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)) |
Indicate by check mark if the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). | |
[ ] | 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 13(a) of the Exchange Act. |
Item 2.02 | Results of Operations and Financial Condition |
Item 7.01 | Regulation FD Disclosure |
Item 9.01 | Financial Statements and Exhibits |
(d) | Exhibits. |
Exhibit 99.1 | |
Exhibit 99.2 | |
Exhibit 99.3 |
HomeStreet, Inc. | |||
By: | /s/ Mark R. Ruh | ||
Mark R. Ruh | |||
Executive Vice President and Chief Financial Officer | |||
• | Approved a plan of exit or disposal of our home loan center-based mortgage origination business and related mortgage loan servicing, resulting in a recast of our financial statements to reflect discontinued operations accounting and the elimination of segment reporting |
• | Entered into an agreement on April 4, 2019 to sell substantially all of our stand-alone home loan centers and to transfer to the buyer a significant portion of the related personnel - expected to be completed in the second quarter of 2019 |
• | Sold single family mortgage servicing rights ("MSRs") totaling $14.26 billion in unpaid principal balance, representing $176.9 million in MSR fair value |
• | Approved a $75 million common stock repurchase program |
• | Completed the acquisition of a retail deposit branch in San Marcos, California, with approximately $74.5 million in deposits, along with $112.1 million of commercial loans and a San Diego County focused commercial lending team |
• | Opened two de novo retail branches in San Jose and Santa Clara, California |
• | Grew loans held for investment to $5.36 billion, an increase of 5% from December 31, 2018, and 12% from March 31, 2018 |
• | Increased deposits to $5.18 billion, an increase of 6% from December 31, 2018, and 8% from March 31, 2018 |
• | Increased noninterest bearing deposits to $683.8 million, an increase of 12% from December 31, 2018, and 15% from March 31, 2018 |
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, 2019 | Dec. 31, 2018 | Sept. 30, 2018 | June 30, 2018 | Mar. 31, 2018 | ||||||||||||||
Income statement data (for the period ended): | |||||||||||||||||||
Net interest income | $ | 47,557 | $ | 48,910 | $ | 47,860 | $ | 47,745 | $ | 45,448 | |||||||||
Provision for credit losses | 1,500 | 500 | 750 | 1,000 | 750 | ||||||||||||||
Noninterest income | 8,092 | 10,382 | 10,650 | 8,405 | 7,096 | ||||||||||||||
Noninterest expense | 47,846 | 47,892 | 47,914 | 49,964 | 49,471 | ||||||||||||||
Income from continuing operations before income taxes | 6,303 | 10,900 | 9,846 | 5,186 | 2,323 | ||||||||||||||
Income tax expense (benefit) from continuing operations | 1,245 | (1,575 | ) | 1,757 | 1,015 | 569 | |||||||||||||
Income from continuing operations | 5,058 | 12,475 | 8,089 | 4,171 | 1,754 | ||||||||||||||
(Loss) income from discontinued operations before income taxes | (8,440 | ) | 3,959 | 4,561 | 3,641 | 5,449 | |||||||||||||
Income tax (benefit) expense from discontinued operations | (1,667 | ) | 1,207 | 815 | 713 | 1,337 | |||||||||||||
(Loss) income from discontinued operations | (6,773 | ) | 2,752 | 3,746 | 2,928 | 4,112 | |||||||||||||
NET (LOSS) INCOME | $ | (1,715 | ) | $ | 15,227 | $ | 11,835 | $ | 7,099 | $ | 5,866 | ||||||||
Basic income (loss) per common share: | |||||||||||||||||||
Income from continuing operations | $ | 0.19 | $ | 0.46 | $ | 0.30 | $ | 0.15 | $ | 0.07 | |||||||||
(Loss) income from discontinued operations | (0.25 | ) | 0.10 | 0.14 | 0.11 | 0.15 | |||||||||||||
Basic (loss) income per common share | $ | (0.06 | ) | $ | 0.56 | $ | 0.44 | $ | 0.26 | $ | 0.22 | ||||||||
Diluted income (loss) per common share: | |||||||||||||||||||
Income from continuing operations | $ | 0.19 | $ | 0.46 | $ | 0.30 | $ | 0.15 | $ | 0.06 | |||||||||
(Loss) income from discontinued operations | (0.25 | ) | 0.10 | 0.14 | 0.11 | 0.15 | |||||||||||||
Diluted (loss) income per common share | $ | (0.06 | ) | $ | 0.56 | $ | 0.44 | $ | 0.26 | $ | 0.22 | ||||||||
Common shares outstanding | 27,038,257 | 26,995,348 | 26,989,742 | 26,978,229 | 26,972,074 | ||||||||||||||
Core net income (2) | $ | 8,139 | $ | 9,721 | $ | 12,253 | $ | 12,547 | $ | 5,597 | |||||||||
Core diluted income per common share (2) | $ | 0.30 | $ | 0.36 | $ | 0.45 | $ | 0.46 | $ | 0.21 | |||||||||
Weighted average number of shares outstanding: | |||||||||||||||||||
Basic | 27,021,507 | 26,993,885 | 26,985,425 | 26,976,892 | 26,927,464 | ||||||||||||||
Diluted | 27,185,175 | 27,175,522 | 27,181,688 | 27,156,329 | 27,159,000 | ||||||||||||||
Shareholders' equity per share | $ | 27.63 | $ | 27.39 | $ | 26.48 | $ | 26.19 | $ | 25.99 | |||||||||
Tangible book value per share (2) | $ | 26.26 | $ | 26.36 | $ | 25.43 | $ | 25.12 | $ | 24.90 | |||||||||
Financial position (at period end): | |||||||||||||||||||
Loans held for investment, net | $ | 5,345,969 | $ | 5,075,371 | $ | 5,026,301 | $ | 4,883,310 | $ | 4,758,261 | |||||||||
Total assets | 7,171,405 | 7,042,221 | 7,029,082 | 7,163,877 | 6,924,056 | ||||||||||||||
Deposits | 5,178,334 | 4,888,558 | 4,943,545 | 4,901,164 | 4,803,674 | ||||||||||||||
Shareholders' equity | 747,031 | 739,520 | 714,782 | 706,459 | 700,963 | ||||||||||||||
Other data: | |||||||||||||||||||
Full-time equivalent employees (ending) | 1,937 | 2,036 | 2,053 | 2,253 | 2,384 |
Quarter Ended | |||||||||||||||||||
(dollars in thousands, except share data) | Mar. 31, 2019 | Dec. 31, 2018 | Sept. 30, 2018 | June 30, 2018 | Mar. 31, 2018 | ||||||||||||||
Financial performance, continuing and discontinued: (8) | |||||||||||||||||||
Return on average shareholders' equity (1) | (0.91 | )% | 8.30 | % | 6.23 | % | 3.78 | % | 3.27 | % | |||||||||
Return on average shareholders' equity, excluding income tax reform-related benefit, restructuring-related and acquisition-related expenses (net of tax) (2) | 4.34 | % | 5.30 | % | 6.45 | % | 6.68 | % | 3.12 | % | |||||||||
Return on average tangible shareholders' equity, excluding income tax reform-related benefit, restructuring-related and acquisition-related expenses (net of tax) (2) | 4.51 | % | 5.51 | % | 6.70 | % | 6.95 | % | 3.25 | % | |||||||||
