HomeStreet, Inc.

Good afternoon. Thank you for attending today's second quarter earnings release call for Home Street Bank. Joining us on this call is Mark Mason, CEO, President, and Chairman of the Board. All lines will be muted in the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star one on your telephone keypad. I would now like to pass the conference over to our host, Mark Mason, please go ahead.

Hello, and thank you for joining us for our 2022 second quarter earnings call. Before we begin, I'd like to remind you that our detailed earnings released 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 will 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 can 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 second quarter of 2022, our net income was $17.7 million, our $0.94 per share, as compared to net income of $20 million, our $1.01 per share, in the first quarter of 2022. In the second quarter of 2022, our annualized return on average tangible equity was 12.6%. Our annualized return on average assets was 89 basis points, and our efficiency ratio was 68.5%. R&D interest income in the second quarter of 2022 was $5.5 million higher as compared to the first quarter of 2022 due to a 10% increase in interest earning assets. The increase in the average balance of interest earning assets was due to the high level of loan originations and purchases of investment securities during the second quarter. R&D interest margins stayed constant at 3.27% as a 14 basis point increase in the yield on interest earning assets increased was offset by a 17 basis point increase in the cost of interest-bearing liabilities. The increases in yields on interest-earning assets and the interest rates paid on interest-bearing liabilities, primarily borrowings, was due to the significant increase in market interest rates during the first half of 2022. Our effective tax rate for the second quarter was 21%, while our quarterly effective tax rate for the remainder of 2022 is expected to be 21.5%. No provision for credit losses was recorded during the second quarter of 2022 as the benefits of the continuing favorable performance of our loan portfolio offset any required ACL resulting from the significant growth in our loan portfolio. Our ratio of non-performing assets to total assets improved to 13 basis points. The 2.5 million decrease in non-interest income in the second quarter of 2022 as compared to the first quarter of 2022 was primarily due to a $2.2 million decrease in single-family gain on loan origination and sales activities due to a decrease in rate lock volume and margins as a result of the effects of increasing interest rates. The $3.8 million decrease in non-interest expense in the second quarter of 2022, as compared to the first quarter of 2022, was primarily due to lower compensation costs due to the seasonality of certain employee benefit costs such as employer taxes, 401K match, and vacation accruals, which are higher in the first quarter of a year, and the deferred costs benefit resulting from significantly higher level originations in the second quarter. Higher information services costs were due to the implementation of new systems in the second quarter, and lower legal costs were due to the non-recurring costs expended on litigation activities and legal matters in the first quarter of 2022. I will now turn the call over to Mark. Thank you, John.