Washington | 001-35424 | 91-0186600 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
[ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
[ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
[ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
[ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
[ ] | Emerging growth Company |
[ ] | If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 12(a) of the Exchange Act. |
Item 2.02 | Results of Operations and Financial Condition |
Item 9.01 | Financial Statements and Exhibits |
(d) | Exhibits. |
Exhibit 99.1 | |
Exhibit 99.2 |
HomeStreet, Inc. | |||
By: | /s/ Mark R. Ruh | ||
Mark R. Ruh | |||
Executive Vice President and Chief Financial Officer | |||
• | Loans held for investment grew to $4.78 billion, an increase of $250.9 million, or 6%, from $4.53 billion at December 31, 2017, and an increase of $794.4 million, or 20%, from $3.99 billion at March 31, 2017 |
• | Deposits increased to $5.05 billion, up 6% from December 31, 2017 and 10% from March 31, 2017 |
• | The ratio of non-performing assets to total assets fell to 0.16%, the lowest level since 2006 |
• | Three de novo retail deposit branches opened during the quarter |
• | Mortgage Banking segment results were adversely impacted by reduced gain-on-sale margins, lower origination volumes, and lower servicing income |
• | A cost reduction initiative executed in April 2018 is expected to result in $12.4 million of planned personnel and other annualized cost savings |
Contact: | Investor Relations: | |
HomeStreet, Inc. | ||
Gerhard Erdelji (206) 515-4039 | ||
Gerhard.Erdelji@HomeStreet.com | ||
http://ir.homestreet.com |
Quarter Ended | ||||||||||||||||||||
(dollars in thousands, except share data) | Mar. 31, 2018 | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | |||||||||||||||
Income statement data (for the period ended): | ||||||||||||||||||||
Net interest income | $ | 48,460 | $ | 51,079 | $ | 50,840 | $ | 46,868 | $ | 45,651 | ||||||||||
Provision for credit losses | 750 | — | 250 | 500 | — | |||||||||||||||
Noninterest income | 60,831 | 72,801 | 83,884 | 81,008 | 74,461 | |||||||||||||||
Noninterest expense | 100,769 | 106,838 | 114,697 | 111,244 | 106,874 | |||||||||||||||
Restructuring-related (recoveries) expenses (included in noninterest expense) | (291 | ) | (260 | ) | 3,877 | 103 | — | |||||||||||||
Acquisition-related (recoveries) expenses (included in noninterest expense) | (50 | ) | 72 | 353 | 177 | — | ||||||||||||||
Income before income taxes | 7,772 | 17,042 | 19,777 | 16,132 | 13,238 | |||||||||||||||
Income tax expense (benefit) | 1,906 | (17,873 | ) | 5,938 | 4,923 | 4,255 | ||||||||||||||
Net income | $ | 5,866 | $ | 34,915 | $ | 13,839 | $ | 11,209 | $ | 8,983 | ||||||||||
Basic income per common share | $ | 0.22 | $ | 1.30 | $ | 0.51 | $ | 0.42 | $ | 0.33 | ||||||||||
Diluted income per common share | $ | 0.22 | $ | 1.29 | $ | 0.51 | $ | 0.41 | $ | 0.33 | ||||||||||
Common shares outstanding | 26,972,074 | 26,888,288 | 26,884,402 | 26,874,871 | 26,862,744 | |||||||||||||||
Core net income (1) | $ | 5,597 | $ | 11,467 | $ | 16,588 | $ | 11,391 | $ | 8,983 | ||||||||||
Core diluted income per common share (1) | $ | 0.21 | $ | 0.42 | $ | 0.61 | $ | 0.42 | $ | 0.33 | ||||||||||
Weighted average number of shares outstanding: | ||||||||||||||||||||
Basic | 26,927,464 | 26,887,611 | 26,883,392 | 26,866,230 | 26,821,396 | |||||||||||||||
Diluted | 27,159,000 | 27,136,977 | 27,089,040 | 27,084,608 | 27,057,449 | |||||||||||||||
Shareholders' equity per share | $ | 25.99 | $ | 26.20 | $ | 24.98 | $ | 24.40 | $ | 23.86 | ||||||||||
Tangible book value per share (1) | $ | 24.90 | $ | 25.09 | $ | 23.86 | $ | 23.30 | $ | 22.73 | ||||||||||
Financial position (at period end): | ||||||||||||||||||||
Loans held for investment, net | 4,758,261 | 4,506,466 | 4,313,225 | 4,156,424 | 3,957,959 | |||||||||||||||
Total assets | 6,924,056 | 6,742,041 | 6,796,346 | 6,586,557 | 6,401,143 | |||||||||||||||
Deposits | 5,048,996 | 4,760,952 | 4,670,486 | 4,747,771 | 4,595,809 | |||||||||||||||
Shareholders’ equity | $ | 700,963 | $ | 704,380 | $ | 671,469 | $ | 655,841 | $ | 640,919 | ||||||||||
Other data: | ||||||||||||||||||||
Full-time equivalent employees (ending) | 2,384 | 2,419 | 2,463 | 2,542 | 2,581 |
Quarter Ended | ||||||||||||||||||||
(dollars in thousands, except share data) | Mar. 31, 2018 | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | |||||||||||||||
Financial performance: | ||||||||||||||||||||
Return on average shareholders’ equity(2) | 3.27 | % | 19.90 | % | 8.10 | % | 6.71 | % | 5.53 | % | ||||||||||
Return on average shareholders’ equity, excluding income tax reform-related benefit, restructuring-related and acquisition-related expenses (net of tax)(1) | 3.12 | % | 6.54 | % | 9.71 | % | 6.82 | % | 5.53 | % | ||||||||||
Return on average tangible shareholders' equity, excluding income tax reform-related benefit, restructuring-related and acquisition-related expenses (net of tax) (1) | 3.25 | % | 6.83 | % | 10.15 | % | 7.14 | % | 5.81 | % | ||||||||||
Return on average assets | 0.35 | % | 2.03 | % | 0.83 | % | 0.70 | % | 0.57 | % | ||||||||||
Return on average assets, excluding income tax reform-related benefit, restructuring-related and acquisition-related expenses (net of tax)(1) | 0.33 | % | 0.67 | % | 0.99 | % | 0.71 | % | 0.57 | % | ||||||||||
Net interest margin (3) | 3.25 | % | 3.33 | % | 3.40 | % | 3.29 | % | 3.23 | % | ||||||||||
Efficiency ratio (4) | 92.20 | % | 86.24 | % | 85.13 | % | 86.99 | % | 88.98 | % | ||||||||||
Core efficiency ratio (1)(5) | 92.51 | % | 86.39 | % | 82.00 | % | 86.77 | % | 88.98 | % | ||||||||||
Asset quality: | ||||||||||||||||||||
Allowance for loan losses/total loans(6) | 0.81 | % | 0.83 | % | 0.85 | % | 0.86 | % | 0.87 | % | ||||||||||
Allowance for loan losses/nonaccrual loans | 359.32 | % | 251.63 | % | 245.02 | % | 233.50 | % | 185.99 | % | ||||||||||
Nonaccrual loans/total loans | 0.23 | % | 0.33 | % | 0.35 | % | 0.37 | % | 0.47 | % | ||||||||||
Nonperforming assets/total assets | 0.16 | % | 0.23 | % | 0.28 | % | 0.30 | % | 0.38 | % | ||||||||||
Regulatory capital ratios for the Bank: | ||||||||||||||||||||
Tier 1 leverage capital (to average assets) | 9.55 | % | (7) | 9.67 | % | 9.86 | % | 10.13 | % | 9.98 | % | |||||||||
Tier 1 common equity risk-based capital (to risk-weighted assets) | 12.26 | % | (7) | 13.22 | % | 12.88 | % | 13.23 | % | 13.25 | % | |||||||||
Tier 1 risk-based capital (to risk-weighted assets) | 12.26 | % | (7) | 13.22 | % | 12.88 | % | 13.23 | % | 13.25 | % | |||||||||
Total risk-based capital (to risk-weighted assets) | 13.05 | % | (7) | 14.02 | % | 13.65 | % | 14.01 | % | 14.02 | % | |||||||||
Risk-weighted assets | $ | 5,098,995 | (7) | $ | 4,915,576 | $ | 5,014,437 | $ | 4,814,330 | $ | 4,680,840 | |||||||||
