|
x
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Washington
|
|
91-0186600
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification Number)
|
Title of each class
|
|
Name of each exchange on which registered
|
Common Stock, no par value
|
|
Nasdaq Stock Market LLC
|
|
ITEM 1
|
BUSINESS
|
1 DUS® is a registered trademark of Fannie Mae
|
4
|
|
•
|
control of another depository institution (or a holding company parent) without prior approval of the Federal Reserve (as “control” is defined under the Bank Holding Company Act);
|
•
|
another depository institution (or a holding company thereof), through merger, consolidation or purchase of all or substantially all of the assets of such institution (or holding company) without prior approval from the Federal Reserve or FDIC;
|
•
|
more than 5.0% of the voting shares of a non-subsidiary depository institution or a holding company subject to certain exceptions; or
|
•
|
control of any depository institution not insured by the FDIC (except through a merger with and into the holding company's bank subsidiary that is approved by the FDIC).
|
•
|
“well capitalized” if it has a total risk-based capital ratio of 10.0% or more, a Tier 1 risk-based capital ratio of 8.0% or more, a common equity Tier 1 risk-based ratio of 6.5% or more, and a leverage capital ratio of 5.0% or more, and is not subject to any written agreement, order or capital directive to meet and maintain a specific capital level for any capital measure;
|
•
|
“adequately capitalized” if it has a total risk-based capital ratio of 8.0% or more, a Tier 1 risk-based capital ratio of 6.0% or more, a common equity Tier 1 risk-based ratio of 4.5% or more, and a leverage capital ratio of 4.0% or more;
|
•
|
“undercapitalized” if it has a total risk-based capital ratio less than 8.0%, a Tier 1 risk-based capital ratio less than 6.0%, a common equity risk-based ratio less than 4.5% or a leverage capital ratio less than 4.0%;
|
•
|
“significantly undercapitalized” if it has a total risk-based capital ratio less than 6.0%, a Tier 1 risk-based capital ratio less than 4.0%, a common equity risk-based ratio less than 3.0% or a leverage capital ratio less than 3.0%; and
|
•
|
“critically undercapitalized” if it has a ratio of tangible equity to total assets that is equal to or less than 2.0%.
|
•
|
Net transaction accounts up to $15.5 million were exempt from reserve requirements.
|
•
|
A reserve of 3.0% of the aggregate is required for transaction accounts over $15.5 million up to $115.1 million.
|
•
|
A reserve of 10% is required for any transaction accounts over $115.1 million.
|
•
|
Net transaction accounts up to $16.0 million were exempt from reserve requirements.
|
•
|
A reserve of 3.0% of the aggregate is required for transaction accounts over $16.0 million up to $122.3 million.
|
•
|
A reserve of 10% is required for any transaction accounts over $122.3 million.
|
ITEM 1A
|
RISK FACTORS
|
•
|
Volatility in interest rates may limit our ability to make loans, decrease our net interest income and noninterest income, create disparity between actual and expected closed loan volumes based on historical fallout rates, reduce demand for loans, diminish the value of our loan servicing rights, affect the value of our hedging instruments, increase the cost of deposits and otherwise negatively impact our financial situation;
|
•
|
Volatility in mortgage markets, which is driven by factors outside of our control such as interest rate changes, imbalances in housing supply and demand and general economic conditions, may negatively impact our ability to originate loans and change the fair value of our existing loans and servicing rights;
|
•
|
Our hedging strategies to offset risks related to interest rate changes may not be successful and may result in unanticipated losses for the Company;
|
•
|
Changes in regulations or in regulators' interpretations of existing regulations may negatively impact the Company or the Bank and may limit our ability to offer certain products or services, increase our costs of compliance or restrict our growth initiatives, branch expansion and acquisition activities;
|
•
|
Increased costs from growth through acquisition could exceed the income growth anticipated from these opportunities, especially in the short term as these acquisitions are integrated into our business;
|
•
|
Increased costs for controls over data confidentiality, integrity, and availability due to growth or as may be necessary to strengthen the security profile of our computer systems and computer networks may have a negative impact on our net income;
|
•
|
Changes in government-sponsored enterprises and their ability to insure or to buy our loans in the secondary market may result in significant changes in our ability to recognize income on sale of our loans to third parties;
|
•
|
Competition in the mortgage market industry may drive down the interest rates we are able to offer on our mortgages, which would negatively impact our net interest income; and
|
•
|
Changes in the cost structures and fees of government-sponsored enterprises to whom we sell many of these loans may compress our margins and reduce our net income and profitability.
|
•
|
Activist investors may attempt to effect changes in the Company’s strategic direction and how the Company is governed, or to acquire control over the Company. In particular, the above mentioned activist investor has suggested changes to our business that conflict with our strategic direction and could cause uncertainty amongst employees, customers, investors and other constituencies about the strategic direction of our business.
|
•
|
While the Company welcomes the opinions of all shareholders, responding to proxy contests and related actions by activist investors could be costly and time-consuming, disrupt our operations, and divert the attention of our Board of Directors and senior management and employees away from their regular duties and the pursuit of business opportunities. In addition, there may be litigation in connection with a proxy contest, which would serve as a further distraction to our Board of Directors, senior management and employees and could require the Company to incur significant additional costs.
|
•
|
Perceived uncertainties as to our future direction as a result of potential changes to the composition of the Board of Directors may lead to the perception of a change in the strategic direction of the business, instability or lack of continuity which may be exploited by our competitors; may cause concern to our existing or potential customers and employees; may result in the loss of potential business opportunities; and may make it more difficult to attract and retain qualified personnel and business partners.
|
•
|
Proxy contests and related actions by activist investors could cause significant fluctuations in our stock price based on temporary or speculative market perceptions or other factors that do not necessarily reflect the underlying fundamentals and prospects of our business.
|
•
|
Diversion of management's attention from normal daily operations of the business;
|
•
|
Difficulties in integrating the operations, technologies, and personnel of the acquired companies;
|
•
|
Difficulties in implementing, upgrading and maintaining our internal controls over financial reporting and our disclosure controls and procedures;
|
•
|
Increased risk of compliance errors related to regulatory requirements, including customer notices and other related disclosures;
|
•
|
Inability to maintain the key business relationships and the reputations of acquired businesses;
|
•
|
Entry into markets in which we have limited or no prior experience and in which competitors have stronger market positions;
|
•
|
Potential responsibility for the liabilities of acquired businesses;
|
•
|
Increased operating costs associated with addressing the foregoing risks;
|
•
|
Inability to maintain our internal standards, procedures and policies at the acquired companies or businesses; and
|
•
|
Potential loss of key employees of the acquired companies.
|
•
|
Reduced cash flows and capital resources, as we are required to make cash advances to meet contractual obligations to investors, process foreclosures, and maintain, repair and market foreclosed properties;
|
•
|
Declining mortgage servicing fee revenues because we recognize these revenues only upon collection;
|
•
|
Increasing mortgage servicing costs;
|
•
|
Declining fair value on our mortgage servicing rights; and
|
•
|
Declining fair values and liquidity of securities held in our investment portfolio that are collateralized by mortgage obligations.
|
•
|
Variances in our operating results;
|
•
|
Disparity between our operating results and the operating results of our competitors;
|
•
|
Changes in analyst’s estimates of our earnings results and future performance, or variances between our actual performance and that forecast by analysts;
|
•
|
News releases or other announcements of material events relating to the Company, including but not limited to mergers, acquisitions, expansion plans, restructuring activities or other strategic developments;
|
•
|
Statements made by activist investors criticizing our strategy, our management team or our Board of Directors;
|
•
|
Future securities offerings by us of debt or equity securities;
|
•
|
Addition or departure of key personnel;
|
•
|
Market-wide events that may be seen by the market as impacting the Company;
|
•
|
The presence or absence of short-selling of our common stock;
|
•
|
General financial conditions of the country or the regions in which we operate;
|
•
|
Trends in real estate in our primary markets; or
|
•
|
Trends relating to the economic markets generally.
|
•
|
A classified Board of Directors so that only approximately one third of our board of directors is elected each year;
|
•
|
Elimination of cumulative voting in the election of directors;
|
•
|
Procedures for advance notification of shareholder nominations and proposals;
|
•
|
The ability of our Board of Directors to amend our bylaws without shareholder approval; and
|
•
|
The ability of our Board of Directors to issue shares of preferred stock without shareholder approval upon the terms and conditions and with the rights, privileges and preferences as the board of directors may determine.
|
ITEM 1B
|
UNRESOLVED STAFF COMMENTS
|
ITEM 2
|
PROPERTIES
|
ITEM 3
|
LEGAL PROCEEDINGS
|
ITEM 4
|
MINE SAFETY DISCLOSURES
|
ITEM 5
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
|
High
|
|
Low
|
|
Special Cash Dividends Declared
|
||||||
For the Year Ended December 31, 2017
|
|
|
|
|
|
||||||
First quarter ended March 31
|
$
|
32.50
|
|
|
$
|
25.01
|
|
|
$
|
—
|
|
Second quarter ended June 30
|
29.88
|
|
|
25.40
|
|
|
—
|
|
|||
Third quarter ended September 30
|
28.40
|
|
|
24.00
|
|
|
—
|
|
|||
Fourth quarter ended December 31
|
31.30
|
|
|
26.83
|
|
|
—
|
|
|||
|
|
|
|
|
|
||||||
For the Year Ended December 31, 2016
|
|
|
|
|
|
||||||
First quarter ended March 31
|
$
|
22.79
|
|
|
$
|
18.58
|
|
|
$
|
—
|
|
Second quarter ended June 30
|
22.97
|
|
|
18.74
|
|
|
—
|
|
|||
Third quarter ended September 30
|
27.21
|
|
|
19.07
|
|
|
—
|
|
|||
Fourth quarter ended December 31
|
33.70
|
|
|
24.03
|
|
|
—
|
|
ITEM 6
|
SELECTED FINANCIAL DATA
|
|
At or for the Years Ended December 31,
|
||||||||||||||||||
(dollars in thousands, except share data)
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Income statement data (for the period ended):
|
|
|
|
|
|
|
|
|
|
||||||||||
Net interest income
|
$
|
194,438
|
|
|
$
|
180,049
|
|
|
$
|
148,338
|
|
|
$
|
98,669
|
|
|
$
|
74,444
|
|
Provision (reversal of provision) for credit losses
|
750
|
|
|
4,100
|
|
|
6,100
|
|
|
(1,000
|
)
|
|
900
|
|
|||||
Noninterest income
|
312,154
|
|
|
359,150
|
|
|
281,237
|
|
|
185,657
|
|
|
190,745
|
|
|||||
Noninterest expense
|
439,653
|
|
|
444,322
|
|
|
366,568
|
|
|
252,011
|
|
|
229,495
|
|
|||||
Income before income taxes
|
66,189
|
|
|
90,777
|
|
|
56,907
|
|
|
33,315
|
|
|
34,794
|
|
|||||
Income tax (benefit) expense
|
(2,757
|
)
|
|
32,626
|
|
|
15,588
|
|
|
11,056
|
|
|
10,985
|
|
|||||
Net income
|
$
|
68,946
|
|
|
$
|
58,151
|
|
|
$
|
41,319
|
|
|
$
|
22,259
|
|
|
$
|
23,809
|
|
Basic income per share
|
$
|
2.57
|
|
|
$
|
2.36
|
|
|
$
|
1.98
|
|
|
$
|
1.50
|
|
|
$
|
1.65
|
|
Diluted income per share
|
$
|
2.54
|
|
|
$
|
2.34
|
|
|
$
|
1.96
|
|
|
$
|
1.49
|
|
|
$
|
1.61
|
|
Common shares outstanding
|
26,888,288
|
|
|
26,800,183
|
|
|
22,076,534
|
|
|
14,856,611
|
|
|
14,799,991
|
|
|||||
Weighted average number of shares outstanding:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
26,864,657
|
|
|
24,615,990
|
|
|
20,818,045
|
|
|
14,800,689
|
|
|
14,412,059
|
|
|||||
Diluted
|
27,092,019
|
|
|
24,843,683
|
|
|
21,059,201
|
|
|
14,961,081
|
|
|
14,798,168
|
|
|||||
Book value per share
|
$
|
26.20
|
|
|
$
|
23.48
|
|
|
$
|
21.08
|
|
|
$
|
20.34
|
|
|
$
|
17.97
|
|
Dividends per share
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.11
|
|
|
$
|
0.33
|
|
Financial position (at year end):
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
72,718
|
|
|
$
|
53,932
|
|
|
$
|
32,684
|
|
|
$
|
30,502
|
|
|
$
|
33,908
|
|
Investment securities
|
904,304
|
|
|
1,043,851
|
|
|
572,164
|
|
|
455,332
|
|
|
498,816
|
|
|||||
Loans held for sale
|
610,902
|
|
|
714,559
|
|
|
650,163
|
|
|
621,235
|
|
|
279,941
|
|
|||||
Loans held for investment, net
|
4,506,466
|
|
|
3,819,027
|
|
|
3,192,720
|
|
|
2,099,129
|
|
|
1,871,813
|
|
|||||
Mortgage servicing rights
|
284,653
|
|
|
245,860
|
|
|
171,255
|
|
|
123,324
|
|
|
162,463
|
|
|||||
Other real estate owned
|
664
|
|
|
5,243
|
|
|
7,531
|
|
|
9,448
|
|
|
12,911
|
|
|||||
Total assets
|
6,742,041
|
|
|
6,243,700
|
|
|
4,894,495
|
|
|
3,535,090
|
|
|
3,066,054
|
|
|||||
Deposits
|
4,760,952
|
|
|
4,429,701
|
|
|
3,231,953
|
|
|
2,445,430
|
|
|
2,210,821
|
|
|||||
Federal Home Loan Bank advances
|
979,201
|
|
|
868,379
|
|
|
1,018,159
|
|
|
597,590
|
|
|
446,590
|
|
|||||
Federal funds purchased and securities sold under agreements to repurchase
|
—
|
|
|
—
|
|
|
—
|
|
|
50,000
|
|
|
—
|
|
|||||
Total shareholders' equity
|
$
|
704,380
|
|
|
$
|
629,284
|
|
|
$
|
465,275
|
|
|
$
|
302,238
|
|
|
$
|
265,926
|
|
|
At or for the Years Ended December 31,
|
|
||||||||||||||||||
(dollars in thousands, except share data)
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial position (averages):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Investment securities
|
$
|
1,023,702
|
|
|
$
|
834,671
|
|
|
$
|
523,756
|
|
|
$
|
459,060
|
|
|
$
|
515,000
|
|
|
Loans held for investment
|
4,178,326
|
|
|
3,668,263
|
|
|
2,834,511
|
|
|
1,890,537
|
|
|
1,496,146
|
|
|
|||||
Total interest-earning assets
|
5,998,521
|
|
|
5,307,118
|
|
|
4,150,089
|
|
|
2,869,414
|
|
|
2,422,136
|
|
|
|||||
Total interest-bearing deposits
|
3,588,515
|
|
|
3,145,137
|
|
|
2,499,538
|
|
|
1,883,622
|
|
|
1,661,568
|
|
|
|||||
Federal Home Loan Bank advances
|
1,037,650
|
|
|
942,593
|
|
|
795,368
|
|
|
431,623
|
|
|
293,871
|
|
|
|||||
Total interest-bearing liabilities
|
4,755,221
|
|
|
4,189,582
|
|
|
3,368,160
|
|
|
2,386,537
|
|
|
2,020,613
|
|
|
|||||
Shareholders’ equity
|
675,877
|
|
|
566,148
|
|
|
442,105
|
|
|
289,420
|
|
|
249,081
|
|
|
|||||
Financial performance:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Return on average shareholders' equity (1)
|
10.20
|
%
|
|
10.27
|
%
|
|
9.35
|
%
|
|
7.69
|
%
|
|
9.56
|
%
|
|
|||||
Return on average total assets
|
1.05
|
%
|
|
1.01
|
%
|
|
0.91
|
%
|
|
0.69
|
%
|
|
0.88
|
%
|
|
|||||
Net interest margin (2)
|
3.31
|
%
|
|
3.45
|
%
|
|
3.63
|
%
|
|
3.51
|
%
|
|
3.17
|
%
|
(3)
|
|||||
Efficiency ratio (4)
|
86.79
|
%
|
|
82.40
|
%
|
|
85.33
|
%
|
|
88.63
|
%
|
|
86.54
|
%
|
|
|||||
Asset quality:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for credit losses
|
$
|
39,116
|
|
|
$
|
35,264
|
|
|
$
|
30,659
|
|
|
$
|
22,524
|
|
|
$
|
24,089
|
|
|
Allowance for loan losses/total loans (5)
|
0.83
|
%
|
|
0.88
|
%
|
|
0.91
|
%
|
|
1.04
|
%
|
|
1.26
|
%
|
|
|||||
Allowance for loan losses/nonaccrual loans
|
251.63
|
%
|
|
165.52
|
%
|
|
170.54
|
%
|
|
137.51
|
%
|
|
93.00
|
%
|
|
|||||
Total nonaccrual loans (6)/(7)
|
$
|
15,041
|
|
|
$
|
20,542
|
|
|
$
|
17,168
|
|
|
$
|
16,014
|
|
|
$
|
25,707
|
|
|
Nonaccrual loans/total loans
|
0.33
|
%
|
|
0.53
|
%
|
|
0.53
|
%
|
|
0.75
|
%
|
|
1.36
|
%
|
|
|||||
Other real estate owned
|
$
|
664
|
|
|
$
|
5,243
|
|
|
$
|
7,531
|
|
|
$
|
9,448
|
|
|
$
|
12,911
|
|
|
Total nonperforming assets
|
$
|
15,705
|
|
|
$
|
25,785
|
|
|
$
|
24,699
|
|
|
$
|
25,462
|
|
|
$
|
38,618
|
|
|
Nonperforming assets/total assets
|
0.23
|
%
|
|
0.41
|
%
|
|
0.50
|
%
|
|
0.72
|
%
|
|
1.26
|
%
|
|
|||||
Net (recoveries) charge-offs
|
$
|
(3,102
|
)
|
|
$
|
(505
|
)
|
|
$
|
(2,035
|
)
|
|
$
|
565
|
|
|
$
|
4,562
|
|
|
Regulatory capital ratios for the Bank:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basel III - Tier 1 leverage capital (to average assets)
|
9.67
|
%
|
|
10.26
|
%
|
|
9.46
|
%
|
|
NA
|
|
|
NA
|
|
|
|||||
Basel III - Tier 1 common equity risk-based capital (to risk-weighted assets)
|
13.22
|
%
|
|
13.92
|
%
|
|
13.04
|
%
|
|
NA
|
|
|
NA
|
|
|
|||||
Basel III - Tier 1 risk-based capital (to risk-weighted assets)
|
13.22
|
%
|
|
13.92
|
%
|
|
13.04
|
%
|
|
NA
|
|
|
NA
|
|
|
|||||
Basel III - Total risk-based capital (to risk-weighted assets)
|
14.02
|
%
|
|
14.69
|
%
|
|
13.92
|
%
|
|
NA
|
|
|
NA
|
|
|
|||||
Basel I - Tier 1 leverage capital (to average assets)
|
NA
|
|
|
NA
|
|
|
NA
|
|
|
9.38
|
%
|
|
9.96
|
%
|
|
|||||
Basel I - Tier 1 risk-based capital (to risk-weighted assets)
|
NA
|
|
|
NA
|
|
|
NA
|
|
|
13.10
|
%
|
|
14.12
|
%
|
|
|||||
Basel I - Total risk-based capital (to risk-weighted assets)
|
NA
|
|
|
NA
|
|
|
NA
|
|
|
14.03
|
%
|
|
15.28
|
%
|
|
|||||
Regulatory capital ratios for the Company:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basel III - Tier 1 leverage capital (to average assets)
|
9.12
|
%
|
|
9.78
|
%
|
|
9.95
|
%
|
|
NA
|
|
|
NA
|
|
|
|||||
Basel III - Tier 1 common equity risk-based capital (to risk-weighted assets)
|
9.86
|
%
|
|
10.54
|
%
|
|
10.52
|
%
|
|
NA
|
|
|
NA
|
|
|
|||||
Basel III - Tier 1 risk-based capital (to risk-weighted assets)
|
10.92
|
%
|
|
11.66
|
%
|
|
11.94
|
%
|
|
NA
|
|
|
NA
|
|
|
|||||
Basel III - Total risk-based capital (to risk-weighted assets)
|
11.61
|
%
|
|
12.34
|
%
|
|
12.70
|
%
|
|
NA
|
|
|
NA
|
|
|
|
|
At or for the Years Ended December 31,
|
||||||||||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
SUPPLEMENTAL DATA:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loans serviced for others
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Single family
|
|
$
|
22,631,147
|
|
|
$
|
19,488,456
|
|
|
$
|
15,347,811
|
|
|
$
|
11,216,208
|
|
|
$
|
11,795,621
|
|
Multifamily
|
|
1,311,399
|
|
|
1,108,040
|
|
|
924,367
|
|
|
752,640
|
|
|
720,429
|
|
|||||
Other
|
|
79,797
|
|
|
69,323
|
|
|
79,513
|
|
|
82,354
|
|
|
95,673
|
|
|||||
Total loans serviced for others
|
|
$
|
24,022,343
|
|
|
$
|
20,665,819
|
|
|
$
|
16,351,691
|
|
|
$
|
12,051,202
|
|
|
$
|
12,611,723
|
|
Loan origination activity
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Single family
|
|
$
|
8,091,400
|
|
|
$
|
9,214,463
|
|
|
$
|
7,440,612
|
|
|
$
|
4,697,767
|
|
|
$
|
4,852,879
|
|
Other
|
|
2,749,291
|
|
|
2,560,549
|
|
|
1,540,455
|
|
|
967,500
|
|
|
603,271
|
|
|||||
Total loan origination activity
|
|
$
|
10,840,691
|
|
|
$
|
11,775,012
|
|
|
$
|
8,981,067
|
|
|
$
|
5,665,267
|
|
|
$
|
5,456,150
|
|
(1)
|
Net earnings available to common shareholders divided by average shareholders’ equity.
