Midlantic Corp. has signed an agreement to sell s and foreclosed properties to private investors, a bank official confirmed on Friday.
Market sources said the $110 million portfolio is being sold for about 27 cents to 32 cents on the dollar. Midlantic declined comment on specifics of the sale.
Donald Ebbert, Midlantic's treasurer, said the bank expects to complete the sale by the end of this month.
Selloff of Nonperformers
The portfolio is the last to be sold under the bank's plan to sell packages of nonperforming real estate loans and property with a carrying value of $244 million, Mr. Ebbert said. The bank announced those plans earlier this year.
A market source said a private investor partnership, including Starwood Capital Group of Chicago, submitted a winning bid of $30 million to $35 million.
The bank was carrying the portfolio at less than $45 million, Mr. Ebbert said. A Starwood official did not return calls for comment.
About two-thirds of the hotel portfolio was based in New Jersey.
Earlier this year, Midlantic sold one package of assets based in the Northeast and another portfolio of Florida loans or properties.
Beyond saying that those sales totaled about 85% of the dollar value of the planned bulk sales. Midlantic did not disclose specific terms of the transactions.
The bank is in the midst of an earnings turn-around fueled by a dramatic reduction of nonperforming assets, cost-cutting, and rebuilding of capital.
|A Major Priority'
The $13.8 billion-asset bank had $855 million of nonaccrual loans and foreclosed real estate at the end of June, a 50% drop from the year before. Its $529 million of nonaccruing loans equaled 6.2% of total loans at the end of June.
"Further reductions in our problem asset levels continue to be a major priority for us," said Mr. Ebbert. While we have no specific plans for further bulk sales, we will explore any alternatives to accelerate any further problem-asset reduction."