HomeStreet Inc.

10/29/2024 | Press release | Distributed by Public on 10/29/2024 14:38

HomeStreet Reports Third Quarter 2024 Results Form 8 K

HomeStreet Reports Third Quarter 2024 Results

SEATTLE -October 29, 2024 - (BUSINESS WIRE) - HomeStreet, Inc. (Nasdaq: HMST) (including its consolidated subsidiaries, the "Company", "HomeStreet" or "we"), the parent company of HomeStreet Bank, today announced the financial results for the quarter ended September 30, 2024. 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."

Operating Results
Third quarter 2024 compared to second quarter 2024
Reported Results:
•Net loss: $7.3 million compared to $6.2 million
•Net loss per fully diluted share: $0.39 compared to $0.33
•Net interest margin: 1.33% compared to 1.37%
Core Results (1):
•Net loss: $6.0 million compared to $4.3 million
•Net loss per fully diluted share: $0.32 compared to $0.23
(1) Core loss and core loss per fully diluted share are non-GAAP measures. For a reconciliation of these measures to the nearest comparable GAAP measure see "Non-GAAP financial measures" in this earnings release.
"As a result of lower noninterest income and lower net interest income, our net loss and core net loss were higher in the third quarter than in the second quarter," said Mark Mason, Chairman of the Board, President, and Chief Executive Officer. "While our net interest margin decreased slightly during the quarter we did see it stabilize during the latter part of the quarter. With the recent decrease in short term rates, we expect our funding costs to decrease in the fourth quarter and beyond and our interest margin to begin to increase. In the third quarter we reduced the rates offered on our promotional certificates of deposit and are offering our highest rates on shorter duration certificates of deposit in anticipation of continued decreases in the near future of short term interest rates. Our noninterest expenses decreased by $1.8 million during the third quarter as we continue to focus on reducing expenses where possible. Our full time equivalent employees declined to 819 from 840 in the prior quarter primarily as a result of not replacing employees lost through attrition."

Financial Position
As of and for the quarter ended September 30, 2024
•Excluding brokered deposits, total deposits increased by $111 million
•Uninsured deposits were $509 million, or 8% of total deposits
•Loans held for investment ("LHFI"), decreased by $46 million
•Nonperforming assets to total assets: 0.47% compared to 0.42% at June 30, 2024
•Delinquencies (2): 0.69% compared to 0.66% at June 30, 2024
•Allowance for credit losses to LHFI: 0.53%
•Book value per share: $28.55
•Tangible book value per share: $28.13 (3)

(2) Total past due and nonaccrual loans as a percentage of total loans held for investment.
(3) 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.

1

"Our quarter-end deposit balances, excluding brokered deposits, increased $111 million," continued Mark Mason. "Our noninterest-bearing deposits have stabilized and we continue to see growth in deposits from new business customers."

"Our loan balances decreased $46 million during the third quarter and we are seeing a low level of prepayments in our commercial real estate loan portfolio. Our loan originations continue to be focused on variable rate loan products with appropriate margins over incremental funding costs," added Mark Mason. "In the third quarter our ratio of nonaccrual assets to total assets and our total loan delinquencies remained low at 0.47% and 0.69%, respectively. Our credit quality remains strong and we have not identified any potentially significant credit issues in our loan portfolio."

"With the benefits of lower interest rates, our tangible book value per share has increased due to the increased value of our available for sale securities portfolio," stated Mark Mason. "In spite of the operating losses we have incurred through the first nine months of 2024, our tangible book value per share increased from $28.11 at December 31, 2023 to $28.13 as of September 30, 2024. Importantly, as a result of the recent reductions in interest rates and the passage of time, as of September 30, 2024, our estimated tangible fair value per share has increased to $18.52." (4)

(4) Tangible fair 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.

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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
[email protected]
http://ir.homestreet.com

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HomeStreet, Inc. and Subsidiaries
Summary Financial Data
For the Quarter Ended
(in thousands, except per share data and FTE data) September 30,
2024
June 30,
2024
March 31,
2024
December 31,
2023
September 30,
2023
Select Income Statement Data:
Net interest income $ 28,619 $ 29,701 $ 32,151 $ 34,989 $ 38,912
Provision for credit losses - - - 445 (1,110)
Noninterest income 11,058 13,227 9,454 10,956 10,464
Noninterest expense 49,166 50,931 52,164 49,511 49,089
Income (loss) before income taxes
(9,489) (8,003) (10,559) (4,011) 1,397
Net income (loss)
(7,282) (6,238) (7,497) (3,419) 2,295
Net income (loss) per fully diluted share
(0.39) (0.33) (0.40) (0.18) 0.12
Core net income (loss): (1)
Total (5,999) (4,341) (5,469) (2,249) 2,295
Core net income (loss) per fully diluted share
(0.32) (0.23) (0.29) (0.12) 0.12
Select Performance Ratios:
Return on average equity - annualized (5.4) % (4.8) % (5.6) % (2.6) % 1.7 %
Return on average tangible equity - annualized (1)
(4.2) % (3.0) % (3.8) % (1.3) % 2.2 %
Return on average assets - annualized
Net income (loss) (0.32) % (0.27) % (0.32) % (0.15) % 0.10 %
Core (1)
(0.26) % (0.19) % (0.23) % (0.10) % 0.10 %
Efficiency ratio (1)
118.7 % 111.9 % 118.0 % 105.9 % 98.3 %
Net interest margin 1.33 % 1.37 % 1.44 % 1.59 % 1.74 %
Other data:
Full-time equivalent employees ("FTE") 819 840 858 875 901
(1)Core net income (loss), core net income (loss) per fully diluted share, return on average tangible equity, core return on average assets 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.

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HomeStreet, Inc. and Subsidiaries
Summary Financial Data (continued)
As of
(in thousands, except share and per share data) September 30,
2024
June 30,
2024
March 31,
2024
December 31,
2023
September 30,
2023
Select Balance Sheet Data:
Loans held for sale
$ 38,863 $ 29,781 $ 21,102 $ 19,637 $ 33,879
Loans held for investment, net
7,294,603 7,340,309 7,405,052 7,382,404 7,400,501
Allowance for credit losses ("ACL")
38,651 39,741 39,677 40,500 40,000
Investment securities
1,158,035 1,160,595 1,191,108 1,278,268 1,294,634
Total assets
9,201,285 9,266,039 9,455,182 9,392,450 9,458,751
Deposits
6,435,404 6,532,470 6,491,102 6,763,378 6,745,551
Borrowings
1,896,000 1,886,000 2,094,000 1,745,000 1,873,000
Long-term debt
225,039 224,948 224,857 224,766 224,671
Total shareholders' equity
538,315 520,117 527,333 538,387 502,487
Other Data:
Book value per share
$ 28.55 $ 27.58 $ 27.96 $ 28.62 $ 26.74
Tangible book value per share (1)
$ 28.13 $ 27.14 $ 27.49 $ 28.11 $ 26.18
Total equity to total assets 5.9 % 5.6 % 5.6 % 5.7 % 5.3 %
Tangible common equity to tangible assets (1)
5.8 % 5.5 % 5.5 % 5.6 % 5.2 %
Shares outstanding at end of period
18,857,565 18,857,565 18,857,566 18,810,055 18,794,030
Loans to deposit ratio (Bank)
113.5 % 112.6 % 114.3 % 109.4 % 110.0 %
Credit Quality:
ACL to total loans (2)
0.53 % 0.55 % 0.54 % 0.55 % 0.55 %
ACL to nonaccrual loans 95.9 % 109.3 % 80.2 % 103.9 % 103.2 %
Nonaccrual loans to total loans 0.55 % 0.49 % 0.66 % 0.53 % 0.52 %
Nonperforming assets to total assets
0.47 % 0.42 % 0.56 % 0.45 % 0.42 %
Nonperforming assets
$ 43,320 $ 39,374 $ 52,584 $ 42,643 $ 39,749
Regulatory Capital Ratios:
Bank
Tier 1 leverage 8.59 % 8.44 % 8.34 % 8.50 % 8.49 %
Total risk-based capital
13.41 % 13.29 % 13.34 % 13.49 % 13.32 %
Common equity Tier 1 capital 12.75 % 12.62 % 12.67 % 12.79 % 12.64 %
Company
Tier 1 leverage 7.04 % 6.98 % 6.90 % 7.04 % 7.01 %
Total risk-based capital
12.70 % 12.67 % 12.70 % 12.84 % 12.62 %
Common equity Tier 1 capital 9.50 % 9.49 % 9.55 % 9.66 % 9.52 %

(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)This ratio excludes balances insured by the FHA or guaranteed by the VA or SBA.

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HomeStreet, Inc. and Subsidiaries
Consolidated Balance Sheets
(in thousands, except share data)
September 30, 2024 December 31, 2023
ASSETS
Cash and cash equivalents
$ 205,886 $ 215,664
Investment securities
1,158,035 1,278,268
Loans held for sale
38,863 19,637
Loans held for investment ("LHFI") (net of allowance for credit losses of $38,651 and $40,500)
7,294,603 7,382,404
Mortgage servicing rights
97,122 104,236
Premises and equipment, net
48,716 53,582
Other real estate owned
3,000 3,667
Intangible assets
7,766 9,641
Other assets
347,294 325,351
Total assets $ 9,201,285 $ 9,392,450
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits
$ 6,435,404 $ 6,763,378
Borrowings
1,896,000 1,745,000
Long-term debt
225,039 224,766
Accounts payable and other liabilities
106,527 120,919
Total liabilities 8,662,970 8,854,063
Shareholders' equity:
Common stock, no par value; 160,000,000 shares authorized
18,857,565 and 18,810,055 shares issued and outstanding
232,645 229,889
Retained earnings
374,340 395,357
Accumulated other comprehensive income (loss) (68,670) (86,859)
Total shareholders' equity 538,315 538,387
Total liabilities and shareholders' equity $ 9,201,285 $ 9,392,450

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HomeStreet, Inc. and Subsidiaries
Consolidated Income Statements
Quarter Ended September 30, Nine Months Ended September 30,
(in thousands, except share and per share data) 2024 2023 2024 2023
Interest income:
Loans $ 87,161 $ 85,899 $ 260,740 $ 254,250
Investment securities 9,633 12,309 30,507 37,944
Cash, Fed Funds and other 3,043 2,498 12,254 6,270
Total interest income
99,837 100,706 303,501 298,464
Interest expense:
Deposits 44,009 33,840 130,151 98,603
Borrowings 27,209 27,954 82,879 68,097
Total interest expense
71,218 61,794 213,030 166,700
Net interest income
28,619 38,912 90,471 131,764
Provision for credit losses - (1,110) - (886)
Net interest income after provision for credit losses 28,619 40,022 90,471 132,650
Noninterest income:
Net gain on loan origination and sale activities 2,760 2,372 8,102 7,238
Loan servicing income 3,058 3,092 9,500 9,390
Deposit fees 2,222 2,455 6,672 7,817
Other 3,018 2,545 9,465 6,520
Total noninterest income
11,058 10,464 33,739 30,965
Noninterest expense:
Compensation and benefits 26,760 27,002 82,387 84,031
Information services 7,742 7,579 22,664 22,207
Occupancy 4,974 5,306 15,538 16,834
General, administrative and other 9,690 9,202 31,672 29,432
Goodwill impairment - - - 39,857
Total noninterest expense
49,166 49,089 152,261 192,361
Income (loss) before income taxes (9,489) 1,397 (28,051) (28,746)
Income tax (benefit) expense (2,207) (898) (7,034) (4,657)
Net income (loss) $ (7,282) $ 2,295 $ (21,017) $ (24,089)
Net income (loss) per share:
Basic $ (0.39) $ 0.12 $ (1.11) $ (1.28)
Diluted $ (0.39) $ 0.12 $ (1.11) $ (1.28)
Weighted average shares outstanding:
Basic
18,857,565 18,792,893 18,857,335 18,774,593
Diluted
18,857,565 18,792,893 18,857,335 18,774,593

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HomeStreet, Inc. and Subsidiaries
Five Quarter Consolidated Income Statements
Quarter Ended
(in thousands, except share and per share data) September 30,
2024
June 30,
2024
March 31,
2024
December 31,
2023
September 30,
2023
Interest income:
Loans $ 87,161 $ 87,323 $ 86,256 $ 87,005 $ 85,899
Investment securities 9,633 10,160 10,714 11,671 12,309
Cash, Fed Funds and other 3,043 3,640 5,571 2,603 2,498
Total interest income 99,837 101,123 102,541 101,279 100,706
Interest expense:
Deposits 44,009 43,535 42,607 39,317 33,840
Borrowings 27,209 27,887 27,783 26,973 27,954
Total interest expense 71,218 71,422 70,390 66,290 61,794
Net interest income
28,619 29,701 32,151 34,989 38,912
Provision for credit losses - - - 445 (1,110)
Net interest income after provision for credit losses 28,619 29,701 32,151 34,544 40,022
Noninterest income:
Net gain on loan origination and sale activities 2,760 3,036 2,306 2,108 2,372
Loan servicing income 3,058 3,410 3,032 3,258 3,092
Deposit fees 2,222 2,209 2,241 2,331 2,455
Other 3,018 4,572 1,875 3,259 2,545
Total noninterest income 11,058 13,227 9,454 10,956 10,464
Noninterest expense:
Compensation and benefits 26,760 27,616 28,011 27,033 27,002
Information services 7,742 7,580 7,342 7,694 7,579
Occupancy 4,974 5,130 5,434 5,407 5,306
General, administrative and other 9,690 10,605 11,377 9,377 9,202
Total noninterest expense 49,166 50,931 52,164 49,511 49,089
Income (loss) before income taxes (9,489) (8,003) (10,559) (4,011) 1,397
Income tax (benefit) expense (2,207) (1,765) (3,062) (592) (898)
Net income (loss) $ (7,282) $ (6,238) $ (7,497) $ (3,419) $ 2,295
Net income (loss) per share:
Basic $ (0.39) $ (0.33) $ (0.40) $ (0.18) $ 0.12
Diluted $ (0.39) $ (0.33) $ (0.40) $ (0.18) $ 0.12
Weighted average shares outstanding:
Basic 18,857,565 18,857,566 18,856,870 18,807,965 18,792,893
Diluted 18,857,565 18,857,566 18,856,870 18,807,965 18,792,893
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HomeStreet, Inc. and Subsidiaries
Average Balances, Yields (Taxable-equivalent basis) and Rates

Quarter Ended September 30, Nine Months Ended September 30,
Average Balances: 2024 2023 2024 2023
Investment securities
$ 1,155,284 $ 1,356,410 $ 1,186,061 $ 1,417,438
Loans
7,385,970 7,461,220 7,433,680 7,477,454
Total interest-earning assets 8,727,590 9,007,360 8,890,811 9,055,725
Total assets 9,138,291 9,433,648 9,303,598 9,508,701
Deposits: Interest-bearing
5,045,396 5,092,025 5,133,118 5,457,283
Deposits: Noninterest-bearing 1,283,502 1,430,834 1,295,044 1,459,506
Borrowings
1,950,109 2,051,584 2,016,440 1,677,276
Long-term debt
224,994 224,614 224,904 224,525
Total interest-bearing liabilities
7,220,499 7,368,223 7,374,462 7,359,084
Average Yield/Rate:
Investment securities
3.65 % 3.90 % 3.74 % 3.83 %
Loans
4.66 % 4.54 % 4.64 % 4.51 %
Total interest earning assets
4.56 % 4.46 % 4.56 % 4.42 %
Deposits: Interest-bearing
3.47 % 2.63 % 3.38 % 2.41 %
Total deposits
2.76 % 2.06 % 2.70 % 1.90 %
Borrowings
4.85 % 4.81 % 4.81 % 4.69 %
Long-term debt
5.48 % 5.49 % 5.49 % 5.37 %
Total interest-bearing liabilities
3.90 % 3.33 % 3.84 % 3.02 %
Net interest rate spread
0.66 % 1.13 % 0.73 % 1.40 %
Net interest margin
1.33 % 1.74 % 1.38 % 1.96 %

