Net Income of $10.3 Million, or $0.59 per
Diluted Share
HomeStreet, Inc. (NASDAQ:HMST) (the “Company” or “HomeStreet”),
the parent company of HomeStreet Bank (the “Bank”), today announced
net income of $10.3 million, or $0.59 per diluted share, for the
first quarter of 2015, compared to net income of $5.6 million, or
$0.38 per share, for the fourth quarter of 2014 and $2.3 million,
or $0.15 per share, for the first quarter of 2014. Excluding
merger-related expenses (net of tax) of $7.9 million and a bargain
purchase gain of $6.6 million, net income for the quarter was $11.6
million(1), or $0.67(1) per share, compared to net income of $6.2
million(1), or $0.41(1) per share, for the fourth quarter of 2014
and $2.8 million(1), or $0.19(1) per share, for the first quarter
of 2014.
Simplicity merger
On March 1, 2015, the Company completed its merger with
Simplicity Bancorp, Inc. and Simplicity Bank (“Simplicity”) located
in Southern California. The provisional application of the
acquisition method of accounting resulted in a bargain purchase
gain of $6.6 million which is reported as a component of
noninterest income on our consolidated statement of operations for
the first quarter of 2015. We also recorded merger-related expenses
of $12.2 million during the quarter. The results of operations of
Simplicity are included in the consolidated results of operations
from the date of the merger. The merger represents a significant
expansion of HomeStreet’s banking activities in California.
“We made substantial progress toward our goals this quarter,”
said Mark K. Mason, Chairman and Chief Executive Officer. “We
closed our merger with Simplicity, recognizing a bargain purchase
gain and meaningfully reducing the amount of merger-related
expenses in the process, the combined effect of which reduced the
cost of the merger by $10.7 million. Our integration of
Simplicity is on plan, all deposits and loans have now been
converted onto HomeStreet systems and we will substantially
complete the full realization of anticipated Simplicity operating
cost reductions in the second quarter. As a result of the
merger and ongoing organic activity, in the quarter we grew total
assets 30% to $4.6 billion and total deposits 37% to $3.3
billion.
“We added commercial lending capabilities in California, hiring
a new commercial real estate lending group who will operate as
HomeStreet Commercial Capital and a group of SBA lenders. Both of
these groups are seasoned and highly successful. We also added
to our network of mortgage loan centers and personnel in the
quarter and set new records for mortgage
production. Continuing low interest rates and a fast start to
the home buying season have provided us with strong first quarter
mortgage banking income making the first quarter, which is
historically the weakest in mortgage banking, a great start to our
year. And, as a result of net income in the quarter and the
Simplicity merger, ending total equity was $439 million.”
For details and the complete earnings release, please refer to
the Company’s investor relations website at
http://ir.homestreet.com as well as tomorrow’s Form 8-K filing at
www.sec.gov.
(1) The press release contains certain non-GAAP financial
disclosures for consolidated net income excluding merger-related
expenses, diluted earnings per share excluding merger-related
expenses, and Commercial and Consumer Banking segment net income
excluding merger-related expenses. The Company uses certain
non-GAAP financial measures to provide meaningful supplemental
information regarding the Company's operational performance and to
enhance investors' overall understanding of such financial
performance. For corresponding reconciliations to GAAP financial
measures, see Non-GAAP Financial Measures beginning on page 28 of
the full earnings release at http://ir.homestreet.com.
Conference Call
HomeStreet, Inc. will conduct a quarterly earnings conference
call on Tuesday, April 28, 2015 at 1:00 p.m. EDT. The Company will
discuss first quarter 2015 results and provide an update on recent
activities. A question and answer session will follow the
presentation. Shareholders, analysts and other interested parties
may register in advance at http://dpregister.com/10062349 or may
join the call by dialing 1-877-508-9589 (1-855-669-9657 in Canada)
shortly before 1:00 p.m. EDT. A rebroadcast will be available
approximately one hour after the conference call by dialing
1-877-344-7529 and entering passcode 10062349.
The information to be discussed in the conference call will be
available on the company's web site at 8:00 p.m. EDT on Monday,
April 27, 2015.
Forward-Looking Statements
This press release contains forward-looking statements
concerning HomeStreet, Inc. and HomeStreet Bank and their
operations, performance, financial conditions and likelihood of
success. All statements other than statements of historical fact
are forward-looking statements. Forward-looking statements are
based on many beliefs, assumptions, estimates and expectations of
our future performance, taking into account information currently
available to us, and include statements about the competitiveness
of the banking industry. When used in this press release, the words
“anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,”
“may,” “plan,” “potential,” “should,” “will” and “would” and
similar expressions (including the negative of these terms) may
help identify forward-looking statements. Such statements involve
inherent risks and uncertainties, many of which are difficult to
predict and are generally beyond the control of the Company.
Forward-looking statements speak only as of the date made, and we
do not undertake to update them to reflect changes or events that
occur after that date.
We caution readers that a number of factors could cause actual
results to differ materially from those expressed in, implied or
projected by, such forward-looking statements. Among other things,
our ability to expand our banking operations geographically and
across market sectors, grow our franchise and capitalize on market
opportunities, meet the growth targets that management has set for
the Company, maintain our position in the industry and generate
positive net income and cash flow, may be limited due to future
risks and uncertainties including, but not limited to, changes in
general economic conditions that impact our markets and our
business, actions by the Federal Reserve affecting monetary and
fiscal policy, regulatory and legislative actions that may increase
capital requirements or otherwise constrain our ability to do
business, our ability to maintain electronic and physical security
of our customer data, our ability to attract and retain key
personnel, our ability to make accurate estimates of the value of
our non-cash assets and liabilities, significant increases in the
competition we face in our industry and market and the extent of
our success in problem asset resolution efforts. We may not realize
the benefits expected from our recently completed bank and branch
acquisitions in the anticipated time frame (or at all), and
integration of acquired operations may take longer or prove more
expensive than anticipated. In addition, we may not recognize all
or a substantial portion of the value of our rate-lock loan
activity due to challenges our customers may face in meeting
current underwriting standards, a decrease in interest rates, an
increase in competition for such loans, unfavorable changes in
general economic conditions, including housing prices, the job
market, consumer confidence and spending habits either nationally
or in the regional and local market areas in which the Company does
business and legislative or regulatory actions or reform
(including, without limitation, the Dodd-Frank Wall Street Reform
and Consumer Protection Act). A discussion of the factors that we
recognize to pose risk to the achievement of our business goals and
our operational and financial objectives is contained in our Annual
Report on Form 10-K for the fiscal year ended December 31,
2014. These factors are updated from time to time in our filings
with the Securities and Exchange Commission, and readers of this
release are cautioned to review those disclosures in conjunction
with the discussions herein.
Information contained herein, other than information at
December 31, 2014 and for the twelve months then ended, is
unaudited. All financial data should be read in conjunction with
the notes to the consolidated financial statements of HomeStreet,
Inc., and subsidiaries as of and for the fiscal year ended
December 31, 2014, as contained in the Company's Annual Report
on Form 10-K for such fiscal year.
Investor Relations & Media:HomeStreet, Inc.Terri
Silver,
206-389-6303terri.silver@homestreet.comhttp://ir.homestreet.com
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