HomeStreet, Inc. (HMST) (the “Company” or “HomeStreet”), the parent company of HomeStreet Bank (the “Bank”), today announced net income of $12.1 million, or $0.82 per diluted share, for the second quarter of 2013, compared to net income of $10.9 million, or $0.74 per share, for the first quarter of 2013 and $18.7 million, or $1.26 per share, for the second quarter of 2012.
Second quarter 2013:
- Pre-tax income of $17.9 million, up 9.0% from the first quarter of 2013 and down 21.3% from the second quarter of 2012.
- Net interest margin of 3.10%, up from 2.85% in the second quarter of 2012.
- Return on average equity of 17.2% and return on average assets of 1.86%.
- Pre-tax income of $34.2 million, down 16.4% from the first half of 2012.
- Net interest margin of 2.96%, up from 2.68% in the first half of 2012.
- The Company's estimated annual effective income tax rate for the quarter was 32.4% as compared to 20.8% for 2012. The prior year effective income tax rate reflects the benefit of the full reversal of deferred tax asset valuation allowances.
- Return on average equity of 16.6% and return on average assets of 1.81%.
- Second quarter 2013:
Mortgage Banking segment second quarter results:
- Mortgage Banking segment net income of $10.7 million, down 22.1% from the first quarter of 2013 and down 59.0% from the second quarter of 2012.
- Single family mortgage interest rate lock commitments of $1.42 billion, up 37.4% from the first quarter of 2013 and up 9.2% from the second quarter of 2012.
- Single family mortgage closed loan production of $1.31 billion, up 9.7% from the first quarter of 2013 and up 22.3% from the second quarter of 2012.
- Net gain on single family mortgage origination and sale activities of $51.7 million, down 0.6% from the first quarter of 2013 and up 13.0% from the second quarter of 2012.
- The portfolio of single family loans serviced for others increased to $10.40 billion at quarter end, up 7.2% from $9.70 billion at March 31, 2013.
- During the quarter, HomeStreet became the number one originator by volume of purchase mortgages in the five-county Puget Sound region, our core market area. This ranking is based on the combined results for HomeStreet and our affiliate, Windermere Mortgage Services Series LLC.
Commercial and Consumer Banking segment second quarter results:
- Commercial and Consumer Banking segment net income of $1.3 million, returning to profitability for the first time since the economic downturn of 2008.
Loans held for investment of $1.42 billion at June 30, 2013 increased $57.5 million, or 4.2%, from March 31, 2013. New loan commitments totaled $210.7 million.
Transaction and savings deposits increased to $1.33 billion, or 67.7% of total deposits, up from $1.16 billion, or 60.1% of total deposits, at March 31, 2013.
Classified assets and nonperforming assets ended the quarter at 2.69% and 1.50% of total assets, respectively, down from 3.28% and 2.05% of total assets at December 31, 2012.
- The Company has declared a special cash dividend of $0.11 per share payable to shareholders of record as of August 5, 2013.
- On July 26, 2013, HomeStreet announced agreements to purchase two community banks: Fortune Bank and Yakima National Bank. Fortune Bank provides a full range of financial services to smaller businesses and professionals and also specializes in U.S. Small Business Administration (“SBA”) loans with locations in Seattle and Bellevue, Washington. Yakima National Bank has a Central and Eastern Washington market with retail banking locations in Yakima, Selah, Sunnyside and Kennewick. On July 9, 2013, the Company announced an agreement to purchase two Puget Sound area branches from AmericanWest Bank, located on Bainbridge Island and in West Seattle. These acquisitions, all of which are subject to regulatory approval and the approval of their respective shareholders, are anticipated to close in the fourth quarter of 2013 and, once completed, would bring our retail deposit branch network to 19 in the Puget Sound region and 29 overall. These acquisitions are expected to increase loans and deposits by approximately $220 million and $280 million, respectively.
“Our second quarter earnings improved from first quarter 2013, despite the challenge of rising interest rates for our mortgage banking business,” said CEO Mark K. Mason. “During the quarter, mortgage profit margins declined as lenders competed for loans in a market with sharply declining refinancing loan volume. Anticipating these changes, we continue to focus on retail purchase mortgage origination and expansion of our market and market share through hiring high volume purchase focused mortgage originators. As a result, HomeStreet is now the number one-ranked originator of purchase mortgages by volume in the Puget Sound area, our core market. We also made strong progress in the quarter toward our goal of diversifying our business. In the quarter, our commercial and consumer banking segment completed another strong origination quarter and more importantly attained profitability in the quarter, recognizing segment net income of $1.3 million. Additionally, to accelerate our diversification and growth, we recently entered into agreements to acquire Fortune Bank, Yakima National Bank and two retail deposit branches from AmericanWest Bank. Beyond the additional customers, loans and deposits, these acquisitions bring two teams of seasoned community bankers and two talented executives in David Straus and Jeff Newgard to help us grow our franchise in Puget Sound and expand in Central and Eastern Washington.”
Results of Operations
Net Interest Income
Net interest income in the second quarter of 2013 was $17.4 million, up $2.2 million, or 14.3%, from the first quarter of 2013 and $2.6 million, or 17.7%, from the second quarter of 2012. In the second quarter of 2013 net interest margin, on a tax equivalent basis, increased to 3.10% from 2.81% in the first quarter of 2013, and was up from 2.85% in the second quarter of 2012. The Company's net interest margin for the first quarter of 2013, excluding the impact of a $1.4 million prior period interest expense correction, was 3.06%. Improvement in the margin from the second quarter of 2012 primarily resulted from a 47 basis point decline in our cost of funds. This improvement was partially offset by a 16 basis point decline in our yield on interest-earning assets, largely due to lower yields on our single family adjustable-rate mortgage loans.
Total average interest-earning assets increased from the comparative periods in 2012 primarily as a result of higher average balance of portfolio loans, loans held for sale and investment securities, being partially offset by a decrease in cash and cash equivalents which had been used to fund loans held for sale. The increase in average balances of portfolio loans and loans held for sale reflects our continued growth in loan production volume across all of our business lines. Total average interest-bearing deposit balances declined from the prior periods mostly as a result of a decline in higher-cost certificates of deposit, partially offset by an increase in transaction and savings deposits.
Noninterest income in the second quarter of 2013 was $57.6 million, down $1.4 million, or 2.4%, from $58.9 million in the first quarter of 2013 and up $706 thousand, or 1.2%, from $56.9 million in the second quarter of 2012. The decrease from the prior quarter was primarily driven by lower mortgage loan origination and sale revenue and lower mortgage servicing income.
The increase from the second quarter of 2012 was primarily driven by increased net gain on mortgage loan origination and sale activities, primarily resulting from increased single family loan production volume. Partially offsetting this increase to noninterest income was a decrease in mortgage servicing income, primarily resulting from a reduction in income recognized from MSR risk management activities.
Noninterest expense of $56.7 million in the second quarter of 2013 increased $913 thousand, or 1.6%, from the first quarter of 2013, and $9.8 million, or 20.8%, from $47.0 million in the second quarter of 2012. The increase from the second quarter of 2012 is primarily the result of increased mortgage loan production commissions and incentives related to the 22.3% increase in closed loan production in second quarter 2013 verses second quarter 2012. Additionally, higher marketing and other general and administrative expenses, resulting from the Company's growth in retail deposit branches and increased mortgage and commercial loan production personnel, were partially offset by a decrease in other real estate owned ("OREO") expenses. At June 30, 2013, our full-time equivalent employees had increased 43.4% from June 30, 2012 and our retail deposit branch system had increased 15% to 23 branches.
The Company's income tax expense was $5.8 million for the quarter. The Company's estimated annual effective income tax rate for the quarter was 32.4% as compared to 20.8% for 2012. The prior year effective income tax rate reflected the benefit of the full reversal of deferred tax asset valuation allowances.
Change in Business Segments
Commencing with the second quarter of 2013, the Company realigned its business segments and organized them into two lines of business: Mortgage Banking and Commercial and Consumer Banking.
Mortgage Banking originates and purchases single family residential mortgage loans for sale in the secondary market and manages the Company's single family mortgage servicing rights.
Commercial and Consumer Banking provides traditional banking services to consumers and businesses through the Company's retail banking network, including deposit products; residential, consumer and commercial portfolio loans; investment products; insurance products and cash management services. This segment originates loans for investment and multifamily loans for sale, and manages the Company's loans held for investment portfolio, multifamily mortgage servicing rights, deposits and other assets and liabilities not related to the single family mortgage banking business.
