HomeStreet(US:HMST)2021-05-07 17:07Financial Performance - Net income for Q1 2021 was $29.7 million, an increase from $27.6 million in Q4 2020, while income before income taxes rose to $36.7 million from $35.3 million[148]. - Net income for Q1 2021 was $29.7 million, significantly higher than $7.1 million in Q1 2020, driven by increased net interest income and noninterest income[161]. - The company reported a net income of $29,663,000 for the quarter ended March 31, 2021, compared to $27,598,000 for the previous quarter, representing a growth of 7.5%[208]. - Total revenues for the quarter were $93,350,000, a decrease from $100,025,000 in the previous quarter, reflecting a decline of 6.7%[208]. Income and Expenses - Net interest income decreased to $54.5 million in Q1 2021 from $56.0 million in Q4 2020, while noninterest income fell to $38.8 million from $44.0 million[138]. - Noninterest expense decreased to $56.6 million in Q1 2021 from $64.8 million in Q4 2020, contributing to higher income before taxes[148]. - Noninterest expense decreased to $56.608 million in Q1 2021 from $64.770 million in Q4 2020, attributed to lower costs in information services, occupancy, and general administrative expenses[159]. - Noninterest income for the quarter was $38,833,000, compared to $43,977,000 in the previous quarter, a decline of 11.6%[208]. Tax and Effective Rates - The effective tax rate for Q1 2021 was 19.3%, down from 21.7% in Q4 2020, primarily due to tax-advantaged investments[149]. - The effective tax rate for Q1 2021 was 19.3%, slightly lower than 19.6% in Q1 2020, due to benefits from tax-advantaged investments[162]. Assets and Liabilities - Total assets increased to $7.27 billion as of March 31, 2021, compared to $7.24 billion at the end of 2020[140]. - Total assets amounted to $7,265,191,000, with interest-earning assets at $6,810,054,000[214]. - The total liabilities and shareholders' equity stood at $7,265,191,000, with non-interest bearing liabilities at $1,663,826,000[214]. Loans and Credit - Loans held for investment rose to $5.23 billion from $5.18 billion, while loans held for sale increased to $390.2 million from $361.9 million[140]. - The company funded 1,170 loans totaling $123 million under the Paycheck Protection Program (PPP) in Q1 2021, with outstanding PPP loan balances at $381 million[145]. - No provision for credit losses was recorded in Q1 2021 or Q4 2020, reflecting favorable loan portfolio performance[152]. - The company recorded no provision for credit losses in Q1 2021, compared to a $14 million provision in Q1 2020 due to adverse economic conditions[167]. Capital and Ratios - As of March 31, 2021, the Tier 1 leverage capital ratio for HomeStreet, Inc. was 9.83%, exceeding the minimum requirement of 4.0%[199]. - The capital conservation buffer for the company was 6.05% as of March 31, 2021, indicating strong capital adequacy[200]. - The total risk-based capital ratio for HomeStreet Bank was 14.84% as of March 31, 2021, well above the minimum requirement of 8.0%[199]. - The tangible common equity to tangible assets ratio was 9.2% as of March 31, 2021, down from 9.5% as of December 31, 2020[208]. Cash Flow - For the quarter ended March 31, 2021, net cash of $2 million was used in operating activities, an improvement from $14 million used in Q1 2020[191]. - Net cash of $28 million was used in investing activities in Q1 2021, compared to a net cash inflow of $45 million in Q1 2020[192]. - Financing activities provided net cash of $41 million in Q1 2021, primarily due to growth in deposits, compared to a net cash outflow of $16 million in Q1 2020[193]. Shareholder Actions - Share repurchases in Q1 2021 totaled 560,996 shares at an average price of $44.56, with a new repurchase program approved for up to $25 million[146]. - The company declared a quarterly cash dividend of $0.25 per common share in Q1 2021, with intentions to continue this practice[201]. Interest Rate Sensitivity - The company is exposed to price and interest rate risks, primarily from financial instruments such as loans and investment securities[209]. - Interest rate sensitivity is managed through an interest rate simulation model, which assesses the impact of changes in market interest rates on net interest income[212]. - The company is considered liability-sensitive, but historical deposit repricing betas suggest a positive net interest income in rising interest rate scenarios[216]. - A 100 basis points increase in interest rates could lead to a 3.4% increase in net interest income[219].