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FirstSun Capital Bancorp and HomeStreet, Inc. announced that regulatory approvals necessary for their planned merger have not been obtained, with regulators requesting FirstSun and Sunflower Bank to withdraw their merger applications. The companies are now discussing alternative regulatory structures for the merger, while also considering terms for potential termination if no alternative is feasible. HomeStreet confirmed no specific regulatory concerns were related to their operations. FirstSun cited a more challenging external environment for bank mergers as a contributing factor, particularly following industry events earlier this year.
FirstSun Capital Bancorp e HomeStreet, Inc. hanno annunciato che le approvazioni regolamentari necessarie per la loro fusione pianificata non sono state ottenute, con i regolatori che hanno richiesto a FirstSun e Sunflower Bank di ritirare le loro domande di fusione. Le aziende stanno ora discutendo strutture normative alternative per la fusione, considerando anche i termini per una potenziale cessazione qualora non fosse fattibile alcuna alternativa. HomeStreet ha confermato che non c’erano preoccupazioni regolatorie specifiche legate alle loro operazioni. FirstSun ha citato un ambiente esterno più impegnativo per le fusioni bancarie come fattore contribuente, in particolare a seguito degli eventi del settore all’inizio di quest’anno.
FirstSun Capital Bancorp y HomeStreet, Inc. anunciaron que no se han obtenido las aprobaciones regulatorias necesarias para su fusión planificada, con los reguladores solicitando a FirstSun y Sunflower Bank que retiren sus solicitudes de fusión. Las empresas están discutiendo ahora estructuras regulatorias alternativas para la fusión, considerando también los términos para una posible terminación si no se encuentra ninguna alternativa viable. HomeStreet confirmó que no había preocupaciones regulatorias específicas relacionadas con sus operaciones. FirstSun citó un entorno externo más desafiante para las fusiones bancarias como un factor contribuyente, especialmente después de los eventos de la industria a principios de este año.
퍼스트선 캐피털 뱅콥과 홈스트리트, Inc.는 계획된 합병을 위한 규제 승인이 얻어지지 않았다고 발표했으며, 규제 당국은 퍼스트선과 선플라워 은행에 합병 신청서를 철회할 것을 요청했습니다. 두 회사는 현재 합병을 위한 대체 규제 구조에 대해 논의하고 있으며, 대안이 실행 가능하지 않은 경우 종료 가능성에 대한 조건도 고려하고 있습니다. 홈스트리트는 그들의 운영과 관련된 특정 규제 우려가 없다고 확인했습니다. 퍼스트선은 특히 올해 초 산업 이벤트 이후로 은행 합병에 대한 외부 환경이 더 어려워졌다고 언급했습니다.
FirstSun Capital Bancorp et HomeStreet, Inc. ont annoncé que les approbations réglementaires nécessaires à leur fusion planifiée n’avaient pas été obtenues, les régulateurs demandant à FirstSun et à Sunflower Bank de retirer leurs demandes de fusion. Les entreprises discutent maintenant de structures réglementaires alternatives pour la fusion, tout en envisageant également des conditions pour une résiliation potentielle si aucune alternative n’est viable. HomeStreet a confirmé qu’aucune préoccupation réglementaire spécifique n’était liée à leurs opérations. FirstSun a cité un environnement extérieur plus difficile pour les fusions bancaires comme un facteur contributif, en particulier à la suite des événements de l’industrie au début de cette année.
FirstSun Capital Bancorp und HomeStreet, Inc. gaben bekannt, dass die für ihre geplante Fusion notwendigen behördlichen Genehmigungen nicht erteilt wurden, wobei die Regulierungsbehörden FirstSun und die Sunflower Bank aufforderten, ihre Fusionsanträge zurückzuziehen. Die Unternehmen diskutieren jetzt alternative regulatorische Strukturen für die Fusion und ziehen auch die Bedingungen für eine mögliche Kündigung in Betracht, wenn keine Alternative machbar ist. HomeStreet bestätigte, dass es keine spezifischen regulatorischen Bedenken hinsichtlich ihrer Geschäfte gab. FirstSun verwies auf ein herausforderndes externes Umfeld für Bankfusionen als mitverantwortlichen Faktor, insbesondere im Anschluss an Branchenereignisse zu Beginn dieses Jahres.
Positive
- No specific regulatory concerns were identified with HomeStreet’s operations
- FirstSun reported strong financial results, including solid earnings, liquidity, credit, and capital profile
Negative
- Regulatory approvals for the merger were not obtained
- Merger applications had to be withdrawn
- Risk of merger termination if alternative structure proves unfeasible
Insights
The failed merger attempt between FirstSun and HomeStreet represents a significant setback for both institutions. The regulatory rejection, particularly noteworthy given HomeStreet’s clean regulatory status, signals heightened scrutiny in the banking sector following recent industry turbulence. The $8.1 billion asset FirstSun’s inability to secure approval highlights the increasingly challenging landscape for regional bank consolidations.
While the parties are exploring alternative structures, the likelihood of deal completion appears diminished. For HomeStreet investors, this development creates uncertainty about the bank’s strategic direction and standalone prospects. The bank may need to explore other strategic alternatives or focus on organic growth, potentially impacting near-term valuation and growth trajectory.
The regulatory hurdle particularly impacts smaller regional banks’ consolidation strategies, suggesting a more challenging path for similar-sized institutions seeking strategic combinations. This could affect industry-wide M&A premiums and valuation multiples for regional banks.
The regulators’ stance reflects a fundamental shift in merger approval dynamics, particularly following the regional banking crisis earlier this year. The rejection, despite HomeStreet’s regulatory clearance, suggests broader systemic concerns about bank consolidation and concentration risks. This regulatory position could establish a precedent for future regional bank mergers.
The request to withdraw applications rather than face formal rejection indicates potential structural or systemic concerns beyond individual bank metrics. This regulatory environment may force regional banks to reconsider their growth strategies, potentially favoring organic growth over acquisitive expansion. The development signals a more stringent regulatory framework for bank mergers, likely requiring enhanced capital buffers and risk management frameworks for future deals.
DENVER & SEATTLE–(BUSINESS WIRE)– FirstSun Capital Bancorp (NASDAQ: FSUN) (“FirstSun”) and HomeStreet, Inc. (NASDAQ: HMST) (“HomeStreet”) announced that, based on discussions FirstSun and its subsidiary, Sunflower Bank, N.A. (“Sunflower”) have had with the Federal Reserve and the Texas Department of Banking, that regulatory approvals necessary for the mergers with HomeStreet and its subsidiary, HomeStreet Bank to proceed have not been obtained and FirstSun and Sunflower have been asked to withdraw their merger applications. FirstSun and HomeStreet are discussing the pursuit of an alternative regulatory structure for the merger. The parties are also discussing terms on which they would terminate the merger agreement if no alternative structure is feasible. There can be no assurance that an alternative regulatory structure may ultimately be feasible.
“We are disappointed in the process to date, but we remain hopeful that we will be able to continue productive discussions with regulators in order to obtain regulatory approval,” stated Neal Arnold, Chief Executive Officer and President of FirstSun.
“We are disappointed that the regulators are unwilling to grant the regulatory approvals necessary for the merger to proceed,” stated Mark Mason, Chairman, President and Chief Executive Officer of HomeStreet. “Importantly, HomeStreet has been advised by its regulators that there were no regulatory concerns specifically related to HomeStreet that would have prevented approval of the merger.”
Mr. Arnold continued, “While we have worked tirelessly to obtain regulatory approval, we firmly believe the external environment and landscape regarding regulatory approvals for bank mergers of this nature has become more challenging, particularly following industry news earlier this year. We intend to continue to work with HomeStreet and our regulators on possible solutions that will also make sense for our shareholders. We also remain focused on our organic business prospects following another quarter of strong financial results, including our strong earnings, liquidity, credit and capital profile.”
About FirstSun Capital Bancorp
FirstSun Capital Bancorp, headquartered in Denver, Colorado, is the financial holding company for Sunflower Bank, N.A., which operates as Sunflower Bank, First National 1870 and Guardian Mortgage. Sunflower Bank provides a full range of relationship-focused services to meet personal, business and wealth management financial objectives, with a branch network in five states and mortgage capabilities in 43 states. FirstSun had total consolidated assets of $8.1 billion as of September 30, 2024.
First National 1870 and Guardian Mortgage are divisions of Sunflower Bank, N.A. To learn more, visit ir.firstsuncb.com, SunflowerBank.com, FirstNational1870.com or GuardianMortgageOnline.com.
About HomeStreet, Inc.
HomeStreet, Inc. (Nasdaq: HMST) is a diversified financial services company headquartered in Seattle, Washington, serving consumers and businesses in the Western United States and Hawaii. The Company is principally engaged in real estate lending, including mortgage banking activities, and commercial and consumer banking. Its principal subsidiary is HomeStreet Bank. Certain information about our business can be found on our investor relations web site, located at https://ir.homestreet.com/corporate-profile/default.aspx. HomeStreet Bank is a member of the FDIC and is an Equal Housing Lender.
Cautionary Note Regarding Forward Looking Statements
Statements included in this press release which are not historical in nature are intended to be, and hereby are identified as, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include, but are not limited to, statements regarding discussions relating to the pursuit of an alternative regulatory structure for the proposed mergers (collectively, the “Merger”) and the possible termination of the merger agreement if no alternative structure is feasible. In general, forward-looking statements can be identified through use of words such as “may,” “will,” “believe,” “anticipate,” “expect,” “intend,” “opportunity,” “continue,” “should,” and “could” and variations of such words and similar expressions. Forward-looking statements are subject to risks, uncertainties and assumptions that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence, which could cause actual results to differ materially from anticipated results. Such risks, uncertainties and assumptions, include, among others, the following:
- the failure to obtain necessary regulatory approvals when expected or at all (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the Merger);
- the failure of either party to satisfy any of the other closing conditions to the Merger on a timely basis or at all;
- the occurrence of any event, change or other circumstances that could give rise to the right of one or both of the parties to terminate the merger agreement;
- subsequent events and developments may cause FirstSun’s and HomeStreet’s assessments to change;
- the possibility that the anticipated benefits of the Merger, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy, competitive factors in the areas where FirstSun and HomeStreet do business, or as a result of other unexpected factors or events;
- diversion of management’s attention from ongoing business operations and opportunities;
- adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the Merger or other developments regarding the Merger;
- the outcome of any legal proceedings that have been or may be instituted against FirstSun or HomeStreet; and
- other factors that may affect future results of FirstSun or HomeStreet including changes in asset quality and credit risk; the inability to sustain revenue and earnings growth; changes in interest rates and capital markets; inflation; customer borrowing, repayment, investment and deposit practices; the impact, extent and timing of technological changes; capital management activities; and actions of the Federal Reserve Board and legislative and regulatory actions and reforms.
Further information regarding additional factors that could affect the forward-looking statements can be found in the cautionary language included under the headings “Cautionary Statement Regarding Forward-Looking Statements” and “Risk Factors” in FirstSun’s registration statement on Form S-4 that contains a HomeStreet proxy statement and prospectus of FirstSun dated May 16, 2024, and other documents subsequently filed by FirstSun and HomeStreet with the U.S. Securities and Exchange Commission (“SEC”).
Many of these factors are beyond FirstSun’s and HomeStreet’s ability to control or predict. If one or more events related to these or other risks or uncertainties materialize, or if the underlying assumptions prove to be incorrect, actual results may differ materially from the forward-looking statements. There may also be additional risks that neither FirstSun nor HomeStreet presently knows, or that FirstSun or HomeStreet currently believes are immaterial, that could cause actual events and results to differ from those contained in the forward-looking statements. Accordingly, shareholders and investors should not place undue reliance on any such forward-looking statements. All forward-looking statements speak only as of the date of this communication, and neither FirstSun nor HomeStreet assumes any obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made or to reflect the occurrence of unanticipated events except as required by federal securities laws. Neither FirstSun nor HomeStreet gives any assurance that either FirstSun or HomeStreet, or the combined company, will achieve the results or other matters set forth in the forward-looking statements.
FirstSun and HomeStreet qualify all forward-looking statements by these cautionary statements.
View source version on businesswire.com: https://www.businesswire.com/news/home/20241029101336/en/
Investor Contacts:
FirstSun Capital Bancorp
Ed Jacques
Director of Investor Relations & Business Development, FirstSun
214.473.7958 | Investor.Relations@firstsuncb.com
HomeStreet, Inc.
John Michel
Executive Vice President, Chief Financial Officer
206.515.2291 john.michel@homestreet.com
Media Contacts:
FirstSun Capital Bancorp
Jeanne Lipson
915.881.6785 jeanne.lipson@sunflowerbank.com
HomeStreet, Inc.
Misty Ford
206.876.5506 misty.ford@homestreet.com
Source: FirstSun Capital Bancorp and HomeStreet, Inc.
FAQ
Why was the FirstSun-HomeStreet (HMST) merger application withdrawn?
Federal regulators requested FirstSun and Sunflower Bank to withdraw their merger applications after failing to obtain necessary regulatory approvals, citing a more challenging regulatory environment for bank mergers.
What alternatives are being considered for the HomeStreet (HMST) merger?
FirstSun and HomeStreet are discussing the pursuit of an alternative regulatory structure for the merger, while also considering termination terms if no alternative proves feasible.
Were there any regulatory concerns specific to HomeStreet (HMST)?
No, HomeStreet was advised by its regulators that there were no regulatory concerns specifically related to HomeStreet that would have prevented merger approval.
