CEO Chris Maher says the bank typically retains 96-97% of acquired customers through low-impact integration, as it absorbs its largest deal yet
OceanFirst Financial is applying a familiar retention playbook following its $579 million acquisition of Flushing Financial, which closed Monday as the New Jersey-based lender’s eighth whole-bank acquisition and its largest to date.
CEO Chris Maher said the first priority is reassuring customer-facing staff. “Probably the most important thing we do is immediately provide assurance to the folks that are in front of the customer, that they will have not just jobs but career opportunities at OceanFirst as we grow,” he said. Some consolidation will happen in administrative and operational roles, though the bank hasn’t detailed numbers.
The deal brings OceanFirst Flushing’s $9 billion in assets and 30 branches across three New York City boroughs and Long Island, pushing the combined bank to roughly $23 billion in assets. No branch closures are planned. OceanFirst expects to operate under a single unified brand by the start of the fourth quarter, backed by a significant marketing push from October 1 to introduce the OceanFirst name into communities that may not be familiar with it.
“From a customer perspective, if the branches remain the same, staff remains the same, and you do a careful and low-impact integration, you’re going to have a very successful outcome,” Maher said, pointing to past acquisitions where the bank retained over 96% of customers.
OceanFirst is also donating $5 million of bank stock to the OceanFirst Foundation to support nonprofits within Flushing’s footprint, a model Maher described as “critical” for building goodwill in newly acquired communities. Separately, private equity firm Warburg Pincus invested $225 million in a related capital raise, giving it a 12% stake in OceanFirst and a board seat.
The acquisition is part of a broader push to improve financial performance. OceanFirst is targeting return on assets above 1% over coming quarters; first-quarter profit was flat year-over-year at $20.5 million but up from $13.1 million the prior quarter, with non-interest expenses down 13% to $73.4 million. The bank continues hiring bankers at its usual pace of a couple dozen per year, with the fastest growth expected in its relationship-driven commercial and industrial business.
One complication: the Flushing deal pushes OceanFirst’s commercial real estate concentration ratio to 461% from 417%, well above the 300% threshold that draws closer regulatory scrutiny. Maher said the bank is “thinking hard about the balance sheet” and may pursue some restructuring in connection with the closing to bring down CRE exposure.
On further M&A, Maher didn’t rule out additional deals but said OceanFirst’s focus is delivering on the Flushing integration first. He pointed to a more favourable regulatory environment for bank M&A generally, citing faster deal timelines and greater clarity from federal banking agencies on how supervisory determinations and appeals are handled, a notable comment given OceanFirst’s own history with its Community Reinvestment Act rating, which dropped in 2022 before the bank paid over $15 million to resolve redlining allegations and subsequently received an “outstanding” rating.