Market Overview

HomeStreet Sends Letter to Shareholders

Share:

Leading Proxy Advisory Firm ISS Recommends Shareholders Vote on the
WHITE Proxy Card for ALL Three Company Nominees: Sandra A. Cavanaugh,
Mark K. Mason and Donald R. Voss

HomeStreet Has a Strong Board Focused on Shareholder Engagement and
Value Creation

Chairman and CEO Mark Mason, Lead Independent Director Donald Voss
and Independent Director Sandra Cavanaugh Serve Essential Leadership
Roles and Bring Important Perspectives to the Board

HomeStreet Corrects Roaring Blue Lion's Misleading Claims and False
Narratives

Vote on the WHITE Proxy Card
Today to Secure Your Investment

The Board of Directors (the "Board") of HomeStreet, Inc. (NASDAQ:HMST)
(the "Company" or "HomeStreet"), the parent company of HomeStreet Bank,
today sent a letter to shareholders in connection with the Company's
upcoming 2019 Annual Meeting of Shareholders (the "2019 Annual
Meeting"), which is scheduled to be held on June 20, 2019.

This press release features multimedia. View the full release here:
https://www.businesswire.com/news/home/20190607005259/en/

For additional information and shareholder materials please visit www.VoteHMST.com.

The full text of the letter follows:

June 7, 2019

Dear Fellow Shareholders,

This year we are once again engaged in a proxy contest initiated by
Roaring Blue Lion Capital Management, L.P. ("Roaring Blue Lion"), an
activist hedge fund that has resorted to a long series of inaccurate,
misleading, or just plain false claims to try to discredit HomeStreet's
Board and management team.

As you consider how to cast your votes for HomeStreet's directors at the
2019 Annual Meeting, we ask that you focus on the facts rather than the
rhetoric. The bottom line is that this year's director elections should
be about HomeStreet's strategy and execution, future opportunities and
strategic leadership at the Board level. It should not be about
disrupting a well-functioning Board in order to serve or promote Roaring
Blue Lion's shareholder activism ambitions.

Further, leading proxy advisory firm Institutional Shareholder Services
Inc. ("ISS") has recommended that shareholders vote on the WHITE proxy
card FOR all three of the Company's highly-qualified director nominees:
Sandra A. Cavanaugh, Mark K. Mason and Donald R. Voss.

Superior Stock Price Performance in 2019

Our superior stock price performance this year shows that investors
support the actions of HomeStreet's Board and management in creating
value for investors.

ISS acknowledged this positive performance, saying in its report, "HMST
outperformed peers and the KBW Regional Banking Index from both the 2018
AGM and the announcement that HMST intended to seek buyers for its
mortgage banking business through the unaffected date, as well as over
the trailing one year, including when the measurement periods are
extended."1

A Strong Board Focused on Engagement and Value

Since the 2018 Annual Meeting, HomeStreet's Board has engaged
extensively with its shareholders and has worked together to translate
this feedback into positive and constructive action. As a result of this
engagement, the Board has taken a number of positive steps to enhance
shareholder value. Further, the Board has initiated numerous corporate
governance improvements to help ensure that the voices of our
shareholders are heard loud and clear.

Our nominees up for election this year are essential parts of these
efforts and of the overall strategic leadership of the Company.

Sandra A. Cavanaugh – Independent Director: Proven track
record of developing, launching and turning around large, complex
businesses and product portfolios to produce long-term, sustainable
profitability

  • Appointed to the Board in May 2018. Currently the Chair of the
    Enterprise Risk Management Committee and serves on the Human Resources
    and Corporate Governance Committee (the "HRCG Committee")
  • 30+ years serving as a senior level executive in the financial
    services, banking, and mutual fund industries. Previous positions
    include:
    • Chief Executive Officer and President of U.S. Private Client
      Services at Russell Investments overseeing its $45 billion mutual
      fund business in U.S.
    • Executive Vice President at SunTrust Bank in 2009
    • Senior Executive at Washington Mutual / JP Morgan Chase from 2007
      to 2009
    • President of WM Funds Distributor and Shareholder Services from
      1997 to 2007
    • Various senior positions with AIM Mutual Funds, First Interstate
      Bank, and American Savings Bank

"Over the past year, it has been an honor working with the Board and
management team analyzing HomeStreet's strategy, challenges and
opportunities and bringing my unique perspective to bear. What I have
seen is a constructive, transparent, independent and engaged Board and a
strong executive management team making difficult but productive
decisions."

