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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): April 28, 2025
 
HOMESTREET, INC.
(Exact name of registrant as specified in its charter)
 
Washington   001-35424   91-0186600
(State or other jurisdiction
of incorporation)		   (Commission
File Number)		   (IRS Employer
Identification No.)
601 Union Street, Ste. 2000, Seattle, WA 98101
(Address of principal executive offices) (Zip Code)
(206) 623-3050
(Registrant’s telephone number, including area code)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, No Par Value HMST Nasdaq Global Select Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Act or Rule 12b-2 of the Exchange Act.
☐ Emerging growth company
☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 12(a) of the Exchange Act.



Item 2.02 Results of Operations and Financial Condition

On April 28, 2025, HomeStreet, Inc. issued a press release reporting results of operations for the first quarter of 2025. A copy of the earnings release is attached as Exhibit 99.1. A copy of the press release reporting summary results of operations is attached as Exhibit 99.2. This information shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, and is not incorporated by reference into any filing under the Securities Act of 1933, as amended, or Securities Exchange Act of 1934, as amended.



Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
Exhibit 99.1
Exhibit 99.2
Exhibit 104 Cover Page Interactive Data File (embedded within with Inline XBRL)




Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: April 28, 2025
HomeStreet, Inc.
By:   /s/ John M. Michel
  John M. Michel
  Executive Vice President and Chief Financial Officer
 


EX-99.1 2 a1q2025earningsrelease.htm EX-99.1 Q1 2025 EARNINGS RELEASE Document



image2a.jpg
HomeStreet Reports First Quarter 2025 Results

SEATTLE –April 28, 2025 – (BUSINESS WIRE) – HomeStreet, Inc. (Nasdaq: HMST) (including its consolidated subsidiaries, the "Company", "HomeStreet" or "we"), the parent company of HomeStreet Bank (the "Bank"), today announced the financial results for the quarter ended March 31, 2025. As we present non-GAAP measures in this release, the reader should refer to the non-GAAP reconciliations set forth below under the section “Non-GAAP Financial Measures.”
“As a result of the implementation of our new strategic plan, we anticipate a return to profitability during 2025,” said Mark Mason, Chairman of the Board, President, and Chief Executive Officer. “During the first quarter of 2025, our core net loss was 44% less than the fourth quarter 2024 core net loss, and our interest margin improved from 1.38% in the fourth quarter of 2024 to 1.82% in the first quarter of 2025. Importantly, the Bank, on a standalone basis, realized $1.1 million in net income in the first quarter of 2025, achieving our strategic goal of returning the Bank to profitability in the first quarter. In addition, our total deposits, excluding brokered deposits, increased $131 million during the first quarter and our loans held for investment declined by $169 million, improving our funding and liquidity position. Given the scheduled repricing of our remaining multifamily and other commercial real estate loans, future anticipated reductions in higher cost borrowings, the repricing of our term deposits to lower rates and continued effective noninterest expense management, we anticipate continuous growth in earnings for the foreseeable future. Additionally, as a result of the deferred tax asset valuation allowance recorded in the fourth quarter of 2024, we do not expect to recognize any income tax expense on our earnings for the next few years.”

Operating Results
                  First quarter 2025 compared to fourth quarter 2024
Reported Results:
•Net loss: $4.5 million compared to $123.3 million
•Net loss per fully diluted share: $0.24 compared to $6.54
•Noninterest expenses: $49.1 million compared to $44.0 million
•Return on Average Equity ("ROAE"): (4.5)% compared to (92.7)%
•Return on Average Tangible Equity ("ROATE"): (4.2)% compared to (93.7)%(1)
•Return on Average Assets ("ROAA"): (0.23)% compared to (5.38)%
•Net interest margin: 1.82% compared to 1.38%
•Efficiency ratio: 102.9% compared to 115.6% (1)
Core Results: (1)
•Net loss: $2.9 million compared to $5.1 million
•Net loss per fully diluted share: $0.15 compared to $0.27
•Core noninterest expenses: $46.7 million compared to $46.6 million
•ROAE: (2.9)% compared to (3.9)%
•ROATE: (2.5)% compared to (3.5)%
•ROAA: (0.15)% compared to (0.22)%
                                                                                                
(1) ROATE, the efficiency ratio, core net income (loss), core net income (loss) per fully diluted share, core noninterest expense, core ROAE, core ROATE and core ROAA are non-GAAP measures. For a reconciliation of these measures to the nearest comparable GAAP measure or a computation of the measure see "Non-GAAP financial measures" in this earnings release.
1



“Our net interest margin in the first quarter increased significantly due to the impact of the fourth quarter loan sale as we sold lower yielding loans and paid off higher cost funding,” continued Mark Mason. “Our core noninterest expenses remained stable as seasonal increases in compensation costs were offset by continuing decreases in our full time equivalent employees.”

Financial Position
                    As of and for the quarter ended March 31, 2025
•Excluding brokered deposits, total deposits increased by $131 million
•Uninsured deposits were $542 million, or 9% of total deposits
•Loans held for investment ("LHFI"), decreased by $169 million
•Nonperforming assets to total assets: 0.75%
•Delinquencies: 1.09%
•Allowance for credit losses to LHFI: 0.66%
•Book value per share: $21.18
•Tangible book value per share: $20.83(2)

(2) Tangible book value per share is a non-GAAP measure. For a reconciliation of this measure to the nearest comparable GAAP measure see "Non-GAAP financial measures" in this earnings release.

“Our credit quality remained stable with no significant changes in the amount of nonaccrual loans or delinquent loans,” added Mark Mason. “During the first quarter of 2025, we increased the specific reserves for a syndicated commercial loan by $3.9 million based on updated analysis of the collateral support for this non-performing loan.”


2

About HomeStreet

HomeStreet, Inc. (Nasdaq: HMST) is a diversified financial services company headquartered in Seattle, Washington, serving consumers and businesses in the Western United States and Hawaii. The Company is principally engaged in real estate lending, including mortgage banking activities, and commercial and consumer banking. Its principal subsidiary is HomeStreet Bank. Certain information about our business can be found on our investor relations web site, located at http://ir.homestreet.com. HomeStreet Bank is a member of the FDIC and is an Equal Housing Lender.



Contact:    Executive Vice President and Chief Financial Officer
HomeStreet, Inc.
   John Michel (206) 515-2291
   john.michel@homestreet.com
   http://ir.homestreet.com





3



HomeStreet, Inc. and Subsidiaries
Summary Financial Data
  For the Quarter Ended
(in thousands, except per share data and FTE data) March 31,
2025		 December 31,
2024		 September 30,
2024		 June 30,
2024		 March 31,
2024
Select Income Statement Data:
Net interest income $ 33,221  $ 29,616  $ 28,619  $ 29,701  $ 32,151 
Provision for credit losses 1,000  —  —  —  — 
Noninterest income (loss)
 12,136  (78,124) 11,058  13,227  9,454 
Noninterest expense 49,108  43,953  49,166  50,931  52,164 
Income (loss) before income taxes
 (4,751) (92,461) (9,489) (8,003) (10,559)
Net income (loss)
 (4,465) (123,327) (7,282) (6,238) (7,497)
Net income (loss) per fully diluted share
 (0.24) (6.54) (0.39) (0.33) (0.40)
Core net income (loss): (1)
Total (2,866) (5,140) (5,999) (4,341) (5,469)
Core net income (loss) per fully diluted share
(0.15) (0.27) (0.32) (0.23) (0.29)
Select Performance Ratios:
ROAE - annualized
Net Income (loss) (4.5) % (92.7) % (5.4) % (4.8) % (5.6) %
Core (1)
 (2.9) % (3.9) % (4.5) % (3.3) % (4.1) %
ROATE - annualized (1)
Net Income (loss) (4.2) % (93.7) % (5.1) % (4.5) % (5.3) %
Core (1)
 (2.5) % (3.5) % (4.2) % (3.0) % (3.8) %
ROAA - annualized
Net income (loss) (0.23) % (5.38) % (0.32) % (0.27) % (0.32) %
Core (1)
 (0.15) % (0.22) % (0.26) % (0.19) % (0.23) %
Efficiency ratio (1)
 102.9  % 115.6  % 118.7  % 111.9  % 118.0  %
Net interest margin 1.82  % 1.38  % 1.33  % 1.37  % 1.44  %
Other data:
Full-time equivalent employees ("FTE") 766  792  819  840  858 
(1)ROATE, core net income (loss), core net income (loss) per fully diluted share, core ROAE, core ROATE, core ROAA and the efficiency ratio are non-GAAP financial measures. For a reconciliation of these measures to the nearest comparable GAAP financial measure or the computation of the measure see “Non-GAAP Financial Measures” in this earnings release.





