Flushing Financial Corporation (NasdaqGS:FFIC) agreed to acquire Empire Bancorp, Inc. (OTCPK:EMPK) from a group of sellers for approximately $110 million on August 14, 2019. A definitive merger agreement was signed on October 24, 2019. Under the terms of the merger agreement, each share of Empire Bancorp common stock will be exchanged for either 0.6548 shares of Flushing common stock or $14.04 in cash, based upon the election of each Empire shareholder, subject to the election and proration procedures specified in the merger agreement (which provides for an aggregate split of total consideration of 50% Flushing common stock and 50% cash). Post completion, Empire Bancorp, Inc. will merge into Flushing Financial Corporation and in connection with the transaction, Empire National Bank owned by Empire Bancorp, Inc. will merge with and into Flushing Bank owned by Flushing Financial Corporation, with Flushing Bank as the surviving entity. Flushing Financial will have a pro-forma stock ownership of 92% while Empire Bancorp will own the remaining 8%. As of August 3, 2020, Flushing Financial and Empire Bancorp announced that they will not exercise their respective rights to terminate the transaction and will decide a longer term extension of time to complete the merger. As of August 14, 2020, Flushing Financial Corporation and Empire Bancorp entered into an amendment agreement. Pursuant to the amendment agreement, the transaction is no longer conditioned upon receiving opinions that the Transaction will qualify as a “reorganization” within the meaning of Section 368(a) of the U.S. Internal Revenue Code of 1986, as amended. If the merger agreement is terminated under certain circumstances, Empire will be obligated to pay Flushing Financial a termination fee equal to $3.3 million.

Simultaneous with the execution of the merger agreement, Flushing Financial and Empire entered into separate voting agreements with Thomas M. Buonaiuto, Francis F. Boulton, John P. Bracken, John D. Caffrey, Jr., John L. Ciarelli, Alan M. Coren, Larry R. Davis, Frank A. DiFazio, Robert D. Falese, Jr., Salvatore Ferro, Douglas C. Manditch, Mukeshkumar Patel, Charles C. Russo, Joseph S. Tantillo, Jr. and Paul J. Tonna, and Patriot Financial Partners II, L.P. and Patriot Financial Partners Parallel II, L.P in which each such shareholder has agreed, among other things, to vote the shares of Empire common stock in favor of the merger agreement. Following the acquisition, Empire Bancorp Current Chairman and Chief Executive Officer Douglas C Manditch will be appointed to serve as a Class C director of the Boards of Directors of Flushing Financial and Flushing Bank. In addition, Flushing Financial will create an Advisory Board of Flushing Financial and will appoint the current members of Empire's Board of Directors to serve as members of the Advisory Board. Thomas M. Buonaiuto entered into an employment agreement with Flushing Financial pursuant to which Thomas M. Buonaiuto shall serve as a Senior Executive Vice President for an initial term of two years from the closing of the transaction. Douglas C Manditch entered into a consulting agreement with Flushing Bank pursuant to which Manditch will provide consulting services to Flushing Bank until the third anniversary of the closing of the transaction.

Completion of the transaction is subject to customary closing conditions including receipt of regulatory approvals and expiration or termination of all statutory waiting periods in respect thereof, approval from Federal Deposit Insurance Corporation and New York State Department of Financial Services, waiver by the Board of Governors of the Federal Reserve System, the approval of Empire Bancorp's shareholders. The merger is also subject to the effectiveness of the registration statement to be filed by Flushing Financial with the Securities and Exchange Commission with respect to the Flushing Financial Common Stock to be issued and authorization for listing on the NASDAQ Global Select Market of the shares of Flushing Financial Common Stock to be issued in the transaction, receipt of an opinion to the effect that the merger will qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986 and execution of employment and consulting agreements. The amendment agreement is subject to approval from Empire's shareholders at a special meeting of shareholders and was unanimously approved by the Board of Directors of each of Flushing Financial Corporation and Empire Bancorp. The merger agreement has been unanimously approved by the Boards of Directors of each of Flushing Financial and Empire Bancorp. Flushing's registration statement was declared effective by the SEC on January 17, 2020. As of February 26, 2020, Flushing Financial received all the requisite bank regulatory approvals and waivers in connection with the transactions providing for the acquisition and merger of Empire. The Empire's shareholder meeting will be held on February 27, 2020. As of February 27, 2020, the transaction was approved by the shareholders of Empire Bancorp. As per filing dated September 21, 2020, Empire will hold a special meeting of shareholders in connection with the Amendment on October 27, 2020. As of September 21, 2020, Flushing has received all remaining regulatory approvals to complete the transaction. As of February 27, 2020, Flushing announced that the deadline by which Empire shareholders may elect to receive cash, shares of common stock, of Flushing, or both as merger consideration is April 1, 2020. As of October 27, 2020, the shareholders of Empire Bancorp have approved the transaction. The transaction is expected to close in second quarter of 2020. As of February 27, 2020, the transaction is expected to close on or about April 4, 2020. As of March 23, 2020, the transaction is expected to close earlier or at the end of the 2nd quarter or early in the 3rd quarter of 2020. As of August 17, 2020, the transaction is expected to complete in fourth quarter of 2020. As of September 21, 2020, the transaction is expected to close effective on or about October 31, 2020. The transaction is expected to be approximately 20% accretive in 2021 with an earn back of 3.4 years.

Deutsche Bank Securities Inc. acted as financial advisor and Robert C. Azarow, Stephanie Nygard, Michael Mancusi, Kathleen Wechter and Laurie Abramowitz of Arnold & Porter acted as legal advisors to Flushing Financial. Sandler O'Neill + Partners, L.P. acted as financial advisor and fairness opinion provider and Geoffrey S. Kay of Fenimore, Kay, Harrison & Ford acted as legal advisor to Empire Bancorp. Sandler O'Neill will receive a fee equal to 1.30% of the aggregate merger consideration amounting to $1.45 million contingent upon the closing of the merger. Sandler O'Neill also received a $0.25 million as fee from Empire upon rendering its fairness opinion. Equiniti (US) Services LLC acted as proxy solicitor and received $6,500 as fee from Empire Bancorp, Inc. Computershare Trust Company, NA acted as transfer agent and registrar of Flushing.