Magazine article American Banker

N.J. Bank Deal a Harbinger?

Magazine article American Banker

N.J. Bank Deal a Harbinger?

Article excerpt

Byline: Robert Barba

In another sign of life for the bank mergers-and-acquisitions market, OceanFirst Financial Corp. has agreed to buy another New Jersey company, Central Jersey Bancorp, for $68.4 million of stock.

The deal, announced Wednesday, is OceanFirst's first for another banking company but may not be its last.

John R. Garbarino, the $1.9 billion-asset OceanFirst's chairman, president and chief executive officer, said his Toms River company is preparing a shelf registration for a sale of equity and debt. Though it plans to use the proceeds to buttress its balance sheet, some of the money may go toward repaying the $38.3 million it received from the Treasury Department's Troubled Asset Relief Program or to making further deals, he said.

"We haven't done much in the way of acquisitions. We've looked at them and put out bids, but we are disciplined pricers," Garbarino said. "But all financial stocks are depressed right now, and there is a lot of value there."

He would not say how much OceanFirst plans to raise through the offering but said the registration could be filed next week.

Any acquisition would have to add value to OceanFirst, Garbarino said. "We are not looking to run the state of New Jersey."

By buying the $576 million-asset Central Jersey in Oakhurst, OceanFirst would increase its retail network by more than half, to 36 branches. It said it expects the deal to boost profits next year, after a 35% reduction of Central Jersey's operating expenses.

"We've known the Central Jersey team for years, and we competed against them," Garbarino said. "There is very little direct overlap."

Central Jersey shareholders would get half a share of OceanFirst for each of their shares. The price equals 90% of book value and 149% of tangible book value. The deal is expected to close by yearend. …

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