The parent company of HomeStreet Bank, which is based in Seattle, has agreed to sell to Bank of America loans for a multifamily commercial property worth $990 million.
The mentioned price, including the value of the retained servicing, is 92% of the principal balance of the loans. The loans’ sale is expected to be closed until Tuesday, December 31. The relevant information is contained in a press release published by HomeStreet Bank on Friday, December 27.
Mark Mason, chairman of the board, president, and chief executive officer of HomeStreet, stated that the pricing for loan sales reflects the current interest rates environment. It was also separately noted that the loans being sold are predominantly low-yield and have a longer duration compared to the overall portfolio. Moreover, Mark Mason stated the proceeds from the loan sale will be used to pay down Federal Home Loan Bank advances and brokered deposits which carry substantially higher interest rates than core deposits.
According to media reports, for some time, HomeStreet had been under pressure because it has been paying more for deposits but at the same time earned less on investments. In the third quarter, the bank recorded a net loss of $7.28 million. In this context, it is worth noting that HomeStreet has been reporting losses for four consecutive quarters.
In October, the bank reported that its planned merger with FirstSun Capital Bancorp had not received the necessary regulatory approvals. If this intention had been realized, a financial institution with combined assets of over $17 billion would have been built.
As we have reported earlier, Bank of America Allows Companies to Lock in FX Rates.
