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)) |
Securities registered pursuant to Section 12(b) of the Act: |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common Stock, No Par Value | HMST | Nasdaq Stock Market LLC |
[ ] | 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 | |||
• | Adopted the Current Expected Credit Losses ("CECL") accounting standard resulting in an increase in our allowance for credit losses of $3.7 million at January 1, 2020, or 9%, as compared to our December 31, 2019 aggregate reserve levels. This "Day 1" adjustment was recorded in retained earnings and did not impact net income |
• | Recorded a provision for credit losses of $14.0 million in the first quarter of 2020 exclusively due to the forecasted economic impacts of COVID-19 |
• | Reported net income for the first quarter of 2020 of $7.1 million, or $0.30 per diluted share, compared with $11.0 million, or $0.45 per diluted share for the fourth quarter of 2019 |
• | Reported core net income for the first quarter of 2020 of $8.1 million, or $0.34 per diluted share, compared with $12.7 million, or $0.52 per diluted share for the fourth quarter of 2019 |
• | Reported core pre provision income from continuing operations before income taxes of $24.1 million in the first quarter of 2020 |
• | Increased net interest margin for the first quarter of 2020 to 2.93% compared to 2.87% for the fourth quarter of 2019 |
• | Period ending cost of deposits fell from 1.22% on December 31, 2019, to 0.72% on March 31, 2020 |
• | Increased business core deposits - checking, savings and money market by $72.6 million, or 4.5%, and increased consumer core deposits by $117.5 million, or 6.1% |
• | Reduced full time equivalent employees to 996 at March 31, 2020 compared to 1,071 and 1,221 at December 31, 2019 and June 30, 2019, a 7.0% and 18.4% reduction, respectively |
• | Ended the quarter with consolidated Tier 1 and Risk-Based capital ratios of 10.06% and 13.95%, respectively at the Bank, 10.15% and 13.50%, respectively at the Company, and tangible book value per share of $27.52 |
• | Authorized a quarterly dividend of $0.15 per share to be paid on May 20, 2020 to holders of our common stock of record on May 4, 2020 |
• | Repurchased a total of 580,278 shares of our common stock at an average price of $27.57 per share in the first quarter of 2020 |
• | Suspended our $25 million stock repurchase program with $17.1 million in authorized purchases remaining, and withdrew the subsequent $10 million additional repurchase authorization |
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, 2020 | Dec. 31, 2019 | Sept. 30, 2019 | June 30, 2019 | Mar. 31, 2019 | |||||||||||||||
Income statement data (for the period ended): | ||||||||||||||||||||
Net interest income | $ | 45,434 | $ | 45,512 | $ | 47,134 | $ | 49,187 | $ | 47,557 | ||||||||||
Provision for credit losses | 14,000 | (2,000 | ) | — | — | 1,500 | ||||||||||||||
Noninterest income | 32,630 | 21,931 | 24,580 | 19,829 | 8,092 | |||||||||||||||
Noninterest expense | 55,184 | 53,215 | 55,721 | 58,832 | 47,846 | |||||||||||||||
Income from continuing operations before income taxes | 8,880 | 16,228 | 15,993 | 10,184 | 6,303 | |||||||||||||||
Income tax expense from continuing operations | 1,741 | 3,123 | 2,328 | 1,292 | 1,245 | |||||||||||||||
Income from continuing operations | 7,139 | 13,105 | 13,665 | 8,892 | 5,058 | |||||||||||||||
(Loss) income from discontinued operations before income taxes | — | (3,357 | ) | 190 | (16,678 | ) | (8,440 | ) | ||||||||||||
Income tax (benefit) expense from discontinued operations | — | (1,240 | ) | 28 | (2,198 | ) | (1,667 | ) | ||||||||||||
(Loss) income from discontinued operations (1) | — | (2,117 | ) | 162 | (14,480 | ) | (6,773 | ) | ||||||||||||
NET INCOME (LOSS) | $ | 7,139 | $ | 10,988 | $ | 13,827 | $ | (5,588 | ) | $ | (1,715 | ) | ||||||||
Basic income (loss) per common share: | ||||||||||||||||||||
Income from continuing operations | $ | 0.30 | $ | 0.54 | $ | 0.55 | $ | 0.32 | $ | 0.19 | ||||||||||
(Loss) income from discontinued operations | — | (0.09 | ) | 0.01 | (0.54 | ) | (0.25 | ) | ||||||||||||
Basic income (loss) per common share | $ | 0.30 | $ | 0.45 | $ | 0.55 | $ | (0.22 | ) | $ | (0.06 | ) | ||||||||
Diluted income (loss) per common share: | ||||||||||||||||||||
Income from continuing operations | $ | 0.30 | $ | 0.54 | $ | 0.54 | $ | 0.32 | $ | 0.19 | ||||||||||
(Loss) income from discontinued operations | — | (0.09 | ) | 0.01 | (0.54 | ) | (0.25 | ) | ||||||||||||
Diluted income (loss) per common share | $ | 0.30 | $ | 0.45 | $ | 0.55 | $ | (0.22 | ) | $ | (0.06 | ) | ||||||||
Common shares outstanding | 23,376,793 | 23,890,855 | 24,408,513 | 26,085,164 | 27,038,257 | |||||||||||||||
Core net income (3) | $ | 8,110 | $ | 12,715 | $ | 13,505 | $ | 4,076 | $ | 8,139 | ||||||||||
Core diluted income per common share (3) | $ | 0.34 | $ | 0.52 | $ | 0.54 | $ | 0.14 | $ | 0.30 | ||||||||||
Core net income from continuing operations (3) | $ | 8,110 | $ | 14,944 | $ | 14,338 | $ | 10,018 | $ | 5,255 | ||||||||||
Core diluted income from continuing operations per common share (3) | $ | 0.34 | $ | 0.61 | $ | 0.57 | $ | 0.36 | $ | 0.20 | ||||||||||
Pre provision income from continuing operations before income taxes | $ | 22,880 | $ | 14,228 | $ | 15,993 | $ | 10,184 | $ | 7,803 | ||||||||||
Core pre provision income from continuing operations before income taxes | $ | 24,109 | $ | 16,556 | $ | 16,845 | $ | 11,609 | $ | 8,052 | ||||||||||
Weighted average number of shares outstanding: | ||||||||||||||||||||
Basic | 23,688,930 | 24,233,434 | 24,419,793 | 26,619,216 | 27,021,507 | |||||||||||||||
Diluted | 23,860,280 | 24,469,891 | 24,625,938 | 26,802,130 | 27,185,175 | |||||||||||||||
Shareholders' equity per share | $ | 28.97 | $ | 28.45 | $ | 28.32 | $ | 27.75 | $ | 27.63 | ||||||||||
Tangible book value per share (3) | $ | 27.52 | $ | 27.02 | $ | 26.83 | $ | 26.34 | $ | 26.26 | ||||||||||
Financial position (at period end): | ||||||||||||||||||||
Loans held for investment, net | $ | 5,034,930 | $ | 5,072,784 | $ | 5,139,108 | $ | 5,287,859 | $ | 5,345,969 | ||||||||||
Total assets | 6,806,718 | 6,812,435 | 6,835,878 | 7,200,790 | 7,171,405 | |||||||||||||||
Deposits | 5,257,057 | 5,339,959 | 5,804,307 | 5,590,893 | 5,178,334 | |||||||||||||||
Shareholders' equity | 677,314 | 679,723 | 691,136 | 723,910 | 747,031 | |||||||||||||||
Other data: | ||||||||||||||||||||
Full-time equivalent employees (ending) | 996 | 1,071 | 1,132 | 1,221 | 1,937 |
Quarter Ended | ||||||||||||||||||||
(dollars in thousands, except share data) | Mar. 31, 2020 | Dec. 31, 2019 | Sept. 30, 2019 | June 30, 2019 | Mar. 31, 2019 | |||||||||||||||
Financial performance, continuing and discontinued: | ||||||||||||||||||||
Return on average shareholders' equity (2) | 4.13 | % | 6.27 | % | 7.98 | % | (3.02 | )% | (0.91 | )% | ||||||||||
Return on average shareholders' equity, excluding income tax reform-related benefit, loss on exit or disposal and restructuring-related and acquisition-related expenses (net of tax) (3) | 4.70 | % | 7.26 | % | 7.79 | % | 2.19 | % | 4.34 | % | ||||||||||
Return on average tangible shareholders' equity, excluding income tax reform-related benefit, loss on exit or disposal and restructuring-related and acquisition-related expenses (net of tax) (3) | 4.94 | % | 7.64 | % | 8.22 | % | 2.31 | % | 4.51 | % | ||||||||||
Return on average assets | 0.42 | % | 0.64 | % | 0.79 | % | (0.31 | )% | (0.10 | )% | ||||||||||
Return on average assets, excluding income tax reform-related benefit, loss on exit or disposal and restructuring-related and acquisition-related expenses (net of tax) (3) | 0.48 | % | 0.74 | % | 0.77 | % | 0.22 | % | 0.45 | % | ||||||||||
