OceanFirst Financial in Toms River, N.J., has agreed to buy Cape Bancorp in Cape May Court House, N.J.
The $2.6 billion-asset OceanFirst said in a press release Tuesday that it will pay $208.1 million, or $15 a share, in cash and stock for the $1.6 billion-asset Cape. The deal, which is expected to close in the summer, values Cape at 141% of its tangible book value.
Cape has $1.3 billion in deposits, $1.1 billion in loans and 22 branches. The company also has two loan offices in the Philadelphia area.
"This opportunity will provide additional scale that will enhance our core deposit franchise, including the significant deposit market share position in key central and southern New Jersey counties," Christopher Maher, OceanFirst's president and chief executive, said in the release. "These locations represent a complementary market extension of our New Jersey network, providing a low-cost core deposit funding base."
OceanFirst said the acquisition will likely dilute its tangible book value per common by 6.4%; it should take the company 3.5 years to earn the dilution back. The transaction is expected to boost OceanFirst's earnings per share by 13% in 2017.
OceanFirst said expects to incur pretax merger costs of about $15.5 million, though it also plans to cut Cape's noninterest expenses by 33%, or $12.2 million a year.
Michael Devlin, Cape's president and CEO, will join OceanFirst's board.
Sandler O'Neill and Skadden, Arps, Slate, Meagher & Flom advised OceanFirst. Raymond James and Luse Gorman advised Cape.