HomeStreet, Inc. reported a significant decline in financial performance for the fiscal year ending December 31, 2024, with a net loss of $144.3 million compared to a loss of $27.5 million in 2023. The company's net interest income fell to $120.1 million from $166.8 million, primarily due to a decrease in net interest margin, which dropped from 1.88% to 1.38%. Noninterest income also turned negative, with a loss of $44.4 million, largely attributed to an $88.8 million loss on the sale of $990 million in multifamily loans. The company’s total assets decreased to $8.1 billion from $9.4 billion, reflecting a strategic shift in its loan portfolio.
In 2024, HomeStreet undertook a strategic repositioning following the termination of a merger agreement with FirstSun Capital Bancorp. The company sold a substantial portion of its multifamily loans, which allowed it to pay off higher-cost borrowings and improve its net interest margin. The sale was part of a broader effort to return to profitability, which management anticipates will occur in the first half of 2025. The company also reported a decrease in total loans held for investment, which fell to $6.2 billion from $7.4 billion in the previous year.
Operationally, HomeStreet's employee headcount increased to 827 from 902, reflecting a reduction in workforce as part of its efficiency measures. The company operates 56 full-service bank branches across several states, including Washington, California, and Hawaii. Despite the challenges, HomeStreet continues to focus on enhancing its customer service and product offerings, particularly in the commercial banking sector, where it serves small and medium-sized businesses.
The company’s credit quality indicators showed some deterioration, with nonaccrual loans increasing to 0.88% of total loans from 0.53% in 2023. The allowance for credit losses (ACL) increased to 0.63% of total loans, up from 0.55% the previous year. HomeStreet's management noted that the economic environment, including rising interest rates and inflation, has impacted borrowers' repayment capabilities, leading to a cautious outlook on credit quality.
Looking ahead, HomeStreet expects continued improvements in its financial performance as market conditions stabilize and interest rates potentially decrease. The company is focused on managing its costs and enhancing its operational efficiency while navigating the competitive landscape of the financial services industry. The management remains optimistic about returning to profitability in 2025, contingent on favorable economic conditions and effective execution of its strategic initiatives.
About HomeStreet, Inc.
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