HomeStreet is merging with Mechanics Bank in an all-stock transaction, expected to close in Q3 2025. HomeStreet's sale of its servicing portfolio is projected not to realize any gains or losses, and it also recently sold $990 million in multifamily commercial real estate loans to streamline its balance sheet. HomeStreet operates 56 branches and has $8 billion in assets. Mechanics Bank, with $16 billion in assets, can leverage this merger to become a publicly-traded bank holding company, enhancing future opportunities and market presence.
As HomeStreet carried this servicing portfolio at current market value at June 30, 2025, no gain or loss is expected to be realized upon the close of the sale, the company stated in a filing with the Securities and Exchange Commission (SEC).
According to mortgage technology platform Modex, the bank originated $523 million in residential mortgages over the past 12 months--nearly 65% of which were conventional loans and 49% were purchase originations.
The transaction allows Mechanics the opportunity to become a publicly-traded bank holding company, which better positions Mechanics Bank for future opportunities, said Carl B. Webb, chairman of Mechanics Bank.
The combined company will have a strong branch footprint and deposit market share in the best markets in the west, strong core deposit funding, a well-diversified, conservatively underwritten loan portfolio and a growing wealth management and trust business.
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