The Bank Slate


FirstSun in Denver to buy HomeStreet in Seattle for $286M

FirstSun Capital Bancorp in Denver has agreed to buy HomeStreet in Seattle.

The $7.8 billion-asset FirstSun said in a press release that it will pay $286 million in stock for the $9.5 billion-asset HomeStreet. The deal, which is expected to close in mid-2024, priced HomeStreet at 56% of its tangible book value.

FirstSun also agreed to raise capital by selling about 2.5 million shares of common stock to Wellington Management. About $80 million of stock will be immediately issued; another $95 million will be sold after the HomeStreet deal closes.

FirstSun will have 129 branches and enter Southern California, Hawaii, and other Pacific Northwest markets with the acquisition.

Mark Mason, HomeStreet’s chairman, president and CEO, will become vice chairman at FirstSun. Three HomeStreet directors, including Mason, will join the board.

“We are very confident that this merger will enhance our ability to deliver stronger and more sustainable growth with greater earnings power and shareholder value creation to our combined shareholders,” Mollie Hale Carter, FirstSun’s chairman, said in the release.

“Each entity brings a presence in large, dynamic markets that are ripe for future organic growth,” she added. The merger “creates a premier midcap bank in the nation’s best markets and an opportunity to deploy FirstSun’s proven playbook of C&I focused growth.”

FirstSun said it should take less than two years to earn back any dilution to its tangible book value. The deal should be 30% accretive to FirstSun’s 2025 earnings per share.

FirstSun plans to cut about $55 million on annual noninterest expenses, or roughly 11% of the combined company’s expenses.

HomeStreet will operate under its own brand in its current markets.

Stephens and Nelson Mullins Riley & Scarborough advised FirstSun. Keefe Bruyette and Woods and Sullivan and Cromwell advised HomeStreet. Schulte, Roth & Zabel advised Wellington Management, while Latham & Watkins advised KBW.

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