(in thousands, except yield/rate) Quarter Ended
Average Balances: September 30,
2024
June 30,
2024
March 31,
2024
December 31,
2023
September 30,
2023
Investment securities
$ 1,155,284 $ 1,164,144 $ 1,239,093 $ 1,278,344 $ 1,356,410
Loans
7,385,970 7,454,945 7,460,650 7,465,375 7,461,220
Total interest earning assets
8,727,590 8,858,433 9,088,205 8,923,338 9,007,360
Total assets 9,138,291 9,272,131 9,502,189 9,351,866 9,433,648
Deposits: Interest-bearing
5,045,396 5,122,284 5,232,637 5,187,242 5,092,025
Deposits: Noninterest-bearing
1,283,502 1,282,447 1,319,309 1,343,043 1,430,834
Borrowings
1,950,109 2,025,415 2,074,527 1,975,536 2,051,584
Long-term debt
224,994 224,903 224,812 224,722 224,614
Total interest-bearing liabilities
7,220,499 7,372,602 7,531,976 7,387,500 7,368,223
Average Yield/Rate:
Investment securities
3.65 % 3.80 % 3.75 % 3.94 % 3.90 %
Loans
4.66 % 4.66 % 4.60 % 4.60 % 4.54 %
Total interest earning assets
4.56 % 4.59 % 4.54 % 4.52 % 4.46 %
Deposits: Interest-bearing
3.47 % 3.41 % 3.27 % 3.00 % 2.63 %
Total deposits
2.76 % 2.73 % 2.61 % 2.39 % 2.06 %
Borrowings
4.85 % 4.85 % 4.73 % 4.74 % 4.81 %
Long-term debt
5.48 % 5.49 % 5.51 % 5.52 % 5.49 %
Total interest-bearing liabilities
3.90 % 3.87 % 3.74 % 3.55 % 3.33 %
Net interest rate spread
0.66 % 0.72 % 0.80 % 0.98 % 1.13 %
Net interest margin
1.33 % 1.37 % 1.44 % 1.59 % 1.74 %

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Results of Operations

Third Quarter of 2024 Compared to the Second Quarter of 2024

Non-core amounts: For the third quarter and second quarter of 2024 non-core items include $1.6 million and $2.4 million of merger related expenses, respectively.

Our net loss and loss before income taxes were $(7.3) million and $(9.5) million, respectively, in the third quarter of 2024, as compared to $(6.2) million and $(8.0) million, respectively, in the second quarter of 2024. The $1.5 million increase in loss before income taxes was primarily due to lower net interest income and lower noninterest income which was partially offset by a decrease in noninterest expense.

The income tax benefit realized resulted in an effective tax rate of 23.3% for the third quarter of 2024 as compared to an effective tax rate of 22.1% in the second quarter of 2024.

Our net interest income in the third quarter of 2024 was $1.1 million lower than the second quarter of 2024 due to a decrease in our net interest margin from 1.37% to 1.33% and a decrease in interest earning assets. The decrease in the net interest margin was due to a 3 basis point decrease in the yield on interest earning assetsand a 3 basis point increase in the rates paid on interest-bearing liabilities. Yields on interest-earning assets decreased due to lower yields on investment securities. The increase in the rates paid on our interest-bearing liabilities was due to higher deposit costs due to a greater proportion of higher cost certificates of deposit.

There was no provision for credit losses recognized during either the third or second quarter of 2024. This reflects 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 third quarter of 2024 decreased from the second quarter of 2024 primarily due to more income realized in the second quarter of 2024 from our investments in small business investment companies.

The 3.5% decrease in noninterest expense in the third quarter of 2024, as compared to the second quarter of 2024, reflects the Company's emphasis on reducing operating expenses where possible.

Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023

Non-core amounts: For the nine months ended September 30, 2024, non-core items include $6.7 million of merger related expenses. During the nine months ended September 30, 2023, non-core items include a $39.9 million goodwill impairment charge.

Our net income (loss) and income (loss) before income taxes were $(21.0) million and $(28.1) million, respectively, in the nine months ended September 30, 2024, as compared to $(24.1) million and $(28.7) million, respectively, in the nine months ended September 30, 2023. Our core net income (loss) and core income (loss) before income taxes in the nine months ended September 30, 2024, which excludes the impact of merger related expenses and goodwill impairment charges, was $(15.8) million and $(21.4) million, as compared to $10.5 million and $11.1 million, respectively, in the nine months ended September 30, 2023. The $32.5 million decrease in core income before taxes was primarily due to lower net interest income, partially offset by an increase in noninterest income and a decrease in noninterest expense.

The income tax benefit realized in the nine months ended September 30, 2024 resulted in an effective tax rate of 25.1% as compared to an effective tax rate of 16.2% for the nine months ended September 30, 2023. Our
effective tax rate in the nine months ended September 30, 2023 was significantly impacted by the goodwill impairment charge, a portion of which is not deductible for tax purposes.

Net interest income in the nine months ended September 30, 2024 decreased $41.3 million as compared to the nine months ended September 30, 2023 due primarily to a decrease in our net interest margin. Our net interest margin decreased from 1.96% in the nine months ended September 30, 2023 to 1.38% in the nine months ended September 30, 2024 due to a 82 basis point increase in the rates paid on interest-bearing liabilities which was partially offset by a 14 basis point increase in the yield on interest earning assets. Yields on interest-earning assets increased as yields on adjustable-rate loans increased due to increases in the indexes on which their pricing is based. The increase in the rates paid on our interest-bearing liabilities was due to an increase in the proportion of higher cost borrowings and a decrease in the proportion of noninterest-bearing deposits to the total balance of interest-bearing liabilities and higher deposit rates and higher borrowing rates. The increases in the rates paid on deposits were due to increases in market interest rates over the prior year and the migration of noninterest-bearing and lower cost interest-bearing accounts to higher cost certificates of deposit and money market accounts.

