HomeStreet (HMST) Q2 2024 earnings summary

Executive summary

• Net loss of $6.2 million for Q2 2024, improved from $7.5 million loss in Q1 2024; core net loss was $4.3 million, down from $5.5 million sequentially.

• Shareholders approved a merger with FirstSun Capital Bancorp, expected to close in late 2024, pending regulatory and shareholder approvals.

• Book value per share was $27.58 and tangible book value per share was $27.14 at quarter end.

• Full-time equivalent employees reduced to 840 from 858, reflecting ongoing cost control efforts.

• Uninsured deposits comprised 8% of total deposits as of June 30, 2024.

Financial highlights

• Net interest income was $29.7 million, down from $32.2 million in Q1 2024 and $43.5 million in Q2 2023.

• Net interest margin declined to 1.37% from 1.44% in the prior quarter and 1.93% a year ago.

• Noninterest income rose to $13.2 million from $9.5 million in Q1 2024.

• Noninterest expense was $50.9 million, with core operating expenses annualized at 2.0% of average assets.

• Book value per share was $27.58 at June 30, 2024, down from $28.62 at year-end 2023.

Outlook and guidance

• Loan balances expected to remain stable and net interest margin to stay lower in 2024 due to high short-term rates and competitive deposit environment.

• Deposit migration to higher-yielding products slowed significantly late in Q2, which may stabilize funding costs if trends persist.

• Management continues to focus on expense reduction and expects funding costs to stabilize if current deposit trends continue.

• Gain on loan sales activities anticipated to remain low for the remainder of 2024.

• No quarterly dividends planned for 2024.