|
(2)
|
Net interest income divided by total average interest-earning assets on a tax equivalent basis.
|
(3)
|
Net interest margin for the year ended December 31, 2013 included $1.4 million in interest expense related to the correction of the cumulative effect of an error in prior years, resulting from the under accrual of interest due on the trust preferred securities for which the Company had deferred the payment of interest. Excluding the impact of the prior period interest expense correction, the net interest margin was 3.23% for the year ended December 31, 2013.
|
(4)
|
Noninterest expense divided by total revenue (net interest income and noninterest income).
|
(5)
|
Includes loans acquired with bank acquisitions. Excluding acquired loans, allowance for loan losses /total loans was 0.90%, 1.00%, 1.10%, 1.10% and 1.40% at December 31, 2017, 2016, 2015, 2014 and 2013, respectively.
|
(6)
|
Generally, loans are placed on nonaccrual status when they are 90 or more days past due, unless payment is insured by the FHA or guaranteed by the VA.
|
(7)
|
Includes $1.9 million and $1.9 million of nonperforming loans at December 31, 2017 and 2016, respectively, which are guaranteed by the Small Business Administration ("SBA").
|
ITEM 7
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
|
At or for the Years Ended December 31,
|
||||||||||
(in thousands, except per share data and ratios)
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
|
||||||
Selected statement of operations data
|
|
|
|
|
|
|
||||||
Total net revenue (1)
|
|
$
|
506,592
|
|
|
$
|
539,199
|
|
|
$
|
429,575
|
|
Total noninterest expense
|
|
439,653
|
|
|
444,322
|
|
|
366,568
|
|
|||
Provision for credit losses
|
|
750
|
|
|
4,100
|
|
|
6,100
|
|
|||
Income tax (benefit) expense
|
|
(2,757
|
)
|
|
32,626
|
|
|
15,588
|
|
|||
Net income
|
|
$
|
68,946
|
|
|
$
|
58,151
|
|
|
$
|
41,319
|
|
|
|
|
|
|
|
|
||||||
Financial performance
|
|
|
|
|
|
|
||||||
Diluted income per share
|
|
$
|
2.54
|
|
|
$
|
2.34
|
|
|
$
|
1.96
|
|
Return on average common shareholders’ equity
|
|
10.20
|
%
|
|
10.27
|
%
|
|
9.35
|
%
|
|||
Return on average assets
|
|
1.05
|
%
|
|
1.01
|
%
|
|
0.91
|
%
|
|||
Net interest margin
|
|
3.31
|
%
|
|
3.45
|
%
|
|
3.63
|
%
|
(1)
|
Total net revenue is net interest income and noninterest income.
|
•
|
lending policies and procedures;
|
•
|
international, national, regional and local economic business conditions and developments that affect the collectability of the portfolio, including the condition of various markets;
|
•
|
the nature of the loan portfolio, including the terms of the loans;
|
•
|
the experience, ability and depth of the lending management and other relevant staff;
|
•
|
the volume and severity of past due and adversely classified or graded loans and the volume of nonaccrual loans;
|
•
|
the quality of our loan review and process;
|
•
|
the value of underlying collateral for collateral-dependent loans;
|
•
|
the existence and effect of any concentrations of credit and changes in the level of such concentrations; and
|
•
|
the effect of external factors such as competition and legal and regulatory requirements on the level of estimated credit losses in the existing portfolio.
|
•
|
Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date. An active market for the asset or liability is a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis.
|
•
|
Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. This includes quoted prices for similar assets and liabilities in active markets and inputs that are observable for the asset or liability for substantially the full term of the financial instrument.
|
•
|
Level 3 – Unobservable inputs for the asset or liability. These inputs reflect the Company’s assumptions of what market participants would use in pricing the asset or liability.
|
|
Years Ended December 31,
|
|||||||||||||||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||||||||||||||
(in thousands)
|
Average
Balance
|
|
Interest
|
|
Average
Yield/Cost
|
|
Average
Balance
|
|
Interest
|
|
Average
Yield/Cost
|
|
Average
Balance |
|
Interest
|
|
Average
Yield/Cost |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Interest-earning assets: (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Cash and cash equivalents
|
$
|
85,430
|
|
|
$
|
567
|
|
|
0.67
|
%
|
|
$
|
39,962
|
|
|
$
|
254
|
|
|
0.63
|
%
|
|
$
|
36,134
|
|
|
$
|
67
|
|
|
0.18
|
%
|
Investment securities
|
1,023,702
|
|
|
25,810
|
|
|
2.54
|
|
|
834,671
|
|
|
21,611
|
|
|
2.57
|
|
|
523,756
|
|
|
14,270
|
|
|
2.72
|
|
||||||
Loans held for sale
|
711,063
|
|
|
28,732
|
|
|
4.05
|
|
|
764,222
|
|
|
28,581
|
|
|
3.76
|
|
|
755,688
|
|
|
29,165
|
|
|
3.86
|
|
||||||
Loans held for investment
|
4,178,326
|
|
|
187,281
|
|
|
4.46
|
|
|
3,668,263
|
|
|
162,219
|
|
|
4.40
|
|
|
2,834,511
|
|
|
123,680
|
|
|
4.36
|
|
||||||
Total interest-earning assets
|
5,998,521
|
|
|
242,390
|
|
|
4.03
|
|
|
5,307,118
|
|
|
212,665
|
|
|
4.00
|
|
|
4,150,089
|
|
|
167,182
|
|
|
4.03
|
|
||||||
Noninterest-earning assets (2)
|
591,561
|
|
|
|
|
|
|
470,021
|
|
|
|
|
|
|
410,404
|
|
|
|
|
|
||||||||||||
Total assets
|
$
|
6,590,082
|
|
|
|
|
|
|
$
|
5,777,139
|
|
|
|
|
|
|
$
|
4,560,493
|
|
|
|
|
|
|||||||||
Liabilities and shareholders’ equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Deposits:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Interest-bearing demand accounts
|
$
|
477,635
|
|
|
1,964
|
|
|
0.41
|
%
|
|
$
|
450,838
|
|
|
$
|
1,950
|
|
|
0.43
|
%
|
|
$
|
317,510
|
|
|
$
|
1,492
|
|
|
0.46
|
%
|
|
Savings accounts
|
306,151
|
|
|
1,013
|
|
|
0.33
|
|
|
299,502
|
|
|
1,029
|
|
|
0.34
|
|
|
284,309
|
|
|
1,053
|
|
|
0.38
|
|
||||||
Money market accounts
|
1,579,115
|
|
|
8,533
|
|
|
0.54
|
|
|
1,370,256
|
|
|
7,344
|
|
|
0.53
|
|
|
1,122,321
|
|
|
4,930
|
|
|
0.44
|
|
||||||
Certificate accounts
|
1,225,614
|
|
|
13,028
|
|
|
1.06
|
|
|
1,024,541
|
|
|
9,086
|
|
|
0.88
|
|
|
775,398
|
|
|
4,501
|
|
|
0.58
|
|
||||||
Total interest-bearing deposits
|
3,588,515
|
|
|
24,538
|
|
|
0.68
|
|
|
3,145,137
|
|
|
19,409
|
|
|
0.61
|
|
|
2,499,538
|
|
|
11,976
|
|
|
0.48
|
|
||||||
Federal Home Loan Bank advances
|
1,037,650
|
|
|
12,589
|
|
|
1.19
|
|
|
942,593
|
|
|
6,030
|
|
|
0.64
|
|
|
795,368
|
|
|
3,669
|
|
|
0.46
|
|
||||||
Federal funds purchased and securities sold under agreements to repurchase
|
3,732
|
|
|
48
|
|
|
1.20
|
|
|
803
|
|
|
6
|
|
|
0.40
|
|
|
11,397
|
|
|
29
|
|
|
0.31
|
|
||||||
Long-term debt
|
125,228
|
|
|
6,067
|
|
|
4.83
|
|
|
101,049
|
|
|
4,043
|
|
|
3.73
|
|
|
61,857
|
|
|
1,104
|
|
|
1.78
|
|
||||||
Other borrowings
|
96
|
|
|
3
|
|
|
0.89
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total interest-bearing liabilities
|
4,755,221
|
|
|
43,245
|
|
|
0.91
|
|
|
4,189,582
|
|
|
29,488
|
|
|
0.70
|
|
|
3,368,160
|
|
|
16,778
|
|
|
0.50
|
|
||||||
Noninterest-bearing liabilities
|
1,158,984
|
|
|
|
|
|
|
1,021,409
|
|
|
|
|
|
|
750,228
|
|
|
|
|
|
||||||||||||
Total liabilities
|
5,914,205
|
|
|
|
|
|
|
5,210,991
|
|
|
|
|
|
|
4,118,388
|
|
|
|
|
|
||||||||||||
Shareholders’ equity
|
675,877
|
|
|
|
|
|
|
566,148
|
|
|
|
|
|
|
442,105
|
|
|
|
|
|
||||||||||||
Total liabilities and shareholders’ equity
|
$
|
6,590,082
|
|
|
|
|
|
|
$
|
5,777,139
|
|
|
|
|
|
|
$
|
4,560,493
|
|
|
|
|
|
|||||||||
Net interest income (3)
|
|
|
$
|
199,145
|
|
|
|
|
|
|
$
|
183,177
|
|
|
|
|
|
|
$
|
150,404
|
|
|
|
|||||||||
Net interest spread
|
|
|
|
|
3.12
|
%
|
|
|
|
|
|
3.30
|
%
|
|
|
|
|
|
3.53
|
%
|
||||||||||||
Impact of noninterest-bearing sources
|
|
|
|
|
0.19
|
%
|
|
|
|
|
|
0.15
|
%
|
|
|
|
|
|
0.10
|
%
|
||||||||||||
Net interest margin
|
|
|
|
|
3.31
|
%
|
|
|
|
|
|
3.45
|
%
|
|
|
|
|
|
3.63
|
%
|
(1)
|
The average balances of nonaccrual assets and related income, if any, are included in their respective categories.
|
(2)
|
Includes former loan balances that have been foreclosed and are now reclassified to OREO.
|
(3)
|
Includes taxable-equivalent adjustments primarily related to tax-exempt income on certain loans and securities of $4.7 million, $3.1 million and $2.1 million for the years ended December 31, 2017, 2016 and 2015, respectively. The estimated federal statutory tax rate was 35% for the periods presented.
|
|
Years Ended December 31,
|
||||||||||||||||||||||
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||||||||||||||||||||
|
Increase (Decrease)
Due to
|
|
Total Change
|
|
Increase (Decrease)
Due to |
|
Total Change
|
||||||||||||||||
(in thousands)
|
Rate
|
|
Volume
|
|
|
Rate
|
|
Volume
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest-earning assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
$
|
27
|
|
|
$
|
287
|
|
|
$
|
314
|
|
|
$
|
180
|
|
|
$
|
7
|
|
|
$
|
187
|
|
Investment securities
|
(656
|
)
|
|
4,855
|
|
|
4,199
|
|
|
(1,128
|
)
|
|
8,469
|
|
|
7,341
|
|
||||||
Loans held for sale
|
2,149
|
|
|
(1,998
|
)
|
|
151
|
|
|
(914
|
)
|
|
329
|
|
|
(585
|
)
|
||||||
Loans held for investment
|
2,597
|
|
|
22,464
|
|
|
25,061
|
|
|
2,191
|
|
|
36,348
|
|
|
38,539
|
|
||||||
Total interest-earning assets
|
4,117
|
|
|
25,608
|
|
|
29,725
|
|
|
329
|
|
|
45,153
|
|
|
45,482
|
|
||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Deposits
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest-bearing demand accounts
|
(103
|
)
|
|
116
|
|
|
13
|
|
|
(161
|
)
|
|
619
|
|
|
458
|
|
||||||
Savings accounts
|
(39
|
)
|
|
23
|
|
|
(16
|
)
|
|
(81
|
)
|
|
57
|
|
|
(24
|
)
|
||||||
Money market accounts
|
81
|
|
|
1,108
|
|
|
1,189
|
|
|
1,325
|
|
|
1,089
|
|
|
2,414
|
|
||||||
Certificate accounts
|
2,179
|
|
|
1,763
|
|
|
3,942
|
|
|
3,130
|
|
|
1,454
|
|
|
4,584
|
|
||||||
Total interest-bearing deposits
|
2,118
|
|
|
3,010
|
|
|
5,128
|
|
|
4,213
|
|
|
3,219
|
|
|
7,432
|
|
||||||
Federal Home Loan Bank advances
|
5,952
|
|
|
608
|
|
|
6,560
|
|
|
1,682
|
|
|
679
|
|
|
2,361
|
|
||||||
Securities sold under agreements to repurchase
|
30
|
|
|
11
|
|
|
41
|
|
|
10
|
|
|
(32
|
)
|
|
(22
|
)
|
||||||
Long-term debt
|
1,124
|
|
|
901
|
|
|
2,025
|
|
|
2,242
|
|
|
697
|
|
|
2,939
|
|
||||||
Other borrowings
|
3
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total interest-bearing liabilities
|
9,227
|
|
|
4,530
|
|
|
13,757
|
|
|
8,147
|
|
|
4,563
|
|
|
12,710
|
|
||||||
Total changes in net interest income
|
$
|
(5,110
|
)
|
|
$
|
21,078
|
|
|
$
|
15,968
|
|
|
$
|
(7,818
|
)
|
|
$
|
40,590
|
|
|
$
|
32,772
|
|
|
Years Ended December 31,
|
||||||||||||||||||||||||
(in thousands)
|
2017
|
|
Dollar
Change |
|
Percent
Change |
|
2016
|
|
Dollar
Change |
|
Percent
Change |
|
2015
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Noninterest income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gain on loan origination and sale activities (1)
|
$
|
255,876
|
|
|
$
|
(51,437
|
)
|
|
(17
|
)%
|
|
$
|
307,313
|
|
|
$
|
70,925
|
|
|
30
|
%
|
|
$
|
236,388
|
|
Loan servicing income
|
35,384
|
|
|
2,325
|
|
|
7
|
|
|
33,059
|
|
|
8,809
|
|
|
36
|
|
|
24,250
|
|
|||||
Income from WMS Series LLC
|
598
|
|
|
(1,735
|
)
|
|
(74
|
)
|
|
2,333
|
|
|
709
|
|
|
44
|
|
|
1,624
|
|
|||||
Depositor and other retail banking fees
|
7,221
|
|
|
431
|
|
|
6
|
|
|
6,790
|
|
|
909
|
|
|
15
|
|
|
5,881
|
|
|||||
Insurance agency commissions
|
1,904
|
|
|
285
|
|
|
18
|
|
|
1,619
|
|
|
(63
|
)
|
|
(4
|
)
|
|
1,682
|
|
|||||
Gain on sale of investment securities available for sale
|
489
|
|
|
(2,050
|
)
|
|
(81
|
)
|
|
2,539
|
|
|
133
|
|
|
6
|
|
|
2,406
|
|
|||||
Bargain purchase gain
|
—
|
|
|
—
|
|
|
NM
|
|
|
—
|
|
|
(7,726
|
)
|
|
NM
|
|
|
7,726
|
|
|||||
Other
|
10,682
|
|
|
5,185
|
|
|
94
|
|
|
5,497
|
|
|
4,217
|
|
|
329
|
|
|
1,280
|
|
|||||
Total noninterest income
|
$
|
312,154
|
|
|
$
|
(46,996
|
)
|
|
(13
|
)%
|
|
$
|
359,150
|
|
|
$
|
77,913
|
|
|
28
|
%
|
|
$
|
281,237
|
|
NM = not meaningful
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Single family and multifamily mortgage banking activities.
|
|
|
Years Ended December 31,
|
||||||||||||||||||||||||
(in thousands)
|
|
2017
|
|
Dollar
Change |
|
Percent
Change |
|
2016
|
|
Dollar
Change |
|
Percent
Change |
|
2015
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Single family held for sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Servicing value and secondary market gains(1)
|
|
$
|
209,027
|
|
|
$
|
(51,450
|
)
|
|
(20
|
)%
|
|
$
|
260,477
|
|
|
$
|
54,964
|
|
|
27
|
%
|
|
$
|
205,513
|
|
Loan origination and administrative fees
|
|
26,822
|
|
|
(3,144
|
)
|
|
(10
|
)
|
|
29,966
|
|
|
7,745
|
|
|
35
|
|
|
22,221
|
|
|||||
Total single family held for sale
|
|
235,849
|
|
|
(54,594
|
)
|
|
(19
|
)
|
|
290,443
|
|
|
62,709
|
|
|
28
|
|
|
227,734
|
|
|||||
Multifamily DUS®
|
|
13,210
|
|
|
1,813
|
|
|
16
|
|
|
11,397
|
|
|
4,272
|
|
|
60
|
|
|
7,125
|
|
|||||
SBA
|
|
2,439
|
|
|
1,025
|
|
|
72
|
|
|
1,414
|
|
|
344
|
|
|
32
|
|
|
1,070
|
|
|||||
CRE Non-DUS®
|
|
4,378
|
|
|
319
|
|
|
8
|
|
|
4,059
|
|
|
3,600
|
|
|
784
|
|
|
459
|
|
|||||
Gain on loan origination and sale activities
|
|
$
|
255,876
|
|
|
$
|
(51,437
|
)
|
|
(17
|
)%
|
|
$
|
307,313
|
|
|
$
|
70,925
|
|
|
30
|
%
|
|
$
|
236,388
|
|
(1)
|
Comprised of gains and losses on interest rate lock commitments (which considers the value of servicing), single family loans held for sale, forward sale commitments used to economically hedge secondary market activities, and changes in the Company's repurchase liability for loans that have been sold.
|
|
For The Years Ended December 31,
|
||||||||||||||||||||||||
(in thousands)
|
2017
|
|
Dollar
Change |
|
Percent
Change |
|
2016
|
|
Dollar
Change |
|
Percent
Change |
|
2015
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Single family mortgage closed loan volume (1)
|
$
|
7,554,185
|
|
|
$
|
(1,443,162
|
)
|
|
(16
|
)%
|
|
$
|
8,997,347
|
|
|
$
|
1,784,912
|
|
|
25
|
%
|
|
$
|
7,212,435
|
|
Single family mortgage interest rate lock commitments (1)
|
$
|
6,980,477
|
|
|
$
|
(1,640,499
|
)
|
|
(19
|
)%
|
|
$
|
8,620,976
|
|
|
$
|
1,689,868
|
|
|
24
|
%
|
|
$
|
6,931,108
|
|
(1)
|
Includes loans originated by WMS Series LLC and purchased by HomeStreet Bank.
|
|
Years Ended December 31,
|
||||||||||
(in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
||||||
Effect of changes to the mortgage repurchase liability recorded in gain on loan origination and sale activities:
|
|
|
|
|
|
||||||
New loan sales (1)
|
$
|
(2,528
|
)
|
|
$
|
(3,574
|
)
|
|
$
|
(2,764
|
)
|
Other changes in estimated repurchase losses(2)
|
2,354
|
|
|
2,032
|
|
|
—
|
|
|||
|
$
|
(174
|
)
|
|
$
|
(1,542
|
)
|
|
$
|
(2,764
|
)
|
(1)
|
Represents the estimated fair value of the repurchase or indemnity obligation recognized as a reduction of proceeds on new loan sales.
|
(2)
|
Represents changes in estimated probable future repurchase losses on previously sold loans.
|
|
|
Years Ended December 31,
|
||||||||||||||||||||||||
(in thousands)
|
|
2017
|
|
Dollar
Change |
|
Percent
Change |
|
2016
|
|
Dollar
Change |
|
Percent
Change |
|
2015
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Servicing income, net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Servicing fees and other
|
|
$
|
66,192
|
|
|
$
|
12,538
|
|
|
23
|
%
|
|
$
|
53,654
|
|
|
$
|
11,638
|
|
|
28
|
%
|
|
$
|
42,016
|
|
Changes in fair value of single family MSRs due to amortization (1)
|
|
(35,451
|
)
|
|
(2,146
|
)
|
|
6
|
|
|
(33,305
|
)
|
|
733
|
|
|
(2
|
)
|
|
(34,038
|
)
|
|||||
Amortization of multifamily and SBA MSRs
|
|
(3,932
|
)
|
|
(1,297
|
)
|
|
49
|
|
|
(2,635
|
)
|
|
(643
|
)
|
|
32
|
|
|
(1,992
|
)
|
|||||
|
|
26,809
|
|
|
9,095
|
|
|
51
|
|
|
17,714
|
|
|
11,728
|
|
|
196
|
|
|
5,986
|
|
|||||
Risk management:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Changes in fair value of MSRs due to changes in model inputs and/or assumptions
|
|
(1,157
|
)
|
|
(21,182
|
)
|
|
(106
|
)
|
|
20,025
|
|
|
13,470
|
|
|
205
|
|
|
6,555
|
|
|||||
Net gain (loss) from derivatives economically hedging MSRs
|
|
9,732
|
|
|
14,412
|
|
|
(308
|
)
|
|
(4,680
|
)
|
|
(16,389
|
)
|
|
(140
|
)
|
|
11,709
|
|
|||||
|
|
8,575
|
|
|
(6,770
|
)
|
|
(44
|
)
|
|
15,345
|
|
|
(2,919
|
)
|
|
(16
|
)
|
|
18,264
|
|
|||||
Loan servicing income
|
|
$
|
35,384
|
|
|
$
|
2,325
|
|
|
7
|
%
|
|
$
|
33,059
|
|
|
$
|
8,809
|
|
|
36
|
%
|
|
$
|
24,250
|
|
(1)
|
Represents changes due to collection/realization of expected cash flows and curtailments.
