HomeStreet(HMST) - 2020 Q1 - Quarterly Report

Financial Performance - Net interest income for Q1 2020 was $45,434,000, a slight decrease from $45,512,000 in Q4 2019[316] - Noninterest income rose significantly to $32,630,000 in Q1 2020, up from $21,931,000 in Q4 2019, representing a 48.9% increase[316] - Income from continuing operations decreased to $7,139,000 in Q1 2020, down from $13,105,000 in Q4 2019, a decline of 45.5%[316] - Net income for Q1 2020 was $7,139,000, compared to $10,988,000 in Q4 2019, a decrease of 34.5%[316] - Total net revenue for Q1 2020 was $78.1 million, a 40% increase from $55.6 million in Q1 2019[340] - Net income for Q1 2020 was $7.1 million, compared to a net loss of $1.7 million in Q1 2019, representing a 516% improvement[341] - Basic income per common share from continuing operations was $0.30 in Q1 2020, down from $0.54 in Q4 2019, a decline of 44.4%[316] - The comprehensive income for the first quarter of 2020 was $20,547,000, compared to $8,449,000 in the first quarter of 2019, indicating a year-over-year increase of 143%[13]. Credit Losses and Provisions - Provision for credit losses increased to $14,000,000 in Q1 2020, compared to a reversal of $(2,000,000) in Q4 2019[316] - The allowance for credit losses increased to $60,606 thousand, up from $42,837 thousand in the previous quarter, representing an increase of 41.5%[318] - Provision for credit losses increased to $14.0 million in Q1 2020 from $1.5 million in Q1 2019, an increase of 833%[340] - The provision for credit losses increased to $14.0 million for the three months ended March 31, 2020, compared to $1.5 million for the same period in 2019[411] - The allowance for credit losses was 1.14% of loans held for investment as of March 31, 2020, compared to 0.80% as of March 31, 2019[366] - The total allowance for credit losses, including reserves for unfunded commitments, was $60.606 million as of March 31, 2020, representing 100% of total loans[416] - Consumer loans accounted for 35% of the total allowance for credit losses, with single-family loans at $8.587 million and home equity loans at $12.891 million[416] - The company is actively working with COVID-19 affected borrowers to defer payments, which may impact future interest income and credit losses[330]. Assets and Liabilities - Total assets at the end of Q1 2020 were $6,806,718,000, slightly down from $6,812,435,000 at the end of Q4 2019[316] - Loans held for investment, net, were $5,034,930,000 in Q1 2020, a decrease from $5,072,784,000 in Q4 2019[316] - Total liabilities were $6,129,404,000 as of March 31, 2020, compared to $6,132,712,000 at the end of 2019[9] - Total deposits decreased to $5.26 billion at March 31, 2020, a decline of $82.9 million, or 1.6% from December 31, 2019[395] - Cash and cash equivalents increased to $72.4 million at March 31, 2020, up $14.6 million, or 25.2% from December 31, 2019[385] - Investment securities rose to $1.06 billion at March 31, 2020, an increase of $115.3 million, or 12.2% from December 31, 2019[386] Operational Efficiency - Noninterest expense increased to $55,184,000 in Q1 2020, compared to $53,215,000 in Q4 2019, reflecting a 3.7% rise[316] - The efficiency ratio improved to 70.69%, down from 83.87% in the previous quarter, indicating better cost management[318] - The company suspended its share repurchase program on March 20, 2020, to preserve capital amid the COVID-19 pandemic[337] - The company authorized share repurchase programs of up to $35 million in Q1 2020, but these were suspended in March 2020 due to the COVID-19 pandemic[25]. Regulatory and Capital Ratios - The Tier 1 leverage capital ratio for HomeStreet, Inc. was 10.15% as of March 31, 2020, remaining above regulatory minimums[344] - HomeStreet Bank's Tier 1 leverage capital ratio was 10.06%, significantly above the minimum requirement of 4.0%[457] - The common equity Tier 1 capital ratio was 12.75% as of March 31, 2020, well above the minimum requirement of 4.5%[457] - The total risk-based capital ratio for HomeStreet, Inc. was 13.50% as of March 31, 2020, exceeding the minimum requirement of 8.0%[457] COVID-19 Impact - As of May 5, 2020, the company granted forbearance on 393 loans with an outstanding balance of $223.0 million due to COVID-19[335] - The company closed or approved 1,479 Paycheck Protection Program loans totaling $304.7 million, which are fully guaranteed by the U.S. government[336] - The company is evaluating its policy for interest income recognition for loans receiving forbearance due to COVID-19 hardships[424] - The company expects that the volume of TDRs will not increase significantly in the near term due to temporary relief under the CARES Act[422].