Net interest margin (4) | 2.93 | % | 2.87 | % | 2.96 | % | 3.11 | % | 3.11 | % | ||||||||||
Efficiency ratio (5) | 70.69 | % | 83.87 | % | 78.08 | % | 106.83 | % | 100.66 | % | ||||||||||
Core efficiency ratio (3)(6) | 69.11 | % | 80.63 | % | 78.63 | % | 93.96 | % | 87.81 | % | ||||||||||
Financial performance, continuing operations: | ||||||||||||||||||||
Return on average shareholders' equity (2) | 4.13 | % | 7.48 | % | 7.88 | % | 4.80 | % | 2.70 | % | ||||||||||
Return on average shareholders' equity, excluding income tax reform-related benefit, restructuring-related and acquisition-related expenses (net of tax) (3) | 4.70 | % | 8.53 | % | 8.27 | % | 5.41 | % | 2.80 | % | ||||||||||
Return on average tangible shareholders' equity | 4.35 | % | 7.87 | % | 8.32 | % | 5.05 | % | 2.80 | % | ||||||||||
Return on average tangible shareholders' equity, excluding, restructuring-related and acquisition-related expenses (net of tax) (3) | 4.94 | % | 8.98 | % | 8.73 | % | 5.69 | % | 2.91 | % | ||||||||||
Return on average assets (8) | 0.42 | % | 0.76 | % | 0.78 | % | 0.49 | % | 0.28 | % | ||||||||||
Return on average assets, excluding income tax reform-related benefit, restructuring-related and acquisition-related expenses (net of tax) (3) | 0.48 | % | 0.87 | % | 0.82 | % | 0.55 | % | 0.29 | % | ||||||||||
Efficiency ratio (5) | 70.69 | % | 78.90 | % | 77.70 | % | 85.24 | % | 85.98 | % | ||||||||||
Core efficiency ratio (3)(6) | 69.11 | % | 75.45 | % | 76.51 | % | 83.17 | % | 85.53 | % | ||||||||||
Financial performance, continuing and discontinued: | ||||||||||||||||||||
Asset quality: | ||||||||||||||||||||
Allowance for credit losses/total loans (9) | 1.14 | % | 0.82 | % | 0.84 | % | 0.81 | % | 0.80 | % | ||||||||||
Allowance for credit losses/nonaccrual loans(10) | 449.32 | % | 324.80 | % | 349.37 | % | 435.59 | % | 271.99 | % | ||||||||||
Nonaccrual loans/total loans | 0.25 | % | 0.25 | % | 0.24 | % | 0.19 | % | 0.29 | % | ||||||||||
Nonperforming assets/total assets | 0.21 | % | 0.21 | % | 0.21 | % | 0.16 | % | 0.23 | % | ||||||||||
Regulatory capital ratios for the Bank: (7) | ||||||||||||||||||||
Tier 1 leverage capital (to average assets) | 10.06 | % | 10.56 | % | 10.17 | % | 9.86 | % | 11.17 | % | ||||||||||
Tier 1 common equity risk-based capital (to risk-weighted assets) | 12.75 | % | 13.50 | % | 13.45 | % | 13.26 | % | 14.88 | % | ||||||||||
Tier 1 risk-based capital (to risk-weighted assets) | 12.75 | % | 13.50 | % | 13.45 | % | 13.26 | % | 14.88 | % | ||||||||||
Total risk-based capital (to risk-weighted assets) | 13.95 | % | 14.37 | % | 14.37 | % | 14.15 | % | 15.77 | % | ||||||||||
Risk-weighted assets | $ | 5,267,667 | $ | 5,276,694 | $ | 5,207,244 | $ | 5,350,351 | $ | 5,347,115 | ||||||||||
Regulatory capital ratios for the Company: (7) | ||||||||||||||||||||
Tier 1 leverage capital (to average assets) | 10.15 | % | 10.16 | % | 10.04 | % | 10.12 | % | 10.73 | % | ||||||||||
Tier 1 common equity risk-based capital (to risk-weighted assets) | 11.24 | % | 11.43 | % | 11.67 | % | 11.99 | % | 12.62 | % | ||||||||||
Tier 1 risk-based capital (to risk-weighted assets) | 12.32 | % | 12.52 | % | 12.77 | % | 13.06 | % | 13.68 | % | ||||||||||
Total risk-based capital (to risk-weighted assets) | 13.50 | % | 13.40 | % | 13.69 | % | 13.95 | % | 14.58 | % | ||||||||||
Risk-weighted assets | $ | 5,567,854 | $ | 5,522,728 | $ | 5,456,964 | $ | 5,628,362 | $ | 5,626,399 |
(1) | Discontinued operations accounting was terminated effective January 1, 2020, as it was no longer material to our consolidated operations. |
(2) | Net earnings available to common shareholders divided by average shareholders' equity. |
(3) | Core net income; core diluted income per common share; core net income from continuing operations, core diluted income from continuing operations 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, return on average assets and core pre provision net operating income from continuing operations, 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. |
(4) | Net interest income divided by total average interest-earning assets on a tax equivalent basis. |
(5) | Noninterest expense divided by total net revenue (pre-provision net interest income and noninterest income). |
(6) | Noninterest expense divided by total net revenue (pre-provision net interest income and noninterest income), adjusted for restructuring-related and acquisition-related items. |
(7) | Regulatory capital ratios at March 31, 2020 are preliminary. |
(8) | Includes assets of both continuing and discontinued operations. |
(9) | Prior to January 1, 2020 and the adoption of ASU 2016-13 CECL, this calculation represented the Allowance for Loan Losses/Total Loans. |
(10) | Prior to January 1, 2020 and the adoption of ASU 2016-13 CECL, this calculation represented the Allowance for Loan Losses/Non-Accrual Loans. |
Quarter Ended | ||||||||||||||||||||
(in thousands, except share data) | Mar. 31, 2020 | Dec. 31, 2019 | Sept. 30, 2019 | June 30, 2019 | Mar. 31, 2019 | |||||||||||||||
Interest income: | ||||||||||||||||||||
Loans | $ | 59,114 | $ | 61,443 | $ | 64,803 | $ | 67,015 | $ | 62,931 | ||||||||||
Investment securities | 4,387 | 5,204 | 4,879 | 4,884 | 5,564 | |||||||||||||||
Other | 248 | 120 | 395 | 180 | 188 | |||||||||||||||
63,749 | 66,767 | 70,077 | 72,079 | 68,683 | ||||||||||||||||
Interest expense: | ||||||||||||||||||||
Deposits | 14,783 | 18,635 | 20,502 | 16,940 | 14,312 | |||||||||||||||
Federal Home Loan Bank advances | 1,310 | 564 | 501 | 3,635 | 4,642 | |||||||||||||||
Federal funds purchased and securities sold under agreements to repurchase | 458 | 227 | 39 | 463 | 304 | |||||||||||||||
Long-term debt | 1,590 | 1,655 | 1,698 | 1,725 | 1,744 | |||||||||||||||
Other | 174 | 174 | 203 | 129 | 124 | |||||||||||||||
18,315 | 21,255 | 22,943 | 22,892 | 21,126 | ||||||||||||||||
Net interest income | 45,434 | 45,512 | 47,134 | 49,187 | 47,557 | |||||||||||||||
Provision for credit losses | 14,000 | (2,000 | ) | — | — | 1,500 | ||||||||||||||
Net interest income after provision for credit losses | 31,434 | 47,512 | 47,134 | 49,187 | 46,057 | |||||||||||||||
Noninterest income: | ||||||||||||||||||||
Net gain on loan origination and sale activities | 22,541 | 13,386 | 15,951 | 12,178 | 2,607 | |||||||||||||||
Loan servicing income | 5,607 | 1,896 | 2,687 | 2,176 | 1,043 | |||||||||||||||
Depositor and other retail banking fees | 1,890 | 2,078 | 2,079 | 2,024 | 1,745 | |||||||||||||||
Insurance agency commissions | 406 | 491 | 603 | 573 | 625 | |||||||||||||||
Gain (loss) on sale of investment securities available for sale | 112 | 121 | (18 | ) | 137 | (247 | ) | |||||||||||||
Other | 2,074 | 3,959 | 3,278 | 2,741 | 2,319 | |||||||||||||||
32,630 | 21,931 | 24,580 | 19,829 | 8,092 | ||||||||||||||||
Noninterest expense: | ||||||||||||||||||||
Salaries and related costs | 32,043 | 29,878 | 32,793 | 34,239 | 25,279 | |||||||||||||||
General and administrative | 7,966 | 8,297 | 9,539 | 7,844 | 8,182 | |||||||||||||||
Amortization of core deposit intangibles | 345 | 411 | 429 | 461 | 333 | |||||||||||||||
Legal | 610 | (655 | ) | 594 | 1,824 | (204 | ) | |||||||||||||
Consulting | 934 | 894 | 866 | 887 | 1,408 | |||||||||||||||
Federal Deposit Insurance Corporation assessments (recoveries) | 771 | 860 | (694 | ) | 833 | 821 | ||||||||||||||
Occupancy | 5,521 | 6,592 | 4,856 | 5,826 | 4,968 | |||||||||||||||
Information services | 6,942 | 6,964 | 7,325 | 6,948 | 7,088 | |||||||||||||||