There was no provision for credit losses recognized during the nine months ended September 30, 2024 as compared to a $0.9 million recovery in the nine months ended September 30, 2023. These low levels of provisions 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 nine months ended September 30, 2024 increased from the nine months ended September 30, 2023 primarily due to higher levels of income realized from our investments in small business investment companies and an increase in single family gain on loan origination and sales activities which were partially offset by lower deposit fees.

The $40.1 million decrease in noninterest expense in the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023 was primarily due to a $39.9 million goodwill impairment in the nine months ended September 30, 2023, lower compensation and benefit costs and lower occupancy costs, which were partially offset by $6.7 million of merger related expenses recognized in 2024. The decrease in compensation and benefit costs was primarily due to lower staffing levels, which was partially offset by wage increases given in the nine months ended September 30, 2024. FTEs decreased from 910 in the nine months ended September 30, 2023 to 839 in the nine months ended September 30, 2024.

Financial Position

During the nine months ended September 30, 2024, our total assets decreased $191 million due primarily to a $120 million decrease in investment securities as we are not purchasing new investment securities to replace principal paydowns in our portfolio. During the nine months ended September 30, 2024 total liabilities decreased $191 million due to a $328 million decrease in deposits, partially offset by an increase in borrowings. The decrease in deposits was primarily due to a $477 million decrease in brokered certificates of deposit which was partially offset by increases in non-brokered deposits. The $151 million of additional borrowings were used to replace maturing brokered deposits.
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Loans Held for Investment
(in thousands) September 30,
2024
June 30,
2024
March 31,
2024
December 31,
2023
September 30,
2023
Commercial real estate ("CRE")
Non-owner occupied CRE $ 590,956 $ 612,937 $ 633,401 $ 641,885 $ 633,083
Multifamily 3,950,941 3,935,158 3,929,679 3,940,189 3,957,209
Construction/land development 535,601 530,445 575,152 565,916 566,289
Total 5,077,498 5,078,540 5,138,232 5,147,990 5,156,581
Commercial and industrial loans
Owner occupied CRE 365,138 372,452 381,943 391,285 428,253
Commercial business 345,999 376,711 387,464 359,049 385,148
Total 711,137 749,163 769,407 750,334 813,401
Consumer loans
Single family (1)
1,137,981 1,152,004 1,149,940 1,140,279 1,099,644
Home equity and other 406,638 400,343 387,150 384,301 370,875
Total 1,544,619 1,552,347 1,537,090 1,524,580 1,470,519
Total LHFI 7,333,254 7,380,050 7,444,729 7,422,904 7,440,501
Allowance for credit losses ("ACL") (38,651) (39,741) (39,677) (40,500) (40,000)
Total LHFI less ACL $ 7,294,603 $ 7,340,309 $ 7,405,052 $ 7,382,404 $ 7,400,501
(1)Includes $1.3 million at September 30, 2024, June 30, 2024, March 31, 2024 and December 31, 2023 and $1.2 million at September 30, 2023 of single family loans that are carried at fair value.

11


Loan Roll-forward
(in thousands) September 30,
2024
June 30,
2024
March 31,
2024
December 31,
2023
September 30,
2023
Loans - beginning balance $ 7,380,050 $ 7,444,729 $ 7,422,904 $ 7,440,501 $ 7,436,651
Originations and advances 279,783 282,460 287,568 297,867 329,294
Transfers (to) from loans held for sale (378) (520) (273) - 466
Payoffs, paydowns and other (324,651) (346,533) (264,876) (312,265) (325,312)
Charge-offs and transfers to OREO (1,550) (86) (594) (3,199) (598)
Loans - ending balance $ 7,333,254 $ 7,380,050 $ 7,444,729 $ 7,422,904 $ 7,440,501

Loan Originations and Advances
(in thousands) September 30,
2024
June 30,
2024
March 31,
2024
December 31,
2023
September 30,
2023
CRE
Non-owner occupied CRE $ 9 $ 977 $ 1,146 $ 12,405 $ 2,315
Multifamily
48,960 17,495 489 1,482 44,356
Construction/land development 160,220 152,681 157,453 158,755 155,460
Total 209,189 171,153 159,088 172,642 202,131
Commercial and industrial loans
Owner occupied CRE - 663 949 7,883 2,242
Commercial business 12,966 38,990 61,400 21,115 34,255
Total 12,966 39,653 62,349 28,998 36,497
Consumer loans
Single family (1)
15,960 33,359 31,769 62,167 57,483
Home equity and other 41,668 38,295 34,362 34,060 33,183
Total 57,628 71,654 66,131 96,227 90,666
Total loan originations and advances $ 279,783 $ 282,460 $ 287,568 $ 297,867 $ 329,294
(1) Includes loans transferred from construction loans to permanent single family loans upon completion of construction of $12.9 million, $31.6 million, $30.8 million, $57.6 million and $55.1 million for the quarters ended September 30, 2024, June 30, 2024, March 31, 2024, December 31, 2023 and September 30, 2023, respectively.

Credit Quality

During the third quarter of 2024, our ratios of nonperforming assets to total assets and total loans delinquent over 30 days, including nonaccrual loans, remained at low levels. As of September 30, 2024, our ratio of nonperforming assets to total assets was 0.47% as compared to 0.42% at June 30, 2024 while our ratio of total loans delinquent over 30 days, including nonaccrual loans, to total loans was 0.69% as compared to 0.66% at June 30, 2024.
12

Delinquencies
Past Due and Still Accruing
(in thousands) 30-59 days 60-89 days
90 days or
more (1)
Nonaccrual
Total past
due and nonaccrual (2)
Current Total
loans
September 30, 2024
Total loans held for investment $ 3,719 $ 1,867 $ 4,967 $ 40,320 $ 50,873 $ 7,282,381 $ 7,333,254
% 0.05 % 0.02 % 0.07 % 0.55 % 0.69 % 99.31 % 100.00 %
June 30, 2024
Total loans held for investment $ 3,824 $ 2,691 $ 5,459 $ 36,374 $ 48,348 $ 7,331,702 $ 7,380,050
% 0.05 % 0.04 % 0.08 % 0.49 % 0.66 % 99.34 % 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 $11.0 million and $11.3 million at September 30, 2024 and June 30, 2024, respectively.

