining shares exchanged for OceanFirst common stock, subject to proration. Assuming 80% of the shares of Partners common stock are converted into OceanFirst common stock and 20% of the shares of Partners common stock are converted into cash, the aggregate consideration to be paid in exchange for the Partners common stock will consist of approximately 6.5 million shares of OceanFirst common stock and $37 million in cash. Certain stockholders of Partners owning in the aggregate approximately 44% of Partners’ outstanding common stock have entered into support agreements with OceanFirst pursuant to which they have agreed to vote in favor of the merger agreement.
Christopher D. Maher, OceanFirst Chairman and Chief Executive Officer commented on the announcement, “The banks that comprise Partners Bancorp are each strong organizations operating community commercial banking models and have demonstrated strong growth in their markets. Joining the OceanFirst family will allow these highly professional commercial bankers to continue to build new relationships while leveraging the technology and operating efficiency offered by our Company. The addition of the customers and employees of The Bank of Delmarva and Virginia Partners Bank, along with their respective operating divisions of Liberty Bell Bank and Maryland Partners Bank, joining our OceanFirst team provides an exciting opportunity to expand our digitally-focused commercial banking franchise further into Delaware, Maryland, Virginia, and the Washington D.C. metro area.” Maher added, “We believe the foundation and core values of OceanFirst are consistent with the teams at the Partners Bancorp banks and together we can achieve enhanced value for our stockholders while delivering an extraordinary experience for our customers.”
“This partnership creates a powerful and innovative financial services provider better able to serve its clients and communities of today and tomorrow,” said Lloyd B. Harrison, III, Chief Executive Officer of Partners. “The team at OceanFirst has built and maintains a high quality banking franchise, and there is no better team with which to unite to deliver community-style banking and to capitalize on the opportunities presented by an evolving industry.”
“We are thrilled to be partnering with OceanFirst in this merger. As part of a larger and more diverse institution, our employees will have additional opportunities to grow and develop, our customers will have greater access to expanded banking services, and our shareholders should benefit from our increased profitability, liquidity, and increased market capitalization,” said John W. Breda, President and Chief Operating Officer of Partners.
The merger is expected to close in the first half of 2022, subject to Partners receiving the requisite approval of its stockholders, receipt of all required regulatory approvals, and fulfillment of other customary closing conditions.
Raymond James & Associates, Inc. served as financial advisor to OceanFirst and Skadden, Arps, Slate, Meagher & Flom LLP served as OceanFirst’s legal counsel. Piper Sandler Companies served as financial advisor to Partners and Troutman Pepper Hamilton Sanders LLP served as Partners’ legal counsel.
Conference Call, Webcast, and Investor Presentation
OceanFirst will host a conference call to discuss the proposed transaction on Thursday, November 4, 2021 at 11:00 a.m. Eastern Time. Christopher D. Maher, OceanFirst Financial Corp. Chairman and Chief Executive Officer, will host the call. The conference call dial-in number is 1-844-200-6205 with an access code: 261782. For those unable to participate in the conference call, a replay will be available. To access the replay, dial 1-866-813-9403 with an access code: 968870 from one hour after the end of the call until February 7, 2022. A copy of the slide presentation will also be available on the website by going to Investor Relations and clicking on Events & Presentations. The conference call will also be available (listen-only) via the Internet by accessing OceanFirst’s Web address: www.oceanfirst.com – Investor Relations. Web users should go to the site at least fifteen minutes prior to the call to register, download and install any necessary audio software.
About OceanFirst Financial Corp.
OceanFirst Financial Corp.’s subsidiary, OceanFirst Bank N.A., founded in 1902, is a $11.8 billion regional bank providing financial services throughout New Jersey and in the major metropolitan markets of Philadelphia, New York, Baltimore, Washington D.C., and Boston. OceanFirst Bank delivers commercial and residential financing, treasury management, trust and asset management, and deposit services and is one of the largest and oldest community-based financial institutions headquartered in New Jersey. To learn more about OceanFirst, go to www.oceanfirst.com.
About Partners Bancorp
Partners Bancorp is the holding company for The Bank of Delmarva and Virginia Partners Bank. The Bank of Delmarva commenced operations in 1896. The Bank of Delmarva’s main office is in Seaford, Delaware and it conducts full service commercial banking through 12 branch locations in Maryland and Delaware, and three branches operating under the name Liberty Bell Bank in the South Jersey/Philadelphia metro market. The Bank of Delmarva focuses on serving its local communities, knowing its customers and providing superior customer service. Virginia Partners Bank, headquartered in Fredericksburg, Virginia was founded in 2008 and has three branches in Fredericksburg, Virginia. In Maryland, Virginia Partners Bank trades under the name Maryland Partners Bank (a division of Virginia Partners Bank) and operates a full-service branch and commercial banking office in La Plata, Maryland and a Loan Production Office in Annapolis Maryland. For more information, visit www.bankofdelmarvahb.com and www.vapartnersbank.com.
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