Net cost (benefit) from operation and sale of other real estate owned | 52 | (26 | ) | 13 | (30 | ) | (29 | ) | ||||||||||||
55,184 | 53,215 | 55,721 | 58,832 | 47,846 | ||||||||||||||||
Income from continuing operations before income taxes | 8,880 | 16,228 | 15,993 | 10,184 | 6,303 | |||||||||||||||
Income tax expense from continuing operations | 1,741 | 3,123 | 2,328 | 1,292 | 1,245 | |||||||||||||||
Income from continuing operations | 7,139 | 13,105 | 13,665 | 8,892 | 5,058 | |||||||||||||||
(Loss) income from discontinued operations before income taxes | — | (3,357 | ) | 190 | (16,678 | ) | (8,440 | ) | ||||||||||||
Income tax (benefit) expense for discontinued operations | — | (1,240 | ) | 28 | (2,198 | ) | (1,667 | ) | ||||||||||||
(Loss) income from discontinued operations | — | (2,117 | ) | 162 | (14,480 | ) | (6,773 | ) | ||||||||||||
NET INCOME (LOSS) | $ | 7,139 | $ | 10,988 | $ | 13,827 | $ | (5,588 | ) | $ | (1,715 | ) | ||||||||
Basic income (loss) per common share: | ||||||||||||||||||||
Income from continuing operations | $ | 0.30 | $ | 0.54 | $ | 0.55 | $ | 0.32 | $ | 0.19 | ||||||||||
(Loss) income from discontinued operations | — | (0.09 | ) | 0.01 | (0.54 | ) | (0.25 | ) | ||||||||||||
Basic income (loss) per share | $ | 0.30 | $ | 0.45 | $ | 0.55 | $ | (0.22 | ) | $ | (0.06 | ) | ||||||||
Diluted income (loss) per common share: | ||||||||||||||||||||
Income from continuing operations | $ | 0.30 | $ | 0.54 | $ | 0.54 | $ | 0.32 | $ | 0.19 | ||||||||||
(Loss) income from discontinued operations | — | (0.09 | ) | 0.01 | (0.54 | ) | (0.25 | ) | ||||||||||||
Diluted income (loss) per share | $ | 0.30 | $ | 0.45 | $ | 0.55 | $ | (0.22 | ) | $ | (0.06 | ) | ||||||||
Basic weighted average number of shares outstanding | 23,688,930 | 24,233,434 | 24,419,793 | 26,619,216 | 27,021,507 | |||||||||||||||
Diluted weighted average number of shares outstanding | 23,860,280 | 24,469,891 | 24,625,938 | 26,802,130 | 27,185,175 |
(in thousands, except share data) | Mar. 31, 2020 | Dec. 31, 2019 | Sept. 30, 2019 | June 30, 2019 | Mar. 31, 2019 | |||||||||||||||
Assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 72,441 | $ | 57,880 | $ | 74,788 | $ | 99,602 | $ | 67,690 | ||||||||||
Investment securities | 1,058,492 | 943,150 | 866,736 | 803,819 | 816,878 | |||||||||||||||
Loans held for sale | 140,527 | 208,177 | 172,958 | 145,252 | 56,928 | |||||||||||||||
Loans held for investment, net | 5,034,930 | 5,072,784 | 5,139,108 | 5,287,859 | 5,345,969 | |||||||||||||||
Mortgage servicing rights | 80,053 | 97,603 | 90,624 | 94,950 | 95,942 | |||||||||||||||
Other real estate owned | 1,342 | 1,393 | 1,753 | 1,753 | 838 | |||||||||||||||
Federal Home Loan Bank stock, at cost | 26,795 | 22,399 | 8,764 | 24,048 | 32,533 | |||||||||||||||
Premises and equipment, net | 74,698 | 76,973 | 78,925 | 81,167 | 85,635 | |||||||||||||||
Lease right-of-use assets | 91,375 | 94,873 | 101,843 | 102,353 | 113,083 | |||||||||||||||
Goodwill | 28,492 | 28,492 | 30,170 | 30,170 | 29,857 | |||||||||||||||
Other assets | 197,573 | 180,083 | 187,298 | 176,888 | 169,268 | |||||||||||||||
Assets of discontinued operations | — | 28,628 | 82,911 | 352,929 | 356,784 | |||||||||||||||
Total assets | $ | 6,806,718 | $ | 6,812,435 | $ | 6,835,878 | $ | 7,200,790 | $ | 7,171,405 | ||||||||||
Liabilities and shareholders' equity: | ||||||||||||||||||||
Liabilities: | ||||||||||||||||||||
Deposits | $ | 5,257,057 | $ | 5,339,959 | $ | 5,804,307 | $ | 5,590,893 | $ | 5,178,334 | ||||||||||
Federal Home Loan Bank advances | 463,590 | 346,590 | 5,590 | 387,590 | 599,590 | |||||||||||||||
Accounts payable and other liabilities | 78,959 | 79,818 | 84,095 | 102,943 | 126,546 | |||||||||||||||
Federal funds purchased and securities sold under agreements to repurchase | — | 125,000 | — | — | 27,000 | |||||||||||||||
Other borrowings | 95,000 | — | — | — | — | |||||||||||||||
Long-term debt | 125,697 | 125,650 | 125,603 | 125,556 | 125,509 | |||||||||||||||
Lease liabilities | 109,101 | 113,092 | 120,072 | 121,677 | 130,221 | |||||||||||||||
Liabilities of discontinued operations | — | 2,603 | 5,075 | 148,221 | 237,174 | |||||||||||||||
Total liabilities | 6,129,404 | 6,132,712 | 6,144,742 | 6,476,880 | 6,424,374 | |||||||||||||||
Shareholders' equity: | ||||||||||||||||||||
Temporary shareholders' equity | ||||||||||||||||||||
Shares subject to repurchase | — | — | — | 52,735 | — | |||||||||||||||
Permanent 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 | 293,791 | 300,218 | 309,649 | 308,705 | 342,049 | |||||||||||||||
Retained earnings | 365,283 | 374,673 | 372,981 | 359,252 | 411,826 | |||||||||||||||
Accumulated other comprehensive income (loss) | 17,729 | 4,321 | 7,995 | 2,707 | (7,355 | ) | ||||||||||||||
Total permanent shareholders' equity | 677,314 | 679,723 | 691,136 | 671,175 | 747,031 | |||||||||||||||
Total liabilities, temporary shareholders' equity and permanent shareholders' equity | $ | 6,806,718 | $ | 6,812,435 | $ | 6,835,878 | $ | 7,200,790 | $ | 7,171,405 |
Quarter Ended March 31, | Quarter Ended December 31, | Quarter Ended March 31, | ||||||||||||||||||||||||||||||
2020 | 2019 | 2019 | ||||||||||||||||||||||||||||||
(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 | $ | 41,652 | $ | 5 | 0.05 | % | $ | 64,158 | $ | 127 | 0.78 | % | $ | 58,650 | $ | 184 | 1.27 | % | ||||||||||||||
Investment securities | 993,158 | 5,317 | 2.14 | % | 892,833 | 5,620 | 2.52 | % | 891,813 | 6,048 | 2.71 | % | ||||||||||||||||||||
Loans held for sale (4) | 137,409 | 1,367 | 3.98 | % | 187,099 | 1,818 | 3.89 | % | 285,080 | 3,344 | 4.69 | % | ||||||||||||||||||||
Loans held for investment | 5,080,928 | 57,878 | 4.52 | % | 5,184,089 | 59,965 | 4.55 | % | 5,236,387 | 63,034 | 4.82 | % | ||||||||||||||||||||
Total interest-earning assets | 6,253,147 | 64,567 | 4.10 | % | 6,328,179 | 67,530 | 4.21 | % | 6,471,930 | 72,610 | 4.50 | % | ||||||||||||||||||||
Noninterest-earning assets (2)(4) | 572,846 | 535,775 | 721,795 | |||||||||||||||||||||||||||||
Total assets | $ | 6,825,993 | $ | 6,863,954 | $ | 7,193,725 | ||||||||||||||||||||||||||
Liabilities and shareholders' equity: | ||||||||||||||||||||||||||||||||
Deposits:(4) | ||||||||||||||||||||||||||||||||
Interest-bearing demand accounts | $ | 369,439 | $ | 341 | 0.37 | % | $ | 374,084 | $ | 366 | 0.39 | % | $ | 375,530 | $ | 375 | 0.41 | % | ||||||||||||||
Savings accounts | 220,150 | 98 | 0.18 | % | 224,239 | 120 | 0.21 | % | 240,900 | 150 | 0.25 | % | ||||||||||||||||||||
Money market accounts | 2,261,776 | 6,306 | 1.12 | % | 2,229,704 | 7,437 | 1.32 | % | 1,932,317 | 5,803 | 1.21 | % | ||||||||||||||||||||
Certificate accounts | 1,482,391 | 8,134 | 2.21 | % | 1,846,770 | 10,809 | 2.32 | % | 1,597,031 | 8,153 | 2.07 | % | ||||||||||||||||||||
Total interest-bearing deposits (5) | 4,333,756 | 14,879 | 1.38 | % | 4,674,797 | 18,732 | 1.59 | % | 4,145,778 | 14,481 | 1.41 | % | ||||||||||||||||||||
Federal Home Loan Bank advances | 333,821 | 1,310 | 1.55 | % | 125,414 | 636 | 1.99 | % | 833,478 | 5,614 | 2.69 | % | ||||||||||||||||||||
Federal funds purchased and securities sold under agreements to repurchase | 134,539 | 458 | 1.35 | % | 53,163 | 227 | 1.67 | % | 47,778 | 304 | 2.54 | % | ||||||||||||||||||||
Other borrowings | 15,373 | 78 | 2.03 | % | 9,119 | 78 | 3.42 | % | 7,339 | 94 | 5.15 | % | ||||||||||||||||||||
Long-term debt | 125,666 | 1,590 | 5.04 | % | 125,619 | 1,655 | 5.23 | % | 125,480 | 1,744 | 5.56 | % | ||||||||||||||||||||
Total interest-bearing liabilities | 4,943,155 | 18,315 | 1.48 | % | 4,988,112 | 21,328 | 1.69 | % | 5,159,853 | 22,237 | 1.74 | % | ||||||||||||||||||||
Noninterest-bearing liabilities(4)(5) | 1,191,546 | 1,174,824 | 1,283,406 | |||||||||||||||||||||||||||||