Allowance for Credit Losses (roll-forward)
Quarter Ended
(in thousands) September 30,
2024
June 30,
2024
March 31,
2024
December 31,
2023
September 30,
2023
Allowance for credit losses
Beginning balance $ 39,741 $ 39,677 $ 40,500 $ 40,000 $ 41,500
Provision for credit losses 104 128 242 223 (990)
Recoveries (charge-offs), net (1,194) (64) (1,065) 277 (510)
Ending balance
$ 38,651 $ 39,741 $ 39,677 $ 40,500 $ 40,000
Allowance for unfunded commitments:
Beginning balance $ 1,453 $ 1,581 $ 1,823 $ 1,601 $ 1,721
Provision for credit losses (104) (128) (242) 222 (120)
Ending balance
$ 1,349 $ 1,453 $ 1,581 $ 1,823 $ 1,601
Provision for credit losses:
Allowance for credit losses - loans $ 104 $ 128 $ 242 $ 223 $ (990)
Allowance for unfunded commitments (104) (128) (242) 222 (120)
Total
$ - $ - $ - $ 445 $ (1,110)

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Allocation of Allowance for Credit Losses by Product Type

September 30, 2024 June 30, 2024 March 31, 2024
(in thousands) Balance
Rate (1)
Balance
Rate (1)
Balance
Rate (1)
Non-owner occupied CRE $ 1,812 0.31 % $ 1,777 0.29 % $ 2,131 0.34 %
Multifamily
15,760 0.40 % 17,070 0.43 % 18,947 0.48 %
Construction/land development
Multifamily construction
1,389 0.88 % 1,971 1.03 % 1,621 0.84 %
CRE construction 82 0.85 % 35 0.53 % 188 1.02 %
Single family construction 7,187 2.29 % 5,445 2.03 % 5,578 2.00 %
Single family construction to perm 255 0.47 % 300 0.47 % 435 0.51 %
Total CRE 26,485 0.52 % 26,598 0.52 % 28,900 0.56 %
Owner occupied CRE 639 0.18 % 731 0.20 % 836 0.22 %
Commercial business
4,472 1.30 % 5,595 1.49 % 2,646 0.69 %
Total commercial and industrial 5,111 0.72 % 6,326 0.85 % 3,482 0.46 %
Single family
3,804 0.36 % 3,844 0.36 % 4,273 0.40 %
Home equity and other
3,251 0.80 % 2,973 0.74 % 3,022 0.78 %
Total consumer 7,055 0.49 % 6,817 0.47 % 7,295 0.51 %
Total $ 38,651 0.53 % $ 39,741 0.55 % $ 39,677 0.54 %
(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) September 30,
2024
June 30,
2024
March 31,
2024
December 31,
2023
September 30,
2023
Loan originations
Single family loans
$ 125,964 $ 101,057 $ 76,528 $ 67,330 $ 95,917
Commercial and industrial and CRE loans
- 19,593 3,496 7,142 11,863
Loans sold
Single family loans 109,091 98,081 70,379 77,916 101,575
Commercial and industrial and CRE loans (1)
7,602 13,539 8,196 10,619 2,821
Net gain on loan origination and sale activities
Single family loans 2,779 2,718 1,986 1,844 2,267
Commercial and industrial and CRE loans (1)
(19) 318 320 264 105
Total $ 2,760 $ 3,036 $ 2,306 $ 2,108 $ 2,372
(1) May include loans originated as held for investment.

14


Loan Servicing Income
Quarter Ended
(in thousands) September 30,
2024
June 30,
2024
March 31,
2024
December 31,
2023
September 30,
2023
Single family servicing income, net:
Servicing fees and other $ 3,776 $ 3,751 $ 3,839 $ 3,880 $ 3,852
Changes - amortization (1)
(1,669) (1,713) (1,428) (1,504) (1,564)
Net 2,107 2,038 2,411 2,376 2,288
Risk management, single family MSRs:
Changes in fair value due to assumptions (2)
(1,963) 529 618 (1,380) 785
Net gain (loss) from economic hedging (3)
1,418 (509) (1,110) 1,089 (1,160)
Subtotal (545) 20 (492) (291) (375)
Single family servicing income 1,562 2,058 1,919 2,085 1,913
Commercial loan servicing income:
Servicing fees and other 2,919 2,811 2,515 2,588 2,553
Amortization of capitalized MSRs (1,423) (1,459) (1,402) (1,415) (1,374)
Total 1,496 1,352 1,113 1,173 1,179
Total loan servicing income $ 3,058 $ 3,410 $ 3,032 $ 3,258 $ 3,092
(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 $0.3 million for each of the quarters ended September 30, 2024, June 30, 2024, March 31, 2024, December 31, 2023 and September 30, 2023.

