HomeStreet, Inc.

Good day and welcome to HomeStreet's third quarter 2021 earnings call. All participants will be in listen-only mode. If you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note that this event is being recorded. I'd like to turn the call over to Mr. Mark Mason, Chairman and CEO. Please go ahead.

Hello, and thank you for joining us for our third quarter 2021 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 filings. Additionally, reconciliations to non-GAAP measures referred to on our call today could be found in 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 third quarter of 2021, our net income was $27 million, or $1.31 per share. as compared to net income of $29 million or $1.37 per share in the second quarter of 2021. Our annualized return on tangible common equity for the third quarter was 15.6%. Our annualized return on average assets was 1.48%. And our efficiency ratio was 62.8%. Our net interest income in the third quarter was slightly lower than the second quarter due to a $1.7 million decrease and interest income derived from PPP loans, which was partially offset by higher levels of non-PPP loans. PPP loans caused our net interest margin to be higher by 11 basis points. Excluding the impact of PPP loans, our net interest margin in the third quarter of 2021 was consistent with our net interest margin in the second quarter of 2021. As of September 30th, 2021, outstanding PPP loans were $77 million, with deferred fees of $2.4 million. As a result of the continued favorable performance of our loan portfolio and the improving outlook of the impact of COVID-19 on our loan portfolio, we recorded a $5 million recovery of our allowance for credit losses in the third quarter of 2021. As we continue to have more clarity of the minimal impact COVID is having on our loan portfolio, and with projected improvements in our economies, We expect to recover additional amounts of our allowance for credit losses in future periods. Our ratio of non-performing assets to total assets improved to 26 basis points. Our ratio of ACL to total loans was 1.06%. The $3.8 million decrease in net gain on loan origination and sales activities in the third quarter of 2021 as compared to the second quarter of 2021 was due primarily to a lower volume of single-family mortgage rate locks and lower levels of CRE loans sold in the third quarter. The $0.9 million decrease in non-interest expense in the third quarter, as compared to the second quarter, was primarily due to lower compensation costs, which were partially offset by higher general administrative and other expenses. The $3.2 million decrease in compensation costs was primarily due to reduced commissions resulting from lower levels of loans closed in our single-family mortgage operations and lower benefit costs due to third-quarter seasonality. General, administrative, and other costs increased due to a $1.9 million reimbursement of legal costs received from our insurance carrier in the second quarter of 2021 and higher marketing costs. During the third quarter of 2021, we repurchased 2% of our outstanding common stock at an average price of $40.26 per share and declared and paid a dividend of 25 cents per share. Since the beginning of 2021, we have repurchased 7% of our outstanding common stock. This is in addition to the 12% and 9% repurchased in 2019 and 2020 respectively. I will now turn the call over to Mark.