Regulatory capital ratios for the Company: | ||||||||||||||||||||
Tier 1 leverage capital (to average assets) | 9.02 | % | (7) | 9.12 | % | 9.33 | % | 9.55 | % | 9.45 | % | |||||||||
Tier 1 common equity risk-based capital (to risk-weighted assets) | 9.14 | % | (7) | 9.86 | % | 9.77 | % | 10.01 | % | 9.96 | % | |||||||||
Tier 1 risk-based capital (to risk-weighted assets) | 10.16 | % | (7) | 10.92 | % | 10.81 | % | 11.10 | % | 11.07 | % | |||||||||
Total risk-based capital (to risk-weighted assets) | 10.85 | % | (7) | 11.61 | % | 11.48 | % | 11.79 | % | 11.74 | % | |||||||||
Risk-weighted assets | $ | 5,846,622 | (7) | $ | 5,628,733 | $ | 5,678,249 | $ | 5,434,895 | $ | 5,331,674 |
(1) | Core net income; core diluted income per common share; tangible book value per share of common stock; core efficiency ratio; and return on average shareholders' equity, return on average tangible shareholders’ equity, and return on average assets, in each including income tax reform-related items, restructuring related items and acquisition-related items, are non-GAAP financial measures. For additional information on these non-GAAP financial measures and for corresponding reconciliations to GAAP financial measures, see Non-GAAP Financial Measures in this earnings release. |
(2) | Net earnings available to common shareholders divided by average shareholders’ equity. |
(3) | Net interest income divided by total average interest-earning assets on a tax equivalent basis. |
(4) | Noninterest expense divided by total net revenue (net interest income and noninterest income). |
(5) | Noninterest expense divided by total net revenue (net interest income and noninterest income), adjusted for restructuring-related and acquisition-related items. |
(6) | Includes loans acquired with bank acquisitions. Excluding acquired loans, allowance for loan losses /total loans was 0.87%, 0.90%, 0.93%, 0.95% and 0.97% at March 31, 2018, December 31, 2017, September 30, 2017, June 30, 2017 and March 31, 2017, respectively. |
(7) | Regulatory capital ratios at March 31, 2018 are preliminary. |
Quarter Ended | |||||||||||||||||||
(in thousands, except share data) | Mar. 31, 2018 | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | ||||||||||||||
Interest income: | |||||||||||||||||||
Loans | $ | 55,936 | $ | 58,112 | $ | 56,547 | $ | 51,198 | $ | 49,506 | |||||||||
Investment securities | 5,559 | 5,438 | 5,264 | 5,419 | 5,632 | ||||||||||||||
Other | 179 | 136 | 170 | 125 | 136 | ||||||||||||||
61,674 | 63,686 | 61,981 | 56,742 | 55,274 | |||||||||||||||
Interest expense: | |||||||||||||||||||
Deposits | 7,788 | 6,402 | 6,020 | 5,867 | 5,623 | ||||||||||||||
Federal Home Loan Bank advances | 3,636 | 4,415 | 3,405 | 2,368 | 2,401 | ||||||||||||||
Federal funds purchased and securities sold under agreements to repurchase | 32 | — | — | 5 | — | ||||||||||||||
Long-term debt | 1,584 | 1,554 | 1,520 | 1,514 | 1,479 | ||||||||||||||
Other | 174 | 236 | 196 | 120 | 120 | ||||||||||||||
13,214 | 12,607 | 11,141 | 9,874 | 9,623 | |||||||||||||||
Net interest income | 48,460 | 51,079 | 50,840 | 46,868 | 45,651 | ||||||||||||||
Provision for credit losses | 750 | — | 250 | 500 | — | ||||||||||||||
Net interest income after provision for credit losses | 47,710 | 51,079 | 50,590 | 46,368 | 45,651 | ||||||||||||||
Noninterest income: | |||||||||||||||||||
Net gain on loan origination and sale activities | 48,319 | 58,677 | 71,010 | 65,908 | 60,281 | ||||||||||||||
Loan servicing income | 7,574 | 9,099 | 8,282 | 8,764 | 9,239 | ||||||||||||||
(Loss) income from WMS Series LLC | (11 | ) | (159 | ) | 166 | 406 | 185 | ||||||||||||
Depositor and other retail banking fees | 1,945 | 1,915 | 1,839 | 1,811 | 1,656 | ||||||||||||||
Insurance agency commissions | 543 | 472 | 535 | 501 | 396 | ||||||||||||||
Gain (loss) on sale of investment securities available for sale | 222 | (399 | ) | 331 | 551 | 6 | |||||||||||||
Other | 2,239 | 3,196 | 1,721 | 3,067 | 2,698 | ||||||||||||||
60,831 | 72,801 | 83,884 | 81,008 | 74,461 | |||||||||||||||
Noninterest expense: | |||||||||||||||||||
Salaries and related costs | 66,691 | 70,798 | 75,374 | 76,390 | 71,308 | ||||||||||||||
General and administrative | 14,584 | 15,889 | 16,147 | 15,872 | 17,128 | ||||||||||||||
Amortization of core deposit intangibles | 406 | 233 | 470 | 493 | 514 | ||||||||||||||
Legal | 730 | 748 | 352 | 150 | 160 | ||||||||||||||
Consulting | 877 | 724 | 914 | 771 | 1,058 | ||||||||||||||
Federal Deposit Insurance Corporation assessments | 929 | 967 | 791 | 697 | 824 | ||||||||||||||
Occupancy | 8,180 | 8,788 | 12,391 | (1) | 8,880 | 8,209 | |||||||||||||
Information services | 8,465 | 8,563 | 8,760 | 8,172 | 7,648 | ||||||||||||||
Net (benefit) cost from operation and sale of other real estate owned | (93 | ) | 128 | (502 | ) | (181 | ) | 25 | |||||||||||
100,769 | 106,838 | 114,697 | 111,244 | 106,874 | |||||||||||||||
Income before income taxes | 7,772 | 17,042 | 19,777 | 16,132 | 13,238 | ||||||||||||||
Income tax expense (benefit) | 1,906 | (17,873 | ) | 5,938 | 4,923 | 4,255 | |||||||||||||
NET INCOME | $ | 5,866 | $ | 34,915 | $ | 13,839 | $ | 11,209 | $ | 8,983 | |||||||||
Basic income per share | $ | 0.22 | $ | 1.30 | $ | 0.51 | $ | 0.42 | $ | 0.33 | |||||||||
Diluted income per share | $ | 0.22 | $ | 1.29 | $ | 0.51 | $ | 0.41 | $ | 0.33 | |||||||||
Basic weighted average number of shares outstanding | 26,927,464 | 26,887,611 | 26,883,392 | 26,866,230 | 26,821,396 | ||||||||||||||
Diluted weighted average number of shares outstanding | 27,159,000 | 27,136,977 | 27,089,040 | 27,084,608 | 27,057,449 |
(1) | Includes approximately $3 million of a pretax charge related to the Mortgage Banking restructuring activity that occurred in the third quarter of 2017. |
(in thousands, except share data) | Mar. 31, 2018 | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | |||||||||||||||
Assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 66,289 | $ | 72,718 | $ | 55,050 | $ | 54,447 | $ | 61,492 | ||||||||||
Investment securities | 915,483 | 904,304 | 919,459 | 936,522 | 1,185,654 | |||||||||||||||
Loans held for sale | 500,533 | 610,902 | 851,126 | 784,556 | 537,959 | |||||||||||||||
Loans held for investment, net | 4,758,261 | 4,506,466 | 4,313,225 | 4,156,424 | 3,957,959 | |||||||||||||||
Mortgage servicing rights | 320,105 | 284,653 | 268,072 | 258,222 | 257,421 | |||||||||||||||
Other real estate owned | 297 | 664 | 3,704 | 4,597 | 5,646 | |||||||||||||||
Federal Home Loan Bank stock, at cost | 41,923 | 46,639 | 52,486 | 41,769 | 41,656 | |||||||||||||||
Premises and equipment, net | 104,508 | 104,654 | 104,389 | 101,797 | 97,349 | |||||||||||||||
Goodwill | 22,564 | 22,564 | 22,564 | 22,175 | 22,175 | |||||||||||||||
Other assets | 194,093 | 188,477 | 206,271 | 226,048 | 233,832 | |||||||||||||||
