HomeStreet(US:HMST)2021-08-06 17:47Financial Performance - Net interest income for Q2 2021 was $57.972 million, up from $54.517 million in Q1 2021, contributing to a total of $112.489 million for the first half of 2021, compared to $96.930 million for the same period in 2020[125] - Noninterest income for Q2 2021 was $28.224 million, down from $38.833 million in Q1 2021, leading to a total of $67.057 million for the first half of 2021, compared to $69.232 million in the first half of 2020[125] - For the six months ended June 30, 2021, net income was $58.8 million, significantly up from $26.0 million for the same period in 2020[147] - The net income for the quarter ended June 30, 2021, was $29,157,000, reflecting a decrease from $29,663,000 in the previous quarter[188] - The total revenues for the six months ended June 30, 2021, were $179,546,000, an increase from $165,596,000 in the same period of 2020[188] Credit Quality - Provision for credit losses decreased to $(4.000) million in Q2 2021 from $20.469 million in the same quarter of the previous year, indicating improved credit quality[125] - A recovery of $4 million in the allowance for credit losses was recorded in Q2 2021, compared to no provision in Q1 2021, reflecting favorable loan portfolio performance[140][141] - The provision for credit losses recorded a recovery of $4 million for the six months ended June 30, 2021, compared to a $20.5 million provision in the same period of 2020[153] - Nonperforming assets remained stable at 0.31% of total assets as of June 30, 2021, indicating consistent asset quality[127] - The ratio of nonperforming assets to total assets remained low at 0.31% as of June 30, 2021[163] Assets and Liabilities - Total assets as of June 30, 2021, were $7.168 billion, a slight decrease from $7.237 billion at the end of 2020[127] - Loans held for investment increased to $5.333 billion as of June 30, 2021, from $5.180 billion at the end of 2020, showing growth in lending activities[127] - The total Allowance for Credit Losses (ACL) was $59,897 thousand with a reserve rate of 1.18% as of June 30, 2021, down from $64,294 thousand and 1.33% at December 31, 2020[167] - Interest-bearing liabilities totaled $4,700,703,000, with demand deposit accounts at $557,677,000 and money market accounts at $2,650,564,000[193] Deposits - Deposits increased to $6.087 billion as of June 30, 2021, compared to $5.822 billion at the end of 2020, reflecting strong customer confidence[127] - Total deposits decreased slightly to $4.58 billion in Q2 2021 from $4.59 billion in Q1 2021, with a total cost of deposits at 0.24%[138] - Total deposits increased by $265 million, reflecting growth from new customers and increases in existing customer balances[161] - The cost of deposits, including noninterest-bearing deposits, decreased from 0.86% in the six months ended June 30, 2020, to 0.21% in 2021[150] Tax and Efficiency - The effective tax rate for Q2 2021 was 22.0%, higher than 19.3% in Q1 2021, primarily due to tax benefits from investments[135] - The effective tax rate for the six months ended June 30, 2021, was 20.6%, slightly lower than 20.7% for the same period in 2020[148] - The efficiency ratio for the quarter was 62.8%, compared to 60.0% in the previous quarter[188] Shareholder Returns - The company repurchased 1,126,352 shares of common stock at an average price of $44.39 per share during the first half of 2021, with a new repurchase program approved for up to $15 million[133] - The Company declared a quarterly cash dividend of $0.25 per common share for the first and second quarters of 2021, with intentions to continue this practice[181] Market and Interest Rate Sensitivity - The company is exposed to market risks primarily related to price and interest rate fluctuations[189] - The company is considered liability-sensitive, with a cumulative interest sensitivity gap of $(2,126,507,000), representing (30)% of total assets[195] - A 200 basis point increase in interest rates is projected to increase net interest income by 5.4% and decrease net portfolio value by (11.1)%[199] - The estimated impact on net interest income for a 100 basis point increase in interest rates is a 2.2% increase, while a decrease of 100 basis points would result in a (3.6)% decline[199] - The company’s interest rate sensitivity analysis indicates a potential for positive results in increasing interest rate scenarios due to historical deposit repricing betas[195] Operational Cash Flow - Net cash provided by operating activities was $55 million for the six months ended June 30, 2021, a significant improvement from a net cash usage of $145 million in the same period of 2020[173] - Net cash provided by investing activities was $44 million for the six months ended June 30, 2021, compared to a net cash usage of $371 million in the same period of 2020[174] - The Company used $69 million in financing activities for the six months ended June 30, 2021, primarily due to net repayment of short-term borrowings and dividends paid[175] Growth Strategy - The company plans to pursue opportunities for growth, including opening additional offices or acquiring complementary businesses[182]