Return on average assets | (0.10 | )% | 0.86 | % | 0.66 | % | 0.40 | % | 0.35 | % | |||||||||
Return on average assets, excluding income tax reform-related benefit, restructuring-related and acquisition-related expenses (net of tax) (2) | 0.45 | % | 0.55 | % | 0.69 | % | 0.71 | % | 0.33 | % | |||||||||
Net interest margin (3) | 3.11 | % | 3.19 | % | 3.20 | % | 3.25 | % | 3.25 | % | |||||||||
Efficiency ratio (4) | 100.66 | % | 84.64 | % | 86.19 | % | 91.84 | % | 92.20 | % | |||||||||
Core efficiency ratio (2)(5) | 87.81 | % | 85.43 | % | 85.71 | % | 86.11 | % | 92.51 | % | |||||||||
Asset quality: | |||||||||||||||||||
Allowance for loan losses/total loans (6) | 0.80 | % | 0.81 | % | 0.80 | % | 0.80 | % | 0.81 | % | |||||||||
Allowance for loan losses/nonaccrual loans | 271.99 | % | 356.92 | % | 419.57 | % | 409.97 | % | 359.32 | % | |||||||||
Nonaccrual loans/total loans | 0.29 | % | 0.23 | % | 0.19 | % | 0.20 | % | 0.23 | % | |||||||||
Nonperforming assets/total assets | 0.23 | % | 0.17 | % | 0.15 | % | 0.14 | % | 0.16 | % | |||||||||
Regulatory capital ratios for the Bank: (7) | |||||||||||||||||||
Tier 1 leverage capital (to average assets) | 11.17 | % | 10.15 | % | 9.70 | % | 9.72 | % | 9.58 | % | |||||||||
Tier 1 common equity risk-based capital (to risk-weighted assets) | 14.88 | % | 13.82 | % | 13.26 | % | 12.69 | % | 12.30 | % | |||||||||
Tier 1 risk-based capital (to risk-weighted assets) | 14.88 | % | 13.82 | % | 13.26 | % | 12.69 | % | 12.30 | % | |||||||||
Total risk-based capital (to risk-weighted assets) | 15.77 | % | 14.72 | % | 14.15 | % | 13.52 | % | 13.09 | % | |||||||||
Risk-weighted assets | $ | 5,347,115 | $ | 5,121,575 | $ | 5,072,821 | $ | 5,291,165 | $ | 5,116,728 | |||||||||
Regulatory capital ratios for the Company: (7) | |||||||||||||||||||
Tier 1 leverage capital (to average assets) | 10.73 | % | 9.51 | % | 9.17 | % | 9.18 | % | 9.08 | % | |||||||||
Tier 1 common equity risk-based capital (to risk-weighted assets) | 12.62 | % | 11.26 | % | 10.84 | % | 10.48 | % | 9.26 | % | |||||||||
Tier 1 risk-based capital (to risk-weighted assets) | 13.68 | % | 12.37 | % | 11.94 | % | 11.56 | % | 10.28 | % | |||||||||
Total risk-based capital (to risk-weighted assets) | 14.58 | % | 13.27 | % | 12.82 | % | 12.38 | % | 10.97 | % | |||||||||
Risk-weighted assets | $ | 5,626,399 | $ | 5,396,261 | $ | 5,363,263 | $ | 5,524,113 | $ | 5,833,243 |
(1) | Net earnings available to common shareholders divided by average shareholders' equity. |
(2) | Core net income; core diluted income per common share; tangible book value per share of common share; core efficiency ratio; return on average shareholders' equity, return on average tangible shareholders' equity, and return on average assets, in each case excluding 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. |
(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 0.86%, 0.85%, 0.84%, 0.85% and 0.87% at March 31, 2019, December 31, 2018, September 30, 2018, June 30, 2018 and March 31, 2018, respectively. |
(7) | Regulatory capital ratios at March 31, 2019 are preliminary. |
(8) | Consolidated operations include both continuing and discontinued operations. |
Quarter Ended | |||||||||||||||||||
(in thousands, except share data) | Mar. 31, 2019 | Dec. 31, 2018 | Sept. 30, 2018 | June 30, 2018 | Mar. 31, 2018 | ||||||||||||||
Interest income: | |||||||||||||||||||
Loans | $ | 62,931 | $ | 62,070 | $ | 58,624 | $ | 56,168 | $ | 51,488 | |||||||||
Investment securities | 5,564 | 5,979 | 5,580 | 5,527 | 5,559 | ||||||||||||||
Other | 188 | 204 | 76 | 123 | 64 | ||||||||||||||
68,683 | 68,253 | 64,280 | 61,818 | 57,111 | |||||||||||||||
Interest expense: | |||||||||||||||||||
Deposits | 14,312 | 13,359 | 11,286 | 9,562 | 7,788 | ||||||||||||||
Federal Home Loan Bank advances | 4,642 | 4,088 | 3,277 | 2,780 | 2,229 | ||||||||||||||
Federal funds purchased and securities sold under agreements to repurchase | 304 | 159 | 83 | 24 | 32 | ||||||||||||||
Long-term debt | 1,744 | 1,706 | 1,695 | 1,662 | 1,584 | ||||||||||||||
Other | 124 | 31 | 79 | 45 | 30 | ||||||||||||||
21,126 | 19,343 | 16,420 | 14,073 | 11,663 | |||||||||||||||
Net interest income | 47,557 | 48,910 | 47,860 | 47,745 | 45,448 | ||||||||||||||
Provision for credit losses | 1,500 | 500 | 750 | 1,000 | 750 | ||||||||||||||
Net interest income after provision for credit losses | 46,057 | 48,410 | 47,110 | 46,745 | 44,698 | ||||||||||||||
Noninterest income: | |||||||||||||||||||
Net gain on loan origination and sale activities | 2,607 | 3,516 | 4,193 | 2,710 | 1,447 | ||||||||||||||
Loan servicing income | 1,043 | 872 | 954 | 937 | 908 | ||||||||||||||
Depositor and other retail banking fees | 1,745 | 2,104 | 2,031 | 1,947 | 1,937 | ||||||||||||||
Insurance agency commissions | 625 | 535 | 588 | 527 | 543 | ||||||||||||||
(Loss) gain on sale of investment securities available for sale | (247 | ) | 1 | (4 | ) | 16 | 222 | ||||||||||||
Other | 2,319 | 3,354 | 2,888 | 2,268 | 2,039 | ||||||||||||||
8,092 | 10,382 | 10,650 | 8,405 | 7,096 | |||||||||||||||
Noninterest expense: | |||||||||||||||||||
Salaries and related costs | 25,279 | 25,649 | 25,183 | 27,005 | 27,205 | ||||||||||||||
General and administrative | 8,182 | 7,274 | 8,591 | 8,701 | 8,366 | ||||||||||||||
Amortization of core deposit intangibles | 333 | 406 | 406 | 407 | 406 | ||||||||||||||
Legal | (204 | ) | 980 | 873 | 816 | 704 | |||||||||||||
Consulting | 1,408 | 746 | 426 | 615 | 682 | ||||||||||||||
Federal Deposit Insurance Corporation assessments | 821 | 1,069 | 880 | 998 | 861 | ||||||||||||||
Occupancy | 4,968 | 4,572 | 4,548 | 4,453 | 4,530 | ||||||||||||||
Information services | 7,088 | 7,246 | 7,005 | 6,967 | 6,810 | ||||||||||||||
Net (benefit) cost from operation and sale of other real estate owned | (29 | ) | (50 | ) | 2 | 2 | (93 | ) | |||||||||||
47,846 | 47,892 | 47,914 | 49,964 | 49,471 | |||||||||||||||
Income from continuing operations before income taxes | 6,303 | 10,900 | 9,846 | 5,186 | 2,323 | ||||||||||||||
Income tax expense (benefit) from continuing operations | 1,245 | (1,575 | ) | 1,757 | 1,015 | 569 | |||||||||||||
Income from continuing operations | 5,058 | 12,475 | 8,089 | 4,171 | 1,754 | ||||||||||||||
