By Katherine Hamilton
HomeStreet shares rose after the company agreed to combine with Mechanics Bank.
The stock opened up 12% at $10.40 on Monday. Shares have lost 9% of their value since the start of the year.
The banking and lending company HomeStreet plans to undergo an all-stock reverse merger with the privately held Walnut Creek, Calif., bank. The deal carries an estimated equity value of $300 million for HomeStreet and $3.3 billion for Mechanics.
The new company is set to be called Mechanics Bancorp and would have $23 billion in assets and 168 branches in California, Washington, Oregon and Hawaii.
HomeStreet's shareholders will own about 8.3% stake and Mechanics investors will hold the rest, the companies said. Ford Financial, which invested in Mechanics in 2014, will own about 74.3% stake once the deal is complete.
The deal is set to close in the third quarter.
Write to Katherine Hamilton at katherine.hamilton@wsj.com
(END) Dow Jones Newswires
March 31, 2025 09:53 ET (13:53 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.
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