HomeStreet in Seattle will sell nearly $1 billion of multifamily loans to Bank of America.
The $9.4 billion-asset company, which had to nix plans to sell itself to FirstSun Capital Bancorp in Denver, said in a press release that the loans should sell at 91.5% of their principal balance. HomeStreet will continue to service the loans.
The sale is expected to close by Dec. 31.
“Entering into this agreement and completing the sale … 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,” Mark Mason, HomeStreet’s chairman, president and CEO, said in the release.
The pricing “reflects the current interest rate environment and that the loans being sold are primarily lower-yielding loans with longer duration than the overall portfolio,” he added. “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.”