HomeStreet(US:HMST)2021-11-05 16:47Financial Performance - Net income for Q3 2021 was $27.2 million, down from $29.2 million in Q2 2021, while income before taxes decreased from $37.4 million to $34.8 million[133]. - Noninterest income for Q3 2021 was $24.298 million, down from $28.224 million in Q2 2021, contributing to the overall decrease in income[122]. - The company reported net income of $86.0 million for the nine months ended September 30, 2021, compared to $52.4 million for the same period in 2020[146]. - Net income for the quarter ended September 30, 2021, was $27,170,000, compared to $52,392,000 for the same quarter in 2020, reflecting a decrease of 48%[186]. - Total revenues for the nine months ended September 30, 2021, were $261,328,000, up from $257,435,000 in the same period of 2020, representing a growth of 1.1%[186]. Interest Income and Margin - Net interest income for Q3 2021 was $57.484 million, compared to $57.972 million in Q2 2021, reflecting a decrease in net interest margin from 3.45% to 3.42%[122]. - Net interest income for Q3 2021 was $58.356 million, a decrease from $58.826 million in Q2 2021[137]. - The net interest margin for Q3 2021 was 3.42%, compared to 3.45% in Q2 2021[137]. - Net interest income increased by $114 million due to a rise in interest-earning assets and an increase in net interest margin from 3.09% to 3.39% for the nine months ended September 30, 2021[150]. - The average yield on loans for the nine months ended September 30, 2021, was 3.95%, down from 4.16% in the same period of 2020[148]. Credit Losses and Allowances - Provision for credit losses was $5 million in Q3 2021, an increase from $4 million in Q2 2021, while the allowance for credit losses (ACL) decreased to $54.516 million from $64.294 million[122][124]. - Provision for credit losses recorded a recovery of $5 million in Q3 2021, up from a $4 million recovery in Q2 2021[138]. - Provision for credit losses recorded a recovery of $9 million for the nine months ended September 30, 2021, compared to a provision of $20.5 million in the same period of 2020[152]. - The allowance for credit losses (ACL) totaled $54.5 million, with a reserve rate of 1.06% as of September 30, 2021, down from $64.3 million and 1.33% at December 31, 2020[165]. Assets and Loans - Total assets increased to $7.372 billion as of September 30, 2021, compared to $7.237 billion at the end of 2020[124]. - Loans held for investment, net, rose to $5.299 billion from $5.179 billion at the end of 2020, indicating growth in the loan portfolio[124]. - Total assets as of September 30, 2021, were $7,372,451,000, an increase from $7,204,211,000 as of December 31, 2020[186]. - The ratio of nonperforming assets to total assets remained low at 0.26% as of September 30, 2021, with total loans delinquent over 30 days at 0.54%[161]. Capital and Dividends - HomeStreet Inc. maintained a Tier 1 leverage capital ratio of 10.00% as of September 30, 2021, exceeding the minimum requirement of 4.0%[177]. - The capital conservation buffer for HomeStreet Inc. as of September 30, 2021, was 5.01%, indicating strong capital adequacy[178]. - The company declared a quarterly cash dividend of $0.25 per common share for each of the first three quarters of 2021, with intentions to continue this practice[179]. Cash Flow and Commitments - Net cash provided by operating activities for the nine months ended September 30, 2021, was $182 million, a significant increase from a net cash usage of $40 million in the same period of 2020[171]. - Net cash used in investing activities for the nine months ended September 30, 2021, was $155 million, a decrease from $394 million used in the same period of 2020[172]. - Total off-balance sheet commitments as of September 30, 2021, amounted to $1,260,782 thousand, an increase from $1,113,532 thousand at December 31, 2020[175]. Operational Efficiency - Noninterest expense for Q3 2021 was $51.949 million, down from $52.815 million in Q2 2021[143]. - Total noninterest expense decreased by $9.5 million to $161.4 million for the nine months ended September 30, 2021, driven by lower information services, occupancy, and general administrative expenses[158]. - The efficiency ratio for the quarter ended September 30, 2021, was 62.8%, consistent with the previous quarter, indicating stable operational efficiency[186]. Interest Rate Sensitivity - The company is primarily exposed to price and interest rate risks, with no significant exposure to foreign currency exchange or commodity price risks[187]. - Interest rate sensitivity is managed through an interest rate simulation model, focusing on the repricing characteristics of assets and liabilities[190]. - The company is considered liability-sensitive, with a cumulative interest sensitivity gap of $(2,183,565), representing (30)% of total assets[194]. - A 200 basis point increase in interest rates is projected to increase net interest income by 7.0% and decrease net portfolio value by (7.1)%[198]. - The estimated impact on net interest income for a 100 basis point increase in interest rates is 3.0%, while a decrease of 100 basis points would result in a (4.2)% decline[198].