Mechanics Bank and HomeStreet, Inc. Announce Strategic Merger
Mechanics Bank and HomeStreet Inc. (NASDAQ: HMST) have announced a strategic merger agreement to create the premier publicly-traded West Coast bank. The all-stock transaction values HomeStreet at $300 million and Mechanics Bank at $3.3 billion.
The merger will combine HomeStreet's 56 branches across Washington, Oregon, Southern California, and Hawaii with Mechanics Bank's 112 California branches, creating a network of 168 branches with $23 billion in assets. Post-merger, existing HomeStreet shareholders will own approximately 8.3% of the combined company, while Mechanics Bank shareholders will hold 91.7%, with Ford Financial Fund controlling about 74.3%.
The combined entity will operate as Mechanics Bancorp, remaining publicly traded. The merger is expected to close in the third quarter of 2025, subject to regulatory and shareholder approvals.
Mechanics Bank e HomeStreet Inc. (NASDAQ: HMST) hanno annunciato un accordo di fusione strategica per creare la principale banca quotata in pubblico della costa occidentale. La transazione interamente in azioni valuta HomeStreet a 300 milioni di dollari e Mechanics Bank a 3,3 miliardi di dollari.
La fusione unirà i 56 sportelli di HomeStreet situati in Washington, Oregon, California meridionale e Hawaii con i 112 sportelli di Mechanics Bank in California, creando una rete di 168 sportelli con 23 miliardi di dollari in attivi. Dopo la fusione, gli attuali azionisti di HomeStreet possiederanno circa l'8,3% della società combinata, mentre gli azionisti di Mechanics Bank deterranno il 91,7%, con il Ford Financial Fund che controllerà circa il 74,3%.
L'entità combinata opererà come Mechanics Bancorp, rimanendo quotata in borsa. Si prevede che la fusione si concluderà nel terzo trimestre del 2025, soggetta ad approvazioni normative e degli azionisti.
Mechanics Bank y HomeStreet Inc. (NASDAQ: HMST) han anunciado un acuerdo de fusión estratégica para crear el principal banco que cotiza en bolsa en la costa oeste. La transacción totalmente en acciones valora a HomeStreet en 300 millones de dólares y a Mechanics Bank en 3.3 mil millones de dólares.
La fusión combinará las 56 sucursales de HomeStreet en Washington, Oregón, el sur de California y Hawái con las 112 sucursales de Mechanics Bank en California, creando una red de 168 sucursales con 23 mil millones de dólares en activos. Después de la fusión, los accionistas actuales de HomeStreet poseerán aproximadamente el 8.3% de la empresa combinada, mientras que los accionistas de Mechanics Bank tendrán el 91.7%, con Ford Financial Fund controlando alrededor del 74.3%.
La entidad combinada operará como Mechanics Bancorp, permaneciendo cotizada en bolsa. Se espera que la fusión se cierre en el tercer trimestre de 2025, sujeto a aprobaciones regulatorias y de los accionistas.
메커닉스 은행과 홈스트리트 주식회사 (NASDAQ: HMST)는 전략적 합병 계약을 발표하여 서부 해안의 주요 상장 은행을 만들기로 했습니다. 전액 주식 거래로 홈스트리트의 가치는 3억 달러, 메커닉스 은행의 가치는 33억 달러로 평가됩니다.
이번 합병은 워싱턴, 오리건, 남부 캘리포니아 및 하와이에 있는 홈스트리트의 56개 지점과 캘리포니아에 있는 메커닉스 은행의 112개 지점을 통합하여 총 168개 지점의 네트워크를 생성하며, 230억 달러의 자산을 보유하게 됩니다. 합병 후 기존 홈스트리트 주주들은 합병된 회사의 약 8.3%를 소유하게 되며, 메커닉스 은행 주주들은 91.7%를 보유하게 되며, 포드 금융 기금이 약 74.3%를 통제하게 됩니다.
합병된 회사는 메커닉스 뱅코프로 운영되며, 상장 상태를 유지합니다. 합병은 2025년 3분기에 마무리될 것으로 예상되며, 규제 및 주주 승인에 따라 달라질 수 있습니다.
Mechanics Bank et HomeStreet Inc. (NASDAQ: HMST) ont annoncé un accord de fusion stratégique pour créer la principale banque cotée en bourse de la côte ouest. La transaction entièrement en actions valorise HomeStreet à 300 millions de dollars et Mechanics Bank à 3,3 milliards de dollars.
