In the news:
Originally published February 7, 2012 at 3:11 PM | Page modified February 8, 2012 at 12:35 PM
HomeStreet renews a downsized IPO effort
HomeStreet Bank's parent company slashed the size of its proposed initial public offering to $64.7 million in a filing on Tuesday, a fraction of the $210 million IPO it first pitched to Wall Street last May.
Seattle Times staff reporter
HomeStreet Bank's parent company slashed the size of its proposed initial public offering to $64.7 million in a filing on Tuesday, a fraction of the $210 million IPO it first pitched to Wall Street last May.
It also proposed a higher price per share — $43 to $45 — instead of the $22 to $24 it suggested last year.
HomeStreet Inc., facing a tough market for bank IPOs, has repeatedly postponed its offering and scaled down the amount it seeks to raise. Regulators have told the 90-year-old Seattle financial-services company that it needs to raise more capital to get out from under a May 2009 enforcement order.
Concurrent with its IPO, HomeStreet is selling 113,636 shares in a private placement through its lead underwriter, FBR Capital Markets, according to HomeStreet's regulatory filing.
Between the IPO and the private placement, the company will contribute $44 million to the Seattle bank — far short of the $132 million it had sought to recapitalize the bank last year.
That's not enough to meet capital levels required under its agreement with regulators, including a Tier 1 leverage ratio of 10 percent. As of Sept. 30, HomeStreet's ratio was 5.6 percent.
HomeStreet says it believes that a successful offering, plus the completion of its next bank examination, will be enough to qualify the bank for a new regulatory order with a Tier 1 ratio of 8.5 percent.
The company reported more than $2.2 billion in assets at year-end.
According to its call report filed with regulators, HomeStreet made a $17.6 million profit in 2011, a big improvement over the prior year's $29.3 million loss.
As part of a plan to expand its mortgage-banking business, HomeStreet said it offered jobs last month to most of the mortgage bankers employed by MetLife Home Loans, which is getting out of home lending.
It has hired about 140 MetLife mortgage employees and plans to open 11 more stand-alone loan offices in Washington and Idaho in the first half of this year.
That represents a huge expansion for HomeStreet, which has a network of 20 bank branches and nine loan offices in Washington, Oregon and Hawaii.
Following the completion of its IPO, HomeStreet said it would have more than 2.75 million shares outstanding.
Sanjay Bhatt: 206-464-3103 or sbhatt@seattletimes.com
Start the conversation >