OceanFirst to buy Flushing Bank in $579M merger

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The basics:

• $579M all-stock merger sets OceanFirst, Flushing Financial combination
• Deal would create regional bank with about $23B in assets, 71 branches
• OceanFirst secures $225M equity investment from Warburg Pincus affiliates
• Transaction expected to close in Q2 2026, pending approvals

Another New Jersey community bank is poised to expand, with the holding company for OceanFirst Bank NA and Flushing Financial Corp. revealing merger plans.

OceanFirst Financial Corp. and Flushing announced the definitive agreement Dec. 29. The $579 million deal would combine the entities in an all-stock transaction, with Flushing Bank merging into OceanFirst Bank. According to the parties, the transaction value is based on OceanFirst’s Dec. 26 closing stock price ($19.76.)

The combination will create a high-performing regional bank operating across New Jersey, Long Island and New York. At the same time, OceanFirst also announced a $225 million investment agreement. That arrangement with affiliates of funds managed by Warburg Pincus LLC fully committed to the funding for newly issued equity securities, subject to the merger closing.

Following the close, the combined OceanFirst will establish a company with approximately $23 billion in assets, $17 billion in total loans and $18 billion in total deposits across 71 retail branches.

“This acquisition represents a natural extension of our proven growth strategy,” said Christopher Maher, chairman and CEO, 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.”

A ‘more profitable franchise’

The parties anticipate closing the deal in the second quarter of 2026. Regulatory approvals, clearance from shareholders and the satisfaction of other customary closing conditions will apply. OceanFirst said it expects the equity capital raise to close concurrently with the merger, subject to that deal and other closing conditions.

Dating to 1902, Toms River-based OceanFirst is a $14.3 billion bank serving business and retail customers. The institution currently has 35 locations across New Jersey, along with outposts in Philadelphia and New York.

OceanFirst said the strategic investment will immediately expand its presence in “deposit-rich markets” in Suffolk and Nassau counties and the boroughs of Queens, Brooklyn and Manhattan in New York.

Established in 1929, Flushing Bank serves customers from 30 locations. It also features an online banking division operating under the iGObanking and BankPurely brands. As of Sept. 30, 2025, the most recent information available, Flushing posted $8.8 billion in total assets.

Maher will continue in his leadership post, serving as CEO of the combined company.

Flushing President and Chief Executive Officer John Buran will join the resulting organization as non-executive chairman of the board, after the merger closes. The board of directors will comprise 17 directors: 10 from the existing OceanFirst board, six from Flushing’s current board and one from Warburg Pincus.

Buran said this transaction creates meaningful opportunities for Flushing’s clients, employees and communities. “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,” he added.

Climate of consolidation

Banks have been busy combining in 2025, particularly to close out the year.

U.S. News & World Report noted 52 deals announced in the third quarter of 2025, the most since 2021, it said, citing S&P Global Intelligence data. It attributed the activity to a favorable regulatory environment along with the need to stay competitive amid a changing financial landscape.

Additionally, a piece from the Harvard Law School Forum on Corporate Governance noted an emerging consensus among industry regulators in the U.S. that consolidation could be a good thing, creating a “stronger, more efficient and more stable industry.” The mergers & acquisitions review and look ahead to 2026 added: “The welcome shift of focus of bank regulators away from micromanaging banks toward material financial risks has also given reason for optimism in acquiring and growing banking franchises.”

In New Jersey, Blue Foundry Bank and Fulton Financial announced plans to combine in a $243 million deal last month. Earlier this year, ConnectOne Bank also completed its merger with First National Bank of Long Island.

OceanFirst and Flushing noted expectations this transaction will foster an estimated 2027 earnings per share accretion of approximately 16%, an internal rate of return of approximately 24% and have tangible book value dilution of approximately 6%, to be earned back in approximately three years.

On a pro forma basis, they said the business is expected to deliver compelling return metrics supported by a strong balance sheet, such as:

• 2027 Return on Average Tangible Common Equity of approximately 13%
• 2027 Return on Average Assets of approximately 1.00%
• 2027 Net Interest Margin of approximately 3.2%
• 2027 Non-Interest Expense to Average Assets of approximately 1.7%
• Allowance Coverage Ratio of 1.5% at close
• Common Equity Tier 1 Capital Ratio of 10.8%

A live conference call on the deal was scheduled for Dec. 30 at 8 a.m. Presentation materials are available here.

In September, OceanFirst made a strategic decision regarding its residential loan origination business that resulted in 100-plus job cuts.