Total assets | $ | 6,924,056 | $ | 6,742,041 | $ | 6,796,346 | $ | 6,586,557 | $ | 6,401,143 | ||||||||||
Liabilities and shareholders’ equity: | ||||||||||||||||||||
Liabilities: | ||||||||||||||||||||
Deposits | $ | 5,048,996 | $ | 4,760,952 | $ | 4,670,486 | $ | 4,747,771 | $ | 4,595,809 | ||||||||||
Federal Home Loan Bank advances | 851,657 | 979,201 | 1,135,245 | 867,290 | 862,335 | |||||||||||||||
Accounts payable and other liabilities | 172,119 | 172,234 | 193,866 | 190,421 | 176,891 | |||||||||||||||
Federal funds purchased and securities sold under agreements to repurchase | 25,000 | — | — | — | — | |||||||||||||||
Long-term debt | 125,321 | 125,274 | 125,280 | 125,234 | 125,189 | |||||||||||||||
Total liabilities | 6,223,093 | 6,037,661 | 6,124,877 | 5,930,716 | 5,760,224 | |||||||||||||||
Shareholders’ equity: | ||||||||||||||||||||
Preferred stock, no par value | ||||||||||||||||||||
Authorized 10,000 shares | — | — | — | — | — | |||||||||||||||
Common stock, no par value | ||||||||||||||||||||
Authorized 160,000,000 shares | 511 | 511 | 511 | 511 | 511 | |||||||||||||||
Additional paid-in capital | 339,902 | 339,009 | 338,283 | 337,515 | 336,875 | |||||||||||||||
Retained earnings | 377,848 | 371,982 | 337,067 | 323,228 | 312,019 | |||||||||||||||
Accumulated other comprehensive loss | (17,298 | ) | (7,122 | ) | (4,392 | ) | (5,413 | ) | (8,486 | ) | ||||||||||
Total shareholders’ equity | 700,963 | 704,380 | 671,469 | 655,841 | 640,919 | |||||||||||||||
Total liabilities and shareholders’ equity | $ | 6,924,056 | $ | 6,742,041 | $ | 6,796,346 | $ | 6,586,557 | $ | 6,401,143 |
Quarter Ended March 31, | Quarter Ended December 31, | Quarter Ended March 31, | ||||||||||||||||||||||||||||||
2018 | 2017 | 2017 | ||||||||||||||||||||||||||||||
(in thousands) | Average Balance | Interest | Average Yield/Cost | Average Balance | Interest | Average Yield/Cost | Average Balance | Interest | Average Yield/Cost | |||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||
Interest-earning assets: (1) | ||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 79,026 | $ | 179 | 0.92 | % | $ | 74,697 | $ | 136 | 0.72 | % | $ | 91,220 | $ | 136 | 0.60 | % | ||||||||||||||
Investment securities | 915,562 | 6,086 | 2.65 | % | 929,995 | 6,459 | 2.78 | % | 1,153,248 | 6,598 | 2.29 | % | ||||||||||||||||||||
Loans held for sale | 456,862 | 4,653 | 4.10 | % | 835,131 | 8,473 | 4.05 | % | 623,056 | 6,087 | 3.91 | % | ||||||||||||||||||||
Loans held for investment | 4,641,980 | 51,458 | 4.47 | % | 4,429,777 | 49,925 | 4.47 | % | 3,914,537 | 43,486 | 4.45 | % | ||||||||||||||||||||
Total interest-earning assets | 6,093,430 | 62,376 | 4.12 | % | 6,269,600 | 64,993 | 4.12 | % | 5,782,061 | 56,307 | 3.90 | % | ||||||||||||||||||||
Noninterest-earning assets (2) | 656,823 | 618,512 | 561,957 | |||||||||||||||||||||||||||||
Total assets | $ | 6,750,253 | $ | 6,888,112 | $ | 6,344,018 | ||||||||||||||||||||||||||
Liabilities and shareholders’ equity: | ||||||||||||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||||||||||||
Interest-bearing demand accounts | $ | 441,363 | $ | 440 | 0.40 | % | $ | 474,804 | $ | 484 | 0.40 | % | $ | 450,598 | $ | 477 | 0.43 | % | ||||||||||||||
Savings accounts | 293,108 | 230 | 0.31 | % | 300,203 | 246 | 0.33 | % | 304,315 | 252 | 0.33 | % | ||||||||||||||||||||
Money market accounts | 1,860,678 | 3,448 | 0.74 | % | 1,586,999 | 2,332 | 0.58 | % | 1,589,696 | 2,211 | 0.56 | % | ||||||||||||||||||||
Certificate accounts | 1,239,042 | 3,844 | 1.24 | % | 1,219,905 | 3,544 | 1.15 | % | 1,151,581 | 2,801 | 0.98 | % | ||||||||||||||||||||
Total interest-bearing deposits | 3,834,191 | 7,962 | 0.83 | % | 3,581,911 | 6,606 | 0.73 | % | 3,496,190 | 5,741 | 0.66 | % | ||||||||||||||||||||
Federal Home Loan Bank advances | 858,451 | 3,636 | 1.70 | % | 1,264,893 | 4,416 | 1.38 | % | 975,914 | 2,401 | 0.99 | % | ||||||||||||||||||||
Federal funds purchased and securities sold under agreements to repurchase | 7,333 | 32 | 1.76 | % | 8,828 | 30 | 1.37 | % | 978 | 2 | 0.85 | % | ||||||||||||||||||||
Long-term debt | 125,290 | 1,584 | 5.07 | % | 125,294 | 1,554 | 4.92 | % | 125,161 | 1,479 | 4.75 | % | ||||||||||||||||||||
Total interest-bearing liabilities | 4,825,265 | 13,214 | 1.10 | % | 4,980,926 | 12,606 | 1.00 | % | 4,598,243 | 9,623 | 0.84 | % | ||||||||||||||||||||
Noninterest-bearing liabilities | 1,207,246 | 1,205,337 | 1,096,336 | |||||||||||||||||||||||||||||
Total liabilities | 6,032,511 | 6,186,263 | 5,694,579 | |||||||||||||||||||||||||||||
Shareholders’ equity | 717,742 | 701,849 | 649,439 | |||||||||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 6,750,253 | $ | 6,888,112 | $ | 6,344,018 | ||||||||||||||||||||||||||
Net interest income (3) | $ | 49,162 | $ | 52,387 | $ | 46,684 | ||||||||||||||||||||||||||
Net interest spread | 3.02 | % | 3.12 | % | 3.06 | % | ||||||||||||||||||||||||||
Impact of noninterest-bearing sources | 0.23 | % | 0.21 | % | 0.17 | % | ||||||||||||||||||||||||||
Net interest margin | 3.25 | % | 3.33 | % | 3.23 | % |
(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 recorded in other real estate owned. |
(3) | Includes taxable-equivalent adjustments primarily related to tax-exempt income on certain loans and securities of $702 thousand, $1.3 million and $1.0 million for the quarters ended March 31, 2018, December 31, 2017 and March 31, 2017, respectively. The estimated federal statutory tax rate was 21%, 35% and 35%, respectively, for the periods presented. |
Quarter Ended | |||||||||||||||||||||
(in thousands) | Mar. 31, 2018 | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | ||||||||||||||||
Net interest income | $ | 45,447 | $ | 45,876 | $ | 45,314 | $ | 42,448 | $ | 40,904 | |||||||||||
Provision for credit losses | 750 | — | 250 | 500 | — | ||||||||||||||||
Noninterest income | 7,096 | 12,697 | 11,962 | 8,276 | 9,425 | ||||||||||||||||
Noninterest expense | 38,271 | 38,716 | 37,160 | 36,631 | 36,470 | ||||||||||||||||
Income before income taxes | 13,522 | 19,857 | 19,866 | 13,593 | 13,859 | ||||||||||||||||
Income tax expense | 3,316 | 10,496 | 5,904 | 4,147 | 4,567 | ||||||||||||||||
Net income | $ | 10,206 | $ | 9,361 | $ | 13,962 | $ | 9,446 | $ | 9,292 | |||||||||||
Net income, excluding income tax reform-related expense and acquisition-related expenses (net of tax)(1) | $ | 10,167 | $ | 13,568 | $ | 14,191 | $ | 9,561 | $ | 9,292 | |||||||||||
Efficiency ratio (2) | 72.84 | % | 66.10 | % | 64.88 | % | 72.22 | % | 72.46 | % | |||||||||||
Core efficiency ratio (1)(3) | 72.93 | % | 65.98 | % | 64.26 | % | 71.87 | % | 72.46 | % | |||||||||||
Full-time equivalent employees (ending) | 1,077 | 1,068 | 1,071 | 1,055 | 1,022 | ||||||||||||||||
Production volumes for sale to the secondary market: | |||||||||||||||||||||
Loan originations | |||||||||||||||||||||
Multifamily DUS ® (4) | $ | 21,744 | $ | 115,419 | $ | 109,994 | $ | 58,343 | $ | 57,552 | |||||||||||
