DSNews The homepage of the servicing industry
""Bank of the Cascades"":https://www.botc.com has agreed to sell off a chunk of nonperforming, substandard, and related performing loans with a book carrying value of approximately $108 million to an undisclosed buyer. Included in the sale is an additional $2 million of the bank's other real estate owned (OREO) assets.
Subject to closing the sale transaction, the bank will receive proceeds from the sale of approximately $58 million, while incurring approximately $4 million in closing related costs. The sale will result in an estimated
[IMAGE] [COLUMN_BREAK]charge-off of approximately $55 million with an additional loss on the sale of OREO of approximately $1 million.
The majority of the nonperforming assets are construction loans. Commercial real estate loans make up the bulk of what the bank describes as substandard assets, but residential real estate assets also claim a sizeable amount of the substandard disposition.
The sale transaction is expected to close before the end of the third quarter of 2011. Bank of the Cascades says it will result in a reduction of nonperforming assets by approximately 38 percent, leaving a remaining balance of approximately $60 million.
Nonperforming assets at June 30, 2011 were approximately $98 million including approximately $37 million of OREO.
""The successful capital raise completed by the bank in early 2011 positioned the bank to take this action to reduce its non-performing assets,"" said Patricia L. Moss, CEO of Bank of the Cascades. ""Consummating this transaction will be a significant step forward for the company.""
Bank of the Cascades is headquartered in Bend, Oregon, and operates in the Oregon and Idaho markets.
