New Jersey-based OceanFirst Financial Corp. has announced a merger with Flushing Financial Corporation that will create a regional bank with $23 billion in assets across New Jersey, Long Island and New York markets.
The deal is expected to close in the second quarter of this year. OceanFirst is based in Red Bank in Monmouth County and is one of New Jersey largest regional banks.
The all-stock transaction values Flushing at $579 million based on OceanFirst’s Dec. 26 closing stock price of $19.76, according to a statement by OceanFirst.
Investment firm Warburg Pincus has committed to invest $225 million in newly issued equity securities when the merger closes.
The combined bank will operate 71 retail branches and hold approximately $17 billion in total loans and $18 billion in total deposits.
The deal expands OceanFirst’s presence in Suffolk, Nassau, Queens, Brooklyn and Manhattan counties.
“This acquisition represents a natural extension of our proven growth strategy,” Christopher Maher, chairman and chief executive officer of OceanFirst said in a statement.
“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.”
Under the agreement, Flushing stockholders will receive 0.85 shares of OceanFirst common stock for each share of Flushing stock.
After the merger closes, former Flushing shareholders are expected to own approximately 30% of the combined company, Warburg Pincus will hold about 12%, and existing OceanFirst shareholders will retain approximately 58%.
Maher will serve as chief executive officer of the combined company.
John Buran, president and chief executive officer of Flushing, will become non-executive chairman of the board.
The board will consist of 17 directors: 10 from OceanFirst, six from Flushing and one from Warburg Pincus.
OceanFirst will sell approximately 9.7 million shares of common stock and additional non-voting shares to Warburg Pincus at $19.76 per share.
The transaction requires regulatory approvals and shareholder approval from both companies.
OceanFirst Bank, founded in 1902 and headquartered in Red Bank, currently has $14.3 billion in assets.
Flushing Bank has operated in New York since 1929, serving customers in Queens, Brooklyn, Manhattan and Long Island.
