HomeStreet, Inc.

Welcome to the third quarter 2024 Analyst Earnings Call for HomeStreetBank. Presenting on today's call will be Mark K. Mason, Chairman, President, and Chief Executive Officer of HomeStreetBank, and John M. Mitchell, Executive Vice President and Chief Financial Officer. I will now turn today's call over to Mr. Mark Mason. Please go ahead, sir.

Hello, and thank you all for joining us for our third quarter 2024 Analyst Earnings Call. Before we begin, I'd like to remind you that our detailed earnings release, our investor presentation, and a press release providing an update on the status of our strategic merger 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. An additional 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, the expectations and uncertainties about the company's performance, and our financial results. These are likely forward-looking statements that are made subject to the safe harbor statements included in yesterday's earnings release, our forms 8K, our investor deck, and the risk factors disclosed in our other public filings. Additionally, reconciliations and non-GAAP measures referred to on our call today can be found and our earnings release and investor deck. 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, the status of our strategic merger, and our outlook going forward. We'll then respond to questions from our analysts. John?

Thank you, Mark. Good morning, everyone, and thank you for joining us. In the third quarter of 2024, our net loss was $7.3 million, our $0.39 per share, as compared to our net loss of $6.2 million, or 33 cents per share, in the second quarter of 2024. On a core basis, which includes the impact of merger-related expenses, our net loss was $6 million, or 32 cents per share, as compared to our net loss of $4.3 million, or 23 cents per share, in the second quarter of 2024. The impact of higher interest rates continues to negatively impact our levels of net interest income and non-interest income. Our net interest income in the third quarter of 2024 was $1.1 million lower than the second quarter of 2024 due to a decrease in our net interest margin from 1.37% to 1.33% and a decrease in interest earning assets. The decrease in our net interest margin was due to a three basis point decrease in the yield on interest earning assets and a three basis point increase in the rates paid on interest bearing liabilities. Yields on interest-earning assets decreased due to lower yields on investment securities. The increase in the rates paid on our interest-bearing liabilities was due to higher deposit costs due to a greater proportion of higher cost certificates of deposits. The income tax benefit resulted in an effective rate of 23.3% for the third quarter of 2024 as compared to an effective tax rate of 22.1% in the second quarter of 2024. There was no provision for credit losses recognized during either the third or second quarter of 2024. This reflects the stable balance of our loan portfolio. And a minimal level of identified credit issues in our loan portfolio and the lack of significant expected credit issues arising in future periods. Going forward, we expect the ratio of our allowance for credit losses to our health for investment loan portfolio to remain relatively stable. and provisioning in future periods to generally reflect changes in the balance of our loans held for investment, assuming our history of minimal charge-offs continues. Our ratios of non-performing assets to total assets and total loan delinquent over 30 days, including non-accrual loans, remained at low levels. As of September 30, 2024, our ratio of non-performing assets to total assets was 0.4%, while our ratio of total loans to delinquent over 30 days including non-accrual loans to total loans with 69 basis points. Non-interest income in the third quarter of 2024 decreased from the second quarter of 2024, primarily due to more income realized in the second quarter of 2024 from our investments in small business investment companies, as we continue to experience low levels of single-family and commercial mortgage banking originations. The 3.5% decrease in non-interest expense in the third quarter of 2024, as compared to the second quarter of 2024, reflects the company's emphasis on reducing operating expenses where possible. I will now turn the call over to Mark.