OceanFirst Financial Corp. (“OceanFirst”) (NASDAQ:OCFC),
headquartered in Toms River, New Jersey, and Ocean Shore Holding
Co. (“Ocean Shore”) (NASDAQ:OSHC), headquartered in Ocean City, New
Jersey, jointly announced today that they have entered into a
definitive agreement and plan of merger pursuant to which Ocean
Shore, the holding company and parent of Ocean City Home Bank, will
merge with and into OceanFirst, the holding company and parent of
OceanFirst Bank. Ocean City Home Bank will also merge with and into
OceanFirst Bank. The transaction is valued at approximately $22.47
per Ocean Shore common share or approximately $145.6 million in the
aggregate.
With roots dating back to 1887, Ocean City Home
Bank is one of Southern New Jersey’s oldest and largest community
banks with approximately $1.1 billion in total assets, $818 million
in total deposits and $796 million in gross loans. Ocean Shore
operates 11 full-service banking centers in Atlantic and Cape May
Counties. Following OceanFirst’s recently completed acquisition of
Cape Bancorp, Inc., the proposed transaction will further enrich
OceanFirst’s distribution, scale and core deposit funding base, as
it presents an exceptionally rare opportunity to combine two
well-established, like-minded New Jersey franchises.
OceanFirst will strengthen its position as the
largest bank headquartered in Central and Southern New Jersey and
rank as the fourth largest New Jersey based banking institution by
deposit market share. Based on financial information as of
March 31, 2016, and pro forma for the Cape transaction, the
combined institution would have approximately $5.3 billion in total
assets, $4.0 billion in total deposits, $4.0 billion in gross loans
and 61 full-service banking locations.
Under the terms of the merger agreement, which
has been unanimously approved by the Boards of Directors of both
companies, upon completion of the merger, shareholders of Ocean
Shore common stock will be entitled to receive $4.35 in cash and
0.9667 shares of OceanFirst common stock for each share of Ocean
Shore common stock. The transaction is expected to close late
fourth quarter of 2016 or early first quarter of 2017, subject to
each company receiving the required approval of its shareholders,
receipt of all required regulatory approvals and fulfillment of
other customary closing conditions.
The purchase price equates to 132% of Ocean
Shore’s March 31, 2016 tangible book value, 4.9% premium to core
deposits, 20.1x Ocean Shore’s trailing twelve month earnings, and
9.3x Ocean Shore’s estimated 2017 (forward) earnings (assuming
fully phased-in cost savings). Tangible book value per common share
is expected to be diluted by approximately 3.1% at closing with a
projected earnback period of approximately 3.7 years using the
cross-over1 method.
The transaction includes strong earnings per
share accretion of approximately 5.4% in 2018 (the first full year
of combined operations and synergies) in addition to the projected
double-digit earnings accretion from the Cape Bancorp, Inc.
transaction. The combined company will be structured to support
enhanced financial return targets of greater than 1.05% return on
average assets and greater than 13.0% return on average tangible
common equity along with remaining “well-capitalized” under
regulatory guidelines.
OceanFirst expects to incur pre-tax merger and
integration costs of approximately $19 million and to achieve cost
savings of approximately 53% of Ocean Shore’s non-interest expenses
or $12.4 million if 2017 cost savings were to be fully phased
in.
“We are excited to welcome Ocean City Home Bank
customers and employees to the OceanFirst family. Our two
institutions have developed our respective community banks with a
consistent vision, effectively sharing similar histories.
With our mutual understanding of our community bank business models
and local market focus, OceanFirst and Ocean Shore can leverage
this synergy to create one of the most highly valued banking
institutions in the Mid-Atlantic region,” said Christopher D.
Maher, President and Chief Executive Officer
of OceanFirst.
Mr. Maher further commented, “This transaction
represents a unique opportunity for OceanFirst to capitalize on its
recent entry into Southern New Jersey through the acquisition of an
extremely valuable deposit franchise coupled with significant
efficiencies and low execution risk. Ocean Shore’s residential
focus creates strategic optionality for prudent commercial real
estate growth with strong cash flows. We look forward to
continuing to provide extraordinary customer care to all OceanFirst
and Ocean Shore customers, as well as providing enhanced value to
our stockholders.”
Steven E. Brady, President and Chief Executive
Officer of Ocean Shore, echoed Mr. Maher’s comments stating, “The
combination with OceanFirst provides several strategic benefits for
all Ocean Shore stakeholders, including improved operating scale,
access to additional product lines and increased shareholder
liquidity.” Mr. Brady added that “while this merger
solidifies the pro forma bank’s Jersey Shore dominance, it also
provides Ocean Shore the opportunity to capitalize on OceanFirst’s
considerable expansion efforts toward the demographically
attractive Philadelphia metro market - a natural market extension
for Ocean Shore’s franchise as well.”