Total liabilities | 6,134,701 | 6,162,936 | 6,443,259 | |||||||||||||||||||||||||||||
Permanent shareholders' equity | 691,292 | 701,018 | 750,466 | |||||||||||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 6,825,993 | $ | 6,863,954 | $ | 7,193,725 | ||||||||||||||||||||||||||
Net interest income (3) | $ | 46,252 | $ | 46,202 | $ | 50,373 | ||||||||||||||||||||||||||
Net interest spread | 2.62 | % | 2.52 | % | 2.76 | % | ||||||||||||||||||||||||||
Impact of noninterest-bearing sources | 0.31 | % | 0.35 | % | 0.35 | % | ||||||||||||||||||||||||||
Net interest margin | 2.93 | % | 2.87 | % | 3.11 | % |
(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 $818 thousand, $436 thousand and $670 thousand for the quarters ended March 31, 2020, December 31, 2019 and March 31, 2019, 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 net interest margin related to discontinued operations is immaterial. |
(5) | Cost of deposits of 1.14%, 1.33% and 1.14% for the quarters ended March 31, 2020, December 31, 2019 and March 31, 2019, respectively. |
(in thousands, except for duration data) | Mar. 31, 2020 | Dec. 31, 2019 | Sept. 30, 2019 | June 30, 2019 | Mar. 31, 2019 | |||||||||||||||
Available for sale: | ||||||||||||||||||||
Mortgage-backed securities: | ||||||||||||||||||||
Residential | $ | 84,746 | $ | 91,695 | $ | 109,581 | $ | 110,021 | $ | 112,146 | ||||||||||
Commercial | 43,918 | 38,025 | 29,836 | 30,428 | 30,382 | |||||||||||||||
Collateralized mortgage obligations: | ||||||||||||||||||||
Residential | 294,153 | 291,618 | 187,989 | 157,064 | 156,308 | |||||||||||||||
Commercial | 160,770 | 156,154 | 109,543 | 124,579 | 122,969 | |||||||||||||||
Municipal bonds | 452,633 | 341,318 | 380,093 | 357,097 | 351,360 | |||||||||||||||
Corporate debt securities | 16,611 | 18,661 | 18,767 | 18,897 | 18,464 | |||||||||||||||
U.S. Treasury securities | 1,314 | 1,307 | 1,309 | 1,311 | 11,037 | |||||||||||||||
Agency debentures | — | — | 25,221 | — | 9,766 | |||||||||||||||
Total available for sale | 1,054,145 | 938,778 | 862,339 | 799,397 | 812,432 | |||||||||||||||
Held to maturity | 4,347 | 4,372 | 4,397 | 4,422 | 4,446 | |||||||||||||||
$ | 1,058,492 | $ | 943,150 | $ | 866,736 | $ | 803,819 | $ | 816,878 | |||||||||||
Weighted average duration in years - available for sale | 3.9 | 4.1 | 3.7 | 3.8 | 4.4 |
(in thousands) | Mar. 31, 2020 | Dec. 31, 2019 | Sept. 30, 2019 | June 30, 2019 | Mar. 31, 2019 | |||||||||||||||
Consumer loans | ||||||||||||||||||||
Single family (1) | $ | 988,967 | $ | 1,072,706 | $ | 1,190,666 | $ | 1,261,910 | $ | 1,351,377 | ||||||||||
Home equity and other | 525,544 | 553,376 | 589,411 | 610,801 | 607,328 | |||||||||||||||
Total consumer loans | 1,514,511 | 1,626,082 | 1,780,077 | 1,872,711 | 1,958,705 | |||||||||||||||
Commercial real estate loans | ||||||||||||||||||||
Non-owner occupied commercial real estate | 872,173 | 895,546 | 795,563 | 767,995 | 781,329 | |||||||||||||||
Multifamily | 1,167,242 | 999,140 | 922,445 | 997,970 | 941,700 | |||||||||||||||
Construction/land development | 626,969 | 701,762 | 762,341 | 778,800 | 836,844 | |||||||||||||||
Total commercial real estate loans | 2,666,384 | 2,596,448 | 2,480,349 | 2,544,765 | 2,559,873 | |||||||||||||||
Commercial and industrial loans | ||||||||||||||||||||
Owner occupied commercial real estate | 473,338 | 477,316 | 475,634 | 469,960 | 448,258 | |||||||||||||||
Commercial business | 438,996 | 414,710 | 446,485 | 443,677 | 422,309 | |||||||||||||||
Total commercial and industrial loans | 912,334 | 892,026 | 922,119 | 913,637 | 870,567 | |||||||||||||||
Total loans before allowance, net deferred loan fees and costs (2) | 5,093,229 | 5,114,556 | 5,182,545 | 5,331,113 | 5,389,145 | |||||||||||||||
Allowance for credit losses | (58,299 | ) | (41,772 | ) | (43,437 | ) | (43,254 | ) | (43,176 | ) | ||||||||||
$ | 5,034,930 | $ | 5,072,784 | $ | 5,139,108 | $ | 5,287,859 | $ | 5,345,969 |
(1) | Includes $4.9 million, $3.5 million, $5.3 million, $4.5 million and $4.8 million of single family loans that are carried at fair value at March 31, 2020, December 31, 2019, September 30, 2019, June 30, 2019 and March 31, 2019, respectively. |
(in thousands) | Mar. 31, 2020 | Dec. 31, 2019 | Sept. 30, 2019 | June 30, 2019 | Mar. 31, 2019 | |||||||||||||||
Loans - beginning balance (1) | $ | 5,114,556 | $ | 5,182,545 | $ | 5,331,113 | $ | 5,389,145 | $ | 5,116,841 | ||||||||||
Originations | 446,776 | 587,656 | 355,989 | 402,893 | 361,841 | |||||||||||||||
Purchases and advances | 220,263 | 245,609 | 248,585 | 290,680 | 383,576 | |||||||||||||||
Payoffs, paydowns, sales and other (1) | (688,142 | ) | (900,914 | ) | (753,126 | ) | (750,814 | ) | (472,265 | ) | ||||||||||
Charge-offs and transfers to OREO | (224 | ) | (340 | ) | (16 | ) | (791 | ) | (848 | ) | ||||||||||
Loans - ending balance (1) | $ | 5,093,229 | $ | 5,114,556 | $ | 5,182,545 | $ | 5,331,113 | $ | 5,389,145 | ||||||||||
Net change - loans outstanding | $ | (21,327 | ) | $ | (67,989 | ) | $ | (148,568 | ) | $ | (58,032 | ) | $ | 272,304 |
(in thousands) | Mar. 31, 2020 | Dec. 31, 2019 | Sept. 30, 2019 | June 30, 2019 | Mar. 31, 2019 | |||||||||||||||
Consumer loans | ||||||||||||||||||||
Single family | $ | 14,815 | $ | 19,748 | $ | 21,691 | $ | 28,249 | $ | 36,545 | ||||||||||
Home equity and other | 24,585 | 31,546 | 43,196 | 84,361 | 96,768 | |||||||||||||||
Total consumer loans | 39,400 | 51,294 | 64,887 | 112,610 | 133,313 | |||||||||||||||
Commercial real estate loans | ||||||||||||||||||||
Non-owner occupied commercial real estate | 36,627 | 90,927 | 35,727 | 26,830 | 45,008 | |||||||||||||||
Multifamily | 274,197 | 334,582 | 162,000 | 201,766 | 141,748 | |||||||||||||||
Construction/land development | 185,884 | 249,781 | 170,918 | 198,280 | 147,030 | |||||||||||||||
Total commercial real estate loans | 496,708 | 675,290 | 368,645 | 426,876 | 333,786 | |||||||||||||||
Commercial and industrial loans | ||||||||||||||||||||
Owner occupied commercial real estate | 12,550 | 33,190 | 27,217 | 10,636 | 6,623 | |||||||||||||||
Commercial business | 45,726 | 45,739 | 34,669 | 61,184 | 72,737 | |||||||||||||||
Total commercial and industrial loans | 58,276 | 78,929 | 61,886 | 71,820 | 79,360 | |||||||||||||||
$ | 594,384 | $ | 805,513 | $ | 495,418 | $ | 611,306 | $ | 546,459 |
• | C&I lending, except to support existing clients on a case-by-case basis |
• | Commercial real estate related new construction and land loans; |
• | Permanent loans on retail, office, industrial, or self-storage properties; |
• | Residential construction related acquisition & development and raw land loans; and |
• | Non-owner occupied and owner-occupied loans on 2-4 unit permanent residential properties. |
Quarter Ended | ||||||||||||||||||||
(in thousands) | Mar. 31, 2020 | Dec. 31, 2019 | Sept. 30, 2019 | June 30, 2019 | Mar. 31, 2019 | |||||||||||||||
Beginning balance | $ | 42,837 | $ | 44,634 | $ | 44,628 | $ | 44,536 | $ | 42,913 | ||||||||||
Provision for credit losses | 14,000 | (2,000 | ) | — | — | 1,500 | ||||||||||||||
Recoveries, net of (charge-offs) | 29 | 203 | 6 | 92 | 123 | |||||||||||||||
Impact of ASC 326 adoption (1) | 3,740 | — | — | — | — | |||||||||||||||
Ending balance | $ | 60,606 | $ | 42,837 | $ | 44,634 | $ | 44,628 | $ | 44,536 | ||||||||||
Components: | ||||||||||||||||||||
Allowance for credit losses | $ | 58,299 | $ | 41,772 | $ | 43,437 | $ | 43,254 | $ | 43,176 | ||||||||||
Allowance for unfunded commitments | 2,307 | 1,065 | 1,197 | 1,374 | 1,360 | |||||||||||||||
Allowance for credit losses including unfunded commitments | $ | 60,606 | $ | 42,837 | $ | 44,634 | $ | 44,628 | $ | 44,536 | ||||||||||
Allowance for credit losses as a % of loans held for investment (2) (3) | 1.14 | % | 0.82 | % | 0.84 | % | 0.81 | % | 0.80 | % | ||||||||||
Allowance for credit losses as a % of nonaccrual loans (4) | 449.32 | % | 324.80 | % | 349.37 | % | 435.59 | % | 271.99 | % |
(in thousands) | Mar. 31, 2020 | Dec. 31, 2019 | Sept. 30, 2019 | June 30, 2019 | Mar. 31, 2019 | |||||||||||||||
Nonaccrual loans (1) | $ | 12,975 | $ | 12,861 | $ | 12,433 | $ | 9,930 | $ | 15,874 | ||||||||||
Other real estate owned | 1,343 | 1,393 | 1,753 | 1,753 | 838 | |||||||||||||||
Total nonperforming assets (2) | $ | 14,318 | $ | 14,254 | $ | 14,186 | $ | 11,683 | $ | 16,712 | ||||||||||
Nonaccrual loans as a % of total loans | 0.25 | % | 0.25 | % | 0.24 | % | 0.19 | % | 0.29 | % | ||||||||||
Nonperforming assets as a % of total assets | 0.21 | % | 0.21 | % | 0.21 | % | 0.16 | % | 0.23 | % |
(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 $1.4 million, $1.3 million, $1.3 million, $1.4 million and $1.7 million of nonperforming loans guaranteed by the SBA at March 31, 2020, December 31, 2019, September 30, 2019, June 30, 2019 and March 31, 2019, respectively. |
Quarter Ended | ||||||||||||||||||||
(in thousands) | Mar. 31, 2020 | Dec. 31, 2019 | Sept. 30, 2019 | June 30, 2019 | Mar. 31, 2019 | |||||||||||||||
Beginning balance | $ | 14,254 | $ | 14,186 | $ | 11,683 | $ | 16,712 | $ | 12,074 | ||||||||||
Additions | 2,932 | 3,606 | 5,205 | 3,329 | 6,887 | |||||||||||||||
Reductions: | ||||||||||||||||||||
Gross charge-offs | (155 | ) | (9 | ) | — | (40 | ) | (4 | ) | |||||||||||
OREO sales | — | (360 | ) | — | (180 | ) | (455 | ) | ||||||||||||
OREO write-downs and other adjustments | (51 | ) | — | — | — | — | ||||||||||||||
Principal paydowns, payoff advances, and equity adjustments | (1,907 | ) | (1,345 | ) | (1,428 | ) | (6,547 | ) | (1,695 | ) | ||||||||||
Transferred back to accrual status | (755 | ) | (1,824 | ) | (1,274 | ) | (1,591 | ) | (95 | ) | ||||||||||
Total reductions | (2,868 | ) | (3,538 | ) | (2,702 | ) | (8,358 | ) | (2,249 | ) | ||||||||||
Net additions (reductions) | 64 | 68 | 2,503 | (5,029 | ) | 4,638 | ||||||||||||||
Ending balance (1) | $ | 14,318 | $ | 14,254 | $ | 14,186 | $ | 11,683 | $ | 16,712 |
(1) | Includes $1.4 million, $1.3 million, $1.3 million, $1.4 million and $1.7 million of nonperforming loans guaranteed by the SBA at March 31, 2020, December 31, 2019, September 30, 2019, June 30, 2019 and March 31, 2019, 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, 2020 | |||||||||||||||||||||||||
Total loans held for investment | $ | 7,082 | $ | 2,775 | $ | 33,820 | $ | 43,677 | $ | 5,049,552 | $ | 5,093,229 | |||||||||||||
Less: FHA/VA loans (1) | 5,192 | 2,102 | 20,845 | 28,139 | 64,760 | 92,899 | |||||||||||||||||||
Less: guaranteed portion of SBA loans (2) | — | — | 1,434 | 1,434 | 3,593 | 5,027 | |||||||||||||||||||
Total loans, excluding FHA/VA and guaranteed portion of SBA loans | $ | 1,890 | $ | 673 | $ | 11,541 | $ | 14,104 | $ | 4,981,199 | $ | 4,995,303 | |||||||||||||
As a % of total loans, excluding FHA/VA and guaranteed portion of SBA loans | 0.04 | % | 0.01 | % | 0.23 | % | 0.28 | % | 99.72 | % | 100.00 | % | |||||||||||||
December 31, 2019 | |||||||||||||||||||||||||
Total loans held for investment | $ | 6,575 | $ | 4,633 | $ | 32,563 | $ | 43,771 | $ | 5,070,785 | $ | 5,114,556 | (3) | ||||||||||||
Less: FHA/VA loans (1) | 4,651 | 2,754 | 19,702 | 27,107 | 63,688 | 90,795 | |||||||||||||||||||
Less: guaranteed portion of SBA loans (2) | — | — | 1,306 | 1,306 | 3,385 | 4,691 | |||||||||||||||||||
Total loans, excluding FHA/VA and guaranteed portion of SBA loans | $ | 1,924 | $ | 1,879 | $ | 11,555 | $ | 15,358 | $ | 5,003,712 | $ | 5,019,070 | |||||||||||||
As a % of total loans, excluding FHA/VA and guaranteed portion of SBA loans | 0.04 | % | 0.04 | % | 0.23 | % | 0.31 | % | 99.69 | % | 100.00 | % |
(1) | Represents loans whose repayments are insured by the FHA or guaranteed by the VA. |
(2) | Represents the portion of loans whose repayments are guaranteed by the SBA. |
(3) | Deferred loans fees and costs of $24.5 million are now included within the carrying amounts of the loan balances as of December 31, 2019, in order to conform to the current period presentation. |
Requests | Granted | |||||||||||||
(dollars in thousands) | Number of loans | Amount | Number of loans | Amount | ||||||||||
Single family | 150 | $ | 58,472 | 150 | $ | 58,472 | ||||||||
Commercial real estate | 18 | 98,583 | — | — | ||||||||||
Residential construction | 11 | 10,254 | — | — | ||||||||||
Commercial and industrial | 291 | 211,012 | (1) | 156 | 123,656 | |||||||||
Total loans | 470 | $ | 378,321 | 306 | $ | 182,128 |
(in thousands) | December 31, 2019 Incurred ALLL | CECL Adoption Impact | January 1, 2020 CECL adoption | Reserve Build | March 31, 2020 Allowance for Credit Losses | |||||||||||||||||||||||
Allowance for credit losses including unfunded commitments | Reserve Balance | Reserve Rate | Reserve Balance | Reserve Rate | Reserve Balance | Reserve Rate | ||||||||||||||||||||||
Single family | $ | 6,450 | 0.60 | % | $ | 468 | 6,918 | 0.64 | % | 1,669 | 8,587 | 0.87 | % | |||||||||||||||
Single family custom home construction | 1,003 | 0.58 | % | 200 | 1,203 | 0.70 | % | 309 | 1,512 | 0.97 | % | |||||||||||||||||
Home equity and other | 6,233 | 1.13 | % | 4,635 | 10,868 | 1.96 | % | 1,540 | 12,408 | 2.36 | % | |||||||||||||||||
Total consumer loans | 13,686 | 0.76 | % | 5,303 | 18,989 | 1.06 | % | 3,518 | 22,507 | 1.35 | % | |||||||||||||||||
Non-owner occupied commercial real estate | 7,245 | 0.81 | % | (3,392 | ) | 3,853 | 0.43 | % | 5,168 | 9,021 | 1.03 | % | ||||||||||||||||
Multifamily | 7,015 | 0.70 | % | (2,977 | ) | 4,038 | 0.40 | % | 227 | 4,265 | 0.37 | % | ||||||||||||||||
Residential construction | 3,800 | 1.33 | % | 4,280 | 8,080 | 2.84 | % | (1,495 | ) | 6,585 | 2.53 | % | ||||||||||||||||
Commercial real estate/Multifamily construction | 3,472 | 1.42 | % | 578 | 4,050 | 1.66 | % | (450 | ) | 3,600 | 1.71 | % | ||||||||||||||||
Total commercial real estate loans | 21,532 | 0.89 | % | (1,511 | ) | 20,021 | 0.83 | % | 3,450 | 23,471 | 0.94 | % | ||||||||||||||||
Owner occupied commercial real estate | 3,639 | 0.76 | % | (2,459 | ) | 1,180 | 0.25 | % | 2,980 | 4,160 | 0.88 | % | ||||||||||||||||
Commercial business | 2,915 | 0.70 | % | 510 | 3,425 | 0.83 | % | 4,736 | 8,161 | 1.86 | % | |||||||||||||||||
Total commercial and industrial loans | 6,554 | 0.73 | % | (1,949 | ) | 4,605 | 0.52 | % | 7,716 | 12,321 | 1.35 | % | ||||||||||||||||
Total allowance for credit losses | $ | 41,772 | 0.82 | % | $ | 1,843 | $ | 43,615 | 0.85 | % | $ | 14,684 | $ | 58,299 | 1.14 | % | ||||||||||||
Allowance for unfunded lending commitments | 1,065 | 1,897 | 2,962 | (655 | ) | 2,307 | ||||||||||||||||||||||
Allowance for credit losses including unfunded commitments | $ | 42,837 | $ | 3,740 | $ | 46,577 | $ | 14,029 | $ | 60,606 |
Quarter Ended | |||||||||||||||||||||||||
(in thousands) | Mar. 31, 2020 | Dec. 31, 2019 | Sept. 30, 2019 | June 30, 2019 | Mar. 31, 2019 | ||||||||||||||||||||
Loan originations | |||||||||||||||||||||||||
Commercial loans | $ | 69,818 | $ | 61,303 | $ | 60,278 | $ | 72,142 | $ | 3,367 | |||||||||||||||
Single family loans | 339,881 | 442,445 | (3 | ) | 652,208 | (3 | ) | 1,462,780 | (3 | ) | 1,042,094 | (3 | ) | ||||||||||||
Loans sold (2) | |||||||||||||||||||||||||
Commercial loans | $ | 282,457 | $ | 257,378 | $ | 270,753 | $ | 151,662 | $ | 164,071 | |||||||||||||||
