OceanFirst Financial Corp. (NASDAQ:OCFC) and Flushing Financial Corp. (NASDAQ:FFIC) have entered into a definitive agreement to combine in an all-stock transaction, a deal bolstered by a significant private equity injection that aims to create a powerhouse regional lender in the New York metropolitan area.
The transaction values Flushing Financial at approximately $579 million, based on OceanFirst’s closing price of $19.76 on Dec. 26.
Under the terms of the agreement, Flushing stockholders will receive 0.85 shares of OceanFirst common stock for each share held.
Concurrently, global private equity firm Warburg Pincus has committed to a $225 million equity investment in the combined entity, purchasing roughly 9.7 million common shares and common-equivalent securities.
The merger is set to create a scaled regional bank with approximately $23 billion in assets, $17 billion in loans, and $18 billion in deposits.
The combined footprint will span 71 branches across New Jersey, Long Island, and the five boroughs of New York City.
Financial projections for the deal are robust, with leadership targeting 2027 earnings per share (EPS) accretion of approximately 16%.
The deal is expected to deliver a return on average tangible common equity (ROATCE) of 13% and a return on average assets (ROAA) of 1%.
While the transaction involves an initial tangible book value dilution of roughly 6%, the companies anticipate an "earn-back" period of approximately three years.
The transaction is expected to close in the second quarter of 2026, pending regulatory approvals and the consent of shareholders from both institutions.
Upon completion, existing OceanFirst stockholders will own approximately 58% of the company, with Flushing shareholders holding 30% and Warburg Pincus owning 12%.