La fusion combinera les 56 agences de HomeStreet situées à Washington, Oregon, Californie du Sud et Hawaï avec les 112 agences de Mechanics Bank en Californie, créant un réseau de 168 agences avec 23 milliards de dollars d'actifs. Après la fusion, les actionnaires existants de HomeStreet posséderont environ 8,3 % de la société combinée, tandis que les actionnaires de Mechanics Bank détiendront 91,7 %, le Ford Financial Fund contrôlant environ 74,3 %.
L'entité combinée fonctionnera sous le nom de Mechanics Bancorp, restant cotée en bourse. La fusion devrait se conclure au troisième trimestre 2025, sous réserve des approbations réglementaires et des actionnaires.
Mechanics Bank und HomeStreet Inc. (NASDAQ: HMST) haben eine strategische Fusionsvereinbarung angekündigt, um die führende börsennotierte Bank an der Westküste zu schaffen. Die gesamte Aktien-Transaktion bewertet HomeStreet mit 300 Millionen Dollar und Mechanics Bank mit 3,3 Milliarden Dollar.
Die Fusion wird die 56 Filialen von HomeStreet in Washington, Oregon, Südkalifornien und Hawaii mit den 112 Filialen von Mechanics Bank in Kalifornien kombinieren und ein Netzwerk von 168 Filialen mit 23 Milliarden Dollar an Vermögenswerten schaffen. Nach der Fusion werden die bestehenden Aktionäre von HomeStreet etwa 8,3% des kombinierten Unternehmens besitzen, während die Aktionäre von Mechanics Bank 91,7% halten werden, wobei der Ford Financial Fund etwa 74,3% kontrolliert.
Die kombinierte Einheit wird als Mechanics Bancorp agieren und börsennotiert bleiben. Die Fusion wird voraussichtlich im dritten Quartal 2025 abgeschlossen sein, vorbehaltlich regulatorischer und aktionärsseitiger Genehmigungen.
- Creation of a premier West Coast bank with $23 billion in assets
- Expanded geographic footprint across multiple states
- Strong combined branch network of 168 locations
- Improved market presence from San Diego to Seattle
- Enhanced competitive position through increased scale
- Significant dilution for HomeStreet shareholders (only 8.3% ownership)
- High concentration of ownership by Ford Financial Fund (74.3%)
- Integration risks across multiple markets and states
- Regulatory approval uncertainty
Insights
This strategic merger between Mechanics Bank and HomeStreet represents a significant positive development for HMST shareholders. The transaction values HomeStreet at
The deal structure as an all-stock transaction allows HMST shareholders to participate in future growth while addressing HomeStreet's scale challenges. The merger creates a formidable West Coast banking franchise with 168 branches spanning from San Diego to Seattle, substantially enhancing the geographic footprint and competitive positioning in key high-growth markets.
For Mechanics Bank, this transaction represents a strategic expansion of its California-focused operations into the Pacific Northwest while simultaneously gaining public company status. The combined entity will benefit from improved operational efficiency, enhanced deposit gathering capabilities, and greater lending capacity.
With the transaction expected to close in Q3 2025 and regulatory approvals still pending, HMST shareholders should closely evaluate whether to maintain positions. The significant ownership by Ford Financial Fund (
This merger represents a textbook example of strategic consolidation in regional banking, addressing key challenges facing mid-sized institutions. For HomeStreet, which has struggled with scale inefficiencies at
The combined
What's particularly notable is how this transaction transforms Mechanics Bank from a privately-held institution into a public company without the complexities and expenses of a traditional IPO. This provides Mechanics immediate access to capital markets for future growth initiatives while expanding its asset base by
The leadership transition approach - maintaining Mechanics Bank's executive team while keeping Mark Mason in a consulting role - suggests a thoughtful integration strategy that preserves institutional knowledge while establishing clear leadership direction. This structure should facilitate customer retention during the transition phase, which is often a significant risk factor in banking mergers.
While integration challenges inevitably remain, the strategic rationale for combining these complementary institutions creates compelling long-term value potential for shareholders of both entities.
Combination will create the premier, publicly-traded West Coast bank
Mechanics Bank is a 120-year-old full-service community bank based in
The transaction values HomeStreet at a pre-transaction estimated equity value of
“This is a very significant milestone for Mechanics Bank and we are excited through this transaction to extend our market presence with a full West Coast footprint from
The board of directors of the combined company will consist of directors of Mechanics Bank and one director of HomeStreet, to be named at a later date. The officers of Mechanics Bank will be the officers of the combined company. Mark Mason, Chairman, President and CEO of HomeStreet, will remain with the combined company in a consulting capacity.
