HomeStreet, Inc. announced unaudited consolidated earnings results for the fourth quarter and full year ended December 31, 2017. For the quarter, the company reported net interest income of $51,079,000 against $48,074,000 a year ago. The increases in net interest income from the third quarter of 2017 and the fourth quarter of 2016 were primarily due to growth in average earning assets in Commercial and Consumer Banking segment. Net interest income after provision for credit losses was $51,079,000 against $47,724,000 a year ago. Income before income taxes was $17,042,000 against $3,406,000 a year ago. Net income was $17,042,000 against $3,406,000 a year ago. Significant increase in net income was primarily due to recognition of a one-time non-cash tax benefit of $23.3 million from the revaluation of net deferred tax liability position at December 31, 2017 at the new, lower federal corporate income tax rate of 21% from the Tax Cuts and Jobs Act legislation signed into law in December 2017. Core net income in the fourth quarter of 2017 was $11.5 million, down $5.1 million, or 31% from the third quarter of 2017 and up $8.9 million, or 349% from the fourth quarter of 2016. The increase in core net income from the fourth quarter of 2016 was primarily the result of higher net interest income mostly resulting from growth in Commercial and Consumer Banking segment together with a decrease in salaries and related costs primarily as a result of second and third quarter 2017 restructuring steps in Mortgage Banking segment. Diluted income per share was $1.29 against basic and diluted income per share of $0.09 a year ago. Book value per share was $26.20 against $23.48 a year ago. Tangible book value per share was $25.09 against $22.33 a year ago. Return on average shareholders' equity was 19.90% against 1.49% a year ago. Return on average tangible shareholders' equity was 20.78% against 1.56% a year ago. Return on average assets was 2.03% against 0.15% a year ago.


For the full year, the company reported net interest income was $194,438,000 against $180,049,000 a year ago. Net interest income after provision for credit losses was $193,688,000 against $175,949,000 a year ago. Income before income taxes was $66,189,000 against $90,777,000 a year ago. Net income was $68,946,000 against $58,151,000 a year ago. Diluted income per share was $2.54 against $2.34 a year ago. Return on average shareholders' equity was 10.20% against 10.27% a year ago. Return on average tangible shareholders' equity was 10.68% against 10.82% a year ago. Return on average assets was 1.05% against 1.01% a year ago.

For the first quarter of 2018, noninterest expenses are expected to decrease, given the seasonality of lower single-family closed loans.


The company expects for the full year 2018, single-family mortgage loan lock and forward sale commitments to total $7.2 billion and loan closing volumes to total $7.4 billion. Additionally mortgage from positive profit margin to decline to a range of between 315 million and 325 basis points during 2018. In Commercial and Consumer Banking segment, company expects average quarterly loan portfolio growth to range from 2% to 4% per quarter for the year of 2018. Reflecting the continued flagging of the yield curve and asset changes and market rates and loan prepayments fees, company expects consolidated net interest margin to decrease to a range of 3.25% to 3.35% for the first and second quarters of this year. As loan portfolio continues to grow and reprice upwards, company expects the net interest margin to increase to a range of 3.35% to 3.45% in the third and fourth quarters of this year. For the remainder of 2018, company expects noninterest expenses to grow, on average, 1% per quarter, reflecting focus on optimizing the profitable growth of HomeStreet. The growth rate of total noninterest expenses will vary somewhat quarter-over-quarter, driven by seasonality and cyclicality in single-family closed loan volume and in relation to the timing of further adjustments in growth. Additionally, as a result of federal tax reform, company expects estimated effective tax rate to fall to between 21% and 22% for 2018.