To provide for additional representation for
OceanFirst’s Southern New Jersey market area, upon completion of
the transaction, three current Ocean Shore Board members are
expected to join the OceanFirst Board, including Mr. Brady.
Mr. Brady will also be named Vice Chairman for the Southern
New Jersey Division, to serve in an advisory capacity for
OceanFirst, where he will provide insight from his extensive
banking and professional experience.
Piper Jaffray & Co. is serving as financial
advisor to OceanFirst and rendered a fairness opinion to
OceanFirst’s Board of Directors in connection with the transaction.
Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal
counsel to OceanFirst. Sandler O’Neill + Partners, L.P. is serving
as financial advisor to Ocean Shore and rendered a fairness opinion
to Ocean Shore’s Board of Directors in connection with the
transaction. Kilpatrick Townsend & Stockton LLP is serving as
legal counsel to Ocean Shore.
Conference Call
OceanFirst will host a conference call to
discuss the transaction on Wednesday, July 13, 2016 at 11:00 a.m.
Eastern Time. The direct dial number for the call is
1-888-338-7143. The presentation will be available for download by
visiting OceanFirst’s web address: www.oceanfirst.com –
Investor Relations. For those unable to participate in the
conference call, a replay will be available. To access the
replay, dial 1-877-344-7529, Replay Conference Number 10089728 from
one hour after the end of the call until October 13, 2016. The
conference call will also be available 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 software. A copy of the slide presentation will
also be available on the website by going to Investor Relations and
clicking on Presentations.
About OceanFirst Financial
Corp.
OceanFirst Financial Corp.’s subsidiary,
OceanFirst Bank, founded in 1902, is a community bank with $4.2
billion in assets and 50 branches located throughout Central and
Southern New Jersey. OceanFirst Bank delivers commercial and
residential financing solutions, wealth management, and deposit
services and is the largest and oldest community-based financial
institution headquartered in Ocean County, New Jersey.
About Ocean Shore Holding
Co.
Ocean Shore Holding Co. (OSHC) is the holding
company for Ocean City Home Bank. Founded in 1887, Ocean City Home
Bank operates 11 branch offices throughout Cape May and Atlantic
Counties in New Jersey. Ocean City Home Bank places a strong
emphasis on obtaining deposits by offering checking account
products and services for consumers, businesses, municipalities and
local boards of education. Additionally, Ocean City Home Bank
provides savings accounts designed to fit any need. Ocean City Home
Bank also provides a full menu of residential, consumer and
commercial lending options. The goal at Ocean City Home Bank is to
develop a strong relationship with customers by continually
offering innovative products and services that will fill all their
financial needs. Ocean City Home Bank works diligently every day to
earn its reputation as “the bank people trust.”
Forward-Looking Statements
This joint press release contains
forward-looking statements. These forward-looking statements may
include: management plans relating to the transaction; the expected
timing of the completion of the transaction; the ability to
complete the transaction; the ability to obtain any required
regulatory, shareholder or other approvals; any statements of the
plans and objectives of management for future operations, products
or services, including the execution of integration plans relating
to the transaction and OceanFirst’s recently completed acquisition
of Cape Bancorp, Inc.; any statements of expectation or belief;
projections related to certain financial metrics; and any
statements of assumptions underlying any of the foregoing.
Forward-looking statements are typically identified by words such
as “believe,” “expect,” “anticipate,” “intend,” “outlook,”
“estimate,” “forecast,” “project” and other similar words and
expressions. Forward-looking statements are subject to numerous
assumptions, risks and uncertainties, which change over time and
are beyond our control. Forward-looking statements speak only as of
the date they are made. Neither OceanFirst nor Ocean Shore assumes
any duty and does not undertake to update forward-looking
statements. Because forward-looking statements are subject to
assumptions and uncertainties, actual results or future events
could differ, possibly materially, from those that OceanFirst or
Ocean Shore anticipated in its forward-looking statements and
future results could differ materially from historical performance.