SBA | $ | 3,230 | $ | 7,351 | $ | 18,734 | $ | 6,126 | $ | 6,798 | |||||||||||
Loans sold | |||||||||||||||||||||
Multifamily DUS ® (4) | $ | 32,976 | $ | 132,848 | $ | 102,075 | $ | 35,312 | $ | 76,849 | |||||||||||
SBA | $ | 3,692 | $ | 4,356 | $ | 11,318 | $ | 3,532 | $ | 7,635 | |||||||||||
CRE Non-DUS (5) | $ | — | $ | 180,810 | $ | 114,175 | $ | 21,163 | $ | 5,551 | (6) | ||||||||||
Net gain on loan origination and sale activities: | |||||||||||||||||||||
Multifamily DUS ® (4) | $ | 1,146 | $ | 4,425 | $ | 4,152 | $ | 1,273 | $ | 3,360 | |||||||||||
SBA | 301 | 465 | 1,056 | 316 | 602 | ||||||||||||||||
CRE Non-DUS® (5) | — | 2,446 | 1,789 | 143 | — | ||||||||||||||||
$ | 1,447 | $ | 7,336 | $ | 6,997 | $ | 1,732 | $ | 3,962 |
(1) | Commercial and Consumer Banking segment net income, excluding tax reform-related expense and acquisition-related items and core efficiency ratios, excluding acquisition-related items, are non-GAAP financial measures The Company uses these non-GAAP financial measures to provide meaningful supplemental information regarding the Company's operational performance and to enhance investors' overall understanding of the Company's financial performance. For corresponding reconciliations to GAAP financial measures, see Non-GAAP Financial Measures in this earnings release. |
(2) | Noninterest expense divided by total net revenue (net interest income and noninterest income). |
(3) | Noninterest expense divided by total net revenue (net interest income and noninterest income), excluding acquisition-related items. |
(4) | Fannie Mae Multifamily Delegated Underwriting and Servicing Program (“DUS"®) is a registered trademark of Fannie Mae. |
(5) | Loans originated as Held for Investment. |
(6) | Balance represents termination of participation agreement. |
(in thousands, except for duration data) | Mar. 31, 2018 | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | |||||||||||||||
Available for sale: | ||||||||||||||||||||
Mortgage-backed securities: | ||||||||||||||||||||
Residential | $ | 121,356 | $ | 130,090 | $ | 152,362 | $ | 150,935 | $ | 174,060 | ||||||||||
Commercial | 31,406 | 23,694 | 20,214 | 23,381 | 29,476 | |||||||||||||||
Municipal bonds | 374,640 | 388,452 | 369,278 | 372,729 | 619,934 | |||||||||||||||
Collateralized mortgage obligations: | ||||||||||||||||||||
Residential | 169,371 | 160,424 | 184,936 | 184,695 | 182,037 | |||||||||||||||
Commercial | 97,727 | 98,569 | 86,817 | 76,230 | 69,144 | |||||||||||||||
Corporate debt securities | 21,761 | 24,737 | 28,731 | 30,218 | 51,075 | |||||||||||||||
U.S. Treasury Securities | 10,489 | 10,652 | 10,750 | 10,740 | 10,663 | |||||||||||||||
Agency Debentures | 9,450 | 9,650 | 9,763 | 35,338 | — | |||||||||||||||
Total available for sale | $ | 836,200 | $ | 846,268 | $ | 862,851 | $ | 884,266 | $ | 1,136,389 | ||||||||||
Held to maturity | 79,283 | 58,036 | 56,608 | 52,256 | 49,265 | |||||||||||||||
$ | 915,483 | $ | 904,304 | $ | 919,459 | $ | 936,522 | $ | 1,185,654 | |||||||||||
Weighted average duration in years - available for sale | 6.0 | 5.7 | 4.9 | 4.6 | 3.6 |
(in thousands) | Mar. 31, 2018 | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | |||||||||||||||
Consumer loans | ||||||||||||||||||||
Single family (1) | $ | 1,444,193 | $ | 1,381,366 | $ | 1,269,484 | $ | 1,148,229 | $ | 1,100,215 | ||||||||||
Home equity and other | 470,273 | 453,489 | 436,755 | 414,506 | 380,869 | |||||||||||||||
Total consumer | 1,914,466 | 1,834,855 | 1,706,239 | 1,562,735 | 1,481,084 | |||||||||||||||
Commercial real estate loans | ||||||||||||||||||||
Non-owner occupied commercial real estate | 633,719 | 622,782 | 651,048 | 617,382 | 599,590 | |||||||||||||||
Multifamily | 811,892 | 728,037 | 747,171 | 780,602 | 748,333 | |||||||||||||||
Construction/land development | 739,248 | 687,631 | 653,132 | 648,672 | 611,150 | |||||||||||||||
Total commercial real estate | 2,184,859 | 2,038,450 | 2,051,351 | 2,046,656 | 1,959,073 | |||||||||||||||
Commercial and industrial loans | ||||||||||||||||||||
Owner occupied commercial real estate | 393,845 | 391,613 | 335,373 | 324,740 | 323,262 | |||||||||||||||
Commercial business | 287,367 | 264,709 | 245,859 | 248,908 | 222,761 | |||||||||||||||
Total commercial and industrial loans | 681,212 | 656,322 | 581,232 | 573,648 | 546,023 | |||||||||||||||
Total loans before allowance, net deferred loan fees and costs | 4,780,537 | 4,529,627 | 4,338,822 | 4,183,039 | 3,986,180 | |||||||||||||||
Net deferred loan fees and costs | 16,814 | 14,686 | 11,458 | 9,521 | 6,514 | |||||||||||||||
4,797,351 | 4,544,313 | 4,350,280 | 4,192,560 | 3,992,694 | ||||||||||||||||
Allowance for loan losses | (39,090 | ) | (37,847 | ) | (37,055 | ) | (36,136 | ) | (34,735 | ) | ||||||||||
$ | 4,758,261 | $ | 4,506,466 | $ | 4,313,225 | $ | 4,156,424 | $ | 3,957,959 |
(1) | Includes $5.3 million, $5.5 million, $5.5 million, $5.1 million and $19.0 million of single family loans that are carried at fair value at March 31, 2018, December 31, 2017, September 30, 2017, June 30, 2017 and March 31, 2017, respectively. |
(in thousands) | Mar. 31, 2018 | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | |||||||||||||||
Loans - beginning balance | $ | 4,529,627 | $ | 4,338,822 | $ | 4,183,039 | $ | 3,986,180 | $ | 3,849,451 | ||||||||||
Originations | 417,451 | 478,535 | 515,351 | 508,263 | 355,684 | |||||||||||||||
Purchases and advances | 236,851 | 339,314 | 196,275 | 228,753 | 186,178 | |||||||||||||||
Payoffs, paydowns, sales and other | (403,340 | ) | (626,791 | ) | (555,611 | ) | (540,019 | ) | (404,385 | ) | ||||||||||
Charge-offs and transfers to OREO | (52 | ) | (253 | ) | (232 | ) | (138 | ) | (748 | ) | ||||||||||
Loans - ending balance | $ | 4,780,537 | $ | 4,529,627 | $ | 4,338,822 | $ | 4,183,039 | $ | 3,986,180 | ||||||||||
Net change - loans outstanding | $ | 250,910 | $ | 190,805 | $ | 155,783 | $ | 196,859 | $ | 136,729 |
Quarter Ended | ||||||||||||||||||||
(in thousands) | Mar. 31, 2018 | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | |||||||||||||||
Beginning balance | $ | 39,116 | $ | 38,195 | $ | 37,470 | $ | 36,042 | $ | 35,264 | ||||||||||
Provision for credit losses | 750 | — | 250 | 500 | — | |||||||||||||||
Recoveries, net of (charge-offs) | 580 | 921 | 475 | 928 | 778 | |||||||||||||||
Ending balance | $ | 40,446 | $ | 39,116 | $ | 38,195 | $ | 37,470 | $ | 36,042 | ||||||||||
Components: | ||||||||||||||||||||
Allowance for loan losses | $ | 39,090 | $ | 37,847 | $ | 37,055 | $ | 36,136 | $ | 34,735 | ||||||||||
Allowance for unfunded commitments | 1,356 | 1,269 | 1,140 | 1,334 | 1,307 | |||||||||||||||
Allowance for credit losses | $ | 40,446 | $ | 39,116 | $ | 38,195 | $ | 37,470 | $ | 36,042 | ||||||||||
