HomeStreet (HMST) to Acquire Orange County Business Bank for $11.70/Share

HomeStreet (Nasdaq: HMST) has entered into a definitive agreement under which it will acquire Orange County Business Bank (OTC: OCBB) (“OCBB”), a California banking corporation.

The proposed transaction was approved by the boards of both companies and is expected to close late in the fourth quarter of 2015 or early in the first quarter of 2016, subject to certain conditions set forth in the merger agreement and the customary closing conditions, including OCBB shareholder and state and federal regulatory approvals.

Under the terms of the agreement, HomeStreet will acquire Orange County Business Bank for $11.70 per share, or a total value of $55.3 million with $5.5 million paid in cash and the remainder in HomeStreet common stock. The merger agreement provides for an adjustment to the number of shares of HomeStreet stock issuable in the transaction if HomeStreet’s average closing stock price, as measured during a ten-day trading day period ending on and excluding the fifth day prior to the closing date, falls outside a range of 90 percent to 115 percent of the average closing price measured during such a period prior to the signing date.

Orange County Business Bank serves businesses throughout the region with a strong customer-service focus and dedication to the local business community. This acquisition provides OCBB with substantial additional resources to better serve clients, including higher loan limits and a broader menu of commercial and consumer loan, deposit, investment and insurance products and services.

“HomeStreet feels like OCBB at a $5 billion size,” said Orange County Business Bank’s Chairman and CEO JP Gough. “I am impressed by the similarity in the way these two organizations think and the caliber of people our banks employ.”

“Orange County Business Bank brings to HomeStreet a team of very talented and dedicated bankers who know the community and the unique needs of businesses,” said HomeStreet President and CEO Mark K. Mason. “Customers will continue to receive the high-quality, personalized service they currently enjoy and will now have a wider range of products and services available to them from the team they know and trust. The two banks share a similar philosophy on providing exceptional customer service through a relationship-based approach to banking, all with a strong commitment to serving the local community. ”

Orange County Business Bank is headquartered in Irvine, Calif. and operates one business banking office at its headquarters building in Irvine. The bank has approximately $200 million in assets and total gross loans of more than $128 million as of June 30, 2015. Upon completion of the merger, the Orange County Business Bank office will become an office of HomeStreet Bank.

On a pro forma basis, the combined company will have approximately $5.01 billion in assets based on June 30, 2015 balances. Currently, the two companies together have a network of 112 retail deposit branches and stand-alone lending centers in eight states.

HomeStreet will conduct a conference call for shareholders and analysts on Tuesday, September 29, 2015 at 1:00 p.m. EDT. Mark Mason, HomeStreet’s President and CEO, will review the transaction presentation and answer questions. Interested parties may register in advance at http://dpregister.com/10073374 or may join the call by dialing 1-877-508-9589 (1-855-669-9657 in Canada) shortly before 1:00 p.m. EDT. A rebroadcast will be available approximately one hour after the conference call by dialing 1-877-344-7529 and entering passcode 10073374. The information to be discussed in the conference call will be available on HomeStreet's website at 12:00 pm EDT on Monday, September 28, 2015.

MJ Capital Partners, LLC served as financial advisors and Davis Wright Tremaine LLP served as legal advisors to HomeStreet, Inc. Sandler O’Neill & Partners, L.P. served as financial advisors and King, Holmes, Paterno & Soriano, LLP served as legal advisors to OCBB.

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