November 5, 2021
OceanFirst Financial Corp executives like the progress they are seeing in Baltimore after entering the market earlier this year, but they already have their eyes on a much bigger goal.
A billion-dollar goal.
The Toms River, New Jersey-based bank hired Tom Crawford from BBVA Compass to oversee its expansion into GreaterBaltimore with a focus on commercial lending. The bank also entered Boston.
CEO Christopher Maher told analysts during an Oct. 29 conference call that OceanFirst's "footings" in both markets are each in "the $50 million range" year-to-date. A spokeswoman told the Baltimore Business Journal that as of Sept. 30, the bank had approximately $19 million in outstanding commercial loans inBaltimore.
But Maher said the bank is "really touching the fringes here" and is gaining momentum.
"We're not launching a team unless we think we can produce several hundred million dollars of outstanding [loans]," Maher said in response to a question about thebank's growth plans in Baltimore and Boston. "And we're not getting into a market unless we think that market has the potential to grow to $1 billion."
In an interview, Maher and Crawford said they view Greater Baltimore as an "exceptional market" because businesses in the region want an alternative to financialgiants such as
M&T Bank, PNC Bank and Bank of America Maher said there are opportunities for loangrowth because Baltimore has a "tremendously rich 'eds and meds' story" due to the presence of Johns Hopkins University and the University of Maryland.
Maher also specifically expressed excitement about the business activity being generated by the Port of Baltimore.
The port has been growing fast for many years and its future is only getting brighter with the opening of a second 50-foot deep berth at the Seagirt Marine Terminal andthe upcoming reconstruction of the Howard Street Tunnel to allow for double-stacking of shipping containers on trains.
The Port of Baltimore has a leg up on competitors in the New York area, Maher said, because real estate is cheaper which makes it easier for businesses in the area totake advantage of the cargo coming in "to get things done."
"The unique thing about the port in Baltimore is it's exceptionally capable, but also there is an ability for companies, both in the immediate area of the port and by the railsystem, to be able to do things with the stuff that comes in through the port, whether that's seafood or whatever it may be," he said.
To win business from other banks, OceanFirst (NASDAQ: OCFC) touts "speed to market" as a major advantage. Unlike bigger banks, where decisions often have to gothrough several layers of bureaucracy, Crawford said his team in Baltimore has the ability to act quickly. Business owners also have the ability to speak directly with bank executives.
"Business owners want to talk to decision makers," Crawford said. "They want to know what their destiny is. They want to know what their borrowing capacity is. It's vitally important to have those boots on the ground that can deliver that, not just a conversation but a quick turnaround."
OceanFirst doubled down on Maher's optimism about Maryland when it announced on Thursday a $186 million acquisition of Salisbury-based Partners Bancorp.
Though based outside of Greater Baltimore, Partners gives OceanFirst its first brick-and-mortar presence in Maryland andexpands the bank into the D.C. area as well.
Partners was created by the 2019 merger of Seaford, Delaware’s The Bank of Delmarva and Fredericksburg, Virginia-based
Virginia Partners Bank Partners also has a loan production office in Annapolis.
"I think it's very complementary," Maher said of the acquisition. "There's not much overlap and it's all additive. But there's a funny thing that happens. As you build yourreputation as a bank, everybody wins. Tom's team becomes more credible because we will have a team in Annapolis and Salisbury. In converse, those teams willbecome more credible because we have Tom."
Crawford said having a branch presence, even if they are not located in Greater Baltimore, will help his team because clients like to see the bank's flag physically planted somewhere. He and Maher noted that many of the chief financial officers they talk to with current and prospective client businesses have homes on the Eastern Shore that they visit on weekends and during the summer.
"They've got a place over there and they spend time over at the beach, so they will recognize the OceanFirst branches over there and feel good about that," Crawford said.