OceanFirst Financial in Toms River, N.J., has agreed to buy Colonial American Bank in Middletown, N.J.
The $2.4 billion-asset OceanFirst will pay about $11.3 million for the $144 million-asset Colonial. The deal, priced at 116% of the seller's tangible book value, is expected to close by the end of this year.
OceanFirst said in a press release Wednesday that the purchase will be 2.5% accretive of its earnings per share in 2016. The company said it should take less than two years to earn back any dilution to its tangible book value.
The move allows OceanFirst to expand into the New Jersey towns of Middletown and Shrewsbury, where Colonial has two branches, $127 million in loans and $129 million in deposits.
"Colonial's commercial lending business offers enhanced loan portfolio diversification and the opportunity to expand these commercial banking relationships by providing wealth management solutions and residential loan services," Christopher Maher, OceanFirst's president and chief executive, said in the release.
Sterne, Agee & Leach and Windels, Marx, Lane & Mittendorf advised OceanFirst. Sandler O'Neill and Giordano, Halleran & Ciesla advised Colonial.
