Benzinga | Aug 4, 2021 05:30PM EDT

First Bank and OceanFirst Bank Announce Definitive Agreement for First Bank to Acquire Two Branch Locations in Central New Jersey Region

First Bank (NASDAQ:FRBA) and OceanFirst Bank, N.A. ("OceanFirst Bank"), the banking subsidiary of OceanFirst Financial Corp. ("OceanFirst") (NASDAQ:OCFC), today announced the execution of a definitive agreement whereby First Bank will acquire two New Jersey branch locations from OceanFirst Bank. The terms of the agreement provide for First Bank to acquire the owned premises and equipment, all deposits associated with the branches, which totaled approximately $124 million as of June 30, 2021, as well as selected performing loans totaling approximately $14 million as of June 30, 2021. The assets will be acquired at book value except for the owned premises, which will be acquired at appraised value, and the deposits will be acquired for a premium of approximately $2.5 million. It is expected that the current staff of the branches will become employees of First Bank. The two branches will continue operating as OceanFirst Bank branches until the transaction is approved and completed. The transaction is subject to regulatory approval and is expected to be completed during the fourth quarter of 2021.

Located in Flemington and Monroe, the two branches will enhance First Bank's existing New Jersey footprint and further strengthen its presence along the New York City to Philadelphia corridor.

"This transaction enables First Bank to realize additional scale in our targeted service area and acquire long-term low-cost core funding 35% below our current cost of funding, along with providing an opportunity for long-term value creation," said Patrick L. Ryan, President and Chief Executive Officer. "We believe that the integration experience we have gained in recent years, along with the excellent relationships we maintain with regulators, will enable a seamless transition with minimal disruption for all customers."

OceanFirst Bank noted that the two branches are each located more than 10 miles from its existing branch franchise and the customers and employees can benefit from the closer geographic proximity to the First Bank New Jersey footprint. In addition, the transaction is consistent with OceanFirst's long-term retail banking strategy, which envisions a mix of robust digital and branch-based solutions tailored to the needs and convenience of customers, while optimizing the efficiency of the branch portfolio.

Boenning & Scattergood, Inc. acted as financial advisor to First Bank. Troutman Pepper provided legal counsel to First Bank and Luse Gorman, PC provided legal counsel to OceanFirst Bank.