Teche Holding Co. (TSH) in New Iberia, La., has agreed to sell a loan portfolio with a book value of $46.3 million.
The $841 million-asset company will record a one-time gain of roughly $2 million in its fiscal first quarter, which ends Dec. 31, from the sale, Teche said Wednesday. It will retain the servicing of the loans.
Teche earned $2.1 million in its fiscal fourth quarter and $7.3 million, up roughly 1% from a year earlier, for its fiscal year.
The transaction is expected to boost Teche's capital, increase its noninterest income for its first quarter and strengthen its overall financial position, Teche said. At June 30 Teche Federal Bank's core capital (leverage) ratio was 8.63%, and its total risk-based capital ratio was 13.79%, according to data from the Federal Deposit Insurance Corp.
The portfolio includes single-family, owner-occupied mortgage loans that are performing. It has a weighted average coupon rate of roughly 3.7% and a weighted average remaining term of about 170 months.
"The loan sale positively impacts our balance sheet and income statement," Patrick Little, the chief executive of Teche Holding, said in a news release. "With more commercial lenders in place, together with the good economy in south Louisiana, we believe we can replace these loans with a mix of conforming mortgage, other retail and commercial loans."