4



HomeStreet, Inc. and Subsidiaries
Summary Financial Data (continued)
  As of
(in thousands, except share and per share data) March 31,
2025		 December 31,
2024		 September 30,
2024		 June 30,
2024		 March 31,
2024
Select Balance Sheet Data:
Loans held for sale
 $ 34,734  $ 20,312  $ 38,863  $ 29,781  $ 21,102 
Loans held for investment, net
 6,023,582  6,193,053  7,294,603  7,340,309  7,405,052 
Allowance for credit losses ("ACL")
 39,634  38,743  38,651  39,741  39,677 
Investment securities
 1,055,318  1,057,006  1,158,035  1,160,595  1,191,108 
Total assets
 7,803,631  8,123,698  9,201,285  9,266,039  9,455,182 
Deposits
 6,090,495  6,413,021  6,435,404  6,532,470  6,491,102 
Borrowings
 1,000,000  1,000,000  1,896,000  1,886,000  2,094,000 
Long-term debt
 225,223  225,131  225,039  224,948  224,857 
Total shareholders' equity
 400,751  396,997  538,315  520,117  527,333 
Other Data:
Book value per share
 $ 21.18  $ 21.05  $ 28.55  $ 27.58  $ 27.96 
Tangible book value per share (1)
 $ 20.83  $ 20.67  $ 28.13  $ 27.14  $ 27.49 
Total equity to total assets 5.1  % 4.9  % 5.9  % 5.6  % 5.6  %
Tangible common equity to tangible assets (1)
 5.1  % 4.8  % 5.8  % 5.5  % 5.5  %
Shares outstanding at end of period
 18,920,808 18,857,565 18,857,565 18,857,565 18,857,566
Loans to deposit ratio (Bank)
 99.9  % 97.4  % 113.5  % 112.6  % 114.3  %
Credit Quality:
Delinquencies(2)
 1.09  % 1.06  % 0.69  % 0.66  % 0.82  %
ACL to total loans (3)
 0.66  % 0.63  % 0.53  % 0.55  % 0.54  %
ACL to nonaccrual loans 71.0  % 70.4  % 95.9  % 109.3  % 80.2  %
Nonaccrual loans to total loans 0.92  % 0.88  % 0.55  % 0.49  % 0.66  %
Nonperforming assets to total assets
 0.75  % 0.71  % 0.47  % 0.42  % 0.56  %
Nonperforming assets
$ 58,611  $ 57,814  $ 43,320  $ 39,374  $ 52,584 
Regulatory Capital Ratios:
Bank
Tier 1 leverage 8.46  % 7.30  % 8.59  % 8.44  % 8.34  %
Total risk-based capital
 13.40  % 13.02  % 13.41  % 13.29  % 13.34  %
Common equity Tier 1 capital 12.61  % 12.27  % 12.75  % 12.62  % 12.67  %
Company
Tier 1 leverage 6.62  % 5.77  % 7.04  % 6.98  % 6.90  %
Total risk-based capital
 12.48  % 12.23  % 12.70  % 12.67  % 12.70  %
Common equity Tier 1 capital 8.76  % 8.62  % 9.50  % 9.49  % 9.55  %

(1)Tangible book value per share and tangible common equity to tangible assets are non-GAAP financial measures. For a reconciliation to the nearest comparable GAAP financial measure, see “Non-GAAP Financial Measures” in this earnings release.
(2)Total past due and nonaccrual loans as a percentage of total loans held for investment.
(3)This ratio excludes balances insured by the FHA or guaranteed by the VA or SBA.





5



HomeStreet, Inc. and Subsidiaries
Consolidated Balance Sheets
 
(in thousands, except share data)
 March 31, 2025 December 31, 2024
ASSETS
Cash and cash equivalents
 $ 252,162  $ 406,600 
Investment securities
 1,055,318  1,057,006 
Loans held for sale
 34,734  20,312 
Loans held for investment ("LHFI") (net of allowance for credit losses of $39,634 and $38,743)
 6,023,582  6,193,053 
Mortgage servicing rights
 97,959  99,466 
Premises and equipment, net
 45,750  47,201 
Other real estate owned
 2,820  2,820 
Intangible assets
 6,662  7,141 
Other assets
 284,644  290,099 
Total assets $ 7,803,631  $ 8,123,698 
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits
 $ 6,090,495  $ 6,413,021 
Borrowings
 1,000,000  1,000,000 
Long-term debt
 225,223  225,131 
Accounts payable and other liabilities
 87,162  88,549 
Total liabilities 7,402,880  7,726,701 
Shareholders' equity:
Common stock, no par value; 160,000,000 shares authorized
18,920,808 and 18,857,565 shares issued and outstanding
 233,418  233,185 
Retained earnings
 246,548  251,013 
Accumulated other comprehensive income (loss) (79,215) (87,201)
Total shareholders' equity 400,751  396,997 
Total liabilities and shareholders' equity $ 7,803,631  $ 8,123,698 


6



HomeStreet, Inc. and Subsidiaries
Consolidated Income Statements
Quarter Ended March 31,
(in thousands, except share and per share data) 2025 2024
Interest income:
Loans $ 73,424  $ 86,256 
Investment securities 8,650  10,714 
Cash, Fed Funds and other 3,691  5,571 
Total interest income
 85,765  102,541 
Interest expense:
Deposits 38,237  42,607 
Borrowings 14,307  27,783 
Total interest expense
 52,544  70,390 
Net interest income
 33,221  32,151 
Provision for credit losses 1,000  — 
Net interest income after provision for credit losses 32,221  32,151 
Noninterest income:
Net gain on loan origination and sale activities 3,216  2,306 
Loan servicing income 4,858  3,032 
Deposit fees 2,071  2,241 
Other 1,991  1,875 
Total noninterest income
 12,136  9,454 
Noninterest expense:
Compensation and benefits 26,309  28,011 
Information services 7,585  7,342 
Occupancy 4,871  5,434 
General, administrative and other 10,343  11,377 
Total noninterest expense
 49,108  52,164 
Income (loss) before income taxes (4,751) (10,559)
Income tax (benefit) expense (286) (3,062)
Net income (loss) $ (4,465) $ (7,497)
Net income (loss) per share:
Basic $ (0.24) $ (0.40)
Diluted $ (0.24) $ (0.40)
Weighted average shares outstanding:
Basic
 18,920,808 18,856,870
Diluted
18,920,808 18,856,870



7



HomeStreet, Inc. and Subsidiaries
Five Quarter Consolidated Income Statements
  Quarter Ended
(in thousands, except share and per share data) March 31,
2025		 December 31,
2024		 September 30,
2024		 June 30,
2024		 March 31,
2024
Interest income:
Loans $ 73,424  $ 85,951  $ 87,161  $ 87,323  $ 86,256 
Investment securities 8,650  9,069  9,633  10,160  10,714 
Cash, Fed Funds and other 3,691  4,052  3,043  3,640  5,571 
Total interest income 85,765  99,072  99,837  101,123  102,541 
Interest expense:
Deposits 38,237  44,101  44,009  43,535  42,607 
Borrowings 14,307  25,355  27,209  27,887  27,783 
Total interest expense 52,544  69,456  71,218  71,422  70,390 
Net interest income
 33,221  29,616  28,619  29,701  32,151 
Provision for credit losses 1,000  —  —  —  — 
Net interest income after provision for credit losses 32,221  29,616  28,619  29,701  32,151 
Noninterest income:
Net gain (loss) on loan origination and sale activities
 3,216  (84,992) 2,760  3,036  2,306 
Loan servicing income 4,858  2,997  3,058  3,410  3,032 
Deposit fees 2,071  2,166  2,222  2,209  2,241 
Other 1,991  1,705  3,018  4,572  1,875 
Total noninterest income (loss)
 12,136  (78,124) 11,058  13,227  9,454 
Noninterest expense:
Compensation and benefits 26,309  25,037  26,760  27,616  28,011 
Information services 7,585  7,208  7,742  7,580  7,342 
Occupancy 4,871  6,181  4,974  5,130  5,434 
General, administrative and other 10,343  5,527  9,690  10,605  11,377 
Total noninterest expense 49,108  43,953  49,166  50,931  52,164 
Income (loss) before income taxes (4,751) (92,461) (9,489) (8,003) (10,559)
Income tax (benefit) expense (286) 30,866  (2,207) (1,765) (3,062)
Net income (loss) $ (4,465) $ (123,327) $ (7,282) $ (6,238) $ (7,497)
Net income (loss) per share:
Basic $ (0.24) $ (6.54) $ (0.39) $ (0.33) $ (0.40)
Diluted $ (0.24) $ (6.54) $ (0.39) $ (0.33) $ (0.40)
Weighted average shares outstanding:
Basic 18,920,808 18,857,565 18,857,565 18,857,566 18,856,870
Diluted 18,920,808 18,857,565 18,857,565 18,857,566 18,856,870
8