Capitalized Mortgage Servicing Rights ("MSRs")
Quarter Ended
(in thousands) September 30,
2024
June 30,
2024
March 31,
2024
December 31,
2023
September 30,
2023
Single Family MSRs
Beginning balance $ 73,725 $ 74,056 $ 74,249 $ 76,470 $ 76,314
Additions and amortization:
Originations
707 853 617 663 935
Changes - amortization (1)
(1,669) (1,713) (1,428) (1,504) (1,564)
Net additions and amortization
(962) (860) (811) (841) (629)
Change in fair value due to assumptions (2)
(1,963) 529 618 (1,380) 785
Ending balance $ 70,800 $ 73,725 $ 74,056 $ 74,249 $ 76,470
Ratio to related loans serviced for others 1.36 % 1.41 % 1.40 % 1.40 % 1.43 %
Multifamily and SBA MSRs
Beginning balance $ 27,583 $ 28,863 $ 29,987 $ 31,141 32,477
Originations
162 179 278 261 38
Amortization
(1,423) (1,459) (1,402) (1,415) (1,374)
Ending balance $ 26,322 $ 27,583 $ 28,863 $ 29,987 $ 31,141
Ratio to related loans serviced for others 1.42 % 1.47 % 1.52 % 1.58 % 1.64 %
(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) September 30,
2024
June 30,
2024
March 31,
2024
December 31,
2023
September 30,
2023
Deposits by Product:
Noninterest-bearing demand deposits $ 1,253,582 $ 1,252,850 $ 1,311,559 $ 1,306,503 $ 1,437,057
Interest-bearing:
Interest-bearing demand deposits 315,711 332,290 330,301 344,748 352,529
Savings 239,060 246,397 256,383 261,508 284,663
Money market 1,445,639 1,502,960 1,536,341 1,622,665 1,723,924
Certificates of deposit:
Brokered deposits 741,051 948,989 921,103 1,218,008 973,314
Other 2,440,361 2,248,984 2,135,415 2,009,946 1,974,064
Total interest-bearing deposits 5,181,822 5,279,620 5,179,543 5,456,875 5,308,494
Total deposits $ 6,435,404 $ 6,532,470 $ 6,491,102 $ 6,763,378 $ 6,745,551

Percent of total deposits:
Noninterest-bearing demand deposits 19.5 % 19.2 % 20.2 % 19.3 % 21.3 %
Interest-bearing:
Interest-bearing demand deposits 4.9 % 5.1 % 5.1 % 5.1 % 5.2 %
Savings 3.7 % 3.8 % 3.9 % 3.9 % 4.2 %
Money market 22.5 % 23.0 % 23.7 % 24.0 % 25.6 %
Certificates of deposit
Brokered deposits 11.5 % 14.5 % 14.2 % 18.0 % 14.4 %
Other 37.9 % 34.4 % 32.9 % 29.7 % 29.3 %
Total interest-bearing deposits 80.5 % 80.8 % 79.8 % 80.7 % 78.7 %
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 goodwill impairment charges 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; and (iii) tangible fair value per share as we believe this information provides an estimate of what the current value per share is of the Company's net assets; (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 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 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 Nine Months Ended
(in thousands, except share and per share data) September 30,
2024
June 30,
2024
March 31,
2024
December 31,
2023
September 30,
2023
September 30,
2024
September 30,
2023
Core net income (loss)
Net income (loss) $ (7,282) $ (6,238) $ (7,497) $ (3,419) $ 2,295 $ (21,017) $ (24,089)
Adjustments (tax effected)
Merger related expenses
1,283 1,897 2,028 1,170 - 5,208 -
Goodwill impairment - - - - - - 34,622
Total $ (5,999) $ (4,341) $ (5,469) $ (2,249) $ 2,295 $ (15,809) $ 10,533
Core net income (loss) per fully diluted share
Fully diluted shares 18,857,565 18,857,566 18,856,870 18,807,965 18,792,893 18,857,335 18,774,593
Computed amount
$ (0.32) $ (0.23) $ (0.29) $ (0.12) $ 0.12 $ (0.84) $ 0.56
Return on average tangible equity (annualized)
Average shareholders' equity
$ 531,608 $ 522,904 $ 537,627 $ 513,758 $ 535,369 $ 530,716 $ 565,200
Less: Average goodwill and other intangibles
(8,176) (8,794) (9,403) (10,149) (10,917) (8,789) (30,934)
Average tangible equity $ 523,432 $ 514,110 $ 528,224 $ 503,609 $ 524,452 $ 521,927 $ 534,266
Core net income (loss) (per above)
(5,999) (4,341) (5,469) (2,249) 2,295 (15,809) 10,533
Adjustments (tax effected)
Amortization of core deposit intangibles 488 487 488 615 614 1,463 1,687
Tangible income (loss) applicable to shareholders
$ (5,511) $ (3,854) $ (4,981) $ (1,634) $ 2,909 $ (14,346) $ 12,220
Ratio
(4.2) % (3.0) % (3.8) % (1.3) % 2.2 % (3.7) % 3.1 %
Efficiency ratio
Noninterest expense
Total
$ 49,166 $ 50,931 $ 52,164 $ 49,511 $ 49,089 $ 152,261 $ 192,361
Adjustments:
Merger related expenses
(1,645) (2,432) (2,600) (1,500) - (6,677) -
Goodwill impairment - - - - - - (39,857)
State of Washington taxes (438) (463) (452) 659 (572) (1,353) (1,653)
Adjusted total $ 47,083 $ 48,036 $ 49,112 $ 48,670 $ 48,517 $ 144,231 $ 150,851
Total revenues
Net interest income
$ 28,619 $ 29,701 $ 32,151 $ 34,989 $ 38,912 90,471 131,764
Noninterest income
11,058 13,227 9,454 10,956 10,464 33,739 30,965
Adjusted total $ 39,677 $ 42,928 $ 41,605 $ 45,945 $ 49,376 $ 124,210 $ 162,729
Ratio 118.7 % 111.9 % 118.0 % 105.9 % 98.3 % 116.1 % 92.7 %
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As of or for the Quarter Ended Nine Months Ended
(in thousands, except share and per share data) September 30,
2024
June 30,
2024
March 31,
2024
December 31,
2023
September 30,
2023
September 30,
2024
September 30,
2023
Return on average assets (annualized) - Core
Average Assets $ 9,138,291 $ 9,272,131 $ 9,502,189 $ 9,351,866 $ 9,433,648 $ 9,303,598 $ 9,508,701
Core net income (loss) (per above)
(5,999) (4,341) (5,469) (2,249) 2,295 (15,809) 10,533
Ratio (0.26) % (0.19) % (0.23) % (0.10) % 0.10 % (0.23) % 0.15 %
Effective tax rate used in computations above (1)
22.0 % 22.0 % 22.0 % 22.0 % 22.0 % 22.0 % 22.0 %
Tangible book value per share
Shareholders' equity
$ 538,315 $ 520,117 $ 527,333 $ 538,387 $ 502,487 $ 538,315 $ 502,487
Less: Intangible assets (7,766) (8,391) (9,016) (9,641) (10,429) (7,766) (10,429)
Tangible shareholders' equity $ 530,549 $ 511,726 $ 518,317 $ 528,746 $ 492,058 $ 530,549 $ 492,058
Common shares outstanding 18,857,565 18,857,565 18,857,566 18,810,055 18,794,030 18,857,565 18,794,030
Computed amount $ 28.13 $ 27.14 $ 27.49 $ 28.11 $ 26.18 $ 28.13 $ 26.18
Tangible common equity to tangible assets
Tangible shareholders' equity (per above) $ 530,549 $ 511,726 $ 518,317 $ 528,746 $ 492,058 $ 530,549 $ 492,058
Tangible assets
Total assets $ 9,201,285 $ 9,266,039 $ 9,455,182 $ 9,392,450 $ 9,458,751 $ 9,201,285 $ 9,458,751
Less: Intangible assets (per above) (7,766) (8,391) (9,016) (9,641) (10,429) (7,766)

