Dive Brief:
- U.S. Bank and MUFG Union Bank will sell three MUFG Union branches in southern California to Seattle-based HomeStreet Bank, the banks announced Wednesday.
- HomeStreet will assume roughly $490 million in deposits and purchase $22 million in loans as part of the agreement. The deal will give HomeStreet roughly 16,000 new customer relationships. Employees based in the three branches — in Big Bear Lake, Hesperia and Yucca Valley — will transfer to HomeStreet, the banks said.
- The Justice Department directed U.S. Bank and MUFG Union to divest the branches as part of their $8 billion combination, announced in September 2021, which still awaits regulator approval.
Dive Insight:
The transaction, set to close in the first quarter of 2023, will push HomeStreet’s asset total past $9 billion and boost its California presence to 20 branches — nearly one-third of the Seattle bank’s brick-and-mortar footprint.
“We have an outstanding record of customer service and community involvement, and we look forward to having a positive impact on the new customers and communities we will be serving,” HomeStreet CEO Mark K. Mason said.
Impact, especially to low- and middle-income (LMI) areas, has been a major sticking point among dozens of community organizations that raised concerns about the transaction to regulators at a public hearing in March.
The bank in May issued a five-year $100 billion community benefits plan.
“In our plan, we will not simply put the two entities together, we will meaningfully increase community investments,” said Reba Dominski, the bank’s chief social responsibility officer.
The agreement, she added, prioritizes LMI and nonwhite-majority communities’ “access to capital, small-business growth, affordable housing, environmental impact, philanthropy and supplier diversity.”
HomeStreet, meanwhile, said it is committed to retaining all of the MUFG Union employees who transfer and will give them additional information “in the near term,” according to Mason.
U.S. Bank and MUFG Union last month extended the termination date for their proposed deal until Dec. 31. The new timeline will push the expected conversion of accounts and systems from February 2023 to May, CEO Andy Cecere said.