Allowance as a % of loans held for investment(1) (2) | 0.81 | % | 0.83 | % | 0.85 | % | 0.86 | % | 0.87 | % | ||||||||||
Allowance as a % of nonaccrual loans | 359.32 | % | 251.63 | % | 245.02 | % | 233.50 | % | 185.99 | % |
(1) | Includes loans acquired with bank acquisitions. Excluding acquired loans, allowance for loan losses/total loans was 0.87%, 0.90%, 0.93%, 0.95% and 0.97% at March 31, 2018, December 31, 2017, September 30, 2017, June 30, 2017 and March 31, 2017, respectively. |
(2) | In this calculation, loans held for investment includes loans that are carried at fair value. |
(in thousands) | Mar. 31, 2018 | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | |||||||||||||||
Nonaccrual loans(1) | $ | 10,879 | $ | 15,041 | $ | 15,123 | $ | 15,476 | $ | 18,676 | ||||||||||
Other real estate owned | 297 | 664 | 3,704 | 4,597 | 5,646 | |||||||||||||||
Total nonperforming assets(2) | $ | 11,176 | $ | 15,705 | $ | 18,827 | $ | 20,073 | $ | 24,322 | ||||||||||
Nonaccrual loans as a % of total loans | 0.23 | % | 0.33 | % | 0.35 | % | 0.37 | % | 0.47 | % | ||||||||||
Nonperforming assets as a % of total assets | 0.16 | % | 0.23 | % | 0.28 | % | 0.30 | % | 0.38 | % |
(1) | Generally, loans are placed on nonaccrual status when they are 90 or more days past due, unless payment is insured by the FHA or guaranteed by the VA. |
(2) | Includes $1.7 million, $1.9 million, $1.4 million, $732 thousand and $750 thousand of nonperforming loans guaranteed by the SBA at March 31, 2018, December 31, 2017, September 30, 2017, June 30, 2017 and March 31, 2017, respectively. |
Quarter Ended | ||||||||||||||||||||
(in thousands) | Mar. 31, 2018 | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | |||||||||||||||
Beginning balance | $ | 15,705 | $ | 18,827 | $ | 20,073 | $ | 24,322 | $ | 25,785 | ||||||||||
Additions | 698 | 1,425 | 2,231 | 1,009 | 5,481 | |||||||||||||||
Reductions: | ||||||||||||||||||||
Gross charge-offs | (47 | ) | (234 | ) | (18 | ) | (103 | ) | (45 | ) | ||||||||||
OREO sales | (367 | ) | (3,014 | ) | (860 | ) | (1,162 | ) | (622 | ) | ||||||||||
OREO writedowns and other adjustments | — | (26 | ) | (33 | ) | — | — | |||||||||||||
Principal paydowns, payoff advances, equity adjustments | (891 | ) | (406 | ) | (2,045 | ) | (1,541 | ) | (3,759 | ) | ||||||||||
Transferred back to accrual status | (3,922 | ) | (867 | ) | (521 | ) | (2,452 | ) | (2,518 | ) | ||||||||||
Total reductions | (5,227 | ) | (4,547 | ) | (3,477 | ) | (5,258 | ) | (6,944 | ) | ||||||||||
Net reductions | (4,529 | ) | (3,122 | ) | (1,246 | ) | (4,249 | ) | (1,463 | ) | ||||||||||
Ending balance(1) | $ | 11,176 | $ | 15,705 | $ | 18,827 | $ | 20,073 | $ | 24,322 |
(1) | Includes $1.7 million, $1.9 million, $1.4 million, $732 thousand and $750 thousand of nonperforming loans guaranteed by the SBA at March 31, 2018, December 31, 2017, September 30, 2017, June 30, 2017 and March 31, 2017, respectively. |
(in thousands) | 30-59 days past due | 60-89 days past due | 90 days or more past due | Total past due | Current | Total loans | ||||||||||||||||||
March 31, 2018 | ||||||||||||||||||||||||
Total loans held for investment | $ | 13,200 | $ | 7,778 | $ | 49,612 | $ | 70,590 | $ | 4,709,947 | $ | 4,780,537 | ||||||||||||
Less: FHA/VA loans(1) | 11,615 | 7,750 | 38,734 | 58,099 | 68,197 | 126,296 | ||||||||||||||||||
Less: guaranteed portion of SBA loans(2) | — | — | 1,732 | 1,732 | 6,351 | 8,083 | ||||||||||||||||||
Total loans, excluding FHA/VA and guaranteed portion of SBA loans | $ | 1,585 | $ | 28 | $ | 9,146 | $ | 10,759 | $ | 4,635,399 | $ | 4,646,158 | ||||||||||||
As a % of total loans, excluding FHA/VA and guaranteed portion of SBA loans | 0.03 | % | — | % | 0.20 | % | 0.23 | % | 99.77 | % | 100.00 | % | ||||||||||||
December 31, 2017 | ||||||||||||||||||||||||
Total loans held for investment | $ | 12,261 | $ | 4,457 | $ | 52,212 | $ | 68,930 | $ | 4,460,697 | $ | 4,529,627 | ||||||||||||
Less: FHA/VA loans(1) | 9,431 | 4,267 | 37,171 | 50,869 | 65,586 | 116,455 | ||||||||||||||||||
Less: guaranteed portion of SBA loans(2) | — | — | 1,856 | 1,856 | 6,136 | 7,992 | ||||||||||||||||||
Total loans, excluding FHA/VA and guaranteed portion of SBA loans | $ | 2,830 | $ | 190 | $ | 13,185 | $ | 16,205 | $ | 4,388,975 | $ | 4,405,180 | ||||||||||||
As a % of total loans, excluding FHA/VA and guaranteed portion of SBA loans | 0.06 | % | — | % | 0.30 | % | 0.37 | % | 99.63 | % | 100.00 | % |
(1) | Represents loans whose repayments are insured by the FHA or guaranteed by the VA. |
(2) | Represents that portion of loans whose repayments are guaranteed by the SBA. |
(in thousands) | Mar. 31, 2018 | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | |||||||||||||||
Commercial | ||||||||||||||||||||
Multifamily DUS ® | $ | 1,323,937 | $ | 1,311,399 | $ | 1,213,459 | $ | 1,135,722 | $ | 1,140,414 | ||||||||||
Other | 81,436 | 79,797 | 78,674 | 75,336 | 73,832 | |||||||||||||||
Total commercial loans serviced for others | $ | 1,405,373 | $ | 1,391,196 | $ | 1,292,133 | $ | 1,211,058 | $ | 1,214,246 |
Quarter Ended | ||||||||||||||||||||
(in thousands) | Mar. 31, 2018 | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | |||||||||||||||
Servicing income, net: | ||||||||||||||||||||
Servicing fees and other | $ | 1,957 | $ | 2,081 | $ | 1,690 | $ | 1,652 | $ | 1,840 | ||||||||||
Amortization of capitalized MSRs | (1,049 | ) | (1,429 | ) | (811 | ) | (761 | ) | (931 | ) | ||||||||||
Commercial loan servicing income | $ | 908 | $ | 652 | $ | 879 | $ | 891 | $ | 909 |
Quarter Ended | ||||||||||||||||||||
(in thousands) | Mar. 31, 2018 | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | |||||||||||||||
Beginning balance | $ | 26,093 | $ | 23,966 | $ | 21,600 | $ | 21,424 | $ | 19,747 | ||||||||||
Originations | 934 | 3,193 | 3,177 | 937 | 2,608 | |||||||||||||||
Amortization | (985 | ) | (1,066 | ) | (811 | ) | (761 | ) | (931 | ) | ||||||||||
Ending balance | $ | 26,042 | $ | 26,093 | $ | 23,966 | $ | 21,600 | $ | 21,424 | ||||||||||
Ratio of MSR carrying value to related loans serviced for others | 1.95 | % | 1.97 | % | 1.96 | % | 1.89 | % | 1.86 | % | ||||||||||
MSR servicing fee multiple (1) | 4.05 | 4.12 | 4.02 | 3.95 | 3.94 | |||||||||||||||
Weighted-average note rate (loans serviced for others) | 4.34 | % | 4.36 | % | 4.41 | % | 4.42 | % | 4.45 | % | ||||||||||
Weighted-average servicing fee (loans serviced for others) | 0.48 | % | 0.48 | % | 0.49 | % | 0.48 | % | 0.47 | % |
(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. |
(in thousands) | Mar. 31, 2018 | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | |||||||||||||||
Deposits by Product: | ||||||||||||||||||||
Noninterest-bearing accounts - checking and savings | $ | 595,549 | $ | 579,504 | $ | 587,994 | $ | 572,734 | $ | 581,101 | ||||||||||
Interest-bearing transaction and savings deposits: | ||||||||||||||||||||
