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

Core Insights - HomeStreet, Inc.'s subsidiary, HomeStreet Bank, is selling approximately $990 million worth of multifamily commercial real estate loans to Bank of America, which is expected to enhance profitability and mitigate funding costs [1][3] - The loans will be sold at an approximate 8$906 million received from Bank of America, primarily due to the existing interest rate environment and the nature of the loans being lower-yielding with longer durations [2][5] - This transaction is a significant milestone for HomeStreet, marking a potential return to profitability after four consecutive quarters of adjusted losses and addressing investor concerns following the halt of a proposed merger with FirstSun Capital Bancorp [3][9] Financial Strategy - The proceeds from the loan sale will be utilized to repay Federal Home Loan Bank (FHLB) advances and brokered deposits, which have higher interest rates compared to the company's core deposits [5] - HomeStreet will retain the servicing of the loans, indicating a continued relationship with the loan portfolio despite the sale [2] Market Context - Both HomeStreet and Bank of America currently hold a Zacks Rank of 3 (Hold), reflecting a neutral outlook in the market [6] - The loan sale aligns with broader industry trends, as other financial firms like Valley National Bancorp are also restructuring their loan portfolios to manage risks and reduce exposure to commercial real estate [4][8]