(10,429)
Net $ 9,193,519 $ 9,257,648 $ 9,446,166 $ 9,382,809 $ 9,448,322 $ 9,193,519 $ 9,448,322
Ratio 5.8 % 5.5 % 5.5 % 5.6 % 5.2 % 5.8 % 5.2 %
(1) Effective tax rate indicated is used for all adjustments except the goodwill impairment charge as a portion of this charge was not deductible for tax purposes. Instead, a computed effective rate of 13.1% was used for the goodwill impairment charge.
As of or for the Quarter Ended September 30, 2024
(in thousands, except share and per share data) Carrying Value Fair Value Change in Value
Tangible Fair Value per Share
Tangible shareholder's equity (see above) $ 530,549
Assets:
Investment securities HTM $ 2,318 $ 2,296 $ (22)
Loans held for investment 7,293,274 7,019,085 (274,189)
MSRs - multifamily and SBA 26,322 31,970 5,648
Liabilities:
Certificates of deposit 3,181,412 3,180,057 1,355
Borrowings 1,896,000 1,909,471 (13,471)
Long term debt 225,039 184,609 40,430
Total change in value (240,249)
Deferred taxes at 24.5% 58,861
$ 349,161
Shares outstanding 18,857,565
Computed amount $ 18.52
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. In addition, all statements in this earnings release (including but not limited to those found in the quotes of our Chief Executive Officer) that address and/or include beliefs, assumptions, estimates, projections and expectations of our future performance and financial condition and trends in product mixes and expected impact on costs, as well as the expected impact of decreases in short term interest rates, 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 release 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. The Company does not endorse any projections regarding future performance that may be made by third parties. 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 FirstSun Capital Bancorp ("FirstSun"), (2) the ability of HomeStreet and FirstSun to obtain required governmental approvals of the Merger, (3) the failure to satisfy the closing conditions in the definitive Agreement and Plan of Merger (the "Merger Agreement"), dated as of January 16, 2024, as amended on April 30, 2024, by and between HomeStreet and FirstSun, 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 U.S. and global economies, including business disruptions, reductions in employment, inflationary pressures and an increase in business failures, specifically among our customers; (8) changes in the interest rate environment; (9) changes in deposit flows, loan demand or real estate values may adversely affect the business of our primary subsidiary, HomeStreet Bank (the "Bank"), through which substantially all of our operations are carried out; (10) there may be increases in competitive pressure among financial institutions or from non-financial institutions; (11) our ability to attract and retain key members of our senior management team; (12) the timing and occurrence or non-occurrence of events may be subject to circumstances beyond our control;(13) our ability to control operating costs and expenses; (14) our credit quality and the effect of credit quality on our credit losses expense and allowance for credit losses; (15) 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 the value of our rate-lock loan activity we recognize; (20) technological changes may be more difficult or 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) our ability to grow efficiently both organically and through acquisitions and to manage our growth and integration costs; (24) staffing fluctuations in response to product demand or the implementation of corporate strategies that affect our work force and potential associated charges; (25) litigation, investigations or other matters before regulatory
20

agencies, whether currently existing or commencing in the future, may delay the occurrence or non-occurrence of events longer than what we anticipate; and (26) our ability to obtain regulatory approvals or non-objection to take various capital actions, including the payment of dividends by us or the Bank, or repurchases of our common stock. 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.

21