NOW accounts | 480,620 | 461,349 | 528,679 | 541,592 | 514,271 | |||||||||||||||
Statement savings accounts due on demand | 295,096 | 293,858 | 308,217 | 311,202 | 310,813 | |||||||||||||||
Money market accounts due on demand | 1,926,153 | 1,834,154 | 1,563,921 | 1,587,741 | 1,579,957 | |||||||||||||||
Total interest-bearing transaction and savings deposits | 2,701,869 | 2,589,361 | 2,400,817 | 2,440,535 | 2,405,041 | |||||||||||||||
Total transaction and savings deposits | 3,297,418 | 3,168,865 | 2,988,811 | 3,013,269 | 2,986,142 | |||||||||||||||
Certificates of deposit | 1,319,842 | 1,190,689 | 1,182,244 | 1,291,935 | 1,211,507 | |||||||||||||||
Noninterest-bearing accounts - other | 431,736 | 401,398 | 499,431 | 442,567 | 398,160 | |||||||||||||||
Total deposits | $ | 5,048,996 | $ | 4,760,952 | $ | 4,670,486 | $ | 4,747,771 | $ | 4,595,809 | ||||||||||
Percent of total deposits: | ||||||||||||||||||||
Noninterest-bearing accounts - checking and savings | 11.8 | % | 12.2 | % | 12.6 | % | 12.1 | % | 12.6 | % | ||||||||||
Interest-bearing transaction and savings deposits: | ||||||||||||||||||||
NOW accounts | 9.5 | 9.7 | 11.3 | 11.4 | 11.2 | |||||||||||||||
Statement savings accounts, due on demand | 5.8 | 6.2 | 6.6 | 6.6 | 6.8 | |||||||||||||||
Money market accounts, due on demand | 38.1 | 38.5 | 33.5 | 33.4 | 34.4 | |||||||||||||||
Total interest-bearing transaction and savings deposits | 53.4 | 54.4 | 51.4 | 51.4 | 52.4 | |||||||||||||||
Total transaction and savings deposits | 65.2 | 66.6 | 64.0 | 63.5 | 65.0 | |||||||||||||||
Certificates of deposit | 26.1 | 25.0 | 25.3 | 27.2 | 26.4 | |||||||||||||||
Noninterest-bearing accounts - other | 8.7 | 8.4 | 10.7 | 9.3 | 8.6 | |||||||||||||||
Total deposits | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
Quarter Ended | |||||||||||||||||||
(in thousands) | Mar. 31, 2018 | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | ||||||||||||||
Net interest income | $ | 3,012 | $ | 5,203 | $ | 5,526 | $ | 4,420 | $ | 4,747 | |||||||||
Noninterest income | 53,735 | 60,104 | 71,922 | 72,732 | 65,036 | ||||||||||||||
Noninterest expense | 62,497 | 68,122 | 77,537 | 74,613 | 70,404 | ||||||||||||||
(Loss) income before income taxes | (5,750 | ) | (2,815 | ) | (89 | ) | 2,539 | (621 | ) | ||||||||||
Income tax (benefit) expense | (1,410 | ) | (28,369 | ) | 34 | 776 | (312 | ) | |||||||||||
Net (loss) income | $ | (4,340 | ) | $ | 25,554 | $ | (123 | ) | $ | 1,763 | $ | (309 | ) | ||||||
Net (loss) income, excluding income tax reform-related benefit and restructuring-related expenses (1) | $ | (4,570 | ) | $ | (2,101 | ) | $ | 2,397 | $ | 1,830 | $ | (309 | ) | ||||||
Efficiency ratio (2) | 110.13 | % | 104.31 | % | 100.11 | % | 96.71 | % | 100.89 | % | |||||||||
Core efficiency ratio (1)(3) | 110.65 | % | 104.71 | % | 95.11 | % | 96.58 | % | 100.89 | % | |||||||||
Full-time equivalent employees (ending) | 1,307 | 1,351 | 1,392 | 1,487 | 1,558 |
(1) | Mortgage Banking segment net income (loss) and core efficiency ratio, excluding tax reform- related benefits, and restructuring-related items, are non-GAAP financial measures. The Company uses these non-GAAP financial measures to provide meaningful supplemental information regarding the Company's operational performance and to enhance investors' overall understanding of the Company's financial performance. For corresponding reconciliations to GAAP financial measures, see Non-GAAP Financial Measures in this earnings release. |
(2) | Noninterest expense divided by total net revenue (net interest income and noninterest income). |
(3) | Noninterest expense divided by total net revenue (net interest income and noninterest income), excluding tax reform-related benefits and restructuring related charges. |
Quarter Ended | ||||||||||||||||||||
(in thousands) | Mar. 31, 2018 | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | |||||||||||||||
Production volumes for sale to the secondary market: | ||||||||||||||||||||
Single family mortgage interest rate lock commitments | $ | 1,571,975 | $ | 1,534,783 | $ | 1,872,645 | $ | 1,950,427 | $1,622,622 | |||||||||||
Single family mortgage closed loan volume (1)(2) | 1,452,398 | 1,887,290 | 2,034,715 | 2,011,127 | 1,621,053 | |||||||||||||||
Single family mortgage loans sold(2) | 1,550,724 | 2,004,583 | 1,956,129 | $ | 1,808,500 | $1,739,737 | ||||||||||||||
Gain on loan origination and sale activities:(3) | ||||||||||||||||||||
Single family: | ||||||||||||||||||||
Servicing value and secondary market gains(4) | $ | 41,427 | $ | 44,479 | $ | 56,657 | $ | 57,353 | $ | 50,538 | ||||||||||
Loan origination fees | 5,445 | 6,862 | 7,356 | 6,823 | 5,781 | |||||||||||||||
Total mortgage banking gain on loan origination and sale activities(3) | $ | 46,872 | $ | 51,341 | $ | 64,013 | $ | 64,176 | $ | 56,319 | ||||||||||
Composite Margin (in basis points): | ||||||||||||||||||||
Servicing value and secondary market gains / interest rate lock commitments(5) | 264 | 290 | 303 | 294 | 312 | |||||||||||||||
Loan origination fees / retail mortgage originations(6) | 40 | 39 | 39 | 37 | 37 | |||||||||||||||
Composite Margin | 304 | 329 | 342 | 331 | 349 |
(1) | Includes loans originated by WMS Series LLC and purchased by HomeStreet and brokered loans where HomeStreet receives fee income but does not fund the loan on its balance sheet or sell it to the secondary market. |
(2) | Represents single family mortgage production volume designated for sale to the secondary market during each respective period. |
(3) | Excludes inter-segment activities. |
(4) | 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. |
(5) | Servicing value and secondary marketing gains have been aggregated and are stated as a percentage of interest rate lock commitments. |
(6) | Loan origination fees are stated as a percentage of mortgage originations from the retail channel and excludes mortgage loans purchased from WMS Series LLC. |
Quarter Ended | ||||||||||||||||||||
(in thousands) | Mar. 31, 2018 | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | |||||||||||||||
Servicing income, net: | ||||||||||||||||||||
Servicing fees and other | $ | 16,494 | $ | 15,475 | $ | 14,790 | $ | 14,325 | $ | 14,339 | ||||||||||
Changes in fair value of single family MSRs due to amortization (1) | (8,870 | ) | (8,855 | ) | (9,167 | ) | (8,909 | ) | (8,520 | ) | ||||||||||
7,624 | 6,620 | 5,623 | 5,416 | 5,819 | ||||||||||||||||
Risk management, single family MSRs: | ||||||||||||||||||||
Changes in fair value of MSR due to changes in model inputs and/or assumptions (2) | 30,019 | 4,155 | (1,027 | ) | (6,417 | ) | 2,132 | |||||||||||||
Net (loss) gain from derivatives economically hedging MSR | (30,977 | ) | (2,328 | ) | 2,807 | 8,874 | 379 | |||||||||||||
(958 | ) | 1,827 | 1,780 | 2,457 | 2,511 | |||||||||||||||
Mortgage Banking servicing income | $ | 6,666 | $ | 8,447 | $ | 7,403 | $ | 7,873 | $ | 8,330 |