– Sandra A. Cavanaugh

Mark K. Mason – Chairman, CEO & President: Successful
track record creating shareholder value at HomeStreet, including
executing growth and diversification strategies, raising capital,
addressing portfolio and operational challenges and effectively working
with shareholders

  • Since being appointed Chief Executive Officer and Director in January
    2010 and Chairman in March 2015, Mr. Mason has led HomeStreet through
    its significant evolution
  • Accomplishments as HomeStreet's CEO include:
    • Led the turnaround of HomeStreet following the 2008-2009
      recession, recapitalizing the bank through an initial public
      offering and returning it to profitability
    • Successfully created and executed a growth and diversification
      strategy away from single-family mortgage banking while converting
      the institution from a thrift to a full-service commercial bank
    • Established or substantially grew lines of business, including:
      commercial lending and cash management, small balance commercial
      real estate lending, residential construction lending and consumer
      product

"We are at a critical moment in HomeStreet's evolution – and our
strategy is working. As we complete our announced transactions to focus
our business even more on the successful Commercial and Consumer Banking
segment, our future is bright. I look forward to working with my fellow
directors, the executive team and our shareholders to lead this
transformation, maintain our positive momentum and translate it into
increased shareholder value."

– Mark K. Mason

Donald R. Voss – Lead Independent Director: Provides
independent leadership to HomeStreet's directors and oversight of
management with the goal of maximizing shareholder value

  • Appointed Lead Independent Director in July 2018, independent director
    since March 2015 and serves on the Audit, Executive and the Enterprise
    Risk Management Committees
  • Extensive independent boardroom experience serving on public company
    boards as well as city governance boards, including:
    • Elected to the board of Simplicity Bancorp in December 2001;
      elected Independent Chairman in October 2013; served on the audit
      committee from 2011 to March 2015 and oversaw the sale of
      Simplicity Bancorp to HomeStreet in March 2015
    • Current member of the board of trustees and the executive board
      and serves as chair of the Planning Committee of Descanso Gardens
      Guild, Inc.
    • Elected council member of the City of La Cañada Flintridge from
      2006 to 2015, and served as its mayor from 2010 to 2011
  • Over 25+ years of experience as a commercial banking and financial
    expert

"My role on the Board is to challenge everything. I am constantly
asking myself and the other directors, ‘what can we do better?' and
evaluating how to use the feedback and ideas we receive from our
shareholders to help us provide even better oversight and strategic
direction. We know that good governance goes hand in hand with driving
value, which is why both of these elements remain top areas of focus for
our team."

– Donald R. Voss

Roaring Blue Lion's Campaign: Heavy on
Hyperbole, Light on Facts

We believe Roaring Blue Lion has repeatedly advanced a number of false
and misleading narratives
that the facts simply do not
support
– and has done investors a disservice in the process:

  • False Narrative: Completely misrepresenting HomeStreet's
    interactions with Dwight Capital and expressing the fund is
    "astounded" that the Board has not fulfilled its fiduciary duty – a
    serious accusation that is nothing more than a red herring that
    Roaring Blue Lion is using to take advantage of the ongoing proxy
    contest.
  • The Reality:
    • HomeStreet's Board does not shy away from making difficult
      decisions and monetizing assets when it makes sense for
      shareholders – as evidenced by its recent decision to sell a
      significant portion of our mortgage origination and servicing
      operations. In fact, as part of this, HomeStreet announced on June
      6th the initial closing of the sale of assets and
      transfer of offices and personnel to Homebridge Financial
      Services, Inc.
    • On June 4th, HomeStreet's Board received a letter from
      Dwight Capital conveying a preliminary non-binding offer for the
      Company's Fannie Mae DUS Business, which was the first formal
      offer HomeStreet has received from Dwight Capital, publicly or
      privately.
    • Consistent with its fiduciary duties under applicable law, the
      Board of Directors and management, together with outside advisors,
      will carefully evaluate Dwight Capital's preliminary offer.
    • HomeStreet will act with expediency and respond to Dwight Capital
      in due course once the Board has completed its evaluation.
    • The Fannie Mae DUS Business and related servicing continues to
      earn a high risk-adjusted return on equity, is an integrated and
      important part of our commercial real estate lending business, and
      has many opportunities for expansion.
  • False Narrative: Publicly accusing HomeStreet of employing
    "corporate machinery" against Roaring Blue Lion when in fact the hedge
    fund has failed to comply with legal rules and regulations or
    has sought to twist such rules and regulations to blame others and
    serve its narrative.
  • The Reality:
    • Roaring Blue Lion admitted to its own investors that its faulty
      nomination notice and failure to secure Washington State
      Department of Financial Institutions (DFI) approval last year were
      due to "errors made by [Roaring Blue Lion's] attorneys." – and
      subsequently changed law firms this year.
    • Notably, this year Roaring Blue Lion's nomination notice was
      accepted by HomeStreet without any comments, and the DFI recently
      issued a non-objection to Roaring Blue Lion's application to
      solicit proxies for HomeStreet's 2019 Annual Meeting. This
      underscores how disingenuous it is – and has always been – for
      Roaring Blue Lion to accuse HomeStreet of disenfranchising
      shareholders, when the real issue was Roaring Blue Lion's
      inability to follow the rules correctly in the past.
  • False Narrative: Turning a simple coding mistake by Broadridge
    related to HomeStreet's broker search into an occasion for ad
    hominem attacks
    , accusing the Company of "manipulating the
    corporate machinery".
  • The Reality:
    • Roaring Blue Lion claimed HomeStreet "violated the proxy rules" in
      setting our record date for the 2019 Annual Meeting in an attempt
      to prevent them from having sufficient time to receive approval
      from the DFI.
    • This is just false. We requested a broker search for the 2019
      Annual Meeting through Broadridge on April 15th for a
      May 13th record date. Broadridge made a clerical error
      in how it coded the record date request. We have previously
      publicly disclosed our correspondence with Broadridge on this
      topic.
    • Our proxy solicitor fixed this in a timely manner and Roaring Blue
      Lion was in no way prejudiced by any of this. In fact, Roaring
      Blue Lion submitted its DFI application on April 9th,
      six days prior to our broker search and more than four weeks prior
      to the record date – and was approved by the DFI in a timely
      manner.
  • False Narrative: Misstating HomeStreet's relative TSR performance in
    Roaring Blue Lion's letter to shareholders by more than 80
    percentage points
    and then quietly correcting it a week later.
  • The Reality:
    • In its May 17th letter to shareholders announcing the
      launch of its campaign, Roaring Blue Lion understated HomeStreet's
      relative total shareholder return (TSR) performance by as much as
      82.1 percentage points.
    • After 5:00 pm ET on Friday May 24th, heading into
      Memorial Day weekend, Roaring Blue Lion quietly filed additional
      proxy materials consisting of its candidate biographies and a TSR
      table with new numbers, accompanied by a footnote in small print
      stating: "This table updates and replaces the table included in
      Roaring Blue Lion Capital's letter to HomeStreet shareholders
      dated May 17, 2019."
    • We believe, similar to last year's campaign, Roaring Blue Lion
      significantly misrepresented important information.
    • Further, in its presentation2 filed on June 3rd,
      Roaring Blue Lion continues to provide false information about
      HomeStreet's share price performance versus the KBW Regional Bank
      Index (KRX).
  • False Narrative: Presenting its strategy for HomeStreet as
    "long-term" – while in reality pushing for a sale of the
    Company.
  • The Reality:
    • Mr. Griege had raised capital in a special fund specifically to
      target HomeStreet in these campaigns, with the explicit goal of
      seeking a sale of the Company. He tried to raise additional
      capital in April 2019, but it appears he was unsuccessful.
    • This matches what we've heard from the market – there is a lot of
      skepticism about his campaign this year and what he is trying to
      achieve.
  • False Narrative: Making abjectly untrue claims about
    Chairman and CEO Mark K. Mason
    's tenure at Fidelity Federal Bank
    and First Alliance Corporation.
  • The Reality:
    • Mr. Mason was brought in to Fidelity Federal Bank to lead a
      turnaround that was incredibly successful. As part of the
      clean-up, Mr. Mason discovered preexisting irregularities that he
      and his team reported to regulators, and which were subsequently
      cleaned up.
    • With regard to First Alliance Corporation, in his role as CFO Mr.
      Mason had no involvement with the loan origination activities that
      Roaring Blue Lion mentions.
    • Yet again, Roaring Blue Lion is grasping at straws and attempting
      to recycle the same falsehoods it tried to pass off as truths in
      its 2018 proxy contest.
  • False Narrative: Attempting to portray HomeStreet's culture in
    a negative light by filing a statement purportedly submitted as a
    comment on its campaign website by David Hooston, a disgruntled
    ex-HomeStreet employee
    who was CFO of HomeStreet from August 2009
    to February 2012.
  • The Reality:
    • Mr. Hooston has not been involved with HomeStreet's business for
      over seven years. The comments attributed to him by Roaring Blue
      Lion appear to be nothing more than the grumblings of a former
      employee with an axe to grind against the executive team that he
      was no longer a part of after he was terminated by HomeStreet less
      than a month after HomeStreet's IPO.
    • If Mr. Hooston made the comments attributed to him, those comments
      were clearly motivated by personal animus.
    • The comments do not contain any facts informed by Mr. Hooston's
      past history at HomeStreet or any "insider" insights; the
      stream-of-consciousness attacks merely parrot Roaring Blue Lion's
      talking points and cast generic aspersions on the integrity of our
      management team. These attacks are baseless and wrong, and the
      reader should carefully consider the source.