HomeStreet, Inc. and Subsidiaries
Average Balances, Yields (Taxable-equivalent basis) and Rates


(in thousands, except yield/rate) Quarter Ended
Average Balances: March 31,
2025		 December 31,
2024		 September 30,
2024		 June 30,
2024		 March 31,
2024
Investment securities
 $ 1,055,336  $ 1,096,695  $ 1,155,284  $ 1,164,144  $ 1,239,093 
Loans
 6,198,659  7,334,221  7,385,970  7,454,945  7,460,650 
Total interest earning assets
 7,496,682  8,721,422  8,727,590  8,858,433  9,088,205 
Total assets 7,870,934  9,127,103  9,138,291  9,272,131  9,502,189 
Deposits: Interest-bearing
 4,877,607  5,148,727  5,045,396  5,122,284  5,232,637 
Deposits: Noninterest-bearing
 1,265,701  1,253,516  1,283,502  1,282,447  1,319,309 
Borrowings
 1,011,111  1,875,616  1,950,109  2,025,415  2,074,527 
Long-term debt
 225,178  225,086  224,994  224,903  224,812 
Total interest-bearing liabilities
 6,113,896  7,249,429  7,220,499  7,372,602  7,531,976 
Average Yield/Rate:
Investment securities
 3.60  % 3.63  % 3.65  % 3.80  % 3.75  %
Loans
 4.76  % 4.62  % 4.66  % 4.66  % 4.60  %
Total interest earning assets
 4.65  % 4.53  % 4.56  % 4.59  % 4.54  %
Deposits: Interest-bearing
 3.18  % 3.40  % 3.47  % 3.41  % 3.27  %
Total deposits
 2.52  % 2.74  % 2.76  % 2.73  % 2.61  %
Borrowings
 4.50  % 4.66  % 4.85  % 4.85  % 4.73  %
Long-term debt
 5.23  % 5.36  % 5.48  % 5.49  % 5.51  %
Total interest-bearing liabilities
 3.47  % 3.79  % 3.90  % 3.87  % 3.74  %
Net interest rate spread
 1.18  % 0.74  % 0.66  % 0.72  % 0.80  %
Net interest margin
 1.82  % 1.38  % 1.33  % 1.37  % 1.44  %


9


Results of Operations

First Quarter of 2025 Compared to the Fourth Quarter of 2024

Non-core amounts: For the first quarter non-core items include $2.1 million of merger related expenses. In the fourth quarter of 2024 non-core items include an $88.8 million loss on the sale of $990 million of multifamily loans, $53.3 million deferred tax assets valuation allowance and $3.2 million of merger related expense recoveries.

Our net loss and loss before income taxes were $4.5 million and $4.8 million, respectively, in the first quarter of 2025, as compared to $123.3 million and $92.5 million, respectively, in the fourth quarter of 2024. Our core net loss and core loss before taxes, which excludes the impact of the loss on the sale of multifamily loans, the deferred tax asset valuation allowance and merger related expenses and recoveries, were $2.9 million and $2.7 million, respectively, in the first quarter of 2025, as compared to $5.1 million and $6.4 million respectively, in the fourth quarter of 2024. The decrease in core loss before income taxes was primarily due to an increase in net interest income and an increase in noninterest income, partially offset by an increase in provision for credit losses and an increase in noninterest expense.

Due to our cumulative losses over the last three year period ended December 31, 2024, accounting rules required us to provide a valuation allowance for the balance of our deferred tax assets in the fourth quarter of 2024. As a result, we do not expect to recognize income tax expense until the deferred tax assets valuation allowance no longer exists. The $0.3 million income tax benefit recognized in the first quarter of 2025 primarily relates to the reversal of the disparate tax effects on our accumulated other comprehensive income ("AOCI") resulting from the recording in the fourth quarter of 2024, of a deferred tax valuation allowance for the deferred tax assets related to the AOCI. In the fourth quarter of 2024, we recorded a $53 million deferred tax allowance which was recorded as income tax expense. Excluding this allowance, the income tax benefit would have been $22.4 million and would have resulted in an effective tax rate of 24.3% for the fourth quarter of 2024.

Our net interest income in the first quarter of 2025 was $3.6 million higher than the fourth quarter of 2024 due to an increase in our net interest margin from 1.38% to 1.82%. The increase in the net interest margin was due primarily to a 32 basis point decrease in the rates paid on interest-bearing liabilities and a 12 basis point increase in the yield on interest earning assets. The increase in yield on interest earning assets was primarily due to the sale of $990 million of lower yielding multifamily loans at the end of the fourth quarter of 2024. The decrease in rates on interest bearing liabilities are primarily due to our paydown at the end of 2024 and beginning of 2025 of higher cost borrowings and brokered certificates of deposit using the proceeds from the sale of multifamily loans.

The $1.0 million provision for credit losses recognized during the first quarter of 2025 was due to a $3.3 million increase in specific reserves which was partially offset by lower general reserves resulting in part from lower loan balances. There was no provision for credit losses in the fourth quarter of 2024 as the benefits of the reduction in loan balances resulting from the loan sale were offset by specific reserves on commercial loans.

Noninterest income in the first quarter of 2025 increased from the fourth quarter of 2024 primarily due to the $88.8 million loss on the sale of multifamily loans in the fourth quarter of 2024 and an increase in loan servicing income. The increase in loan servicing income is primarily due to an increase in the value of our single family mortgage servicing rights.

Noninterest expenses were $5.2 million higher in the first quarter of 2025 due to a $1.3 million increase in
compensation and benefits and a $4.8 million increase in general, administrative and other expenses which were partially offset by a $1.3 million decrease in occupancy expenses. The increase in compensation and benefits was primarily due to wage increases in 2025, and increases in employee benefits and employer taxes, which were partially offset by a 3% reduction in FTEs. The increase in general, administrative and other expenses was due to the recovery of $3.2 million in merger expenses in the fourth quarter of 2024 and $2.1 million of merger related expenses incurred in the first quarter of 2025. The decrease in occupancy costs was primarily due to lease impairment costs recognized in the fourth quarter of 2024.

First Quarter of 2025 Compared to the First Quarter of 2024

Non-core amounts: For the first quarter of 2025, non-core items include $2.1 million of merger related expenses. During the first quarter of 2024, non-core items include $2.6 million of merger related expenses.

Our net loss and loss before income taxes were $4.5 million and $4.8 million, respectively, in the first quarter of 2025, as compared to $7.5 million and $10.6 million, respectively, in the first quarter of 2024. Our core net loss and core loss before income taxes, which exclude the impact of merger related expenses, was $2.9 million and $2.7 million in the first quarter of 2025, as compared to core net loss of $5.5 million and core loss before income taxes of $8.0 million in the first quarter of 2024. The $5.3 million decrease in core loss before income taxes was primarily due to higher net interest income, higher noninterest income and a decrease in noninterest expense, partially offset by an increase in provision for credit losses.

Due to our cumulative losses over the last three year period ended December 31, 2024, accounting rules required us to provide a valuation allowance for the balance of our deferred tax assets in the fourth quarter of 2024. As a result, we do not expect to recognize tax expense until the deferred tax assets valuation allowance no longer exists. The $0.3 million income tax benefit recognized in the first quarter of 2025 primarily relates to the reversal of the disparate tax effects on our AOCI resulting from the recording in the fourth quarter of 2024 of a deferred tax valuation allowance for the deferred tax assets related to AOCI. Our effective tax rate in the first quarter of 2024 of 29.0% was higher than our statutory rate of 24.6% due to the impact of tax advantaged investments which creates a higher benefit due to our taxable loss.

Net interest income in the first quarter of 2025 increased $1.1 million as compared to the first quarter of 2024 due primarily to an increase in net interest margin from 1.44% in the first quarter of 2024 to 1.82% in the first quarter of 2025. The increase in net interest margin is due to a 27 basis point decrease in the rates paid on interest-bearing liabilities and an 11 basis point increase in the yield on interest earning assets. The increase in yield on interest earning assets was primarily due to the sale of $990 million of lower yielding multifamily loans at the end of the fourth quarter of 2024. The decrease in rates on interest bearing liabilities are primarily due to our paydown at the end of 2024 and beginning of 2025 of higher cost borrowings and brokered certificates of deposit using the proceeds from the sale of multifamily loans.

