(Bloomberg) — Bank of America Corp. agreed to buy about $990 million of multifamily commercial real estate loans from HomeStreet Inc., a transaction that the seller said would help make it profitable again.
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Proceeds from the sale will be used by HomeStreet to pay down Federal Home Loan Bank advances and brokered deposits, which carry higher interest rates than the company’s core deposits, the Seattle-based lender said in a statement Friday. The price equals almost 92% of the unpaid principal balance of the loans.
The lender had previously discussed plans to sell some of the loans. It’s seeking to rebound from four straight quarterly losses and a rebuff from regulators on plans to be acquired by FirstSun Capital Bancorp. Results were squeezed as HomeStreet found itself paying more for deposits and earning less on its investments.
The loan 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,” Chief Executive Officer Mark Mason said in the statement. In October, the bank reported a third-quarter net loss of $7.28 million.
The loan sale is slated to be completed in two parts, with roughly $652 million to close Friday, and about $338 million to follow around Dec. 30, HomeStreet said in a regulatory filing.
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