(Loss) income from discontinued operations before income taxes | (8,440 | ) | 3,959 | 4,561 | 3,641 | 5,449 | |||||||||||||
Income tax (benefit) expense for discontinued operations | (1,667 | ) | 1,207 | 815 | 713 | 1,337 | |||||||||||||
(Loss) income from discontinued operations | (6,773 | ) | 2,752 | 3,746 | 2,928 | 4,112 | |||||||||||||
NET (LOSS) INCOME | $ | (1,715 | ) | $ | 15,227 | $ | 11,835 | $ | 7,099 | $ | 5,866 | ||||||||
Basic income (loss) per common share: | |||||||||||||||||||
Income from continuing operations | $ | 0.19 | $ | 0.46 | $ | 0.30 | $ | 0.15 | $ | 0.07 | |||||||||
(Loss) income from discontinued operations | (0.25 | ) | 0.10 | 0.14 | 0.11 | 0.15 | |||||||||||||
Basic (loss) income per share | $ | (0.06 | ) | $ | 0.56 | $ | 0.44 | $ | 0.26 | $ | 0.22 | ||||||||
Diluted income (loss) per common share: | |||||||||||||||||||
Income from continuing operations | $ | 0.19 | $ | 0.46 | $ | 0.30 | $ | 0.15 | $ | 0.06 | |||||||||
(Loss) income from discontinued operations | (0.25 | ) | 0.10 | 0.14 | 0.11 | 0.15 | |||||||||||||
Diluted (loss) income per share | $ | (0.06 | ) | $ | 0.56 | $ | 0.44 | $ | 0.26 | $ | 0.22 | ||||||||
Basic weighted average number of shares outstanding | 27,021,507 | 26,993,885 | 26,985,425 | 26,976,892 | 26,927,464 | ||||||||||||||
Diluted weighted average number of shares outstanding | 27,185,175 | 27,175,522 | 27,181,688 | 27,156,329 | 27,159,000 |
Assets: | Mar. 31, 2019 | Dec. 31, 2018 | Sept. 30, 2018 | June 30, 2018 | Mar. 31, 2018 | |||||||||||||||
Cash and cash equivalents | $ | 67,690 | $ | 57,982 | $ | 59,006 | $ | 176,218 | $ | 66,289 | ||||||||||
Investment securities | 816,878 | 923,253 | 903,685 | 907,457 | 915,483 | |||||||||||||||
Loans held for sale | 56,928 | 77,324 | 103,763 | 110,258 | 112,442 | |||||||||||||||
Loans held for investment, net | 5,345,969 | 5,075,371 | 5,026,301 | 4,883,310 | 4,758,261 | |||||||||||||||
Mortgage servicing rights | 95,942 | 101,963 | 101,843 | 88,419 | 90,972 | |||||||||||||||
Other real estate owned | 838 | 455 | 751 | 752 | 297 | |||||||||||||||
Federal Home Loan Bank stock, at cost | 32,533 | 45,497 | 40,732 | 48,157 | 41,923 | |||||||||||||||
Premises and equipment, net | 85,453 | 88,062 | 88,747 | 91,913 | 96,815 | |||||||||||||||
Lease right-of-use assets | 104,712 | — | — | — | — | |||||||||||||||
Goodwill | 29,857 | 22,564 | 22,564 | 22,564 | 22,564 | |||||||||||||||
Other assets | 171,776 | 173,413 | 164,970 | 162,648 | 166,808 | |||||||||||||||
Assets of discontinued operations | 362,829 | 476,337 | 516,720 | 672,181 | 652,202 | |||||||||||||||
Total assets | $ | 7,171,405 | $ | 7,042,221 | $ | 7,029,082 | $ | 7,163,877 | $ | 6,924,056 | ||||||||||
Liabilities and shareholders' equity: | ||||||||||||||||||||
Liabilities: | ||||||||||||||||||||
Deposits | $ | 5,178,334 | $ | 4,888,558 | $ | 4,943,545 | $ | 4,901,164 | $ | 4,803,674 | ||||||||||
Federal Home Loan Bank advances | 599,590 | 932,590 | 816,591 | 1,008,613 | 851,657 | |||||||||||||||
Accounts payable and other liabilities | 124,365 | 169,160 | 155,621 | 167,825 | 167,877 | |||||||||||||||
Federal funds purchased and securities sold under agreements to repurchase | 27,000 | 19,000 | 55,000 | — | 25,000 | |||||||||||||||
Other borrowings | — | — | — | 30,007 | (1) | — | ||||||||||||||
Long-term debt | 125,509 | 125,462 | 125,415 | 125,368 | 125,321 | |||||||||||||||
Lease liabilities | 120,224 | — | — | — | — | |||||||||||||||
Liabilities of discontinued operations | 249,352 | 167,931 | 218,128 | 224,441 | 249,564 | |||||||||||||||
Total liabilities | 6,424,374 | 6,302,701 | 6,314,300 | 6,457,418 | 6,223,093 | |||||||||||||||
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 | 342,049 | 342,439 | 341,606 | 340,723 | 339,902 | |||||||||||||||
Retained earnings | 411,826 | 412,009 | 396,782 | 384,947 | 377,848 | |||||||||||||||
Accumulated other comprehensive loss | (7,355 | ) | (15,439 | ) | (24,117 | ) | (19,722 | ) | (17,298 | ) | ||||||||||
Total shareholders' equity | 747,031 | 739,520 | 714,782 | 706,459 | 700,963 | |||||||||||||||
Total liabilities and shareholders' equity | $ | 7,171,405 | $ | 7,042,221 | $ | 7,029,082 | $ | 7,163,877 | $ | 6,924,056 |
(1) | Balance represents the annual test draw down on our HomeStreet Inc., line of credit. This balance was subsequently paid off in July 2018. |
Quarter Ended March 31, | Quarter Ended December 31, | Quarter Ended March 31, | ||||||||||||||||||||||||||||||
2019 | 2018 | 2018 | ||||||||||||||||||||||||||||||
(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 | $ | 58,650 | $ | 184 | 1.27 | % | $ | 75,747 | $ | 275 | 1.44 | % | $ | 79,026 | $ | 179 | 0.92 | % | ||||||||||||||
Investment securities | 891,813 | 6,048 | 2.71 | % | 917,300 | 6,532 | 2.85 | % | 915,562 | 6,086 | 2.65 | % | ||||||||||||||||||||
Loans held for sale(4) | 285,080 | 3,344 | 4.69 | % | 431,666 | 5,234 | 4.85 | % | 456,862 | 4,653 | 4.10 | % | ||||||||||||||||||||
Loans held for investment | 5,236,387 | 63,034 | 4.82 | % | 5,035,953 | 60,875 | 4.76 | % | 4,641,980 | 51,458 | 4.47 | % | ||||||||||||||||||||
Total interest-earning assets | 6,471,930 | 72,610 | 4.50 | % | 6,460,666 | 72,916 | 4.46 | % | 6,093,430 | 62,376 | 4.12 | % | ||||||||||||||||||||
Noninterest-earning assets (2)(4) | 721,795 | 652,321 | 656,823 | |||||||||||||||||||||||||||||
Total assets | $ | 7,193,725 | $ | 7,112,987 | $ | 6,750,253 | ||||||||||||||||||||||||||
Liabilities and shareholders' equity: | ||||||||||||||||||||||||||||||||
Deposits:(4) | ||||||||||||||||||||||||||||||||
Interest-bearing demand accounts | $ | 375,530 | $ | 375 | 0.41 | % | $ | 392,695 | $ | 392 | 0.40 | % | $ | 441,363 | $ | 440 | 0.40 | % | ||||||||||||||
Savings accounts | 240,900 | 150 | 0.25 | % | 257,247 | 174 | 0.27 | % | 293,108 | 230 | 0.31 | % | ||||||||||||||||||||
Money market accounts | 1,932,317 | 5,803 | 1.21 | % | 1,924,671 | 5,195 | 1.07 | % | 1,860,678 | 3,448 | 0.74 | % | ||||||||||||||||||||
Certificate accounts | 1,597,031 | 8,153 | 2.07 | % | 1,637,537 | 7,805 | 1.89 | % | 1,239,042 | 3,844 | 1.24 | % | ||||||||||||||||||||
Total interest-bearing deposits | 4,145,778 | 14,481 | 1.41 | % | 4,212,150 | 13,566 | 1.28 | % | 3,834,191 | 7,962 | 0.83 | % | ||||||||||||||||||||