The $1.0 million provision for credit losses recognized during the first quarter of 2025 was due to a $3.3 million increase in specific reserves which was partially offset by lower general reserves resulting in part from lower loan balances. During the first quarter of 2024, the provision for credit losses reflect the stable balance of our loan portfolio, a minimal level of identified credit issues in our loan portfolio and the lack of significant expected credit issues arising in future periods.

Noninterest income in the first quarter of 2025 increased from the first quarter of 2024 primarily due to a $0.9 million increase in gain on loan sales and a $1.8 million increase in loan servicing income. The gain on loan sales increased primarily due to an increase in CRE loan sales volume. The increase in loan servicing income is primarily due to an increase in the value of our single family mortgage servicing rights.

The $3.1 million decrease in noninterest expense in the first quarter of 2025 as compared to the first quarter of 2024 was primarily due to $1.7 million lower compensation and benefit costs, $0.6 million lower occupancy
costs and $1.0 million lower general and administrative costs. The decrease in compensation and benefit costs was primarily due to an 11% decrease in FTE and lower medical costs, which was partially offset by wage increases given in the first quarter of 2025. The decrease in occupancy costs is primarily due to reductions in leased space from branch closures in 2024. The decrease in general and administrative costs reflects the effort made to eliminate or defer nonessential expenses.

Financial Position

During the first quarter of 2025, our total assets decreased $320 million due primarily to a $169 million decrease in loans held for investment and a $154 million decrease in cash. In the first quarter of 2025, total liabilities decreased $324 million due to a $323 million decrease in deposits. The decrease in deposits was primarily due to a $454 million decrease in brokered certificates of deposit which was partially offset by a $131 million increase in non-brokered deposits.
10



Loans Held for Investment 
(in thousands) March 31,
2025		 December 31,
2024		 September 30,
2024		 June 30,
2024		 March 31,
2024
Commercial real estate ("CRE")
Non-owner occupied CRE $ 545,313  $ 570,750  $ 590,956  $ 612,937  $ 633,401 
Multifamily 2,934,442  2,992,675  3,950,941  3,935,158  3,929,679 
Construction/land development 436,610  472,740  535,601  530,445  575,152 
Total 3,916,365  4,036,165  5,077,498  5,078,540  5,138,232 
Commercial and industrial loans
Owner occupied CRE 340,106  361,997  365,138  372,452  381,943 
Commercial business 299,001  312,004  345,999  376,711  387,464 
Total 639,107  674,001  711,137  749,163  769,407 
Consumer loans
Single family
 1,088,264  1,109,095  1,137,981  1,152,004  1,149,940 
Home equity and other 419,480  412,535  406,638  400,343  387,150 
Total (1)
 1,507,744  1,521,630  1,544,619  1,552,347  1,537,090 
Total LHFI 6,063,216  6,231,796  7,333,254  7,380,050  7,444,729 
    Allowance for credit losses ("ACL") (39,634) (38,743) (38,651) (39,741) (39,677)
Total LHFI less ACL $ 6,023,582  $ 6,193,053  $ 7,294,603  $ 7,340,309  $ 7,405,052 
(1)Includes $1.2 million at March 31, 2025 and $1.3 million at December 31, 2024, September 30, 2024, June 30, 2024 and March 31, 2024 of single family loans that are carried at fair value.

11


Loan Roll-forward
(in thousands) March 31,
2025		 December 31,
2024		 September 30,
2024		 June 30,
2024		 March 31,
2024
Loans - beginning balance $ 6,231,796  $ 7,333,254  $ 7,380,050  $ 7,444,729  $ 7,422,904 
Originations and advances 203,589  278,922  279,783  282,460  287,568 
Transfers (to) from loans held for sale (479) 1  (378) (520) (273)
Loan Sold —  (994,243) —  —  — 
Payoffs, paydowns and other (371,629) (385,790) (324,639) (346,493) (264,860)
Charge-offs and transfers to OREO (61) (348) (1,562) (126) (610)
Loans - ending balance $ 6,063,216  $ 6,231,796  $ 7,333,254  $ 7,380,050  $ 7,444,729 


Loan Originations and Advances
(in thousands) March 31,
2025		 December 31,
2024		 September 30,
2024		 June 30,
2024		 March 31,
2024
CRE
Non-owner occupied CRE $ 3,993  $ 9  $ 9  $ 977  $ 1,146 
Multifamily (1)
 2,103  79,710  48,960  17,495  489 
Construction/land development 121,765  122,855  160,220  152,681  157,453 
Total 127,861  202,574  209,189  171,153  159,088 
Commercial and industrial loans
Owner occupied CRE —  4,040  —  663  949 
Commercial business 26,224  28,921  12,966  38,990  61,400 
Total 26,224  32,961  12,966  39,653  62,349 
Consumer loans
Single family (2)
 11,221  6,037  15,960  33,359  31,769 
Home equity and other 38,283  37,350  41,668  38,295  34,362 
Total 49,504  43,387  57,628  71,654  66,131 
Total loan originations and advances $ 203,589  $ 278,922  $ 279,783  $ 282,460  $ 287,568 
(1) Includes loans transferred from construction loans to permanent multifamily loans upon completion of construction of $57.0 million, $47.1 million and $17.5 million for the quarters ended December 31, 2024, September 30, 2024 and June 30, 2024, respectively.
(2) Includes loans transferred from construction loans to permanent single family loans upon completion of construction of $10.4 million, $4.6 million, $12.9 million, $31.6 million and $30.8 million for the quarters ended March 31, 2025, December 31, 2024, September 30, 2024, June 30, 2024 and March 31, 2024, respectively.


Credit Quality

During the first quarter of 2025, our ratios of nonperforming assets to total assets and total loans delinquent over 30 days, including nonaccrual loans, increased slightly primarily due to a decrease in our loans held for investment. As of March 31, 2025, our ratio of nonperforming assets to total assets was 0.75% as compared to 0.71% at December 31, 2024, and our ratio of total loans delinquent over 30 days, including nonaccrual loans, to total loans was 1.09% as compared to 1.06% at December 31, 2024. During the first quarter of 2025, we increased the specific reserves for a syndicated commercial loan by $3.9 million based on updated analysis of the collateral support for this loan.





12

Delinquencies
Past Due and Still Accruing
(dollars in thousands) 30-59 days 60-89 days
90 days or
more (1)
 Nonaccrual
Total past
due and nonaccrual (2)
 Current Total
loans
March 31, 2025
Total loans held for investment $ 3,709  $ 2,204  $ 4,182  $ 55,791  $ 65,886  $ 5,997,330  $ 6,063,216 
% 0.06  % 0.04  % 0.07  % 0.92  % 1.09  % 98.91  % 100.00  %
December 31, 2024
Total loans held for investment $ 4,945  $ 1,727  $ 4,354  $ 54,994  $ 66,020  $ 6,165,776  $ 6,231,796 
% 0.08  % 0.03  % 0.07  % 0.88  % 1.06  % 98.94  % 100.00  %
(1) FHA-insured and VA-guaranteed single family loans that are 90 days or more past due are maintained on accrual status if they are determined to have little to no risk of loss.
(2) Includes loans whose repayments are insured by the FHA or guaranteed by the VA or SBA of $10.4 million and $11.3 million at March 31, 2025 and December 31, 2024, respectively.


Allowance for Credit Losses (roll-forward)
  Quarter Ended
(in thousands) March 31,
2025		 December 31,
2024		 September 30,
2024		 June 30,
2024		 March 31,
2024
Allowance for credit losses
Beginning balance $ 38,743  $ 38,651  $ 39,741  $ 39,677  $ 40,500 
Provision for credit losses 888  203  104  128  242 
Recoveries (charge-offs), net 3  (111) (1,194) (64) (1,065)
Ending balance
 $ 39,634  $ 38,743  $ 38,651  $ 39,741  $ 39,677 
Allowance for unfunded commitments:
Beginning balance $ 1,146  $ 1,349  $ 1,453  $ 1,581  $ 1,823 
Provision for credit losses 112  (203) (104) (128) (242)
Ending balance
 $ 1,258  $ 1,146  $ 1,349  $ 1,453  $ 1,581 
Provision for credit losses:
Allowance for credit losses - loans $ 888  $ 203  $ 104  $ 128  $ 242 
Allowance for unfunded commitments 112  (203) (104) (128) (242)
Total
 $ 1,000  $ —  $ —  $ —  $ — 

