HomeStreet Arm to Unload $990M Multifamily Loans to Bank of America

HomeStreet, Inc.’s HMST subsidiary, HomeStreet Bank, is selling roughly $990 million worth of its multifamily commercial real estate loans to Bank of America, Corp. BAC. This will help it mitigate funding costs and boost profitability. The sale is anticipated to be completed before Dec. 31, 2024.Rationale Behind HMST’s Loan Sale to BACHomeStreet will sell loans at an approximately 8% discount and receive nearly $906 million from Bank of America. This discount signifies the existing interest rate scenario and that the loans sold are primarily lower-yielding loans with longer duration than the entire portfolio. HomeStreet will retain the servicing of the loans.HMST plans to use the proceeds for repayment of FHLB advances and brokered deposits that carry significantly higher interest rates than the company’s core deposits.Mark Mason, CEO, president & chairman of HomeStreet, said, “Entering into this agreement ... 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.”The deal marks a significant milestone for HMST as it paves the way to profitability after four consecutive quarters of adjusted losses. Further, this move could help reduce investor concerns following the regulators’ decision to halt its proposed merger with FirstSun Capital Bancorp.Currently, both HMST & BAC carry Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Restructuring Efforts by Other Finance FirmsEarlier this month, Valley National Bancorp. VLY completed the sale of a diverse pool of performing commercial real estate (CRE) mortgage loans to Brookfield Asset Management Ltd. BAM.The loan pool sold by Valley National had a contractual balance of roughly $925 million, of which almost $823 million was identified and moved to held for sale as of Sept. 30, 2024. The loan pool has been sold at a discount of roughly 1% to par value to BAM, with VLY retaining customer-facing servicing responsibilities.This move aligns with Valley National’s efforts to manage the CRE loan portfolio prudently and reduce its exposure to the loan category, thus mitigating concentration risk.Zacks Naming Top 10 Stocks for 2025Want to be tipped off early to our 10 top picks for the entirety of 2025?History suggests their performance could be sensational.From 2012 (when our Director of Research Sheraz Mian assumed responsibility for the portfolio) through November, 2024, the Zacks Top 10 Stocks gained +2,112.6%, more than QUADRUPLING the S&P 500’s +475.6%. Now Sheraz is combing through 4,400 companies to handpick the best 10 tickers to buy and hold in 2025. Don’t miss your chance to get in on these stocks when they’re released on January 2.Be First to New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Bank of America Corporation (BAC): Free Stock Analysis Report Brookfield Asset Management Ltd. (BAM): Free Stock Analysis Report Valley National Bancorp (VLY): Free Stock Analysis Report HomeStreet, Inc. (HMST): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks