First Bank in Hamilton, N.J., has agreed to buy two New Jersey branches from OceanFirst Financial in Red Bank, N.J.
The $2.4 billion-asset First Bank said in a press release Wednesday that it the branches are located in Flemington and Monroe. First Bank will gain $124 million of deposits and $14 million of loans with an average weighted yield of 3.79%. The acquisition is expected to close in the fourth quarter.
The deposits will be purchased at a 2% premium, or roughly $2.5 million. The assets will be acquired at book value, except for the owned premises, which will be acquired at appraised value.
It is expected that the current staff of the branches will become First Bank employees.
“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,” Patrick Ryan, the bank’s president and CEO, said in the release.
“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,” Ryan added.
First Bank said the acquisition should be 6.74% accretive to earnings per share when fully phased in. It should take about two years for First Bank to earn back an expected 1.25% dilution to its tangible book value per share.
Boenning & Scattergood and Troutman Pepper advised First Bank. Luse Gorman advised OceanFirst.