HomeStreet Inc. (NASDAQ:HMST), the parent company of HomeStreet Bank, has agreed to sell to Bank of America (NYSE:BAC), on a servicing retained basis, $990 million of multifamily commercial real estate loans, at a price, including the value of the retained servicing, of 92% of the principal balance of the loans.
The loan sale is expected to close before the end of the month. Mark Mason, HomeStreet’s chairman of the board, president and CEO, stated, “Entering into this agreement and completing the sale of $990 million of multifamily loans is the first step in implementing a new strategic plan which we expect to result in a return to profitability for the Bank and on a consolidated basis early next year.”
Mason added, “The pricing of the loan sale reflects the current interest rate environment and that the loans being sold are primarily lower yielding loans with longer duration than the overall portfolio. The proceeds from the loan sale will be used to pay down FHLB advances and brokered deposits which carry substantially higher interest rates than our core deposits.”
Photo courtesy of HomeStreet Bank
