OceanFirst falls after unveiling acquisition, $225 million capital infusion

Regional lender OceanFirst Financial's OCFC.O shares slide 9.9% to $17.65 in early trading

OCFC will buy smaller rival Flushing Financial FFIC.O in a $579 million all-stock deal, the banks announced late Monday

Deal will strengthen OCFC's presence in New Jersey, Long Island and New York markets

FFIC shares slump 13% in early trading

"As with most bank deals, OCFC shares may be pressured near-to-intermediate-term as the market digests the deal and the bank is forced to show its merits through performance" - Raymond James analyst Daniel Tamayo

Separately, OCFC has secured $225 million equity raise from buyout firm Warburg Pincus, subject to closing of the acquisition

"While we’re pleased to see Warburg’s involvement, we have concerns with the acquisition given it was unexpected and we view FFIC as a weaker franchise" - Stephens analyst Matt Breese

"The franchise (FFIC) screens as having relatively high commercial real estate exposure that likely necessitated the capital infusion" - Hovde Group analyst David Bishop

As of last close, OCFC stock up 8% YTD