Single family loans | 309,853 | 572,430 | (3 | ) | 893,959 | (3 | ) | 1,454,064 | (3 | ) | 1,004,849 | (3 | ) | ||||||||||||
Net gain on loan origination and sale activities (2) | |||||||||||||||||||||||||
Commercial loans | $ | 4,710 | $ | 5,313 | $ | 6,693 | $ | 2,826 | $ | 2,660 | |||||||||||||||
Single family loans | 17,831 | 8,074 | 9,628 | 33,549 | 35,435 | ||||||||||||||||||||
$ | 22,541 | $ | 13,387 | (3 | ) | $ | 16,321 | (3 | ) | $ | 36,375 | (3 | ) | $ | 38,095 | (3 | ) |
(in thousands) | Mar. 31, 2020 | Dec. 31, 2019 | Sept. 30, 2019 | June 30, 2019 | Mar. 31, 2019 | |||||||||||||||
Commercial loans serviced for others | $ | 1,661,038 | $ | 1,618,876 | $ | 1,576,714 | $ | 1,535,522 | $ | 1,521,597 | ||||||||||
Single family loans serviced for others (1) | 6,772,912 | 7,023,441 | 7,014,265 | 6,790,955 | 6,052,394 | |||||||||||||||
Total loans serviced for others | $ | 8,433,950 | $ | 8,642,317 | $ | 8,590,979 | $ | 8,326,477 | $ | 7,573,991 |
(1) | Excludes interim loan servicing from first quarter 2019 sale of single family mortgage servicing rights. |
Quarter Ended | |||||||||||||||||||||||||
(in thousands) | Mar. 31, 2020 | Dec. 31, 2019 | Sept. 30, 2019 | June 30, 2019 | Mar. 31, 2019 | ||||||||||||||||||||
Commercial loan servicing income, net: | |||||||||||||||||||||||||
Servicing fees and other | $ | 2,556 | $ | 2,312 | $ | 2,202 | $ | 2,183 | $ | 2,419 | |||||||||||||||
Amortization of capitalized MSRs | (1,511 | ) | (1,426 | ) | (1,315 | ) | (1,102 | ) | (1,376 | ) | |||||||||||||||
Commercial loan servicing income | 1,045 | 886 | 887 | 1,081 | 1,043 | ||||||||||||||||||||
Single family servicing income, net: | |||||||||||||||||||||||||
Servicing fees and other | 4,979 | 5,149 | 5,252 | 3,883 | 14,158 | ||||||||||||||||||||
Changes in fair value of single family MSRs due to amortization (2) | (3,494 | ) | (3,776 | ) | (4,489 | ) | (3,422 | ) | (8,983 | ) | |||||||||||||||
1,485 | 1,373 | (1 | ) | 763 | (1 | ) | 461 | (1 | ) | 5,175 | (1 | ) | |||||||||||||
Risk management, single family MSRs: | |||||||||||||||||||||||||
Changes in fair value of MSR due to changes in model inputs and/or assumptions (3)(4) | (16,844 | ) | 5,189 | (7,501 | ) | (9,414 | ) | (4,498 | ) | ||||||||||||||||
Net gain (loss) from derivatives economically hedging MSR | 19,921 | (5,482 | ) | 9,040 | 7,194 | 3,683 | |||||||||||||||||||
3,077 | (293 | ) | 1,539 | (2,220 | ) | (815 | ) | ||||||||||||||||||
Single family servicing income (loss) | 4,562 | 1,080 | 2,302 | (1,759 | ) | 4,360 | |||||||||||||||||||
Total loan servicing income (loss) | $ | 5,607 | $ | 1,966 | (1 | ) | $ | 3,189 | (1 | ) | $ | (678 | ) | (1 | ) | $ | 5,403 | (1 | ) |
(1) | Includes both continuing and discontinued operations. |
(2) | Represents changes due to collection/realization of expected cash flows and curtailments. |
(3) | Principally reflects changes in model assumptions, including prepayment speed assumptions, which are primarily affected by changes in mortgage interest rates. |
(4) | Includes pre-tax income of zero, $22 thousand, $333 thousand, pre-tax loss of $2.0 million and pre-tax income of $774 thousand, net of transaction costs and prepayment reserves, for the first quarter of 2020, fourth quarter of 2019, third quarter 2019, second quarter of 2019 and first quarter of 2019, respectively, from sales of single family MSRs. |
Quarter Ended | ||||||||||||||||||||
(in thousands) | Mar. 31, 2020 | Dec. 31, 2019 | Sept. 30, 2019 | June 30, 2019 | Mar. 31, 2019 | |||||||||||||||
Commercial Mortgage Servicing Rights | ||||||||||||||||||||
Beginning balance | $ | 29,494 | $ | 28,801 | $ | 27,227 | $ | 27,692 | 28,328 | |||||||||||
Originations | 1,957 | 1,902 | 2,770 | 530 | 630 | |||||||||||||||
Amortization | (1,331 | ) | (1,209 | ) | (1,196 | ) | (995 | ) | (1,266 | ) | ||||||||||
Ending balance | $ | 30,120 | $ | 29,494 | $ | 28,801 | $ | 27,227 | $ | 27,692 | ||||||||||
Ratio of MSR carrying value to related loans serviced for others | 1.88 | % | 1.90 | % | 1.91 | % | 1.86 | % | 1.92 | % | ||||||||||
Single Family Mortgage Servicing Rights | ||||||||||||||||||||
Beginning balance | $ | 68,109 | $ | 61,823 | $ | 67,723 | $ | 68,250 | $ | 252,168 | ||||||||||
Additions and amortization: | ||||||||||||||||||||
Originations | 2,162 | 4,895 | 6,408 | 10,184 | 7,287 | |||||||||||||||
Purchases | — | — | 14 | — | — | |||||||||||||||
Sale of servicing rights | — | — | — | — | (176,944 | ) | ||||||||||||||
Changes due to amortization (1) | (3,494 | ) | (3,776 | ) | (4,489 | ) | (3,422 | ) | (8,983 | ) | ||||||||||
Net additions and amortization | (1,332 | ) | 1,119 | 1,933 | 6,762 | (178,640 | ) | |||||||||||||
Changes in fair value due to changes in model inputs and/or assumptions (2)(3) | (16,844 | ) | 5,167 | (7,833 | ) | (7,289 | ) | (5,278 | ) | |||||||||||
Ending balance | $ | 49,933 | $ | 68,109 | $ | 61,823 | $ | 67,723 | $ | 68,250 | ||||||||||
Ratio of MSR carrying value to related loans serviced for others | 0.74 | % | 0.98 | % | 0.88 | % | 1.00 | % | 1.13 | % | ||||||||||
(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, 2020 | Dec. 31, 2019 | Sept. 30, 2019 | June 30, 2019 | Mar. 31, 2019 | |||||||||||||||
Deposits by Product: (1) | ||||||||||||||||||||
Noninterest-bearing accounts - checking and savings | $ | 768,776 | $ | 704,743 | $ | 698,714 | $ | 684,898 | $ | 683,840 | ||||||||||
Interest-bearing transaction and savings deposits: | ||||||||||||||||||||
NOW accounts | 420,606 | 373,832 | 421,750 | 444,130 | 415,402 | |||||||||||||||
Statement savings accounts due on demand | 222,821 | 219,182 | 220,401 | 227,762 | 241,747 | |||||||||||||||
Money market accounts due on demand | 2,299,442 | 2,224,494 | 2,073,907 | 1,995,244 | 2,014,662 | |||||||||||||||
Total interest-bearing transaction and savings deposits | 2,942,869 | 2,817,508 | 2,716,058 | 2,667,136 | 2,671,811 | |||||||||||||||
Total transaction and savings deposits | 3,711,645 | 3,522,251 | 3,414,772 | 3,352,034 | 3,355,651 | |||||||||||||||
Certificates of deposit | 1,297,924 | 1,614,533 | 2,135,869 | 2,060,376 | 1,644,768 | |||||||||||||||
Noninterest-bearing accounts - other | 247,488 | 203,175 | 253,666 | 311,287 | 397,015 | |||||||||||||||
Total deposits | $ | 5,257,057 | $ | 5,339,959 | $ | 5,804,307 | $ | 5,723,697 | $ | 5,397,434 | ||||||||||
Percent of total deposits: | ||||||||||||||||||||
Noninterest-bearing accounts - checking and savings | 14.6 | % | 13.2 | % | 12.0 | % | 12.0 | % | 12.7 | % | ||||||||||
Interest-bearing transaction and savings deposits: | ||||||||||||||||||||
NOW accounts | 8.0 | 7.0 | 7.3 | 7.8 | 7.7 | |||||||||||||||
Statement savings accounts, due on demand | 4.2 | 4.1 | 3.8 | 4.0 | 4.5 | |||||||||||||||
Money market accounts, due on demand | 43.7 | 41.7 | 35.7 | 34.9 | 37.3 | |||||||||||||||
Total interest-bearing transaction and savings deposits | 55.9 | 52.8 | 46.8 | 46.7 | 49.5 | |||||||||||||||
Total transaction and savings deposits | 70.5 | 66.0 | 58.8 | 58.7 | 62.2 | |||||||||||||||
Certificates of deposit | 24.7 | 30.2 | 36.8 | 36.0 | 30.5 | |||||||||||||||
Noninterest-bearing accounts - other | 4.8 | 3.8 | 4.4 | 5.3 | 7.3 | |||||||||||||||
Total deposits | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
(1) | Includes $132.8 million, $219.1 million in servicing deposits related to discontinued operations for the periods ended June 30, 2019 and March 31, 2019, respectively. There were no similar balances at March 31, 2020, December 31, 2019 and September 30, 2019. |
Quarter Ended | ||||||||||||||||||||
(dollars in thousands, except share data) | Mar. 31, 2020 | Dec. 31, 2019 | Sept. 30, 2019 | June 30, 2019 | Mar. 31, 2019 | |||||||||||||||
