HomeStreet, Inc.

Good afternoon. Thank you for attending today's third quarter earnings release call for HomeStreetBank. Joining us on this call is Mark Mason, CEO, President, and Chairman of the Board. 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 call today. 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 now 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 you 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 2022, our net income was $20.4 million, or $1.08 per share as compared to net income of $17.7 million, or $0.94 per share in the second quarter of 2022. In the third quarter of 2022, our annualized return on average tangible equity was 14.2%. Our annualized return on average assets was 91 basis points and our efficiency ratio was 68.4%. Our net interest income in the third quarter of 2022 was $3 million higher than the second quarter of 2022 due to a 13% increase in interest earning assets, which was partially offset by a decrease in our net interest margin from 327 to 3. The increase in the average balance of interest earning assets was due to the high level of loan originations during the second and third quarter. Our net interest margin decreased to 3% as a 67 basis point increase in the cost of interest-bearing liabilities was partially offset by a 27 basis point increase in the yield on interest-earning assets. The yields on interest-earning assets increased as the yields on loan originations during the third quarter were higher than the rates of our existing portfolio loans, and the yields on adjustable rate loans increased due to increases in the indexes on which their pricing is based. The increase in the rates paid on interest bearing liabilities was due to higher deposit costs, higher borrowing costs, and an increase in the proportion of higher cost borrowings used as their sources of funding. The increases in yields on interest earning assets and the rates paid on interest bearing liabilities was due to the significant increase in market interest rates during the first nine months of 2022. Our effective tax rate for the third quarter was 23%, which is expected to be our effective tax rate going forward. No provision for credit losses was recorded during the third quarter of 2022 as the benefits of the continuing favorable performance of our loan portfolio offset any required ACL resulting from the growth in our loan portfolio. Going forward, we expect the ratio of our allowance for credit losses to our loans held for investment portfolio to remain relatively stable and provisioning in future periods to generally reflect changes in the balances of our loans held for investment. Our ratio of non-performing assets to total assets remain low at 15 basis points. Non-interest income in the third quarter of 2022 was consistent with the second quarter of 22 as a $4.3 million gain on sale of eastern Washington branches was offset by a decrease in single-family gain on loan origination and sales activities due to a decrease in rate lock volume as a result of the effects of increasing interest rates and lower loan servicing income. The $0.7 million decrease in non-interest expenses in the third quarter of 2022 as compared to the second quarter of 2022 was primarily due to reduced headcount due to the sale of five eastern Washington branches, lower commission and bonus expenses, offset by higher marketing costs related to our promotional deposit projects, and higher FDIC fees due to our larger asset base. I will now turn the call over to Mark.