HomeStreet was Encouraged by FirstSun Capital Bancorp
Management to Hedge Interest Rate Risk After Merger was Announced
in January 2024 but Mark Mason
Refused
HomeStreet's Profitability and Value Declined as Interest
Rates Increased
On April 30th,
FirstSun Amended and Lowered the Merger Consideration to HomeStreet
Shareholders by $30.5 Million to
Reflect HomeStreet's Lower Profitability and Value
If Shareholders Receive $30.5
Million Less, Why Should HomeStreet Executives Receive
$19.6 Million More Via Change in
Control Payments?
Last Week, HomeStreet Shareholders Voted Against HomeStreet
Management Receiving the Payments
Blue Lion Capital Encourages HomeStreet's Board to Do the
Right Thing and Remove the Management Team Change in Control
Payments as Part of the FirstSun Merger
Blue Lion Encourages Shareholders to Contact James Mitchell, HomeStreet's Lead Independent
Director
DALLAS, June 27,
2024 /PRNewswire/ -- Blue Lion Capital, a
Dallas-based investment firm
("Blue Lion") that beneficially owns approximately 1.3% of the
stock of HomeStreet, Inc. (Nasdaq: HMST) ("HomeStreet" or the
"Company"), has issued a letter to the HomeStreet Board of
Directors ("Board") regarding Change in Control (CIC) payments that
the Company's management team may receive as part of the FirstSun
Capital Bancorp ("FSUN" or "FirstSun") merger.
Blue Lion learned that at the time of the original merger
announcement on January 16th of this
year that FSUN management strongly encouraged HomeStreet's CEO
Mark Mason to hedge the interest
rate risk imbedded in the fixed rate loan and securities portfolios
that caused HMST all the problems to begin with. Mark Mason refused. Over the ensuing months,
interest rates increased and the value of the two portfolios
declined.
On April 30th of this
year, HMST and FSUN amended their merger agreement. The price
that HMST shareholders would receive is now 11% less
($30.5 million) than what was
previously announced in January. The primary reason given for the
lower consideration to HMST shareholders on the April 30th conference call was the
higher for longer interest rate outlook and the impact it would
have on HMST's profitability. Blue Lion believes virtually all the
blame for the $30.5 million reduction
in the consideration for shareholders was due to Mark Mason and the Board.
Blue Lion is strongly encouraging the Board to remove
the CIC payments as part of the merger as a result of these
missteps. Blue Lion believes these CIC payments, which total
$19.6 million, were already
egregious. Chuck Griege stated in his letter to the Board,
"Why should executives still receive millions when their negligence
directly resulted in the $30.5
million reduction in the merger consideration to
shareholders? If shareholders are receiving less because of poor
management decisions, management should not receive the
payments."
Based on the 8k released last
week, HMST shareholders voted against the CIC payments
to be made to Mark Mason and other
named executive officers. However, the outcome of the vote was
"advisory and non-binding." Griege stated "Shareholders have spoken
and the Board needs to do its fiduciary duty and follow the wishes
of shareholders." Griege goes on to say, "Candidly, this outcome
was not surprising with the poor performance of the stock and the
Board over the past twelve years. Shareholders have been fleeced by
this management team and Board."
Blue Lion encourages shareholders to contact James
Mitchell, HomeStreet's Lead Independent Director to strongly
discourage any CIC payments being made to HMST's management
team.
Important Information
Investor Contact:
Chuck Griege
Managing Partner
Blue Lion Capital
214-855-2430
chuck@bluelioncap.com
Website: https://www.bluelioncap.com
Copyright (c) 2024
View original content to download
multimedia:https://www.prnewswire.com/news-releases/blue-lion-capital-encourages-homestreet-board-to-remove-management-team-change-in-control-payments-as-part-of-fsun-merger-302184657.html
SOURCE Blue Lion Capital