HomeStreet (HMST) Q4 2024 earnings summary

Executive summary

• Reported a Q4 2024 net loss of $123.3 million ($6.54/share), primarily due to an $88.8 million loss on a $990 million multifamily loan sale and a $53.3 million deferred tax asset valuation allowance.

• Core net loss for Q4 2024 was $5.1 million ($0.27/share), an improvement from Q3 2024.

• Terminated merger in Q4 2024 led to a new strategic plan, including the loan sale to improve liquidity and reduce commercial real estate concentration.

• Management expects a return to profitability in the first half of 2025, driven by lower funding costs, loan repricing, and expense control.

• Book value per share was $21.05, tangible book value per share $20.67, and estimated tangible fair value per share $12.41 at year-end.

Financial highlights

• Q4 2024 net loss of $123.3 million, compared to $7.3 million net loss in Q3 2024; full year 2024 net loss was $144.3 million.

• Net interest margin rose to 1.38% in Q4 2024 from 1.33% in Q3, but declined from 1.59% in Q4 2023.

• Noninterest income declined sharply due to the $88.8 million loss on the loan sale; gain on sales of FNMA DUS loans was $1.7 million.

• Noninterest expenses fell by $5.2 million sequentially, mainly from lower compensation and administrative costs.

• Loans held for investment decreased by $1.1 billion; total deposits fell by $33 million from Q3 to Q4 2024.

Outlook and guidance

• Expects a return to profitability in the first half of 2025, with ongoing earnings growth from lower funding costs, loan repricing, and expense management.

• Net interest margin is expected to increase as interest rates decline and balance sheet repositioning takes effect.

• Board continues to evaluate strategic alternatives to maximize shareholder value.