13

Allocation of Allowance for Credit Losses by Product Type

March 31, 2025 December 31, 2024
(dollars in thousands) Balance
Rate (1)
 Balance
 Rate (1)
Non-owner occupied CRE $ 1,658  0.30  % $ 1,739  0.30  %
Multifamily
 13,287  0.45  % 14,909  0.50  %
Construction/land development
   Multifamily construction
 468  0.72  % 849  0.86  %
   CRE construction 73  0.66  % 66  0.60  %
   Single family construction 5,704  1.74  % 6,737  2.10  %
   Single family construction to perm 140  0.45  % 184  0.44  %
         Total CRE 21,330  0.55  % 24,484  0.61  %
Owner occupied CRE 598  0.18  % 576  0.16  %
Commercial business
 10,648  3.61  % 6,886  2.23  %
Total commercial and industrial 11,246  1.77  % 7,462  1.12  %
Single family
 3,702  0.37  % 3,610  0.35  %
Home equity and other
 3,356  0.80  % 3,187  0.77  %
Total consumer 7,058  0.50  % 6,797  0.47  %
Total $ 39,634  0.66  % $ 38,743  0.63  %
(1) The ACL rate is calculated excluding balances related to loans that are insured by the FHA or guaranteed by the VA or SBA

Production Volumes for Sale to the Secondary Market
  Quarter Ended
(in thousands) March 31,
2025		 December 31,
2024		 September 30,
2024		 June 30,
2024		 March 31,
2024
Loan originations
Single family loans
 $ 83,834  $ 110,434  $ 125,964  $ 101,057  $ 76,528 
Commercial and industrial and CRE loans
 42,676  84,263  —  19,593  3,496 
Loans sold
Single family loans 82,397  127,401  109,091  98,081  70,379 
Commercial and industrial and CRE loans (1)
 54,195  1,074,405  7,602  13,539  8,196 
Net gain (loss) on loan origination and sale activities
Single family loans 2,283  2,090  2,779  2,718  1,986 
Commercial and industrial and CRE loans (1)
 933  (87,082) (19) 318  320 
Total $ 3,216  $ (84,992) $ 2,760  $ 3,036  $ 2,306 
(1) May include loans originated as held for investment.

14


Loan Servicing Income
  Quarter Ended
(in thousands) March 31,
2025		 December 31,
2024		 September 30,
2024		 June 30,
2024		 March 31,
2024
Single family servicing income, net:
Servicing fees and other $ 3,725  $ 3,715  $ 3,776  $ 3,751  $ 3,839 
Changes - amortization (1)
 (1,582) (1,690) (1,669) (1,713) (1,428)
Net 2,143  2,025  2,107  2,038  2,411 
Risk management, single family MSRs:
Changes in fair value due to assumptions (2)
 271  2,559  (1,963) 529  618 
Net gain (loss) from economic hedging (3)
 1,016  (2,731) 1,418  (509) (1,110)
Subtotal 1,287  (172) (545) 20  (492)
Single family servicing income 3,430  1,853  1,562  2,058  1,919 
Commercial loan servicing income:
Servicing fees and other 2,782  2,472  2,919  2,811  2,515 
Amortization of capitalized MSRs (1,354) (1,328) (1,423) (1,459) (1,402)
Total 1,428  1,144  1,496  1,352  1,113 
Total loan servicing income $ 4,858  $ 2,997  $ 3,058  $ 3,410  $ 3,032 
(1)Represents changes due to collection/realization of expected cash flows and curtailments.
(2)Principally reflects changes in model assumptions, including prepayment speed assumptions, which are primarily affected by changes in mortgage interest rates.
(3)The interest income from US Treasury notes trading securities used for hedging purposes, which is included in interest income on the consolidated income statements, was $0.4 million for the quarter ended March 31, 2025, and $0.3 million for each of the quarters ended, December 31, 2024, September 30, 2024, June 30, 2024 and March 31, 2024.


Capitalized Mortgage Servicing Rights ("MSRs")
  Quarter Ended
(in thousands) March 31,
2025		 December 31,
2024		 September 30,
2024		 June 30,
2024		 March 31,
2024
Single Family MSRs
Beginning balance $ 72,901  $ 70,800  $ 73,725  $ 74,056  $ 74,249 
Additions and amortization:
Originations 695  1,232  707  853  617 
Changes - amortization (1)
 (1,582) (1,690) (1,669) (1,713) (1,428)
Net additions and amortization
 (887) (458) (962) (860) (811)
Change in fair value due to assumptions (2)
 271  2,559  (1,963) 529  618 
Ending balance $ 72,285  $ 72,901  $ 70,800  $ 73,725  $ 74,056 
Ratio to related loans serviced for others 1.41  % 1.41  % 1.36  % 1.41  % 1.40  %
Multifamily and SBA MSRs
Beginning balance $ 26,565  $ 26,322  $ 27,583  $ 28,863  29,987 
Originations
 463  1,571  162  179  278 
Amortization
 (1,354) (1,328) (1,423) (1,459) (1,402)
Ending balance $ 25,674  $ 26,565  $ 26,322  $ 27,583  $ 28,863 
Ratio to related loans serviced for others 1.33  % 1.38  % 1.42  % 1.47  % 1.52  %
(1) Represents changes due to collection/realization of expected cash flows and curtailments.
(2) Principally reflects changes in model assumptions, including prepayment speed assumptions, which are primarily affected by changes in mortgage interest rates.


15



Deposits
(in thousands) March 31,
2025		 December 31,
2024		 September 30,
2024		 June 30,
2024		 March 31,
2024
Deposits by Product:
Noninterest-bearing demand deposits $ 1,276,133  $ 1,195,781  $ 1,253,582  $ 1,252,850  $ 1,311,559 
Interest-bearing:
Interest-bearing demand deposits 327,400  323,112  315,711  332,290  330,301 
Savings 233,240  229,659  239,060  246,397  256,383 
Money market 1,437,024  1,396,697  1,445,639  1,502,960  1,536,341 
Certificates of deposit:
Brokered deposits 297,717  751,406  741,051  948,989  921,103 
Other 2,518,981  2,516,366  2,440,361  2,248,984  2,135,415 
Total interest-bearing deposits 4,814,362  5,217,240  5,181,822  5,279,620  5,179,543 
Total deposits $ 6,090,495  $ 6,413,021  $ 6,435,404  $ 6,532,470  $ 6,491,102 

Percent of total deposits:
Noninterest-bearing demand deposits 21.0  % 18.6  % 19.5  % 19.2  % 20.2  %
Interest-bearing:
Interest-bearing demand deposits 5.4  % 5.0  % 4.9  % 5.1  % 5.1  %
Savings 3.8  % 3.6  % 3.7  % 3.8  % 3.9  %
Money market 23.6  % 21.8  % 22.5  % 23.0  % 23.7  %
Certificates of deposit
Brokered deposits 4.9  % 11.7  % 11.5  % 14.5  % 14.2  %
Other 41.3  % 39.3  % 37.9  % 34.4  % 32.9  %
Total interest-bearing deposits 79.0  % 81.4  % 80.5  % 80.8  % 79.8  %
Total deposits 100.0  % 100.0  % 100.0  % 100.0  % 100.0  %




16

HomeStreet, Inc. and Subsidiaries
Non-GAAP Financial Measures

To supplement our unaudited condensed consolidated financial statements presented in accordance with GAAP, we use certain non-GAAP measures of financial performance.

In this earnings release, we use the following non-GAAP measures: (i) tangible common equity and tangible assets as we believe this information is consistent with the treatment by bank regulatory agencies, which exclude intangible assets from the calculation of capital ratios; (ii) core net income (loss) and effective tax rate on core net income (loss) before taxes, which excludes the loss on the sale of $990 million of multifamily loans in the fourth quarter of 2024 due to the unusual nature and size of the loan sale, the deferred tax asset valuation allowance recognized in the fourth quarter of 2024 because it is a significant unusual item, loss on debt extinguishment in the fourth quarter of 2024 and merger related expenses and the related tax impact as we believe this measure is a better comparison to be used for projecting future results; (iii) core noninterest expenses which excludes the loss on debt extinguishment in the fourth quarter of 2024 and merger related expenses as we believe this measure is a better comparison to be used for projecting future noninterest expenses and (iv) an efficiency ratio which is the ratio of noninterest expense to the sum of net interest income and noninterest income, excluding certain items of income or expense considered non-core and excluding taxes incurred and payable to the state of Washington as such taxes are not classified as income taxes and we believe including them in noninterest expense impacts the comparability of our results to those companies whose operations are in states where assessed taxes on business are classified as income taxes.

These supplemental performance measures, as well as additional measures derived from these supplemental performance measures, may vary from, and may not be comparable to, similarly titled measures provided by other companies in our industry. Non-GAAP financial measures are not in accordance with, or an alternative for, GAAP. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. A non-GAAP financial measure may also be a financial metric that is not required by GAAP or other applicable requirements.

