FirstSun Capital Bancorp And HomeStreet Announce Transformational Strategic Merger And $175M Equity Raise
Portfolio Pulse from Benzinga Newsdesk
FirstSun Capital Bancorp (FSUN) and HomeStreet (HMST) have announced a strategic merger, creating a combined entity with assets of approximately $17 billion. The merger will result in a bank headquartered in Dallas, Texas, with a significant presence in 6 of the top 10 fastest-growing metropolitan statistical areas (MSAs) in the U.S. The combined company is expected to have strong performance metrics, including an estimated return on assets (ROA) of ~1.4% and return on average tangible common equity (ROATCE) of ~17%. The merger is anticipated to be highly accretive to FSUN's 2025 estimated earnings per share (EPS), with an increase of over 30%. Additionally, a $175 million equity raise, led by Wellington Management, has been fully committed to support the merger. The pro forma balance sheet of the combined entity is expected to be robust, with a high-quality deposit franchise and a neutral interest rate risk profile. The executive management team of the merged company will be highly experienced, with a track record of expertise in mergers and acquisitions (M&A).
January 16, 2024 | 11:33 am
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POSITIVE IMPACT
FirstSun Capital Bancorp's strategic merger with HomeStreet is expected to significantly enhance its 2025 EPS by over 30%, backed by a $175M equity raise.
The merger with HomeStreet is likely to have a positive short-term impact on FSUN's stock price due to the anticipated accretion to 2025 EPS and the strong financial backing from the equity raise. The positive pro forma performance metrics and the strategic expansion into fast-growing MSAs also contribute to the optimistic outlook for FSUN.
CONFIDENCE 80
IMPORTANCE 85
RELEVANCE 90
POSITIVE IMPACT
HomeStreet's merger with FirstSun Capital Bancorp is set to create a larger, more competitive entity with a strong presence in key growth markets.
HomeStreet's stock is likely to see a positive short-term impact from the merger announcement due to the expected benefits of scale, market presence, and financial performance. The equity raise and the experienced management team further support the positive outlook for HMST.
CONFIDENCE 80
IMPORTANCE 85
RELEVANCE 90