Federal Home Loan Bank advances | 833,478 | 5,614 | 2.69 | % | 828,648 | 5,363 | 2.53 | % | 858,451 | 3,636 | 1.70 | % | ||||||||||||||||||||
Federal funds purchased and securities sold under agreements to repurchase | 47,778 | 304 | 2.54 | % | 26,421 | 159 | 2.36 | % | 7,333 | 32 | 1.76 | % | ||||||||||||||||||||
Other borrowings | 7,339 | 94 | 5.15 | % | — | — | — | % | — | — | — | % | ||||||||||||||||||||
Long-term debt | 125,480 | 1,744 | 5.56 | % | 125,435 | 1,705 | 5.40 | % | 125,290 | 1,584 | 5.07 | % | ||||||||||||||||||||
Total interest-bearing liabilities | 5,159,853 | 22,237 | 1.74 | % | 5,192,654 | 20,793 | 1.58 | % | 4,825,265 | 13,214 | 1.10 | % | ||||||||||||||||||||
Noninterest-bearing liabilities(4) | 1,283,406 | 1,186,364 | 1,207,246 | |||||||||||||||||||||||||||||
Total liabilities | 6,443,259 | 6,379,018 | 6,032,511 | |||||||||||||||||||||||||||||
Shareholders' equity | 750,466 | 733,969 | 717,742 | |||||||||||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 7,193,725 | $ | 7,112,987 | $ | 6,750,253 | ||||||||||||||||||||||||||
Net interest income (3) | $ | 50,373 | $ | 52,123 | $ | 49,162 | ||||||||||||||||||||||||||
Net interest spread | 2.76 | % | 2.88 | % | 3.02 | % | ||||||||||||||||||||||||||
Impact of noninterest-bearing sources | 0.35 | % | 0.31 | % | 0.23 | % | ||||||||||||||||||||||||||
Net interest margin | 3.11 | % | 3.19 | % | 3.25 | % |
(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 $670 thousand, $751 thousand and $702 thousand for the quarters ended March 31, 2019, December 31, 2018 and March 31, 2018, respectively. The estimated federal statutory tax rate was 21% for all the periods presented. |
(4) | Includes average balances of discontinued operations, which were impractical to remove for the periods presented. The NIM related to discontinued operations is immaterial. |
(in thousands, except for duration data) | Mar. 31, 2019 | Dec. 31, 2018 | Sept. 30, 2018 | June 30, 2018 | Mar. 31, 2018 | |||||||||||||||
Available for sale: | ||||||||||||||||||||
Mortgage-backed securities: | ||||||||||||||||||||
Residential | $ | 112,146 | $ | 107,961 | $ | 110,294 | $ | 115,848 | $ | 121,356 | ||||||||||
Commercial | 30,382 | 34,514 | 34,299 | 30,354 | 31,406 | |||||||||||||||
Municipal bonds | 351,360 | 385,655 | 372,582 | 361,799 | 374,640 | |||||||||||||||
Collateralized mortgage obligations: | ||||||||||||||||||||
Residential | 156,308 | 166,744 | 159,296 | 168,519 | 169,371 | |||||||||||||||
Commercial | 122,969 | 116,674 | 113,385 | 111,623 | 97,727 | |||||||||||||||
Corporate debt securities | 18,464 | 19,995 | 21,259 | 21,478 | 21,761 | |||||||||||||||
U.S. Treasury Securities | 11,037 | 10,900 | 10,670 | 10,438 | 10,489 | |||||||||||||||
Agency Debentures | 9,766 | 9,525 | 9,317 | 9,363 | 9,450 | |||||||||||||||
Total available for sale | 812,432 | 851,968 | 831,102 | 829,422 | 836,200 | |||||||||||||||
Held to maturity (1) | 4,446 | 71,285 | 72,584 | 78,035 | 79,283 | |||||||||||||||
$ | 816,878 | $ | 923,253 | $ | 903,686 | $ | 907,457 | $ | 915,483 | |||||||||||
Weighted average duration in years - available for sale | 4.4 | 4.6 | 4.8 | 4.7 | 6.0 |
(1) | In conjunction with adopting ASU 2017-12 in Q1 2019, we transferred $66.2 million HTM securities to AFS. |
(in thousands) | Mar. 31, 2019 | Dec. 31, 2018 | Sept. 30, 2018 | June 30, 2018 | Mar. 31, 2018 | |||||||||||||||
Consumer loans | ||||||||||||||||||||
Single family (1) | $ | 1,348,554 | $ | 1,358,175 | $ | 1,418,140 | $ | 1,416,072 | $ | 1,444,193 | ||||||||||
Home equity and other | 585,167 | 570,923 | 540,960 | 513,016 | 470,273 | |||||||||||||||
Total consumer | 1,933,721 | 1,929,098 | 1,959,100 | 1,929,088 | 1,914,466 | |||||||||||||||
Commercial real estate loans | ||||||||||||||||||||
Non-owner occupied commercial real estate | 780,939 | 701,928 | 667,429 | 640,984 | 633,719 | |||||||||||||||
Multifamily | 939,656 | 908,015 | 893,105 | 836,260 | 811,892 | |||||||||||||||
Construction/land development | 837,279 | 794,544 | 790,622 | 778,094 | 739,248 | |||||||||||||||
Total commercial real estate | 2,557,874 | 2,404,487 | 2,351,156 | 2,255,338 | 2,184,859 | |||||||||||||||
Commercial and industrial loans | ||||||||||||||||||||
Owner occupied commercial real estate | 450,450 | 429,158 | 420,724 | 400,149 | 393,845 | |||||||||||||||
Commercial business | 421,534 | 331,004 | 314,852 | 319,038 | 287,367 | |||||||||||||||
Total commercial and industrial loans | 871,984 | 760,162 | 735,576 | 719,187 | 681,212 | |||||||||||||||
Total loans before allowance, net deferred loan fees and costs | 5,363,579 | 5,093,747 | 5,045,832 | 4,903,613 | 4,780,537 | |||||||||||||||
Net deferred loan fees and costs | 25,566 | 23,094 | 20,907 | 19,177 | 16,814 | |||||||||||||||
5,389,145 | 5,116,841 | 5,066,739 | 4,922,790 | 4,797,351 | ||||||||||||||||
Allowance for loan losses | (43,176 | ) | (41,470 | ) | (40,438 | ) | (39,480 | ) | (39,090 | ) | ||||||||||
$ | 5,345,969 | $ | 5,075,371 | $ | 5,026,301 | $ | 4,883,310 | $ | 4,758,261 |
(1) | Includes $4.8 million, $4.1 million, $4.1 million, $4.2 million and $5.3 million of single family loans that are carried at fair value at March 31, 2019, December 31, 2018, September 30, 2018, June 30, 2018 and March 31, 2018, respectively. |
(in thousands) | Mar. 31, 2019 | Dec. 31, 2018 | Sept. 30, 2018 | June 30, 2018 | Mar. 31, 2018 | |||||||||||||||
Loans - beginning balance | $ | 5,093,747 | $ | 5,045,832 | $ | 4,903,613 | $ | 4,780,537 | $ | 4,529,627 | ||||||||||
Originations | 361,841 | 447,772 | 482,847 | 498,196 | 417,451 | |||||||||||||||
Purchases and advances | 383,576 | 268,098 | 254,948 | 260,680 | 236,851 | |||||||||||||||
Payoffs, paydowns, sales and other | (474,737 | ) | (667,676 | ) | (595,462 | ) | (634,580 | ) | (403,340 | ) | ||||||||||
Charge-offs and transfers to OREO | (848 | ) | (279 | ) | (114 | ) | (1,220 | ) | (52 | ) | ||||||||||
Loans - ending balance | $ | 5,363,579 | $ | 5,093,747 | $ | 5,045,832 | $ | 4,903,613 | $ | 4,780,537 | ||||||||||
Net change - loans outstanding | $ | 269,832 | $ | 47,915 | $ | 142,219 | $ | 123,076 | $ | 250,910 |
