HomeStreet, Inc. Reports Third Quarter 2013 Results
Net Income of $1.7 Million, or $0.11 per Diluted Share, Net Interest Margin Improves to 3.41%
SEATTLE – October 28, 2013 – (BUSINESS WIRE) – HomeStreet, Inc. (NASDAQ:HMST) (the “Company” or “HomeStreet”), the parent company of HomeStreet Bank (the “Bank”), today announced net income of $1.7 million, or $0.11 per diluted share, for the third quarter of 2013, compared to net income of $12.1 million, or $0.82 per share, for the second quarter of 2013 and $22.0 million, or $1.50 per share, for the third quarter of 2012.
| • | Consolidated results: |
| ◦ | Third quarter 2013 |
| ▪ | Net interest margin of 3.41%, up from 3.12% in the third quarter of 2012. |
| ▪ | Deposit balances grew to $2.10 billion, up 6.9% from the second quarter of 2013. |
| ▪ | Continued strong credit performance including significant reductions in classified assets, nonaccruals, delinquencies and TDRs. |
| ◦ | Year-to-date 2013 |
| ▪ | Pre-tax income of $36.2 million, down 51.8% from the first nine months of 2012. |
| ▪ | Net interest margin of 3.12%, up from 2.83% in the first nine months of 2012. |
| ▪ | The Company's estimated annual effective income tax rate for the year-to-date was 31.9% 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. |
| • | Third quarter segment results: |
◦ | Commercial and Consumer Banking - strong loan and deposit growth |
| ▪ | Commercial and Consumer Banking segment net income of $3.9 million, up $2.5 million from the second quarter of 2013. |
▪ | Loans held for investment of $1.51 billion at September 30, 2013 increased $93.7 million, or 6.6%, from June 30, 2013. New loan commitments totaled $242.5 million, compared to $210.7 million for the second quarter of 2013. |
▪ | Total deposits of $2.10 billion increased 6.9% from June 30, 2013. Transaction and savings deposits increased to $1.42 billion, up from $1.33 billion. |
| ▪ | Classified assets and nonperforming assets ended the quarter at 1.90% and 1.37% of total assets, respectively, down from 2.69% and 1.50% of total assets at June 30, 2013. |
◦Mortgage Banking - rising interest rates, reduced loan volume
| ▪ | Mortgage Banking segment net loss of $2.2 million, down $12.9 million from the second quarter of 2013 and down $26.5 million from the third quarter of 2012. |
| ▪ | Single family mortgage interest rate lock commitments of $786.1 million, down 44.8% from the second quarter of 2013 and down 40.1% from the third quarter of 2012. |
| ▪ | Single family mortgage closed loan production of $1.19 billion, down 9.2% from the second quarter of 2013 and down 13.2% from the third quarter of 2012. |
| ▪ | Net gain on single family mortgage origination and sale activities of $31.4 million, down 39.3% from the second quarter of 2013 and down 51.2% from the third quarter of 2012. |
| ▪ | The portfolio of single family loans serviced for others increased to $11.29 billion at quarter end, up 8.5% from $10.40 billion at June 30, 2013. |
| ▪ | Single family mortgage servicing income of $3.7 million, up from $1.9 million in the second quarter of 2013 and up from $87 thousand in the third quarter of 2012. |
| ▪ | HomeStreet maintained its ranking as the number two originator by volume of purchase mortgages in the Pacific Northwest, based on the combined results of HomeStreet originations and loans originated through an affiliated business arrangement known as Windermere Mortgage Services Series LLC. HomeStreet has held the number one or number two position for originator by volume of purchases mortgages in the Pacific Northwest for all three quarters of 2013. |
• | Other highlights: |
| ◦ | On October 25, 2013, the Company announced that its board of directors approved a common stock dividend of $0.11 per share payable to shareholders of record as of November 4, 2013. |
| ◦ | The Company has entered into two separate merger agreements whereby HomeStreet Bank will acquire Seattle-based Fortune Bank, a Washington state-chartered bank and Yakima National Bank, a national banking association based in Yakima, Wash., and parent holding company, YNB Financial Services Corp. The transactions, which have each been approved by the shareholders of the institution being acquired and our regulators, are expected to close in early November 2013. The acquisition of the two banks, along with the pending acquisition of two retail deposit branches from AmericanWest Bank, will increase the Company's total assets by approximately $290 million and the total number of HomeStreet Bank retail deposit branches to 30. |
"As we anticipated, this has been and continues to be a transitional time for our company,” said CEO Mark K. Mason. “In the third quarter, we experienced cyclical changes in the mortgage market associated with rising interest rates. Significant decreases in refinancing activity were only partially offset by a slow-growing purchase market. Lower aggregate mortgage demand drove lower profit margins as lenders competed for remaining volume in a smaller market. Additionally, substantially lower interest rate lock commitments than closed loans in the quarter negatively affected earnings as a majority of our mortgage revenue is recognized at the date of interest rate lock, while most origination costs, including commissions, are recognized upon funding the loan. We expect this condition to significantly decrease in the fourth quarter. Going forward, we anticipate the primary drivers of quarterly changes in mortgage loan volume to be driven by our continuing growth in loan production personnel and our expansion in new markets as well as seasonal factors.
"In the third quarter, we also made substantial progress toward our goal of business diversification. We continued to build our commercial and consumer banking segment through strong organic growth in addition to three high quality bank and deposit branch acquisitions, which we expect to close in early November. We
2
feel very fortunate to be acquiring these quality franchises and seasoned teams of lenders and customer service professionals. We believe these acquisitions will have an immediate impact and be a catalyst for acceleration of our growth going forward."
Consolidated Results of Operations
Net Interest Income
Net interest income in the third quarter of 2013 was $20.4 million, up $3.0 million, or 17.2%, from the second quarter of 2013 and up $3.9 million, or 23.6%, from the third quarter of 2012. In the third quarter of 2013, net interest margin, on a tax equivalent basis, increased to 3.41% from 3.10% in the second quarter of 2013, and was up from 3.12% in the third quarter of 2012. Improvement in the margin from the third quarter of 2012 resulted from a 42 basis point decline in our average interest-bearing cost of funds, due in large part to the re-pricing of maturing time deposits. This improvement was partially offset by a 6 basis point decline in our yield on interest-earning assets, largely due to increased balances of single family adjustable-rate mortgage loans.
Total average interest-earning assets increased from the three and nine months ended September 30, 2012 primarily as a result of growth in the investment securities portfolio and new portfolio loan originations, being partially offset by a decrease in loans held for sale. The increase in average balances of portfolio loans reflects our year-over-year growth in loan production volume from all of our commercial and consumer business lines. Total average interest-bearing deposit balances increased from the prior periods mostly as a result of an increase in transaction and savings deposits, partially offset by a decline in higher-cost retail certificates of deposit.
Noninterest Income
Noninterest income in the third quarter of 2013 was $38.2 million, down $19.4 million, or 33.7%, from $57.6 million in the second quarter of 2013 and down $30.9 million, or 44.7%, from $69.1 million in the third quarter of 2012. The decrease from the prior quarter and from the third quarter of 2012 was primarily driven by lower mortgage loan origination and sale revenue, mostly due to an increase in mortgage interest rates that has led to substantially lower interest rate lock volume and lower profit margins.
Partially offsetting the decrease in noninterest income was a $1.8 million increase in mortgage servicing income, primarily driven by lower amortization of MSRs as a result of slower current and future estimated prepayments and increased servicing fees collected in the quarter on the Company's single family mortgage servicing.
Noninterest Expense
Noninterest expense of $58.1 million in the third quarter of 2013 increased $1.4 million, or 2.5%, from the second quarter of 2013, and increased $12.2 million, or 26.5%, from $45.9 million in the third quarter of 2012. The increase from the third quarter of 2012 is primarily the result of increased salary and related costs and general and administrative expenses resulting from the growth in personnel as we continue to expand our mortgage banking and commercial and consumer businesses. At September 30, 2013, our full-time equivalent employees had increased 42.9% from September 30, 2012 and our retail deposit branch system had increased 15% to 23 branches.
Income Taxes
The Company's income tax expense was $308 thousand for the quarter. The Company's estimated annual effective income tax rate was 31.9% 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.
3
Business Segments
The Company has two business segments: 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 portfolio of single family mortgages serviced for other investors.
Commercial and Consumer Banking provides traditional banking services to businesses and consumers through the Company's commercial lending offices and retail deposit branch 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, portfolio of multifamily mortgages serviced for other investors, deposits and other assets and liabilities not related to the single family mortgage banking business. This segment is also responsible for the management of the Company's portfolio of investment securities.
Commercial and Consumer Banking Segment
Commercial and Consumer Banking segment net income was $3.9 million in the third quarter of 2013, compared to net income of $1.3 million in the second quarter of 2013 and a net loss of $2.3 million in the third quarter of 2012. For the first nine months of 2013, Commercial and Consumer Banking had net income of $2.3 million, improving from a net loss of $10.2 million for the first nine months of 2012.
Loans Held for Investment
Loans held for investment, net, were $1.51 billion at September 30, 2013, an increase of $93.7 million, or 6.6%, from June 30, 2013 and an increase of $201.2 million, or 15.4%, from December 31, 2012. New loan commitments totaled $242.5 million for the third quarter of 2013, up 15.1% from $210.7 million in the second quarter of 2013.
Asset Quality
Classified assets of $54.4 million, or 1.90% of total assets at September 30, 2013, decreased by $20.4 million, or 27.3%, from $74.7 million, or 2.69% of total assets, at June 30, 2013, primarily due to the upgrade of one $14 million commercial real estate classified loan and payoffs of classified loans during the quarter. Nonperforming assets (NPAs) of $39.0 million, or 1.37% of total assets at September 30, 2013, decreased by $2.6 million, or 6.3%, from $41.7 million, or 1.50% of total assets at June 30, 2013, primarily due to upgrades and payoffs of single family and home equity nonaccrual loans during the quarter.
Nonaccrual loans of $26.8 million, or 1.74% of total loans at September 30, 2013, decreased from $29.7 million, or 2.06% of total loans at June 30, 2013, primarily driven by a decrease in nonaccrual single family and home equity loans. OREO balances were $12.3 million at September 30, 2013, an increase of 2.7% from $11.9 million at June 30, 2013. Delinquent loans of $86.7 million, or 5.64% of total loans at September 30, 2013, decreased from $87.7 million, or 6.06% of total loans at June 30, 2013. Excluding FHA-insured and Department of Veterans' Affairs (VA)-guaranteed single family mortgage loans, delinquent loans were $31.3 million, or 2.16% of total non-FHA/VA loans at September 30, 2013, as compared to $34.3 million, or 2.52% of total non-FHA/VA loans at June 30, 2013.
The allowance for credit losses was $24.9 million at September 30, 2013 compared to $27.9 million at June 30, 2013. The allowance for loan losses as a percentage of loans held for investment declined to 1.61% of total loans at September 30, 2013 compared to 1.92% of total loans at June 30, 2013. Improved credit quality of the Company's loan portfolio resulted in a $1.5 million reversal to the provision for credit losses in the third quarter of 2013, compared to a provision of $400 thousand in the second quarter of 2013 and $5.5 million in the third quarter of 2012. Net charge-offs in the quarter totaled $1.5 million, up from net charge-
4
offs of $1.1 million in the second quarter of 2013 and down from $5.0 million of net charge-offs in the third quarter of 2012. Of the $1.5 million in net charge-offs during the quarter, $967 thousand had been specifically reserved as of June 30, 2013.
