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HomeStreet, Inc. Reports Record Full Year Net Income

Stocks in this article: HMST

HomeStreet, Inc. (NASDAQ:HMST) (the “Company” or “HomeStreet”), the parent company of HomeStreet Bank (the “Bank”), today announced net income of $21.5 million, or $1.46 per diluted share, for the fourth quarter of 2012, compared to net income of $7.0 million, or $1.21 per share, for the fourth quarter of 2011. For the full year 2012, net income was $82.1 million, or $5.98 per share, compared to $16.1 million, or $2.80 per share, for 2011.

  • Record financial performance:
    • Full year 2012:
      • Record net income of $82.1 million, up 409% from 2011.
      • Net interest margin of 2.89%, up from 2.36% in 2011.
      • Return on average equity of 39.18% and return on average assets of 3.43%.
    • Fourth quarter 2012:
      • Net income of $21.5 million, up 206% from fourth quarter 2011.
      • Net interest margin of 3.06%, up from 2.48% in 2011.
      • Return on average equity of 32.80% and return on average assets of 3.46%.
  • Record mortgage banking results:
    • Full year 2012:
      • Record single family mortgage closed loan production of $4.67 billion, up 174% from 2011.
      • Record net gain on mortgage origination and sale activities of $210.2 million, up 334% from 2011.
    • Fourth quarter 2012:
      • Record single family mortgage closed loan production of $1.52 billion, up 143% from fourth quarter 2011.
      • Record net gain on mortgage origination and sale activities of $68.8 million, up 262% from fourth quarter 2011.
  • Other highlights:
    • Loans held for investment were $1.31 billion at December 31, 2012, an increase of $40.3 million, or 3.2%, from the prior quarter with new loan originations in all of HomeStreet's primary lending lines of business: commercial and industrial, commercial real estate, residential construction and single family mortgage. This marks the second consecutive quarter of net increases in loans held for investment since early 2008.
    • Transaction and savings deposits grew to $1.05 billion, or 52.9% of total deposits, up from $774.6 million, or 38.5% of total deposits, at December 31, 2011.
    • Nonperforming assets declined to $53.8 million, or 2.05% of total assets, down 53.2% from December 31, 2011.
    • During the fourth quarter of 2012, HomeStreet remained the second largest residential lender by volume of single family mortgages in the five-county Puget Sound area of Washington State (King, Snohomish, Pierce, Kitsap, and Thurston counties), as well as in Spokane County, Washington, and the largest residential lender by volume of single family homes in Clark County, Washington. (1)
    • During the quarter, HomeStreet opened two new retail deposit branches. In 2012, a total of 15 new mortgage loan origination offices were opened.
    • In recognition of the significant improvement in the Bank’s financial condition, results of operations and risk profile, in December 2012 the Bank’s regulators terminated their memorandum of understanding with the Bank, outstanding since March 26, 2012.

“HomeStreet's strong earnings in the fourth quarter concluded what has been a gratifying year for our company and our shareholders,” said President and Chief Executive Officer Mark K. Mason. “Our many accomplishments over the last year included the successful completion of our initial public offering, record earnings and returns on equity and assets, significant growth in mortgage originations and market share, significant improvement in asset quality, the successful restart of portfolio lending in each of our traditional commercial lending lines, and expansion of our deposit and lending branch networks. While we have been, and expect to continue to be successful in growing our mortgage lending business, we are also focused on the long term goal of business diversification. Toward that goal, we have made and we expect to continue to make substantial investments in our commercial and consumer businesses through new branches, increased staffing, new products and services, and related infrastructure improvements, and we are already seeing the return on these investments.”

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