Dive Brief:<\/p>\n
New Jersey-based OceanFirst Financial Corp. has agreed to acquire<\/a> Long Island-based Flushing Financial Corp. in a roughly $579 million deal that\u2019s expected to close in the second quarter of 2026, the companies announced last week. Dive Insight:<\/p>\n The acquisition, OceanFirst\u2019s largest, aims to accelerate the New Jersey bank\u2019s growth in three New York City boroughs and Long Island.<\/p>\n In a conference call Dec. 30, OceanFirst CEO Christopher Maher said the deal \u201cprovides [a] distribution network and branding presence that it would have taken many years and significant investments to achieve otherwise.”<\/p>\n Maher will serve as CEO of the combined company once the acquisition closes. Flushing CEO John Buran, meanwhile, will become a nonexecutive chair at OceanFirst. Maher would become board chair in 2028, according to an investor presentation<\/a>.<\/p>\n In a statement Dec. 29, Buran said OceanFirst shares Flushing\u2019s \u201cvalues and long-term vision\u201d and \u201cpreserv[es] the relationship-focused culture that has defined our bank for nearly a century.\u201d<\/p>\n \u201cWe 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,\u201d Buran said.<\/p>\n The $579 million value of the deal is based on OceanFirst\u2019s closing stock price of $19.76 from Dec. 26, the banks said. As part of the transaction, Flushing investors would receive 0.85 shares of OceanFirst common stock for each Flushing share they own. OceanFirst stockholders would own about 58% of the combined company, while Flushing investors would own roughly 30%, according to the deal announcement.\u00a0<\/p>\n The combined company\u2019s new board would have 10 directors from OceanFirst and six from Flushing, in addition to Todd Schell, a managing director at Warburg Pincus.<\/p>\n \u201cWe have known both franchises for a long time \u2013 they share an underlying culture and philosophy and are complementary in ways that unlock strategic value for the combined entity,\u201d Schell said. \u201cThis is a natural combination that can produce strong returns for shareholders.\u201d<\/p>\n This is hardly the first time Warburg Pincus has played a pivotal role in bank mergers and acquisitions. The private-equity firm contributed to a $400 million investment, alongside Centerbridge Partners, in Banc of California\u2019s purchase of PacWest<\/a> in 2023.<\/p>\n OceanFirst, too, is no stranger to M&A \u2013 though it hasn\u2019t completed one since 2020. The New Jersey bank\u2019s last attempt to expand through acquisition \u2013 a $186 million proposed purchase<\/a> of Salisbury, Maryland-based Partners Bancorp that would have given OceanFirst a foothold in the Washington, D.C., suburbs \u2013 was terminated in 2022, after it languished with regulators for a year. The 2021 deal announcement, though, came just after OceanFirst saw its Community Reinvestment Act rating decline<\/a>. It would agree to pay more than $15 million in 2024<\/a> to resolve redlining allegations.<\/p>\n Flushing, meanwhile, topped Forbes magazine\u2019s list of most cybersecure banks in 2024 \u2013 a title Buran attributed to the lender\u2019s \u201cvery measured pace<\/a>\u201d of growth.<\/p>\n
\nBuying Flushing would give OceanFirst 30 added branches in New York state, as well as nearly $8.9 billion in extra assets, according to the banks. That would create a roughly $23 billion-asset lender with 80 locations, about $18 billion in deposits and $17 billion in loans.
\nWarburg Pincus will also play a key role in the deal, investing $225 million toward a capital raise that would give the private-equity firm a 12% stake in OceanFirst and a board seat.<\/p>\n