Deposits
Deposit balances were $2.10 billion at September 30, 2013 as compared to $1.96 billion at June 30, 2013 and $1.98 billion at September 30, 2012. Transaction and savings deposits increased $90.9 million, or 6.8%, from June 30, 2013. Certificates of deposit increased $56.6 million, or 14.0%, from the prior quarter, as a result of management's decision to utilize certificates of deposit to extend the duration of liabilities. The continued improvement in the composition of deposits was primarily the result of our successful efforts to attract transaction and savings deposit balances through effective brand marketing and the growth of our retail deposit branch network.
Mortgage Banking Segment
Mortgage Banking segment net loss was $2.2 million for the third quarter of 2013, compared to net income of $10.7 million in the second quarter of 2013 and net income of $24.3 million in the third quarter of 2012. For the first nine months of 2013, Mortgage Banking net income was $22.4 million, a decrease of 68.4% from $70.8 million in the first nine months of 2012.
Mortgage Origination for Sale to Secondary Market
Single family mortgage interest rate lock commitments, net of estimated fall out, totaled $786.1 million in the third quarter of 2013, a decrease of $637.1 million, or 44.8%, from $1.42 billion in the second quarter of 2013 and down $527.0 million, or 40.1%, from the third quarter of 2012. The decrease in interest rate lock commitments in the third quarter of 2013 compared to the second quarter of 2013 and the third quarter of 2012 primarily reflects the sharp drop in refinance volume following the rise in mortgage interest rates beginning in June 2013, partially offset by increased purchase volume from the expansion of our mortgage production offices and personnel. Mortgage production personnel grew by 9.0% during the third quarter of 2013. Third quarter interest rate lock commitments were comprised of 80% purchase and 20% refinance mortgage transactions compared to 59% purchase and 41% refinances in the second quarter 2013.
Single family closed loan volume designated for sale to the secondary market was $1.19 billion in the third quarter, down $120.2 million, or 9.2%, from $1.31 billion in the second quarter of 2013 and down $181.2 million, or 13.2%, from $1.37 billion in the third quarter of 2012. At September 30, 2013, the combined pipeline of interest rate lock commitments, net of estimated fallout, and mortgage loans held for sale was $631.1 million, compared to a total of $1.13 billion at June 30, 2013.
Net gain on single family mortgage loan origination and sale activities in the third quarter of 2013 was $31.4 million, a decrease of $20.3 million, or 39.3%, from the second quarter of 2013 and a decrease of $32.9 million, or 51.2%, from the third quarter of 2012. The decrease from the prior quarter is primarily the result of the 44.8% decrease in interest rate lock commitments, which was heavily driven by a decrease in refinance mortgage volume and the shift to a purchase mortgage-dominated market.
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 third quarter of 2013 was 375 basis points, down from 380 basis points in the second quarter of 2013 (see the Mortgage Banking Activity table for details).
5
Mortgage Servicing
Single family mortgage servicing income of $3.7 million in the third quarter of 2013 increased $1.8 million, or 95.8%, from the second quarter of 2013 and increased $3.6 million from the third quarter of 2012. The increase from the second quarter was primarily driven by lower amortization of MSRs as a result of slower current and future estimated prepayments and increased servicing fees collected in the quarter on the Company's single family mortgage servicing.
Single family mortgage servicing fees collected in the third quarter of 2013 increased $929 thousand, or 12.9%, from the second quarter of 2013 and $2.0 million, or 32.4%, from the third 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 $11.29 billion at quarter end compared to $10.40 billion at June 30, 2013.
Noninterest Expense
Mortgage banking segment noninterest expense of $44.5 million increased $1.3 million, or 3.0% from the second quarter of 2013. This increase was primarily attributable to the net addition of 35 mortgage originators and mortgage fulfillment personnel during the quarter.
Net Loss
Mortgage Banking net loss of $2.2 million for the third quarter of 2013 was driven primarily by the sharp decrease in interest rate lock commitment volume, as a substantial amount of the gain on loan origination and sale activities is recognized at the time of interest rate lock, as well as the imbalance between the volume of interest rate lock commitments and closed loans. In periods where the volume of closed loans significantly exceeds the volume of interest rate lock commitments, noninterest expense will be higher relative to noninterest income because variable costs, notably commissions and incentives, are recognized at the time of closing the loan. In the third quarter of 2013, single family mortgage closed loans of $1.19 billion were 51.0% greater than interest rate lock commitments of $786.1 million.
Capital
Regulatory capital ratios for the Bank are as follows:
| Sept. 30, 2013 | Dec. 31, 2012 | Sept. 30, 2012 | Well-capitalized ratios | |||||||||
| Tier 1 leverage capital (to average assets) | 10.90 | % | 11.78 | % | 10.86 | % | 5.00 | % | ||||
| Tier 1 risk-based capital (to risk-weighted assets) | 17.27 | % | 18.05 | % | 16.76 | % | 6.00 | % | ||||
| Total risk-based capital (to risk-weighted assets) | 18.52 | % | 19.31 | % | 18.01 | % | 10.00 | % | ||||
Special Cash Dividend Declaration
As we announced on October 25, 2013, HomeStreet, Inc.'s board of directors approved a special cash dividend of $0.11 per common share, payable on November 25, 2013 to shareholders of record as of the close of business on November 4, 2013.
Conference Call
HomeStreet, Inc. will conduct a quarterly earnings conference call on Tuesday, October 29, 2013 at 1:00 p.m. EDT. The Company will discuss third 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 1:00 p.m. EDT. A rebroadcast will be available approximately one hour after the conference call by dialing 1-877-344-7529 and entering passcode 10033264.
6
About HomeStreet, Inc.
HomeStreet, Inc. (NASDAQ: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.
Forward-Looking Statements
This press release 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.We may not immediately realize the benefits expected from our pending bank and branch acquisitions and may incur unexpected costs in integrating these acquisitions into our operations. 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.
7
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.
Source: HomeStreet, Inc.
| Contact: | Investor Relations & Media: | |
| HomeStreet, Inc. | ||
| Terri Silver, 206-389-6303 | ||
| terri.silver@homestreet.com | ||
| http://ir.homestreet.com | ||
8
HomeStreet, Inc. and Subsidiaries
Summary Financial Data
| Quarter Ended | Nine Months Ended | |||||||||||||||||||||||||||
| (dollars in thousands, except share data) | Sept. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sept. 30, 2012 | Sept. 30, 2013 | Sept. 30, 2012 | |||||||||||||||||||||
| Income statement data (for the period ended): | ||||||||||||||||||||||||||||
| Net interest income | $ | 20,412 | $ | 17,415 | $ | 15,235 | $ | 16,591 | $ | 16,520 | $ | 53,062 | $ | 44,151 | ||||||||||||||
| Provision (reversal of provision) for loan losses | (1,500 | ) | 400 | 2,000 | 4,000 | 5,500 | 900 | 7,500 | ||||||||||||||||||||
| Noninterest income | 38,174 | 57,556 | 58,943 | 71,932 | 69,091 | 154,673 | 166,089 | |||||||||||||||||||||
| Noninterest expense | 58,116 | 56,712 | 55,799 | 55,966 | 45,934 | 170,627 | 127,625 | |||||||||||||||||||||
| Net income before taxes | 1,970 | 17,859 | 16,379 | 28,557 | 34,177 | 36,208 | 75,115 | |||||||||||||||||||||
| Income tax expense | 308 | 5,791 | 5,439 | 7,060 | 12,186 | 11,538 | 14,487 | |||||||||||||||||||||
| Net income | $ | 1,662 | $ | 12,068 | $ | 10,940 | $ | 21,497 | $ | 21,991 | $ | 24,670 | $ | 60,628 | ||||||||||||||
Basic earnings per common share (1) | $ | 0.12 | $ | 0.84 | $ | 0.76 | $ | 1.50 | $ | 1.53 | $ | 1.72 | $ | 4.68 | ||||||||||||||
Diluted earnings per common share(1) | $ | 0.11 | $ | 0.82 | $ | 0.74 | $ | 1.46 | $ | 1.50 | $ | 1.67 | $ | 4.52 | ||||||||||||||
Common shares outstanding (1) | 14,422,354 | 14,406,676 | 14,400,206 | 14,382,638 | 14,354,972 | 14,422,354 | 14,354,972 | |||||||||||||||||||||
| Weighted average common shares | ||||||||||||||||||||||||||||
| Basic | 14,388,559 | 14,376,580 | 14,359,691 | 14,371,120 | 14,335,950 | 14,374,943 | 12,960,212 | |||||||||||||||||||||
| Diluted | 14,790,671 | 14,785,481 | 14,804,129 | 14,714,166 | 14,699,032 | 14,793,427 | 13,414,475 | |||||||||||||||||||||
| Book value per share | $ | 18.60 | $ | 18.62 | $ | 18.78 | $ | 18.34 | $ | 16.82 | $ | 18.60 | $ | 16.82 | ||||||||||||||
Tangible book value per share (2) | $ | 18.57 | $ | 18.60 | $ | 18.75 | $ | 18.31 | $ | 16.79 | $ | 18.57 | $ | 16.79 | ||||||||||||||
| Financial position (at period end): | ||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 37,906 | $ | 21,645 | $ | 18,709 | $ | 25,285 | $ | 22,051 | $ | 37,906 | $ | 22,051 | ||||||||||||||
| Investment securities available for sale | 573,591 | 538,164 | 415,238 | 416,329 | 414,050 | 573,591 | 414,050 | |||||||||||||||||||||
| Loans held for sale | 385,110 | 471,191 | 430,857 | 620,799 | 535,908 | 385,110 | 535,908 | |||||||||||||||||||||