(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. |
(in thousands) | Mar. 31, 2018 | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | |||||||||||||||
Single family | ||||||||||||||||||||
U.S. government and agency | $ | 22,715,153 | $ | 22,123,710 | $ | 21,378,395 | $ | 20,574,300 | $ | 19,760,612 | ||||||||||
Other | 504,423 | 507,437 | 513,858 | 530,308 | 542,557 | |||||||||||||||
Total single family loans serviced for others | $ | 23,219,576 | $ | 22,631,147 | $ | 21,892,253 | $ | 21,104,608 | $ | 20,303,169 |
Quarter Ended | ||||||||||||||||||||
(in thousands) | Mar. 31, 2018 | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | |||||||||||||||
Beginning balance | $ | 258,560 | $ | 244,106 | $ | 236,621 | $ | 235,997 | $ | 226,113 | ||||||||||
Additions and amortization: | ||||||||||||||||||||
Originations | 14,353 | 19,154 | 17,679 | 15,748 | 15,918 | |||||||||||||||
Purchases | — | — | — | 211 | 354 | |||||||||||||||
Changes due to amortization (1) | (8,870 | ) | (8,855 | ) | (9,167 | ) | (8,909 | ) | (8,520 | ) | ||||||||||
Net additions and amortization | 5,483 | 10,299 | 8,512 | 7,050 | 7,752 | |||||||||||||||
Changes in fair value due to changes in model inputs and/or assumptions (2) | 30,019 | 4,155 | (1,027 | ) | (6,426 | ) | 2,132 | |||||||||||||
Ending balance | $ | 294,062 | $ | 258,560 | $ | 244,106 | $ | 236,621 | $ | 235,997 | ||||||||||
Ratio of MSR carrying value to related loans serviced for others | 1.27 | % | 1.14 | % | 1.12 | % | 1.12 | % | 1.16 | % | ||||||||||
MSR servicing fee multiple (3) | 4.49 | 4.05 | 3.96 | 3.97 | 4.11 | |||||||||||||||
Weighted-average note rate (loans serviced for others) | 4.01 | % | 4.00 | % | 3.99 | % | 3.98 | % | 3.96 | % | ||||||||||
Weighted-average servicing fee (loans serviced for others) | 0.28 | % | 0.28 | % | 0.28 | % | 0.28 | % | 0.28 | % |
(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. |
Quarter Ended | |||||||||||||||||||
(dollars in thousands, except share data) | Mar. 31, 2018 | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | ||||||||||||||
Shareholders' equity | $ | 700,963 | $ | 704,380 | $ | 671,469 | $ | 655,841 | $ | 640,919 | |||||||||
Less: Goodwill and other intangibles | (29,254 | ) | (29,661 | ) | (29,893 | ) | (29,783 | ) | (30,275 | ) | |||||||||
Tangible shareholders' equity (1) | $ | 671,709 | $ | 674,719 | $ | 641,576 | $ | 626,058 | $ | 610,644 | |||||||||
Common shares outstanding | 26,972,074 | 26,888,288 | 26,884,402 | 26,874,871 | 26,862,744 | ||||||||||||||
Shareholders' equity per share | $ | 25.99 | $ | 26.20 | $ | 24.98 | $ | 24.40 | $ | 23.86 | |||||||||
Impact of goodwill and other intangibles | (1.09 | ) | (1.11 | ) | (1.12 | ) | (1.10 | ) | (1.13 | ) | |||||||||
Tangible book value per share (2) | $ | 24.90 | $ | 25.09 | $ | 23.86 | $ | 23.30 | $ | 22.73 | |||||||||
Average shareholders' equity | $ | 717,742 | $ | 701,849 | $ | 683,186 | $ | 668,377 | $ | 649,439 | |||||||||
Less: Average goodwill and other intangibles | (29,500 | ) | (29,898 | ) | (29,722 | ) | (30,104 | ) | (30,611 | ) | |||||||||
Average tangible shareholders' equity | $ | 688,242 | $ | 671,951 | $ | 653,464 | $ | 638,273 | $ | 618,828 | |||||||||
Return on average shareholders’ equity | 3.27 | % | 19.90 | % | 8.10 | % | 6.71 | % | 5.53 | % | |||||||||
Impact of goodwill and other intangibles | 0.14 | % | 0.88 | % | 0.37 | % | 0.31 | % | 0.28 | % | |||||||||
Return on average tangible shareholders' equity (2) | 3.41 | % | 20.78 | % | 8.47 | % | 7.02 | % | 5.81 | % | |||||||||
Return on average shareholders' equity | 3.27 | % | 19.90 | % | 8.10 | % | 6.71 | % | 5.53 | % | |||||||||
Impact of tax reform-related benefit | — | % | (13.29 | )% | — | % | — | % | — | % | |||||||||
Impact of restructuring-related expenses (net of tax) | (0.13 | )% | (0.10 | )% | 1.49 | % | 0.04 | % | — | % | |||||||||
Impact of acquisition-related expenses (net of tax) | (0.02 | )% | 0.03 | % | 0.12 | % | 0.07 | % | — | % | |||||||||
Return on average shareholders' equity, excluding tax reform-related, restructuring-related (net of tax) and acquisition-related expenses (net of tax) | 3.12 | % | 6.54 | % | 9.71 | % | 6.82 | % | 5.53 | % | |||||||||
Return on average assets | 0.35 | % | 2.03 | % | 0.83 | % | 0.70 | % | 0.57 | % | |||||||||
Impact of tax reform-related benefit | — | % | (1.35 | )% | — | % | — | % | — | % | |||||||||
Impact of restructuring-related expenses (net of tax) | (0.01 | )% | (0.01 | )% | 0.15 | % | — | % | — | % | |||||||||
Impact of acquisition-related expenses (net of tax) | (0.01 | )% | — | % | 0.01 | % | 0.01 | % | — | % | |||||||||
Return on average assets, excluding tax reform-related benefit, restructuring-related (net of tax) and acquisition-related expenses (net of tax) | 0.33 | % | 0.67 | % | 0.99 | % | 0.71 | % | 0.57 | % |
(1) | Tangible shareholders’ equity is considered a non-GAAP financial measure and should be viewed in conjunction with shareholders’ equity. Tangible shareholders’ equity is calculated by deducting goodwill and intangible assets (excluding loan servicing rights) from shareholders’ equity. |
(2) | Tangible book value is calculated by dividing tangible shareholders’ equity by the number of common shares outstanding. The return on average tangible shareholders’ equity is calculated by dividing net earnings available to common shareholders (annualized) by average tangible shareholders’ equity. |
Quarter Ended | ||||||||||||||||||||
(in thousands) | Mar. 31, 2018 | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | |||||||||||||||
Consolidated results: | ||||||||||||||||||||
Net income | $ | 5,866 | $ | 34,915 | $ | 13,839 | $ | 11,209 | $ | 8,983 | ||||||||||
Impact of income tax reform-related benefit | — | (23,326 | ) | — | — | — | ||||||||||||||
Impact of restructuring-related (recoveries) expenses, net of tax | (230 | ) | (169 | ) | 2,520 | 67 | — | |||||||||||||
Impact of acquisition-related (recoveries) expenses, net of tax | (39 | ) | 47 | 229 | 115 | — | ||||||||||||||
Core net income | $ | 5,597 | $ | 11,467 | $ | 16,588 | $ | 11,391 | $ | 8,983 | ||||||||||
Net interest income | $ | 48,460 | $ | 51,079 | $ | 50,840 | $ | 46,868 | $ | 45,651 | ||||||||||
Noninterest income | 60,831 | 72,801 | 83,884 | 81,008 | 74,461 | |||||||||||||||
Noninterest expense | $ | 100,769 | $ | 106,838 | $ | 114,697 | $ | 111,244 | $ | 106,874 | ||||||||||
Impact of restructuring-related recoveries (expenses) | 291 | 260 | (3,877 | ) | (103 | ) | — | |||||||||||||
Impact of acquisition-related recoveries (expenses) | 50 | (72 | ) | (353 | ) | (177 | ) | — | ||||||||||||
Noninterest expense, excluding restructuring and acquisition-related recoveries (expenses) | $ | 101,110 | $ | 107,026 | $ | 110,467 | $ | 110,964 | $ | 106,874 | ||||||||||
Efficiency ratio | 92.20 | % | 86.24 | % | 85.13 | % | 86.99 | % | 88.98 | % | ||||||||||
