HomeStreet Closes Sale of $990 Million in Multi-Family Loans
HomeStreet Bank has completed the sale of $990 million in multifamily commercial real estate loans, retaining the servicing rights. The transaction was executed at approximately 92% of the loans' principal balance, including the value of retained servicing. The company utilized nearly all proceeds from the sale to reduce its Federal Home Loan Bank borrowings.
HomeStreet Bank ha completato la vendita di 990 milioni di dollari in prestiti immobiliari commerciali multifamiliari, mantenendo i diritti di servizio. La transazione è stata eseguita a circa 92% del saldo principale dei prestiti, inclusa la valutazione dei diritti di servizio mantenuti. L'azienda ha utilizzato quasi tutti i proventi della vendita per ridurre i propri prestiti alla Federal Home Loan Bank.
HomeStreet Bank ha completado la venta de 990 millones de dólares en préstamos inmobiliarios comerciales multifamiliares, conservando los derechos de gestión. La transacción se ejecutó a aproximadamente 92% del saldo principal de los préstamos, incluido el valor de los derechos de gestión retenidos. La empresa utilizó casi todos los ingresos de la venta para reducir sus préstamos del Federal Home Loan Bank.
HomeStreet 은행이 9억 9천만 달러의 다가구 상업용 부동산 대출을 매각하였으며 서비스 권리를 유지하고 있습니다. 이 거래는 대출 원금 잔액의 약 92%에 해당하는 금액으로 실행되었으며, 유지된 서비스의 가치를 포함합니다. 회사는 매각 수익의 거의 전부를 사용하여 연방 주택 대출 은행에 대한 차입금을 줄였습니다.
HomeStreet Bank a finalisé la vente de 990 millions de dollars en prêts immobiliers commerciaux multifamiliaux, en conservant les droits de gestion. La transaction a été réalisée à environ 92% du solde principal des prêts, y compris la valeur des services conservés. L'entreprise a utilisé presque tous les produits de la vente pour réduire ses emprunts auprès de la Federal Home Loan Bank.
HomeStreet Bank hat den Verkauf von 990 Millionen Dollar an gewerblichen Mehrfamilienimmobilienkrediten abgeschlossen und die Servicingrechte behalten. Die Transaktion wurde zu etwa 92% des Hauptbetrags der Kredite durchgeführt, einschließlich des Wertes des retained Servicing. Das Unternehmen hat nahezu alle Erlöse aus dem Verkauf genutzt, um seine Darlehen bei der Federal Home Loan Bank zu reduzieren.
- Significant debt reduction through paydown of Federal Home Loan Bank borrowings
- Retention of loan servicing rights provides ongoing revenue stream
- Successfully executed large-scale loan sale of $990 million improving liquidity
- Sale executed at 8% discount to principal balance, resulting in potential loss on sale
- Reduction in interest-earning assets could impact future interest income
Insights
The <money>$990 million</money> multi-family loan sale by HomeStreet Bank represents a significant balance sheet restructuring move. At a <percent>92%</percent> price point while retaining servicing rights, the transaction helps improve the bank's liquidity position and reduces its wholesale funding dependence through Federal Home Loan Bank (FHLB) borrowing repayment. The retention of servicing rights is strategically important as it maintains a revenue stream without the associated credit risk of holding the loans. The <percent>8%</percent> discount on the sale, while representing a loss, must be weighed against the benefits of improved capital ratios and reduced interest rate risk exposure.
For a bank with a market cap of only <money>$207 million</money>, this transaction materially transforms the balance sheet composition. The FHLB borrowing reduction will lower interest expenses in a high-rate environment, though the immediate recognition of losses from selling at a discount will impact near-term earnings. This defensive move aims to strengthen the bank's financial position and reduce risk exposure, albeit at the cost of some earning assets.
This strategic divestment reflects broader industry pressures facing regional banks amid interest rate volatility. The decision to sell loans at a discount while maintaining servicing rights represents a calculated trade-off between short-term earnings impact and long-term balance sheet resilience. The reduction in FHLB borrowings is particularly noteworthy as it decreases the bank's wholesale funding reliance, which typically carries higher costs and refinancing risks compared to core deposits.
The retained servicing component partially offsets the sale discount by maintaining a steady fee income stream without capital requirements. This hybrid approach to risk management - reducing credit exposure while maintaining customer relationships through servicing - suggests a defensive posture focused on stability over growth. The transaction's size relative to HomeStreet's market capitalization indicates management's strong commitment to de-risking, though careful monitoring of the servicing portfolio's performance will be crucial.
About HomeStreet, Inc.
HomeStreet, Inc. (Nasdaq:HMST) is a diversified financial services company headquartered in
View source version on businesswire.com: https://www.businesswire.com/news/home/20241230332746/en/
Investor contact:
John Michel, Executive Vice President, Chief Financial Officer
john.michel@homestreet.com
206-515-2291
Media contact:
Misty Ford
misty.ford@homestreet.com
206-876-5506
Source: HomeStreet, Inc.
FAQ
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