| Loans held for investment, net | 1,510,169 | 1,416,439 | 1,358,982 | 1,308,974 | 1,268,703 | 1,510,169 | 1,268,703 | |||||||||||||||||||||
| Mortgage servicing rights | 146,300 | 137,385 | 111,828 | 95,493 | 81,512 | 146,300 | 81,512 | |||||||||||||||||||||
| Other real estate owned | 12,266 | 11,949 | 21,664 | 23,941 | 17,003 | 12,266 | 17,003 | |||||||||||||||||||||
| Total assets | 2,854,323 | 2,776,124 | 2,508,251 | 2,631,230 | 2,511,269 | 2,854,323 | 2,511,269 | |||||||||||||||||||||
| Deposits | 2,098,076 | 1,963,123 | 1,934,704 | 1,976,835 | 1,981,814 | 2,098,076 | 1,981,814 | |||||||||||||||||||||
| FHLB advances | 338,690 | 409,490 | 183,590 | 259,090 | 131,597 | 338,690 | 131,597 | |||||||||||||||||||||
| Shareholders’ equity | 268,208 | 268,321 | 270,405 | 263,762 | 241,499 | 268,208 | 241,499 | |||||||||||||||||||||
| Financial position (averages): | ||||||||||||||||||||||||||||
| Investment securities available for sale | $ | 556,862 | $ | 512,475 | $ | 422,761 | $ | 418,261 | $ | 411,916 | $ | 497,857 | $ | 408,320 | ||||||||||||||
| Loans held for investment | 1,475,011 | 1,397,219 | 1,346,100 | 1,297,615 | 1,270,652 | 1,406,582 | 1,304,526 | |||||||||||||||||||||
| Total interest-earning assets | 2,474,397 | 2,321,195 | 2,244,563 | 2,244,727 | 2,187,059 | 2,347,560 | 2,140,383 | |||||||||||||||||||||
| Total interest-bearing deposits | 1,488,076 | 1,527,732 | 1,543,645 | 1,609,075 | 1,625,437 | 1,519,615 | 1,656,874 | |||||||||||||||||||||
| FHLB advances | 374,682 | 307,296 | 147,097 | 122,516 | 112,839 | 277,192 | 83,523 | |||||||||||||||||||||
| Repurchase agreements | — | 10,913 | — | 558 | 18,478 | 3,638 | 23,597 | |||||||||||||||||||||
| Total interest-bearing liabilities | 2,045,155 | 1,917,098 | 1,752,599 | 1,794,006 | 1,818,611 | 1,906,023 | 1,825,851 | |||||||||||||||||||||
| Shareholders’ equity | 271,286 | 280,783 | 274,355 | 262,163 | 231,361 | 275,463 | 193,308 | |||||||||||||||||||||
9
HomeStreet, Inc. and Subsidiaries
Summary Financial Data (continued)
| Quarter Ended | Nine Months Ended | |||||||||||||||||||||||||||
| (dollars in thousands, except share data) | Sept. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sept. 30, 2012 | Sept. 30, 2013 | Sept. 30, 2012 | |||||||||||||||||||||
| Financial performance: | ||||||||||||||||||||||||||||
Return on average common shareholders’ equity (3) | 2.45 | % | 17.19 | % | 15.95 | % | 32.80 | % | 38.02 | % | 11.94 | % | 41.82 | % | ||||||||||||||
Return on average tangible common shareholders' equity(2) | 2.45 | % | 17.22 | % | 15.97 | % | 32.85 | % | 38.09 | % | 11.96 | % | 41.91 | % | ||||||||||||||
| Return on average assets | 0.24 | % | 1.86 | % | 1.75 | % | 3.46 | % | 3.60 | % | 1.25 | % | 3.40 | % | ||||||||||||||
Net interest margin (4) | 3.41 | % | 3.10 | % | 2.81 | % | (5) | 3.06 | % | 3.12 | % | 3.12 | % | (5) | 2.83 | % | ||||||||||||
Efficiency ratio (6) | 99.20 | % | 75.65 | % | 75.22 | % | 63.22 | % | 53.65 | % | 82.14 | % | 60.70 | % | ||||||||||||||
| Asset quality: | ||||||||||||||||||||||||||||
| Allowance for credit losses | $ | 24,894 | $ | 27,858 | $ | 28,594 | $ | 27,751 | $ | 27,627 | $ | 24,894 | $ | 27,627 | ||||||||||||||
| Allowance for loan losses/total loans | 1.61 | % | 1.92 | % | 2.05 | % | 2.06 | % | 2.12 | % | 1.61 | % | 2.12 | % | ||||||||||||||
| Allowance for loan losses/nonaccrual loans | 92.30 | % | 93.11 | % | 88.40 | % | 92.20 | % | 71.80 | % | 92.30 | % | 71.80 | % | ||||||||||||||
| Total classified assets | $ | 54,355 | $ | 74,721 | $ | 90,076 | $ | 86,270 | $ | 102,385 | $ | 54,355 | $ | 102,385 | ||||||||||||||
| Classified assets/total assets | 1.90 | % | 2.69 | % | 3.59 | % | 3.28 | % | 4.08 | % | 1.90 | % | 4.08 | % | ||||||||||||||
Total nonaccrual loans(7) | $ | 26,753 | $ | 29,701 | $ | 32,133 | $ | 29,892 | $ | 38,247 | $ | 26,753 | $ | 38,247 | ||||||||||||||
| Nonaccrual loans/total loans | 1.74 | % | 2.06 | % | 2.32 | % | 2.24 | % | 2.95 | % | 1.74 | % | 2.95 | % | ||||||||||||||
| Other real estate owned | $ | 12,266 | $ | 11,949 | $ | 21,664 | $ | 23,941 | $ | 17,003 | $ | 12,266 | $ | 17,003 | ||||||||||||||
| Total nonperforming assets | $ | 39,019 | $ | 41,650 | $ | 53,797 | $ | 53,833 | $ | 55,250 | $ | 39,019 | $ | 55,250 | ||||||||||||||
| Nonperforming assets/total assets | 1.37 | % | 1.50 | % | 2.14 | % | 2.05 | % | 2.20 | % | 1.37 | % | 2.20 | % | ||||||||||||||
| Net charge-offs | $ | 1,464 | $ | 1,136 | $ | 1,157 | $ | 3,876 | $ | 4,998 | $ | 3,757 | $ | 22,673 | ||||||||||||||
| Regulatory capital ratios for the Bank: | ||||||||||||||||||||||||||||
| Tier 1 leverage capital (to average assets) | 10.90 | % | 11.89 | % | 11.97 | % | 11.78 | % | 10.86 | % | 10.90 | % | 10.86 | % | ||||||||||||||
| Tier 1 risk-based capital (to risk-weighted assets) | 17.27 | % | 17.89 | % | 19.21 | % | 18.05 | % | 16.76 | % | 17.27 | % | 16.76 | % | ||||||||||||||
| Total risk-based capital (to risk-weighted assets) | 18.52 | % | 19.15 | % | 20.47 | % | 19.31 | % | 18.01 | % | 18.52 | % | 18.01 | % | ||||||||||||||
| Other data: | ||||||||||||||||||||||||||||
| Full-time equivalent employees (ending) | 1,426 | 1,309 | 1,218 | 1,099 | 998 | 1,426 | 998 | |||||||||||||||||||||
| (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) | 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. |
| (3) | Net earnings available to common shareholders (annualized) divided by average common shareholders’ equity. |
| (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, 3.08% for the quarter ended June 30, 2013 and 3.21% for the nine months ended September 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. |
10
HomeStreet, Inc. and Subsidiaries
Consolidated Statements of Operations
| Three Months Ended September 30, | % | Nine Months Ended September 30, | % | |||||||||||||||||||
| (in thousands, except share data) | 2013 | 2012 | Change | 2013 | 2012 | Change | ||||||||||||||||
| Interest income: | ||||||||||||||||||||||
| Loans | $ | 19,425 | $ | 18,512 | 5 | % | $ | 54,920 | $ | 52,344 | 5 | |||||||||||
| Investment securities available for sale | 3,895 | 2,517 | 55 | 9,552 | 7,205 | 33 | ||||||||||||||||
| Other | 28 | 24 | 17 | 82 | 216 | (62 | ) | |||||||||||||||
| 23,348 | 21,053 | 11 | 64,554 | 59,765 | 8 | |||||||||||||||||
| Interest expense: | ||||||||||||||||||||||
| Deposits | 2,222 | 3,908 | (43 | ) | 8,078 | 12,985 | (38 | ) | ||||||||||||||
| Federal Home Loan Bank advances | 434 | 297 | 46 | 1,113 | 1,506 | (26 | ) | |||||||||||||||
| Securities sold under agreements to repurchase | — | 19 | (100 | ) | 11 | 69 | (84 | ) | ||||||||||||||
| Long-term debt | 274 | 305 | (10 | ) | 2,274 | 1,041 | 118 | |||||||||||||||
| Other | 6 | 4 | 50 | 16 | 13 | 23 | ||||||||||||||||
| 2,936 | 4,533 | (35 | ) | 11,492 | 15,614 | (26 | ) | |||||||||||||||
| Net interest income | 20,412 | 16,520 | 24 | 53,062 | 44,151 | 20 | ||||||||||||||||
| Provision (reversal of provision) for credit losses | (1,500 | ) | 5,500 | (127 | ) | 900 | 7,500 | (88 | ) | |||||||||||||
| Net interest income after provision for credit losses | 21,912 | 11,020 | 99 | 52,162 | 36,651 | 42 | ||||||||||||||||
| Noninterest income: | ||||||||||||||||||||||
| Net gain on mortgage loan origination and sale activities | 33,491 | 65,336 | (49 | ) | 139,870 | 141,683 | (1 | ) | ||||||||||||||
| Mortgage servicing income | 4,011 | 506 | 693 | 9,265 | 15,470 | (40 | ) | |||||||||||||||
| (Loss) income from Windermere Mortgage Services Series LLC | (550 | ) | 1,188 | (146 | ) | 1,063 | 3,748 | (72 | ) | |||||||||||||
| Loss on debt extinguishment | — | — | NM | — | (939 | ) | NM | |||||||||||||||
| Depositor and other retail banking fees | 791 | 756 | 5 | 2,273 | 2,262 | — | ||||||||||||||||
| Insurance commissions | 242 | 192 | 26 | 612 | 551 | 11 | ||||||||||||||||
| (Loss) gain on sale of investment securities available for sale | (184 | ) | 397 | (146 | ) | 6 | 1,349 | (100 | ) | |||||||||||||
| Other | 373 | 716 | (48 | ) | 1,584 | 1,965 | (19 | ) | ||||||||||||||
| 38,174 | 69,091 | (45 | ) | 154,673 | 166,089 | (7 | ) | |||||||||||||||
| Noninterest expense: | ||||||||||||||||||||||
| Salaries and related costs | 39,689 | 31,573 | 26 | 113,330 | 81,148 | 40 | ||||||||||||||||
| General and administrative | 9,234 | 7,148 | 29 | 30,434 | 19,304 | 58 | ||||||||||||||||
| Legal | 844 | 312 | 171 | 2,054 | 1,471 | 40 | ||||||||||||||||
| Consulting | 884 | 1,069 | (17 | ) | 2,343 | 1,746 | 34 | |||||||||||||||
| Federal Deposit Insurance Corporation assessments | 227 | 794 | (71 | ) | 937 | 2,751 | (66 | ) | ||||||||||||||
| Occupancy | 3,484 | 2,279 | 53 | 9,667 | 6,160 | 57 | ||||||||||||||||
| Information services | 3,552 | 2,411 | 47 | 10,122 | 6,128 | 65 | ||||||||||||||||
| Other real estate owned expense and other adjustments | 202 | 348 | (42 | ) | 1,740 | 8,917 | (80 | ) | ||||||||||||||
| 58,116 | 45,934 | 27 | 170,627 | 127,625 | 34 | |||||||||||||||||
| Income before income taxes | 1,970 | 34,177 | (94 | ) | 36,208 | 75,115 | (52 | ) | ||||||||||||||
| Income tax expense | 308 | 12,186 | (97 | ) | 11,538 | 14,487 | (20 | ) | ||||||||||||||
| NET INCOME | $ | 1,662 | $ | 21,991 | (92 | ) | $ | 24,670 | $ | 60,628 | (59 | ) | ||||||||||
| Basic income per share | $ | 0.12 | $ | 1.53 | (92 | ) | $ | 1.72 | $ | 4.68 | (63 | ) | ||||||||||
| Diluted income per share | $ | 0.11 | $ | 1.50 | (93 | ) | $ | 1.67 | $ | 4.52 | (63 | ) | ||||||||||
| Basic weighted average number of shares outstanding | 14,388,559 | 14,335,950 | — | 14,374,943 | 12,960,212 | 11 | ||||||||||||||||
| Diluted weighted average number of shares outstanding | 14,790,671 | 14,699,032 | 1 | 14,793,427 | 13,414,475 | 10 | ||||||||||||||||
11
HomeStreet, Inc. and Subsidiaries
Five Quarter Consolidated Statements of Operation
| Quarter ended | ||||||||||||||||||||
| (in thousands, except share data) | Sept. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sept. 30, 2012 | |||||||||||||||
| Interest income: | ||||||||||||||||||||
| Loans | $ | 19,425 | $ | 17,446 | $ | 18,049 | $ | 18,713 | $ | 18,512 | ||||||||||
| Investment securities available for sale | 3,895 | 2,998 | 2,659 | 2,186 | 2,517 | |||||||||||||||
| Other | 28 | 24 | 30 | 27 | 24 | |||||||||||||||
| 23,348 | 20,468 | 20,738 | 20,926 | 21,053 | ||||||||||||||||
| Interest expense: | ||||||||||||||||||||
| Deposits | 2,222 | 2,367 | 3,489 | 3,756 | 3,908 | |||||||||||||||
| Federal Home Loan Bank advances | 434 | 387 | 292 | 282 | 297 | |||||||||||||||
| Securities sold under agreements to repurchase | — | 11 | — | 1 | 19 | |||||||||||||||
| Long-term debt | 274 | 283 | 1,717 | 292 | 305 | |||||||||||||||
| Other | 6 | 5 | 5 | 4 | 4 | |||||||||||||||
| 2,936 | 3,053 | 5,503 | 4,335 | 4,533 | ||||||||||||||||
| Net interest income | 20,412 | 17,415 | 15,235 | 16,591 | 16,520 | |||||||||||||||
| Provision (reversal of provision) for credit losses | (1,500 | ) | 400 | 2,000 | 4,000 | 5,500 | ||||||||||||||
| Net interest income after provision for credit losses | 21,912 | 17,015 | 13,235 | 12,591 | 11,020 | |||||||||||||||
| Noninterest income: | ||||||||||||||||||||
| Net gain on mortgage loan origination and sale activities | 33,491 | 52,424 | 53,955 | 68,881 | 65,336 | |||||||||||||||
| Mortgage servicing income | 4,011 | 2,183 | 3,072 | 651 | 506 | |||||||||||||||
| (Loss) income from Windermere Mortgage Services Series LLC | (550 | ) | 993 | 620 | 516 | 1,188 | ||||||||||||||
| Depositor and other retail banking fees | 791 | 761 | 721 | 800 | 756 | |||||||||||||||
| Insurance commissions | 242 | 190 | 180 | 193 | 192 | |||||||||||||||
| (Loss) gain on sale of investment securities available for sale | (184 | ) | 238 | (48 | ) | 141 | 397 | |||||||||||||
| Other | 373 | 767 | 443 | 750 | 716 | |||||||||||||||
| 38,174 | 57,556 | 58,943 | 71,932 | 69,091 | ||||||||||||||||
| Noninterest expense: | ||||||||||||||||||||
| Salaries and related costs | 39,689 | 38,579 | 35,062 | 38,680 | 31,573 | |||||||||||||||
| General and administrative | 9,234 | 10,270 | 10,930 | 8,534 | 7,148 | |||||||||||||||
| Legal | 844 | 599 | 611 | 325 | 312 | |||||||||||||||
| Consulting | 884 | 763 | 696 | 1,291 | 1,069 | |||||||||||||||
| Federal Deposit Insurance Corporation assessments | 227 | 143 | 567 | 803 | �� | 794 | ||||||||||||||
| Occupancy | 3,484 | 3,381 | 2,802 | 2,425 | 2,279 | |||||||||||||||
| Information services | 3,552 | 3,574 | 2,996 | 2,739 | 2,411 | |||||||||||||||
| Other real estate owned expense and other adjustments | 202 | (597 | ) | 2,135 | 1,169 | 348 | ||||||||||||||
| 58,116 | 56,712 | 55,799 | 55,966 | 45,934 | ||||||||||||||||
| Income before income tax expense | 1,970 | 17,859 | 16,379 | 28,557 | 34,177 | |||||||||||||||
| Income tax expense | 308 | 5,791 | 5,439 | 7,060 | 12,186 | |||||||||||||||
| NET INCOME | $ | 1,662 | $ | 12,068 | $ | 10,940 | $ | 21,497 | $ | 21,991 | ||||||||||
| Basic income per share | $ | 0.12 | $ | 0.84 | $ | 0.76 | $ | 1.50 | $ | 1.53 | ||||||||||
| Diluted income per share | $ | 0.11 | $ | 0.82 | $ | 0.74 | $ | 1.46 | $ | 1.50 | ||||||||||
| Basic weighted average number of shares outstanding | 14,388,559 | 14,376,580 | 14,359,691 | 14,371,120 | 14,335,950 | |||||||||||||||
| Diluted weighted average number of shares outstanding | 14,790,671 | 14,785,481 | 14,804,129 | 14,714,166 | 14,699,032 | |||||||||||||||
12
HomeStreet, Inc. and Subsidiaries
Consolidated Statements of Financial Condition
| (in thousands, except share data) | Sept. 30, 2013 | Dec. 31, 2012 | % Change | ||||||||
| Assets: | |||||||||||
| Cash and cash equivalents (including interest-bearing instruments of $21,747 and $12,414) | $ | 37,906 | $ | 25,285 | 50 | % | |||||
| Investment securities available for sale | 573,591 | 416,329 | 38 | ||||||||
| Loans held for sale (includes $385,110 and $607,578 carried at fair value) | 385,110 | 620,799 | (38 | ) | |||||||
| Loans held for investment (net of allowance for loan losses of $24,694 and $27,561) | 1,510,169 | 1,308,974 | 15 | ||||||||
| Mortgage servicing rights (includes $136,897 and $87,396 carried at fair value) | 146,300 | 95,493 | 53 | ||||||||
| Other real estate owned | 12,266 | 23,941 | (49 | ) | |||||||
| Federal Home Loan Bank stock, at cost | 35,370 | 36,367 | (3 | ) | |||||||
| Premises and equipment, net | 24,684 | 15,232 | 62 | ||||||||
| Accounts receivable and other assets | 128,927 | 88,810 | 45 | ||||||||
| Total assets | $ | 2,854,323 | $ | 2,631,230 | 8 | ||||||
| Liabilities and shareholders’ equity: | |||||||||||
| Liabilities: | |||||||||||
| Deposits | $ | 2,098,076 | $ | 1,976,835 | 6 | ||||||
| Federal Home Loan Bank advances | 338,690 | 259,090 | 31 | ||||||||
| Accounts payable and other liabilities | 87,492 | 69,686 | 26 | ||||||||
| Long-term debt | 61,857 | 61,857 | — | ||||||||
| Total liabilities | 2,586,115 | 2,367,468 | 9 | ||||||||
| Shareholders’ equity: | |||||||||||
| Preferred stock, no par value | |||||||||||
| Authorized 10,000 shares | |||||||||||
| Issued and outstanding, 0 shares and 0 shares | — | — | — | ||||||||
| Common stock, no par value | |||||||||||
| Authorized 160,000,000 | |||||||||||
| Issued and outstanding, 14,422,354 shares and 14,382,638 shares | 511 | 511 | — | ||||||||
| Additional paid-in capital | 91,415 | 90,189 | 1 | ||||||||
| Retained earnings | 185,379 | 163,872 | 13 | ||||||||
| Accumulated other comprehensive (loss) income | (9,097 | ) | 9,190 | (199 | ) | ||||||
| Total shareholders’ equity | 268,208 | 263,762 | 2 | ||||||||
| Total liabilities and shareholders’ equity | $ | 2,854,323 | $ | 2,631,230 | 8 | ||||||
13
HomeStreet, Inc. and Subsidiaries
Five Quarter Consolidated Statements of Financial Condition
| (in thousands, except share data) | Sept. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sept. 30, 2012 | |||||||||||||||
| Assets: | ||||||||||||||||||||
| Cash and cash equivalents | $ | 37,906 | $ | 21,645 | $ | 18,709 | $ | 25,285 | $ | 22,051 | ||||||||||
| Investment securities available for sale | 573,591 | 538,164 | 415,238 | 416,329 | 414,050 | |||||||||||||||
| Loans held for sale | 385,110 | 471,191 | 430,857 | 620,799 | 535,908 | |||||||||||||||
| Loans held for investment, net | 1,510,169 | 1,416,439 | 1,358,982 | 1,308,974 | 1,268,703 | |||||||||||||||
| Mortgage servicing rights | 146,300 | 137,385 | 111,828 | 95,493 | 81,512 | |||||||||||||||
| Other real estate owned | 12,266 | 11,949 | 21,664 | 23,941 | 17,003 | |||||||||||||||
| Federal Home Loan Bank stock, at cost | 35,370 | 35,708 | 36,037 | 36,367 | 36,697 | |||||||||||||||
| Premises and equipment, net | 24,684 | 18,362 | 16,893 | 15,232 | 13,060 | |||||||||||||||
| Accounts receivable and other assets | 128,927 | 125,281 | 98,043 | 88,810 | 122,285 | |||||||||||||||
| Total assets | $ | 2,854,323 | $ | 2,776,124 | $ | 2,508,251 | $ | 2,631,230 | $ | 2,511,269 | ||||||||||
| Liabilities and shareholders’ equity: | ||||||||||||||||||||
| Liabilities: | ||||||||||||||||||||
| Deposits | $ | 2,098,076 | $ | 1,963,123 | $ | 1,934,704 | $ | 1,976,835 | $ | 1,981,814 | ||||||||||
| Federal Home Loan Bank advances | 338,690 | 409,490 | 183,590 | 259,090 | 131,597 | |||||||||||||||
| Accounts payable and other liabilities | 87,492 | 73,333 | 57,695 | 69,686 | 94,502 | |||||||||||||||
| Long-term debt | 61,857 | 61,857 | 61,857 | 61,857 | 61,857 | |||||||||||||||
| Total liabilities | 2,586,115 | 2,507,803 | 2,237,846 | 2,367,468 | 2,269,770 | |||||||||||||||
| Shareholders’ equity: | ||||||||||||||||||||
| Preferred stock, no par value | ||||||||||||||||||||
| Authorized 10,000 shares | — | — | — | — | — | |||||||||||||||
| Common stock, no par value | ||||||||||||||||||||
| Authorized 160,000,000 | 511 | 511 | 511 | 511 | 511 | |||||||||||||||
| Additional paid-in capital | 91,415 | 91,054 | 90,687 | 90,189 | 89,264 | |||||||||||||||
| Retained earnings | 185,379 | 185,300 | 173,229 | 163,872 | 142,375 | |||||||||||||||
| Accumulated other comprehensive (loss) income | (9,097 | ) | (8,544 | ) | 5,978 | 9,190 | 9,349 | |||||||||||||
| Total shareholders’ equity | 268,208 | 268,321 | 270,405 | 263,762 | 241,499 | |||||||||||||||
| Total liabilities and shareholders’ equity | $ | 2,854,323 | $ | 2,776,124 | $ | 2,508,251 | $ | 2,631,230 | $ | 2,511,269 | ||||||||||
14
HomeStreet, Inc. and Subsidiaries
Average Balances, Yields and Rates Paid (Taxable-equivalent basis)
| Quarter Ended September 30, | ||||||||||||||||||||||
| 2013 | 2012 | |||||||||||||||||||||
| (in thousands) | Average Balance | Interest | Average Yield/Cost | Average Balance | Interest | Average Yield/Cost | ||||||||||||||||
| Assets: | ||||||||||||||||||||||
Interest-earning assets: (1) | ||||||||||||||||||||||
| Cash & cash equivalents | $ | 37,671 | $ | 17 | 0.24 | % | $ | 50,056 | $ | 24 | 0.15 | % | ||||||||||
| Investment securities | 556,862 | 4,452 | 3.20 | % | 411,916 | 3,013 | 2.93 | % | ||||||||||||||
| Loans held for sale | 404,853 | 4,004 | 3.96 | % | 454,435 | 4,083 | 3.59 | % | ||||||||||||||
| Loans held for investment | 1,475,011 | 15,453 | 4.18 | % | 1,270,652 | 14,464 | 4.54 | % | ||||||||||||||
| Total interest-earning assets | 2,474,397 | 23,926 | 3.88 | % | 2,187,059 | 21,584 | 3.94 | % | ||||||||||||||
Noninterest-earning assets (2) | 311,897 | 256,631 | ||||||||||||||||||||
| Total assets | $ | 2,786,294 | $ | 2,443,690 | ||||||||||||||||||
| Liabilities and shareholders’ equity: | ||||||||||||||||||||||
| Deposits: | ||||||||||||||||||||||
| Interest-bearing demand accounts | $ | 254,277 | 265 | 0.41 | % | $ | 155,947 | 128 | 0.33 | % | ||||||||||||
| Savings accounts | 123,444 | 140 | 0.45 | % | 98,711 | 114 | 0.46 | % | ||||||||||||||
| Money market accounts | 848,300 | 1,060 | 0.50 | % | 655,123 | 857 | 0.52 | % | ||||||||||||||
| Certificate accounts | 262,055 | 663 | 0.92 | % | 715,656 | 2,809 | 1.56 | % | ||||||||||||||
| Total interest-bearing deposits | 1,488,076 | 2,128 | 0.57 | % | 1,625,437 | 3,908 | 0.96 | % | ||||||||||||||
| FHLB advances | 374,682 | 434 | 0.46 | % | 112,839 | 297 | 1.19 | % | ||||||||||||||
| Securities sold under agreements to repurchase | — | — | — | % | 18,478 | 19 | 0.14 | % | ||||||||||||||
| Long-term debt | 61,231 | 274 | 1.75 | % | 61,857 | 305 | 1.97 | % | ||||||||||||||
| Other borrowings | 121,166 | 99 | 0.31 | % | — | 4 | — | % | ||||||||||||||
| Total interest-bearing liabilities | 2,045,155 | 2,935 | 0.57 | % | 1,818,611 | 4,533 | 0.99 | % | ||||||||||||||
| Noninterest-bearing liabilities | 469,853 | 393,718 | ||||||||||||||||||||
| Total liabilities | 2,515,008 | 2,212,329 | ||||||||||||||||||||
| Shareholders’ equity | 271,286 | 231,361 | ||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 2,786,294 | $ | 2,443,690 | ||||||||||||||||||
Net interest income (3) | $ | 20,991 | $ | 17,051 | ||||||||||||||||||
| Net interest spread | 3.31 | % | 2.95 | % | ||||||||||||||||||
| Impact of noninterest-bearing sources | 0.10 | % | 0.17 | % | ||||||||||||||||||
| Net interest margin | 3.41 | % | 3.12 | % | ||||||||||||||||||
| (1) | The average balances of nonaccrual assets and related income, if any, are included in their respective categories. |
| (2) | Includes loan balances that have been foreclosed and are now reclassified to other real estate owned. |
| (3) | Includes taxable-equivalent adjustments primarily related to tax-exempt income on certain loans and securities of $579 thousand and $531 thousand for the quarters ended September 30, 2013 and September 30, 2012, respectively. The estimated federal statutory tax rate was 35% for the periods presented. |
15
HomeStreet, Inc. and Subsidiaries
Average Balances, Yields and Rates Paid (Taxable-equivalent basis)
| Nine Months Ended September 30, | ||||||||||||||||||||||
| 2013 | 2012 | |||||||||||||||||||||
| (in thousands) | Average Balance | Interest | Average Yield/Cost | Average Balance | Interest | Average Yield/Cost | ||||||||||||||||
| Assets: | ||||||||||||||||||||||
Interest-earning assets: (1) | ||||||||||||||||||||||
| Cash & cash equivalents | $ | 27,488 | $ | 46 | 0.26 | % | $ | 116,789 | $ | 208 | 0.24 | % | ||||||||||
| Investment securities | 497,857 | 11,175 | 2.99 | % | 408,320 | 8,358 | 2.73 | % | ||||||||||||||
| Loans held for sale | 415,633 | 11,218 | 3.60 | % | 310,748 | 8,544 | 3.67 | % | ||||||||||||||
| Loans held for investment | 1,406,582 | 43,795 | 4.13 | % | 1,304,526 | 43,906 | 4.49 | % | ||||||||||||||
| Total interest-earning assets | 2,347,560 | 66,234 | 3.75 | % | 2,140,383 | 61,016 | 3.80 | % | ||||||||||||||
Noninterest-earning assets (2) | 280,668 | 235,791 | ||||||||||||||||||||
| Total assets | $ | 2,628,228 | $ | 2,376,174 | ||||||||||||||||||
| Liabilities and shareholders’ equity: | ||||||||||||||||||||||
| Deposits: | ||||||||||||||||||||||
| Interest-bearing demand accounts | $ | 224,942 | 656 | 0.39 | % | $ | 148,288 | 368 | 0.33 | % | ||||||||||||
| Savings accounts | 114,023 | 358 | 0.42 | % | 85,376 | 290 | 0.45 | % | ||||||||||||||
| Money market accounts | 776,267 | 2,890 | 0.50 | % | 592,195 | 2,390 | 0.54 | % | ||||||||||||||
| Certificate accounts | 404,383 | 4,080 | 1.24 | % | 831,015 | 9,937 | 1.60 | % | ||||||||||||||
| Total interest-bearing deposits | 1,519,615 | 7,984 | 0.69 | % | 1,656,874 | 12,985 | 1.05 | % | ||||||||||||||
| FHLB advances | 277,192 | 1,113 | 0.53 | % | 83,523 | 1,506 | 2.40 | % | ||||||||||||||
| Securities sold under agreements to repurchase | 3,638 | 11 | 0.40 | % | 23,597 | 69 | 0.39 | % | ||||||||||||||
| Long-term debt | 61,646 | 2,274 | 4.86 | % | (3) | 61,857 | 1,041 | 2.24 | % | |||||||||||||
| Other borrowings | 43,932 | 109 | 0.31 | % | — | 12 | — | % | ||||||||||||||
| Total interest-bearing liabilities | 1,906,023 | 11,491 | 0.79 | % | 1,825,851 | 15,613 | 1.14 | % | ||||||||||||||
| Noninterest-bearing liabilities | 446,742 | 357,015 | ||||||||||||||||||||
| Total liabilities | 2,352,765 | 2,182,866 | ||||||||||||||||||||
| Shareholders’ equity | 275,463 | 193,308 | ||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 2,628,228 | $ | 2,376,174 | ||||||||||||||||||
Net interest income (4) | $ | 54,743 | $ | 45,403 | ||||||||||||||||||
| Net interest spread | 2.96 | % | 2.66 | % | ||||||||||||||||||
| Impact of noninterest-bearing sources | 0.16 | % | 0.17 | % | ||||||||||||||||||
| Net interest margin | 3.12 | % | 2.83 | % | ||||||||||||||||||
| (1) | The average balances of nonaccrual assets and related income, if any, are included in their respective categories. |
| (2) | Includes loan balances that have been foreclosed and are now reclassified to other real estate owned. |
| (3) | 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 3.21% for the nine months ended September 30, 2013. |
| (4) | Includes taxable-equivalent adjustments primarily related to tax-exempt income on certain loans and securities of $1.7 million and $1.3 million for the nine months ended September 30, 2013 and September 30, 2012, respectively. The estimated federal statutory tax rate was 35% for the periods presented. |
16
HomeStreet, Inc. and Subsidiaries
Commercial and Consumer Banking Segment
| Quarter ended | ||||||||||||||||||||
| (in thousands) | Sept. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sept. 30, 2012 | |||||||||||||||
| Net interest income | $ | 15,919 | $ | 13,687 | $ | 11,081 | $ | 12,114 | $ | 12,096 | ||||||||||
| Provision (reversal of reserve) for loan losses | (1,500 | ) | 400 | 2,000 | 4,000 | 5,500 | ||||||||||||||
| Noninterest income | 1,229 | 1,537 | 2,390 | 2,529 | 2,474 | |||||||||||||||
| Noninterest expense | 13,577 | 13,472 | 15,699 | 16,393 | 13,302 | |||||||||||||||
| Income (loss) before income taxes | 5,071 | 1,352 | (4,228 | ) | (5,750 | ) | (4,232 | ) | ||||||||||||
| Income tax expense (benefit) | 1,219 | 31 | (1,375 | ) | (1,373 | ) | (1,904 | ) | ||||||||||||
| Net income (loss) | $ | 3,852 | $ | 1,321 | $ | (2,853 | ) | $ | (4,377 | ) | $ | (2,328 | ) | |||||||
Pre-tax pre-provision profit (loss) (1) | $ | 3,571 | $ | 1,752 | $ | (2,228 | ) | $ | (1,750 | ) | $ | 1,268 | ||||||||
Efficiency ratio (2) | 79.18 | % | 88.49 | % | 116.54 | % | 111.95 | % | 91.30 | % | ||||||||||
| Full-time equivalent employees (ending) | 504 | 476 | 440 | 413 | 377 | |||||||||||||||
| Multifamily net gain on mortgage loan origination and sale activity | $ | 2,113 | $ | 709 | $ | 1,925 | $ | 1,631 | $ | 1,040 | ||||||||||
| Production volumes: | ||||||||||||||||||||
| Multifamily mortgage originations | 10,734 | 14,790 | 49,119 | 40,244 | 20,209 | |||||||||||||||
| Multifamily mortgage loans sold | 21,998 | 15,386 | 50,587 | 33,689 | 26,515 | |||||||||||||||
(1) | Pre-tax pre-provision profit is total net revenue (net interest income and noninterest income) less noninterest expense. The Company believes that this financial measure is useful in assessing the ability of a lending institution to generate income in excess of its provision for loan losses. |
(2) | Noninterest expense divided by total net revenue (net interest income and noninterest income). |
Commercial Mortgage Servicing Income
| Quarter ended | ||||||||||||||||||||
| (in thousands) | Sept. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sept. 30, 2012 | |||||||||||||||
| Servicing income, net: | ||||||||||||||||||||
| Servicing fees and other | $ | 789 | $ | 739 | $ | 812 | $ | 827 | $ | 1,017 | ||||||||||
| Amortization of multifamily MSRs | (433 | ) | (423 | ) | (490 | ) | (463 | ) | (598 | ) | ||||||||||
| Commercial mortgage servicing income | $ | 356 | $ | 316 | $ | 322 | $ | 364 | $ | 419 | ||||||||||
17
HomeStreet, Inc. and Subsidiaries
Commercial and Consumer Banking Segment (continued)
Commercial Loans Serviced for Others
| (in thousands) | Sept. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sept. 30, 2012 | |||||||||||||||
| Commercial | ||||||||||||||||||||
| Multifamily | $ | 722,767 | $ | 720,368 | $ | 737,007 | $ | 727,118 | $ | 760,820 | ||||||||||
| Other | 50,629 | 51,058 | 52,825 | 53,235 | 53,617 | |||||||||||||||
| Total commercial loans serviced for others | $ | 773,396 | $ | 771,426 | $ | 789,832 | $ | 780,353 | $ | 814,437 | ||||||||||
Commercial Multifamily Capitalized Mortgage Servicing Rights
| Quarter ended | ||||||||||||||||||||
| (in thousands) | Sept. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sept. 30, 2012 | |||||||||||||||
| Beginning balance | $ | 9,239 | $ | 9,150 | $ | 8,097 | $ | 7,725 | $ | 7,655 | ||||||||||
| Originations | 597 | 512 | 1,543 | 835 | 668 | |||||||||||||||
| Amortization | (433 | ) | (423 | ) | (490 | ) | (463 | ) | (598 | ) | ||||||||||
| Ending balance | $ | 9,403 | $ | 9,239 | $ | 9,150 | $ | 8,097 | $ | 7,725 | ||||||||||
| Ratio of MSR carrying value to related loans serviced for others | 1.22 | % | 1.20 | % | 1.16 | % | 1.04 | % | 0.95 | % | ||||||||||
MSR servicing fee multiple (1) | 2.94 | 2.93 | 2.89 | 2.70 | 2.47 | |||||||||||||||
| Weighted-average note rate (loans serviced for others) | 5.22 | % | 5.25 | % | 5.25 | % | 5.38 | % | 5.48 | % | ||||||||||