We believe that these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provide meaningful supplemental information regarding our performance by providing additional information used by management that is not otherwise required by GAAP or other applicable requirements. Our management uses, and believes that investors benefit from referring to, these non-GAAP financial measures in assessing our operating results and when planning, forecasting and analyzing future periods. These non-GAAP financial measures also facilitate a comparison of our performance to prior periods. We believe these measures are frequently used by securities analysts, investors and other parties in the evaluation of companies in our industry. These non-GAAP financial measures should be considered in addition to, not as a substitute for or superior to, financial measures prepared in accordance with GAAP. In the information below, we have provided reconciliations of, where applicable, the most comparable GAAP financial measures to the non-GAAP measures used in this earnings release, or the computation of the non-GAAP financial measure.





17

HomeStreet, Inc. and Subsidiaries
Non-GAAP Financial Measures

Reconciliations of non-GAAP results of operations to the nearest comparable GAAP measures or calculations of the non-GAAP measure:

As of or for the Quarter Ended
(in thousands, except share and per share data) March 31,
2025		 December 31,
2024		 September 30,
2024		 June 30,
2024		 March 31,
2024
Core net income (loss)
Net income (loss) $ (4,465) $ (123,327) $ (7,282) $ (6,238) $ (7,497)
Adjustments (tax effected)
Loss on loan sale
 —  67,058  —  —  — 
Merger related expenses (recoveries)
 1,599  (2,534) 1,283  1,897  2,028 
Loss on debt extinguishment
 —  353  —  —  — 
Deferred tax asset allowance —  53,310  —  —  — 
Total $ (2,866) $ (5,140) $ (5,999) $ (4,341) $ (5,469)
Core net income (loss) per fully diluted share
Fully diluted shares 18,920,808  18,857,565  18,857,565  18,857,566  18,856,870 
Computed amount
 $ (0.15) $ (0.27) $ (0.32) $ (0.23) $ (0.29)
Return on average tangible equity (annualized)
Average shareholders' equity
 $ 404,800  $ 529,299  $ 531,608  $ 522,904  $ 537,627 
Less: Average goodwill and other intangibles
 (6,976) (7,542) (8,176) (8,794) (9,403)
Average tangible equity $ 397,824  $ 521,757  $ 523,432  $ 514,110  $ 528,224 
Net income (loss) $ (4,465) $ (123,327) $ (7,282) $ (6,238) $ (7,497)
Adjustments (tax effected)
Amortization of core deposit intangibles 374  487  488  487  488 
Tangible income applicable to shareholders $ (4,091) $ (122,840) $ (6,794) $ (5,751) $ (7,009)
Ratio
 (4.2) % (93.7) % (5.1) % (4.5) % (5.3) %
Return on average tangible equity (annualized) - Core
Average tangible equity $ 397,824  $ 521,757  $ 523,432  $ 514,110  $ 528,224 
Core net income (loss) (per above)
 $ (2,866) $ (5,140) $ (5,999) $ (4,341) $ (5,469)
Adjustments (tax effected)
Amortization of core deposit intangibles 374  487  488  487  488 
Tangible income (loss) applicable to shareholders
 $ (2,492) $ (4,653) $ (5,511) $ (3,854) $ (4,981)
Ratio
 (2.5) % (3.5) % (4.2) % (3.0) % (3.8) %
Return on average equity (annualized) - Core
Average shareholders' equity (per above) $ 404,800  $ 529,299  $ 531,608  $ 522,904  $ 537,627 
Core net income (loss) (per above) (2,866) (5,140) (5,999) (4,341) (5,469)
Ratio
 (2.9) % (3.9) % (4.5) % (3.3) % (4.1) %
18

As of or for the Quarter Ended
(in thousands, except share and per share data) March 31,
2025		 December 31,
2024		 September 30,
2024		 June 30,
2024		 March 31,
2024
Efficiency ratio
Noninterest expense
Total
 $ 49,108  $ 43,953  $ 49,166  $ 50,931  $ 52,164 
Adjustments:
Merger related expenses or recoveries
 (2,050) 3,249  (1,645) (2,432) (2,600)
Loss on debt extinguishment
 —  (452) —  —  — 
State of Washington taxes (386) (157) (438) (463) (452)
Adjusted total $ 46,672  $ 46,593  $ 47,083  $ 48,036  $ 49,112 
Total revenues
Net interest income
 $ 33,221  $ 29,616  $ 28,619  $ 29,701  $ 32,151 
Noninterest income (loss)
 12,136  (78,124) 11,058  13,227  9,454 
Loss on loan sale
 —  88,818  —  —  — 
Adjusted total $ 45,357  $ 40,310  $ 39,677  $ 42,928  $ 41,605 
Ratio 102.9  % 115.6  % 118.7  % 111.9  % 118.0  %
Return on average assets (annualized) - Core
Average Assets $ 7,870,934  $ 9,127,103  $ 9,138,291  $ 9,272,131  $ 9,502,189 
Core net income (loss) (per above)
 (2,866) (5,140) (5,999) (4,341) (5,469)
Ratio (0.15) % (0.22) % (0.26) % (0.19) % (0.23) %
Effective tax rate used in computations above (1)
 22.0  % 22.0  % 22.0  % 22.0  % 22.0  %
Tangible book value per share
Shareholders' equity
 $ 400,751  $ 396,997  $ 538,315  $ 520,117  $ 527,333 
Less: Intangible assets (6,662) (7,141) (7,766) (8,391) (9,016)
Tangible shareholders' equity $ 394,089  $ 389,856  $ 530,549  $ 511,726  $ 518,317 
Common shares outstanding 18,920,808  18,857,565  18,857,565  18,857,565  18,857,566 
Computed amount $ 20.83  $ 20.67  $ 28.13  $ 27.14  $ 27.49 
Tangible common equity to tangible assets
Tangible shareholders' equity (per above) $ 394,089  $ 389,856  $ 530,549  $ 511,726  $ 518,317 
Tangible assets
Total assets $ 7,803,631 $ 8,123,698 $ 9,201,285 $ 9,266,039 $ 9,455,182
Less: Intangible assets (per above) (6,662) (7,141) (7,766) (8,391) (9,016)
Net $ 7,796,969 $ 8,116,557 $ 9,193,519 $ 9,257,648 $ 9,446,166
Ratio 5.1  % 4.8  % 5.8  % 5.5  % 5.5  %

(1) Effective tax rate indicated is used for all adjustments except the loss on loan sale. The gross effective tax rate of 24.5% was used for the loss on loan sale due to the large size of the loss in relation to permanent differences that could impact our gross effective rate.




19

Forward-Looking Statements

This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”). Generally, forward-looking statements include the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “goal,” “upcoming,” “outlook,” “guidance” or "project" or the negation thereof, or similar expressions, including statements relating to the growth of the Company and achievement of profitability and timing of such achievement. In addition, all statements in this report that address and/or include beliefs, assumptions, estimates, projections and expectations of our future performance and financial condition are forward-looking statements within the meaning of the Reform Act. Forward-looking statements involve inherent risks, uncertainties and other factors, many of which are difficult to predict and are generally beyond management’s control. Forward-looking statements are based on the Company’s expectations at the time such statements are made and speak only as of the date made. The Company does not assume any obligation or undertake to update any forward-looking statements after the date of this report as a result of new information, future events or developments, except as required by federal securities or other applicable laws, although the Company may do so from time to time. For all forward-looking statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the Reform Act.

We caution readers that actual results may differ materially from those expressed in or implied by the Company’s forward-looking statements. Rather, more important factors could affect the Company’s future results, including but not limited to the following: (1) our ability to successfully consummate the pending merger (the "Merger") with Mechanics Bank ("Mechanics"), (2) the ability of HomeStreet and Mechanics to obtain required governmental approvals of the Merger, (3) the failure to satisfy the closing conditions in the definitive Agreement and Plan of Merger, dated as of March 28, 2025 (the “Merger Agreement”), or any unexpected delay in closing the Merger, (4) the ability to achieve expected cost savings, synergies and other financial benefits from the Merger within the expected time frames and costs or difficulties relating to integration matters being greater than expected, (5) the diversion of management time from core banking functions due to Merger-related issues; (6) potential difficulty in maintaining relationships with customers, associates or business partners as a result of the announced Merger; (7) changes in the interest rate environment and in expectation of reduction in short-term interest rates; (8) changes in the U.S. and global economies, including business disruptions, reductions in employment, inflationary pressures and an increase in business failures, specifically among our customers, and global trade disputes, including the imposition of tariffs by the U.S. and countermeasures by foreign governments; (9) our ability to control operating costs and expenses; (10) our ability to attract and retain key members of our senior management team; (11) changes in deposit flows, loan demand or real estate values may adversely affect our business; (12) there may be increases in competitive pressure among financial institutions or from non-financial institutions; (13) our ability to obtain regulatory approvals or non-objection to take various capital actions, including the payment of dividends by us or the Bank; (14) the timing and occurrence or non-occurrence of events may be subject to circumstances beyond our control; (15) our credit quality and the effect of credit quality on our credit losses expense and allowance for credit losses and impact the adequacy of our allowance for credit losses; (16) changes in accounting principles, policies or guidelines may cause our financial condition to be perceived or interpreted differently; (17) legislative or regulatory changes that may adversely affect our business or financial condition, including, without limitation, changes in corporate and/or individual income tax laws and policies, changes in privacy laws, and changes in regulatory capital or other rules, and the availability of resources to address or respond to such changes; (18) general economic conditions, either nationally or locally in some or all areas in which we conduct business, or conditions in the securities markets or banking industry, may be less favorable than what we currently anticipate; (19) challenges our customers may face in meeting current underwriting standards may adversely impact all or a substantial portion of our rate-lock loan activity we recognize; (20) technological changes may be more difficult or more expensive than what we anticipate; (21) a failure in or breach of our operational or security systems or information technology infrastructure, or those of our third-party providers and vendors, including due to cyber-attacks; (22) success or consummation of new business initiatives may be more difficult or expensive than what we anticipate; (23) staffing fluctuations in response to product demand or the implementation of corporate strategies that affect our work force and potential associated charges; and (24) litigation, investigations or other matters before regulatory agencies, whether currently existing or commencing in the future, may delay the occurrence or non-occurrence of events longer than what we anticipate. A discussion of the factors, risks and uncertainties that could affect our financial results, business goals and operational and financial objectives cited in this release, other releases, public statements and/or filings with the Securities and Exchange Commission (“SEC”) is also contained in the “Risk Factors”
20

sections of the Company's Forms 10-K and 10-Q and in our Current Reports on Form 8-K we file with the SEC. We strongly recommend readers review those disclosures in conjunction with the discussions herein.

All future written and oral forward-looking statements attributable to the Company or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements contained or referred to above. New risks and uncertainties arise from time to time, and factors that the Company currently deems immaterial may become material, and it is impossible for the Company to predict these events or how they may affect the Company.





21
EX-99.2 3 a992q12025earningsreleases.htm EX-99.2 Q1 2025 SUMMARY EARNINGS RELEASE Document

image2a.jpg
HomeStreet Reports First Quarter 2025 Results

SEATTLE –April 28, 2025 – (BUSINESS WIRE) – HomeStreet, Inc. (Nasdaq: HMST) (including its consolidated subsidiaries, the "Company", "HomeStreet" or "we"), the parent company of HomeStreet Bank (the "Bank"), today announced the financial results for the quarter ended March 31, 2025. As we present non-GAAP measures in this release, the reader should refer to the non-GAAP reconciliations set forth below under the section “Non-GAAP Financial Measures.”
“As a result of the implementation of our new strategic plan, we anticipate a return to profitability during 2025,” said Mark Mason, Chairman of the Board, President, and Chief Executive Officer. “During the first quarter of 2025, our core net loss was 44% less than the fourth quarter 2024 core net loss, and our interest margin improved from 1.38% in the fourth quarter of 2024 to 1.82% in the first quarter of 2025. Importantly, the Bank, on a standalone basis, realized $1.1 million in net income in the first quarter of 2025, achieving our strategic goal of returning the Bank to profitability in the first quarter. In addition, our total deposits, excluding brokered deposits, increased $131 million during the first quarter and our loans held for investment declined by $169 million, improving our funding and liquidity position. Given the scheduled repricing of our remaining multifamily and other commercial real estate loans, future anticipated reductions in higher cost borrowings, the repricing of our term deposits to lower rates and continued effective noninterest expense management, we anticipate continuous growth in earnings for the foreseeable future. Additionally, as a result of the deferred tax asset valuation allowance recorded in the fourth quarter of 2024, we do not expect to recognize any income tax expense on our earnings for the next few years.”

Operating Results
                  First quarter 2025 compared to fourth quarter 2024
Reported Results:
•Net loss: $4.5 million compared to $123.3 million
•Net loss per fully diluted share: $0.24 compared to $6.54
•Noninterest expenses: $49.1 million compared to $44.0 million
•Return on Average Equity ("ROAE"): (4.5)% compared to (92.7)%
•Return on Average Tangible Equity ("ROATE"): (4.2)% compared to (93.7)%(1)
•Return on Average Assets ("ROAA"): (0.23)% compared to (5.38)%
•Net interest margin: 1.82% compared to 1.38%
•Efficiency ratio: 102.9% compared to 115.6% (1)
Core Results: (1)
•Net loss: $2.9 million compared to $5.1 million
•Net loss per fully diluted share: $0.15 compared to $0.27
•Core noninterest expenses: $46.7 million compared to $46.6 million
•ROAE: (2.9)% compared to (3.9)%
•ROATE: (2.5)% compared to (3.5)%
•ROAA: (0.15)% compared to (0.22)%
                                                                                                
(1) ROATE, the efficiency ratio, core net income (loss), core net income (loss) per fully diluted share, core noninterest expense, core ROAE, core ROATE and core ROAA are non-GAAP measures. For a reconciliation of these measures to the nearest comparable GAAP measure or a computation of the measure see "Non-GAAP financial measures" in this earnings release.
“Our net interest margin in the first quarter increased significantly due to the impact of the fourth quarter loan sale as we sold lower yielding loans and paid off higher cost funding,” continued Mark Mason. “Our core noninterest expenses remained stable as seasonal increases in compensation costs were offset by continuing decreases in our full time equivalent employees.”

Financial Position
                    As of and for the quarter ended March 31, 2025
•Excluding brokered deposits, total deposits increased by $131 million
•Uninsured deposits were $542 million, or 9% of total deposits
•Loans held for investment ("LHFI"), decreased by $169 million
•Nonperforming assets to total assets: 0.75%
•Delinquencies: 1.09%
•Allowance for credit losses to LHFI: 0.66%
•Book value per share: $21.18
•Tangible book value per share: $20.83(2)

(2) Tangible book value per share is a non-GAAP measure. For a reconciliation of this measure to the nearest comparable GAAP measure see "Non-GAAP financial measures" in this earnings release.

“Our credit quality remained stable with no significant changes in the amount of nonaccrual loans or delinquent loans,” added Mark Mason. “During the first quarter of 2025, we increased the specific reserves for a syndicated commercial loan by $3.9 million based on updated analysis of the collateral support for this non-performing loan.”



About HomeStreet

HomeStreet, Inc. (Nasdaq: HMST) is a diversified financial services company headquartered in Seattle, Washington, serving consumers and businesses in the Western United States and Hawaii. The Company is principally engaged in real estate lending, including mortgage banking activities, and commercial and consumer banking. Its principal subsidiary is HomeStreet Bank. Certain information about our business can be found on our investor relations web site, located at http://ir.homestreet.com. HomeStreet Bank is a member of the FDIC and is an Equal Housing Lender.



Contact:    Executive Vice President and Chief Financial Officer
HomeStreet, Inc.
   John Michel (206) 515-2291
   john.michel@homestreet.com
   http://ir.homestreet.com









Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”). Generally, forward-looking statements include the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “goal,” “upcoming,” “outlook,” “guidance” or "project" or the negation thereof, or similar expressions, including statements relating to the growth of the Company and achievement of profitability and timing of such achievement. In addition, all statements in this report that address and/or include beliefs, assumptions, estimates, projections and expectations of our future performance and financial condition are forward-looking statements within the meaning of the Reform Act. Forward-looking statements involve inherent risks, uncertainties and other factors, many of which are difficult to predict and are generally beyond management’s control. Forward-looking statements are based on the Company’s expectations at the time such statements are made and speak only as of the date made. The Company does not assume any obligation or undertake to update any forward-looking statements after the date of this report as a result of new information, future events or developments, except as required by federal securities or other applicable laws, although the Company may do so from time to time. For all forward-looking statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the Reform Act.

