Under the merger agreement, each share of Flushing common stock was converted into the right to receive a fixed 0.85 of a share of OceanFirst common stock, plus cash in lieu of fractional shares. At announcement, based on OceanFirst's December 26, 2025 closing price of $19.76, the transaction was valued at approximately $16.80 per Flushing share, or approximately $579 million in aggregate deal value, equivalent to roughly 10.6 times Flushing's estimated 2026 earnings, 9.6 times estimated 2027 earnings (5.0 times on a fully synergized 2027 basis), and 0.80 times Flushing's tangible book value per share, with a pay-to-trade ratio of 79% referenced in the companies' investor materials. OceanFirst issued approximately 29.30 million shares of its common stock to former Flushing stockholders (including converted restricted stock unit awards) to fund the merger consideration.
Concurrent with the merger closing, OceanFirst completed a $225 million investment from affiliates of Warburg Pincus LLC, consisting of approximately 9.5 million shares of OceanFirst common stock at $19.76 per share, approximately 1,812 shares of a newly created non-voting, common-equivalent stock (NVCE Stock) economically equivalent to roughly 1.8 million common shares, and a seven-year warrant to purchase approximately 11.4 million shares of NVCE Stock at an exercise price of $19,760 per NVCE share (equivalent to $19.76 per underlying common share). The warrant cannot be voluntarily exercised before the third anniversary of closing except if OceanFirst's stock closes at or above $30 per share, and is subject to mandatory exercise if the stock sustains that level for a specified period. Immediately after closing, OceanFirst had approximately 96.7 million shares outstanding, with pro forma ownership of roughly 58% OceanFirst legacy holders, 30% former Flushing holders, and 12% Warburg Pincus, per the companies' deal-announcement investor materials. As part of the merger, OceanFirst also assumed approximately $251.9 million in aggregate principal amount of Flushing's outstanding subordinated and junior subordinated debt securities, comprising $125 million of 3.125% fixed-to-floating rate subordinated notes due 2031, $65 million of 6.000% fixed-to-floating rate subordinated notes due 2032, and three tranches of junior subordinated debentures totaling approximately $61.9 million due 2037.
At announcement, OceanFirst disclosed expected cost savings equal to 35.0% of Flushing's non-interest expense base, with 50% of those savings phased in during 2026 and the full amount realized thereafter, alongside pre-tax one-time merger and restructuring expenses of approximately $106 million (described as 1.7 times fully phased-in 2026 cost synergies, or about 18% of deal value). The companies' pro forma earnings-per-share reconciliation modeled approximately $46.4 million of after-tax cost savings and $18.5 million of after-tax accretion from fair value marks, producing a pro forma 2027 estimated EPS of $2.48 versus OceanFirst's standalone estimated 2027 EPS of $2.15, equivalent to $0.34, or 16%, EPS accretion to OceanFirst. The companies modeled tangible book value dilution to OceanFirst of approximately 6% including interest rate marks (or approximately 3% excluding rate marks), with an estimated earnback period of 3.1 years, assuming a 10.0 times exit multiple and a 10.0% CET1 target. The deal materials also disclosed a gross credit mark of 2.6% of Flushing's gross loans (approximately $174 million, about 4.1 times Flushing's then-current reserves), including an 8% credit mark on Flushing's $1.4 billion rent-regulated multifamily portfolio, and a core deposit intangible of 1.15% amortized over seven years.
Announcing the strategic rationale, the companies described the deal as creating "a scaled, high performing franchise" that pairs OceanFirst's commercial products and treasury management capabilities with Flushing's 95-plus year deposit franchise concentrated in Long Island and the New York City boroughs, where Flushing held the number 2 community-bank deposit market share position. At closing, CEO Christopher Maher said the combination "pairs Flushing's deeply rooted, 95-year community franchise with OceanFirst's relationship-driven business model, expanded capabilities, and broader product set, and immediately scales our presence in the deposit-rich markets of Long Island and the New York City boroughs," adding that adding Warburg Pincus as a capital partner positions the combined company "to deliver enhanced value to our clients, accelerate profitable growth, and create meaningful long-term value for our shareholders." Materials at announcement also emphasized a goal of reducing commercial real estate concentration over time and improving profitability metrics (NIM, ROAA, and ROATCE) on a pro forma basis.
Following the closing, the combined company operates 71 retail branches across New Jersey, New York, Long Island, and markets from Massachusetts through Virginia, under the OceanFirst brand, with approximately $23 billion in pro forma total assets as referenced in deal materials. John R. Buran, former President and CEO of Flushing, joined the OceanFirst board as non-executive Chairman for a two-year term, after which Christopher Maher is slated to resume the Chairman role. Five other former Flushing directors (Alfred DelliBovi, Steven D'Iorio, Louis C. Grassi, Sam S. Han, and Caren C. Yoh) joined the OceanFirst board, along with Warburg Pincus designee Todd Schell, bringing the OceanFirst board to 17 members. In connection with the merger, OceanFirst also committed a $5 million contribution to the OceanFirst Foundation supporting community organizations across the combined company's markets.
Both companies' stockholders approved the merger at special meetings. At Flushing's special stockholder meeting held April 6, 2026, the merger proposal was approved with 24,102,136 shares voted in favor versus 628,640 against (with 40,182 abstentions), out of 24,770,958 shares represented at the meeting (33,883,626 shares outstanding as of the February 20, 2026 record date). OceanFirst's stockholders approved the related share issuance at a special meeting held April 2, 2026. The merger agreement specified a Termination Fee of $21,431,924 payable by Flushing under specified circumstances (including a change in the Flushing board's recommendation or acceptance of a superior proposal) and a Reverse Termination Fee of $46,339,296 payable by OceanFirst under specified circumstances. OceanFirst's registration statement on Form S-4 (File No. 333-293282) covering the share issuance was filed February 6, 2026, amended February 23, 2026, and declared effective February 25, 2026.
On the financial advisory side, Keefe, Bruyette & Woods, Inc., A Stifel Company, served as financial advisor to OceanFirst, and Piper Sandler & Co. served as financial advisor to Flushing. J.P. Morgan acted as capital markets advisor and sole placement agent to OceanFirst in connection with the Warburg Pincus investment. Jefferies LLC served as financial advisor to Warburg Pincus. On the legal side, Simpson Thacher & Bartlett LLP served as legal counsel to OceanFirst, Hughes Hubbard & Reed LLP served as legal counsel to Flushing, and Wachtell, Lipton, Rosen & Katz served as legal counsel to Warburg Pincus.