In addition to purchasing the loans for its balance sheet, Eastern will service the mortgages. “Our expectation is we would let this go for the next couple of months, maybe through the end of the year, and we would reevaluate, and obviously Embrace would have to reevaluate as well.” “Our initial plan here is to just get started, see what happens, make sure it’s working well for both ourselves and Embrace,” Fitzgerald said in response to an analyst’s question about how much the bank plans to add to its residential portfolio over the next year. The bank had been looking to reduce the size of its securities portfolio during the past year, Fitzgerald said, considering a few options before entering into the flow agreement with Embrace.įitzgerald said the program just started in July, and he does not expect the agreement to have much of an impact on the third quarter balance sheet. The balance sheet also held cash and cash equivalents of $369 million. Eastern’s securities totaled $8 billion at the end of the second quarter, down 3 percent from the first quarter, due mainly to lower market values, the bank said in its second quarter earnings statement. Those loans will be added to Eastern’s balance sheet as part of its residential loan portfolio.įitzgerald said the bank’s goal is to reduce its securities portfolio by about $80 million each month. Through a new flow agreement with the mortgage company, he said, Eastern will now use monthly cash flow from its securities portfolio to purchase loans from Embrace Loans. Eastern Bank has entered into an agreement with Rhode Island-based Embrace Home Loans to purchase about $80 million in loans each month as the bank looks to reduce its securities portfolio.īoston-based Eastern Bank has outsourced its loan processing to Embrace Loans since 2016, said Eastern Bank Chief Financial Officer Jim Fitzgerald during the bank’s second quarter conference call.
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