OceanFirst Bank and Flushing Bank announced Dec. 29 they agreed to merge in an all-stock transaction valued at $579 million that would create a regional banking powerhouse with $23 billion in assets across New Jersey, Long Island and New York markets.
Upon completion of the Flushing merger, Flushing Bank will merge into OceanFirst Bank, with OceanFirst Bank emerging as the sole bank. Based on OceanFirst’s closing stock price on Dec. 26, of $19.76, the transaction is valued at $579 million.
The transaction is expected to close in the second quarter of 2026, subject to the receipt of regulatory approvals and approval by OceanFirst and Flushing shareholders.
The acquisition boosts OceanFirst’s organic growth in New York by expanding its presence within the deposit-rich markets of Suffolk, Nassau, Queens, Brooklyn and Manhattan counties. Prior to the merger announcement, OceanFirst had four branches in New York state, three of them in New York City.
Following the closing of the merger, the combined company is expected to have approximately $23 billion in assets, $17 billion in total loans, and $18 billion in total deposits across 71 retail branches.
OceanFirst Bank is one of the oldest community-based financial institutions in New Jersey, founded in 1902. It is a $14.3 billion regional bank serving business and retail customers throughout New Jersey and the major metropolitan areas between Massachusetts and Virginia.
Flushing Financial Corp., the holding company for 96-year-old Flushing Bank, operates 30 banking offices in Queens, Brooklyn, Manhattan, and on Long Island. Flushing has No. 2 market share in Long Island, which includes the top share in Nassau County. There are 1.4 million small businesses in its markets.
OceanFirst also announced that it has entered into an investment agreement with affiliates of funds managed by Warburg Pincus LLC, which committed to invest $225 million for newly issued equity securities subject to the closing of the merger.
Upon completion of the proposed transaction, the shares issued to Flushing stockholders in the merger are expected to represent about 30% of the outstanding shares of the combined company; the shares issued to Warburg Pincus in the equity capital raise transaction discussed above are expected to represent approximately 12% of the outstanding shares of the combined company; and the shares of OceanFirst common stock that are outstanding immediately prior to completion of the merger are expected to represent about 58% of the outstanding shares of the combined company
“This acquisition represents a natural extension of our proven growth strategy,” said Christopher Maher, chairman and chief executive officer of OceanFirst. “We are bringing together two highly complementary organizations, leveraging Flushing’s 95+ year distribution channel in Long Island and New York alongside OceanFirst’s relationship-driven business model and robust products and services.
“We share a disciplined credit philosophy and long-term commitment to the communities we serve and are highly confident that this combination will enable us to better support our customers and deliver meaningful value for shareholders.”
Maher will serve as the CEO of the combined holding company, OceanFirst Financial Corp. John Buran, president and chief executive officer of Flushing, will join OceanFirst as the non-executive chairman of the board after the closing of the merger. The board of directors of the combined company will consist of 17 directors: 10 from the existing OceanFirst board, six from the existing Flushing board and one from Warburg Pincus.
OceanFirst also said in its announcement that the transaction will include “significant talent retention within client-facing roles from Flushing to support OceanFirst’s continued expansion into New York and Long Island markets.”
“We are excited to partner with OceanFirst, an organization that shares our values and long-term vision,” said Buran. “This transaction creates meaningful opportunities for our clients, employees, and communities while preserving the relationship-focused culture that has defined our bank for nearly a century. We look forward to taking the next step in our journey with OceanFirst and for our shareholders to participate in the future upside resulting from creating a scaled, more profitable franchise together.”
OceanFirst said the transaction “is expected to be financially attractive with an estimated 2027 earnings per share accretion of about 16%, a strong internal rate of return of about 24% and with tangible book value dilution of approximately 6%, to be earned back in about three years.”
Keefe Bruyette & Woods Inc., A Stifel Company, served as financial adviser to OceanFirst and Simpson Thacher & Bartlett LLP served as its legal counsel. Piper Sandler & Co. served as financial adviser to Flushing and Hughes Hubbard & Reed LLP served as its legal counsel. J.P. Morgan acted as capital markets adviser and sole placement agent to OceanFirst. Jefferies LLC served as financial adviser to Warburg Pincus and Wachtell Lipton Rosen & Katz served as its legal counsel.
OceanFirst Financial Corp. shares declined $1.27, or 6.5%, to $18.32, in Tuesday morning trading on the Nasdaq Global Select Market. There were 789,637 OceanFirst shares traded the morning of Dec. 29, about double the average volume of 396,808. Flushing Financial Corp.’s stock fell $1.42, or 8.6%, to $15.45 on the Nasdaq Global Select Market. About 1.3 million shares were traded, compared with average volume of 282,009 shares.