SEAFORD — OceanFirst Financial Corp., a growing New Jersey bank, has announced plans to buy Partners Bancorp, the parent company of Seaford-based Bank of Delmarva.
The $186 million acquisition will grow OceanFirst’s assets by 17%, totalling a post-merger of nearly $13.4 billion as of Sept 30 figures. Those assets include $9.3 billion in loans and $11.2 billion in deposits. Once the deal closes, it is expected to result in roughly 10% earnings per share accretion in 2023.
The merger has been approved by both OceanFirst and Partners board of directors but is subject to approval from regulators and stockholders. Pending approval, the transaction is expected to close in the first half of 2022.
Key to this deal is Partner’s 18 banks through three subsidiaries: the Bank of Delmarva (Maryland and Delaware), Virginia Partners (Virginia) and Liberty Bell Bank (Philadelphia/South Jersey region). The banks rebranded under the OceanFirst name would accelerate the financial institution’s growth plans into the Baltimore and Washington, D.C., regions.
“We have long looked at the geographic area as we have grown around the Cape May, N.J., market, including the Philadelphia and D.C. area, and when this opportunity came up it made sense,” OceanFirst CEO Christopher Maher told the Delaware Business Times. “Partners were looking to diversify and make a move in technology, and when conversations started earlier this year, the more it made sense to engage in a deal.”
OceanFirst has approximately $19 million in outstanding commercial loans in Baltimore, according to the Baltimore Business Journal, and the Partners acquisition will give it its first brick-and-mortar location in Maryland. In the last seven years, OceanFirst has acquired seven banks and solidified its presence from Boston to D.C.
Meanwhile, the 125-year-old Bank of Delmarva established Virginia Partners in 2008. They have a combined $1.11 billion in loans, showing a 46% increase since 2017, according to an OceanFirst investor presentation. The Bank of Delmarva represents $693 million in loans on the Delmarva peninsula.
“We are thrilled to be partnering with OceanFirst in this merger,” Partners President and Chief Operating Officer John Breda said in a prepared statement. “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.”
Looking to the future, Maher told the Delaware Business Times that he believes that 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 went up 15% to 20% last year and we can directly link that to the COVID pandemic and the interest to do business remotely,” he said.
OceanFirst also has tapped into 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 investor tool.
Earlier this year, OceanFirst announced it will close 20 of its 58 branches, a decision spurred by more customers banking online, Maher noted. Online account openings exceeded average branch openings by 700% compared to those opened in a branch, and Maher expects that to continue to accelerate with video banking options.
OceanFirst introduced its first video teller machine in Jackson Township, N.J., in 2014 when the technology department had seven employees. Today, the company operates 40 machines and has boosted its digital staff 12 times over.
“It’s interesting to see how ubiquitous video has become, whether you’re calling into a meeting or Skyping with your grandmother,” Maher said. “The southern Delaware market is similar to coastal New Jersey in that they both have a strong retiree community, which is where we do see a growth in the video use. We’ve completed more than 250,000 transactions since we introduced the video teller machine.”
With more than 1,000 employees, OceanFirst will work with employees at Partners-affiliated banks on continuing employment at OceanFirst, pending regulatory approvals. The merger is expected to save 40% of Partners’ expense bases, according to the company’s investor report.
Maher said he expected that most customer-facing employees will be offered opportunities to stay on with OceanFirst. In its previous acquisitions, approximately 70% of employees continued with OceanFirst after the merger.
“We do not have a planned number of lay-offs, but we do need to re-evaluate our staff. We do expect a small reduction in the workforce based on attrition, and we work hard to minimize it,” Maher said. “We currently have 65 unfilled positions even without the acquisition, and we will work to match our employees to any open job available.”