Mortgage Banking Segment
Mortgage Banking segment net income was $10.7 million for the second quarter of 2013, down 22.1% from the first quarter of 2013 and down 59.0% from the second quarter of 2012. For the first half of 2013, mortgage banking net income was $24.5 million, a decrease of 47.2% from the first half of 2012.
Single family mortgage interest rate lock commitments, net of estimated fall out, totaled $1.42 billion in the second quarter of 2013, an increase of $387.5 million, or 37.4%, from $1.04 billion in the first quarter of 2013 and up $119.9 million, or 9.2%, from the second quarter of 2012. Increased interest rate lock commitments in the second quarter of 2013 as compared to the first quarter of 2013 and the second quarter of 2012 primarily reflects an increase in purchase mortgage origination activity and the continued expansion of our mortgage production personnel, which grew by 3.5% during the second quarter of 2013. These increases were partially offset by a reduction in the origination of refinancing mortgages resulting in part from the significant increase in mortgage interest rates in the quarter. Second quarter interest rate lock commitments were comprised of 59% purchases and 41% refinance transactions compared to 50% purchases and 50% refinances in the first quarter 2013.
Single family closed loan volume designated for sale was $1.31 billion in the second quarter, up $115.1 million, or 9.7%, from $1.19 billion in the first quarter of 2013 and up $238.6 million, or 22.3%, from $1.07 billion in the second quarter of 2012. At June 30, 2013, the combined pipeline of interest rate lock commitments, net of estimated fallout, and mortgage loans held for sale was $1.13 billion, compared to a total of $909.5 million at March 31, 2013.
Net gain on single family mortgage loan origination and sale activities in the second quarter of 2013 was $51.7 million, a decrease of $315 thousand, or 0.6%, from the first quarter of 2013 and up $6.0 million, or 13.0%, from the second quarter of 2012. The decrease from the prior quarter is primarily the result of increased price competition resulting from lower industry application volume and the shift to a purchase mortgage-dominated market. In addition, due to the impact of changes in the FHA mortgage insurance program, we experienced a reduction in Federal Housing Administration (FHA)-insured mortgage loan originations that historically have had higher profit margins on their origination and sale. Additionally, net gain on mortgage loan origination and sale activities for the first quarter of 2013 included an increase of $4.3 million related to a change in accounting estimate that resulted from a change in the application of our methodology used to value interest rate lock commitments.
Due to differences in the timing of revenue recognition between components of the gain on loan origination and sale activities, the Company analyzes the profitability of these activities using a 'Composite Margin,' which is comprised of the ratios of the components to their respective populations of interest rate lock commitments and closed loans. The Composite Margin for the second quarter of 2013 was 380 basis points, down from 461 basis points in the first quarter of 2013 (see the Mortgage Banking Activity table for details).
Single family mortgage servicing income of $1.9 million in the second quarter of 2013 decreased $883 thousand, or 32.1%, from the first quarter of 2013 and $4.9 million, or 72.5% from the second quarter of 2012. The decrease from the first quarter of 2013 was primarily driven by higher decay rates in the quarter on the Company's single family mortgage servicing rights (MSRs) resulting from higher prepayments in the quarter and shorter anticipated remaining lives as well as the changes in the FHA mortgage insurance program, causing these borrowers to refinance into conventional mortgages.
The decrease from the prior year period largely reflected a reduction in sensitivity to interest rates for MSRs, which has enabled the Company to reduce the notional amount of derivative instruments used to economically hedge MSRs. The lower notional amount of derivative instruments, along with lower effective yields on derivative instruments utilized to hedge MSRs, resulted in lower net gains from MSR risk management, which negatively impacted mortgage servicing income.
Single family mortgage servicing fees collected in the second quarter of 2013 increased $421 thousand, or 6.2%, from the first quarter of 2013 and $1.3 million, or 21.6%, from the second quarter of 2012 resulting from growth in the portfolio of single family loans serviced for others. The portfolio of single family loans serviced for others increased to $10.40 billion at quarter end compared to $9.70 billion at March 31, 2013.
Commercial and Consumer Banking Segment
Commercial and Consumer Banking segment net income was $1.3 million for the second quarter of 2013, improving from a net loss of $2.9 million in the first quarter of 2013 and from a net loss of $7.5 million in the second quarter of 2012. For the first half of 2013, Commercial and Consumer banking had a net loss of $1.5 million, improving from a net loss of $7.9 million for the first half of 2012.
Loans held for investment
Loans held for investment, net, were $1.42 billion at June 30, 2013, an increase of $57.5 million, or 4.2%, from March 31, 2013 and an increase of $107.5 million, or 8.2%, from December 31, 2012. New loan commitments totaled $210.7 million for the second quarter of 2013, up 83.5% from $114.8 million in the first quarter of 2013. This increase was partially offset by a decrease in commercial real estate loans, as unscheduled payoffs were greater than loan originations during the quarter.
Classified assets of $74.7 million, or 2.69% of total assets at June 30, 2013, decreased by $15.4 million, or 17.0%, from $90.1 million, or 3.59% of total assets, at March 31, 2013. Nonperforming assets (NPAs) of $41.7 million, or 1.50% of total assets at June 30, 2013, decreased by $12.1 million, or 22.6%, from $53.8 million at March 31, 2013.
Nonaccrual loans of $29.7 million, or 2.06% of total loans at June 30, 2013, decreased from $32.1 million, or 2.32% of total loans at March 31, 2013, primarily driven by a decrease in nonaccrual commercial construction and single family loans. OREO balances of $11.9 million at June 30, 2013 declined from $21.7 million at March 31, 2013, primarily as a result of the sale of commercial real estate properties. Delinquent loans of $87.7 million, or 6.06% of total loans at June 30, 2013, decreased from $92.6 million, or 6.66% of total loans at March 31, 2013. Excluding FHA-insured and Department of Veterans' Affairs (VA)-guaranteed single family mortgage loans, delinquent loans were $34.3 million, or 2.52% of total non-FHA/VA loans at June 30, 2013 as compared to 2.94% at March 31, 2013.
The allowance for credit losses was $27.9 million at June 30, 2013 as compared to $28.6 million at March 31, 2013. The allowance for loan losses as a percentage of loans held for investment declined to 1.92% of total loans at June 30, 2013 compared to 2.05% of total loans at March 31, 2013, reflecting the improved credit quality of the Company's loan portfolio. A provision for credit losses of $400 thousand was recorded for the second quarter of 2013, compared to $2.0 million recorded in both the first quarter of 2013 and the second quarter of 2012. Net charge-offs in the quarter decreased to $1.1 million, down from $1.2 million in the first quarter of 2013 and $10.3 million in the second quarter of 2012. Of the $1.1 million in charge-offs during the quarter, $494 thousand had been specifically reserved in prior quarters.
Deposit balances were $1.96 billion at June 30, 2013 as compared to $1.93 billion at March 31, 2013 and $1.90 billion at June 30, 2012. Certificates of deposit decreased $119.6 million, or 22.9%, from the prior quarter as a result of the managed reduction of these higher-cost deposits and replacement with transaction and savings deposits, which increased $167.2 million, or 14.4%, from March 31, 2013. The improvement in the composition of deposits was primarily the result of our successful efforts to attract transaction and savings deposit balances through our branch network and convert customers with maturing certificates of deposit to transaction and savings deposits.
Regulatory capital ratios for the Bank are as follows:
|Jun. 30,||Dec. 31,||Jun. 30,||capitalized|
|Tier 1 leverage capital (to average assets)||11.89||%||11.78||%||10.20||%||5.00||%|
|Tier 1 risk-based capital (to risk-weighted assets)||17.89||%||18.05||%||15.83||%||6.00||%|
|Total risk-based capital (to risk-weighted assets)||19.15||%||19.31||%||17.09||%||10.00||%|
Special Cash Dividend Declaration
HomeStreet, Inc.'s board of directors has approved a special cash dividend of $0.11 per common share, payable on August 15, 2013 to shareholders of record as of the close of business on August 5, 2013.
HomeStreet, Inc. will conduct a quarterly earnings conference call on Monday, July 29, 2013 at 10:00 a.m. PST (1:00 p.m. EST). The Company will discuss second quarter 2013 results and provide an update on recent activities. A question and answer session will follow the presentation. Shareholders, analysts and other interested parties may join the call by dialing 1-888-317-6016 shortly before 10:00 a.m. PST. A rebroadcast will be available approximately one hour after the conference call by dialing 1-877-344-7529 and entering passcode 10030147.