| Weighted-average servicing fee (loans serviced for others) | 0.41 | % | 0.41 | % | 0.40 | % | 0.38 | % | 0.38 | % | ||||||||||
(1) | Represents the ratio of MSR carrying value to related loans serviced for others divided by the weighted-average servicing fee for loans serviced for others. |
18
HomeStreet, Inc. and Subsidiaries
Commercial and Consumer Banking Segment (continued)
Five Quarter Investment Securities Available for Sale
| (in thousands, except for duration data) | Sept. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sept. 30, 2012 | |||||||||||||||
| Mortgage-backed securities: | ||||||||||||||||||||
| Residential | $ | 144,263 | $ | 120,939 | $ | 69,448 | $ | 62,853 | $ | 63,365 | ||||||||||
| Commercial | 13,720 | 13,892 | 14,407 | 14,380 | 14,532 | |||||||||||||||
| Municipal bonds | 147,441 | 147,675 | 131,047 | 129,175 | 128,595 | |||||||||||||||
| Collateralized mortgage obligations: | ||||||||||||||||||||
| Residential | 153,466 | 137,543 | 150,113 | 170,199 | 167,513 | |||||||||||||||
| Commercial | 16,991 | 17,533 | 19,795 | 9,043 | 9,110 | |||||||||||||||
| Corporate debt securities | 69,963 | 70,973 | — | — | — | |||||||||||||||
| U.S. Treasury | 27,747 | 29,609 | 30,428 | 30,679 | 30,935 | |||||||||||||||
| $ | 573,591 | $ | 538,164 | $ | 415,238 | $ | 416,329 | $ | 414,050 | |||||||||||
| Weighted average duration in years | 5.3 | 5.5 | 5.0 | 4.9 | 5.0 | |||||||||||||||
Five Quarter Loans Held for Investment
| (in thousands) | Sept. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sept. 30, 2012 | |||||||||||||||
| Consumer loans | ||||||||||||||||||||
| Single family | $ | 818,992 | $ | 772,450 | $ | 730,553 | $ | 673,865 | $ | 602,164 | ||||||||||
| Home equity | 129,785 | 132,218 | 132,537 | 136,746 | 141,343 | |||||||||||||||
| 948,777 | 904,668 | 863,090 | 810,611 | 743,507 | ||||||||||||||||
| Commercial loans | ||||||||||||||||||||
| Commercial real estate | 400,150 | 382,345 | 387,819 | 361,879 | 360,919 | |||||||||||||||
| Multifamily | 42,187 | 26,120 | 21,859 | 17,012 | 36,912 | |||||||||||||||
| Construction/land development | 79,435 | 61,125 | 43,600 | 71,033 | 77,912 | |||||||||||||||
| Commercial business | 67,547 | 73,202 | 73,851 | 79,576 | 80,056 | |||||||||||||||
| 589,319 | 542,792 | 527,129 | 529,500 | 555,799 | ||||||||||||||||
| 1,538,096 | 1,447,460 | 1,390,219 | 1,340,111 | 1,299,306 | ||||||||||||||||
| Net deferred loan fees and discounts | (3,233 | ) | (3,366 | ) | (2,832 | ) | (3,576 | ) | (3,142 | ) | ||||||||||
| 1,534,863 | 1,444,094 | 1,387,387 | 1,336,535 | 1,296,164 | ||||||||||||||||
| Allowance for loan losses | (24,694 | ) | (27,655 | ) | (28,405 | ) | (27,561 | ) | (27,461 | ) | ||||||||||
| $ | 1,510,169 | $ | 1,416,439 | $ | 1,358,982 | $ | 1,308,974 | $ | 1,268,703 | |||||||||||
19
HomeStreet, Inc. and Subsidiaries
Commercial and Consumer Banking Segment (continued)
Five Quarter Credit Quality Activity
Allowance for Credit Losses (roll-forward)
| Quarter ended | ||||||||||||||||||||
| (in thousands) | Sept. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sept. 30, 2012 | |||||||||||||||
| Beginning balance | $ | 27,858 | $ | 28,594 | $ | 27,751 | $ | 27,627 | $ | 27,125 | ||||||||||
| Provision (reversal of provision) for credit losses | (1,500 | ) | 400 | 2,000 | 4,000 | 5,500 | ||||||||||||||
| (Charge-offs), net of recoveries | (1,464 | ) | (1,136 | ) | (1,157 | ) | (3,876 | ) | (4,998 | ) | ||||||||||
| Ending balance | $ | 24,894 | $ | 27,858 | $ | 28,594 | $ | 27,751 | $ | 27,627 | ||||||||||
| Components: | ||||||||||||||||||||
| Allowance for loan losses | $ | 24,694 | $ | 27,655 | $ | 28,405 | $ | 27,561 | $ | 27,461 | ||||||||||
| Allowance for unfunded commitments | 200 | 203 | 189 | 190 | 166 | |||||||||||||||
| Allowance for credit losses | $ | 24,894 | $ | 27,858 | $ | 28,594 | $ | 27,751 | $ | 27,627 | ||||||||||
| Allowance as a % of loans held for investment | 1.61 | % | 1.92 | % | 2.05 | % | 2.06 | % | 2.12 | % | ||||||||||
| Allowance as a % of nonaccrual loans | 92.30 | % | 93.11 | % | 88.40 | % | 92.20 | % | 71.80 | % | ||||||||||
Nonperforming Assets (NPAs) roll-forward
| Quarter ended | ||||||||||||||||||||
| (in thousands) | Sept. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sept. 30, 2012 | |||||||||||||||
| Beginning balance | $ | 41,650 | $ | 53,797 | $ | 53,833 | $ | 55,250 | $ | 73,725 | ||||||||||
| Additions | 5,517 | 4,340 | 6,511 | 9,973 | 20,703 | |||||||||||||||
| Reductions: | ||||||||||||||||||||
| Charge-offs | (1,464 | ) | (1,136 | ) | (1,157 | ) | (3,876 | ) | (4,441 | ) | ||||||||||
| OREO sales | (2,573 | ) | (6,746 | ) | (2,117 | ) | (2,028 | ) | (25,946 | ) | ||||||||||
| OREO writedowns and other adjustments | (208 | ) | 300 | (638 | ) | (1,216 | ) | (2,623 | ) | |||||||||||
| Principal paydown, payoff advances and other adjustments | (3,079 | ) | (7,423 | ) | (2,529 | ) | (1,807 | ) | (4,794 | ) | ||||||||||
| Transferred back to accrual status | (824 | ) | (1,482 | ) | (106 | ) | (2,463 | ) | (1,374 | ) | ||||||||||
| Total reductions | (8,148 | ) | (16,487 | ) | (6,547 | ) | (11,390 | ) | (39,178 | ) | ||||||||||
| Net reductions | (2,631 | ) | (12,147 | ) | (36 | ) | (1,417 | ) | (18,475 | ) | ||||||||||
| Ending balance | $ | 39,019 | $ | 41,650 | $ | 53,797 | $ | 53,833 | $ | 55,250 | ||||||||||
20
HomeStreet, Inc. and Subsidiaries
Commercial and Consumer Banking Segment (continued)
Five Quarter Nonperforming Assets by Loan Class
| (in thousands) | Sept. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sept. 30, 2012 | |||||||||||||||
| Loans accounted for on a nonaccrual basis: | ||||||||||||||||||||
| Consumer | ||||||||||||||||||||
| Single family | $ | 12,648 | $ | 14,494 | $ | 15,282 | $ | 13,304 | $ | 12,900 | ||||||||||
| Home equity | 2,295 | 3,367 | 2,917 | 2,970 | 1,024 | |||||||||||||||
| 14,943 | 17,861 | 18,199 | 16,274 | 13,924 | ||||||||||||||||
| Commercial | ||||||||||||||||||||
| Commercial real estate | 6,861 | 6,051 | 6,122 | 6,403 | 16,186 | |||||||||||||||
| Construction/land development | 3,544 | 4,051 | 5,974 | 5,042 | 5,848 | |||||||||||||||
| Commercial business | 1,405 | 1,738 | 1,838 | 2,173 | 2,289 | |||||||||||||||
| 11,810 | 11,840 | 13,934 | 13,618 | 24,323 | ||||||||||||||||
| Total loans on nonaccrual | $ | 26,753 | $ | 29,701 | $ | 32,133 | $ | 29,892 | $ | 38,247 | ||||||||||
| Nonaccrual loans as a % of total loans | 1.74 | % | 2.06 | % | 2.32 | % | 2.24 | % | 2.95 | % | ||||||||||
| Other real estate owned: | ||||||||||||||||||||
| Consumer | ||||||||||||||||||||
| Single family | �� | $ | 5,494 | $ | 4,468 | $ | 4,069 | $ | 4,071 | $ | 2,787 | |||||||||
| Commercial | ||||||||||||||||||||
| Commercial real estate | — | 1,184 | 8,440 | 10,283 | 3,489 | |||||||||||||||
| Construction/land development | 5,815 | 6,297 | 9,155 | 9,587 | 10,727 | |||||||||||||||
| Commercial business | 957 | — | — | — | — | |||||||||||||||
| 6,772 | 7,481 | 17,595 | 19,870 | 14,216 | ||||||||||||||||
| Total other real estate owned | $ | 12,266 | $ | 11,949 | $ | 21,664 | $ | 23,941 | $ | 17,003 | ||||||||||
| Nonperforming assets: | ||||||||||||||||||||
| Consumer | ||||||||||||||||||||
| Single family | $ | 18,142 | $ | 18,962 | $ | 19,351 | $ | 17,375 | $ | 15,687 | ||||||||||
| Home equity | 2,295 | 3,367 | 2,917 | 2,970 | 1,024 | |||||||||||||||
| 20,437 | 22,329 | 22,268 | 20,345 | 16,711 | ||||||||||||||||
| Commercial | ||||||||||||||||||||
| Commercial real estate | 6,861 | 7,235 | 14,562 | 16,686 | 19,675 | |||||||||||||||
| Construction/land development | 9,359 | 10,348 | 15,129 | 14,629 | 16,575 | |||||||||||||||
| Commercial business | 2,362 | 1,738 | 1,838 | 2,173 | 2,289 | |||||||||||||||
| 18,582 | 19,321 | 31,529 | 33,488 | 38,539 | ||||||||||||||||
| Total nonperforming assets | $ | 39,019 | $ | 41,650 | $ | 53,797 | $ | 53,833 | $ | 55,250 | ||||||||||
| Nonperforming assets as a % of total assets | 1.37 | % | 1.50 | % | 2.14 | % | 2.05 | % | 2.20 | % | ||||||||||
21
HomeStreet, Inc. and Subsidiaries
Commercial and Consumer Banking Segment (continued)
Delinquencies by Loan Class
| (in thousands) | 30-59 days past due | 60-89 days past due | 90 days or more past due | Total past due | Current | Total loans | ||||||||||||||||||
| September 30, 2013 | ||||||||||||||||||||||||
| Total loans held for investment | $ | 10,913 | $ | 5,270 | $ | 70,515 | $ | 86,698 | $ | 1,451,398 | $ | 1,538,096 | ||||||||||||
Less: FHA/VA loans(1) | 7,497 | 4,164 | 43,762 | 55,423 | 33,201 | 88,624 | ||||||||||||||||||
| Total loans, excluding FHA/VA loans | $ | 3,416 | $ | 1,106 | $ | 26,753 | $ | 31,275 | $ | 1,418,197 | $ | 1,449,472 | ||||||||||||
| Loans by segment and class, excluding FHA/VA loans: | ||||||||||||||||||||||||
| Consumer loans | ||||||||||||||||||||||||
| Single family residential | $ | 2,862 | $ | 1,006 | $ | 12,648 | $ | 16,516 | $ | 713,852 | $ | 730,368 | ||||||||||||
| Home equity | 554 | 100 | 2,295 | 2,949 | 126,836 | 129,785 | ||||||||||||||||||
| 3,416 | 1,106 | 14,943 | 19,465 | 840,688 | 860,153 | |||||||||||||||||||
| Commercial loans | ||||||||||||||||||||||||
| Commercial real estate | — | — | 6,861 | 6,861 | 393,289 | 400,150 | ||||||||||||||||||
| Multifamily residential | — | — | — | — | 42,187 | 42,187 | ||||||||||||||||||
| Construction/land development | — | — | 3,544 | 3,544 | 75,891 | 79,435 | ||||||||||||||||||
| Commercial business | — | — | 1,405 | 1,405 | 66,142 | 67,547 | ||||||||||||||||||
| — | — | 11,810 | 11,810 | 577,509 | 589,319 | |||||||||||||||||||
| $ | 3,416 | $ | 1,106 | $ | 26,753 | $ | 31,275 | $ | 1,418,197 | $ | 1,449,472 | |||||||||||||