Shareholders' equity | $ | 677,314 | $ | 679,723 | $ | 691,136 | $ | 723,910 | $ | 747,031 | ||||||||||
Less: Goodwill and other intangibles | (33,908 | ) | (34,252 | ) | (36,341 | ) | (36,771 | ) | (36,919 | ) | ||||||||||
Tangible shareholders' equity (1) | $ | 643,406 | $ | 645,471 | $ | 654,795 | $ | 687,139 | $ | 710,112 | ||||||||||
Common shares outstanding | 23,376,793 | 23,890,855 | 24,408,513 | 26,085,164 | 27,038,257 | |||||||||||||||
Shareholders' equity per share | $ | 28.97 | $ | 28.45 | $ | 28.32 | $ | 27.75 | $ | 27.63 | ||||||||||
Impact of goodwill and other intangibles | (1.45 | ) | (1.43 | ) | (1.49 | ) | (1.41 | ) | (1.37 | ) | ||||||||||
Tangible book value per share (2) | $ | 27.52 | $ | 27.02 | $ | 26.83 | $ | 26.34 | $ | 26.26 | ||||||||||
Average shareholders' equity | $ | 691,292 | $ | 701,018 | $ | 693,475 | $ | 741,330 | $ | 750,466 | ||||||||||
Less: Average goodwill and other intangibles | (34,125 | ) | (35,050 | ) | (36,617 | ) | (36,604 | ) | (28,611 | ) | ||||||||||
Average tangible shareholders' equity | $ | 657,167 | $ | 665,968 | $ | 656,858 | $ | 704,726 | $ | 721,855 | ||||||||||
Return on average shareholders' equity | 4.13 | % | 6.27 | % | 7.98 | % | (3.02 | )% | (0.91 | )% | ||||||||||
Impact of goodwill and other intangibles | 0.22 | % | 0.33 | % | 0.44 | % | (0.15 | )% | (0.04 | )% | ||||||||||
Return on average tangible shareholders' equity (2) | 4.35 | % | 6.60 | % | 8.42 | % | (3.17 | )% | (0.95 | )% | ||||||||||
Return on average shareholders' equity | 4.13 | % | 6.27 | % | 7.98 | % | (3.02 | )% | (0.91 | )% | ||||||||||
Impact of loss on exit or disposal and restructuring-related expenses (net of tax) | 0.56 | % | 0.97 | % | (0.19 | )% | 5.23 | % | 5.10 | % | ||||||||||
Impact of acquisition-related expenses (net of tax) | 0.01 | % | 0.02 | % | — | % | (0.02 | )% | 0.15 | % | ||||||||||
Return on average shareholders' equity, excluding income tax reform-related benefit, loss on exit or disposal and restructuring-related (net of tax) and acquisition-related expenses (net of tax) | 4.70 | % | 7.26 | % | 7.79 | % | 2.19 | % | 4.34 | % | ||||||||||
Return on average assets | 0.42 | % | 0.64 | % | 0.79 | % | (0.31 | )% | (0.10 | )% | ||||||||||
Impact of loss on exit or disposal and restructuring-related expenses (recoveries) net of tax | 0.06 | % | 0.10 | % | (0.02 | )% | 0.53 | % | 0.53 | % | ||||||||||
Impact of acquisition-related expenses (net of tax) | — | % | — | % | — | % | — | % | 0.02 | % | ||||||||||
Return on average assets, excluding income tax reform-related benefit, loss on exit or disposal and restructuring-related (net of tax) and acquisition-related expenses (net of tax) | 0.48 | % | 0.74 | % | 0.77 | % | 0.22 | % | 0.45 | % |
(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, 2020 | Dec. 31, 2019 | Sept. 30, 2019 | June 30, 2019 | Mar. 31, 2019 | |||||||||||||||
Consolidated results: | ||||||||||||||||||||
Net income (loss) | $ | 7,139 | $ | 10,988 | $ | 13,827 | $ | (5,588 | ) | $ | (1,715 | ) | ||||||||
Impact of loss on exit or disposal and restructuring-related expenses (recoveries), net of tax | 960 | 1,699 | (326 | ) | 9,697 | 9,564 | ||||||||||||||
Impact of acquisition-related expenses (recoveries), net of tax | 11 | 28 | 4 | (33 | ) | 290 | ||||||||||||||
Core net income | $ | 8,110 | $ | 12,715 | $ | 13,505 | $ | 4,076 | $ | 8,139 | ||||||||||
Noninterest expense (2) | 55,184 | 56,540 | 57,644 | 101,585 | 97,700 | |||||||||||||||
Impact of loss on exit or disposal and restructuring-related (expenses) recoveries (1) | (1,215 | ) | (2,150 | ) | 413 | (12,274 | ) | (12,106 | ) | |||||||||||
Impact of acquisition-related (expenses) recoveries | (14 | ) | (36 | ) | (5 | ) | 42 | (367 | ) | |||||||||||
Noninterest expense, excluding restructuring and acquisition-related recoveries | $ | 53,955 | $ | 54,354 | $ | 58,052 | $ | 89,353 | $ | 85,227 | ||||||||||
Efficiency ratio | 70.69 | % | 83.87 | % | 78.08 | % | 106.83 | % | 100.66 | % | ||||||||||
Impact of loss on exit or disposal and restructuring-related (expenses) recoveries | (1.56 | )% | (3.19 | )% | 0.56 | % | (12.91 | )% | (12.47 | )% | ||||||||||
Impact of acquisition-related (expenses) recoveries | (0.02 | )% | (0.05 | )% | (0.01 | )% | 0.04 | % | (0.38 | )% | ||||||||||
Core efficiency ratio | 69.11 | % | 80.63 | % | 78.63 | % | 93.96 | % | 87.81 | % | ||||||||||
Diluted earnings per common share | $ | 0.30 | $ | 0.45 | $ | 0.55 | $ | (0.22 | ) | $ | (0.06 | ) | ||||||||
Impact of loss on exit or disposal and restructuring-related expenses (recoveries), net of tax | 0.04 | 0.07 | (0.01 | ) | 0.36 | 0.35 | ||||||||||||||
Impact of acquisition-related expenses, net of tax | — | — | — | — | 0.01 | |||||||||||||||
Core diluted earnings per common share | $ | 0.34 | $ | 0.52 | $ | 0.54 | $ | 0.14 | $ | 0.30 | ||||||||||
Return on average tangible shareholders' equity | 4.35 | % | 6.60 | % | 8.42 | % | (3.17 | )% | (0.95 | )% | ||||||||||
Impact of loss on exit or disposal and restructuring-related expenses (recoveries), net of tax | 0.58 | % | 1.02 | % | (0.20 | )% | 5.50 | % | 5.30 | % | ||||||||||
Impact of acquisition-related expenses (recoveries), net of tax | 0.01 | % | 0.02 | % | — | % | (0.02 | )% | 0.16 | % | ||||||||||
Return on average tangible shareholders' equity, excluding loss on exit or disposal and restructuring-related expenses, net of tax, and acquisition-related expenses (recoveries), net of tax | 4.94 | % | 7.64 | % | 8.22 | % | 2.31 | % | 4.51 | % | ||||||||||
Results for Continuing Operations(3) | ||||||||||||||||||||
Return on average shareholders' equity | 4.13 | % | 7.48 | % | 7.88 | % | 4.80 | % | 2.70 | % | ||||||||||
Impact of restructuring-related expenses (recoveries), net of tax | 0.56 | % | 1.03 | % | 0.39 | % | 0.63 | % | (0.05 | )% | ||||||||||
Impact of acquisition-related expenses (net of tax) | 0.01 | % | 0.02 | % | — | % | (0.02 | )% | 0.15 | % | ||||||||||
Return on average shareholders' equity, excluding restructuring-related expenses (recoveries),net of tax and acquisition-related expenses, net of tax | 4.70 | % | 8.53 | % | 8.27 | % | 5.41 | % | 2.80 | % | ||||||||||
Return on average assets (4) | 0.42 | % | 0.76 | % | 0.78 | % | 0.49 | % | 0.28 | % | ||||||||||
Impact of restructuring-related expenses (recoveries), net of tax | 0.06 | % | 0.11 | % | 0.04 | % | 0.06 | % | (0.01 | )% | ||||||||||
Impact of acquisition-related expenses, net of tax | — | % | — | % | — | % | — | % | 0.02 | % | ||||||||||
Return on average assets, excluding restructuring-related (net of tax) and acquisition-related expenses (net of tax) | 0.48 | % | 0.87 | % | 0.82 | % | 0.55 | % | 0.29 | % | ||||||||||
Return on average shareholders' equity | 4.13 | % | 7.48 | % | 7.88 | % | 4.80 | % | 2.70 | % | ||||||||||
Impact of goodwill and other intangibles | 0.22 | % | 0.39 | % | 0.44 | % | 0.25 | % | 0.10 | % | ||||||||||
Return on average tangible shareholders' equity | 4.35 | % | 7.87 | % | 8.32 | % | 5.05 | % | 2.80 | % | ||||||||||
Impact of restructuring-related expenses (recoveries), net of tax | 0.58 | % | 1.09 | % | 0.41 | % | 0.66 | % | (0.05 | )% | ||||||||||
Impact of acquisition-related expenses (recoveries) , net of tax | 0.01 | % | 0.02 | % | — | % | (0.02 | )% | 0.16 | % | ||||||||||
Return on average tangible shareholders' equity, excluding restructuring-related expenses, net of tax, and acquisition-related expenses (recoveries), net of tax | 4.94 | % | 8.98 | % | 8.73 | % | 5.69 | % | 2.91 | % | ||||||||||
Net income from continuing operations | $ | 7,139 | $ | 13,105 | $ | 13,665 | $ | 8,892 | $ | 5,058 | ||||||||||
Impact of restructuring-related expenses (recoveries), net of tax | 960 | 1,811 | 669 | 1,159 | (93 | ) |