About HomeStreet, Inc.
HomeStreet, Inc. (HMST) is a diversified financial services company headquartered in Seattle, Washington, and the holding company for HomeStreet Bank, a Washington state-chartered, FDIC-insured savings bank. HomeStreet Bank offers Commercial and Consumer banking, investment and insurance products and services in Washington, Oregon and Hawaii. HomeStreet Bank conducts lending activities in Washington, Oregon, Hawaii, Idaho, California, Arizona, Utah and Alaska. For more information, visit http://ir.homestreet.com. Information contained in or linked from our website is not incorporated into, and does not form a part of, this release.
This report to shareholders contains forward-looking statements concerning HomeStreet, Inc. and HomeStreet Bank and their operations, performance, financial conditions and likelihood of success. All statements other than statements of historical fact are forward-looking statements. Forward-looking statements are based on many beliefs, assumptions, estimates and expectations of our future performance, taking into account information currently available to us, and include statements about the competitiveness of the banking industry. When used in this press release, the words “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “should,” “will” and “would” and similar expressions (including the negative of these terms) may help identify forward-looking statements. Such statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of the Company. Forward-looking statements speak only as of the date made, and we do not undertake to update them to reflect changes or events that occur after that date.
We caution readers that a number of factors could cause actual results to differ materially from those expressed in, implied or projected by, such forward-looking statements. Among other things, our ability to expand our banking operations geographically and across market sectors, grow our franchise and capitalize on market opportunities, and generate positive net income and cash flow, may be limited due to future risks and uncertainties including, but not limited to, changes in general economic conditions that impact our markets and our business, actions by the Federal Reserve affecting monetary and fiscal policy, regulatory and legislative actions that may constrain our ability to do business, significant increases in the competition we face in our industry and market and the extent of our success in problem asset resolution efforts. In addition, we may not recognize all or a substantial portion of the value of our rate-lock loan activity due to challenges our customers may face in meeting current underwriting standards, a decrease in interest rates, an increase in competition for such loans, unfavorable changes in general economic conditions, including housing prices, the job market, consumer confidence and spending habits either nationally or in the regional and local market areas in which the Company does business and legislative or regulatory actions or reform (including, without limitation, the Dodd-Frank Wall Street Reform and Consumer Protection Act). Further, our ability to pay cash dividends in the future is dependent upon a variety of factors, including our net income, liquidity, capital resources, regulatory and financial condition, and our compliance with the terms of our trust preferred securities and applicable banking laws and regulations. A discussion of the factors that we recognize to pose risk to the achievement of our business goals and our operational and financial objectives is contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012. These factors are updated from time to time in our filings with the Securities and Exchange Commission, and readers of this release are cautioned to review those disclosures in conjunction with the discussions herein.
Information contained herein, other than information at December 31, 2012 and for the twelve months then ended, is unaudited. All financial data should be read in conjunction with the notes to the consolidated financial statements of HomeStreet, Inc., and subsidiaries as of and for the fiscal year ended December 31, 2012, as contained in the Company's Annual Report on Form 10-K for such fiscal year.