| December 31, 2012 | ||||||||||||||||||||||||
| Total loans held for investment | $ | 12,703 | $ | 4,974 | $ | 70,550 | $ | 88,227 | $ | 1,251,884 | $ | 1,340,111 | ||||||||||||
Less: FHA/VA loans(1) | 6,839 | 3,700 | 40,658 | 51,197 | 24,257 | 75,454 | ||||||||||||||||||
| Total loans, excluding FHA/VA loans | $ | 5,864 | $ | 1,274 | $ | 29,892 | $ | 37,030 | $ | 1,227,627 | $ | 1,264,657 | ||||||||||||
| Loans by segment and class, excluding FHA/VA loans: | ||||||||||||||||||||||||
| Consumer loans | ||||||||||||||||||||||||
Single family (1) | $ | 5,077 | $ | 1,032 | $ | 13,304 | $ | 19,413 | $ | 578,998 | $ | 598,411 | ||||||||||||
| Home equity | 787 | 242 | 2,970 | 3,999 | 132,747 | 136,746 | ||||||||||||||||||
| 5,864 | 1,274 | 16,274 | 23,412 | 711,745 | 735,157 | |||||||||||||||||||
| Commercial loans | ||||||||||||||||||||||||
| Commercial real estate | — | — | 6,403 | 6,403 | 355,476 | 361,879 | ||||||||||||||||||
| Multifamily | — | — | — | — | 17,012 | 17,012 | ||||||||||||||||||
| Construction/land development | — | — | 5,042 | 5,042 | 65,991 | 71,033 | ||||||||||||||||||
| Commercial business | — | — | 2,173 | 2,173 | 77,403 | 79,576 | ||||||||||||||||||
| — | — | 13,618 | 13,618 | 515,882 | 529,500 | |||||||||||||||||||
| $ | 5,864 | $ | 1,274 | $ | 29,892 | $ | 37,030 | $ | 1,227,627 | $ | 1,264,657 | |||||||||||||
| (1) | Represents loans whose repayments are insured by the FHA or guaranteed by the VA. |
22
HomeStreet, Inc. and Subsidiaries
Commercial and Consumer Banking Segment (continued)
Troubled Debt Restructurings (TDRs) by Accrual and Nonaccrual Status
| (in thousands) | Sept. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sept. 30, 2012 | |||||||||||||||
| Accrual | �� | |||||||||||||||||||
| Consumer loans | ||||||||||||||||||||
Single family(1) | $ | 71,686 | $ | 71,438 | $ | 69,792 | $ | 67,483 | $ | 67,647 | ||||||||||
| Home equity | 2,426 | 2,326 | 2,338 | 2,288 | 2,705 | |||||||||||||||
| 74,112 | 73,764 | 72,130 | 69,771 | 70,352 | ||||||||||||||||
| Commercial loans | ||||||||||||||||||||
| Commercial real estate | 20,385 | 21,617 | 21,046 | 21,071 | 16,540 | |||||||||||||||
| Multifamily | 3,190 | 3,198 | 3,211 | 3,221 | 6,030 | |||||||||||||||
| Construction/land development | 3,122 | 3,718 | 4,487 | 6,365 | 13,802 | |||||||||||||||
| Commercial business | 120 | 129 | 137 | 147 | 154 | |||||||||||||||
| 26,817 | 28,662 | 28,881 | 30,804 | 36,526 | ||||||||||||||||
| $ | 100,929 | $ | 102,426 | $ | 101,011 | $ | 100,575 | $ | 106,878 | |||||||||||
| Nonaccrual | ||||||||||||||||||||
| Consumer loans | ||||||||||||||||||||
| Single family | $ | 4,819 | $ | 4,536 | $ | 4,593 | $ | 3,931 | $ | 6,210 | ||||||||||
| Home equity | 132 | 121 | 134 | 465 | 64 | |||||||||||||||
| 4,951 | 4,657 | 4,727 | 4,396 | 6,274 | ||||||||||||||||
| Commercial loans | ||||||||||||||||||||
| Commercial real estate | — | — | 770 | 770 | 7,716 | |||||||||||||||
| Construction/land development | 3,544 | 4,051 | 4,625 | 5,042 | 5,845 | |||||||||||||||
| Commercial business | — | — | — | — | 22 | |||||||||||||||
| 3,544 | 4,051 | 5,395 | 5,812 | 13,583 | ||||||||||||||||
| $ | 8,495 | $ | 8,708 | $ | 10,122 | $ | 10,208 | $ | 19,857 | |||||||||||
| Total | ||||||||||||||||||||
| Consumer loans | ||||||||||||||||||||
Single family(1) | $ | 76,505 | $ | 75,974 | $ | 74,385 | $ | 71,414 | $ | 73,857 | ||||||||||
| Home equity | 2,558 | 2,447 | 2,472 | 2,753 | 2,769 | |||||||||||||||
| 79,063 | 78,421 | 76,857 | 74,167 | 76,626 | ||||||||||||||||
| Commercial loans | ||||||||||||||||||||
| Commercial real estate | 20,385 | 21,617 | 21,816 | 21,841 | 24,256 | |||||||||||||||
| Multifamily | 3,190 | 3,198 | 3,211 | 3,221 | 6,030 | |||||||||||||||
| Construction/land development | 6,666 | 7,769 | 9,112 | 11,407 | 19,647 | |||||||||||||||
| Commercial business | 120 | 129 | 137 | 147 | 176 | |||||||||||||||
| 30,361 | 32,713 | 34,276 | 36,616 | 50,109 | ||||||||||||||||
| $ | 109,424 | $ | 111,134 | $ | 111,133 | $ | 110,783 | $ | 126,735 | |||||||||||
(1) | Includes loan balances insured by the FHA or guaranteed by the VA of $17.6 million, $15.9 million, $15.2 million, $13.1 million, $11.0 million at September 30, 2013, June 30, 2013, March 31, 2013, December 31, 2012 and September 30, 2012, respectively. |
23
HomeStreet, Inc. and Subsidiaries
Commercial and Consumer Banking Segment (continued)
Troubled Debt Restructurings (TDRs) - Re-Defaults
| Quarter ended | ||||||||||||||||||||
| (in thousands) | Sept. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sept. 30, 2012 | |||||||||||||||
Recorded investment of re-defaults(1) | ||||||||||||||||||||
| Consumer loans | ||||||||||||||||||||
| Single family | $ | 1,017 | $ | 133 | $ | 1,423 | $ | 1,386 | $ | 5,123 | ||||||||||
| Home equity | — | — | 22 | — | — | |||||||||||||||
| 1,017 | 133 | 1,445 | 1,386 | 5,123 | ||||||||||||||||
| Commercial loans | ||||||||||||||||||||
| Commercial real estate | — | — | 770 | — | 7,716 | |||||||||||||||
| $ | 1,017 | $ | 133 | $ | 2,215 | $ | 1,386 | $ | 12,839 | |||||||||||
| (1) | Represents TDRs that have defaulted in the current period within 12 months of their modification date. Defaulted TDRs are reported in the table above based on a payment default definition of 60 days past due for the consumer loans portfolio segment and 90 days past due for the commercial loans portfolio segment. |
24
HomeStreet, Inc. and Subsidiaries
Commercial and Consumer Banking Segment (continued)
Five Quarter Deposits
| (in thousands) | Sept. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sept. 30, 2012 | |||||||||||||||
| Deposits by Product: | ||||||||||||||||||||
| Noninterest-bearing accounts - checking and savings | $ | 134,725 | $ | 121,281 | $ | 83,202 | $ | 83,563 | $ | 77,149 | ||||||||||
| Interest-bearing transaction and savings deposits: | ||||||||||||||||||||
| NOW accounts | 272,029 | 279,670 | 236,744 | 174,699 | 172,086 | |||||||||||||||
| Statement savings accounts due on demand | 135,428 | 115,817 | 108,627 | 103,932 | 104,239 | |||||||||||||||
| Money market accounts due on demand | 879,122 | 813,608 | 734,647 | 683,906 | 675,363 | |||||||||||||||
| Total interest-bearing transaction and savings deposits | 1,286,579 | 1,209,095 | 1,080,018 | 962,537 | 951,688 | |||||||||||||||
| Total transaction and savings deposits | 1,421,304 | 1,330,376 | 1,163,220 | 1,046,100 | 1,028,837 | |||||||||||||||
| Certificates of deposit | 460,223 | 403,636 | 523,208 | 655,467 | 684,604 | |||||||||||||||
| Noninterest-bearing accounts - other | 216,549 | 229,111 | 248,276 | 275,268 | 268,373 | |||||||||||||||
| Total deposits | $ | 2,098,076 | $ | 1,963,123 | $ | 1,934,704 | $ | 1,976,835 | $ | 1,981,814 | ||||||||||
| Percent of total deposits: | ||||||||||||||||||||
| Noninterest-bearing accounts - checking and savings | 6.4 | % | 6.2 | % | 4.3 | % | 4.2 | % | 3.9 | % | ||||||||||
| Interest-bearing transaction and savings deposits: | ||||||||||||||||||||
| NOW accounts | 13.0 | 14.2 | 12.2 | 8.8 | 8.7 | |||||||||||||||
| Statement savings accounts due on demand | 6.5 | 5.9 | 5.6 | 5.3 | 5.3 | |||||||||||||||
| Money market accounts due on demand | 41.9 | 41.4 | 38.0 | 34.6 | 34.1 | |||||||||||||||
| Total interest-bearing transaction and savings deposits | 61.4 | 61.5 | 55.8 | 48.7 | 48.1 | |||||||||||||||
| Total transaction and savings deposits | 67.8 | 67.7 | 60.1 | 52.9 | 52.0 | |||||||||||||||
| Certificates of deposit | 21.9 | 20.6 | 27.0 | 33.2 | 34.5 | |||||||||||||||
| Noninterest-bearing accounts - other | 10.3 | 11.7 | 12.9 | 13.9 | 13.5 | |||||||||||||||
| Total deposits | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||
25
HomeStreet, Inc. and Subsidiaries
Mortgage Banking Segment
| Quarter ended | ||||||||||||||||||||
| (in thousands) | Sept. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sept. 30, 2012 | |||||||||||||||
| Net interest income | $ | 4,493 | $ | 3,728 | $ | 4,154 | $ | 4,477 | $ | 4,424 | ||||||||||
| Noninterest income | 36,945 | 56,019 | 56,553 | 69,403 | 66,617 | |||||||||||||||
| Noninterest expense | 44,539 | 43,240 | 40,100 | 39,573 | 32,632 | |||||||||||||||
| Income before income taxes | (3,101 | ) | 16,507 | 20,607 | 34,307 | 38,409 | ||||||||||||||
| Income tax expense | (911 | ) | 5,760 | 6,814 | 8,433 | 14,090 | ||||||||||||||
| Net income | $ | (2,190 | ) | $ | 10,747 | $ | 13,793 | $ | 25,874 | $ | 24,319 | |||||||||
Efficiency ratio (1) | 107.48 | % | 72.37 | % | 66.05 | % | 53.56 | % | 45.93 | % | ||||||||||
| Full-time equivalent employees (ending) | 922 | 833 | 779 | 686 | 621 | |||||||||||||||
| Production volumes for sale to the secondary market: | ||||||||||||||||||||
Single family mortgage closed loan volume (2)(3) | $ | 1,187,061 | $ | 1,307,286 | $ | 1,192,156 | $ | 1,518,971 | $ | 1,368,238 | ||||||||||
Single family mortgage interest rate lock commitments(2) | 786,147 | 1,423,290 | 1,035,822 | 1,254,954 | 1,313,182 | |||||||||||||||
Single family mortgage loans sold(2) | 1,326,888 | 1,229,686 | 1,360,344 | 1,434,947 | 1,238,879 | |||||||||||||||
(1) | Noninterest expense divided by total net revenue (net interest income and noninterest income). |
(2) | Includes loans originated by Windermere Mortgage Series Services LLC ("WMS") and purchased by HomeStreet, Inc. |
(3) | Represents single family mortgage production volume designated for sale to the secondary market during each respective period. |
26
HomeStreet, Inc. and Subsidiaries
Mortgage Banking Segment (continued)
Mortgage Banking Net Gain on Sale to the Secondary Market
| Quarter ended | ||||||||||||||||||||||
| (in thousands) | Sept. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sept. 30, 2012 | |||||||||||||||||