|
(2)
|
Principally reflects changes in market inputs, which include current market interest rates and prepayment model updates, both of which affect future prepayment speed and cash flow projections.
|
|
Years Ended December 31,
|
||||||||||||||||||||||||
(in thousands)
|
2017
|
|
Dollar
Change |
|
Percent
Change |
|
2016
|
|
Dollar
Change |
|
Percent
Change |
|
2015
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fees:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Monthly maintenance and deposit-related fees
|
$
|
3,085
|
|
|
$
|
133
|
|
|
5
|
%
|
|
$
|
2,952
|
|
|
$
|
295
|
|
|
11
|
%
|
|
$
|
2,657
|
|
Debit Card/ATM fees
|
3,912
|
|
|
291
|
|
|
8
|
|
|
3,621
|
|
|
476
|
|
|
15
|
|
|
3,145
|
|
|||||
Other fees
|
224
|
|
|
7
|
|
|
3
|
|
|
217
|
|
|
138
|
|
|
175
|
|
|
79
|
|
|||||
Total depositor and other retail banking fees
|
$
|
7,221
|
|
|
$
|
431
|
|
|
6
|
%
|
|
$
|
6,790
|
|
|
$
|
909
|
|
|
15
|
%
|
|
$
|
5,881
|
|
|
Years Ended December 31,
|
||||||||||||||||||||||||
(in thousands)
|
2017
|
|
Dollar
Change |
|
Percent
Change |
|
2016
|
|
Dollar
Change |
|
Percent
Change |
|
2015
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Noninterest expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Salaries and related costs
|
$
|
293,870
|
|
|
$
|
(9,484
|
)
|
|
(3
|
)%
|
|
$
|
303,354
|
|
|
$
|
62,767
|
|
|
26
|
%
|
|
$
|
240,587
|
|
General and administrative
|
65,036
|
|
|
1,830
|
|
|
3
|
|
|
63,206
|
|
|
6,385
|
|
|
11
|
|
|
56,821
|
|
|||||
Amortization of core deposit intangibles
|
1,710
|
|
|
(456
|
)
|
|
(21
|
)
|
|
2,166
|
|
|
242
|
|
|
13
|
|
|
1,924
|
|
|||||
Legal
|
1,410
|
|
|
(457
|
)
|
|
(24
|
)
|
|
1,867
|
|
|
(940
|
)
|
|
(33
|
)
|
|
2,807
|
|
|||||
Consulting
|
3,467
|
|
|
(1,491
|
)
|
|
(30
|
)
|
|
4,958
|
|
|
(2,257
|
)
|
|
(31
|
)
|
|
7,215
|
|
|||||
Federal Deposit Insurance Corporation assessments
|
3,279
|
|
|
(135
|
)
|
|
(4
|
)
|
|
3,414
|
|
|
841
|
|
|
33
|
|
|
2,573
|
|
|||||
Occupancy
|
38,268
|
|
|
7,738
|
|
|
25
|
|
|
30,530
|
|
|
5,603
|
|
|
22
|
|
|
24,927
|
|
|||||
Information services
|
33,143
|
|
|
80
|
|
|
—
|
|
|
33,063
|
|
|
4,009
|
|
|
14
|
|
|
29,054
|
|
|||||
Net (benefit) cost of operation and sale of other real estate owned
|
(530
|
)
|
|
(2,294
|
)
|
|
(130
|
)
|
|
1,764
|
|
|
1,104
|
|
|
167
|
|
|
660
|
|
|||||
Total noninterest expense
|
$
|
439,653
|
|
|
$
|
(4,669
|
)
|
|
(1
|
)%
|
|
$
|
444,322
|
|
|
$
|
77,754
|
|
|
21
|
%
|
|
$
|
366,568
|
|
|
Years Ended December 31,
|
||||||||||
(in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
||||||
Noninterest expense
|
|
|
|
|
|
||||||
Salaries and related costs
|
$
|
—
|
|
|
$
|
4,128
|
|
|
$
|
7,672
|
|
General and administrative
|
79
|
|
|
633
|
|
|
1,463
|
|
|||
Legal
|
64
|
|
|
132
|
|
|
830
|
|
|||
Consulting
|
366
|
|
|
1,500
|
|
|
5,703
|
|
|||
Occupancy
|
72
|
|
|
180
|
|
|
382
|
|
|||
Information services
|
21
|
|
|
563
|
|
|
514
|
|
|||
Total noninterest expense
|
$
|
602
|
|
|
$
|
7,136
|
|
|
$
|
16,564
|
|
|
Years Ended December 31,
|
||||||||||
(in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
||||||
Noninterest expense
|
|
|
|
|
|
||||||
Salaries and related costs
|
$
|
648
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Occupancy
|
3,072
|
|
|
—
|
|
|
—
|
|
|||
Total noninterest expense
|
$
|
3,720
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
At December 31,
|
||||||||||||||
|
2017
|
|
2016
|
||||||||||||
|
Amortized
Cost
|
|
Fair Value
|
|
Amortized
Cost
|
|
Fair Value
|
||||||||
(in thousands)
|
|||||||||||||||
|
|
|
|
|
|
|
|
||||||||
Investment securities available for sale:
|
|
|
|
|
|
|
|
||||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
||||||||
Residential
|
$
|
133,654
|
|
|
$
|
130,090
|
|
|
$
|
181,158
|
|
|
$
|
177,074
|
|
Commercial
|
24,024
|
|
|
23,694
|
|
|
25,896
|
|
|
25,536
|
|
||||
Municipal bonds
|
389,117
|
|
|
388,452
|
|
|
473,153
|
|
|
467,673
|
|
||||
Collateralized mortgage obligations:
|
|
|
|
|
|
|
|
||||||||
Residential
|
164,502
|
|
|
160,424
|
|
|
194,982
|
|
|
191,201
|
|
||||
Commercial
|
100,001
|
|
|
98,569
|
|
|
71,870
|
|
|
70,764
|
|
||||
Corporate debt securities
|
25,146
|
|
|
24,737
|
|
|
52,045
|
|
|
51,122
|
|
||||
U.S. Treasury securities
|
10,899
|
|
|
10,652
|
|
|
10,882
|
|
|
10,620
|
|
||||
Agency debentures
|
9,861
|
|
|
9,650
|
|
|
—
|
|
|
—
|
|
||||
Total investment securities available for sale
|
$
|
857,204
|
|
|
$
|
846,268
|
|
|
$
|
1,009,986
|
|
|
$
|
993,990
|
|
|
At December 31,
|
|||||||||||||||||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|||||||||||||||||||||||||
(in thousands)
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Consumer loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Single family
|
$
|
1,381,366
|
|
(1)
|
30.5
|
%
|
|
$
|
1,083,822
|
|
(1)
|
28.2
|
%
|
|
$
|
1,203,180
|
|
|
37.3
|
%
|
|
$
|
896,665
|
|
|
42.2
|
%
|
|
$
|
904,913
|
|
|
47.7
|
%
|
Home equity and other
|
453,489
|
|
|
10.0
|
|
|
359,874
|
|
|
9.3
|
|
|
256,373
|
|
|
8.0
|
|
|
135,598
|
|
|
6.4
|
|
|
135,650
|
|
|
7.1
|
|
|||||
|
1,834,855
|
|
|
40.5
|
|
|
1,443,696
|
|
|
37.5
|
|
|
1,459,553
|
|
|
45.3
|
|
|
1,032,263
|
|
|
48.6
|
|
|
1,040,563
|
|
|
54.8
|
|
|||||
Commercial real estate loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Non-owner occupied commercial real estate
|
622,782
|
|
|
13.8
|
|
|
588,672
|
|
|
15.4
|
|
|
445,903
|
|
|
13.8
|
|
|
379,664
|
|
|
17.8
|
|
|
320,942
|
|
|
16.8
|
|
|||||
Multifamily
|
728,037
|
|
|
16.1
|
|
|
674,219
|
|
|
17.5
|
|
|
426,557
|
|
|
13.2
|
|
|
55,088
|
|
|
2.6
|
|
|
79,216
|
|
|
4.2
|
|
|||||
Construction/ land development
|
687,631
|
|
|
15.2
|
|
|
636,320
|
|
|
16.5
|
|
|
583,160
|
|
|
18.1
|
|
|
367,934
|
|
|
17.3
|
|
|
130,465
|
|
|
6.9
|
|
|||||
|
2,038,450
|
|
|
45.1
|
|
|
1,899,211
|
|
|
49.4
|
|
|
1,455,620
|
|
|
45.1
|
|
|
802,686
|
|
|
37.7
|
|
|
530,623
|
|
|
27.9
|
|
|||||
Commercial and industrial loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Owner occupied commercial real estate
|
391,613
|
|
|
8.6
|
|
|
282,891
|
|
|
7.3
|
|
|
154,800
|
|
|
4.8
|
|
|
143,800
|
|
|
6.8
|
|
|
156,700
|
|
|
8.3
|
|
|||||
Commercial business
|
264,709
|
|
|
5.8
|
|
|
223,653
|
|
|
5.8
|
|
|
154,262
|
|
|
4.8
|
|
|
147,449
|
|
|
6.9
|
|
|
171,054
|
|
|
9.0
|
|
|||||
|
656,322
|
|
|
14.4
|
|
|
506,544
|
|
|
13.1
|
|
|
309,062
|
|
|
9.6
|
|
|
291,249
|
|
|
13.7
|
|
|
327,754
|
|
|
17.3
|
|
|||||
Total loans before allowance, net deferred loan fees and costs
|
4,529,627
|
|
|
100.0
|
%
|
|
3,849,451
|
|
|
100.0
|
%
|
|
3,224,235
|
|
|
100.0
|
%
|
|
2,126,198
|
|
|
100.0
|
%
|
|
1,898,940
|
|
|
100.0
|
%
|
|||||
Net deferred loan fees and costs
|
14,686
|
|
|
|
|
3,577
|
|
|
|
|
(2,237
|
)
|
|
|
|
(5,048
|
)
|
|
|
|
(3,219
|
)
|
|
|
||||||||||
|
4,544,313
|
|
|
|
|
3,853,028
|
|
|
|
|
3,221,998
|
|
|
|
|
2,121,150
|
|
|
|
|
1,895,721
|
|
|
|
||||||||||
Allowance for loan losses
|
(37,847
|
)
|
|
|
|
(34,001
|
)
|
|
|
|
(29,278
|
)
|
|
|
|
(22,021
|
)
|
|
|
|
(23,908
|
)
|
|
|
||||||||||
|
$
|
4,506,466
|
|
|
|
|
$
|
3,819,027
|
|
|
|
|
$
|
3,192,720
|
|
|
|
|
$
|
2,099,129
|
|
|
|
|
$
|
1,871,813
|
|
|
|
(1)
|
Includes $5.5 million and $18.0 million of loans at December 31, 2017 and 2016 respectively, where a fair value option election was made at the time of origination and, therefore, are carried at fair value with changes recognized in the consolidated statements of operations.
|
|
At December 31,
|
||||||||||||
|
2017
|
|
2016
|
||||||||||
(in thousands)
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
||||||
|
|
|
|
|
|
|
|
||||||
Adjustable-rate loans:
|
|
|
|
|
|
|
|
||||||
Single family
|
$
|
998,237
|
|
|
22.0
|
%
|
|
$
|
657,837
|
|
|
17.1
|
%
|
Non-owner occupied commercial real estate
|
545,076
|
|
|
12.0
|
|
|
512,005
|
|
|
13.3
|
|
||
Multifamily
|
696,267
|
|
|
15.4
|
|
|
655,271
|
|
|
17.0
|
|
||
Construction/land development, net (1)
|
596,913
|
|
|
13.2
|
|
|
497,175
|
|
|
12.9
|
|
||
Owner occupied commercial real estate
|
259,207
|
|
|
5.7
|
|
|
189,689
|
|
|
4.9
|
|
||
Commercial business
|
189,163
|
|
|
4.2
|
|
|
143,960
|
|
|
3.7
|
|
||
Home equity and other
|
415,441
|
|
|
9.2
|
|
|
303,565
|
|
|
7.9
|
|
||
Total adjustable-rate loans
|
3,700,304
|
|
|
81.7
|
|
|
2,959,502
|
|
|
76.8
|
|
||
Fixed-rate loans:
|
|
|
|
|
|
|
|
||||||
Single family
|
383,129
|
|
|
8.5
|
|
|
425,985
|
|
|
11.1
|
|
||
Non-owner occupied commercial real estate
|
77,706
|
|
|
1.7
|
|
|
76,667
|
|
|
2.0
|
|
||
Multifamily
|
31,770
|
|
|
0.7
|
|
|
18,949
|
|
|
0.5
|
|
||
Construction/land development, net (1)
|
90,718
|
|
|
2.0
|
|
|
139,145
|
|
|
3.6
|
|
||
Owner occupied commercial real estate
|
132,406
|
|
|
2.9
|
|
|
93,201
|
|
|
2.4
|
|
||
Commercial business
|
75,546
|
|
|
1.7
|
|
|
79,693
|
|
|
2.1
|
|
||
Home equity and other
|
38,048
|
|
|
0.8
|
|
|
56,309
|
|
|
1.5
|
|
||
Total fixed-rate loans
|
829,323
|
|
|
18.3
|
|
|
889,949
|
|
|
23.2
|
|
||
Total loans held for investment
|
4,529,627
|
|
|
100.0
|
%
|
|
3,849,451
|
|
|
100.0
|
%
|
||
Less:
|
|
|
|
|
|
|
|
||||||
Net deferred loan fees and costs
|
14,686
|
|
|
|
|
3,577
|
|
|
|
||||
Allowance for loan losses
|
(37,847
|
)
|
|
|
|
(34,001
|
)
|
|
|
||||
Loans held for investment, net
|
$
|
4,506,466
|
|
|
|
|
$
|
3,819,027
|
|
|
|
(1)
|
Construction/land development is presented net of the undisbursed portion of the loan commitment.
|
|
December 31, 2017
|
|
Loans due after one year
by rate characteristic
|
||||||||||||||||||||
(in thousands)
|
Within one year
|
|
After
one year through
five years
|
|
After
five
years
|
|
Total
|
|
Fixed-
rate
|
|
Adjustable-
rate
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Consumer:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Single family
|
$
|
1,854
|
|
|
$
|
4,532
|
|
|
$
|
1,374,980
|
|
|
$
|
1,381,366
|
|
|
$
|
381,275
|
|
|
$
|
998,237
|
|
Home equity and other
|
1
|
|
|
80
|
|
|
453,408
|
|
|
453,489
|
|
|
38,047
|
|
|
415,441
|
|
||||||
Total consumer
|
1,855
|
|
|
4,612
|
|
|
1,828,388
|
|
|
1,834,855
|
|
|
419,322
|
|
|
1,413,678
|
|
||||||
Commercial real estate loans:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Non-owner occupied commercial real estate
|
28,363
|
|
|
65,470
|
|
|
528,949
|
|
|
622,782
|
|
|
66,565
|
|
|
527,854
|
|
||||||
Multifamily
|
11,197
|
|
|
74,237
|
|
|
642,603
|
|
|
728,037
|
|
|
30,046
|
|
|
686,794
|
|
||||||
Construction/land development
|
528,813
|
|
|
144,824
|
|
|
13,994
|
|
|
687,631
|
|
|
62,810
|
|
|
96,008
|
|
||||||
Total commercial real estate
|
568,373
|
|
|
284,531
|
|
|
1,185,546
|
|
|
2,038,450
|
|
|
159,421
|
|
|
1,310,656
|
|
||||||
Commercial and industrial loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Owner occupied commercial real estate
|
9,137
|
|
|
41,416
|
|
|
341,060
|
|
|
391,613
|
|
|
126,316
|
|
|
256,160
|
|
||||||
Commercial business
|
60,274
|
|
|
90,704
|
|
|
113,731
|
|
|
264,709
|
|
|
67,061
|
|
|
137,374
|
|
||||||
Total commercial and industrial
|
69,411
|
|
|
132,120
|
|
|
454,791
|
|
|
656,322
|
|
|
193,377
|
|
|
393,534
|
|
||||||
Total loans held for investment
|
$
|
639,639
|
|
|
$
|
421,263
|
|
|
$
|
3,468,725
|
|
|
$
|
4,529,627
|
|
|
$
|
772,120
|
|
|
$
|
3,117,868
|
|
|
December 31, 2016
|
|
Loans due after one year
by rate characteristic
|
||||||||||||||||||||
(in thousands)
|
Within one year
|
|
After
one year through
five years
|
|
After
five
years
|
|
Total
|
|
Fixed-
rate
|
|
Adjustable-
rate
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Consumer:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Single family
|
$
|
7,327
|
|
|
$
|
4,878
|
|
|
$
|
1,071,618
|
|
|
$
|
1,083,823
|
|
|
$
|
418,923
|
|
|
$
|
657,573
|
|
Home equity and other
|
7,156
|
|
|
27,879
|
|
|
324,838
|
|
|
359,873
|
|
|
52,922
|
|
|
299,795
|
|
||||||
Total consumer
|
14,483
|
|
|
32,757
|
|
|
1,396,456
|
|
|
1,443,696
|
|
|
471,845
|
|
|
957,368
|
|
||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Non-owner occupied commercial real estate
|
22,887
|
|
|
75,403
|
|
|
490,382
|
|
|
588,672
|
|
|
69,668
|
|
|
496,117
|
|
||||||
Multifamily
|
1,658
|
|
|
51,766
|
|
|
620,796
|
|
|
674,220
|
|
|
17,664
|
|
|
654,898
|
|
||||||
Construction/land development
|
483,211
|
|
|
151,785
|
|
|
1,324
|
|
|
636,320
|
|
|
74,003
|
|
|
79,106
|
|
||||||
Total commercial real estate
|
507,756
|
|
|
278,954
|
|
|
1,112,502
|
|
|
1,899,212
|
|
|
161,335
|
|
|
1,230,121
|
|
||||||
Commercial and industrial:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Owner occupied commercial real estate
|
25,232
|
|
|
32,164
|
|
|
225,495
|
|
|
282,891
|
|
|
78,300
|
|
|
179,359
|
|
||||||
Commercial business
|
55,820
|
|
|
72,985
|
|
|
94,847
|
|
|
223,652
|
|
|
76,060
|
|
|
91,772
|
|
||||||
Total commercial and industrial
|
81,052
|
|
|
105,149
|
|
|
320,342
|
|
|
506,543
|
|
|
154,360
|
|
|
271,131
|
|
||||||
Total loans held for investment
|
$
|
603,291
|
|
|
$
|
416,860
|
|
|
$
|
2,829,300
|
|
|
$
|
3,849,451
|
|
|
$
|
787,540
|
|
|
$
|
2,458,620
|
|
|
Years Ended December 31,
|
||||||||||
(in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
||||||
Loans originated
|
|
|
|
|
|
||||||
Real estate
|
|
|
|
|
|
||||||
Single family
|
|
|
|
|
|
||||||
Originated by HomeStreet
|
$
|
7,525,248
|
|
|
$
|
8,637,631
|
|
|
$
|
6,834,296
|
|
Originated by WMS Series LLC
|
566,152
|
|
|
576,832
|
|
|
606,316
|
|
|||
Total single family
|
8,091,400
|
|
|
9,214,463
|
|
|
7,440,612
|
|
|||
Multifamily
|
746,748
|
|
|
640,142
|
|
|
322,637
|
|
|||
Non-owner occupied commercial real estate
|
208,130
|
|
|
271,701
|
|
|
134,068
|
|
|||
Owner occupied commercial real estate
|
121,398
|
|
|
173,017
|
|
|
35,236
|
|
|||
Construction/land development
|
1,084,092
|
|
|
1,079,243
|
|
|
767,063
|
|
|||
Total real estate
|
10,251,768
|
|
|
11,378,566
|
|
|
8,699,616
|
|
|||
Commercial business
|
227,880
|
|
|
116,595
|
|
|
105,021
|
|
|||
Home equity and other
|
361,043
|
|
|
279,851
|
|
|
176,430
|
|
|||
Total loans originated
|
$
|
10,840,691
|
|
|
$
|
11,775,012
|
|
|
$
|
8,981,067
|
|
Loans sold
|
|
|
|
|
|
||||||
Single family
|
$
|
7,508,949
|
|
|
$
|
8,785,412
|
|
|
$
|
7,038,635
|
|
Multifamily DUS ® (1)
|
347,084
|
|
|
301,442
|
|
|
204,744
|
|
|||
SBA
|
26,841
|
|
|
17,308
|
|
|
14,275
|
|
|||
CRE Non-DUS® (2)
|
321,699
|
|
|
150,903
|
|
(3)
|
15,038
|
|
|||
Total loans sold
|
$
|
8,204,573
|
|
|
$
|
9,255,065
|
|
|
$
|
7,272,692
|
|
(1)
|
Fannie Mae Multifamily Delegated Underwriting and Servicing Program (“DUS"®) is a registered trademark of Fannie Mae.
|
(2)
|
Loans originated as Held for Investment.
|
(3)
|
Includes $63.2 million of single family portfolio loan sales in 2016.
