Attached files
| file | filename |
|---|---|
| 8-K/A - 8-K/A - OCEANFIRST FINANCIAL CORP | d224359d8ka.htm |
| EX-23.1 - EX-23.1 - OCEANFIRST FINANCIAL CORP | d224359dex231.htm |
EXHIBIT 99.4
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF FINANCIAL CONDITION AS OF MARCH 31, 2016 REFLECTING THE INTEGRATED MERGER
The following unaudited pro forma condensed combined statement of financial condition gives effect to the acquisition by OceanFirst Financial Corp. (“OceanFirst”) of Cape Bancorp, Inc. (“Cape”) using the acquisition method of accounting assuming the acquisition was consummated on March 31, 2016. Cape was acquired by OceanFirst on May 2, 2016.
| OceanFirst Financial Corp. (As Reported) |
Cape Bancorp, Inc. (As Reported) |
Adjustments to Reflect Acquisition of Cape Bancorp, Inc. |
OceanFirst Financial Corp. (Pro-forma) |
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| (Dollars in thousands) |
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| Assets |
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| Cash, due from banks and interest-bearing bank balances and interest-bearing time deposits |
$ | 34,261 | $ | 24,399 | $ | (39,076 | ) | (a) | $ | 19,584 | ||||||||
| Securities and Federal Home Loan Bank Stock |
422,346 | 268,255 | 361 | (b) | 690,962 | |||||||||||||
| Loans receivable, net |
1,996,993 | 1,172,028 | (12,482 | ) | (c) | 3,156,539 | ||||||||||||
| Mortgage loans held for sale |
3,386 | — | — | 3,386 | ||||||||||||||
| Other assets |
112,284 | 83,617 | (6,616 | ) | (d) | 189,285 | ||||||||||||
| Deferred tax asset |
16,786 | 11,496 | 11,602 | (e) | 39,884 | |||||||||||||
| Core deposit intangible |
310 | 845 | 2,873 | (f) | 4,028 | |||||||||||||
| Goodwill |
2,081 | 24,104 | 45,429 | (g) | 71,614 | |||||||||||||
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| Total assets |
$ | 2,588,447 | $ | 1,584,744 | $ | 2,091 | $ | 4,175,282 | ||||||||||
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| Liabilities And Stockholders’ Equity |
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| Deposits |
$ | 1,971,360 | $ | 1,239,001 | $ | 679 | (h) | $ | 3,211,040 | |||||||||
| Federal Home Loan Bank advances and other borrowings |
358,330 | 168,844 | 879 | (i) | 528,053 | |||||||||||||
| Other liabilities |
17,681 | 6,191 | 5,340 | (j) | 29,212 | |||||||||||||
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| Total liabilities |
2,347,371 | 1,414,036 | 6,898 | 3,768,305 | ||||||||||||||
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| Stockholders’ equity |
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| Common stock |
336 | 161 | (161 | ) | (k) | 336 | ||||||||||||
| Additional paid-in capital |
271,003 | 155,728 | $ | 10,173 | (k) | 436,904 | ||||||||||||
| Retained earnings |
231,016 | 48,091 | (48,091 | ) | (k) | 231,016 | ||||||||||||
| Accumulated other comprehensive loss |
(5,923 | ) | (757 | ) | 757 | (k) | (5,923 | ) | ||||||||||
| Less: Unallocated common stock held by |
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| Employee Stock Ownership Plan |
(2,974 | ) | (7,144 | ) | 7,144 | (k) | (2,974 | ) | ||||||||||
| Treasury stock |
(252,382 | ) | (25,371 | ) | 25,371 | (k) | (252,382 | ) | ||||||||||
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| Total stockholders’ equity |
241,076 | 170,708 | (4,807 | ) | 406,977 | |||||||||||||
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| Total liabilities and stockholders’ equity |
$ | 2,588,447 | $ | 1,584,744 | $ | 2,091 | $ | 4,175,282 | ||||||||||
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See “Notes to Unaudited Pro Forma Condensed Combined Financial Statements” below for additional information.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME FOR THE YEAR ENDED DECEMBER 31, 2015 REFLECTING THE INTEGRATED MERGER
The following unaudited pro forma condensed combined statement of income for the year ended December 31, 2015 gives effect to OceanFirst’s acquisition of Cape using the acquisition method of accounting assuming the acquisition was consummated on January 1, 2015. Cape was acquired by OceanFirst on May 2, 2016.
