OceanFirst Financial Corp.’s Merger Agreements With Two River Bancorp and Country Bank Holding Company, Inc.


Piper Jaffray & Co. served as financial advisor to OceanFirst and Skadden, Arps, Slate, Meagher & Flom LLP served as OceanFirst’s legal counsel. Boenning & Scattergood, Inc. served as financial advisor to Two River and Stevens & Lee served as Two River’s legal counsel. Sandler O’Neill & Partners, L.P. served as financial advisor to CYHC and Luse Gorman, PC served as CYHC’s legal counsel.

OceanFirst Financial Corp. (NASDAQ:OCFC), parent company of OceanFirst Bank N.A., finalized the concurrent signing of two separate definitive merger agreements. Under one agreement, Two River Bancorp (NASDAQ:TRCB), parent company of Two River Community Bank, headquartered in Tinton Falls, New Jersey, will merge into OceanFirst. Upon completion of the Two River merger, Two River Community Bank will merge into OceanFirst Bank. Under the other agreement, Country Bank Holding Company, Inc. (OTC PINK:CYHC) (“CYHC”), parent company of Country Bank, headquartered in New York, New York, will merge into OceanFirst. Upon completion of the CYHC merger, Country Bank will merge into OceanFirst Bank.

Based on June 30, 2019 results and the impact of purchase accounting, the combined company is expected to have pro forma approximately $9.9 billion in assets, $7.5 billion in loans and $7.7 billion in deposits. The proposed acquisition of CYHC would expand OceanFirst’s retail branch footprint into metropolitan New York. The two transactions combined are expected to result in approximately 8% earnings per share accretion in 2021 (the first full year of fully phased-in synergies) and approximately 5% tangible book value per share dilution at closing with a projected earnback period of less than 4 years using the cross-over method.

Founded in 2000, Two River is a full-service community bank operating 14 branch locations and 2 loan production offices in Monmouth, Ocean, Union and Essex Counties. At June 30, 2019, Two River had $1.2 billion in assets, $953.1 million in loans, $972.6 million in deposits and $121.4 million in shareholders’ equity. Under the terms of the Two River merger agreement, upon completion of the merger, shareholders of Two River will be entitled to receive 0.6663 shares of OceanFirst common stock and $5.375 in cash for each outstanding share of Two River common stock. Based on OceanFirst’s closing stock price on August 8 of $23.14, the Two River transaction is valued at approximately $20.79 per Two River common share or approximately $182.8 million in the aggregate.

CYHC was founded in 1988 and provides banking services to small businesses and individuals through its network of five Country Bank branches located in the metropolitan New York market. At June 30, 2019, CYHC had $783.4 million in assets, $592.4 million in loans, $649.7 million in deposits and $67.5 million in shareholders’ equity. Under the terms of the CYHC merger agreement, upon completion of the merger, shareholders of CYHC will be entitled to receive 2,000 shares of OceanFirst common stock for each outstanding share of CYHC common stock. Based on OceanFirst’s closing stock price on August 8 of $23.14, the CYHC transaction is valued at approximately $46,280.00 per CYHC common share or approximately $102.2 million in the aggregate.

Each of the Two River and CYHC merger agreements have been unanimously approved by the OceanFirst Board of Directors. The Two River Board of Directors has unanimously approved the Two River merger agreement. The Two River merger is expected to close in the first quarter of 2020, subject to Two River receiving the requisite approval of its shareholders, receipt of all required regulatory approvals, and fulfillment of other customary closing conditions. The CYHC Board of Directors has unanimously approved the CYHC merger agreement. The CYHC merger is expected to close in the first quarter of 2020, subject to CYHC receiving the requisite approval of its shareholders, receipt of all required regulatory approvals, and fulfillment of other customary closing conditions. Neither transaction is conditioned on the completion of the other.

The Skadden team includes: Financial Institutions M&A partner David Ingles and associates Matthew Nemeroff and Makala Kaupalolo; Financial Institutions Regulation and Enforcement partner Brian Christiansen (Washington D.C.), counsel Collin Janus (Washington, D.C.) and associate Dewey Bennett; Executive Compensation and Benefits partner Erica Schohn and counsel Shalom Huber; Tax partner Chase Wink and associate Nazmiye Gokcebay; and Labor and Employment associate Grace Jun.

Involved fees earner: Dewey Bennett – Skadden Arps Slate Meager & Flom; Brian Christiansen – Skadden Arps Slate Meager & Flom; Nazmiye Gokcebay – Skadden Arps Slate Meager & Flom; Shalom Huber – Skadden Arps Slate Meager & Flom; David Ingles – Skadden Arps Slate Meager & Flom; Collin Janus – Skadden Arps Slate Meager & Flom; Grace Jun – Skadden Arps Slate Meager & Flom; Makala Kaupalolo – Skadden Arps Slate Meager & Flom; Matthew Nemeroff – Skadden Arps Slate Meager & Flom; Erica Schohn – Skadden Arps Slate Meager & Flom; Chase Wink – Skadden Arps Slate Meager & Flom;

Law Firms: Skadden Arps Slate Meager & Flom;

Clients: OceanFirst Financial;