|
|
|
At December 31,
|
||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
|
||||||
Noninterest-bearing accounts - checking and savings
|
|
$
|
579,504
|
|
|
$
|
537,651
|
|
|
$
|
370,523
|
|
Interest-bearing transaction and savings deposits:
|
|
|
|
|
|
|
||||||
NOW accounts
|
|
461,349
|
|
|
468,812
|
|
|
408,477
|
|
|||
Statement savings accounts due on demand
|
|
293,858
|
|
|
301,361
|
|
|
292,092
|
|
|||
Money market accounts due on demand
|
|
1,834,154
|
|
|
1,603,141
|
|
|
1,155,464
|
|
|||
Total interest-bearing transaction and savings deposits
|
|
2,589,361
|
|
|
2,373,314
|
|
|
1,856,033
|
|
|||
Total transaction and savings deposits
|
|
3,168,865
|
|
|
2,910,965
|
|
|
2,226,556
|
|
|||
Certificates of deposit
|
|
1,190,689
|
|
|
1,091,558
|
|
|
732,892
|
|
|||
Noninterest-bearing accounts - other
|
|
401,398
|
|
|
427,178
|
|
|
272,505
|
|
|||
Total deposits
|
|
$
|
4,760,952
|
|
|
$
|
4,429,701
|
|
|
$
|
3,231,953
|
|
|
Years Ended December 31,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
|
|
|
|
|
|
|||
Return on assets (1)
|
1.05
|
%
|
|
1.01
|
%
|
|
0.91
|
%
|
Return on equity (2)
|
10.20
|
%
|
|
10.27
|
%
|
|
9.35
|
%
|
Equity to assets ratio (3)
|
10.26
|
%
|
|
9.80
|
%
|
|
9.69
|
%
|
(1)
|
Net income divided by average total assets.
|
(2)
|
Net earnings available to common shareholders divided by average common shareholders’ equity.
|
(3)
|
Average equity divided by average total assets.
|
•
|
a funds transfer pricing system, which allocates interest income credits and funding charges between the segments, assigning to each segment a funding credit for its liabilities, such as deposits, and a charge to fund its assets;
|
•
|
an allocation of charges for services rendered to the segments by centralized functions, such as corporate overhead, which are generally based on each segment’s consumption patterns; and
|
•
|
an allocation of the Company's consolidated income taxes which are based on the effective tax rate applied to the segment's pretax income or loss.
|
|
Years Ended December 31,
|
|
||||||||||||||||||||||||
(in thousands)
|
2017
|
|
Dollar
Change |
|
Percent
Change |
|
2016
|
|
Dollar
Change |
|
Percent
Change |
|
2015
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net interest income
|
$
|
174,542
|
|
|
$
|
20,527
|
|
|
13
|
%
|
|
$
|
154,015
|
|
|
$
|
33,995
|
|
|
28
|
%
|
|
$
|
120,020
|
|
|
Provision for credit losses
|
750
|
|
|
(3,350
|
)
|
|
(82
|
)
|
|
4,100
|
|
|
(2,000
|
)
|
|
(33
|
)
|
|
6,100
|
|
|
|||||
Noninterest income
|
42,360
|
|
|
6,678
|
|
|
19
|
|
|
35,682
|
|
|
6,315
|
|
|
22
|
|
|
29,367
|
|
|
|||||
Noninterest expense
|
148,977
|
|
|
10,592
|
|
|
8
|
|
|
138,385
|
|
|
15,787
|
|
|
13
|
|
|
122,598
|
|
|
|||||
Income before income tax expense
|
67,175
|
|
|
19,963
|
|
|
42
|
|
|
47,212
|
|
|
26,523
|
|
|
128
|
|
|
20,689
|
|
|
|||||
Income tax expense
|
25,114
|
|
|
8,702
|
|
|
53
|
|
|
16,412
|
|
|
13,740
|
|
|
514
|
|
|
2,672
|
|
|
|||||
Net income
|
$
|
42,061
|
|
|
$
|
11,261
|
|
|
37
|
%
|
|
$
|
30,800
|
|
|
$
|
12,783
|
|
|
71
|
%
|
|
$
|
18,017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total assets
|
$
|
5,875,329
|
|
|
$
|
605,877
|
|
|
11
|
%
|
|
$
|
5,269,452
|
|
|
$
|
1,223,402
|
|
|
30
|
%
|
|
$
|
4,046,050
|
|
|
Efficiency ratio (1)
|
68.68
|
%
|
|
|
|
|
|
72.95
|
%
|
|
|
|
|
|
|
|
82.07
|
%
|
|
|||||||
Full-time equivalent employees (ending)
|
1,068
|
|
|
70
|
|
|
7
|
%
|
|
998
|
|
|
170
|
|
|
21
|
%
|
|
828
|
|
|
|||||
Production volumes for sale to the secondary market:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Loan originations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Multifamily DUS ® (2)
|
$
|
341,308
|
|
|
$
|
15,457
|
|
|
5
|
%
|
|
$
|
325,851
|
|
|
$
|
121,013
|
|
|
59
|
%
|
|
$
|
204,838
|
|
|
SBA
|
39,009
|
|
|
25,279
|
|
|
184
|
%
|
|
13,730
|
|
|
13,730
|
|
|
NM
|
|
|
$
|
—
|
|
|
||||
Loans sold
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Multifamily DUS ® (2)
|
$
|
347,084
|
|
|
$
|
45,642
|
|
|
15
|
%
|
|
$
|
301,442
|
|
|
$
|
96,698
|
|
|
47
|
%
|
|
$
|
204,744
|
|
|
SBA
|
26,841
|
|
|
9,533
|
|
|
55
|
%
|
|
17,308
|
|
|
3,033
|
|
|
21
|
%
|
|
14,275
|
|
|
|||||
CRE Non-DUS (3)
|
321,699
|
|
|
170,796
|
|
|
113
|
%
|
|
150,903
|
|
(4)
|
135,865
|
|
|
903
|
%
|
|
15,038
|
|
|
|||||
Net gain on mortgage loan origination and sale activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Multifamily DUS ® (2)
|
$
|
13,210
|
|
|
$
|
1,813
|
|
|
16
|
%
|
|
$
|
11,397
|
|
|
$
|
4,272
|
|
|
60
|
%
|
|
$
|
7,125
|
|
|
SBA
|
2,439
|
|
|
1,025
|
|
|
72
|
%
|
|
1,414
|
|
|
344
|
|
|
32
|
%
|
|
1,070
|
|
|
|||||
CRE Non-DUS (3)
|
4,378
|
|
|
319
|
|
|
8
|
%
|
|
4,059
|
|
(5)
|
3,600
|
|
|
784
|
%
|
|
459
|
|
(5)
|
|||||
|
$
|
20,027
|
|
|
$
|
3,157
|
|
|
19
|
%
|
|
$
|
16,870
|
|
|
$
|
8,216
|
|
|
95
|
%
|
|
$
|
8,654
|
|
|
(1)
|
Noninterest expense divided by total net revenue (net interest income and noninterest income).
|
(2)
|
Fannie Mae Multifamily Delegated Underwriting and Servicing Program (“DUS"®) is a registered trademark of Fannie Mae.
|
(3)
|
Loans originated as Held for Investment.
|
(4)
|
Includes $63.2 million of single family portfolio loan sales in 2016.
|
(5)
|
Includes $2.8 million net gain on sale of single family portfolio loan during fourth quarter of 2016 and $27 thousand during fourth quarter of 2015.
|
|
At December 31,
|
||||||
(in thousands)
|
2017
|
|
2016
|
||||
Commercial
|
|
|
|
||||
Multifamily DUS®
|
$
|
1,311,399
|
|
|
$
|
1,108,040
|
|
Other
|
79,797
|
|
|
69,323
|
|
||
Total commercial loans serviced for others
|
$
|
1,391,196
|
|
|
$
|
1,177,363
|
|
|
Years Ended December 31,
|
||||||||||||||||||||||||
(in thousands)
|
2017
|
|
Dollar
Change |
|
Percent
Change |
|
2016
|
|
Dollar
Change |
|
Percent
Change |
|
2015
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Servicing income, net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Servicing fees and other
|
$
|
7,263
|
|
|
$
|
1,649
|
|
|
29
|
%
|
|
$
|
5,614
|
|
|
$
|
1,335
|
|
|
31
|
%
|
|
$
|
4,279
|
|
Amortization of multifamily and SBA MSRs
|
(3,932
|
)
|
|
(1,297
|
)
|
|
49
|
|
|
(2,635
|
)
|
|
(643
|
)
|
|
32
|
|
|
(1,992
|
)
|
|||||
Commercial mortgage servicing income
|
$
|
3,331
|
|
|
$
|
352
|
|
|
12
|
%
|
|
$
|
2,979
|
|
|
$
|
692
|
|
|
30
|
%
|
|
$
|
2,287
|
|
|
Years Ended December 31,
|
||||||||||||||||||||||||
(in thousands)
|
2017
|
|
Dollar
Change |
|
Percent
Change |
|
2016
|
|
Dollar
Change |
|
Percent
Change |
|
2015
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net interest income
|
$
|
19,896
|
|
|
$
|
(6,138
|
)
|
|
(24
|
)%
|
|
$
|
26,034
|
|
|
$
|
(2,284
|
)
|
|
(8
|
)%
|
|
$
|
28,318
|
|
Noninterest income
|
269,794
|
|
|
(53,674
|
)
|
|
(17
|
)
|
|
323,468
|
|
|
71,598
|
|
|
28
|
|
|
251,870
|
|
|||||
Noninterest expense
|
290,676
|
|
|
(15,261
|
)
|
|
(5
|
)
|
|
305,937
|
|
|
61,967
|
|
|
25
|
|
|
243,970
|
|
|||||
Income (loss) before income tax (benefit) expense
|
(986
|
)
|
|
(44,551
|
)
|
|
(102
|
)
|
|
43,565
|
|
|
7,347
|
|
|
20
|
|
|
36,218
|
|
|||||
Income tax (benefit) expense
|
(27,871
|
)
|
|
(44,085
|
)
|
|
(272
|
)
|
|
16,214
|
|
|
3,298
|
|
|
26
|
|
|
12,916
|
|
|||||
Net income
|
$
|
26,885
|
|
|
$
|
(466
|
)
|
|
(2
|
)%
|
|
$
|
27,351
|
|
|
$
|
4,049
|
|
|
17
|
%
|
|
$
|
23,302
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
866,712
|
|
|
$
|
(107,536
|
)
|
|
(11
|
)%
|
|
$
|
974,248
|
|
|
$
|
125,803
|
|
|
15
|
%
|
|
$
|
848,445
|
|
Efficiency ratio (1)
|
100.34
|
%
|
|
|
|
|
|
87.54
|
%
|
|
|
|
|
|
87.07
|
%
|
|||||||||
Full-time equivalent employees (ending)
|
1,351
|
|
|
(203
|
)
|
|
(13
|
)%
|
|
1,554
|
|
|
243
|
|
|
19
|
%
|
|
1,311
|
|
|||||
Production volumes for sale to the secondary market:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Single family mortgage closed loan volume (2)(3)
|
$
|
7,554,185
|
|
|
$
|
(1,443,162
|
)
|
|
(16
|
)%
|
|
$
|
8,997,347
|
|
|
$
|
1,784,912
|
|
|
25
|
%
|
|
$
|
7,212,435
|
|
Single family mortgage interest rate lock commitments(2)
|
6,980,477
|
|
|
(1,640,499
|
)
|
|
(19
|
)
|
|
8,620,976
|
|
|
1,689,868
|
|
|
24
|
|
|
6,931,108
|
|
|||||
Single family mortgage loans sold(2)
|
$
|
7,508,949
|
|
|
$
|
(1,276,463
|
)
|
|
(15
|
)%
|
|
$
|
8,785,412
|
|
|
$
|
1,778,075
|
|
|
25
|
%
|
|
$
|
7,007,337
|
|
(1)
|
Noninterest expense divided by total net revenue (net interest income and noninterest income).
|
(2)
|
Includes loans originated by WMS Series LLC and purchased by HomeStreet Bank and brokered loans where HomeStreet receives fee income but does not fund the loan on its balance sheet or sell it into the secondary market.
|
(3)
|
Represents single family mortgage production volume designated for sale to the secondary market during each respective period.
|
|
Years Ended December 31,
|
||||||||||||||||||||||||
(in thousands)
|
2017
|
|
Dollar
Change |
|
Percent
Change |
|
2016
|
|
Dollar
Change |
|
Percent
Change |
|
2015
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Single family: (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Servicing value and secondary market gains(2)
|
$
|
209,027
|
|
|
$
|
(51,450
|
)
|
|
(20
|
)%
|
|
$
|
260,477
|
|
|
$
|
54,964
|
|
|
27
|
%
|
|
$
|
205,513
|
|
Loan origination and funding fees
|
26,822
|
|
|
(3,144
|
)
|
|
(10
|
)
|
|
29,966
|
|
|
7,745
|
|
|
35
|
|
|
22,221
|
|
|||||
Total mortgage banking gain on mortgage loan origination and sale activities(1)
|
$
|
235,849
|
|
|
$
|
(54,594
|
)
|
|
(19
|
)%
|
|
$
|
290,443
|
|
|
$
|
62,709
|
|
|
28
|
%
|
|
$
|
227,734
|
|
(1)
|
Excludes inter-segment activities.
|
(2)
|
Comprised of gains and losses on interest rate lock commitments (which considers the value of servicing), single family loans held for sale, forward sale commitments used to economically hedge secondary market activities, and the estimated fair value of the repurchase or indemnity obligation recognized on new loan sales.
|
|
Years Ended December 31,
|
|
||||||||||||||||||||||||
(in thousands)
|
2017
|
|
Dollar
Change |
|
Percent
Change |
|
2016
|
|
Dollar
Change |
|
Percent
Change |
|
2015
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Servicing income, net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Servicing fees and other
|
$
|
58,929
|
|
|
$
|
10,889
|
|
|
23
|
%
|
|
$
|
48,040
|
|
|
$
|
10,303
|
|
|
27
|
%
|
|
$
|
37,737
|
|
|
Changes in fair value of MSRs due to amortization (1)
|
(35,451
|
)
|
|
(2,146
|
)
|
|
6
|
|
|
(33,305
|
)
|
|
733
|
|
|
(2
|
)
|
|
(34,038
|
)
|
|
|||||
|
23,478
|
|
|
8,743
|
|
|
59
|
|
|
14,735
|
|
|
11,036
|
|
|
298
|
|
|
3,699
|
|
|
|||||
Risk management:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Changes in fair value of MSRs due to changes in market inputs and/or model updates (2)
|
(1,157
|
)
|
|
(21,182
|
)
|
|
(106
|
)
|
|
20,025
|
|
|
13,470
|
|
|
205
|
|
|
6,555
|
|
|
|||||
Net gain (loss) from derivatives economically hedging MSRs
|
9,732
|
|
|
14,412
|
|
|
(308
|
)
|
|
(4,680
|
)
|
|
(16,389
|
)
|
|
(140
|
)
|
|
11,709
|
|
|
|||||
|
8,575
|
|
|
(6,770
|
)
|
|
(44
|
)
|
|
15,345
|
|
|
(2,919
|
)
|
|
(16
|
)
|
|
18,264
|
|
|
|||||
Mortgage Banking servicing income
|
$
|
32,053
|
|
|
$
|
1,973
|
|
|
7
|
%
|
|
$
|
30,080
|
|
|
$
|
8,117
|
|
|
37
|
%
|
|
$
|
21,963
|
|
|
(1)
|
Represents changes due to collection/realization of expected cash flows and curtailments.
|
(2)
|
Principally reflects changes in model assumptions, including prepayment speed assumptions, which are primarily affected by changes in mortgage interest rates.
|
|
At December 31,
|
||||||
(in thousands)
|
2017
|
|
2016
|
||||
Single family
|
|
|
|
||||
U.S. government and agency
|
$
|
22,123,710
|
|
|
$
|
18,931,835
|
|
Other
|
507,437
|
|
|
556,621
|
|
||
Total single family loans serviced for others
|
$
|
22,631,147
|
|
|
$
|
19,488,456
|
|
•
|
Unfunded loan commitments. We make certain unfunded loan commitments as part of our lending activities that have not been recognized in the Company’s financial statements. These include commitments to extend credit made as part of our lending activities on loans we intend to hold in our loans held for investment portfolio. The aggregate amount of these unrecognized unfunded loan commitments existing at December 31, 2017 and 2016 was $56.9 million and $42.6 million, respectively.
|
•
|
Credit agreements. We extend secured and unsecured open-end loans to meet the financing needs of our customers. These commitments, which primarily related to unused home equity and commercial real estate lines of credit and business banking funding lines, totaled $456.1 million and $289.3 million at December 31, 2017 and 2016, respectively. Undistributed construction loan proceeds, where the Company has an obligation to advance funds for construction progress payments, was $706.7 million and $603.8 million at December 31, 2017 and 2016, respectively. The total amounts of unused commitments do not necessarily represent future credit exposure or cash requirements in that commitments may expire without being drawn upon.
|
•
|
Interest rate lock commitments. The Company writes options in the form of interest rate lock commitments on single family mortgage loans that are exercisable at the option of the borrower. We are exposed to market risk on interest rate lock commitments. The fair value of interest rate lock commitments existing at December 31, 2017 and 2016, was $12.9 million and $19.2 million, respectively. We mitigate the risk of future changes in the fair value of interest rate lock commitments primarily through the use of forward sale commitments.
|
•
|
Credit loss sharing. We originate, sell and service multifamily loans through the Fannie Mae DUS program. Multifamily loans are sold to Fannie Mae subject to a loss sharing arrangement. HomeStreet Capital services the loans for Fannie Mae and shares in the risk of loss with Fannie Mae under the terms of the DUS contracts. Under the DUS program, in general the DUS lender is contractually responsible for all losses on the first 5% of the unpaid principal balance of the loan (determined as of the day prior to valuation of the asset for loss purposes) and then shares in the remainder of losses with Fannie Mae with the lender being responsible for 25% of any losses that exceed 5% of the unpaid principal balance up to 20% of the unpaid principal balance and 10% of any losses that exceed 20% of the unpaid principal balance. The maximum lender loss on most DUS program loans is 20% of the original principal balance. The total principal balance of loans outstanding under the DUS program as of December 31, 2017 and 2016 was $1.31 billion and $1.11 billion, respectively, and our loss reserve was $2.0 million and $1.8 million as of December 31, 2017 and 2016, respectively.
|
•
|
Mortgage repurchase liability. In our single family lending business, we sell residential mortgage loans to government sponsored and other entities. In addition, the Company pools Federal Housing Administration ("FHA")-insured and Department of Veterans' Affairs ("VA")-guaranteed mortgage loans into Ginnie Mae, Fannie Mae and Freddie Mac guaranteed mortgage-backed securities. We have made representations and warranties that the loans sold meet certain requirements. We may be required to repurchase mortgage loans or indemnify loan purchasers due to defects in the origination process of the loan, such as documentation errors, underwriting errors and judgments, early payment defaults and fraud.
|
•
|
Leases. The Company is obligated under non-cancelable leases for office space and leased equipment. The office leases also contain renewal and space options. Rental expense under non-cancelable operating leases totaled $26.1 million, $22.7 million and $20.1 million for the years ended December 31, 2017, 2016 and 2015, respectively.
|
•
|
Small business investment company ("SBIC") investment funds. In 2017 and 2016, we entered into agreements to invest $8.3 million and $5.0 million, respectively, over time in qualifying small businesses and small enterprises. At December 31, 2017 and 2016 we had unfunded commitments of $11.0 million and $4.0 million, respectively, related to these agreements.
|
(in thousands)
|
Within
one year
|
|
After one but
within three years
|
|
After three but
within five
|
|
More than
five years
|
|
Total
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Deposits (1)
|
$
|
4,460,052
|
|
|
$
|
269,919
|
|
|
$
|
30,827
|
|
|
$
|
154
|
|
|
$
|
4,760,952
|
|
FHLB advances
|
963,611
|
|
|
10,000
|
|
|
—
|
|
|
5,590
|
|
|
979,201
|
|
|||||
Long term debt
|
—
|
|
|
—
|
|
|
—
|
|
|
65,000
|
|
|
65,000
|
|
|||||
Trust preferred securities (2)
|
—
|
|
|
—
|
|
|
—
|
|
|
61,857
|
|
|
61,857
|
|
|||||
Interest (3)
|
14,815
|
|
|
15,990
|
|
|
13,457
|
|
|
41,526
|
|
|
85,788
|
|
|||||
Operating leases
|
26,477
|
|
|
44,589
|
|
|
32,752
|
|
|
48,752
|
|
|
152,570
|
|
|||||
Purchase obligations (4)
|
14,768
|
|
|
8,278
|
|
|
782
|
|
|
—
|
|
|
23,828
|
|
|||||
Total
|
$
|
5,479,723
|
|
|
$
|
348,776
|
|
|
$
|
77,818
|
|
|
$
|
222,879
|
|
|
$
|
6,129,196
|
|
(1)
|
Deposits with indeterminate maturities, such as demand, savings and money market accounts, are reflected as obligations due less than one year.
|
(2)
|
Trust preferred securities are included in long-term debt on the consolidated statements of financial condition.
|
(3)
|
Represents the future interest obligations related to interest-bearing time deposits and long-term debt in the normal course of business. These interest obligations assume no early debt redemption. We estimated variable interest rate payments using December 31, 2017 rates, which we held constant until maturity.
|
(4)
|
Represents agreements to purchase goods or services.
|
•
|
Audit Committee. The Audit Committee oversees the policies and management activities relating to our financial reporting and internal and external audit.
|
•
|
Finance Committee. The Finance Committee oversees the consolidated companies' activities related to balance sheet management, major financial risks including market, interest rate, liquidity and funding risks and counterparty risk management, including trading limits.
|
•
|
Credit Committee. The Credit Committee oversees the annual Loan Review Plan, lending policies, credit performance and trends, the allowance for credit loss policy and loan loss reserves, large borrower exposure and concentrations, and approval of broker/dealer relationships.
|
•
|
Human Resources and Corporate Governance Committee. The Human Resources and Corporate Governance Committee (the "HRCG") of HomeStreet, Inc. reviews all matters concerning our human resources, compensation, benefits, and corporate governance. HRCG's policy objectives are to ensure that HomeStreet and its operating subsidiaries meet their corporate objectives of attracting and retaining a well-qualified workforce, to oversee our human resource strategies and policies and to ensure processes are in place to assure compliance with employment laws and regulations.