We caution readers that actual results may differ materially from those expressed in or implied by the Company’s forward-looking statements. Rather, more important factors could affect the Company’s future results, including but not limited to the following: (1) our ability to successfully consummate the pending merger (the "Merger") with Mechanics Bank ("Mechanics"), (2) the ability of HomeStreet and Mechanics to obtain required governmental approvals of the Merger, (3) the failure to satisfy the closing conditions in the definitive Agreement and Plan of Merger, dated as of March 28, 2025 (the “Merger Agreement”), or any unexpected delay in closing the Merger, (4) the ability to achieve expected cost savings, synergies and other financial benefits from the Merger within the expected time frames and costs or difficulties relating to integration matters being greater than expected, (5) the diversion of management time from core banking functions due to Merger-related issues; (6) potential difficulty in maintaining relationships with customers, associates or business partners as a result of the announced Merger; (7) changes in the interest rate environment and in expectation of reduction in short-term interest rates; (8) changes in the U.S. and global economies, including business disruptions, reductions in employment, inflationary pressures and an increase in business failures, specifically among our customers, and global trade disputes, including the imposition of tariffs by the U.S. and countermeasures by foreign governments; (9) our ability to control operating costs and expenses; (10) our ability to attract and retain key members of our senior management team; (11) changes in deposit flows, loan demand or real estate values may adversely affect our business; (12) there may be increases in competitive pressure among financial institutions or from non-financial institutions; (13) our ability to obtain regulatory approvals or non-objection to take various capital actions, including the payment of dividends by us or the Bank; (14) the timing and occurrence or non-occurrence of events may be subject to circumstances beyond our control; (15) our credit quality and the effect of credit quality on our credit losses expense and allowance for credit losses and impact the adequacy of our allowance for credit losses; (16) changes in accounting principles, policies or guidelines may cause our financial condition to be perceived or interpreted differently; (17) legislative or regulatory changes that may adversely affect our business or financial condition, including, without limitation, changes in corporate and/or individual income tax laws and policies, changes in privacy laws, and changes in regulatory capital or other rules, and the availability of resources to address or respond to such changes; (18) general economic conditions, either nationally or locally in some or all areas in which we conduct business, or conditions in the securities markets or banking industry, may be less favorable than what we currently anticipate; (19) challenges our customers may face in meeting current underwriting standards may adversely impact all or a substantial portion of our rate-lock loan activity we recognize; (20) technological changes may be more difficult or more expensive than what we anticipate; (21) a failure in or breach of our operational or security systems or information technology infrastructure, or those of our third-party providers and vendors, including due to cyber-attacks; (22) success or consummation of new business initiatives may be more difficult or expensive than what we anticipate; (23) staffing fluctuations in response to product demand or the implementation of corporate strategies that affect our work force and potential associated charges; and (24) litigation, investigations or other matters before regulatory agencies, whether currently existing or commencing in the future, may delay the occurrence or non-occurrence of events longer than what we anticipate. A discussion of the factors, risks and uncertainties that could affect our financial results, business goals and operational and financial objectives cited in this release, other releases, public statements and/or filings with the Securities and Exchange Commission (“SEC”) is also contained in the “Risk Factors” sections of the Company's Forms 10-K and 10-Q and in our Current Reports on Form 8-K we file with the SEC. We strongly recommend readers review those disclosures in conjunction with the discussions herein.



All future written and oral forward-looking statements attributable to the Company or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements contained or referred to above. New risks and uncertainties arise from time to time, and factors that the Company currently deems immaterial may become material, and it is impossible for the Company to predict these events or how they may affect the Company.












HomeStreet, Inc. and Subsidiaries
Non-GAAP Financial Measures

To supplement our unaudited condensed consolidated financial statements presented in accordance with GAAP, we use certain non-GAAP measures of financial performance.

In this earnings release, we use the following non-GAAP measures: (i) tangible common equity and tangible assets as we believe this information is consistent with the treatment by bank regulatory agencies, which exclude intangible assets from the calculation of capital ratios; (ii) core net income (loss) and effective tax rate on core net income (loss) before taxes, which excludes the loss on the sale of $990 million of multifamily loans in the fourth quarter of 2024 due to the unusual nature and size of the loan sale, the deferred tax asset valuation allowance recognized in the fourth quarter of 2024 because it is a significant unusual item, loss on debt extinguishment in the fourth quarter of 2024 and merger related expenses and the related tax impact as we believe this measure is a better comparison to be used for projecting future results; (iii) core noninterest expenses which excludes the loss on debt extinguishment in the fourth quarter of 2024 and merger related expenses as we believe this measure is a better comparison to be used for projecting future noninterest expenses and (iv) an efficiency ratio which is the ratio of noninterest expense to the sum of net interest income and noninterest income, excluding certain items of income or expense considered non-core and excluding taxes incurred and payable to the state of Washington as such taxes are not classified as income taxes and we believe including them in noninterest expense impacts the comparability of our results to those companies whose operations are in states where assessed taxes on business are classified as income taxes.

These supplemental performance measures, as well as additional measures derived from these supplemental performance measures, may vary from, and may not be comparable to, similarly titled measures provided by other companies in our industry. Non-GAAP financial measures are not in accordance with, or an alternative for, GAAP. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. A non-GAAP financial measure may also be a financial metric that is not required by GAAP or other applicable requirements.

We believe that these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provide meaningful supplemental information regarding our performance by providing additional information used by management that is not otherwise required by GAAP or other applicable requirements. Our management uses, and believes that investors benefit from referring to, these non-GAAP financial measures in assessing our operating results and when planning, forecasting and analyzing future periods. These non-GAAP financial measures also facilitate a comparison of our performance to prior periods. We believe these measures are frequently used by securities analysts, investors and other parties in the evaluation of companies in our industry. These non-GAAP financial measures should be considered in addition to, not as a substitute for or superior to, financial measures prepared in accordance with GAAP. In the information below, we have provided reconciliations of, where applicable, the most comparable GAAP financial measures to the non-GAAP measures used in this earnings release, or the computation of the non-GAAP financial measure.











HomeStreet, Inc. and Subsidiaries
Non-GAAP Financial Measures

Reconciliations of non-GAAP results of operations to the nearest comparable GAAP measures or calculations of the non-GAAP measure:
As of or for the Quarter Ended
(in thousands, except share and per share data) March 31,
2025		 December 31,
2024
Core net income (loss)
Net income (loss) $ (4,465) $ (123,327)
Adjustments (tax effected)
Loss on loan sale
 —  67,058 
Merger related expenses (recoveries) 1,599  (2,534)
Loss on debt extinguishment —  353 
Deferred tax asset allowance —  53,310 
Total $ (2,866) $ (5,140)
Core net income (loss) per fully diluted share
Fully diluted shares 18,920,808  18,857,565 
Computed amount $ (0.15) $ (0.27)
Return on average tangible equity (annualized)
Average shareholders' equity $ 404,800  $ 529,299 
Less: Average intangibles (6,976) (7,542)
Average tangible equity $ 397,824  $ 521,757 
Net income (loss) $ (4,465) $ (123,327)
Adjustments (tax effected)
Amortization of core deposit intangibles 374  487 
Tangible income applicable to shareholders $ (4,091) $ (122,840)
Ratio
 (4.2) % (93.7) %
Return on average tangible equity (annualized) - Core
Average tangible equity $ 397,824  $ (7,542)
Core net income (loss) (per above) $ (2,866) $ (5,140)
Adjustments (tax effected)
Amortization of core deposit intangibles 374  487 
               Tangible income (loss) applicable to shareholders $ (2,492) $ (4,653)
Ratio (2.5) % (3.5) %
Return on average equity (annualized) - Core
Average shareholders' equity (per above) $ 404,800  $ 529,299 
Core net income (loss) (per above) (2,866) (5,140)
Ratio (2.9) % (3.9) %
Effective tax rate used in computations above (1)
 22.0  % 22.0  %
Efficiency ratio
Noninterest expense
Total $ 49,108  $ 43,953 
Adjustments:
Merger related (expenses) recoveries (2,050) 3,249 
Loss on debt extinguishment —  (452)
State of Washington taxes (386) (157)
Adjusted total $ 46,672  $ 46,593 
March 31,
2025		 December 31,
2024
Total revenues
Net interest income $ 33,221  $ 29,616 
Noninterest income (loss) 12,136  (78,124)
Loss on loan sale
 —  88,818 
Adjusted total $ 45,357  $ 40,310 
Ratio 102.9  % 115.6  %
Return on average assets (annualized) - Core
Average Assets $ 7,870,934  $ 9,127,103 
Core net income (loss) (per above) (2,866) (5,140)
Ratio (0.15) % (0.22) %
(in thousands, except share and per share data)
Tangible book value per share
Shareholders' equity $ 400,751  $ 396,997 
Less: Intangibles (6,662) (7,141)
Tangible shareholders' equity $ 394,089  $ 389,856 
Common shares outstanding 18,920,808  18,857,565 
Computed amount $ 20.83  $ 20.67 

(1) Effective tax rate indicated is used for all adjustments except the loss on loan sale. The gross effective tax rate of 24.5% was used for the loss on loan sale due to the large size of the loss in relation to permanent differences that could impact our gross effective rate.