OceanFirst Financial in Red Bank, N.J, has agreed to buy Flushing Financial in Uniondale, N.Y.
The $14.3 billion-asset OceanFirst said in a press release that it will pay $579 million in stock for the $8.9 billion-asset Flushing. The deal, which is expected to close in the second quarter, priced Flushing at 80% of its tangible book value.
OceanFirst also plans to raise $225 million by selling securities to affiliates of funds managed by Warburg Pincus at the time of the deal’s closing.
“This acquisition represents a natural extension of our proven growth strategy,” Christopher Maher, OceanFirst’s chairman and CEO, said in the release. “We are bringing together two highly complementary organizations, leveraging Flushing’s … distribution channel in Long Island and New York alongside OceanFirst’s relationship-driven business model and robust products and services.”
John Buran, Flushing’s president and CEO, will join OceanFirst as the non-executive chairman. Six Flushing directors will join OceanFirst’s board. Todd Schell, a Warburg Pincus managing partner, will also join the board. Maher will become chairman in 2028.
The deal is expected to be 16% accretive to OceanFirst’s 2027 earnings per share. It should take about three years to earn back an estimated 6% dilution to OceanFirst’s tangible book value.
OceanFirst plans to cut 35% of Flushing’s annual noninterest expense and incur $106 million of pretax merger-related expenses. OceanFirst is modeling a $400,000 after-tax reduction in Flushing’s interchange income due to the Durbin Amendment
Keefe, Bruyette & Woods and Simpson Thacher & Bartlett advised OceanFirst. Piper Sandler and Hughes Hubbard & Reed advised Flushing. J.P. Morgan was the capital markets adviser and sole placement agent to OceanFirst. Jefferies and Wachtell, Lipton, Rosen & Katz advised Warburg Pincus.