(in thousands) | Mar. 31, 2019 | Dec. 31, 2018 | Sept. 30, 2018 | June 30, 2018 | Mar. 31, 2018 | |||||||||||||||
Consumer loans | ||||||||||||||||||||
Single family | $ | 36,545 | $ | 54,871 | $ | 107,040 | $ | 186,837 | $ | 124,608 | ||||||||||
Home equity and other | 96,768 | 124,388 | 124,446 | 140,968 | 91,794 | |||||||||||||||
Total consumer | 133,313 | 179,259 | 231,486 | 327,805 | 216,402 | |||||||||||||||
Commercial real estate loans | ||||||||||||||||||||
Non-owner occupied commercial real estate | 45,008 | 64,572 | 49,257 | 23,577 | 35,650 | |||||||||||||||
Multifamily | 141,748 | 151,769 | 136,827 | 89,112 | 88,698 | |||||||||||||||
Construction/land development | 147,030 | 240,680 | 235,857 | 346,249 | 302,444 | |||||||||||||||
Total commercial real estate | 333,786 | 457,021 | 421,941 | 458,938 | 426,792 | |||||||||||||||
Commercial and industrial loans | ||||||||||||||||||||
Owner occupied commercial real estate | 6,623 | 16,744 | 8,590 | 7,693 | 11,213 | |||||||||||||||
Commercial business | 72,737 | 39,322 | 63,358 | 44,332 | 36,555 | |||||||||||||||
Total commercial and industrial loans | 79,360 | 56,066 | 71,948 | 52,025 | 47,768 | |||||||||||||||
$ | 546,459 | $ | 692,346 | $ | 725,375 | $ | 838,768 | $ | 690,962 |
Quarter Ended | ||||||||||||||||||||
(in thousands) | Mar. 31, 2019 | Dec. 31, 2018 | Sept. 30, 2018 | June 30, 2018 | Mar. 31, 2018 | |||||||||||||||
Beginning balance | $ | 42,913 | $ | 41,854 | $ | 40,982 | $ | 40,446 | $ | 39,116 | ||||||||||
Provision for credit losses | 1,500 | 500 | 750 | 1,000 | 750 | |||||||||||||||
Recoveries, net of (charge-offs) | 123 | 559 | 122 | (464 | ) | 580 | ||||||||||||||
Ending balance | $ | 44,536 | $ | 42,913 | $ | 41,854 | $ | 40,982 | $ | 40,446 | ||||||||||
Components: | ||||||||||||||||||||
Allowance for loan losses | $ | 43,176 | $ | 41,470 | $ | 40,438 | $ | 39,480 | $ | 39,090 | ||||||||||
Allowance for unfunded commitments | 1,360 | 1,443 | 1,416 | 1,502 | 1,356 | |||||||||||||||
Allowance for credit losses | $ | 44,536 | $ | 42,913 | $ | 41,854 | $ | 40,982 | $ | 40,446 | ||||||||||
Allowance as a % of loans held for investment (1) (2) | 0.80 | % | 0.81 | % | 0.80 | % | 0.80 | % | 0.81 | % | ||||||||||
Allowance as a % of nonaccrual loans | 271.99 | % | 356.92 | % | 419.57 | % | 409.97 | % | 359.32 | % |
(1) | Includes loans acquired in bank acquisitions. Excluding acquired loans, allowance for loan losses/total loans was 0.86%, 0.85%, 0.84%, 0.85% and 0.87% at March 31, 2019, December 31, 2018, September 30, 2018, June 30, 2018 and March 31, 2018, respectively. |
(2) | In this calculation, loans held for investment includes loans that are carried at fair value. |
(in thousands) | Mar. 31, 2019 | Dec. 31, 2018 | Sept. 30, 2018 | June 30, 2018 | Mar. 31, 2018 | |||||||||||||||
Nonaccrual loans (1) | $ | 15,874 | $ | 11,619 | $ | 9,638 | $ | 9,630 | $ | 10,879 | ||||||||||
Other real estate owned | 838 | 455 | 751 | 751 | 297 | |||||||||||||||
Total nonperforming assets (2) | $ | 16,712 | $ | 12,074 | $ | 10,389 | $ | 10,381 | $ | 11,176 | ||||||||||
Nonaccrual loans as a % of total loans | 0.29 | % | 0.23 | % | 0.19 | % | 0.20 | % | 0.23 | % | ||||||||||
Nonperforming assets as a % of total assets | 0.23 | % | 0.17 | % | 0.15 | % | 0.14 | % | 0.16 | % |
(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, $1.4 million and $1.7 million of nonperforming loans guaranteed by the SBA at March 31, 2019, December 31, 2018, September 30, 2018, June 30, 2018 and March 31, 2018, respectively. |
Quarter Ended | ||||||||||||||||||||
(in thousands) | Mar. 31, 2019 | Dec. 31, 2018 | Sept. 30, 2018 | June 30, 2018 | Mar. 31, 2018 | |||||||||||||||
Beginning balance | $ | 12,074 | $ | 10,389 | $ | 10,381 | $ | 11,176 | $ | 15,705 | ||||||||||
Additions | 6,887 | 3,139 | 1,390 | 2,097 | 698 | |||||||||||||||
Reductions: | ||||||||||||||||||||
Gross charge-offs | (4 | ) | (148 | ) | (78 | ) | (76 | ) | (47 | ) | ||||||||||
OREO sales | (455 | ) | (297 | ) | — | — | (367 | ) | ||||||||||||
Principal paydowns, payoff advances, and equity adjustments | (1,695 | ) | (709 | ) | (642 | ) | (2,001 | ) | (891 | ) | ||||||||||
Transferred back to accrual status | (95 | ) | (300 | ) | (662 | ) | (815 | ) | (3,922 | ) | ||||||||||
Total reductions | (2,249 | ) | (1,454 | ) | (1,382 | ) | (2,892 | ) | (5,227 | ) | ||||||||||
Net additions (reductions) | 4,638 | 1,685 | 8 | (795 | ) | (4,529 | ) | |||||||||||||
Ending balance (1) | $ | 16,712 | $ | 12,074 | $ | 10,389 | $ | 10,381 | $ | 11,176 |
(1) | Includes $1.7 million, $1.9 million, $1.4 million, $1.4 million and $1.7 million of nonperforming loans guaranteed by the SBA at March 31, 2019, December 31, 2018, September 30, 2018, June 30, 2018 and March 31, 2018, 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, 2019 | ||||||||||||||||||||||||
Total loans held for investment | $ | 6,670 | $ | 7,551 | $ | 45,147 | $ | 59,368 | $ | 5,304,211 | $ | 5,363,579 | ||||||||||||
Less: FHA/VA loans (1) | 4,928 | 4,119 | 29,273 | 38,320 | 71,058 | 109,378 | ||||||||||||||||||
Less: guaranteed portion of SBA loans (2) | — | — | 1,682 | 1,682 | 6,864 | 8,546 | ||||||||||||||||||
Total loans, excluding FHA/VA and guaranteed portion of SBA loans | $ | 1,742 | $ | 3,432 | $ | 14,192 | $ | 19,366 | $ | 5,226,289 | $ | 5,245,655 | ||||||||||||
As a % of total loans, excluding FHA/VA and guaranteed portion of SBA loans | 0.03 | % | 0.07 | % | 0.27 | % | 0.37 | % | 99.63 | % | 100.00 | % | ||||||||||||
December 31, 2018 | ||||||||||||||||||||||||
Total loans held for investment | $ | 9,870 | $ | 3,753 | $ | 50,735 | $ | 64,358 | $ | 5,029,389 | $ | 5,093,747 | ||||||||||||
Less: FHA/VA loans (1) | 7,003 | 3,583 | 39,116 | 49,702 | 70,589 | 120,291 | ||||||||||||||||||
Less: guaranteed portion of SBA loans (2) | — | — | 1,872 | 1,872 | 6,726 | 8,598 | ||||||||||||||||||
Total loans, excluding FHA/VA and guaranteed portion of SBA loans | $ | 2,867 | $ | 170 | $ | 9,747 | $ | 12,784 | $ | 4,952,074 | $ | 4,964,858 | ||||||||||||
As a % of total loans, excluding FHA/VA and guaranteed portion of SBA loans | 0.06 | % | — | % | 0.20 | % | 0.26 | % | 99.74 | % | 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, 2019 | Dec. 31, 2018 | Sept. 30, 2018 | June 30, 2018 | Mar. 31, 2018 | |||||||||||||||