|
•
|
Enterprise Risk Management Committee. The Enterprise Risk Management Committee (the "ERMC") oversees the Company's enterprise-wide risk management framework, including evaluating management's identification and assessment of the significant risks and the related infrastructure to address such risks and monitors the Company's compliance with its risk appetite and risk limit structures and effective remediation of non-compliance on an ongoing, enterprise-wide, and individual entity basis. The ERMC also oversees policies and management activities relating to operational, regulatory, legal and compliance risks. The ERMC does not duplicate the risk oversight of the Board's other committees, but rather helps ensure end-to-end understanding and oversight of all risk issues in one Board committee and enhances the Board's and management's understanding of the Company's aggregate enterprise-wide risk profile.
|
•
|
We generally do not perform valuation monitoring for pass-graded credits because we believe they carry minimal credit risk.
|
•
|
For commercial loans secured by real estate that are graded special mention, an appraisal is performed at the time of loan downgrade, and an appraisal or evaluation is performed at least every two years thereafter, depending upon property complexity, market area, market conditions, intended use and other considerations.
|
•
|
For commercial loans secured by real estate that are graded substandard or doubtful and for all OREO properties, we require an independent third-party appraisal at the time of downgrade or transfer to OREO and at least every twelve months thereafter until disposition or loan upgrade. For loans where foreclosure is probable, an appraisal or evaluation is prepared at the intervening six-month period prior to foreclosure.
|
•
|
For performing consumer segment loans secured by real estate that are graded special mention or substandard, property values are determined semi-annually from automated valuation model services employed by the Bank.
|
•
|
In addition, if we determine that market conditions, changes to the property, changes in the intended use of the property or other factors indicate an appraisal is no longer reliable, we will also obtain an updated appraisal or evaluation and assess whether a change in collateral value requires an additional adjustment to carrying value.
|
|
At December 31, 2017
|
||||||||||
(in thousands)
|
Recorded
Investment
|
|
Unpaid Principal
Balance (2)
|
|
Related
Allowance
|
||||||
|
|
|
|
|
|
||||||
Impaired loans:
|
|
|
|
|
|
||||||
Loans with no related allowance recorded
|
$
|
78,696
|
|
(3)
|
$
|
80,904
|
|
|
$
|
—
|
|
Loans with an allowance recorded
|
5,150
|
|
|
5,288
|
|
|
289
|
|
|||
Total
|
$
|
83,846
|
|
(1)
|
$
|
86,192
|
|
|
$
|
289
|
|
|
|||||||||||
|
At December 31, 2016
|
||||||||||
(in thousands)
|
Recorded
Investment
|
|
Unpaid Principal
Balance (2)
|
|
Related
Allowance
|
||||||
|
|
|
|
|
|
||||||
Impaired loans:
|
|
|
|
|
|
||||||
Loans with no related allowance recorded
|
$
|
86,723
|
|
|
$
|
92,431
|
|
|
$
|
—
|
|
Loans with an allowance recorded
|
3,785
|
|
|
3,875
|
|
|
379
|
|
|||
Total
|
$
|
90,508
|
|
(1)
|
$
|
96,306
|
|
|
$
|
379
|
|
|
|||||||||||
|
At December 31, 2015
|
||||||||||
(in thousands)
|
Recorded
Investment
|
|
Unpaid Principal
Balance (2)
|
|
Related
Allowance
|
||||||
|
|
|
|
|
|
||||||
Impaired loans:
|
|
|
|
|
|
||||||
Loans with no related allowance recorded
|
$
|
90,547
|
|
|
$
|
94,058
|
|
|
$
|
—
|
|
Loans with an allowance recorded
|
3,126
|
|
|
3,293
|
|
|
567
|
|
|||
Total
|
$
|
93,673
|
|
(1)
|
$
|
97,351
|
|
|
$
|
567
|
|
(1)
|
Includes $69.6 million, $73.1 million and $74.7 million in single family performing troubled debt restructurings ("TDRs") at December 31, 2017, 2016 and 2015, respectively.
|
(2)
|
Unpaid principal balance does not include partial charge-offs, purchase discounts and premiums or nonaccrual interest paid. Related allowance is calculated on net book balances not unpaid principal balances.
|
(3)
|
Includes $231 thousand of fair value option loans.
|
|
At December 31,
|
||||||||||||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||||||||||||||||||||
(in thousands)
|
Amount
|
|
Percent of
Allowance
to Total
Allowance
|
|
Loan
Category
as a % of
Total Loans (1)
|
|
Amount
|
|
Percent of
Allowance
to Total
Allowance
|
|
Loan
Category as a % of Total Loans (1) |
|
Amount
|
|
Percent of
Allowance
to Total
Allowance
|
|
Loan
Category as a % of Total Loans (1) |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Consumer loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Single family
|
$
|
9,412
|
|
|
24.1
|
%
|
|
30.4
|
%
|
|
$
|
8,196
|
|
|
23.2
|
%
|
|
27.8
|
%
|
|
$
|
8,942
|
|
|
29.2
|
%
|
|
36.9
|
%
|
Home equity and other
|
7,081
|
|
|
18.1
|
|
|
10.0
|
|
|
6,153
|
|
|
17.4
|
|
|
9.4
|
|
|
4,620
|
|
|
15.1
|
|
|
8.0
|
|
|||
|
16,493
|
|
|
42.2
|
|
|
40.4
|
|
|
14,349
|
|
|
40.6
|
|
|
37.2
|
|
|
13,562
|
|
|
44.3
|
|
|
44.9
|
|
|||
Commercial real estate loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Non-owner occupied commercial real estate
|
4,755
|
|
|
12.1
|
|
|
13.8
|
|
|
4,481
|
|
|
12.7
|
|
|
15.4
|
|
|
3,594
|
|
|
11.7
|
|
|
13.9
|
|
|||
Multifamily
|
3,895
|
|
|
10.0
|
|
|
16.1
|
|
|
3,086
|
|
|
8.8
|
|
|
17.6
|
|
|
1,194
|
|
|
3.9
|
|
|
13.3
|
|
|||
Construction/land development
|
8,677
|
|
|
22.2
|
|
|
15.2
|
|
|
8,553
|
|
|
24.3
|
|
|
16.6
|
|
|
9,271
|
|
|
30.2
|
|
|
18.2
|
|
|||
|
17,327
|
|
|
44.3
|
|
|
45.1
|
|
|
16,120
|
|
|
45.8
|
|
|
49.6
|
|
|
14,059
|
|
|
45.8
|
|
|
45.4
|
|
|||
Commercial and industrial loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Owner occupied commercial real estate
|
2,960
|
|
|
7.5
|
|
|
8.7
|
|
|
2,199
|
|
|
6.2
|
|
|
7.4
|
|
|
1,253
|
|
|
4.1
|
|
|
4.9
|
|
|||
Commercial business
|
2,336
|
|
|
6.0
|
|
|
5.9
|
|
|
2,596
|
|
|
7.4
|
|
|
5.8
|
|
|
1,785
|
|
|
5.8
|
|
|
4.8
|
|
|||
|
5,296
|
|
|
13.5
|
|
|
14.5
|
|
|
4,795
|
|
|
13.6
|
|
|
13.2
|
|
|
3,038
|
|
|
9.9
|
|
|
9.7
|
|
|||
Total allowance for credit losses
|
$
|
39,116
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
$
|
35,264
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
$
|
30,659
|
|
|
100.0
|
%
|
|
100.0
|
%
|
(1)
|
Excludes loans held for investment balances that are carried at fair value.
|
|
At December 31, 2017
|
|
|
|||||||||||||||||
(in thousands)
|
Accrual
|
|
Number of accrual relationships
|
|
Nonaccrual
|
|
Number of nonaccrual relationships
|
|
Total
|
|
Total number of relationships
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Consumer
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Single family (1)
|
$
|
69,555
|
|
|
280
|
|
|
$
|
2,451
|
|
|
11
|
|
|
$
|
72,006
|
|
|
291
|
|
Home equity and other
|
1,254
|
|
|
16
|
|
|
36
|
|
|
2
|
|
|
1,290
|
|
|
18
|
|
|||
|
70,809
|
|
|
296
|
|
|
2,487
|
|
|
13
|
|
|
73,296
|
|
|
309
|
|
|||
Commercial real estate loans
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Multifamily
|
507
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
507
|
|
|
1
|
|
|||
Construction/land development
|
454
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
454
|
|
|
1
|
|
|||
|
961
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
961
|
|
|
2
|
|
|||
Commercial and industrial loans
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Owner occupied commercial real estate
|
876
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
876
|
|
|
1
|
|
|||
Commercial business
|
377
|
|
|
3
|
|
|
62
|
|
|
1
|
|
|
439
|
|
|
4
|
|
|||
|
1,253
|
|
|
4
|
|
|
62
|
|
|
1
|
|
|
1,315
|
|
|
5
|
|
|||
|
$
|
73,023
|
|
|
302
|
|
|
$
|
2,549
|
|
|
14
|
|
|
$
|
75,572
|
|
|
316
|
|
(1)
|
Includes loan balances insured by the FHA or guaranteed by the VA of $46.7 million at December 31, 2017.
|
|
At December 31, 2016
|
|
|
||||||||||||||||
(in thousands)
|
Accrual
|
|
Number of accrual relationships
|
|
Nonaccrual
|
|
Number of nonaccrual relationships
|
|
Total
|
|
Total number of relationships
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Consumer
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Single family (1)
|
$
|
73,147
|
|
|
229
|
|
|
$
|
2,885
|
|
|
10
|
|
|
$
|
76,032
|
|
|
239
|
Home equity and other
|
1,247
|
|
|
18
|
|
|
216
|
|
|
3
|
|
|
1,463
|
|
|
21
|
|||
|
74,394
|
|
|
247
|
|
|
3,101
|
|
|
13
|
|
|
77,495
|
|
|
260
|
|||
Commercial real estate loans
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Multifamily
|
508
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
508
|
|
|
1
|
|||
Construction/land development
|
1,186
|
|
|
1
|
|
|
707
|
|
|
1
|
|
|
1,893
|
|
|
2
|
|||
|
1,694
|
|
|
2
|
|
|
707
|
|
|
1
|
|
|
2,401
|
|
|
3
|
|||
Commercial and industrial loans
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Owner occupied commercial real estate
|
—
|
|
|
—
|
|
|
933
|
|
|
1
|
|
|
933
|
|
|
1
|
|||
Commercial business
|
493
|
|
|
4
|
|
|
133
|
|
|
1
|
|
|
626
|
|
|
5
|
|||
|
493
|
|
|
4
|
|
|
1,066
|
|
|
2
|
|
|
1,559
|
|
|
6
|
|||
|
$
|
76,581
|
|
|
253
|
|
|
$
|
4,874
|
|
|
16
|
|
|
$
|
81,455
|
|
|
269
|
(1)
|
Includes loan balances insured by the FHA or guaranteed by the VA of $35.1 million at December 31, 2016.
|
|
At December 31, 2015
|
|
|
||||||||||||||||
(in thousands)
|
Accrual
|
|
Number of accrual relationships
|
|
Nonaccrual
|
|
Number of nonaccrual relationships
|
|
Total
|
|
Total number of relationships
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Consumer
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Single family (1)
|
$
|
74,685
|
|
|
213
|
|
|
$
|
2,452
|
|
|
11
|
|
|
$
|
77,137
|
|
|
224
|
Home equity and other
|
1,340
|
|
|
20
|
|
|
271
|
|
|
4
|
|
|
1,611
|
|
|
24
|
|||
|
76,025
|
|
|
233
|
|
|
2,723
|
|
|
15
|
|
|
78,748
|
|
|
248
|
|||
Commercial real estate loans
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Multifamily
|
3,014
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
3,014
|
|
|
2
|
|||
Construction/land development
|
3,714
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
3,714
|
|
|
3
|
|||
|
6,728
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
6,728
|
|
|
5
|
|||
Commercial and industrial loans
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Owner occupied commercial real estate
|
—
|
|
|
—
|
|
|
1,023
|
|
|
1
|
|
|
1,023
|
|
|
1
|
|||
Commercial business
|
1,658
|
|
|
4
|
|
|
185
|
|
|
1
|
|
|
1,843
|
|
|
5
|
|||
|
1,658
|
|
|
4
|
|
|
1,208
|
|
|
2
|
|
|
2,866
|
|
|
6
|
|||
|
$
|
84,411
|
|
|
242
|
|
|
$
|
3,931
|
|
|
17
|
|
|
$
|
88,342
|
|
|
259
|
(1)
|
Includes loan balances insured by the FHA or guaranteed by the VA of $29.6 million at December 31, 2015.
|
|
At December 31,
|
||||||||||||||||||
(in thousands)
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Loans accounted for on a nonaccrual basis: (1)
|
|
|
|
|
|
|
|
|
|
||||||||||
Consumer
|
|
|
|
|
|
|
|
|
|
||||||||||
Single family
|
$
|
11,091
|
|
|
$
|
12,717
|
|
|
$
|
12,119
|
|
|
$
|
8,368
|
|
|
$
|
8,861
|
|
Home equity and other
|
1,404
|
|
|
1,571
|
|
|
1,576
|
|
|
1,526
|
|
|
1,846
|
|
|||||
|
12,495
|
|
|
14,288
|
|
|
13,695
|
|
|
9,894
|
|
|
10,707
|
|
|||||
Commercial real estate loans
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-owner occupied commercial real estate
|
—
|
|
|
871
|
|
|
—
|
|
|
193
|
|
|
3,200
|
|
|||||
Multifamily
|
302
|
|
|
337
|
|
|
119
|
|
|
—
|
|
|
—
|
|
|||||
Construction/land development
|
78
|
|
|
1,376
|
|
|
339
|
|
|
—
|
|
|
—
|
|
|||||
|
380
|
|
|
2,584
|
|
|
458
|
|
|
193
|
|
|
3,200
|
|
|||||
Commercial and industrial loans
|
|
|
|
|
|
|
|
|
|
||||||||||
Owner occupied commercial real estate
|
640
|
|
|
1,256
|
|
|
2,341
|
|
|
4,650
|
|
|
9,057
|
|
|||||
Commercial business
|
1,526
|
|
|
2,414
|
|
|
674
|
|
|
1,277
|
|
|
2,743
|
|
|||||
|
2,166
|
|
|
3,670
|
|
|
3,015
|
|
|
5,927
|
|
|
11,800
|
|
|||||
Total loans on nonaccrual
|
15,041
|
|
|
20,542
|
|
|
17,168
|
|
|
16,014
|
|
|
25,707
|
|
|||||
Other real estate owned
|
664
|
|
|
5,243
|
|
|
7,531
|
|
|
9,448
|
|
|
12,911
|
|
|||||
Total nonperforming assets
|
$
|
15,705
|
|
|
$
|
25,785
|
|
|
$
|
24,699
|
|
|
$
|
25,462
|
|
|
$
|
38,618
|
|
Loans 90 days or more past due and accruing (2)
|
$
|
37,171
|
|
|
$
|
40,846
|
|
|
$
|
36,612
|
|
|
$
|
34,987
|
|
|
$
|
46,811
|
|
Accruing TDR loans
|
$
|
73,023
|
|
|
$
|
76,581
|
|
|
$
|
84,411
|
|
|
$
|
107,815
|
|
|
$
|
101,905
|
|
Nonaccrual TDR loans
|
2,549
|
|
|
4,874
|
|
|
3,931
|
|
|
4,110
|
|
|
4,731
|
|
|||||
Total TDR loans
|
$
|
75,572
|
|
|
$
|
81,455
|
|
|
$
|
88,342
|
|
|
$
|
111,925
|
|
|
$
|
106,636
|
|
Allowance for loan losses as a percent of nonaccrual loans
|
251.63
|
%
|
|
165.52
|
%
|
|
170.54
|
%
|
|
137.51
|
%
|
|
93.00
|
%
|
|||||
Nonaccrual loans as a percentage of total loans
|
0.33
|
%
|
|
0.53
|
%
|
|
0.53
|
%
|
|
0.75
|
%
|
|
1.36
|
%
|
|||||
Nonperforming assets as a percentage of total assets
|
0.23
|
%
|
|
0.41
|
%
|
|
0.50
|
%
|
|
0.72
|
%
|
|
1.26
|
%
|
(1)
|
If interest on nonaccrual loans under the original terms had been recognized, such income is estimated to have been $1.5 million, $2.2 million and $2.5 million for the years ended December 31, 2017, 2016 and 2015.
|
(2)
|
FHA-insured and VA-guaranteed single family loans that are 90 days or more past due are maintained on an accrual status if they have been determined to have little or no risk of loss.
|
|
At December 31, 2017
|
||||||||||||||||||||||
(in thousands)
|
30-59 Days
Past Due
|
|
60-89 Days
Past Due
|
|
Nonaccrual
|
|
90 Days or
More Past Due and Accruing
|
|
Total
Past Due
Loans
|
|
Other
Real Estate
Owned
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Consumer loans
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Single family
|
$
|
10,493
|
|
|
$
|
4,437
|
|
|
$
|
11,091
|
|
|
$
|
37,171
|
|
(1)
|
$
|
63,192
|
|
|
$
|
664
|
|
Home equity and other
|
750
|
|
|
20
|
|
|
1,404
|
|
|
—
|
|
|
2,174
|
|
|
—
|
|
||||||
|
11,243
|
|
|
4,457
|
|
|
12,495
|
|
|
37,171
|
|
|
65,366
|
|
|
664
|
|
||||||
Commercial real estate loans
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Multifamily
|
—
|
|
|
—
|
|
|
302
|
|
|
—
|
|
|
302
|
|
|
—
|
|
||||||
Construction/land development
|
641
|
|
|
—
|
|
|
78
|
|
|
—
|
|
|
719
|
|
|
—
|
|
||||||
|
641
|
|
|
—
|
|
|
380
|
|
|
—
|
|
|
1,021
|
|
|
—
|
|
||||||
Commercial and industrial loans
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Owner occupied commercial real estate
|
—
|
|
|
—
|
|
|
640
|
|
|
—
|
|
|
640
|
|
|
—
|
|
||||||
Commercial business
|
377
|
|
|
—
|
|
|
1,526
|
|
|
—
|
|
|
1,903
|
|
|
—
|
|
||||||
|
377
|
|
|
—
|
|
|
2,166
|
|
|
—
|
|
|
2,543
|
|
|
—
|
|
||||||
Total
|
$
|
12,261
|
|
|
$
|
4,457
|
|
|
$
|
15,041
|
|
|
$
|
37,171
|
|
|
$
|
68,930
|
|
|
$
|
664
|
|
(1)
|
FHA-insured and VA-guaranteed single family loans that are 90 days or more past due are maintained on accrual status if they are determined to have little to no risk of loss. At December 31, 2017, these past due loans totaled $37.2 million.
|
|
At December 31, 2016
|
||||||||||||||||||||||
(in thousands)
|
30-59 Days
Past Due
|
|
60-89 Days
Past Due
|
|
Nonaccrual
|
|
90 Days or
More Past Due and Accruing |
|
Total
Past Due
Loans
|
|
Other
Real Estate
Owned
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Consumer loans
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Single family
|
$
|
4,310
|
|
|
$
|
5,459
|
|
|
$
|
12,717
|
|
|
$
|
40,846
|
|
(1)
|
$
|
63,332
|
|
|
$
|
2,133
|
|
Home equity and other
|
251
|
|
|
442
|
|
|
1,571
|
|
|
—
|
|
|
2,264
|
|
|
—
|
|
||||||
|
4,561
|
|
|
5,901
|
|
|
14,288
|
|
|
40,846
|
|
|
65,596
|
|
|
2,133
|
|
||||||
Commercial real estate loans
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Non-owner occupied commercial real estate
|
23
|
|
|
—
|
|
|
871
|
|
|
—
|
|
|
894
|
|
|
—
|
|
||||||
Multifamily
|
—
|
|
|
—
|
|
|
337
|
|
|
—
|
|
|
337
|
|
|
—
|
|
||||||
Construction/land development
|
—
|
|
|
—
|
|
|
1,376
|
|
|
—
|
|
|
1,376
|
|
|
2,712
|
|
||||||
|
23
|
|
|
—
|
|
|
2,584
|
|
|
—
|
|
|
2,607
|
|
|
2,712
|
|
||||||
Commercial and industrial loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Owner occupied commercial real estate
|
48
|
|
|
205
|
|
|
1,256
|
|
|
—
|
|
|
1,509
|
|
|
398
|
|
||||||
Commercial business
|
202
|
|
|
—
|
|
|
2,414
|
|
|
—
|
|
|
2,616
|
|
|
—
|
|
||||||
|
250
|
|
|
205
|
|
|
3,670
|
|
|
—
|
|
|
4,125
|
|
|
398
|
|
||||||
Total
|
$
|
4,834
|
|
|
$
|
6,106
|
|
|
$
|
20,542
|
|
|
$
|
40,846
|
|
|
$
|
72,328
|
|
|
$
|
5,243
|
|
(1)
|
FHA-insured and VA-guaranteed single family loans that are 90 days or more past due are maintained on accrual status as they have little to no risk of loss. At December 31, 2016, these past due loans totaled $40.8 million.