Impact of acquisition-related expenses (recoveries), net of tax | 11 | 28 | 4 | (33 | ) | 290 | ||||||||||||||
Core net income from continuing operations | $ | 8,110 | $ | 14,944 | $ | 14,338 | $ | 10,018 | $ | 5,255 | ||||||||||
Noninterest expense from continuing operations | $ | 55,184 | $ | 53,215 | $ | 55,721 | $ | 58,832 | $ | 47,846 | ||||||||||
Impact of restructuring-related (expenses) recoveries | (1,215 | ) | (2,292 | ) | (847 | ) | (1,467 | ) | 118 | |||||||||||
Impact of acquisition-related (expenses) recoveries | (14 | ) | (36 | ) | (5 | ) | 42 | (367 | ) | |||||||||||
Noninterest expense from continuing operations, excluding restructuring and acquisition-related expenses | $ | 53,955 | $ | 50,887 | $ | 54,869 | $ | 57,407 | $ | 47,597 | ||||||||||
Income from continuing operations before income taxes | $ | 8,880 | 16,228 | 15,993 | 10,184 | 6,303 | ||||||||||||||
Provision for credit losses | 14,000 | (2,000 | ) | — | — | 1,500 | ||||||||||||||
Pre provision operating income | 22,880 | 14,228 | 15,993 | 10,184 | 7,803 | |||||||||||||||
Impact of restructuring-related (expenses) recoveries | 1,215 | 2,292 | 847 | 1,467 | (118 | ) | ||||||||||||||
Impact of acquisition-related (expenses) recoveries | 14 | 36 | 5 | (42 | ) | 367 | ||||||||||||||
Core pre provision net operating income from continuing operations | $ | 24,109 | $ | 16,556 | $ | 16,845 | $ | 11,609 | $ | 8,052 | ||||||||||
Efficiency ratio | 70.69 | % | 78.90 | % | 77.70 | % | 85.24 | % | 85.98 | % | ||||||||||
Impact of restructuring-related (expenses) recoveries | (1.56 | )% | (3.40 | )% | (1.18 | )% | (2.13 | )% | 0.21 | % | ||||||||||
Impact of acquisition-related (expenses) recoveries | (0.02 | )% | (0.05 | )% | (0.01 | )% | 0.06 | % | (0.66 | )% | ||||||||||
Core efficiency ratio | 69.11 | % | 75.45 | % | 76.51 | % | 83.17 | % | 85.53 | % | ||||||||||
Diluted earnings per common share from continuing operations | $ | 0.30 | $ | 0.54 | $ | 0.54 | $ | 0.32 | $ | 0.19 | ||||||||||
Impact of restructuring-related expenses, net of tax | 0.04 | 0.07 | 0.03 | 0.04 | — | |||||||||||||||
Impact of acquisition-related expenses, net of tax | — | — | — | — | 0.01 | |||||||||||||||
Core diluted earnings per common share from continuing operations | $ | 0.34 | $ | 0.61 | $ | 0.57 | $ | 0.36 | $ | 0.20 | ||||||||||
(1) | The first quarter of 2020 includes $147 thousand expense related to severance and other related costs, and $573 thousand cost expense related to facilities & IT expenses and $495 thousand on other related expenses. The fourth quarter 2019 includes $755 thousand expense related to severance and other related costs, and $768 thousand cost expenses related to facilities & IT expenses, $22 thousand gain on sale of MSR and $649 thousand other related expenses. The third quarter 2019 includes $892 thousand expense related to severance and other related costs, and $1.5 million cost recoveries related to facilities & IT expenses, $333 thousand gain on sale of MSR and $488 thousand income other related expenses. The second quarter 2019 includes $5.1 million, $3.5 million, $2.0 million and $1.6 million expenses related to facilities & IT, severance, loss on mortgage servicing sales and other related expenses. The first quarter of 2019 includes facilities & IT, severance and other related, and other related expenses of $10.7 million, $1.0 million and $1.2 million and gain on sale of MSR of $774 thousand. |
(2) | Includes noninterest expense from discontinued operations in the amount of $0.0 million, $3.3 million, $1.9 million, $42.8 million and $49.9 million for the three months ended March 31, 2020, December 31, 2019, September 30, 2019, June 30, 2019 and March 31, 2019, respectively. |
(3) | Discontinued operations accounting was terminated effective January 1, 2020, as it was no longer material to our operations. |
(4) | Includes assets of continuing and discontinued operations. |
• | Adopted the Current Expected Credit Losses ("CECL") accounting standard resulting in an increase in our allowance for credit losses of $3.7 million at January 1, 2020, or 9%, as compared to our December 31, 2019 aggregate reserve levels. This "Day 1" adjustment was recorded in retained earnings and did not impact net income |
• | Recorded a provision for credit losses of $14.0 million in the first quarter of 2020 exclusively due to the forecasted economic impacts of COVID-19 |
• | Reported net income for the first quarter of 2020 of $7.1 million, or $0.30 per diluted share, compared with $11.0 million, or $0.45 per diluted share for the fourth quarter of 2019 |
• | Reported core net income for the first quarter of 2020 of $8.1 million, or $0.34 per diluted share, compared with $12.7 million, or $0.52 per diluted share for the fourth quarter of 2019 |
• | Reported core pre provision income from continuing operations before income taxes of $24.1 million in the first quarter of 2020 |
• | Increased net interest margin for the first quarter of 2020 to 2.93% compared to 2.87% for the fourth quarter of 2019 |
• | Period ending cost of deposits fell from 1.22% on December 31, 2019, to 0.72% on March 31, 2020 |
• | Increased business core deposits - checking, savings and money market by $72.6 million, or 4.5%, and increased consumer core deposits by $117.5 million, or 6.1% |
• | Reduced full time equivalent employees to 996 at March 31, 2020 compared to 1,071 and 1,221 at December 31, 2019 and June 30, 2019, a 7.0% and 18.4% reduction, respectively |
• | Ended the quarter with consolidated Tier 1 and Risk-Based capital ratios of 10.06% and 13.89%, respectively at the Bank, 10.15% and 13.45%, respectively at the Company, and tangible book value per share of $27.52 |
• | Authorized a quarterly dividend of $0.15 per share to be paid on May 20, 2020 to holders of our common stock of record on May 4, 2020 |
• | Repurchased a total of 580,278 shares of our common stock at an average price of $27.57 per share in the first quarter of 2020 |
• | Suspended our $25 million stock repurchase program with $17.1 million in authorized purchases remaining, and withdrew the subsequent $10 million additional repurchase authorization |
Contact: | Investor Relations: | |
HomeStreet, Inc. | ||
Gerhard Erdelji (206) 515-4039 | ||
Gerhard.Erdelji@HomeStreet.com | ||
http://ir.homestreet.com |
Consolidated results | Quarter Ended | |||||||
(in thousands) | March 31, 2020 | December 31, 2019 | ||||||
Net income | $ | 7,139 | $ | 10,988 | ||||
Impact of loss on exit or disposal and restructuring-related expenses, net of tax | 960 | 1,699 | ||||||
Impact of acquisition related expenses, net of tax | 11 | 28 | ||||||
Core net income | $ | 8,110 | $ | 12,715 | ||||
Continuing operations results | Quarter Ended | |||||||
(in thousands) | March 31, 2020 | December 31, 2019 | ||||||
Net income | $ | 7,139 | $ | 13,105 | ||||
Impact of loss on exit or disposal and restructuring-related expenses, net of tax | 960 | 1,811 | ||||||
Impact of acquisition related expenses, net of tax | 11 | 28 | ||||||
Core net income from continuing operations | $ | 8,110 | $ | 14,944 | ||||
Income from continuing operations before income taxes | $ | 8,880 | $ | 16,228 | ||||
Provision for credit losses | 14,000 | (2,000 | ) | |||||
Pre provision operating income | 22,880 | 14,228 | ||||||
Impact of restructuring-related (expenses) recoveries | 1,215 | 2,292 | ||||||
Impact of acquisition-related (expenses) recoveries | 14 | 36 | ||||||
Core pre provision net operating income from continuing operations | $ | 24,109 | $ | 16,556 | ||||
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