How will the combined entity's expanded geographic footprint affect its revenue growth and cost synergies in the short to medium term?

The merger instantly lifts Mechanics Bank’s franchise to a true West‑Coast platform, adding 166 branches in four high‑growth states and taking assets above $22 bn. In the next 6‑12 months the expanded footprint will primarily boost top‑line growth by widening the deposit capture net and giving the combined bank a larger, more diversified loan base. Both California and Washington still feature strong housing‑price appreciation and commercial‑real‑estate activity, so Mechanics can immediately cross‑sell existing HomeStreet products (mortgages, consumer‑loans, cash‑management) to a broader customer set and capture market‑share in the Pacific‑Northwest corridor. Analysts are likely to begin credit‑ing a 2‑3 % incremental YoY revenue lift once the two balance‑sheets are fully integrated, which should translate into earnings‑beat potential once the FY‑2025 guidance is released.

On the cost side, the primary synergies arise from the consolidation of back‑office functions, shared technology platforms, and the rationalisation of branch overlap in the Bay Area and Seattle‑Tacoma corridors. The “one‑bank” model can shave roughly 4‑6 % of the combined SG&A expense line within 12‑18 months, a benchmark that industry peers have hit after similar “West‑Coast‑scale” roll‑ups. However, integration‑related expenses—severance, IT migration, and compliance alignment—will hit the income‑statement in Q3‑Q4, capping net‑cost‑savings until the second half of FY‑2025.

Trading implications

* Near‑term catalyst: The market has already factored the goodwill premium, so the stock may be modestly compressed on short‑term integration‑cost concerns. A pull‑back toward the prior‑day support zone (≈ $38‑$39) could present a higher‑‑risk‑reward entry for patient longs.

* Medium‑term upside: If the bank delivers the projected 2‑3 % revenue uplift plus 4‑6 % SG&A reduction, the forward‑PE could compress from ~13× to ~11×, supporting a 10‑12 % price appreciation over the next 9‑12 months (target $43‑$45).

* Actionable stance: Maintain a neutral‑to‑bull bias. Consider adding a modest position on any corrective dip, with a stop just below the $38 support, and scale in as integration‑update data rolls in (e.g., the Q4 earnings call). The trade is best suited for investors comfortable with a “buy‑the‑rumor, sell‑the‑news” play coupled with a 6‑12 month time horizon.