OceanFirst Financial (OCFC) M&A Announcement summary

Deal rationale and strategic fit

• Creates a high-performing regional bank with $23 billion in assets, expanding in New Jersey, Long Island, Queens, Brooklyn, Manhattan, and New York City, leveraging a 95+ year-old distribution network.

• Combines two organizations with shared values, disciplined credit philosophy, and strong community commitment, leveraging Flushing's distribution and OceanFirst's technology.

• Accelerates organic growth in deposit-rich markets, enhances customer support, and increases shareholder value.

• Diversifies loan portfolio and reduces CRE concentration over time.

• Enhances product offerings and market competitiveness, combining robust digital, commercial, and local market capabilities.

Financial terms and conditions

• All-stock merger valued at $579 million, with a fixed exchange ratio of 0.85 OceanFirst shares per Flushing share.

• Implied deal value of $16.80 per Flushing share, based on OceanFirst's closing price of $19.76.

• $225 million equity investment from Warburg Pincus at $19.76 per share, including common and non-voting stock plus warrants, concurrent with closing.

• Pro forma ownership: 58% OceanFirst, 30% Flushing, 12% Warburg Pincus.

• No goodwill created; expected $9 million bargain purchase gain.

Synergies and expected cost savings

• Targeting 35% cost savings from Flushing's non-interest expense, phased in by 2027.

• One-time pre-tax restructuring charges of $106 million, including $5 million in charitable contributions.

• 16% EPS accretion expected by 2027, with a 3.1-year tangible book value earnback and 6% tangible book value dilution.

• Net interest margin projected at 3.2% and non-interest expense to average assets at 1.7% by 2027.

• No immediate branch closures or real estate savings included in projections, though these remain long-term opportunities.