|
|
At December 31, 2015
|
||||||||||||||||||||||
(in thousands)
|
30-59 Days
Past Due
|
|
60-89 Days
Past Due
|
|
Nonaccrual
|
|
90 Days or
More Past Due and Accruing
|
|
Total
Past Due
Loans
|
|
Other
Real Estate
Owned
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Consumer loans
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Single family
|
$
|
7,098
|
|
|
$
|
3,537
|
|
|
$
|
12,119
|
|
|
$
|
36,595
|
|
(1)
|
$
|
59,349
|
|
|
$
|
301
|
|
Home equity and other
|
1,095
|
|
|
398
|
|
|
1,576
|
|
|
—
|
|
|
3,069
|
|
|
—
|
|
||||||
|
8,193
|
|
|
3,935
|
|
|
13,695
|
|
|
36,595
|
|
|
62,418
|
|
|
301
|
|
||||||
Commercial real estate loans
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Non-owner occupied commercial real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,071
|
|
||||||
Multifamily
|
—
|
|
|
—
|
|
|
119
|
|
|
—
|
|
|
119
|
|
|
—
|
|
||||||
Construction/land development
|
77
|
|
|
—
|
|
|
339
|
|
|
—
|
|
|
416
|
|
|
3,159
|
|
||||||
|
77
|
|
|
—
|
|
|
458
|
|
|
—
|
|
|
535
|
|
|
7,230
|
|
||||||
Commercial and industrial loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Owner occupied commercial real estate
|
233
|
|
|
—
|
|
|
2,341
|
|
|
—
|
|
|
2,574
|
|
|
—
|
|
||||||
Commercial business
|
—
|
|
|
—
|
|
|
675
|
|
|
17
|
|
|
692
|
|
|
—
|
|
||||||
|
233
|
|
|
—
|
|
|
3,016
|
|
|
17
|
|
|
3,266
|
|
|
—
|
|
||||||
Total
|
$
|
8,503
|
|
|
$
|
3,935
|
|
|
$
|
17,169
|
|
|
$
|
36,612
|
|
|
$
|
66,219
|
|
|
$
|
7,531
|
|
(1)
|
FHA-insured and VA-guaranteed single family loans that are 90 days or more past due are maintained on accrual status as they have little to no risk of loss. At December 31, 2015, these past due loans totaled $36.6 million.
|
At December 31, 2017
|
|
||||
Greater Than
|
|
Less Than or Equal To
|
|
Percentage
|
(1)
|
N/A
|
(2)
|
N/A
|
(2)
|
1.9%
|
|
<
|
|
500
|
|
0.1%
|
|
500
|
|
549
|
|
0.1%
|
|
550
|
|
599
|
|
0.5%
|
|
600
|
|
649
|
|
4.1%
|
|
650
|
|
699
|
|
13.1%
|
|
700
|
|
749
|
|
30.8%
|
|
750
|
|
>
|
|
49.4%
|
|
|
|
TOTAL
|
|
100.0%
|
|
(1)
|
Percentages based on aggregate loan amounts.
|
(2)
|
Information is not available.
|
At December 31, 2016
|
|
||||
Greater Than
|
|
Less Than or Equal To
|
|
Percentage
|
(1)
|
N/A
|
(2)
|
N/A
|
(2)
|
2.5%
|
|
<
|
|
500
|
|
—%
|
|
500
|
|
549
|
|
0.1%
|
|
550
|
|
599
|
|
0.7%
|
|
600
|
|
649
|
|
4.8%
|
|
650
|
|
699
|
|
16.0%
|
|
700
|
|
749
|
|
28.6%
|
|
750
|
|
>
|
|
47.2%
|
|
|
|
TOTAL
|
|
100.0%
|
|
(1)
|
Percentages based on aggregate loan amounts.
|
(2)
|
Information is not available.
|
•
|
MSRs in excess of 10% of Tier 1 capital before threshold based deductions must be deducted from common equity. The disallowable portion of MSRs was phased in incrementally (40% in 2015; 60% in 2016; 80% in 2017 and beyond).
|
•
|
In addition, the combined balance of MSRs and deferred tax assets is limited to approximately 15% of the Bank’s and the Company’s common equity Tier 1 capital. These combined assets must be deducted from common equity to the extent that they exceed the 15% threshold.
|
•
|
Any portion of the Bank’s and the Company’s MSRs that are not deducted from the calculation of common equity Tier 1 are subject to a 100% risk weight.
|
|
|
At December 31, 2017
|
|||||||||||||||||||
HomeStreet Bank
|
|
Actual
|
|
For Minimum Capital
Adequacy Purposes
|
|
To Be Categorized As
“Well Capitalized” Under
Prompt Corrective
Action Provisions
|
|||||||||||||||
(in thousands)
|
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Tier 1 leverage capital (to average assets)
|
|
$
|
649,864
|
|
|
9.67
|
%
|
|
$
|
268,708
|
|
|
4.0
|
%
|
|
$
|
335,885
|
|
|
5.0
|
%
|
Common equity risk-based capital (to risk-weighted assets)
|
|
$
|
649,864
|
|
|
13.22
|
%
|
|
$
|
221,201
|
|
|
4.5
|
%
|
|
$
|
319,512
|
|
|
6.5
|
%
|
Tier 1 risk-based capital (to risk-weighted assets)
|
|
$
|
649,864
|
|
|
13.22
|
%
|
|
$
|
294,935
|
|
|
6.0
|
%
|
|
$
|
393,246
|
|
|
8.0
|
%
|
Total risk-based capital (to risk-weighted assets)
|
|
$
|
688,981
|
|
|
14.02
|
%
|
|
$
|
393,246
|
|
|
8.0
|
%
|
|
$
|
491,558
|
|
|
10.0
|
%
|
|
|
At December 31, 2017
|
|||||||||||||||||||
HomeStreet, Inc.
|
|
Actual
|
|
For Minimum Capital
Adequacy Purposes
|
|
To Be Categorized As
“Well Capitalized” Under
Prompt Corrective
Action Provisions
|
|||||||||||||||
(in thousands)
|
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Tier 1 leverage capital (to average assets)
|
|
$
|
614,624
|
|
|
9.12
|
%
|
|
$
|
269,534
|
|
|
4.0
|
%
|
|
$
|
336,918
|
|
|
5.0
|
%
|
Common equity risk-based capital (to risk-weighted assets)
|
|
$
|
555,120
|
|
|
9.86
|
%
|
|
$
|
253,293
|
|
|
4.5
|
%
|
|
$
|
365,868
|
|
|
6.5
|
%
|
Tier 1 risk-based capital (to risk-weighted assets)
|
|
$
|
614,624
|
|
|
10.92
|
%
|
|
$
|
337,724
|
|
|
6.0
|
%
|
|
$
|
450,299
|
|
|
8.0
|
%
|
Total risk-based capital (to risk-weighted assets)
|
|
$
|
653,741
|
|
|
11.61
|
%
|
|
$
|
450,299
|
|
|
8.0
|
%
|
|
$
|
562,873
|
|
|
10.0
|
%
|
|
|
At December 31, 2016
|
|||||||||||||||||||
HomeStreet Bank
|
|
Actual
|
|
For Minimum Capital
Adequacy Purposes
|
|
To Be Categorized As
“Well Capitalized” Under
Prompt Corrective
Action Provisions
|
|||||||||||||||
(in thousands)
|
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Tier 1 leverage capital (to average assets)
|
|
$
|
635,988
|
|
|
10.26
|
%
|
|
$
|
248,055
|
|
|
4.0
|
%
|
|
$
|
310,069
|
|
|
5.0
|
%
|
Common equity risk-based capital (to risk-weighted assets)
|
|
$
|
635,988
|
|
|
13.92
|
%
|
|
$
|
205,615
|
|
|
4.5
|
%
|
|
$
|
297,000
|
|
|
6.5
|
%
|
Tier 1 risk-based capital (to risk-weighted assets)
|
|
$
|
635,988
|
|
|
13.92
|
%
|
|
$
|
274,154
|
|
|
6.0
|
%
|
|
$
|
365,538
|
|
|
8.0
|
%
|
Total risk-based capital (to risk-weighted assets)
|
|
$
|
671,252
|
|
|
14.69
|
%
|
|
$
|
365,538
|
|
|
8.0
|
%
|
|
$
|
456,923
|
|
|
10.0
|
%
|
|
|
At December 31, 2016
|
|||||||||||||||||||
HomeStreet, Inc.
|
|
Actual
|
|
For Minimum Capital
Adequacy Purposes
|
|
To Be Categorized As
“Well Capitalized” Under
Prompt Corrective
Action Provisions
|
|||||||||||||||
(in thousands)
|
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Tier 1 leverage capital (to average assets)
|
|
$
|
608,988
|
|
|
9.78
|
%
|
|
$
|
249,121
|
|
|
4.0
|
%
|
|
$
|
311,402
|
|
|
5.0
|
%
|
Common equity risk-based capital (to risk-weighted assets)
|
|
$
|
550,510
|
|
|
10.54
|
%
|
|
$
|
234,965
|
|
|
4.5
|
%
|
|
$
|
339,395
|
|
|
6.5
|
%
|
Tier 1 risk-based capital (to risk-weighted assets)
|
|
$
|
608,988
|
|
|
11.66
|
%
|
|
$
|
313,287
|
|
|
6.0
|
%
|
|
$
|
417,716
|
|
|
8.0
|
%
|
Total risk-based capital (to risk-weighted assets)
|
|
$
|
644,252
|
|
|
12.34
|
%
|
|
$
|
417,716
|
|
|
8.0
|
%
|
|
$
|
522,146
|
|
|
10.0
|
%
|
|
|
At December 31, 2015
|
|||||||||||||||||||
HomeStreet Bank
|
|
Actual
|
|
For Minimum Capital
Adequacy Purposes |
|
To Be Categorized As
“Well Capitalized” Under Prompt Corrective Action Provisions |
|||||||||||||||
(in thousands)
|
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Tier 1 leverage capital (to average assets)
|
|
$
|
455,101
|
|
|
9.46
|
%
|
|
$
|
192,428
|
|
|
4.0
|
%
|
|
$
|
240,536
|
|
|
5.0
|
%
|
Common equity risk-based capital (to risk-weighted assets)
|
|
$
|
455,101
|
|
|
13.04
|
%
|
|
$
|
157,074
|
|
|
4.5
|
%
|
|
$
|
226,885
|
|
|
6.5
|
%
|
Tier 1 risk-based capital (to risk-weighted assets)
|
|
$
|
455,101
|
|
|
13.04
|
%
|
|
$
|
209,432
|
|
|
6.0
|
%
|
|
$
|
279,243
|
|
|
8.0
|
%
|
Total risk-based capital (to risk-weighted assets)
|
|
$
|
485,761
|
|
|
13.92
|
%
|
|
$
|
279,243
|
|
|
8.0
|
%
|
|
$
|
349,054
|
|
|
10.0
|
%
|
|
|
At December 31, 2015
|
|||||||||||||||||||
HomeStreet, Inc.
|
|
Actual
|
|
For Minimum Capital
Adequacy Purposes |
|
To Be Categorized As
“Well Capitalized” Under Prompt Corrective Action Provisions |
|||||||||||||||
(in thousands)
|
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Tier 1 leverage capital (to average assets)
|
|
$
|
480,038
|
|
|
9.95
|
%
|
|
$
|
193,025
|
|
|
4.0
|
%
|
|
$
|
241,281
|
|
|
5.0
|
%
|
Common equity risk-based capital (to risk-weighted assets)
|
|
$
|
423,005
|
|
|
10.52
|
%
|
|
$
|
180,912
|
|
|
4.5
|
%
|
|
$
|
261,317
|
|
|
6.5
|
%
|
Tier 1 risk-based capital (to risk-weighted assets)
|
|
$
|
480,038
|
|
|
11.94
|
%
|
|
$
|
241,216
|
|
|
6.0
|
%
|
|
$
|
321,621
|
|
|
8.0
|
%
|
Total risk-based capital (to risk-weighted assets)
|
|
$
|
510,697
|
|
|
12.70
|
%
|
|
$
|
321,621
|
|
|
8.0
|
%
|
|
$
|
402,026
|
|
|
10.0
|
%
|
ITEM 7A
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
•
|
understanding the nature and level of the Company's interest rate risk and interest rate sensitivity;
|
•
|
assessing how that risk fits within our overall business strategies;
|
•
|
ensuring an appropriate level of rigor and sophistication in the risk management process for the overall level of risk;
|
•
|
complying with and reviewing the asset/liability management policy; and
|
•
|
formulating and implementing strategies to improve balance sheet mix and earnings.
|
|
December 31, 2017
|
||||||||||||||||||||||||||||||
(dollars in thousands)
|
3 Mos.
or Less
|
|
More Than
3 Mos.
to 6 Mos.
|
|
More Than
6 Mos.
to 12 Mos.
|
|
More Than
12 Mos.
to 3 Yrs.
|
|
More Than
3 Yrs.
to 5 Yrs.
|
|
More Than
5 Yrs.
|
|
Non-Rate-
Sensitive
|
|
Total
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest-earning assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash & cash equivalents
|
$
|
72,718
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
72,718
|
|
FHLB Stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
46,639
|
|
|
—
|
|
|
46,639
|
|
||||||||
Investment securities(1)
|
37,240
|
|
|
35,978
|
|
|
46,017
|
|
|
210,030
|
|
|
135,838
|
|
|
439,201
|
|
|
—
|
|
|
904,304
|
|
||||||||
Mortgage loans held for sale
|
607,445
|
|
|
67
|
|
|
136
|
|
|
598
|
|
|
689
|
|
|
1,967
|
|
|
—
|
|
|
610,902
|
|
||||||||
Loans held for investment(1)
|
1,398,210
|
|
|
323,288
|
|
|
514,689
|
|
|
970,991
|
|
|
585,363
|
|
|
713,925
|
|
|
—
|
|
|
4,506,466
|
|
||||||||
Total interest-earning assets
|
2,115,613
|
|
|
359,333
|
|
|
560,842
|
|
|
1,181,619
|
|
|
721,890
|
|
|
1,201,732
|
|
|
—
|
|
|
6,141,029
|
|
||||||||
Non-interest-earning assets
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
601,012
|
|
|
601,012
|
|
||||||||
Total assets
|
$
|
2,115,613
|
|
|
$
|
359,333
|
|
|
$
|
560,842
|
|
|
$
|
1,181,619
|
|
|
$
|
721,890
|
|
|
$
|
1,201,732
|
|
|
$
|
601,012
|
|
|
$
|
6,742,041
|
|
Interest-bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
NOW accounts(2)
|
$
|
461,349
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
461,349
|
|
Statement savings accounts(2)
|
293,858
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
293,858
|
|
||||||||
Money market
accounts(2)
|
1,834,154
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,834,154
|
|
||||||||
Certificates of deposit
|
395,769
|
|
|
271,297
|
|
|
237,928
|
|
|
255,139
|
|
|
30,555
|
|
|
1
|
|
|
—
|
|
|
1,190,689
|
|
||||||||
FHLB advances
|
933,611
|
|
|
—
|
|
|
30,000
|
|
|
10,000
|
|
|
—
|
|
|
5,590
|
|
|
—
|
|
|
979,201
|
|
||||||||
Long-term debt(3)
|
60,274
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
65,000
|
|
|
—
|
|
|
125,274
|
|
||||||||
Total interest-bearing liabilities
|
3,979,015
|
|
|
271,297
|
|
|
267,928
|
|
|
265,139
|
|
|
30,555
|
|
|
70,591
|
|
|
—
|
|
|
4,884,525
|
|
||||||||
Non-interest bearing liabilities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,153,136
|
|
|
1,153,136
|
|
||||||||
Equity
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
704,380
|
|
|
704,380
|
|
||||||||
Total liabilities and shareholders’ equity
|
$
|
3,979,015
|
|
|
$
|
271,297
|
|
|
$
|
267,928
|
|
|
$
|
265,139
|
|
|
$
|
30,555
|
|
|
$
|
70,591
|
|
|
$
|
1,857,516
|
|
|
$
|
6,742,041
|
|
Interest sensitivity gap
|
$
|
(1,863,402
|
)
|
|
$
|
88,036
|
|
|
$
|
292,914
|
|
|
$
|
916,480
|
|
|
$
|
691,335
|
|
|
$
|
1,131,141
|
|
|
|
|
|
||||
Cumulative interest sensitivity gap
|
$
|
(1,863,402
|
)
|
|
$
|
(1,775,366
|
)
|
|
$
|
(1,482,452
|
)
|
|
$
|
(565,972
|
)
|
|
$
|
125,363
|
|
|
$
|
1,256,504
|
|
|
|
|
|
||||
Cumulative interest sensitivity gap as a percentage of total assets
|
(28
|
)%
|
|
(26
|
)%
|
|
(22
|
)%
|
|
(8
|
)%
|
|
2
|
%
|
|
19
|
%
|
|
|
|
|
||||||||||
Cumulative interest-earning assets as a percentage of cumulative interest-bearing liabilities
|
53
|
%
|
|
58
|
%
|
|
67
|
%
|
|
88
|
%
|
|
103
|
%
|
|
126
|
%
|
|
|
|
|
(1)
|
Based on contractual maturities, repricing dates and forecasted principal payments assuming normal amortization and, where applicable, prepayments.
|
(2)
|
Assumes 100% of interest-bearing non-maturity deposits are subject to repricing in three months or less.
|
(3)
|
Based on contractual maturity.
|
(1)
|
For purposes of our model, we assume interest rates will not go below zero. This "floor" limits the effect of a potential negative interest rate shock in a low rate environment like the one we are currently experiencing.
|
(2)
|
This percentage change represents the impact to net interest income for a one-year period, assuming there is no change in the structure of the balance sheet.
|
(3)
|
This percentage change represents the impact to the net present value of equity, assuming there is no change in the structure of the balance sheet.
