FirstSun Capital Bancorp and HomeStreet, Inc. Amend Merger Agreement

FirstSun Capital Bancorp (OTCQX: FSUN) (“FirstSun”) and HomeStreet, Inc. (“HomeStreet”) (Nasdaq: HMST) today announced that they have mutually agreed to amend their definitive merger agreement that was entered into on January 16, 2024.

The amendment provides for, among other things:

• an increase in FirstSun’s total equity capital raised in connection with the merger of an additional $45 million to $60 million, resulting in an increase from an aggregate capital raise of $175 million to up to $235 million (as further discussed below);
• a revised exchange ratio pursuant to which HomeStreet shareholders will receive 0.3867 shares (revised from 0.4345 shares under the original merger agreement) of FirstSun common stock for each share of HomeStreet common stock, which represents a value of $13.53 per share (based on the closing price per share of FirstSun shares on April 29, 2024);
• a reduced termination fee payable by HomeStreet in certain circumstances if HomeStreet receives a competing acquisition proposal within 30 days after the effective date of the Amendment to $2,600,000, plus reimbursement of FirstSun’s transaction fees and expenses;
• that the combined company’s ongoing banking operations will operate under a Texas state charter with FirstSun’s subsidiary bank, Sunflower Bank, converting from a national bank to a Texas state chartered bank and that Sunflower Bank will also seek membership in the Federal Reserve System;
• FirstSun’s issuance of $48.5 million of subordinated debt concurrently with the closing, the proceeds of which will be contributed to Sunflower Bank to further support Sunflower Bank’s capital; and
• HomeStreet’s disposition or sale of approximately $300 million (based on principal balance) of certain of its Commercial Real Estate loans, which disposition or loan sales will be consummated upon, or as soon as reasonably practicable, after the closing of the merger.

FirstSun and HomeStreet each believe that a Texas state bank charter is the appropriate charter for the combined company’s banking operations since Sunflower Bank is now headquartered in Dallas, Texas. Under the amended merger agreement, the necessary bank regulatory approvals required to consummate the merger are the approval of the Federal Reserve Board and the Texas Department of Banking. In conjunction with the amendment to the merger agreement, the parties’ previous application with the Office of the Comptroller of the Currency (“OCC”) in connection with the bank merger has been withdrawn. Neal Arnold, CEO of FirstSun and Sunflower Bank, stated, “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.” Mark Mason, CEO of HomeStreet and HomeStreet Bank, stated, “We continue to believe FirstSun is the right partner and we are working well with the FirstSun team to remain focused on ensuring an effective integration and a seamless conversion of systems.”