HomeStreet(HMST) - 2024 Q3 - Quarterly Results

Financial Performance - Net loss for Q3 2024 was $7.3 million, an increase from $6.2 million in Q2 2024, with a net loss per fully diluted share of $0.39 compared to $0.33[2] - The company reported a net loss of $7,282 thousand for the quarter, compared to a net income of $2,295 thousand in the same quarter last year[13] - Core net income (loss) for the nine months ended September 30, 2024, was $(15.8) million, compared to $10.5 million for the same period in 2023[26] - Core net income for the quarter was $(7,282) thousand, compared to $(6,238) thousand in the previous quarter[58] - The company reported a ratio of 5.8% for net income to average assets, up from 5.5% in the previous quarter[18] Income and Expenses - Noninterest income fell to $11.1 million from $13.2 million in Q2 2024, while noninterest expenses decreased by $1.8 million to $49.2 million[3][9] - Total interest income for the quarter ended September 30, 2023, was $99,837 thousand, a slight decrease from $100,706 thousand in the previous quarter[13] - Total interest expense rose to $71,218 thousand, compared to $61,794 thousand in the prior year, primarily due to higher deposit costs[13] - Noninterest expense remained stable at $49,166 thousand, slightly up from $49,089 thousand year-over-year[13] - The company experienced a $40.1 million decrease in noninterest expense compared to the same period in 2023, primarily due to a prior goodwill impairment charge[32] Assets and Liabilities - Total assets decreased to $9,201,285 thousand as of September 30, 2024, from $9,392,450 thousand at December 31, 2023, representing a decline of approximately 2.0%[11] - Total loans held for investment (LHFI) as of September 30, 2024, was $7,333,254, a decrease of 0.6% from $7,380,050 on June 30, 2024[35] - Total interest-bearing liabilities decreased to $7,220,499 as of September 30, 2024, from $7,368,223 as of September 30, 2023[19] - Total deposits decreased to $6,435,404 thousand from $6,763,378 thousand, reflecting a decline of approximately 4.8%[11] - Total deposits as of September 30, 2024, amounted to $6,435,404, a decrease from $6,532,470 on June 30, 2024, representing a decline of approximately 1.49%[50] Credit Quality - Loans held for investment decreased by $46 million, with nonperforming assets to total assets rising to 0.47% from 0.42% in the previous quarter[4] - The ratio of total loan delinquencies was 0.69%, up from 0.66% in the previous quarter, indicating stable credit quality[4] - Nonperforming assets increased to $43,320 thousand from $39,374 thousand, representing an increase of about 10.0%[11] - The allowance for credit losses (ACL) decreased to $38,651 thousand from $40,500 thousand, a reduction of approximately 4.6%[11] - There was no provision for credit losses recognized during the nine months ended September 30, 2024, reflecting a stable loan portfolio[30] Capital and Equity - Tangible book value per share increased to $28.13 from $28.11 at the end of 2023, despite operating losses[5] - Total shareholders' equity remained relatively stable at $538,315 thousand compared to $538,387 thousand at December 31, 2023[11] - Tier 1 leverage ratio improved to 8.59% from 8.49%, reflecting a stronger capital position[11] - Book value per share increased to $28.55 from $26.74, an increase of approximately 6.8%[11] - Tangible common equity to tangible assets ratio improved to 5.8% from 5.2%, indicating enhanced capital efficiency[11] Future Outlook - The company anticipates that funding costs will decrease in Q4 2024 and beyond, potentially improving the interest margin[3] - The company is in the process of merging with FirstSun Capital Bancorp, which is expected to yield cost savings and synergies[62] - The company anticipates potential challenges in maintaining customer relationships due to the merger[62] - Forward-looking statements indicate that actual results may differ materially from expectations due to various risks and uncertainties, including economic conditions and regulatory changes[61]