|
|
At December 31, 2017
|
||||||||||
|
Notional amount
|
|
Fair value
|
||||||||
(in thousands)
|
Asset
derivatives
|
|
Liability
derivatives
|
||||||||
Forward sale commitments
|
$
|
1,687,658
|
|
|
$
|
1,311
|
|
|
$
|
(1,445
|
)
|
Interest rate swaptions
|
120,000
|
|
|
—
|
|
|
—
|
|
|||
Interest rate lock commitments
|
472,733
|
|
|
12,950
|
|
|
(25
|
)
|
|||
Interest rate swaps
|
1,869,000
|
|
|
12,172
|
|
|
(23,654
|
)
|
|||
Eurodollar Futures
|
3,287,000
|
|
|
—
|
|
|
(101
|
)
|
|||
|
$
|
7,436,391
|
|
|
$
|
26,433
|
|
|
$
|
(25,225
|
)
|
ITEM 8
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
|
|
At December 31,
|
||||||
(in thousands, except share data)
|
|
2017
|
|
2016
|
||||
|
|
|
|
|
||||
ASSETS
|
|
|
|
|
||||
Cash and cash equivalents (including interest-earning instruments of $30,268 and $34,615)
|
|
$
|
72,718
|
|
|
$
|
53,932
|
|
Investment securities (includes $846,268 and $993,990 carried at fair value)
|
|
904,304
|
|
|
1,043,851
|
|
||
Loans held for sale (includes $577,313 and $656,334 carried at fair value)
|
|
610,902
|
|
|
714,559
|
|
||
Loans held for investment (net of allowance for loan losses of $37,847 and $34,001; includes $5,477 and $17,988 carried at fair value)
|
|
4,506,466
|
|
|
3,819,027
|
|
||
Mortgage servicing rights (includes $258,560 and $226,113 carried at fair value)
|
|
284,653
|
|
|
245,860
|
|
||
Other real estate owned
|
|
664
|
|
|
5,243
|
|
||
Federal Home Loan Bank stock, at cost
|
|
46,639
|
|
|
40,347
|
|
||
Premises and equipment, net
|
|
104,654
|
|
|
77,636
|
|
||
Goodwill
|
|
22,564
|
|
|
22,175
|
|
||
Other assets
|
|
188,477
|
|
|
221,070
|
|
||
Total assets
|
|
$
|
6,742,041
|
|
|
$
|
6,243,700
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
||||
Liabilities:
|
|
|
|
|
||||
Deposits
|
|
$
|
4,760,952
|
|
|
$
|
4,429,701
|
|
Federal Home Loan Bank advances
|
|
979,201
|
|
|
868,379
|
|
||
Accounts payable and other liabilities
|
|
172,234
|
|
|
191,189
|
|
||
Long-term debt
|
|
125,274
|
|
|
125,147
|
|
||
Total liabilities
|
|
6,037,661
|
|
|
5,614,416
|
|
||
Commitments and contingencies (Note 13)
|
|
|
|
|
||||
Shareholders’ equity:
|
|
|
|
|
||||
Preferred stock, no par value, authorized 10,000 shares, issued and outstanding, 0 shares and 0 shares
|
|
—
|
|
|
—
|
|
||
Common stock, no par value, authorized 160,000,000 shares, issued and outstanding, 26,888,288 shares and 26,800,183 shares
|
|
511
|
|
|
511
|
|
||
Additional paid-in capital
|
|
339,009
|
|
|
336,149
|
|
||
Retained earnings
|
|
371,982
|
|
|
303,036
|
|
||
Accumulated other comprehensive loss
|
|
(7,122
|
)
|
|
(10,412
|
)
|
||
Total shareholders' equity
|
|
704,380
|
|
|
629,284
|
|
||
Total liabilities and shareholders' equity
|
|
$
|
6,742,041
|
|
|
$
|
6,243,700
|
|
|
|
Years Ended December 31,
|
||||||||||
(in thousands, except share data)
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
|
||||||
Interest income:
|
|
|
|
|
|
|
||||||
Loans
|
|
$
|
215,363
|
|
|
$
|
190,667
|
|
|
$
|
152,621
|
|
Investment securities
|
|
21,753
|
|
|
18,394
|
|
|
11,590
|
|
|||
Other
|
|
567
|
|
|
476
|
|
|
903
|
|
|||
|
|
237,683
|
|
|
209,537
|
|
|
165,114
|
|
|||
Interest expense:
|
|
|
|
|
|
|
||||||
Deposits
|
|
23,912
|
|
|
19,009
|
|
|
11,801
|
|
|||
Federal Home Loan Bank advances
|
|
12,589
|
|
|
6,030
|
|
|
3,668
|
|
|||
Federal funds purchased and securities sold under agreements to repurchase
|
|
5
|
|
|
4
|
|
|
8
|
|
|||
Long-term debt
|
|
6,067
|
|
|
4,043
|
|
|
1,104
|
|
|||
Other
|
|
672
|
|
|
402
|
|
|
195
|
|
|||
|
|
43,245
|
|
|
29,488
|
|
|
16,776
|
|
|||
Net interest income
|
|
194,438
|
|
|
180,049
|
|
|
148,338
|
|
|||
Provision for credit losses
|
|
750
|
|
|
4,100
|
|
|
6,100
|
|
|||
Net interest income after provision for credit losses
|
|
193,688
|
|
|
175,949
|
|
|
142,238
|
|
|||
Noninterest income:
|
|
|
|
|
|
|
||||||
Net gain on loan origination and sale activities
|
|
255,876
|
|
|
307,313
|
|
|
236,388
|
|
|||
Loan servicing income
|
|
35,384
|
|
|
33,059
|
|
|
24,250
|
|
|||
Income from WMS Series LLC
|
|
598
|
|
|
2,333
|
|
|
1,624
|
|
|||
Depositor and other retail banking fees
|
|
7,221
|
|
|
6,790
|
|
|
5,881
|
|
|||
Insurance agency commissions
|
|
1,904
|
|
|
1,619
|
|
|
1,682
|
|
|||
Gain on sale of investment securities available for sale
|
|
489
|
|
|
2,539
|
|
|
2,406
|
|
|||
Bargain purchase gain
|
|
—
|
|
|
—
|
|
|
7,726
|
|
|||
Other
|
|
10,682
|
|
|
5,497
|
|
|
1,280
|
|
|||
|
|
312,154
|
|
|
359,150
|
|
|
281,237
|
|
|||
Noninterest expense:
|
|
|
|
|
|
|
||||||
Salaries and related costs
|
|
293,870
|
|
|
303,354
|
|
|
240,587
|
|
|||
General and administrative
|
|
65,036
|
|
|
63,206
|
|
|
56,821
|
|
|||
Amortization of core deposit intangibles
|
|
1,710
|
|
|
2,166
|
|
|
1,924
|
|
|||
Legal
|
|
1,410
|
|
|
1,867
|
|
|
2,807
|
|
|||
Consulting
|
|
3,467
|
|
|
4,958
|
|
|
7,215
|
|
|||
Federal Deposit Insurance Corporation assessments
|
|
3,279
|
|
|
3,414
|
|
|
2,573
|
|
|||
Occupancy
|
|
38,268
|
|
|
30,530
|
|
|
24,927
|
|
|||
Information services
|
|
33,143
|
|
|
33,063
|
|
|
29,054
|
|
|||
Net (benefit) cost from operation and sale of other real estate owned
|
|
(530
|
)
|
|
1,764
|
|
|
660
|
|
|||
|
|
439,653
|
|
|
444,322
|
|
|
366,568
|
|
|||
Income before income taxes
|
|
66,189
|
|
|
90,777
|
|
|
56,907
|
|
|||
Income tax (benefit) expense
|
|
(2,757
|
)
|
|
32,626
|
|
|
15,588
|
|
|||
NET INCOME
|
|
$
|
68,946
|
|
|
$
|
58,151
|
|
|
$
|
41,319
|
|
Basic income per share
|
|
$
|
2.57
|
|
|
$
|
2.36
|
|
|
$
|
1.98
|
|
Diluted income per share
|
|
$
|
2.54
|
|
|
$
|
2.34
|
|
|
$
|
1.96
|
|
Basic weighted average number of shares outstanding
|
|
26,864,657
|
|
|
24,615,990
|
|
|
20,818,045
|
|
|||
Diluted weighted average number of shares outstanding
|
|
27,092,019
|
|
|
24,843,683
|
|
|
21,059,201
|
|
|
Years Ended December 31,
|
||||||||||
(in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
||||||
Net income
|
$
|
68,946
|
|
|
$
|
58,151
|
|
|
$
|
41,319
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
||||||
Unrealized gain (loss) on investment securities available for sale:
|
|
|
|
|
|
||||||
Unrealized holding gain (loss) arising during the year, net of tax expense (benefit) of $1,942, $(3,400) and $(713)
|
3,607
|
|
|
(6,313
|
)
|
|
(1,325
|
)
|
|||
Reclassification adjustment for net gains included in net income, net of tax expense (benefit) of $172, $889 and $(264)
|
(317
|
)
|
|
(1,650
|
)
|
|
(2,670
|
)
|
|||
Other comprehensive income (loss)
|
3,290
|
|
|
(7,963
|
)
|
|
(3,995
|
)
|
|||
Comprehensive income
|
$
|
72,236
|
|
|
$
|
50,188
|
|
|
$
|
37,324
|
|
(in thousands, except share data)
|
Number
of shares
|
|
Common
stock
|
|
Additional
paid-in
capital
|
|
Retained
earnings
|
|
Accumulated
other
comprehensive
income (loss)
|
|
Total
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance, December 31, 2014
|
14,856,611
|
|
|
$
|
511
|
|
|
$
|
96,615
|
|
|
$
|
203,566
|
|
|
$
|
1,546
|
|
|
$
|
302,238
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
41,319
|
|
|
—
|
|
|
41,319
|
|
|||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
1,267
|
|
|
—
|
|
|
—
|
|
|
1,267
|
|
|||||
Common stock issued
|
7,219,923
|
|
|
—
|
|
|
124,446
|
|
|
—
|
|
|
—
|
|
|
124,446
|
|
|||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,995
|
)
|
|
(3,995
|
)
|
|||||
Balance, December 31, 2015
|
22,076,534
|
|
|
511
|
|
|
222,328
|
|
|
244,885
|
|
|
(2,449
|
)
|
|
465,275
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
58,151
|
|
|
—
|
|
|
58,151
|
|
|||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
1,788
|
|
|
—
|
|
|
—
|
|
|
1,788
|
|
|||||
Common stock issued
|
4,723,649
|
|
|
—
|
|
|
112,033
|
|
|
—
|
|
|
—
|
|
|
112,033
|
|
|||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,963
|
)
|
|
(7,963
|
)
|
|||||
Balance, December 31, 2016
|
26,800,183
|
|
|
511
|
|
|
336,149
|
|
|
303,036
|
|
|
(10,412
|
)
|
|
629,284
|
|
|||||
Net income
|
|
|
|
—
|
|
|
|
|
|
68,946
|
|
|
|
|
|
68,946
|
|
|||||
Share-based compensation expense
|
|
|
|
—
|
|
|
2,502
|
|
|
—
|
|
|
|
|
|
2,502
|
|
|||||
Common stock issued
|
88,105
|
|
|
—
|
|
|
358
|
|
|
—
|
|
|
|
|
|
358
|
|
|||||
Other comprehensive income
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
3,290
|
|
|
3,290
|
|
|||||
Balance, December 31, 2017
|
26,888,288
|
|
|
$
|
511
|
|
|
$
|
339,009
|
|
|
$
|
371,982
|
|
|
$
|
(7,122
|
)
|
|
$
|
704,380
|
|
|
Years Ended December 31,
|
||||||||||
(in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
||||||
Net income
|
$
|
68,946
|
|
|
$
|
58,151
|
|
|
$
|
41,319
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
|
|
|
|
|
||||||
Depreciation, amortization and accretion
|
22,645
|
|
|
15,667
|
|
|
14,877
|
|
|||
Provision for credit losses
|
750
|
|
|
4,100
|
|
|
6,100
|
|
|||
Net fair value adjustment and gain on sale of loans held for sale
|
(218,331
|
)
|
|
(268,104
|
)
|
|
9,632
|
|
|||
Fair value adjustment of loans held for investment
|
(1,030
|
)
|
|
(354
|
)
|
|
2,000
|
|
|||
Origination of mortgage servicing rights
|
(78,412
|
)
|
|
(90,520
|
)
|
|
(76,417
|
)
|
|||
Change in fair value of mortgage servicing rights
|
36,615
|
|
|
13,280
|
|
|
27,483
|
|
|||
Net gain on sale of investment securities
|
(489
|
)
|
|
(2,539
|
)
|
|
(2,406
|
)
|
|||
Net gain on sale of loans originated as held for investment
|
(4,600
|
)
|
|
(2,607
|
)
|
|
(456
|
)
|
|||
Net fair value adjustment, gain on sale and provision for losses on other real estate owned
|
(383
|
)
|
|
1,767
|
|
|
176
|
|
|||
Loss on disposal of fixed assets
|
215
|
|
|
253
|
|
|
61
|
|
|||
Loss on lease abandonment
|
5,054
|
|
|
—
|
|
|
—
|
|
|||
Net deferred income tax (benefit) expense
|
(2,094
|
)
|
|
31,490
|
|
|
16,389
|
|
|||
Share-based compensation expense
|
2,856
|
|
|
2,062
|
|
|
1,060
|
|
|||
Bargain purchase gain
|
—
|
|
|
—
|
|
|
(7,726
|
)
|
|||
Origination of loans held for sale
|
(7,763,844
|
)
|
|
(9,169,488
|
)
|
|
(7,265,622
|
)
|
|||
Proceeds from sale of loans originated as held for sale
|
8,084,916
|
|
|
9,379,720
|
|
|
7,243,990
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Decrease (increase) in accounts receivable and other assets
|
27,711
|
|
|
(60,946
|
)
|
|
(12,151
|
)
|
|||
(Decrease) increase in accounts payable and other liabilities
|
(19,957
|
)
|
|
43,255
|
|
|
10,002
|
|
|||
Net cash provided by (used in) operating activities
|
160,568
|
|
|
(44,813
|
)
|
|
8,311
|
|
|||
|
|
|
|
|
|
||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||||||
Purchase of investment securities
|
(368,071
|
)
|
|
(743,861
|
)
|
|
(247,713
|
)
|
|||
Proceeds from sale of investment securities
|
397,492
|
|
|
164,429
|
|
|
112,259
|
|
|||
Principal repayments and maturities of investment securities
|
105,801
|
|
|
112,245
|
|
|
36,798
|
|
|||
Proceeds from sale of other real estate owned
|
6,105
|
|
|
5,672
|
|
|
6,110
|
|
|||
Proceeds from sale of loans originated as held for investment
|
324,745
|
|
|
153,518
|
|
|
34,111
|
|
|||
Proceeds from sale of mortgage servicing rights
|
—
|
|
|
—
|
|
|
4,325
|
|
|||
Mortgage servicing rights purchased from others
|
(565
|
)
|
|
—
|
|
|
(9
|
)
|
|||
Capital expenditures related to other real estate owned
|
(57
|
)
|
|
(720
|
)
|
|
—
|
|
|||
Origination of loans held for investment and principal repayments, net
|
(998,638
|
)
|
|
(609,981
|
)
|
|
(476,062
|
)
|
|||
Proceeds from sale of property and equipment
|
—
|
|
|
1,148
|
|
|
—
|
|
|||
Purchase of property and equipment
|
(42,286
|
)
|
|
(24,482
|
)
|
|
(20,560
|
)
|
|||
Net cash acquired from acquisitions
|
19,285
|
|
|
122,760
|
|
|
132,407
|
|
|||
Net cash used in investing activities
|
(556,189
|
)
|
|
(819,272
|
)
|
|
(418,334
|
)
|
|
Years Ended December 31,
|
||||||||||
(in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
||||||
Increase in deposits, net
|
$
|
309,798
|
|
|
$
|
919,497
|
|
|
$
|
111,906
|
|
Proceeds from Federal Home Loan Bank advances
|
10,972,200
|
|
|
14,734,636
|
|
|
10,618,900
|
|
|||
Repayment of Federal Home Loan Bank advances
|
(10,861,200
|
)
|
|
(14,898,636
|
)
|
|
(10,263,900
|
)
|
|||
Proceeds from federal funds purchased and securities sold under agreements to repurchase
|
875,166
|
|
|
64,804
|
|
|
82,204
|
|
|||
Repayment of federal funds purchased and securities sold under agreements to repurchase
|
(875,166
|
)
|
|
(64,804
|
)
|
|
(132,204
|
)
|
|||
Proceeds from Federal Home Loan Bank stock repurchase
|
187,766
|
|
|
284,662
|
|
|
153,657
|
|
|||
Purchase of Federal Home Loan Bank stock
|
(194,058
|
)
|
|
(279,436
|
)
|
|
(158,565
|
)
|
|||
Proceeds from debt issuance, net
|
(65
|
)
|
|
63,184
|
|
|
—
|
|
|||
(Payments) proceeds from equity raise, net
|
(45
|
)
|
|
58,713
|
|
|
—
|
|
|||
Proceeds from stock issuance, net
|
11
|
|
|
2,713
|
|
|
178
|
|
|||
Excess tax benefit related to the exercise of stock options
|
—
|
|
|
—
|
|
|
29
|
|
|||
Net cash provided by financing activities
|
414,407
|
|
|
885,333
|
|
|
412,205
|
|
|||
NET INCREASE IN CASH AND CASH EQUIVALENTS
|
18,786
|
|
|
21,248
|
|
|
2,182
|
|
|||
CASH AND CASH EQUIVALENTS:
|
|
|
|
|
|
||||||
Beginning of year
|
53,932
|
|
|
32,684
|
|
|
30,502
|
|
|||
End of period
|
$
|
72,718
|
|
|
$
|
53,932
|
|
|
$
|
32,684
|
|
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
|
|
|
|
|
|
||||||
Cash paid during the period for:
|
|
|
|
|
|
||||||
Interest paid
|
$
|
42,889
|
|
|
$
|
28,672
|
|
|
$
|
16,647
|
|
Federal and state income taxes (refunded) paid , net
|
(21,885
|
)
|
|
14,441
|
|
|
11,328
|
|
|||
Non-cash activities:
|
|
|
|
|
|
||||||
Loans held for investment foreclosed and transferred to other real estate owned
|
1,125
|
|
|
2,056
|
|
|
4,396
|
|
|||
Loans transferred from held for investment to held for sale
|
419,494
|
|
|
169,745
|
|
|
76,178
|
|
|||
Loans transferred from held for sale to held for investment
|
100,049
|
|
|
12,311
|
|
|
25,668
|
|
|||
Ginnie Mae loans recognized with the right to repurchase, net
|
3,534
|
|
|
6,775
|
|
|
7,857
|
|
|||
Simplicity acquisition:
|
|
|
|
|
|
||||||
Assets acquired, excluding cash acquired
|
—
|
|
|
—
|
|
|
738,279
|
|
|||
Liabilities assumed
|
—
|
|
|
—
|
|
|
718,916
|
|
|||
Bargain purchase gain
|
—
|
|
|
—
|
|
|
7,345
|
|
|||
Common stock issued
|
—
|
|
|
—
|
|
|
124,214
|
|
|||
Orange County Business Bank acquisition:
|
|
|
|
|
|
||||||
Assets acquired, excluding cash acquired
|
—
|
|
|
165,786
|
|
|
—
|
|
|||
Liabilities assumed
|
—
|
|
|
141,267
|
|
|
—
|
|
|||
Goodwill
|
—
|
|
|
8,360
|
|
|
—
|
|
|||
Common stock issued
|
$
|
—
|
|
|
$
|
50,373
|
|
|
$
|
—
|
|
|
|
(in thousands)
|
||
Goodwill balance at December 31, 2015
|
|
$
|
11,521
|
|
Acquisitions
|
|
10,654
|
|
|
Goodwill balance at December 31, 2016
|
|
22,175
|
|
|
Acquisitions
|
|
389
|
|
|
Goodwill balance at December 31, 2017
|
|
$
|
22,564
|
|
(in thousands)
|
|
March 1, 2015
|
||||||
|
|
|
|
|
||||
Fair value consideration paid to Simplicity shareholders:
|
|
|
|
|
||||
Cash paid (79,399 stock options, consideration based on intrinsic value at a calculated price of $17.53)
|
|
|
|
$
|
471
|
|
||
Fair value of common shares issued (7,180,005 shares at $17.30 per share)
|
|
|
|
124,214
|
|
|||
Total purchase price
|
|
|
|
124,685
|
|
|||
Fair value of assets acquired:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
112,667
|
|
|
|
||
Investment securities
|
|
26,845
|
|
|
|
|||
Acquired loans
|
|
664,148
|
|
|
|
|||
Mortgage servicing rights
|
|
980
|
|
|
|
|||
Federal Home Loan Bank stock
|
|
5,520
|
|
|
|
|||
Premises and equipment
|
|
2,966
|
|
|
|
|||
Bank-owned life insurance
|
|
14,501
|
|
|
|
|||
Core deposit intangibles
|
|
7,450
|
|
|
|
|||
Accounts receivable and other assets
|
|
15,869
|
|
|
|
|||
Total assets acquired
|
|
850,946
|
|
|
|
|||
|
|
|
|
|
||||
Fair value of liabilities assumed:
|
|
|
|
|
||||
Deposits
|
|
651,202
|
|
|
|
|||
Federal Home Loan Bank advances
|
|
65,855
|
|
|
|
|||
Accounts payable and accrued expenses
|
|
1,859
|
|
|
|
|||
Total liabilities assumed
|
|
718,916
|
|
|
|
|||
Net assets acquired
|
|
|
|
132,030
|
|
|||
Bargain purchase (gain)
|
|
|
|
|
$
|
(7,345
|
)
|
|
|
Year Ended December 31,
|
||
(in thousands)
|
|
2015
|
||
|
|
|
||
Noninterest expense
|
|
|
||
Salaries and related costs
|
|
$
|
7,669
|
|
General and administrative
|
|
1,256
|
|
|
Legal
|
|
530
|
|
|
Consulting
|
|
5,539
|
|
|
Occupancy
|
|
335
|
|
|
Information services
|
|
481
|
|
|
Total noninterest expense
|
|
$
|
15,810
|
|
|
At December 31, 2017
|
|||||||||||||||||||
HomeStreet Bank
|
Actual
|
|
For Minimum Capital
Adequacy Purposes
|
|
To Be Categorized As
“Well Capitalized” Under
Prompt Corrective
Action Provisions
|
|||||||||||||||
(in thousands)
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Tier 1 leverage capital
(to average assets) |
$
|
649,864
|
|
|
9.67
|
%
|
|
$
|
268,708
|
|
|
4.0
|
%
|
|
$
|
335,885
|
|
|
5.0
|
%
|
Common equity risk-based capital (to risk-weighted assets)
|
649,864
|
|
|
13.22
|
|
|
221,201
|
|
|
4.5
|
|
|
319,512
|
|
|
6.5
|
|
|||
Tier 1 risk-based capital
(to risk-weighted assets) |
649,864
|
|
|
13.22
|
|
|
294,935
|
|
|
6.0
|
|
|
393,246
|
|
|
8.0
|
|
|||
Total risk-based capital
(to risk-weighted assets) |
688,981
|
|
|
14.02
|
|
|
393,246
|
|
|
8.0
|
|
|
491,558
|
|
|
10.0
|
|
|
At December 31, 2017
|
|||||||||||||||||||
HomeStreet, Inc.
|
Actual
|
|
For Minimum Capital
Adequacy Purposes
|
|
To Be Categorized As
“Well Capitalized” Under
Prompt Corrective
Action Provisions
|
|||||||||||||||
(in thousands)
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Tier 1 leverage capital
(to average assets) |
$
|
614,624
|
|
|
9.12
|
%
|
|
$
|
269,534
|
|
|
4.0
|
%
|
|
$
|
336,918
|
|
|
5.0
|
%
|
Common equity risk-based capital (to risk-weighted assets)
|
555,120
|
|
|
9.86
|
|
|
253,293
|
|
|
4.5
|
|
|
365,868
|
|
|
6.5
|
|
|||
Tier 1 risk-based capital
(to risk-weighted assets) |
614,624
|
|
|
10.92
|
|
|
337,724
|
|
|
6.0
|
|
|
450,299
|
|
|
8.0
|
|
|||
Total risk-based capital
(to risk-weighted assets) |
653,741
|
|
|
11.61
|
|
|
450,299
|
|
|
8.0
|
|
|
562,873
|
|
|
10.0
|
|
|
At December 31, 2016
|
|||||||||||||||||||
HomeStreet Bank
|
Actual
|
|
For Minimum Capital
Adequacy Purposes
|
|
To Be Categorized As
“Well Capitalized” Under
Prompt Corrective
Action Provisions
|
|||||||||||||||
(in thousands)
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Tier 1 leverage capital
(to average assets) |
$
|
635,988
|
|
|
10.26
|
%
|
|
$
|
248,055
|
|
|
4.0
|
%
|
|
$
|
310,069
|
|
|
5.0
|
%
|
Common equity risk-based capital (to risk-weighted assets)
|
635,988
|
|
|
13.92
|
|
|
205,615
|
|
|
4.5
|
|
|
297,000
|
|
|
6.5
|
|
|||
Tier 1 risk-based capital
(to risk-weighted assets)
|
635,988
|
|
|
13.92
|
|
|
274,154
|
|
|
6.0
|
|
|
365,538
|
|
|
8.0
|
|
|||
Total risk-based capital
(to risk-weighted assets) |
671,252
|
|
|
14.69
|
|
|
365,538
|
|
|
8.0
|
|
|
456,923
|
|
|
10.0
|
|
|
At December 31, 2016
|
|||||||||||||||||||
HomeStreet, Inc.