|HomeStreet, Inc. and Subsidiaries|
|Summary Financial Data|
|Quarter Ended||Six Months Ended|
|Jun. 30,||Mar. 31,||Dec. 31,||Sept. 30,||Jun. 30,||Jun. 30,||Jun. 30,|
(dollars in thousands, except share data)
|Income statement data (for the period ended):|
|Net interest income||$||17,415||$||15,235||$||16,591||$||16,520||$||14,799||$||32,650||$||27,631|
|Provision for loan losses||400||2,000||4,000||5,500||2,000||2,400||2,000|
|Net income before taxes||17,859||16,379||28,557||34,177||22,695||34,238||40,938|
|Income tax expense||5,791||5,439||7,060||12,186||4,017||11,230||2,301|
|Basic earnings per common share (1)||$||0.84||$||0.76||$||1.50||$||1.53||$||1.31||$||1.60||$||3.15|
|Diluted earnings per common share(1)||$||0.82||$||0.74||$||1.46||$||1.50||$||1.26||$||1.56||$||3.03|
|Common shares outstanding (1)||14,406,676||14,400,206||14,382,638||14,354,972||14,325,214||14,406,676||14,325,214|
|Weighted average common shares|
|Book value per share||$||18.62||$||18.78||$||18.34||$||16.82||$||15.05||$||18.62||$||15.05|
|Tangible book value per share (2)||$||18.60||$||18.75||$||18.31||$||16.79||$||15.02||$||18.60||$||15.02|
Financial position (at period end):
|Cash and cash equivalents||$||21,645||$||18,709||$||25,285||$||22,051||$||75,063||$||21,645||$||75,063|
|Investment securities available for sale||538,164||415,238||416,329||414,050||415,610||538,164||415,610|
|Loans held for sale||471,191||430,857||620,799||535,908||415,189||471,191||415,189|
|Loans held for investment, net||1,416,439||1,358,982||1,308,974||1,268,703||1,235,253||1,416,439||1,235,253|
|Mortgage servicing rights||137,385||111,828||95,493||81,512||78,240||137,385||78,240|
|Other real estate owned||11,949||21,664||23,941||17,003||40,618||11,949||40,618|
|Financial position (averages):|
|Investment securities available for sale||$||512,475||$||422,761||$||418,261||$||411,916||$||431,875||$||467,865||$||406,502|
|Loans held for investment||1,397,219||1,346,100||1,297,615||1,270,652||1,304,740||1,371,801||1,321,646|
|Total interest-earning assets||2,321,195||2,244,563||2,244,727||2,187,059||2,143,380||2,283,090||2,116,785|
|Total interest-bearing deposits||1,527,732||1,543,645||1,609,075||1,625,437||1,640,159||1,535,644||1,672,764|
|Total interest-bearing liabilities||1,917,098||1,752,599||1,794,006||1,818,611||1,833,875||1,835,302||1,829,510|
HomeStreet, Inc. and Subsidiaries
Summary Financial Data (continued)
|Quarter Ended||Six Months Ended|
|Jun. 30,||Mar. 31,||Dec. 31,||Sept. 30,||Jun. 30,||Jun. 30,||Jun. 30,|
(dollars in thousands, except share data)
|Return on average common shareholders’ equity (2)||17.19||%||15.95||%||32.80||%||38.02||%||36.03||%||16.58||%||44.39||%|
|Return on average tangible common shareholders' equity(3)||17.22||%||15.97||%||32.85||%||38.09||%||36.11||%||16.60||%||44.50||%|
|Return on average assets||1.86||%||1.75||%||3.46||%||3.60||%||3.15||%||1.81||%||3.30||%|
|Net interest margin (4)||3.10||%||2.81||%||(5)||3.06||%||3.12||%||2.85||%||2.96||%||(5)||2.68||%|
|Efficiency ratio (6)||75.65||%||75.22||%||63.22||%||53.65||%||65.53||%||75.44||%||65.55||%|
|Allowance for credit losses||$||27,858||$||28,594||$||27,751||$||27,627||$||27,125||$||27,858||$||27,125|
|Allowance for loan losses/total loans||1.92||%||2.05||%||2.06||%||2.12||%||2.13||%||1.92||%||2.13||%|
|Allowance for loan losses/nonaccrual loans||93.11||%||88.40||%||92.20||%||71.80||%||81.28||%||93.11||%||81.28||%|
|Total classified assets||$||74,721||$||90,076||$||86,270||$||102,385||$||137,165||$||74,721||$||137,165|
|Classified assets/total assets||2.69||%||3.59||%||3.28||%||4.08||%||5.66||%||2.69||%||5.66||%|
|Total nonaccrual loans(7)||$||29,701||$||32,133||$||29,892||$||38,247||$||33,107||$||29,701||$||33,107|
|Nonaccrual loans/total loans||2.06||%||2.32||%||2.24||%||2.95||%||2.62||%||2.06||%||2.62||%|
|Other real estate owned||$||11,949||$||21,664||$||23,941||$||17,003||$||40,618||$||11,949||$||40,618|
|Total nonperforming assets||$||41,650||$||53,797||$||53,833||$||55,250||$||73,725||$||41,650||$||73,725|
|Nonperforming assets/total assets||1.50||%||2.14||%||2.05||%||2.20||%||3.04||%||1.50||%||3.04||%|
|Regulatory capital ratios for the Bank:|
|Tier 1 leverage capital (to average assets)||11.89||%||11.97||%||11.78||%||10.86||%||10.20||%||11.89||%||10.20||%|
|Tier 1 risk-based capital (to risk-weighted assets)||17.89||%||19.21||%||18.05||%||16.76||%||15.83||%||17.89||%||15.83||%|
|Total risk-based capital (to risk-weighted assets)||19.15||%||20.47||%||19.31||%||18.01||%||17.09||%||19.15||%||17.09||%|
|Full-time equivalent employees (ending)||1,309||1,218||1,099||998||913||1,309||913|
|(1)||Share and per share data shown after giving effect to the 2-for-1 forward stock splits effective March 6, 2012 and November 5, 2012.|
|(2)||Net earnings available to common shareholders (annualized) divided by average common shareholders’ equity.|
Tangible equity ratios and tangible book value per share of common stock are non-GAAP financial measures. Other companies may define or calculate these measures differently. Tangible book value is calculated by dividing shareholders' common equity less average goodwill and intangible assets, net (excluding MSRs) by the number of common shares outstanding. The return on average tangible common shareholders' equity is calculated by dividing net earnings available to common shareholders (annualized) by average shareholders' common equity less average goodwill and intangible assets, net (excluding MSRs). For additional information on these ratios and for corresponding reconciliations to GAAP financial measures, see Non-GAAP Financial Measures in this earnings release.