Factors that could cause or contribute to such differences include,
but are not limited to, those included under Item 1A “Risk Factors”
in OceanFirst’s Annual Report on Form 10-K, those included under
Item 1A “Risk Factors” in Ocean Shore’s Annual Report on Form 10-K,
those disclosed in OceanFirst’s and Ocean Shore’s respective other
periodic reports filed with the Securities and Exchange Commission
(the “SEC”), as well as the possibility: that expected benefits of
the transaction and the Cape acquisition may not materialize in the
timeframe expected or at all, or may be more costly to achieve;
that the transaction may not be timely completed, if at all; that
prior to the completion of the transaction or thereafter,
OceanFirst’s and Ocean Shore’s respective businesses may not
perform as expected due to transaction-related uncertainty or other
factors; that the parties are unable to successfully implement
integration strategies relating to the transaction or the Cape
acquisition; that required regulatory, shareholder or other
approvals are not obtained or other customary closing conditions
are not satisfied in a timely manner or at all; reputational risks
and the reaction of the companies’ shareholders, customers,
employees and other constituents to the transaction; and diversion
of management time on merger-related matters. For any
forward-looking statements made in this joint press release or in
any documents, OceanFirst and Ocean Shore claim the protection of
the safe harbor for forward-looking statements contained in the
Private Securities Litigation Reform Act of 1995.
Annualized, pro forma, projected and estimated
numbers are used for illustrative purpose only, are not forecasts
and may not reflect actual results.
Additional Information about the
Transaction
This joint press release is being made in
respect of the proposed transaction involving OceanFirst and Ocean
Shore. This material is not a solicitation of any vote or
approval of OceanFirst’s or Ocean Shore’s shareholders and is not a
substitute for the joint proxy statement/prospectus or any other
documents which OceanFirst and Ocean Shore may send to their
respective shareholders in connection with the proposed
transaction. This joint press release shall not constitute an offer
to sell or the solicitation of an offer to buy any securities.
In connection with the proposed transaction,
OceanFirst intends to file a registration statement on Form S-4
containing a joint proxy statement/prospectus and other documents
regarding the proposed transaction with the SEC. Before
making any voting or investment decision, the respective investors
and shareholders of OceanFirst and Ocean Shore are urged to
carefully read the entire joint proxy statement/prospectus when it
becomes available and any other relevant documents filed by either
company with the SEC, as well as any amendments or supplements to
those documents, because they will contain important information
about OceanFirst, Ocean Shore and the proposed
transaction. Investors and security holders are also urged
to carefully review and consider each of OceanFirst’s and Ocean
Shore’s public filings with the SEC, including but not limited to
their Annual Reports on Form 10-K, their proxy statements, their
Current Reports on Form 8-K and their Quarterly Reports on Form
10-Q. When available, copies of the joint proxy
statement/prospectus will be mailed to the respective shareholders
of OceanFirst and Ocean Shore. When available, copies of the joint
proxy statement/prospectus also may be obtained free of charge at
the SEC's web site at http://www.sec.gov, or by directing a request
to OceanFirst Financial Corp., 975 Hooper Avenue, Toms River, New
Jersey 08753, Attn: Christopher D. Maher or Ocean Shore Holding
Co., 1001 Asbury Avenue, Ocean City, NJ 08226, Attn: Steven E.
Brady, President and Chief Executive Officer.
Participants in the SolicitationOceanFirst,
Ocean Shore and certain of their respective directors and executive
officers, under the SEC’s rules, may be deemed to be participants
in the solicitation of proxies of OceanFirst’s and Ocean Shore’s
shareholders in connection with the proposed transaction.
Information about the directors and executive officers of
OceanFirst and their ownership of OceanFirst common stock is set
forth in the proxy statement for OceanFirst’s 2016 Annual Meeting
of Stockholders, as filed with the SEC on Schedule 14A on April 26,
2016. Information about the directors and executive officers of
Ocean Shore and their ownership of Ocean Shore’s common stock is
set forth in the proxy statement for Ocean Shore’s 2016 Annual
Meeting of Shareholders, as filed with the SEC on Schedule 14A on
April 19, 2016. Additional information regarding the interests of
those participants and other persons who may be deemed participants
in the solicitation of proxies of OceanFirst’s or Ocean Shore’s
shareholders in connection with the proposed transaction may be
obtained by reading the joint proxy statement/prospectus regarding
the proposed transaction when it becomes available. Once available,
free copies of the joint proxy statement/prospectus may be obtained
as described in the preceding paragraph.
1 Calculated as the time period which OceanFirst’s pro
forma tangible book value per share equals OceanFirst’s projected
stand-alone tangible book value per share.
Contacts:
For OceanFirst Financial Corp.:
Christopher D. Maher, 732-240-4500
President and Chief Executive Officer
or
For Ocean Shore Holding Co.:
Steven E. Brady, 609-399-0012
President and Chief Executive Officer
Ocean Shore Holding Co. (NASDAQ:OSHC)
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