Cascade Bancorp in Bend, Ore., has agreed to sell about $108 million of problem loans, generating $58 million in proceeds in an effort to remain well capitalized.
The proposed sale, announced earlier in the week, is expected to close by Friday. Cascade’s management said in a press release that it believes that the $1.6-billion-asset company will remain well capitalized with a Tier 1 leverage ratio above 10% following the sale. Cascade did not disclose the buyer.
The loans being sold include nonperforming, substandard and related performing loans and another $2 million of real estate holdings that were not listed as other real estate owned as of June 30. The sale will result in a charge-off of about $55 million with an additional loss on the sale of real estate of roughly $1 million. The company said it is evaluating what will happen to the loan-loss provision and allowance for loan losses.
Nonperforming assets are expected to be decrease to about $60 million, compared to $98 million at the end of the second quarter. The company said that anticipated proceeds are subject to adjustment per the agreement while incurring about $4 million in closing related costs.
Daily Briefing | Friday, September 30, 2011
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