Flagstar Bancorp, the holding company for Flagstar Bank, announced that, effective February 5, 2013, the bank has entered into a definitive Asset and Portfolio Purchase and Sale Agreement under which Customers Bank will acquire substantially all of Flagstar’s remaining Northeast-based commercial loan portfolio.
Under the terms of the agreement, Customers will acquire $187.6 million in commercial loan commitments, of which $150.9 million is currently outstanding. The loans sold consist primarily of commercial and industrial loans. Flagstar expects that the total purchase price will be approximately $148.9 million, which represents 98.7% of the outstanding balance.
Flagstar expects that a vast majority of these assets will be transferred during the first quarter 2013. Upon completion of these transfers, and completion of the transfers associated with the Northeast-based commercial loan sale previously announced on January 2, 2013, Flagstar expects its remaining Northeast-based commercial loan portfolio balance to be approximately $19.3 million. As part of the agreement, and subject to receipt of customary third-party consents, Customers will also assume the leases for two of Flagstar’s commercial banking offices in the Northeast.
“This agreement represents another milestone as we enhance our focus on our community banking operation in Michigan and our national mortgage business,” said Michael Tierney, Flagstar’s chief executive officer. “Going forward, our commercial banking efforts will primarily relate to small business and middle-market companies in Michigan. We thank our commercial banking team in the Northeast for their efforts in building a strong portfolio of loans.”
Sandler O’Neill Mortgage Finance, an affiliate of Sandler O’Neill + Partners, is acting as exclusive financial advisor and agent to Flagstar in connection with the asset sale. Bracewell & Giuliani and Nutter, McClennen & Fish are serving as legal advisors to Flagstar.
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