Commercial | ||||||||||||||||||||
Multifamily DUS® (1) | $ | 1,435,036 | $ | 1,458,020 | $ | 1,442,727 | $ | 1,357,929 | $ | 1,323,937 | ||||||||||
Other | 86,561 | 84,457 | 83,308 | 82,083 | 81,436 | |||||||||||||||
Total commercial loans serviced for others | 1,521,597 | 1,542,477 | 1,526,035 | 1,440,012 | 1,405,373 | |||||||||||||||
Single family | ||||||||||||||||||||
U.S. government and agency | 5,450,159 | 19,541,450 | 19,211,119 | 18,493,704 | 22,715,153 | |||||||||||||||
Other | 602,235 | 610,285 | 593,144 | 579,472 | 504,423 | |||||||||||||||
Total single family loans serviced for others | 6,052,394 | 20,151,735 | 19,804,263 | 19,073,176 | 23,219,576 | |||||||||||||||
Total loans serviced for others | $ | 7,573,991 | $ | 21,694,212 | $ | 21,330,298 | $ | 20,513,188 | $ | 24,624,949 | ||||||||||
(1) | Fannie Mae Multifamily Delegated Underwriting and Servicing Program ("DUS"®) is a registered trademark of Fannie Mae. |
Quarter Ended | ||||||||||||||||||||
(in thousands) | Mar. 31, 2019 | Dec. 31, 2018 | Sept. 30, 2018 | June 30, 2018 | Mar. 31, 2018 | |||||||||||||||
Commercial loan servicing income, net: | ||||||||||||||||||||
Servicing fees and other | $ | 2,419 | $ | 2,107 | $ | 1,988 | $ | 2,001 | $ | 1,957 | ||||||||||
Amortization of capitalized MSRs | (1,376 | ) | (1,236 | ) | (1,034 | ) | (1,064 | ) | (1,049 | ) | ||||||||||
Commercial loan servicing income | 1,043 | 871 | 954 | 937 | 908 | |||||||||||||||
Single family servicing income, net:(4) | ||||||||||||||||||||
Servicing fees and other | 14,938 | 14,949 | 13,058 | 16,384 | 16,494 | |||||||||||||||
Changes in fair value of single family MSRs due to amortization (1) | (8,983 | ) | (8,135 | ) | (8,300 | ) | (9,400 | ) | (8,870 | ) | ||||||||||
5,955 | 6,814 | 4,758 | 6,984 | 7,624 | ||||||||||||||||
Risk management, single family MSRs:(4) | ||||||||||||||||||||
Changes in fair value of MSR due to changes in model inputs and/or assumptions (2) | (5,278 | ) | (3) | (13,532 | ) | 11,562 | 11,299 | (3) | 30,019 | |||||||||||
Net gain (loss) from derivatives economically hedging MSR | 3,683 | 12,137 | (9,446 | ) | (12,188 | ) | (30,977 | ) | ||||||||||||
(1,595 | ) | (1,395 | ) | 2,116 | (889 | ) | (958 | ) | ||||||||||||
Single Family servicing income | 4,360 | 5,419 | 6,874 | 6,095 | 6,666 | |||||||||||||||
Total loan servicing income | $ | 5,403 | $ | 6,290 | $ | 7,828 | $ | 7,032 | $ | 7,574 | ||||||||||
(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) | Includes pre-tax income of $774 thousand and $573 thousand, net of transaction costs and prepayment reserves, for the first quarter of 2019 and the second quarter 2018, respectively, sales of single family MSRs. |
(4) | Includes both continuing and discontinued operations. |
Quarter Ended | ||||||||||||||||||||
(in thousands) | Mar. 31, 2019 | Dec. 31, 2018 | Sept. 30, 2018 | June 30, 2018 | Mar. 31, 2018 | |||||||||||||||
Commercial Mortgage Servicing Rights | ||||||||||||||||||||
Beginning balance | $ | 28,326 | $ | 28,136 | $ | 26,460 | $ | 26,042 | 26,093 | |||||||||||
Originations | 631 | 1,267 | 2,657 | 1,409 | 934 | |||||||||||||||
Amortization | (1,265 | ) | (1,077 | ) | (981 | ) | (991 | ) | (985 | ) | ||||||||||
Ending balance | $ | 27,692 | $ | 28,326 | $ | 28,136 | $ | 26,460 | $ | 26,042 | ||||||||||
Ratio of MSR carrying value to related loans serviced for others | 1.92 | % | 1.93 | % | 1.94 | % | 1.93 | % | 1.95 | % | ||||||||||
MSR servicing fee multiple (1) | 3.99 | 4.02 | 4.04 | 4.03 | 4.05 | |||||||||||||||
Weighted-average note rate (loans serviced for others) | 4.40 | % | 4.39 | % | 4.38 | % | 4.34 | % | 4.34 | % | ||||||||||
Weighted-average servicing fee (loans serviced for others) | 0.48 | % | 0.48 | % | 0.48 | % | 0.48 | % | 0.48 | % | ||||||||||
Single Family Mortgage Servicing Rights | ||||||||||||||||||||
Beginning balance | $ | 252,168 | $ | 263,622 | $ | 245,744 | $ | 294,062 | $ | 258,560 | ||||||||||
Additions and amortization: | ||||||||||||||||||||
Originations | 7,287 | 10,057 | 14,525 | 16,673 | 14,353 | |||||||||||||||
Sale of servicing rights | (176,944 | ) | — | (12 | ) | (66,890 | ) | — | ||||||||||||
Changes due to amortization (2) | (8,983 | ) | (8,135 | ) | (8,300 | ) | (9,400 | ) | (8,870 | ) | ||||||||||
Net additions and amortization | (178,640 | ) | 1,922 | 6,213 | (59,617 | ) | 5,483 | |||||||||||||
Changes in fair value due to changes in model inputs and/or assumptions (3) | (5,278 | ) | (4) | (13,376 | ) | 11,665 | 11,299 | (4) | 30,019 | |||||||||||
Ending balance | $ | 68,250 | $ | 252,168 | $ | 263,622 | $ | 245,744 | $ | 294,062 | ||||||||||
Ratio of MSR carrying value to related loans serviced for others | 1.13 | % | 1.25 | % | 1.33 | % | 1.29 | % | 1.27 | % | ||||||||||
MSR servicing fee multiple (5) | 3.86 | 4.34 | 4.61 | 4.47 | 4.49 | |||||||||||||||
Weighted-average note rate (loans serviced for others) | 4.32 | % | 4.19 | % | 4.15 | % | 4.10 | % | 4.01 | % | ||||||||||
Weighted-average servicing fee (loans serviced for others) | 0.29 | % | 0.29 | % | 0.29 | % | 0.29 | % | 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) | Includes pre-tax income of $774 thousand and $573 thousand, net of transaction costs and prepayment reserves, resulting from the first quarter of 2019 and the second quarter 2018 sale of single family MSRs, respectively. |
(4) | 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, 2019 | Dec. 31, 2018 | Sept. 30, 2018 | June 30, 2018 | Mar. 31, 2018 | |||||||||||||||
Deposits by Product:(1) | ||||||||||||||||||||
Noninterest-bearing accounts - checking and savings | $ | 683,840 | $ | 612,540 | $ | 608,839 | $ | 627,893 | $ | 595,549 | ||||||||||
Interest-bearing transaction and savings deposits: | ||||||||||||||||||||
NOW accounts | 415,402 | 376,137 | 442,158 | 486,104 | 480,620 | |||||||||||||||
Statement savings accounts due on demand | 241,747 | 245,795 | 272,949 | 283,969 | 295,096 | |||||||||||||||
Money market accounts due on demand | 2,014,662 | 1,935,516 | 1,907,782 | 1,932,340 | 1,926,153 | |||||||||||||||
Total interest-bearing transaction and savings deposits | 2,671,811 | 2,557,448 | 2,622,889 | 2,702,413 | 2,701,869 | |||||||||||||||
