HomeStreet Reports Third Quarter 2024 Results
Operating Results |
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Third quarter 2024 compared to second quarter 2024 Reported Results:
Core Results (1):
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(1) |
Core loss and core loss per fully diluted share are non-GAAP measures. For a reconciliation of these measures to the nearest comparable GAAP measure see "Non-GAAP financial measures" in this earnings release. |
“As a result of lower noninterest income and lower net interest income, our net loss and core net loss were higher in the third quarter than in the second quarter,” said
Financial Position |
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As of and for the quarter ended
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(2) |
Total past due and nonaccrual loans as a percentage of total loans held for investment. |
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(3) |
Tangible book value per share is a non-GAAP measure. For a reconciliation of this measure to the nearest comparable GAAP measure see "Non-GAAP financial measures" in this earnings release. |
"Our quarter-end deposit balances, excluding brokered deposits, increased
"Our loan balances decreased
“With the benefits of lower interest rates, our tangible book value per share has increased due to the increased value of our available for sale securities portfolio,” stated
(4) |
Tangible fair value per share is a non-GAAP measure. For a reconciliation of this measure to the nearest comparable GAAP measure see "Non-GAAP financial measures" in this earnings release. |
About HomeStreet
Forward-Looking Statements
This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”). Generally, forward-looking statements include the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “goal,” “upcoming,” “outlook,” “guidance” or "project" or the negation thereof, or similar expressions. In addition, all statements in this earnings release (including but not limited to those found in the quotes of our Chief Executive Officer) that address and/or include beliefs, assumptions, estimates, projections and expectations of our future performance and financial condition and trends in product mixes and expected impact on costs, as well as the expected impact of decreases in short term interest rates, are forward-looking statements within the meaning of the Reform Act. Forward-looking statements involve inherent risks, uncertainties and other factors, many of which are difficult to predict and are generally beyond management’s control. Forward-looking statements are based on the Company’s expectations at the time such statements are made and speak only as of the date made. The Company does not assume any obligation or undertake to update any forward-looking statements after the date of this release as a result of new information, future events or developments, except as required by federal securities or other applicable laws, although the Company may do so from time to time. The Company does not endorse any projections regarding future performance that may be made by third parties. For all forward-looking statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the Reform Act.
We caution readers that actual results may differ materially from those expressed in or implied by the Company’s forward-looking statements. Rather, more important factors could affect the Company’s future results, including but not limited to the following: (1) our ability to successfully consummate the pending merger (the "Merger") with FirstSun Capital Bancorp ("FirstSun"), (2) the ability of HomeStreet and FirstSun to obtain required governmental approvals of the Merger, (3) the failure to satisfy the closing conditions in the definitive Agreement and Plan of Merger (the “Merger Agreement”), dated as of
All future written and oral forward-looking statements attributable to the Company or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements contained or referred to above. New risks and uncertainties arise from time to time, and factors that the Company currently deems immaterial may become material, and it is impossible for the Company to predict these events or how they may affect the Company.
Non-GAAP Financial Measures
To supplement our unaudited condensed consolidated financial statements presented in accordance with GAAP, we use certain non-GAAP measures of financial performance.
In this earnings release, we use the following non-GAAP measures: (i) tangible common equity and tangible assets as we believe this information is consistent with the treatment by bank regulatory agencies, which exclude intangible assets from the calculation of capital ratios; (ii) core net income (loss) and effective tax rate on core net income (loss) before taxes, which excludes goodwill impairment charges and merger related expenses and the related tax impact as we believe this measure is a better comparison to be used for projecting future results; and (iii) tangible fair value per share as we believe this information provides an estimate of what the current value per share is of the Company’s net assets; (iv) an efficiency ratio which is the ratio of noninterest expense to the sum of net interest income and noninterest income, excluding certain items of income or expense and excluding taxes incurred and payable to the state of
These supplemental performance measures may vary from, and may not be comparable to, similarly titled measures provided by other companies in our industry. Non-GAAP financial measures are not in accordance with, or an alternative for, GAAP. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. A non-GAAP financial measure may also be a financial metric that is not required by GAAP or other applicable requirements.
We believe that these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provide meaningful supplemental information regarding our performance by providing additional information used by management that is not otherwise required by GAAP or other applicable requirements. Our management uses, and believes that investors benefit from referring to, these non-GAAP financial measures in assessing our operating results and when planning, forecasting and analyzing future periods. These non-GAAP financial measures also facilitate a comparison of our performance to prior periods. We believe these measures are frequently used by securities analysts, investors and other parties in the evaluation of companies in our industry. These non-GAAP financial measures should be considered in addition to, not as a substitute for or superior to, financial measures prepared in accordance with GAAP. In the information below, we have provided reconciliations of, where applicable, the most comparable GAAP financial measures to the non-GAAP measures used in this earnings release, or the computation of the non-GAAP financial measure.
