The merger is subject to customary closing conditions, including shareholder and regulatory approvals.
HomeStreet and Simplicity management will conduct a joint investor call on the proposed transaction on Tuesday, September 30, 2014 at 1:00 p.m. Eastern Time. Interested parties may join the call by dialing 1-877-508-9589. A rebroadcast will be available approximately one hour after the call by dialing 1-877-344-7529 and entering passcode 10053094. An investor presentation detailing the transaction is available on our website at http://ir.homestreet.com.
Under the terms of the 100% stock agreement, Simplicity stockholders are expected to receive one share of HomeStreet common stock for each share owned of Simplicity common stock, subject to adjustment if HomeStreet’s closing stock price during a specified measurement period prior to closing is more than $20 or less than $15 per share.
On a pro forma basis, the combined company will have approximately $4.1 billion in assets, total deposits of approximately $3.1 billion, and total loans of approximately $3.1 billion (based on 6/30/14 balances). At the time of the anticipated closing, the combined company is expected to have a network of more than 100 retail deposit branches and stand-alone lending centers in six states.
The proposed transaction was approved by the boards of both companies and is expected to close in the first quarter of 2015, subject to certain conditions set forth in the merger agreement.
Simplicity Bank is headquartered in Covina, Calif. and operates seven retail bank branches in Los Angeles and San Bernardino counties. Simplicity has approximately $870 million in assets, total net loans of more than $700 million and total deposits exceeding $650 million as of June 30, 2014. Upon completion of the mergers, Simplicity Bank branches will become HomeStreet Bank branches.
"Our two companies complement each other well in products, service standards, culture and commitment to our communities," said HomeStreet President and CEO Mark K. Mason. "We believe Simplicity Bank’s strong Southern California retail franchise, with nearly 60,000 deposit accounts, and HomeStreet’s growing regional consumer mortgage, residential construction and commercial real estate businesses will prove to be a great match for our customers and our companies. We will work closely with Simplicity management and employees throughout this process to ensure a smooth transition and uninterrupted, high quality service to customers. Additionally, we believe that HomeStreet Bank, with our long history of exemplary corporate citizenship and community service, will be a welcome addition to the communities currently served by Simplicity Bank. HomeStreet Bank and its employees today support over 200 community agencies in the cities that we serve. We have received numerous awards for our community service and philanthropy and we have an uninterrupted history of ‘Outstanding’ community reinvestment ratings since the enactment of the Community Reinvestment Act."
"We are very excited about this merger and the opportunities we expect from the combined company. We also believe our customers and communities will be excited about this merger, especially as they become more aware of what the combined organization can offer in expanded products and services and increased community involvement," said Simplicity President and CEO Dustin Luton. "It is also important for our investors, employees and customers to understand the comprehensive and lengthy process that the Board and management conducted to reach this decision. As a public company, we have consistently sought to meet the financial expectations of the capital markets, provide exceptional service to our customers and support our communities. We have determined that to meet these goals we need to broaden our customer base as well as expand our geographic footprint and our product and service offerings. In March 2014, we engaged Keefe, Bruyette & Woods, Inc. to assist us in exploring our strategic options. This process, which included assessing various stand-alone strategies, concluded that we needed a larger, stronger platform to make us more efficient and competitive. We conducted a broad-based process to identify a merger partner that would allow us to achieve our goals, and the merger with HomeStreet we believe represents by far the best opportunity for maximizing value for our stockholders and for promoting the interests of our employees, customers and communities."
MJ Capital Partners, LLC served as financial advisors and Davis Wright Tremaine served as legal advisors to HomeStreet, Inc. Keefe, Bruyette & Woods, Inc. served as financial advisors and Luse Gorman Pomerenk & Schick, PC served as legal advisors to Simplicity Bancorp, Inc.
