Nov. 1 — OceanFirst Financial Corp., parent company of OceanFirst Bank N.A., Red Bank, N.J., and Capital Bank of New Jersey, Vineland, jointly announced a definitive agreement pursuant to which Capital Bank will merge into OceanFirst Bank in an all-stock transaction. The transaction is valued at approximately $31.33 per Capital Bank common share or approximately $80 million in the aggregate (including options) based on OceanFirst’s closing stock price of $25.06 as of Oct. 25.
Capital Bank serves the southern New Jersey and greater Philadelphia metro markets through four branches located in Cumberland, Gloucester and Atlantic counties, and a loan production office in Burlington County.
Under the terms of the merger agreement, which has been unanimously approved by the boards of directors of both companies, upon completion of the merger, shareholders of Capital Bank will be entitled to receive 1.25 shares of OceanFirst common stock for each share of Capital Bank common stock. The transaction is expected to close in the first quarter of 2019, subject to Capital Bank receiving the approval of its shareholders, receipt of all required regulatory approvals and fulfillment of other customary closing conditions.
Based on OceanFirst’s closing stock price on Oct. 25, the transaction value equates to 172 percent of Capital Bank’s Sept. 30 tangible book value, 8.1 percent premium to core deposits, 13.7x Capital Bank’s core trailing 12-months earnings, and 8x Capital Bank’s core trailing 12-months earnings with cost savings. Tangible book value per common share is expected to be diluted by approximately 1.4 percent at closing with a projected earnback period of approximately three years using the cross-over method.