|(4)||Net interest income divided by total average interest-earning assets on a tax equivalent basis.|
|(5)||Net interest margin for the first quarter of 2013 included $1.4 million in interest expense related to the correction of the cumulative effect of an error in prior years, resulting from the under accrual of interest due on the TruPS for which the Company had deferred the payment of interest. Excluding the impact of the prior period interest expense correction, the net interest margin was 3.06% for the quarter ended March 31, 2013 and 3.08% for the six months ended June 30, 2013.|
|(6)||Noninterest expense divided by total net revenue (net interest income and noninterest income).|
|(7)||Generally, loans are placed on nonaccrual status when they are 90 or more days past due.|
|HomeStreet, Inc. and Subsidiaries|
|Consolidated Statements of Operations|
|Three Months Ended June 30,||%||Six Months Ended June 30,||%|
|(in thousands, except share data)||2013||2012||Change||2013||2012||Change|
|Investment securities available for sale||2,998||2,449||22||5,657||4,688||21|
|Federal Home Loan Bank advances||387||535||(28||)||680||1,209||(44||)|
|Securities sold under agreements to repurchase||11||50||(78||)||11||50||(78||)|
|Net interest income||17,415||14,799||18||32,650||27,631||18|
|Provision for credit losses||400||2,000||(80||)||2,400||2,000||20|
|Net interest income after provision for credit losses||17,015||12,799||33||30,250||25,631||18|
|Net gain on mortgage loan origination and sale activities||52,424||46,799||12||106,379||76,347||39|
|Mortgage servicing income||2,183||7,091||(69||)||5,255||14,964||(65||)|
|Income from Windermere Mortgage Services Series LLC||993||1,394||(29||)||1,613||2,560||(37||)|
|Loss on debt extinguishment||—||(939||)||
|Depositor and other retail banking fees||761||771||(1||)||1,482||1,506||(2||)|
|Gain on sale of investment securities available for sale||238||911||(74||)||190||952||(80||)|
|Salaries and related costs||38,579||28,224||37||73,641||49,575||49|
|General and administrative||10,270||6,832||50||21,200||12,156||74|
|Federal Deposit Insurance Corporation assessments||143||717||(80||)||710||1,957||(64||)|
|Other real estate owned expense and other adjustments||(597||)||6,049||
|Income before income taxes||17,859||22,695||(21||)||34,238||40,938||(16||)|
|Income tax expense (benefit)||5,791||4,017||44||11,230||2,301||388|
|Basic income per share||$||0.84||$||1.31||(36||)||$||1.60||$||3.15||(49||)|
|Diluted income per share||$||0.82||$||1.26||(35||)||$||1.56||$||3.03||(49||)|
|Basic weighted average number of shares outstanding||14,376,580||14,252,120||1||14,368,135||12,272,342||17|
|Diluted weighted average number of shares outstanding||14,785,481||14,824,064||—||14,794,805||12,772,198||16|
|HomeStreet, Inc. and Subsidiaries|
Five Quarter Consolidated Statements of Operation
|Jun. 30,||Mar. 31,...|
- Banking & Budgeting