| OceanFirst Financial Corp. (As Reported) |
Cape Bancorp, Inc. (As Reported) |
Adjustments to Reflect Acquisition of Cape Bancorp, Inc. |
OceanFirst Financial Corp. (Pro-forma) |
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| (Dollars in thousands, except per share data) |
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| INTEREST INCOME |
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| Loans |
$ | 77,694 | $ | 46,372 | $ | 4,945 | (l) | $ | 129,011 | |||||||||
| Investment securities and other |
8,169 | 4,703 | (225 | ) | (m) | 12,647 | ||||||||||||
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| Total interest income |
85,863 | 51,075 | 4,720 | 141,658 | ||||||||||||||
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| INTEREST EXPENSE |
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| Deposits |
4,301 | 3,675 | (565 | ) | (n) | 7,411 | ||||||||||||
| Borrowed funds |
4,733 | 2,348 | (362 | ) | (o) | 6,719 | ||||||||||||
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| Total interest expense |
9,034 | 6,023 | (927 | ) | 14,130 | |||||||||||||
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| Net interest income |
76,829 | 45,052 | 5,647 | 127,528 | ||||||||||||||
| Provision for loan losses |
1,275 | 2,675 | — | 3,950 | ||||||||||||||
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| Net interest income after provision for loan losses |
75,554 | 42,377 | 5,647 | 123,578 | ||||||||||||||
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| NON-INTEREST INCOME |
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| Fees and service charges |
14,116 | 4,099 | 18,215 | |||||||||||||||
| Net gain on sale of loan servicing |
111 | — | 111 | |||||||||||||||
| Net gain on sale of loans available for sale |
822 | 68 | 890 | |||||||||||||||
| Net gain on sale of investment securities available for sale, net |
— | 150 | 150 | |||||||||||||||
| Net loss from other real estate operations |
(149 | ) | (297 | ) | (446 | ) | ||||||||||||
| Income from Bank Owned Life Insurance |
1,501 | 1,211 | 2,712 | |||||||||||||||
| Bargain purchase gain |
— | 6,479 | 6,479 | |||||||||||||||
| Other |
25 | 766 | 791 | |||||||||||||||
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| Total non-interest income |
16,426 | 12,476 | — | 28,902 | ||||||||||||||
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| NON-INTEREST EXPENSE |
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| Compensation and employee benefits |
31,946 | 19,103 | 51,049 | |||||||||||||||
| Occupancy and equipment |
9,447 | 4,000 | (79 | ) | (p) | 13,368 | ||||||||||||
| Other operating expense |
17,483 | 13,507 | 30,990 | |||||||||||||||
| Amortization of core deposit intangible |
21 | 144 | 517 | (q) | 682 | |||||||||||||
| Merger related expense |
1,878 | 2,305 | 4,183 | |||||||||||||||
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| Total non-interest expense |
60,775 | 39,059 | 438 | 100,272 | ||||||||||||||
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| Income before provision for income taxes |
31,205 | 15,794 | 5,209 | 52,208 | ||||||||||||||
| Provision for income taxes |
10,883 | 3,639 | 1,823 | (r) | 16,345 | |||||||||||||
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| Net income |
$ | 20,322 | $ | 12,155 | $ | 3,386 | $ | 35,863 | ||||||||||
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| Net income per common share |
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| Basic |
$ | 1.22 | $ | 0.97 | 1.46 | |||||||||||||
| Diluted |
$ | 1.21 | $ | 0.96 | 1.43 | |||||||||||||
| Weighted average common shares |
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| Basic |
16,600 | 12,548 | (4,533 | ) | (s) | 24,615 | ||||||||||||
| Diluted |
16,811 | 12,718 | (4,533 | ) | (s) | 24,996 | ||||||||||||
See “Notes to Unaudited Pro Forma Condensed Combined Financial Statements” below for additional information.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME FOR THE THREE MONTHS ENDED MARCH 31, 2016 REFLECTING THE INTEGRATED MERGER
The following unaudited pro forma condensed combined statement of income for the three months ended March 31, 2016 gives effect to OceanFirst’s acquisition of Cape using the acquisition method of accounting assuming the acquisition was consummated on January 1, 2016. Cape was acquired by OceanFirst on May 2, 2016.
| OceanFirst Financial Corp. (As Reported) |
Cape Bancorp, Inc. (As Reported) |
Adjustments to Reflect Acquisition of Cape Bancorp, Inc. |
OceanFirst Financial Corp. (Pro-forma) |
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| (Dollars in thousands, except per share data) |
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| INTEREST INCOME |
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| Loans |
$ | 21,035 | $ | 13,794 | $ | 1,482 | (l) | $ | 36,311 | |||||||||
| Investment securities and other |
2,038 | 1,359 | (58 | ) | (m) | 3,339 | ||||||||||||
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| Total interest income |
23,073 | 15,153 | 1,424 | 39,650 | ||||||||||||||
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| INTEREST EXPENSE |
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| Deposits |
1,271 | 1,030 | (230 | ) | (n) | 2,071 | ||||||||||||
| Borrowed funds |
1,243 | 626 | (125 | ) | (o) | 1,744 | ||||||||||||
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| Total interest expense |
2,514 | 1,656 | (355 | ) | 3,815 | |||||||||||||
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| Net interest income |
20,559 | 13,497 | 1,779 | 35,835 | ||||||||||||||
| Provision for loan losses |
563 | 1,216 | — | 1,779 | ||||||||||||||
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| Net interest income after provision for loan losses |
19,996 | 12,281 | 1,779 | 34,056 | ||||||||||||||
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| NON-INTEREST INCOME |
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| Fees and service charges |
3,274 | 1,046 | 4,320 | |||||||||||||||
| Net gain on sale of loans available for sale |
179 | 91 | 270 | |||||||||||||||
| Net gain on sale of investment securities available for sale, net |
— | 244 | 244 | |||||||||||||||
| Net loss (gain) from other real estate operations |
(406 | ) | 152 | (254 | ) | |||||||||||||
| Income from Bank Owned Life Insurance |
319 | 328 | 647 | |||||||||||||||
| Other |
10 | 112 | 122 | |||||||||||||||
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| Total non-interest income |
3,376 | 1,973 | — | 5,349 | ||||||||||||||
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| NON-INTEREST EXPENSE |
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| Compensation and employee benefits |
8,466 | 4,876 | 13,342 | |||||||||||||||
| Occupancy and equipment |
2,595 | 1,099 | (20 | ) | (p) | 3,674 | ||||||||||||
| Other operating expense |
4,240 | 3,214 | 7,454 | |||||||||||||||
| Amortization of core deposit intangible |
13 | 48 | 121 | (q) | 182 | |||||||||||||
| Merger related expense |
1,402 | 1,093 | 2,495 | |||||||||||||||
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| Total non-interest expense |
16,716 | 10,330 | 101 | 27,147 | ||||||||||||||
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| Income before provision for income taxes |
6,656 | 3,924 | 1,678 | 12,258 | ||||||||||||||
| Provision for income taxes |
2,451 | 1,924 | 587 | (r) | 4,962 | |||||||||||||
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| Net income |
$ | 4,205 | $ | 2,000 | $ | 1,091 | $ | 7,296 | ||||||||||
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| Net income per common share |
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| Basic |
$ | 0.25 | $ | 0.16 | 0.29 | |||||||||||||
| Diluted |
$ | 0.25 | $ | 0.15 | 0.28 | |||||||||||||
| Weighted average common shares |
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| Basic |
16,906 | 12,815 | (4,533 | ) | (s) | 25,188 | ||||||||||||
| Diluted |
17,118 | 13,107 | (4,533 | ) | (s) | 25,692 | ||||||||||||
See “Notes to Unaudited Pro Forma Condensed Combined Financial Statements” below for additional information.
Notes to Unaudited Pro Forma Condensed Combined Financial Statements
| (a) | Adjustment reflects payment of transaction expenses of $8.6 million (which includes certain cash payments made to Cape executive officers pursuant to the terms of their change in control agreements) and payment of cash consideration of $30.5 million to Cape stockholders, representing $2.25 for each share of Cape common stock held by Cape stockholders. |
| (b) | Adjustment reflects the fair value premium on investment securities held to maturity. |
| (c) | Adjustment reflects elimination of Cape’s historical allowance for loan losses, a fair value premium due to interest rates, a fair value discount due to credit and a net reversal of net deferred fees, premiums and discounts. |
| (d) | Adjustment reflects the fair value discount on land and buildings and other real estate owned. |
| (e) | Adjustment reflects the tax impact of pro forma accounting fair value adjustments. |
| (f) | Adjustment reflects the fair value of acquired core deposit intangible of $3.7 million, net of Cape’s existing core deposit intangible of $845,000. The core deposit intangible is calculated as the present value of the difference between a market participant’s cost of obtaining alternative funds and the cost to maintain the acquired deposit base. Deposit accounts that are evaluated as part of the core deposit intangible include demand deposit, money market and savings accounts. |
| (g) | Adjustment reflects the excess of the purchase price over the fair value of net assets acquired, net of Cape’s existing goodwill balance. The purchase price is based upon $19.48 per share, the closing price of OceanFirst common stock on April 29, 2016, the last trading date before the closing. |
| (h) | Adjustment reflects the fair value premium on time deposits which was calculated by discounting future contractual payments at a current market interest rate. |
| (i) | Adjustment reflects the fair value premium on borrowings which was calculated by discounting future contractual payments at a current market interest rate. |
| (j) | Adjustment reflects an increase in the obligation for Cape’s defined benefit pension plan based on estimated fair value. |
| (k) | Adjustment reflects elimination of Cape’s historical stockholder’s equity and the issuance of OceanFirst common stock by OceanFirst as a portion of the merger consideration. |
| (l) | Interest income on loans was adjusted to reflect the difference between the contractual interest rate earned on loans and estimated discount accretion over the remaining life of the acquired loans based on current market yields for similar loans. |
| (m) | Interest income on securities was adjusted to reflect the difference between the contractual interest rate earned on securities and estimated premium amortization over the remaining life of the securities based on current market yields for similar securities. |
| (n) | Interest expense on deposits was adjusted to reflect the amortization of the time deposit fair value premium over the remaining life of the deposits. |
| (o) | Interest expense on borrowings was adjusted to reflect the amortization of the estimated fair value premium over the remaining life of the borrowings. |
| (p) | Adjustment to depreciation expense relating to the fair value discount on buildings over their estimated useful life. |
| (q) | Adjustment reflects the amortization of core deposit intangible over an estimated ten year useful life and calculated on a sum of the years digits basis. |
| (r) | Adjustment reflects the tax impact of the pro forma purchase accounting adjustments. |
| (s) | Adjustment reflects the conversion of pro forma weighted average shares (basic and diluted) reported by Cape into equivalent shares of OceanFirst common stock based on the exchange ratio. |