Non-GAAP Financial Measures
Reconciliations of non-GAAP results of operations to the nearest comparable GAAP measures or calculations of the non-GAAP measure:
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As of or for the Quarter Ended |
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(in thousands, except share and per share data) |
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Core net income (loss) |
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Net income (loss) |
$ |
(7,282 |
) |
|
$ |
(6,238 |
) |
Adjustments (tax effected) |
|
|
|
||||
Merger related expenses |
|
1,283 |
|
|
|
1,897 |
|
Total |
$ |
(5,999 |
) |
|
$ |
(4,341 |
) |
Core net income (loss) per fully diluted share |
|
|
|||||
Fully diluted shares |
|
18,857,565 |
|
|
|
18,857,566 |
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Computed amount |
$ |
(0.32 |
) |
|
$ |
(0.23 |
) |
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|
|
|
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Return on average tangible equity (annualized) |
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|
|
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Average shareholders' equity |
$ |
531,608 |
|
|
$ |
522,904 |
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Less: Average goodwill and other intangibles |
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(8,176 |
) |
|
|
(8,794 |
) |
Average tangible equity |
$ |
523,432 |
|
|
$ |
514,110 |
|
|
|
|
|
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Core net income (loss) (per above) |
$ |
(5,999 |
) |
|
$ |
(4,341 |
) |
Adjustments (tax effected) |
|
|
|
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Amortization of core deposit intangibles |
|
488 |
|
|
|
487 |
|
Tangible income (loss) applicable to shareholders |
$ |
(5,511 |
) |
|
$ |
(3,854 |
) |
|
|
|
|
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Ratio |
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(4.2 |
)% |
|
|
(3.0 |
)% |
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Efficiency ratio |
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|
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Noninterest expense |
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|
|
||||
Total |
$ |
49,166 |
|
|
$ |
50,931 |
|
Adjustments: |
|
|
|
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Merger related expenses |
|
(1,645 |
) |
|
|
(2,432 |
) |
|
|
(438 |
) |
|
|
(463 |
) |
Adjusted total |
$ |
47,083 |
|
|
$ |
48,036 |
|
|
|
|
|
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Total revenues |
|
|
|
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Net interest income |
$ |
28,619 |
|
|
$ |
29,701 |
|
Noninterest income |
|
11,058 |
|
|
|
13,227 |
|
Adjusted total |
$ |
39,677 |
|
|
$ |
42,928 |
|
Ratio |
|
118.7 |
% |
|
|
111.9 |
% |
|
|
|
|
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Return on average assets (annualized) - Core |
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Average Assets |
$ |
9,138,291 |
|
|
$ |
9,272,131 |
|
Core net income (loss) (per above) |
|
(5,999 |
) |
|
|
(4,341 |
) |
Ratio |
|
(0.26 |
)% |
|
|
(0.19 |
)% |
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|
|
|
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Tangible book value per share |
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|
|
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Shareholders' equity |
$ |
538,315 |
|
|
$ |
520,117 |
|
Less: |
|
(7,766 |
) |
|
|
(8,391 |
) |
Tangible shareholders' equity |
$ |
530,549 |
|
|
$ |
511,726 |
|
Common shares outstanding |
|
18,857,565 |
|
|
|
18,857,565 |
|
Computed amount |
$ |
28.13 |
|
|
$ |
27.14 |
|
|
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As of or for the Quarter Ended |
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(in thousands, except share and per share data) |
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Carrying Value |
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Fair Value |
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Change in Value |
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Tangible Fair Value per Share |
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|||||||||||||||
Tangible shareholder's equity (see above) |
|
|
|
|
|
|
$ |
530,549 |
|
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Assets: |
|
|
|
|
|
|
|
|||||||||
Investment securities HTM |
|
$ |
2,318 |
|
$ |
2,296 |
|
$ |
(22 |
) |
|
|||||
Loans held for investment |
|
|
7,293,274 |
|
|
|
7,019,085 |
|
|
|
(274,189 |
) |
|
|||
MSRs - multifamily and SBA |
|
|
26,322 |
|
|
|
31,970 |
|
|
|
5,648 |
|
|
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Liabilities: |
|
|
|
|
|
|
|
|||||||||
Certificates of deposit |
|
|
3,181,412 |
|
|
|
3,180,057 |
|
|
|
1,355 |
|
|
|||
Borrowings |
|
|
1,896,000 |
|
|
|
1,909,471 |
|
|
|
(13,471 |
) |
|
|||
Long term debt |
|
|
225,039 |
|
|
|
184,609 |
|
|
|
40,430 |
|
|
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Total change in value |
|
|
|
|
|
|
|
(240,249 |
) |
|||||||
Deferred taxes at 24.5% |
|
|
|
|
|
|
|
58,861 |
|
|||||||
|
|
|
|
|
|
|
$ |
349,161 |
|
|||||||
Shares outstanding |
|
|
|
|
|
|
|
18,857,565 |
|
|||||||
Computed amount |
|
|
|
|
|
|
$ |
18.52 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20241029225501/en/
Executive Vice President and Chief Financial Officer
John Michel (206) 515-2291
john.michel@homestreet.com
http://ir.homestreet.com
Source: