HomeStreet, Inc.

Good day and welcome to the Home Street second quarter 2021 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Mark Mason, Chief Executive Officer. Please go ahead.

Hello, and thank you for joining us for our second quarter earnings call. Before we begin, I'd like to remind you that our detailed earnings release and an accompanying investor presentation were filed with the SEC on Form 8K yesterday. and are available on our website at ir.homestreet.com under the news and events link. In addition, a recording and a transcript of this call will be available at the same address following our call. Please note that during our call today, we may make certain predictive statements that reflect our current views and expectations about the company's performance and financial results. These are likely forward-looking statements that are made subject to the safe harbor statements included in yesterday's earnings release our investor deck, and the risk factors disclosed in our other public filing. Additionally, reconciliations to non-GAAP measures referred to in our call today can be found on our earnings release and investor deck available on our website. Joining me today is our Chief Financial Officer, John Mitchell. John will briefly discuss our financial results, and then I'd like to give an update on our results of operations and our outlook going forward. John?

Thank you, Mark. Good morning, everyone, and thank you for joining us. In the second quarter of 2021, our net income was $29 million, or $1.37 per share. This compares to net income of $30 million, or $1.35 per share in the first quarter of 2021. Our annualized return on tangible common equity for the second quarter was 17.2%. Our annualized return on average assets was 1.59%. and our efficiency ratio was 63%. Our net interest income increased 6% in the second quarter due to a higher net interest margin and higher levels of interest earning assets. Our net interest margin in the second quarter increased to 3.45% as a result of lower deposit rates as our total deposit cost decreased to 18 basis points in the second quarter and $200 million of payoffs of PPP loans. The net interest income from our PPP loans caused our net interest margin to be higher by 15 basis points in the second quarter. As of June 30th, 2021, the amount of remaining PPP loans was $204 million with deferred fees of $5.6 million. As a result of the continued favorable performance of our loan portfolio and improving economic conditions, we recorded a $4 million recovery of our allowance for credit losses in the second quarter of 2021. Our ratio of non-performing assets to total assets improved to 31 basis points. Our ratio of ACL to total loans was 1.18%. The $12.2 million decrease in net gain on loan origination and sales activities in the second quarter of 2021 as compared to the first quarter of 2021 was primarily due to lower volume and lower profit margins on our single family mortgage origination and sales. The $1.2 million increase in loan servicing income was due primarily to unfavorable risk management results realized in the first quarter of 2021 for single family mortgage servicing rights. The $3.8 million decrease in non-interest expense in the second quarter as compared to the first quarter was primarily due to lower payroll taxes and a $1.9 million reimbursement of legal costs received from our insurance carrier. During the second quarter of 2021, we repurchased 3% of our outstanding common stock and an average price of $44.22 per share and declared and paid a dividend of $0.25 per share. I will now turn the call over to Mark.