Financial Services Provider Sells $198 Million of Performing Loans
First Federal Savings and Loan Association, a subsidiary of First Financial Holdings, has signed an agreement to sell nearly $198 million of selected performing loans and classified assets to Varde Partners' joint venture partners FirstCity Financial Corp., Mountain Real Estate Group and Shelving Rock Partners.
The sale is structured to include two consecutive closings, in which the first closing took place on Oct. 27. This closing consisted of 504 assets that had an aggregate principal balance of about $195 million of the total transaction through the Aug. 31 sale cutoff date.
The cutoff date balance reflects the June 30 held for sale loan pool balance, adjusted for principal pay-downs, migration to other real estate owned and loan resolutions conducted in July and August.
The second closing is expected to occur in November and will include an additional eight OREO properties totaling $3.1 million of contractual principal balances as of the Aug. 31 cutoff date.
Overall gross proceeds for this transaction is expected to total approximately $81 million, First Financial said.
Through Sept. 30, the Charleston, S.C.-based financial services provider had $108.5 million in nonperforming assets. This total was due to the number of completed loan resolutions and OREO sales that occurred for the company during the fourth quarter of 2011, as well as $41.3 million in nonperforming assets held for sale and $27.7 million of assets covered under a loss-share agreement with the Federal Deposit Insurance Corp.
Sandler O'Neill Mortgage Finance, based in New York, is acting as the financial advisor to First Financial for this asset sale.
“The completion of the asset sale will allow us to focus more on business development and strategic initiatives,” said R. Wayne Hall, president and CEO of First Financial. “This transaction strengthens our balance sheet, creates capital from the improved pricing at execution and will assist our planned return to core operating earnings.”