###

Donald R. Voss, as Lead Independent Director, and Mark K. Mason, as
Chairman and CEO, bring to the Board essential perspectives from a
corporate governance and strategic execution point of view. Roaring Blue
Lion's nominees would not be additive to the Board and would likely
disrupt the process of open-minded debate and robust discussion that
currently characterizes the Board's decision-making process. Further, as
we have outlined in this letter, Roaring Blue Lion has played fast and
loose with the truth and has failed on multiple occasions to follow
clear-cut legal and regulatory procedures – something which poorly
qualifies Mr. Griege and his associate from sitting on the Board of a
highly regulated Company.

With the 2019 Annual Meeting quickly approaching, we ask for your
support to continue to move forward to pursue the many opportunities
available to HomeStreet.

We urge shareholders to follow ISS's recommendation and vote for the
Company's nominees on the WHITE
proxy card today.

Sincerely,

The Board of Directors of HomeStreet, Inc.

###

About HomeStreet, Inc.

HomeStreet, Inc. (NASDAQ:HMST) (the "Company") is a diversified
financial services company headquartered in Seattle, Washington, serving
consumers and businesses in the Western United States and Hawaii through
its various operating subsidiaries. The Company's primary business is
community banking, including: commercial real estate lending, commercial
lending, residential construction lending, single family residential
lending, retail banking, private banking, investment, and insurance
services. Its principal subsidiaries are HomeStreet Bank and HomeStreet
Capital Corporation. Certain information about our business can be found
on our investor relations web site, located at http://ir.homestreet.com.

Important Additional Information and Where to
Find It

The Company has filed a definitive proxy statement on Schedule 14A and
accompanying WHITE proxy card with
the Securities and Exchange Commission (the "SEC") in connection with
the solicitation of proxies for its 2019 Annual Meeting of Shareholders.
SHAREHOLDERS ARE STRONGLY ADVISED TO READ THE COMPANY'S DEFINITIVE PROXY
STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY
OTHER DOCUMENTS FILED WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE
THEY WILL CONTAIN IMPORTANT INFORMATION. Shareholders may obtain a free
copy of the proxy statement and accompanying WHITE
proxy card, any amendments or supplements to the proxy statement and
other documents that the Company files with the SEC from the SEC's
website at www.sec.gov
or the Company's website at http://ir.homestreet.com
as soon as reasonably practicable after such materials are
electronically filed with, or furnished to, the SEC.

Forward-Looking Statements

This letter, as well as other information provided from time to time by
the Company or its employees, may contain forward-looking statements
that involve risks and uncertainties that could cause actual results to
differ materially from those anticipated in the forward-looking
statements. Forward-looking statements give the Company's current
beliefs, expectations and intentions regarding future events. You can
identify forward-looking statements by the fact that they do not relate
strictly to historical or current facts. These statements may include
words such as "anticipate," "believe," "could," "estimate," "expect,"
"intend," "may," "plan," "potential," "should," "will" and "would" and
similar expressions (including the negative of these terms). These
forward-looking statements involve risks, uncertainties (some of which
are beyond the Company's control) and assumptions. Although we believe
that expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity,
performance or achievements. The Company intends these forward-looking
statements to speak only at the time of this letter and the Company does
not undertake to update or revise these statements as more information
becomes available, except as required under federal securities laws and
the rules and regulations of the SEC. Please refer to the risk factors
discussed in the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 2018 and subsequent periodic and current reports
filed with the SEC (each of which can be found at the SEC's website www.sec.gov),
as well as other factors described from time to time in the Company's
filings with the SEC. Any forward-looking statement made by the Company
in this letter speaks only as of the date on which it is made.

____________________________

1   Permission to quote ISS was neither sought nor obtained.
2 Roaring Blue Lion presentation, June 3, 2019, page 6.
 

View Comments and Join the Discussion!
 
Fastest Market News Application
You'll Hear It First On Pro
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com