HomeStreet, Inc. announced an agreement to sell $990 million of multifamily commercial real estate loans to Bank of America. The sale, on a servicing-retained basis, is priced at 92% of the principal balance, including the value of retained servicing. This transaction is expected to close before December 31, 2024.
The proceeds from this significant loan sale will be used to pay down Federal Home Loan Bank advances and brokered deposits, which carry substantially higher interest rates. Mark Mason, Chairman, President, and CEO, stated that this is the first step in a new strategic plan.
Management anticipates this strategic repositioning will lead to a return to profitability for HomeStreet Bank and on a consolidated basis early next year. The sale aims to improve the company's liquidity and reduce its reliance on higher-cost funding.
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