Impact of restructuring-related expenses (recoveries) | 0.26 | % | 0.21 | % | (2.87 | )% | (0.08 | )% | — | % | ||||||||||
Impact of acquisition-related expenses (recoveries) | 0.05 | % | (0.06 | )% | (0.26 | )% | (0.14 | )% | — | % | ||||||||||
Core efficiency ratio | 92.51 | % | 86.39 | % | 82.00 | % | 86.77 | % | 88.98 | % | ||||||||||
Diluted earnings per common share | $ | 0.22 | $ | 1.29 | $ | 0.51 | $ | 0.41 | $ | 0.33 | ||||||||||
Impact of income tax reform-related benefit | — | (0.86 | ) | — | — | — | ||||||||||||||
Impact of restructuring-related (recoveries) expenses, net of tax | (0.01 | ) | (0.01 | ) | 0.09 | — | — | |||||||||||||
Impact of acquisition-related (recoveries) expenses, net of tax | — | — | 0.01 | 0.01 | — | |||||||||||||||
Core diluted earnings per common share | $ | 0.21 | $ | 0.42 | $ | 0.61 | $ | 0.42 | $ | 0.33 | ||||||||||
Return on average tangible shareholders' equity | 3.41 | % | 20.78 | % | 8.47 | % | 7.02 | % | 5.81 | % | ||||||||||
Impact of income tax reform-related benefit | — | % | (13.89 | )% | — | % | — | % | — | % | ||||||||||
Impact of restructuring-related (recoveries) expenses, net of tax | (0.13 | )% | (0.10 | )% | 1.54 | % | 0.05 | % | — | % | ||||||||||
Impact of acquisition-related (recoveries) expenses, net of tax | (0.03 | )% | 0.04 | % | 0.14 | % | 0.07 | % | — | % | ||||||||||
Return on average tangible shareholders' equity, excluding income tax reform-related benefit, restructuring, net of tax, and acquisition-related (recoveries) expenses, net of tax | 3.25 | % | 6.83 | % | 10.15 | % | 7.14 | % | 5.81 | % |
Quarter Ended | ||||||||||||||||||||
(in thousands) | Mar. 31, 2018 | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | |||||||||||||||
Commercial and Consumer Banking segment results: | ||||||||||||||||||||
Net income | $ | 10,206 | $ | 9,361 | $ | 13,962 | $ | 9,446 | $ | 9,292 | ||||||||||
Impact of income tax reform-related tax expense | — | 4,160 | — | — | — | |||||||||||||||
Impact of acquisition-related (recoveries) expenses, net of tax | (39 | ) | 47 | 229 | 115 | — | ||||||||||||||
Net income, excluding income tax reform-related expense and acquisition-related (recoveries) expenses, net of tax | $ | 10,167 | $ | 13,568 | $ | 14,191 | $ | 9,561 | $ | 9,292 | ||||||||||
Net interest income | $ | 45,447 | $ | 45,876 | $ | 45,314 | $ | 42,448 | $ | 40,904 | ||||||||||
Noninterest income | 7,096 | 12,697 | 11,962 | 8,276 | 9,425 | |||||||||||||||
Noninterest expense | 38,271 | 38,716 | 37,160 | 36,631 | 36,470 | |||||||||||||||
Impact of acquisition-related recoveries (expenses) | 50 | (72 | ) | (353 | ) | (177 | ) | — | ||||||||||||
Noninterest expense, excluding acquisition-related (expenses) recoveries | $ | 38,321 | $ | 38,644 | $ | 36,807 | $ | 36,454 | $ | 36,470 | ||||||||||
Efficiency ratio | 72.84 | % | 66.10 | % | 64.88 | % | 72.22 | % | 72.46 | % | ||||||||||
Impact of acquisition-related expenses (recoveries) | 0.09 | % | (0.12 | )% | (0.62 | )% | (0.35 | )% | — | % | ||||||||||
Core efficiency ratio | 72.93 | % | 65.98 | % | 64.26 | % | 71.87 | % | 72.46 | % |
Quarter Ended | ||||||||||||||||||||
(in thousands) | Mar. 31, 2018 | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | |||||||||||||||
Mortgage Banking segment results: | ||||||||||||||||||||
Net (loss) income | $ | (4,340 | ) | $ | 25,554 | $ | (123 | ) | $ | 1,763 | $ | (309 | ) | |||||||
Impact of income tax reform-related tax benefit | — | (27,486 | ) | — | — | — | ||||||||||||||
Impact of restructuring-related expenses (recoveries), net of tax | (230 | ) | (169 | ) | 2,520 | 67 | — | |||||||||||||
Net (loss) income, excluding income tax reform-related benefit and restructuring-related expenses (recoveries), net of tax | $ | (4,570 | ) | $ | (2,101 | ) | $ | 2,397 | $ | 1,830 | $ | (309 | ) | |||||||
Net interest income | 3,012 | 5,203 | 5,526 | 4,420 | 4,747 | |||||||||||||||
Noninterest income | 53,735 | 60,104 | 71,922 | 72,732 | 65,036 | |||||||||||||||
Noninterest expense | 62,497 | 68,122 | 77,537 | 74,613 | 70,404 | |||||||||||||||
Impact of restructuring-related recoveries (expenses) | 291 | 260 | (3,877 | ) | (103 | ) | — | |||||||||||||
Noninterest expense, excluding restructuring-related (expenses) recoveries | $ | 62,788 | $ | 68,382 | $ | 73,660 | $ | 74,510 | $ | 70,404 | ||||||||||
Efficiency ratio | 110.13 | % | 104.31 | % | 100.11 | % | 96.71 | % | 100.89 | % | ||||||||||
Impact of restructuring-related recoveries (expenses) | 0.52 | % | 0.40 | % | (5.00 | )% | (0.13 | )% | — | % | ||||||||||
Core efficiency ratio | 110.65 | % | 104.71 | % | 95.11 | % | 96.58 | % | 100.89 | % |
• | Loans held for investment grew to $4.78 billion, an increase of $250.9 million, or 6%, from $4.53 billion at December 31, 2017, and an increase of $794.4 million, or 20%, from $3.99 billion at March 31, 2017 |
• | Deposits increased to $5.05 billion, up 6% from December 31, 2017 and 10% from March 31, 2017 |
• | The ratio of non-performing assets to total assets fell to 0.16%, the lowest level since 2006 |
• | Three de novo retail deposit branches opened during the quarter |
• | Mortgage Banking segment results were adversely impacted by reduced gain-on-sale margins, lower origination volumes, and lower servicing income |
• | A cost reduction initiative executed in April 2018 is expected to result in $12.4 million of planned personnel and other annualized cost savings |
Contact: | Investor Relations: | |
HomeStreet, Inc. | ||
Gerhard Erdelji (206) 515-4039 | ||
Gerhard.Erdelji@HomeStreet.com | ||
http://ir.homestreet.com |
Quarter Ended | ||||||||||||||||||||
(in thousands) | Mar. 31, 2018 | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | |||||||||||||||
Consolidated results: | ||||||||||||||||||||
Net income | $ | 5,866 | $ | 34,915 | $ | 13,839 | $ | 11,209 | $ | 8,983 | ||||||||||
Impact of income tax reform-related benefit | — | (23,326 | ) | — | — | — | ||||||||||||||
Impact of restructuring-related (recoveries) expenses, net of tax | (230 | ) | (169 | ) | 2,520 | 67 | — | |||||||||||||
Impact of acquisition-related (recoveries) expenses, net of tax | (39 | ) | 47 | 229 | 115 | — | ||||||||||||||
Core net income | $ | 5,597 | $ | 11,467 | $ | 16,588 | $ | 11,391 | $ | 8,983 | ||||||||||
Diluted earnings per common share | $ | 0.22 | $ | 1.29 | $ | 0.51 | $ | 0.41 | $ | 0.33 | ||||||||||
Impact of income tax reform-related benefit | — | (0.86 | ) | — | — | — | ||||||||||||||
Impact of restructuring-related (recoveries) expenses, net of tax | (0.01 | ) | (0.01 | ) | 0.09 | — | — | |||||||||||||
Impact of acquisition-related (recoveries) expenses, net of tax | — | — | 0.01 | 0.01 | — | |||||||||||||||
Core diluted earnings per common share | $ | 0.21 | $ | 0.42 | $ | 0.61 | $ | 0.42 | $ | 0.33 | ||||||||||
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