Banking merger gains shareholder backing
HomeStreet has received shareholder approval for its merger with FirstSun Capital Bancorp, according to preliminary voting results from a recent shareholder meeting.
“The strong vote in favor of our merger with FirstSun reflects the attractiveness of the combination for the company,” HomeStreet CEO and chairman Mark Mason said in a news release. “We are excited to accomplish this milestone in the merger process and look forward to closing the merger, subject to receipt of the required regulatory approvals. We believe this merger represents a unique investment opportunity in an otherwise challenging banking environment, and we look forward to realizing the benefits to our shareholders.”
The merger agreement, initially announced in January and amended in late April, has undergone revisions. FirstSun's total equity capital raise related to the deal has increased by $60 million, from $175 million to $235 million.
Read more: FirstSun, HomeStreet revise merger terms, boost capital raise
The stock exchange ratio has been adjusted to 0.3867 shares of FirstSun common stock for each HomeStreet share. This values each HomeStreet share at $13.53, based on FirstSun’s closing price as of April 29.
Additionally, the termination fee HomeStreet would pay if it accepts a competing acquisition proposal within 30 days post-amendment has been reduced to $2.6 million. This fee also includes covering FirstSun’s transaction fees and expenses.
As part of the merger, FirstSun will transition its subsidiary, Sunflower Bank, from a national bank to a Texas state-chartered bank. The merged entity will operate under a Texas state charter and seek membership in the Federal Reserve System. To bolster Sunflower Bank's capital, FirstSun will issue $48.5 million in subordinated debt.
Meanwhile, HomeStreet will begin disposing of or selling about $300 million in specific commercial real estate loans.
"We greatly appreciate the long history we have had with the OCC, including the supervisory staff in our local markets who have been great partners over the years, and we look forward to working with the Texas Department of Banking and the Federal Reserve Bank of Dallas as we continue to grow our presence in the State of Texas," said Neal Arnold, CEO of FirstSun and Sunflower Bank.
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