OceanFirst to buy Flushing, raise $225M from Warburg Pincus

• Key insight: The deal is expected to create a $23 billion company with operations focused around New Jersey and New York.
• What’s at stake: The past year has marked a turnaround for bank consolidation, which has been especially pronounced among small regional and community institutions.
• Forward look: Warburg Pincus will make a $225 million investment in the combined company, giving the private equity firm a seat on the board and a 12% ownership stake.

OceanFirst Financial Corp. in New Jersey has inked one of the last bank deals of 2025, agreeing to buy Long Island-based Flushing Financial for $579 million.
The private equity firm Warburg Pincus will invest $225 million for newly issued equity securities alongside the acquisition, which is expected to close in the second quarter of next year. The Monday night announcement comes near the end of the most active year in bank mergers and acquisitions since 2021.

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The banks’ combination will create a regional player with $23 billion of assets and 71 branches, primarily across New Jersey, New York and the Philadelphia area.

OceanFirst’s common stock is expected to represent about 58% of the merged company, while Flushing stockholders should hold about 30% of the outstanding shares. The shares issued to Warburg Pincus in the capital raise are expected to make up about 12%.

The merger agreement comes about one year after Flushing raised $70 million to clean up its securities portfolio and offload about $100 million of commercial real estate loans — tasks that led to a $49 million loss in the fourth quarter. The fundraising followed pressure from prominent bank investor Larry Seidman last fall on Flushing to sell itself.

Flushing has been working to strengthen its performance, adding branches in New York City, hiring deposit bankers from Flagstar Bank and specifically targeting Asian market deposits.

“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,” Flushing CEO John Buran said in a prepared statement.

The deal for Flushing marks OceanFirst’s first proposed acquisition since 2022, when it called off its $186 million purchase of Partners Bancorp in Salisbury, Maryland. That deal, which was announced in 2021, fell through due to protracted regulatory approval timelines, OceanFirst said at the time.

OceanFirst’s last successful acquisitions were in 2020, when the company purchased Two River Bancorp and Country Bank Holding Co. concurrently.

OceanFirst CEO Christopher Maher said Monday that the Flushing deal brings together two “highly complementary organizations,” leveraging Flushing’s footprint in Long Island and New York City alongside his bank’s business model and product offerings.

“This acquisition represents a natural extension of our proven growth strategy,” Maher said in a prepared statement.

OceanFirst has also been aiming to bolster its sources of stable funding. The company has been hiring bankers from institutions like Wells Fargo and TD Bank Group to its so-called Premier Bank unit, with a goal of bringing in some $500 million of deposits in 2025. As of the third quarter, the strategy had yielded about half that amount.

The two companies estimate that the transaction will come with tangible book value dilution of about 6%, to be earned back in roughly three years. The deal is expected to yield earnings per share accretion of about 16% and an internal rate of return of about 24% in 2024.

The banks also said the deal, in 2027, will offer a return on average tangible common equity of about 13%, a return on average assets of about 1%, a net interest margin of 3.2% and a common equity tier 1 capital ratio of 10.8%.

If the deal wins approval from regulators and shareholders, OceanFirst CEO Maher will become chief executive and Flushing CEO Buran will take on the role of non-executive board chairman. The board will consist of 17 directors: 10 from OceanFirst, six from Flushing and one from Warburg Pincus.

The equity capital raise is slated to close at the same time of the closing of the merger.

Todd Schell, a managing director at Warburg Pincus who will join the bank’s board, said in the release that his firm has “known both franchises for a long time.”

“This combination marries OceanFirst’s scalable platform and robust product suite with Flushing’s distribution network and deep customer relationships,” Schell said. “This is a natural combination.”

Warburg Pincus, whose chairman is former Treasury Secretary Timothy Geithner, has more than $85 billion in assets under management and is no stranger to bank investments.

The company was part of the purchase of EverBank in 2023, as well as the distressed purchase of PacWest Bancorp by Banc of California the same year.

Following several years of tepid dealmaking, banks have hatched more than 170 deals in 2025, worth more than $47 billion of value.