Total transaction and savings deposits | 3,355,651 | 3,169,988 | 3,231,728 | 3,330,306 | 3,297,418 | |||||||||||||||
Certificates of deposit | 1,644,768 | 1,579,806 | 1,548,392 | 1,396,082 | 1,319,842 | |||||||||||||||
Noninterest-bearing accounts - other | 397,015 | 301,614 | 374,922 | 393,897 | 431,736 | |||||||||||||||
Total deposits | $ | 5,397,434 | $ | 5,051,408 | $ | 5,155,042 | $ | 5,120,285 | $ | 5,048,996 | ||||||||||
Percent of total deposits: | ||||||||||||||||||||
Noninterest-bearing accounts - checking and savings | 12.7 | % | 12.1 | % | 11.8 | % | 12.3 | % | 11.8 | % | ||||||||||
Interest-bearing transaction and savings deposits: | ||||||||||||||||||||
NOW accounts | 7.7 | 7.4 | 8.6 | 9.5 | 9.5 | |||||||||||||||
Statement savings accounts, due on demand | 4.5 | 4.9 | 5.3 | 5.5 | 5.8 | |||||||||||||||
Money market accounts, due on demand | 37.3 | 38.3 | 37.0 | 37.7 | 38.1 | |||||||||||||||
Total interest-bearing transaction and savings deposits | 49.5 | 50.6 | 50.9 | 52.7 | 53.4 | |||||||||||||||
Total transaction and savings deposits | 62.2 | 62.7 | 62.7 | 65.0 | 65.2 | |||||||||||||||
Certificates of deposit | 30.5 | 31.3 | 30.0 | 27.3 | 26.1 | |||||||||||||||
Noninterest-bearing accounts - other | 7.3 | 6.0 | 7.3 | 7.7 | 8.7 | |||||||||||||||
Total deposits | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
(1) | Includes $219.1 million, $162.8 million, $211.5 million, $219.1 million, $245.3 million in servicing deposits related to discontinued operations for the periods ended March 31, 2019, December 31, 2018, September 30, 2018, June 30, 2018 and March 31, 2018, respectively. |
Quarter Ended | |||||||||||||||||||
(dollars in thousands, except share data) | Mar. 31, 2019 | Dec. 31, 2018 | Sept. 30, 2018 | June 30, 2018 | Mar. 31, 2018 | ||||||||||||||
Shareholders' equity | $ | 747,031 | $ | 739,520 | $ | 714,782 | $ | 706,459 | $ | 700,963 | |||||||||
Less: Goodwill and other intangibles | (36,919 | ) | (28,035 | ) | (28,442 | ) | (28,848 | ) | (29,254 | ) | |||||||||
Tangible shareholders' equity (1) | $ | 710,112 | $ | 711,485 | $ | 686,340 | $ | 677,611 | $ | 671,709 | |||||||||
Common shares outstanding | 27,038,257 | 26,995,348 | 26,989,742 | 26,978,229 | 26,972,074 | ||||||||||||||
Shareholders' equity per share | $ | 27.63 | $ | 27.39 | $ | 26.48 | $ | 26.19 | $ | 25.99 | |||||||||
Impact of goodwill and other intangibles | (1.37 | ) | (1.03 | ) | (1.05 | ) | (1.07 | ) | (1.09 | ) | |||||||||
Tangible book value per share (2) | $ | 26.26 | $ | 26.36 | $ | 25.43 | $ | 25.12 | $ | 24.90 | |||||||||
Average shareholders' equity | $ | 750,466 | $ | 733,969 | $ | 760,446 | $ | 751,593 | $ | 717,742 | |||||||||
Less: Average goodwill and other intangibles | (28,611 | ) | (28,277 | ) | (28,698 | ) | (29,109 | ) | (29,500 | ) | |||||||||
Average tangible shareholders' equity | $ | 721,855 | $ | 705,692 | $ | 731,748 | $ | 722,484 | $ | 688,242 | |||||||||
Return on average shareholders' equity | (0.91 | )% | 8.30 | % | 6.23 | % | 3.78 | % | 3.27 | % | |||||||||
Impact of goodwill and other intangibles | (0.04 | )% | 0.33 | % | 0.24 | % | 0.15 | % | 0.14 | % | |||||||||
Return on average tangible shareholders' equity (2) | (0.95 | )% | 8.63 | % | 6.47 | % | 3.93 | % | 3.41 | % | |||||||||
Return on average shareholders' equity | (0.91 | )% | 8.30 | % | 6.23 | % | 3.78 | % | 3.27 | % | |||||||||
Impact of tax reform-related benefit | — | % | (2.66 | )% | — | % | — | % | — | % | |||||||||
Impact of restructuring-related expenses (net of tax) | 5.10 | % | (0.37 | )% | 0.22 | % | 2.90 | % | (0.13 | )% | |||||||||
Impact of acquisition-related expenses (net of tax) | 0.15 | % | 0.03 | % | — | % | — | % | (0.02 | )% | |||||||||
Return on average shareholders' equity, excluding income tax reform-related benefit, restructuring-related (net of tax) and acquisition-related expenses (net of tax) | 4.34 | % | 5.30 | % | 6.45 | % | 6.68 | % | 3.12 | % | |||||||||
Return on average assets | (0.10 | )% | 0.86 | % | 0.66 | % | 0.40 | % | 0.35 | % | |||||||||
Impact of tax reform-related benefit | — | % | (0.27 | )% | — | — | — | ||||||||||||
Impact of restructuring-related expenses (net of tax) | 0.53 | % | (0.04 | )% | 0.02 | % | 0.31 | % | (0.01 | )% | |||||||||
Impact of acquisition-related expenses (net of tax) | 0.02 | % | — | % | 0.01 | % | — | % | (0.01 | )% | |||||||||
Return on average assets, excluding income tax reform-related benefit, restructuring-related (net of tax) and acquisition-related expenses (net of tax) | 0.45 | % | 0.55 | % | 0.69 | % | 0.71 | % | 0.33 | % |
(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, a non-GAAP financial measure is calculated by dividing tangible shareholders' equity by the number of common shares outstanding. The return on average tangible shareholders' equity, a non-GAAP financial measure is calculated by dividing net earnings available to common shareholders (annualized) by average tangible shareholders' equity. |
Quarter Ended | |||||||||||||||||||
(in thousands) | Mar. 31, 2019 | Dec. 31, 2018 | Sept. 30, 2018 | June 30, 2018 | Mar. 31, 2018 | ||||||||||||||
Consolidated results (consolidated): | |||||||||||||||||||
Net (loss) income | $ | (1,715 | ) | $ | 15,227 | $ | 11,835 | $ | 7,099 | $ | 5,866 | ||||||||
Impact of income tax reform-related benefit | — | (4,884 | ) | — | — | — | |||||||||||||
Impact of loss on exit or disposal and restructuring-related (recoveries) expenses, net of tax | 9,564 | (676 | ) | 414 | 5,445 | (230 | ) | ||||||||||||
Impact of acquisition-related (recoveries) expenses, net of tax | 290 | 54 | 4 | 3 | (39 | ) | |||||||||||||
Core net income | $ | 8,139 | $ | 9,721 | $ | 12,253 | $ | 12,547 | $ | 5,597 | |||||||||
Noninterest expense (2) | 97,700 | 84,644 | 94,595 | 110,565 | 100,769 | ||||||||||||||
Impact of loss on exit or disposal and restructuring-related (expenses) recoveries (1) | (12,106 | ) | 856 | (524 | ) | (6,892 | ) | 291 | |||||||||||
Impact of acquisition-related recoveries (expenses) | (367 | ) | (68 | ) | (5 | ) | (4 | ) | 50 | ||||||||||
Noninterest expense, excluding restructuring and acquisition-related recoveries (expenses) | $ | 85,227 | $ | 85,432 | $ | 94,066 | $ | 103,669 | $ | 101,110 | |||||||||
