HomeStreet Subsidiary Free From Agreement With Regulators
Dec 28th 2012 2:19PM
Updated Dec 28th 2012 2:22PM
On Friday, financial services company HomeStreet announced that the Federal Deposit Insurance Corporation and Washington Department of Financial Institutions had informed its HomeStreet Bank subsidiary that its obligation to maintain a 9% Tier 1 capital ratio is no longer in effect.
In a Memorandum of Understanding dated March 26, 2012, FDIC had required HomeStreet Bank to maintain 9% Tier 1 capital as part of a plan to reduce its exposure to certain "adversely classified" assets. The FDIC also forbade HomeStreet Bank from paying dividends to its parent company. The memorandum has been terminated effective yesterday.
In a statement, HomeStreet characterized FDIC's move as acknowledging its "strong earnings and greatly improved credit quality." Shares of the company are up 1.4% as of this writing, at $24.69.
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