HomeStreet and FirtSun agree to amend definitive merger agreement

FirstSun Capital Bancorp and HomeStreet announced that they have mutually agreed to amend their definitive merger agreement that was entered into on January 16. The amendment provides for, among other things: an increase in FirstSun’s total equity capital raised in connection with the merger of an additional $45M to $60M, resulting in an increase from an aggregate capital raise of $175M to up to $235M; a revised exchange ratio pursuant to which HomeStreet shareholders will receive 0.3867 shares of FirstSun common stock for each share of HomeStreet common stock, which represents a value of $13.53 per share; 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 $2.6M 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 $48.5M 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 $300M 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 also announced that to further support the pro-forma company’s balance sheet, it has amended its investment agreements with investors to raise capital to support the merger, led by Wellington Management, to increase the total equity capital raise from an aggregate of $175M to up to $235M, $80M of which was issued to Wellington on January 17 immediately following the initial merger agreement announcement. The remaining equity capital of up to $155M will be issued concurrently with, and subject to, closing of the merger.