Efficiency ratio | 100.66 | % | 84.64 | % | 86.19 | % | 91.84 | % | 92.20 | % | |||||||||
Impact of loss on exit or disposal and restructuring-related (expenses) recoveries | (12.47 | )% | 0.86 | % | (0.48 | )% | (5.72 | )% | 0.26 | % | |||||||||
Impact of acquisition-related (expenses) recoveries | (0.38 | )% | (0.07 | )% | — | % | (0.01 | )% | 0.05 | % | |||||||||
Core efficiency ratio | 87.81 | % | 85.43 | % | 85.71 | % | 86.11 | % | 92.51 | % | |||||||||
Diluted earnings per common share | $ | (0.06 | ) | $ | 0.56 | $ | 0.44 | $ | 0.26 | $ | 0.22 | ||||||||
Impact of income tax reform-related benefit | — | (0.18 | ) | — | — | — | |||||||||||||
Impact of loss on exit or disposal and restructuring-related (recoveries) expenses, net of tax | 0.35 | (0.02 | ) | 0.01 | 0.20 | (0.01 | ) | ||||||||||||
Impact of acquisition-related (recoveries) expenses, net of tax | 0.01 | — | — | — | — | ||||||||||||||
Core diluted earnings per common share | $ | 0.30 | $ | 0.36 | $ | 0.45 | $ | 0.46 | $ | 0.21 | |||||||||
Return on average tangible shareholders' equity | (0.95 | )% | 8.63 | % | 6.47 | % | 3.93 | % | 3.41 | % | |||||||||
Impact of income tax reform-related benefit | — | % | (2.77 | )% | — | % | — | % | — | % | |||||||||
Impact of loss on exit or disposal and restructuring-related expenses (recoveries), net of tax | 5.30 | % | (0.38 | )% | 0.23 | % | 3.01 | % | (0.13 | )% | |||||||||
Impact of acquisition-related (recoveries) expenses, net of tax | 0.16 | % | 0.03 | % | — | % | 0.01 | % | (0.03 | )% | |||||||||
Return on average tangible shareholders' equity, excluding income tax reform-related benefit, loss on exit or disposal and restructuring-related expenses, net of tax, and acquisition-related (recoveries) expenses, net of tax | 4.51 | % | 5.51 | % | 6.70 | % | 6.95 | % | 3.25 | % | |||||||||
Reconciliation of adjusted noninterest expense from continuing operations: | |||||||||||||||||||
Noninterest expense from continuing operations | 47,846 | 47,892 | 47,914 | 49,964 | 49,471 | ||||||||||||||
Impact of stranded costs (3) | (8,294 | ) | (9,492 | ) | (10,104 | ) | (10,679 | ) | (11,199 | ) | |||||||||
Adjusted noninterest expense from continuing operations | $ | 39,552 | $ | 38,400 | $ | 37,810 | $ | 39,285 | $ | 38,272 |
(1) | Gain /loss on disposal and restructuring costs in Q1 2019 contain $10.7 million, $1.1 million and $1.1 million related to facilities & IT, severance, and other costs, respectively, and a $774 thousand gain on sale of MSR. |
(2) | Includes noninterest expense from discontinued operations in the amount of $49.9 million, $36.8 million, $46.7 million, $60.6 million $51.3 million for the three months ended March 31, 2019, December 31, 2018, September 30, 2018, June 30, 2018 and March 31, 2018, respectively. |
(3) | As a result of the Board's plan of exit or disposal, the revenues and certain expenses associated with the businesses sold have been classified as discontinued operations. Expenses classified within discontinued operations include only direct operating expenses incurred by the businesses discontinued that are identifiable as costs of the businesses sold, but only to the extent that we did not continue to recognize such expenses after the close of the transaction. Certain indirect costs, such as those related to corporate overhead and shared service functions, such as IT, HR, legal and accounting, that were previously allocated to the businesses discontinued and other expenses that do not meet the foregoing criteria are reported within continuing operations. These costs reported within continuing operations ("Stranded Costs") are included in Adjusted noninterest expense from continuing operations for all periods presented. |
• | Approved a plan of exit or disposal of our home loan center-based mortgage origination business and related mortgage loan servicing, resulting in a recast of our financial statements to reflect discontinued operations accounting and the elimination of segment reporting |
• | Entered into an agreement on April 4, 2019 to sell substantially all of our stand-alone home loan centers and to transfer to the buyer a significant portion of the related personnel - expected to be completed in the second quarter of 2019 |
• | Sold single family mortgage servicing rights ("MSRs") totaling $14.26 billion in unpaid principal balance, representing $176.9 in MSR fair value |
• | Approved a $75 million common stock repurchase program |
• | Completed the acquisition of a retail deposit branch in San Marcos, California, with approximately $74.5 million in deposits, along with $112.1 million of commercial loans and a San Diego County focused commercial lending team |
• | Opened two de novo retail branches in San Jose and Santa Clara, California |
• | Grew loans held for investment to $5.36 billion, an increase of 5% from December 31, 2018, and 12% from March 31, 2018 |
• | Increased deposits to $5.18 billion, an increase of 6% from December 31, 2018, and 8% from March 31, 2018 |
• | Increased noninterest bearing deposits to $683.8 million, an increase of 12% from December 31, 2018, and 15% from March 31, 2018 |
Contact: | Investor Relations: | |
HomeStreet, Inc. | ||
Gerhard Erdelji (206) 515-4039 | ||
Gerhard.Erdelji@HomeStreet.com | ||
http://ir.homestreet.com |
Quarter Ended | ||||||||
(in thousands) | Mar. 31, 2019 | Mar. 31, 2018 | ||||||
Consolidated results: | ||||||||
Net income | $ | (1,715 | ) | $ | 5,866 | |||
Impact of income tax reform-related benefit | — | — | ||||||
Impact of loss on disposal and restructuring-related expenses (recoveries), net of tax | 9,564 | (230 | ) | |||||
Impact of acquisition-related expenses (recoveries), net of tax | 290 | (39 | ) | |||||
Core net income | $ | 8,139 | $ | 5,597 | ||||
Diluted earnings per common share | $ | (0.06 | ) | $ | 0.22 | |||
Impact of loss on disposal and restructuring-related expenses (recoveries), net of tax | 0.35 | (0.01 | ) | |||||
Impact of acquisition-related expenses (recoveries), net of tax | 0.01 | — | ||||||
Core diluted earnings per common share | $ | 0.30 | $ | 0.21 |
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