Net gain on mortgage loan origination and sale activities:(1) | ||||||||||||||||||||||
| Single family: | ||||||||||||||||||||||
Servicing value and secondary marketing gains(2) | $ | 23,076 | $ | 43,448 | $ | 44,235 | $ | 58,154 | $ | 56,142 | ||||||||||||
Provision for repurchase losses(3) | — | — | — | (123 | ) | (526 | ) | |||||||||||||||
| Net gain from secondary marketing activities | 23,076 | 43,448 | 44,235 | 58,031 | 55,616 | |||||||||||||||||
| Loan origination and funding fees | 8,302 | 8,267 | 7,795 | 9,219 | 8,680 | |||||||||||||||||
Total mortgage banking net gain on mortgage loan origination and sale activities(1) | $ | 31,378 | $ | 51,715 | $ | 52,030 | $ | 67,250 | $ | 64,296 | ||||||||||||
| Composite Margin (in basis points): | ||||||||||||||||||||||
Servicing value and secondary marketing gains / interest rate lock commitments(4) | 294 | 305 | 385 | (6 | ) | 452 | (7 | ) | 424 | |||||||||||||
Loan origination and funding fees / retail mortgage originations(5) | 81 | 75 | 76 | 71 | 77 | |||||||||||||||||
| Composite Margin | 375 | 380 | 461 | (6 | ) | 523 | (7 | ) | 501 | |||||||||||||
(1) | Excludes inter-segment activities. |
| (2) | Comprised of gains and losses on interest rate lock commitments (which considers the value of servicing), single family loans held for sale, forward sale commitments used to economically hedge secondary market activities, and the estimated fair value of the repurchase or indemnity obligation recognized on new loan sales. |
| (3) | Represents changes in estimated probable future repurchase losses on previously sold loans. |
| (4) | Servicing value and secondary marketing gains have been aggregated and are stated as a percentage of interest rate lock commitments. In previous quarters, the value of originated mortgage servicing rights was presented as a separate component of the composite margin and stated as a percentage of mortgage loans sold. Prior periods have been revised to conform to the current presentation. |
| (5) | Loan origination and funding fees is stated as a percentage of mortgage originations from the retail channel and excludes mortgage loans purchased from WMS. |
| (6) | Excludes the impact of a $4.3 million upward adjustment related to a change in accounting estimate that resulted from a change in the application of the valuation methodology used to value the Company's interest rate lock commitments. Including the impact of this cumulative effect adjustment, the secondary marketing gain margin and Composite Margin were 427 and 503 basis points, respectively, in the first quarter of 2013. |
| (7) | Excludes the impact of a $1.3 million correction that was recorded in secondary marketing gains in the fourth quarter of 2012 for the cumulative effect of an error in prior years related to the fair value measurement of loans held for sale. Including the impact of this correction, the secondary marketing gain margin and Composite Margin were 462 and 533 basis points, respectively, in the fourth quarter of 2012. |
27
HomeStreet, Inc. and Subsidiaries
Mortgage Banking Segment (continued)
Single Family Mortgage Servicing Income
| Quarter ended | ||||||||||||||||||||
| (in thousands) | Sept. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sept. 30, 2012 | |||||||||||||||
| Servicing income, net: | ||||||||||||||||||||
| Servicing fees and other | $ | 8,145 | $ | 7,216 | $ | 6,795 | $ | 6,696 | $ | 6,151 | ||||||||||
Changes in fair value of single family MSRs due to modeled amortization (1) | (5,221 | ) | (6,569 | ) | (5,106 | ) | (6,280 | ) | (5,360 | ) | ||||||||||
| 2,924 | 647 | 1,689 | 416 | 791 | ||||||||||||||||
| Risk management, single family MSRs: | ||||||||||||||||||||
Changes in fair value of MSR due to changes in model inputs and/or assumptions (2) | (2,900 | ) | 14,725 | 3,579 | 2,489 | (5,565 | ) | |||||||||||||
| Net gain (loss) from derivatives economically hedging MSR | 3,631 | (13,505 | ) | (2,518 | ) | (2,618 | ) | 4,861 | ||||||||||||
| 731 | 1,220 | 1,061 | (129 | ) | (704 | ) | ||||||||||||||
| Mortgage servicing income | $ | 3,655 | $ | 1,867 | $ | 2,750 | $ | 287 | $ | 87 | ||||||||||
(1) | Represents changes due to collection/realization of expected cash flows and curtailments. |
(2) | Principally reflects changes in model assumptions, including prepayment speed assumptions, which are primarily affected by changes in mortgage interest rates. |
Single Family Loans Serviced for Others
| (in thousands) | Sept. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sept. 30, 2012 | |||||||||||||||
| Single family | ||||||||||||||||||||
| U.S. government agency | $ | 10,950,086 | $ | 10,063,558 | $ | 9,352,404 | $ | 8,508,458 | $ | 7,724,562 | ||||||||||
| Other | 336,158 | 341,055 | 348,992 | 362,230 | 385,107 | |||||||||||||||
| Total single family loans serviced for others | $ | 11,286,244 | $ | 10,404,613 | $ | 9,701,396 | $ | 8,870,688 | $ | 8,109,669 | ||||||||||
28
HomeStreet, Inc. and Subsidiaries
Mortgage Banking Segment (continued)
Single Family Capitalized Mortgage Servicing Rights
| Quarter ended | ||||||||||||||||||||
| (in thousands) | Sept. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sept. 30, 2012 | |||||||||||||||
| Beginning balance | $ | 128,146 | $ | 102,678 | $ | 87,396 | $ | 73,787 | $ | 70,585 | ||||||||||
| Additions and amortization: | ||||||||||||||||||||
| Originations | 16,862 | 17,306 | 16,806 | 17,397 | 14,121 | |||||||||||||||
| Purchases | 10 | 6 | 3 | 3 | 6 | |||||||||||||||
Changes due to modeled amortization (1) | (5,220 | ) | (6,569 | ) | (5,106 | ) | (6,280 | ) | (5,360 | ) | ||||||||||
| Net additions and amortization | 11,652 | 10,743 | 11,703 | 11,120 | 8,767 | |||||||||||||||
Changes in fair value due to changes in model inputs and/or assumptions (2) | (2,900 | ) | 14,725 | 3,579 | 2,489 | (5,565 | ) | |||||||||||||
| Ending balance | $ | 136,898 | $ | 128,146 | $ | 102,678 | $ | 87,396 | $ | 73,787 | ||||||||||
| Ratio of MSR carrying value to related loans serviced for others | 1.21 | % | 1.23 | % | 1.03 | % | 0.99 | % | 0.91 | % | ||||||||||
MSR servicing fee multiple (3) | 4.08 | 4.05 | 3.36 | 3.13 | 2.81 | |||||||||||||||
| Weighted-average note rate (loans serviced for others) | 4.13 | % | 4.14 | % | 4.24 | % | 4.34 | % | 4.52 | % | ||||||||||
| Weighted-average servicing fee (loans serviced for others) | 0.30 | % | 0.30 | % | 0.31 | % | 0.31 | % | 0.33 | % | ||||||||||
(1) | Represents changes due to collection/realization of expected cash flows and curtailments. |
(2) | Principally reflects changes in model assumptions, including prepayment speed assumptions, which are primarily affected by changes in mortgage interest rates. |
(3) | Represents the ratio of MSR carrying value to related loans serviced for others divided by the weighted-average servicing fee for loans serviced for others. |
29
HomeStreet, Inc. and Subsidiaries
Non-GAAP Financial Measures
Tangible common shareholders' equity is calculated by deducting goodwill and intangible assets (excluding mortgage servicing rights) from shareholders' equity. Tangible common shareholders' equity is considered a non-GAAP financial measure and should be viewed in conjunction with shareholders' equity. Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, and are not audited. Although we believe these non-GAAP financial measures are frequently used by stakeholders in the evaluation of a company, they have limitations as analytical tools, and should not be considered in isolation or as a substitute for analyses of results as reported under GAAP.
Tangible book value is calculated by dividing tangible common shareholders' equity 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 tangible common shareholders' equity.
| Quarter Ended | Nine Months Ended | |||||||||||||||||||||||||||
| (dollars in thousands, except share data) | Sept. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sept. 30, 2012 | Sept. 30, 2013 | Sept. 30, 2012 | |||||||||||||||||||||
| Shareholders' equity | $ | 268,208 | $ | 268,321 | $ | 270,405 | $ | 263,762 | $ | 241,499 | $ | 268,208 | $ | 241,499 | ||||||||||||||
| Less: Goodwill | (424 | ) | (424 | ) | (424 | ) | (424 | ) | (424 | ) | (424 | ) | (424 | ) | ||||||||||||||
| Tangible common shareholders' equity | $ | 267,784 | $ | 267,897 | $ | 269,981 | $ | 263,338 | $ | 241,075 | $ | 267,784 | $ | 241,075 | ||||||||||||||
| Book value per share | $ | 18.60 | $ | 18.62 | $ | 18.78 | $ | 18.34 | $ | 16.82 | $ | 18.60 | $ | 16.82 | ||||||||||||||
| Impact of goodwill | (0.03 | ) | (0.02 | ) | (0.03 | ) | (0.03 | ) | (0.03 | ) | (0.02 | ) | (0.03 | ) | ||||||||||||||
| Tangible book value per share | $ | 18.57 | $ | 18.60 | $ | 18.75 | $ | 18.31 | $ | 16.79 | $ | 18.57 | $ | 16.79 | ||||||||||||||
| Average shareholders' equity | $ | 271,286 | $ | 280,783 | $ | 274,355 | $ | 262,163 | $ | 231,361 | $ | 275,463 | $ | 193,308 | ||||||||||||||
| Less: Average goodwill | (424 | ) | (424 | ) | (424 | ) | (424 | ) | (424 | ) | (424 | ) | (424 | ) | ||||||||||||||
| Average tangible shareholders' equity | $ | 270,862 | $ | 280,359 | $ | 273,931 | $ | 261,739 | $ | 230,937 | $ | 275,039 | $ | 192,884 | ||||||||||||||
| Return on average common shareholders’ equity | 2.45 | % | 17.19 | % | 15.95 | % | 32.80 | % | 38.02 | % | 11.94 | % | 41.82 | % | ||||||||||||||
| Impact of goodwill | — | 0.03 | % | 0.02 | % | 0.05 | % | 0.07 | % | 0.02 | % | 0.09 | % | |||||||||||||||
Return on average tangible common shareholders' equity | 2.45 | % | 17.22 | % | 15.97 | % | 32.85 | % | 38.09 | % | 11.96 | % | 41.91 | % | ||||||||||||||
30