HomeStreet(US:HMST)2020-11-06 21:04Financial Performance - Net interest income for Q3 2020 was $55.7 million, up from $47.1 million in Q3 2019, representing a 18.5% increase[247] - Noninterest income increased to $36.2 million in Q3 2020 from $24.6 million in Q3 2019, a growth of 47.1%[247] - Income from continuing operations for Q3 2020 was $26.3 million, compared to $13.7 million in Q3 2019, marking a 92.0% increase[260] - Book value per share increased to $31.66 as of September 30, 2020, up from $28.45 at the end of 2019, a rise of 7.7%[249] - HomeStreet Inc. reported a net income of $26,349,000 for the quarter ended September 30, 2020, resulting in a return on average tangible equity of 15.3%[341] - Income from continuing operations for the nine months ended September 30, 2020, was $52.4 million, compared to $27.6 million for the same period in 2019[274] Asset and Liability Management - Total assets increased to $7.41 billion as of September 30, 2020, up from $6.81 billion at the end of 2019, reflecting an 8.7% growth[249] - The total assets increased to $7,499,809 thousand as of September 30, 2020, compared to $7,004,265 thousand as of September 30, 2019[263] - The company reported total assets of $7,409,641,000 as of September 30, 2020, an increase from $6,812,435,000 at December 31, 2019[341] - The company's total assets as of September 30, 2020, amount to $7,409,641,000, with interest-earning assets totaling $6,933,224,000[350] Credit Losses and Provisions - The provision for credit losses was $20.5 million for the nine months ended September 30, 2020, compared to $1.5 million for the same period in 2019[247] - The allowance for credit losses rose to $64.9 million as of September 30, 2020, compared to $41.8 million at the end of 2019, an increase of 55.3%[249] - Provision for credit losses increased significantly to $20.5 million for the nine months ended September 30, 2020, from $1.5 million in the same period of 2019, due to adverse economic conditions related to the COVID-19 pandemic[280] - The company recorded a provision for credit losses of $20.5 million for the nine months ended September 30, 2020, with the allowance for credit losses (ACL) for loans increasing by $23 million[298] Deposits and Loans - The total deposits decreased to $4,326,808 thousand in Q3 2020 from $4,846,585 thousand in Q3 2019[263] - Total deposits increased by $476 million to $4,293 million, attributed to a $547 million rise in business and consumer accounts[289] - Loans held for investment increased to $5,294 million as of September 30, 2020, from $5,115 million at the end of 2019, with significant originations including $298 million under the PPP[293] - As of September 30, 2020, total loans amounted to $5,254,339,000, with 0.76% classified as past due and still accruing[314] Efficiency and Cost Management - The efficiency ratio improved to 59.9% in Q3 2020 from 75.9% in Q3 2019, indicating better cost management[247] - Total noninterest expense increased to $58,057 thousand in Q3 2020 from $55,721 thousand in Q3 2019, mainly due to $2.4 million in impairments related to restructuring[273] - Noninterest expense rose to $170,893 thousand for the nine months ended September 30, 2020, compared to $162,399 thousand in 2019, mainly due to increased compensation and benefits costs[287] Tax and Regulatory Compliance - The effective tax rate for the third quarter of 2020 was 22.0%, compared to 14.6% in the third quarter of 2019, with a statutory rate of 23.7%[261] - The effective tax rate for the nine months ended September 30, 2020, was 21.4%, up from 15.0% in the same period of 2019[275] - HomeStreet Inc. maintained a Tier 1 leverage capital ratio of 9.34% as of September 30, 2020, exceeding the minimum requirement of 4.0%[333] - Total risk-based capital ratio for HomeStreet Bank was 13.95% as of September 30, 2020, well above the minimum requirement of 8.0%[333] Interest Rate Sensitivity - The interest sensitivity gap is reported at $(2,241,727,000) for the 3-month period, indicating a significant exposure to interest rate changes[350] - A 200 basis point increase in interest rates is projected to increase net interest income by 3.3% and decrease net portfolio value by 6.1% as of September 30, 2020[354] - The estimated impact on net interest income for a 100 basis point increase in interest rates is 1.1%, while a decrease of 100 basis points would result in a decline of 3.6%[354] - The company is considered liability sensitive, as indicated by the gap table and projected changes in net portfolio value[356] COVID-19 Impact and Response - The company had 375 loans approved for forbearance totaling $206 million as of September 30, 2020, due to the COVID-19 pandemic[256] - The company closed or approved 1,822 Paycheck Protection Program loans, amounting to $298 million in outstanding balances as of September 30, 2020[257] - The company approved second forbearances for $66 million of loans during the third quarter, indicating ongoing support for borrowers affected by the COVID-19 pandemic[301] - The company is actively managing risks associated with the COVID-19 pandemic, with a focus on credit, market, and operational risks[319]