Mr. Mason said, “This merger validates the intrinsic value of HomeStreet’s loyal customer base, strong management and dynamic markets in which we operate and allows our shareholders to participate in the benefits of the combination going forward. The combined company will have a strong branch footprint and deposit market share in the best markets in the west, strong core deposit funding, a well-diversified, conservatively underwritten loan portfolio and a growing wealth management and trust business. We believe this merger will improve our customers’ experiences and create new opportunities for many of our employees, enabling the company to retain and attract top talent. Both organizations share very similar banking strategies, strong credit cultures and a deep commitment to our customers, community service and being good corporate citizens.”
“This transaction is strategically and financially compelling for shareholders of both Mechanics Bank and HomeStreet,” commented C.J. Johnson, CEO and President of Mechanics Bank. “We have completed a thorough due diligence process and look forward to welcoming HomeStreet’s clients and employees to our company.”
The transactions contemplated by the Merger Agreement are subject to customary closing conditions, including the receipt of regulatory approvals and approval by HomeStreet’s and Mechanics Bank’s shareholders. Ford Financial Fund and its affiliates and certain other shareholders of Mechanics Bank have entered into support agreements agreeing, among other things, to vote their shares in favor of the Merger, which collectively represent the required vote of Mechanics Bank shareholders. The Merger is expected to close in the third quarter of 2025.
Advisors
Wachtell, Lipton Rosen & Katz is serving as legal advisor to Mechanics Bank with J.P. Morgan Securities LLC serving as its financial advisor. Sullivan & Cromwell LLP is serving as legal advisor to HomeStreet with Keefe, Bruyette & Woods, A Stifel Company, serving as its financial advisor.
Joint Conference Call
Mechanics Bank and HomeStreet will conduct a joint conference call on Monday March 31, 2025, at 1:00 p.m. ET. Carl B. Webb, Chairman of the board of directors of Mechanics Bank, C.J. Johnson, CEO and President of Mechanics Bank and Mark K. Mason, CEO and President of HomeStreet will discuss the proposed merger between Mechanics Bank and HomeStreet. A question and answer session will follow the presentation. Shareholders, analysts and other interested parties may register in advance at the following URL:
https://www.netroadshow.com/events/login?show=db979b49&confId=79783
or join the call by dialing directly at 1-833-470-1428 shortly before 1:00 p.m. ET using Access Code 412851
About Mechanics Bank
Mechanics Bank is an independent, full-service bank based in
About HomeStreet, Inc.
HomeStreet, Inc. (Nasdaq: HMST) is a diversified financial services company headquartered in
Cautionary Note Regarding Forward Looking Statements
When used in this press release and in other documents filed with or furnished to the
These forward-looking statements are subject to risks, uncertainties, assumptions, estimates, and other important factors that may cause actual results to differ materially from those projected. In addition to factors previously disclosed in HomeStreet’s reports filed with the SEC, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: a) the occurrence of any event, change, or other circumstance that could give rise to the right of one or all of the parties to terminate the Merger Agreement; b) the outcome of any legal proceedings that may be instituted against Mechanics Bank, HomeStreet or HomeStreet Bank; c) the possibility that the Transaction does not close when expected or at all because required regulatory, shareholder, or other approvals and other conditions to closing are not received or satisfied on a timely basis 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 Transaction); d) the risk that the benefits from the Transaction may not be fully realized or may take longer to realize than expected, including as a result of changes in, or problems arising from, general economic and market conditions, interest and exchange rates, monetary policy, laws and regulations and their enforcement, and the degree of competition in the geographic and business areas in which Mechanics Bank, HomeStreet and HomeStreet Bank operate; e) changes in asset quality and credit risk; f) the inability to sustain revenue and earnings growth; g) customer borrowing, repayment, investment and deposit practices; h) customer disintermediation; i) the ability to promptly and effectively integrate the businesses of Mechanics Bank, HomeStreet and HomeStreet Bank; j) the possibility that the Transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; k) reputational risk and potential adverse reactions of Mechanics Bank’s, HomeStreet’s or HomeStreet Bank’s customers, employees or other business partners, including those resulting from the announcement or completion of the Transaction; l) the dilution caused by HomeStreet’s issuance of additional shares of its capital stock in connection with the Transaction; m) and the diversion of management’s attention and time from ongoing business operations and opportunities on Transaction-related matters.
These factors are not necessarily all of the factors that could cause Mechanics Bank’s, HomeStreet’s, HomeStreet Bank’s or the combined company’s actual results, performance, or achievements to differ materially from those expressed in or implied by any of the forward-looking statements. Other factors, including unknown or unpredictable factors, also could significantly harm Mechanics Bank’s, HomeStreet’s, HomeStreet Bank’s or the combined company’s results.
Forward-looking statements speak only as of the date they are made and Mechanics Bank, HomeStreet and HomeStreet Bank do not undertake or assume any obligation to update any of these statements to reflect actual results, new information or future events, changes in assumptions, or changes in other factors affecting forward-looking statements, except to the extent required by applicable law. If Mechanics Bank, HomeStreet or HomeStreet Bank update one or more forward-looking statements, no inference should be drawn that Mechanics Bank, HomeStreet or HomeStreet Bank will make additional updates with respect to those or other forward-looking statements. Further information regarding HomeStreet and HomeStreet Bank, and factors which could affect the forward-looking statements contained herein can be found in HomeStreet’s filings with the SEC.
No Offer or Solicitation
This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
Additional Information about the Transaction and Where to Find It
In connection with the Transaction, HomeStreet will file with the SEC a Registration Statement on Form S-4 to register the shares of HomeStreet (which will be renamed Mechanics Bancorp following the closing) capital stock to be issued in connection with the Transaction. The Registration Statement will include a consent solicitation statement of Mechanics Bank and a proxy statement of HomeStreet that also constitutes a prospectus. The definitive joint consent solicitation statement/proxy statement/prospectus will be sent to the shareholders of HomeStreet seeking their approval of the Transaction and other related matters and to shareholders of Mechanics Bank.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT ON FORM S-4 AND THE JOINT CONSENT SOLICITATION STATEMENT/PROXY STATEMENT/PROSPECTUS INCLUDED WITHIN THE REGISTRATION STATEMENT ON FORM S-4 WHEN IT BECOMES AVAILABLE, AS WELL AS ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE TRANSACTION OR INCORPORATED BY REFERENCE INTO THE CONSENT SOLICITATION STATEMENT/JOINT PROXY STATEMENT/PROSPECTUS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION REGARDING HOMESTREET, HOMESTREET BANK, MECHANICS BANK, THE TRANSACTION AND RELATED MATTERS.
Investors and security holders may obtain free copies of these documents and other documents filed with the SEC by HomeStreet through the website maintained by the SEC at http://www.sec.gov or from HomeStreet at its website, https://ir.homestreet.com/sec-filings/all-filings/default.aspx. Documents filed with the SEC by HomeStreet will be available free of charge by accessing the “Investor Relations” page of HomeStreet’s website at https://ir.homestreet.com/sec-filings/all-filings/default.aspx.
Participants in the Solicitation
Mechanics Bank, HomeStreet and certain of HomeStreet’s directors and executive officers may be deemed to be participants in the solicitation of proxies from HomeStreet’s shareholders in connection with the Transaction. Information about the interests of the persons who may be deemed to be participants in the solicitation of shareholders of HomeStreet in connection with the Transaction and a description of their direct and indirect interests, by security holdings or otherwise, will be included in the joint consent solicitation statement/proxy statement/prospectus related to the Transaction, which will be filed by HomeStreet with the SEC. Information about the directors and executive officers of HomeStreet, their ownership of HomeStreet common stock, and HomeStreet’s transactions with related persons is set forth in the sections entitled “HomeStreet Corporate Governance and Other Matters,” “2023 Executive Compensation Program,” “2023 Summary Compensation Table” and “Principal Shareholders of HomeStreet” in the definitive proxy statement filed in connection with HomeStreet’s meeting of shareholders held on June 18, 2024, as filed with the SEC on Schedule 14A on May 16, 2024 (and which is available at https://www.sec.gov/Archives/edgar/data/1518715/000155278124000348/e24254_hmst-defm14a.htm). To the extent holdings of HomeStreet common stock by the directors and executive officers of HomeStreet have changed from the amounts held by such persons as reflected therein, such changes have been or will be reflected on Statements of Change in Ownership on Form 4 filed with the SEC. Free copies of these documents may be obtained as described above.
View source version on businesswire.com: https://www.businesswire.com/news/home/20250331342600/en/
Mechanics Bank: Greg Jones, gregory_jones@mechanicsbank.com, (916) 797-8218
HomeStreet, Inc.: Misty Ford, misty.ford@homestreet.com, (206) 876-5506
Source: Mechanics Bank