Net Income of $9.0 Million, or $0.33 per
Diluted Share
HomeStreet, Inc. (NASDAQ:HMST) (including its consolidated
subsidiaries, the “Company” or “HomeStreet”), the parent company of
HomeStreet Bank, today announced net income of $9.0 million, or
$0.33 per diluted share for the quarter ended March 31, 2017,
compared with net income of $2.3 million, or $0.09 per diluted
share for the quarter ended December 31, 2016 and $6.4 million, or
$0.27 per diluted share for the quarter ended March 31, 2016. Core
net income(1) for the quarter ended March 31, 2017 was $9.0
million, or $0.33 per diluted share, compared with core net
income(1) of $2.6 million, or $0.10 per diluted share, for the
quarter ended December 31, 2016 and $9.8 million, or $0.41 per
diluted share, for the quarter ended March 31, 2016.
Key highlights of Q1 2017:
- Net income for the first quarter of
2017 was $9.0 million, an increase of $2.6 million, or 40% compared
to $6.4 million of net income in the first quarter of 2016
- Total assets of $6.40 billion grew
$157.4 million, or 3%, from $6.24 billion at December 31, 2016
- Loans held for investment of $3.99
billion, grew by $136.7 million, or 4%, from $3.85 billion at
December 31, 2016
- Deposits of $4.60 billion grew $166.1
million, or 4%, from $4.43 billion at December 31, 2016, including
5% deposit growth in our California branches
“We are pleased with our results for the first quarter,” said
Mark K. Mason, Chairman, President, and Chief Executive Officer.
“The Mortgage Banking segment recovered from the sharp rise in
interest rates and market dislocation experienced in the fourth
quarter of 2016 and the Commercial & Consumer Banking segment
made significant progress toward our strategic growth goals. In our
Commercial & Consumer Banking segment, loans held for
investment increased 4% from the fourth quarter of 2016 despite the
first quarter generally being seasonally the slowest for commercial
loan originations. Additionally, total deposits increased by 4% and
business deposit balances increased by over 5% during the quarter.
Asset quality also remained a bright spot with nonperforming assets
declining to 0.38% of total assets. In the first quarter we opened
our first Northern California commercial banking office in San
Jose, with plans to open a full service retail deposit branch later
in the year. Our San Jose lending team is already making great
progress in originating new commercial loans and deposits.”
“We are also pleased with the results in our Mortgage Banking
segment. While the first quarter is typically a seasonally slow
origination quarter, our origination business was also negatively
impacted by the multi-year low levels of housing inventory in our
markets. Mitigating this challenge we have improved our execution
on loans sold resulting in a higher composite profit margin.
Additionally, the disruption in the derivatives markets that we
experienced in the fourth quarter normalized in the first quarter,
contributing to positive results in our mortgage servicing
business.”
For details and the complete earnings release, please refer to
the Company’s investor relations website at
http://ir.homestreet.com as well as the Company’s Form 8-K filing
at www.sec.gov.
(1) For notes on non-GAAP financial measures, see pages 10 and 31
of the full earnings release.
Conference Call
HomeStreet, Inc., the parent company of HomeStreet Bank, will
conduct a quarterly earnings conference call on Tuesday, April 25,
2017 at 1:00 p.m. EDT. Mark K. Mason, President and CEO, and Mark
R. Ruh, Senior Vice President and Interim CFO, will discuss first
quarter 2017 results and provide an update on recent activities. A
question and answer session will follow the presentation.
Shareholders, analysts and other interested parties may register in
advance at http://dpregister.com/10103687 or may join the
call by dialing 1-877-508-9589 (1-855-669-9657 in Canada) shortly
before 1:00 p.m. EST.
A rebroadcast will be available approximately one hour after the
conference call by dialing 1-877-344-7529 and entering passcode
10103687.
The information to be discussed in the conference call will be
available on the Company's web site after the market closes on
Monday, April 24, 2017.
About HomeStreet
Now in its 97th year HomeStreet, Inc. (Nasdaq:HMST) is a
diversified financial services company headquartered in Seattle,
Washington and is the holding company for HomeStreet Bank, a
state-chartered, FDIC-insured commercial bank. HomeStreet offers
consumer, commercial and private banking services, investment and
insurance products and originates residential and commercial
mortgages and construction loans for borrowers located in the
Western United States and Hawaii. The bank has consistently
received an “outstanding” rating under the federal Community
Reinvestment Act (CRA). Certain information about our business can
be found on our investor relations web site, located at
http://ir.homestreet.com.
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, as well as plans and expectations for future actions and
events. 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 management's control. 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,
we face limitations and risks associated with our ability to expand
our banking operations geographically and across market sectors,
integrate our recent acquisitions, grow our franchise and
capitalize on market opportunities, meet our growth targets,
maintain our position in the industry and generate positive net
income and cash flow. These limitations and risks include without
limitation changes in general political and economic conditions
that impact our markets and our business, actions by the Federal
Reserve Board and financial market conditions that affect monetary
and fiscal policy, regulatory and legislative actions that may
increase capital requirements or otherwise constrain our ability to
do business, including restrictions that could be imposed by our
regulators on certain aspects of our operations or on our growth
initiatives and acquisition activities, our ability to maintain
electronic and physical security of our customer data and our
information systems, our ability to maintain compliance with
current and evolving laws and regulations, our ability to attract
and retain key personnel, our ability to make accurate estimates of
the value of our non-cash assets and liabilities, increases in the
competition in our industry and across our markets and the extent
of our success in problem asset resolution efforts. The results of
our recent acquisitions may fall short of our financial and
operational expectations. We may not realize the benefits expected
from completed bank and branch acquisitions in the anticipated time
frame (or at all), and integrating acquired operations may take
longer or prove more expensive than anticipated. 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 recent and future legislative or
regulatory actions or reform that affect our Company directly, our
business or the banking or mortgage industries more generally. 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, 2016 and updated from time to time
in our filings with the Securities and Exchange Commission. We
strongly recommend readers review those disclosures in conjunction
with the discussions herein.
The information contained herein is unaudited, although certain
information related to the year ended December 31, 2016 has been
derived from our audited financial statements for the year then
ended as included in our 2016 Form 10-K. 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, 2016, as contained in the Company's
Annual Report on Form 10-K for such fiscal year.
About Non-GAAP Financial Measures
To supplement our consolidated financial statements, which are
prepared and presented in accordance with GAAP, we have disclosed
“core net income” to provide comparisons of quarter-to-date fiscal
2017 net income to the corresponding periods of fiscal 2016. We
believe this information is useful to investors who are seeking to
exclude the after-tax impact of acquisition-related expenses and a
bargain purchase gain, both of which we recorded in connection with
our merger with OCBB on February 1, 2016, with our acquisition of
two retail deposit branches in Lake Oswego, Oregon on August 12,
2016 and two retail deposit branches in Southern California on
November 11, 2016. We also have presented adjusted expenses, which
eliminate costs incurred in connection with these acquisitions.
Similarly, we have provided information about our balance sheet
items, including total loans, total deposits and total assets,
adjusted in each case to eliminate acquisition-related impacts. The
presentation of this financial information is not intended to be
considered in isolation or as a substitute for, or superior to, the
financial information prepared and presented in accordance with
GAAP.
We also have disclosed tangible equity ratios, return on average
tangible shareholders’ equity and tangible book value per share of
common stock which are non-GAAP financial measures. Tangible common
shareholders' equity is calculated by deducting goodwill and
intangible assets (excluding mortgage servicing rights) from
shareholders' equity. 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.
Our management believes that these non-GAAP financial measures
provide meaningful supplemental information regarding our results
of core operations by excluding certain acquisition-related
revenues and expenses that may not be indicative of our expected
recurring results of operations. We believe that both management
and investors benefit from referring to these non-GAAP financial
measures in assessing our performance and when planning,
forecasting, and analyzing future periods. These non-GAAP financial
measures also facilitate management's internal comparisons to our
historical performance, as well as comparisons to our competitors'
operating results. We believe these non-GAAP financial measures are
useful to investors both because (1) they allow for greater
transparency with respect to key metrics used by management in its
financial and operational decision-making and (2) they are
available to institutional investors and analysts to help them
assess the strength of our business on a normalized basis.
For more information on these non-GAAP financial measures, see
the tables captioned "Reconciliations of non-GAAP results of
operations to the nearest comparable GAAP measures," included at
the end of the full release.
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version on businesswire.com: http://www.businesswire.com/news/home/20170424006539/en/
Investor Relations:HomeStreet, Inc.Gerhard Erdelji,
206-515-4039Gerhard.Erdelji@HomeStreet.comhttp://ir.homestreet.com
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