|
Actual
|
|
For Minimum Capital
Adequacy Purposes
|
|
To Be Categorized As
“Well Capitalized” Under
Prompt Corrective
Action Provisions
|
|||||||||||||||
(in thousands)
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Tier 1 leverage capital
(to average assets) |
$
|
608,988
|
|
|
9.78
|
%
|
|
$
|
249,121
|
|
|
4.0
|
%
|
|
$
|
311,402
|
|
|
5.0
|
%
|
Common equity risk-based capital (to risk-weighted assets)
|
550,510
|
|
|
10.54
|
|
|
234,965
|
|
|
4.5
|
|
|
339,395
|
|
|
6.5
|
|
|||
Tier 1 risk-based capital
(to risk-weighted assets) |
608,988
|
|
|
11.66
|
|
|
313,287
|
|
|
6.0
|
|
|
417,716
|
|
|
8.0
|
|
|||
Total risk-based capital
(to risk-weighted assets) |
644,252
|
|
|
12.34
|
|
|
417,716
|
|
|
8.0
|
|
|
522,146
|
|
|
10.0
|
|
|
At December 31, 2017
|
||||||||||||||
(in thousands)
|
Amortized
cost
|
|
Gross
unrealized
gains
|
|
Gross
unrealized
losses
|
|
Fair
value
|
||||||||
|
|
|
|
|
|
|
|
||||||||
AVAILABLE FOR SALE
|
|
|
|
|
|
|
|
||||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
||||||||
Residential
|
$
|
133,654
|
|
|
$
|
4
|
|
|
$
|
(3,568
|
)
|
|
$
|
130,090
|
|
Commercial
|
24,024
|
|
|
8
|
|
|
(338
|
)
|
|
23,694
|
|
||||
Municipal bonds
|
389,117
|
|
|
2,978
|
|
|
(3,643
|
)
|
|
388,452
|
|
||||
Collateralized mortgage obligations:
|
|
|
|
|
|
|
|
||||||||
Residential
|
164,502
|
|
|
3
|
|
|
(4,081
|
)
|
|
160,424
|
|
||||
Commercial
|
100,001
|
|
|
9
|
|
|
(1,441
|
)
|
|
98,569
|
|
||||
Corporate debt securities
|
25,146
|
|
|
67
|
|
|
(476
|
)
|
|
24,737
|
|
||||
U.S. Treasury securities
|
10,899
|
|
|
—
|
|
|
(247
|
)
|
|
10,652
|
|
||||
Agency debentures
|
9,861
|
|
|
—
|
|
|
(211
|
)
|
|
9,650
|
|
||||
|
$
|
857,204
|
|
|
$
|
3,069
|
|
|
$
|
(14,005
|
)
|
|
$
|
846,268
|
|
|
|
|
|
|
|
|
|
||||||||
HELD TO MATURITY
|
|
|
|
|
|
|
|
||||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
||||||||
Residential
|
$
|
12,062
|
|
|
$
|
35
|
|
|
$
|
(99
|
)
|
|
$
|
11,998
|
|
Commercial
|
21,015
|
|
|
75
|
|
|
(161
|
)
|
|
20,929
|
|
||||
Collateralized mortgage obligations
|
3,439
|
|
|
—
|
|
|
—
|
|
|
3,439
|
|
||||
Municipal bonds
|
21,423
|
|
|
339
|
|
|
(97
|
)
|
|
21,665
|
|
||||
Corporate debt securities
|
97
|
|
|
—
|
|
|
—
|
|
|
97
|
|
||||
|
$
|
58,036
|
|
|
$
|
449
|
|
|
$
|
(357
|
)
|
|
$
|
58,128
|
|
|
At December 31, 2016
|
||||||||||||||
(in thousands)
|
Amortized
cost |
|
Gross
unrealized gains |
|
Gross
unrealized losses |
|
Fair
value |
||||||||
|
|
|
|
|
|
|
|
||||||||
AVAILABLE FOR SALE
|
|
|
|
|
|
|
|
||||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
||||||||
Residential
|
$
|
181,158
|
|
|
$
|
31
|
|
|
$
|
(4,115
|
)
|
|
$
|
177,074
|
|
Commercial
|
25,896
|
|
|
13
|
|
|
(373
|
)
|
|
25,536
|
|
||||
Municipal bonds
|
473,153
|
|
|
1,333
|
|
|
(6,813
|
)
|
|
467,673
|
|
||||
Collateralized mortgage obligations:
|
|
|
|
|
|
|
|
||||||||
Residential
|
194,982
|
|
|
32
|
|
|
(3,813
|
)
|
|
191,201
|
|
||||
Commercial
|
71,870
|
|
|
29
|
|
|
(1,135
|
)
|
|
70,764
|
|
||||
Corporate debt securities
|
52,045
|
|
|
110
|
|
|
(1,033
|
)
|
|
51,122
|
|
||||
U.S. Treasury securities
|
10,882
|
|
|
—
|
|
|
(262
|
)
|
|
10,620
|
|
||||
|
$
|
1,009,986
|
|
|
$
|
1,548
|
|
|
$
|
(17,544
|
)
|
|
$
|
993,990
|
|
|
|
|
|
|
|
|
|
||||||||
HELD TO MATURITY
|
|
|
|
|
|
|
|
||||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
||||||||
Residential
|
$
|
13,844
|
|
|
$
|
71
|
|
|
$
|
(90
|
)
|
|
$
|
13,825
|
|
Commercial
|
16,303
|
|
|
70
|
|
|
(64
|
)
|
|
16,309
|
|
||||
Municipal bonds
|
19,612
|
|
|
99
|
|
|
(459
|
)
|
|
19,252
|
|
||||
Corporate debt securities
|
102
|
|
|
—
|
|
|
—
|
|
|
102
|
|
||||
|
$
|
49,861
|
|
|
$
|
240
|
|
|
$
|
(613
|
)
|
|
$
|
49,488
|
|
|
At December 31, 2017
|
||||||||||||||||||||||
|
Less than 12 months
|
|
12 months or more
|
|
Total
|
||||||||||||||||||
(in thousands)
|
Gross
unrealized
losses
|
|
Fair
value
|
|
Gross
unrealized
losses
|
|
Fair
value
|
|
Gross
unrealized
losses
|
|
Fair
value
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
AVAILABLE FOR SALE
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential
|
$
|
(182
|
)
|
|
$
|
18,020
|
|
|
$
|
(3,386
|
)
|
|
$
|
110,878
|
|
|
$
|
(3,568
|
)
|
|
$
|
128,898
|
|
Commercial
|
(113
|
)
|
|
15,265
|
|
|
(225
|
)
|
|
6,748
|
|
|
(338
|
)
|
|
22,013
|
|
||||||
Municipal bonds
|
(760
|
)
|
|
105,415
|
|
|
(2,883
|
)
|
|
134,103
|
|
|
(3,643
|
)
|
|
239,518
|
|
||||||
Collateralized mortgage obligations:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential
|
(612
|
)
|
|
53,721
|
|
|
(3,469
|
)
|
|
104,555
|
|
|
(4,081
|
)
|
|
158,276
|
|
||||||
Commercial
|
(538
|
)
|
|
57,236
|
|
|
(903
|
)
|
|
35,225
|
|
|
(1,441
|
)
|
|
92,461
|
|
||||||
Corporate debt securities
|
(15
|
)
|
|
5,272
|
|
|
(461
|
)
|
|
13,365
|
|
|
(476
|
)
|
|
18,637
|
|
||||||
U.S. Treasury securities
|
(3
|
)
|
|
997
|
|
|
(244
|
)
|
|
9,655
|
|
|
(247
|
)
|
|
10,652
|
|
||||||
Agency debentures
|
(211
|
)
|
|
9,650
|
|
|
—
|
|
|
—
|
|
|
(211
|
)
|
|
9,650
|
|
||||||
|
$
|
(2,434
|
)
|
|
$
|
265,576
|
|
|
$
|
(11,571
|
)
|
|
$
|
414,529
|
|
|
$
|
(14,005
|
)
|
|
$
|
680,105
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
HELD TO MATURITY
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential
|
$
|
(13
|
)
|
|
$
|
2,662
|
|
|
$
|
(86
|
)
|
|
$
|
4,452
|
|
|
$
|
(99
|
)
|
|
$
|
7,114
|
|
Commercial
|
(161
|
)
|
|
15,900
|
|
|
—
|
|
|
—
|
|
|
(161
|
)
|
|
15,900
|
|
||||||
Collateralized mortgage obligations
|
—
|
|
|
3,439
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,439
|
|
||||||
Municipal bonds
|
(3
|
)
|
|
2,185
|
|
|
(94
|
)
|
|
9,465
|
|
|
(97
|
)
|
|
11,650
|
|
||||||
|
$
|
(177
|
)
|
|
$
|
24,186
|
|
|
$
|
(180
|
)
|
|
$
|
13,917
|
|
|
$
|
(357
|
)
|
|
$
|
38,103
|
|
|
At December 31, 2016
|
||||||||||||||||||||||
|
Less than 12 months
|
|
12 months or more
|
|
Total
|
||||||||||||||||||
(in thousands)
|
Gross
unrealized losses |
|
Fair
value |
|
Gross
unrealized losses |
|
Fair
value |
|
Gross
unrealized losses |
|
Fair
value |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
AVAILABLE FOR SALE
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential
|
$
|
(3,842
|
)
|
|
$
|
144,240
|
|
|
$
|
(273
|
)
|
|
$
|
9,907
|
|
|
$
|
(4,115
|
)
|
|
$
|
154,147
|
|
Commercial
|
(373
|
)
|
|
23,798
|
|
|
—
|
|
|
—
|
|
|
(373
|
)
|
|
23,798
|
|
||||||
Municipal bonds
|
(6,813
|
)
|
|
283,531
|
|
|
—
|
|
|
—
|
|
|
(6,813
|
)
|
|
283,531
|
|
||||||
Collateralized mortgage obligations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential
|
(3,052
|
)
|
|
175,490
|
|
|
(761
|
)
|
|
11,422
|
|
|
(3,813
|
)
|
|
186,912
|
|
||||||
Commercial
|
(1,005
|
)
|
|
60,926
|
|
|
(130
|
)
|
|
5,349
|
|
|
(1,135
|
)
|
|
66,275
|
|
||||||
Corporate debt securities
|
(472
|
)
|
|
24,447
|
|
|
(561
|
)
|
|
11,677
|
|
|
(1,033
|
)
|
|
36,124
|
|
||||||
U.S. Treasury securities
|
(262
|
)
|
|
10,620
|
|
|
—
|
|
|
—
|
|
|
(262
|
)
|
|
10,620
|
|
||||||
|
$
|
(15,819
|
)
|
|
$
|
723,052
|
|
|
$
|
(1,725
|
)
|
|
$
|
38,355
|
|
|
$
|
(17,544
|
)
|
|
$
|
761,407
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
HELD TO MATURITY
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential
|
$
|
(90
|
)
|
|
$
|
5,481
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(90
|
)
|
|
$
|
5,481
|
|
Commercial
|
(64
|
)
|
|
13,156
|
|
|
—
|
|
|
—
|
|
|
(64
|
)
|
|
13,156
|
|
||||||
Municipal bonds
|
(459
|
)
|
|
11,717
|
|
|
—
|
|
|
—
|
|
|
(459
|
)
|
|
11,717
|
|
||||||
|
$
|
(613
|
)
|
|
$
|
30,354
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(613
|
)
|
|
$
|
30,354
|
|
|
Years Ended December 31,
|
||||||||||
(in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
||||||
Proceeds
|
$
|
397,492
|
|
|
$
|
164,430
|
|
|
$
|
112,259
|
|
Gross gains
|
1,214
|
|
|
2,782
|
|
|
2,571
|
|
|||
Gross losses
|
(725
|
)
|
|
(243
|
)
|
|
(165
|
)
|
(in thousands)
|
At December 31,
2017 |
|
At December 31,
2016 |
||||
|
|
|
|
||||
Federal Home Loan Bank to secure borrowings
|
$
|
425,866
|
|
|
$
|
103,171
|
|
Washington and California State to secure public deposits
|
118,828
|
|
|
30,364
|
|
||
Securities pledged to secure derivatives in a liability position
|
7,308
|
|
|
9,359
|
|
||
Other securities pledged
|
6,089
|
|
|
8,123
|
|
||
Total securities pledged as collateral
|
$
|
558,091
|
|
|
$
|
151,017
|
|
|
At December 31,
|
||||||
(in thousands)
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Consumer loans
|
|
|
|
||||
Single family(1)
|
$
|
1,381,366
|
|
|
$
|
1,083,822
|
|
Home equity and other
|
453,489
|
|
|
359,874
|
|
||
Total consumer loans
|
1,834,855
|
|
|
1,443,696
|
|
||
Commercial real estate loans
|
|
|
|
||||
Non-owner occupied commercial real estate
|
622,782
|
|
|
588,672
|
|
||
Multifamily
|
728,037
|
|
|
674,219
|
|
||
Construction/land development
|
687,631
|
|
|
636,320
|
|
||
Total commercial real estate loans
|
2,038,450
|
|
|
1,899,211
|
|
||
Commercial and industrial loans
|
|
|
|
|
|
||
Owner occupied commercial real estate
|
391,613
|
|
|
282,891
|
|
||
Commercial business
|
264,709
|
|
|
223,653
|
|
||
Total commercial and industrial loans
|
656,322
|
|
|
506,544
|
|
||
Loans held for investment before deferred fees, costs and allowance
|
4,529,627
|
|
|
3,849,451
|
|
||
Net deferred loan fees and costs
|
14,686
|
|
|
3,577
|
|
||
|
4,544,313
|
|
|
3,853,028
|
|
||
Allowance for loan losses
|
(37,847
|
)
|
|
(34,001
|
)
|
||
Total loans held for investment
|
$
|
4,506,466
|
|
|
$
|
3,819,027
|
|
(1)
|
Includes $5.5 million and $18.0 million at December 31, 2017 and December 31, 2016, respectively, of loans where a fair value option election was made at the time of origination and, therefore, are carried at fair value with changes recognized in the consolidated statements of operations.
|
|
Years Ended December 31,
|
||||||
(in thousands)
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Beginning balance, January 1
|
$
|
4,379
|
|
|
$
|
4,511
|
|
Principal repayments and advances, net
|
(2,411
|
)
|
|
(132
|
)
|
||
Ending balance, December 31
|
$
|
1,968
|
|
|
$
|
4,379
|
|
|
|
Years Ended December 31,
|
||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
|
||||||
Allowance for credit losses (roll-forward):
|
|
|
|
|
|
|
||||||
Beginning balance
|
|
$
|
35,264
|
|
|
$
|
30,659
|
|
|
$
|
22,524
|
|
Provision for credit losses
|
|
750
|
|
|
4,100
|
|
|
6,100
|
|
|||
Recoveries, net of charge-offs
|
|
3,102
|
|
|
505
|
|
|
2,035
|
|
|||
Ending balance
|
|
$
|
39,116
|
|
|
$
|
35,264
|
|
|
$
|
30,659
|
|
Components:
|
|
|
|
|
|
|
||||||
Allowance for loan losses
|
|
$
|
37,847
|
|
|
$
|
34,001
|
|
|
$
|
29,278
|
|
Allowance for unfunded commitments
|
|
1,269
|
|
|
1,263
|
|
|
1,381
|
|
|||
Allowance for credit losses
|
|
$
|
39,116
|
|
|
$
|
35,264
|
|
|
$
|
30,659
|
|
|
Year Ended December 31, 2017
|
||||||||||||||||||
(in thousands)
|
Beginning
balance |
|
Charge-offs
|
|
Recoveries
|
|
(Reversal of) Provision
|
|
Ending
balance |
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Consumer loans
|
|
|
|
|
|
|
|
|
|
||||||||||
Single family
|
$
|
8,196
|
|
|
$
|
(2
|
)
|
|
$
|
1,495
|
|
|
$
|
(277
|
)
|
|
$
|
9,412
|
|
Home equity and other
|
6,153
|
|
|
(707
|
)
|
|
818
|
|
|
817
|
|
|
7,081
|
|
|||||
Total consumer loans
|
14,349
|
|
|
(709
|
)
|
|
2,313
|
|
|
540
|
|
|
16,493
|
|
|||||
Commercial real estate loans
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-owner occupied commercial real estate
|
4,481
|
|
|
—
|
|
|
—
|
|
|
274
|
|
|
4,755
|
|
|||||
Multifamily
|
3,086
|
|
|
—
|
|
|
—
|
|
|
809
|
|
|
3,895
|
|
|||||
Construction/land development
|
8,553
|
|
|
—
|
|
|
1,017
|
|
|
(893
|
)
|
|
8,677
|
|
|||||
Total commercial real estate loans
|
16,120
|
|
|
—
|
|
|
1,017
|
|
|
190
|
|
|
17,327
|
|
|||||
Commercial and industrial loans
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Owner occupied commercial real estate
|
2,199
|
|
|
—
|
|
|
—
|
|
|
761
|
|
|
2,960
|
|
|||||
Commercial business
|
2,596
|
|
|
(411
|
)
|
|
892
|
|
|
(741
|
)
|
|
2,336
|
|
|||||
Total commercial and industrial loans
|
4,795
|
|
|
(411
|
)
|
|
892
|
|
|
20
|
|
|
5,296
|
|
|||||
Total allowance for credit losses
|
$
|
35,264
|
|
|
$
|
(1,120
|
)
|
|
$
|
4,222
|
|
|
$
|
750
|
|
|
$
|
39,116
|
|
|
Year Ended December 31, 2016
|
||||||||||||||||||
(in thousands)
|
Beginning
balance |
|
Charge-offs
|
|
Recoveries
|
|
(Reversal of) Provision
|
|
Ending
balance |
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Consumer loans
|
|
|
|
|
|
|
|
|
|
||||||||||
Single family
|
$
|
8,942
|
|
|
$
|
(790
|
)
|
|
$
|
90
|
|
|
$
|
(46
|
)
|
|
$
|
8,196
|
|
Home equity and other
|
4,620
|
|
|
(839
|
)
|
|
920
|
|
|
1,452
|
|
|
6,153
|
|
|||||
Total consumer loans
|
13,562
|
|
|
(1,629
|
)
|
|
1,010
|
|
|
1,406
|
|
|
14,349
|
|
|||||
Commercial real estate loans
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-owner occupied commercial real estate
|
3,594
|
|
|
—
|
|
|
—
|
|
|
887
|
|
|
4,481
|
|
|||||
Multifamily
|
1,194
|
|
|
—
|
|
|
—
|
|
|
1,892
|
|
|
3,086
|
|
|||||
Construction/land development
|
9,271
|
|
|
(42
|
)
|
|
1,143
|
|
|
(1,819
|
)
|
|
8,553
|
|
|||||
Total commercial real estate loans
|
14,059
|
|
|
(42
|
)
|
|
1,143
|
|
|
960
|
|
|
16,120
|
|
|||||
Commercial and industrial loans
|
|
|
|
|
|
|
|
|
|
||||||||||
Owner occupied commercial real estate
|
1,253
|
|
|
—
|
|
|
—
|
|
|
946
|
|
|
2,199
|
|
|||||
Commercial business
|
1,785
|
|
|
(27
|
)
|
|
50
|
|
|
788
|
|
|
2,596
|
|
|||||
Total commercial and industrial loans
|
3,038
|
|
|
(27
|
)
|
|
50
|
|
|
1,734
|
|
|
4,795
|
|
|||||
Total allowance for credit losses
|
$
|
30,659
|
|
|
$
|
(1,698
|
)
|
|
$
|
2,203
|
|
|
$
|
4,100
|
|
|
$
|
35,264
|
|
|
At December 31, 2017
|
|
||||||||||||||||||||||
(in thousands)
|
Allowance:
collectively
evaluated for
impairment
|
|
Allowance:
individually
evaluated for
impairment
|
|
Total
|
|
Loans:
collectively
evaluated for
impairment
|
|
Loans:
individually
evaluated for
impairment
|
|
Total
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Consumer loans
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Single family
|
$
|
9,188
|
|
|
$
|
224
|
|
|
$
|
9,412
|
|
|
$
|
1,300,939
|
|
|
$
|
74,967
|
|
|
$
|
1,375,906
|
|
|
Home equity and other
|
7,036
|
|
|
45
|
|
|
7,081
|
|
|
452,182
|
|
|
1,290
|
|
|
453,472
|
|
|
||||||
Total consumer loans
|
16,224
|
|
|
269
|
|
|
16,493
|
|
|
1,753,121
|
|
|
76,257
|
|
|
1,829,378
|
|
|
||||||
Commercial real estate loans
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Non-owner occupied commercial real estate
|
4,755
|
|
|
—
|
|
|
4,755
|
|
|
622,782
|
|
|
—
|
|
|
622,782
|
|
|
||||||
Multifamily
|
3,895
|
|
|
—
|
|
|
3,895
|
|
|
727,228
|
|
|
809
|
|
|
728,037
|
|
|
||||||
Construction/land development
|
8,677
|
|
|
—
|
|
|
8,677
|
|
|
687,177
|
|
|
454
|
|
|
687,631
|
|
|
||||||
Total commercial real estate loans
|
17,327
|
|
|
—
|
|
|
17,327
|
|
|
2,037,187
|
|
|
1,263
|
|
|
2,038,450
|
|
|
||||||
Commercial and industrial loans
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Owner occupied commercial real estate
|
2,960
|
|
|
—
|
|
|
2,960
|
|
|
388,624
|
|
|
2,989
|
|
|
391,613
|
|
|
||||||
Commercial business
|
2,316
|
|
|
20
|
|
|
2,336
|
|
|
261,603
|
|
|
3,106
|
|
|
264,709
|
|
|
||||||
Total commercial and industrial loans
|
5,276
|
|
|
20
|
|
|
5,296
|
|
|
650,227
|
|
|
6,095
|
|
|
656,322
|
|
|
||||||
Total loans evaluated for impairment
|
38,827
|
|
|
289
|
|
|
39,116
|
|
|
4,440,535
|
|
|
83,615
|
|
|
4,524,150
|
|
|
||||||
Loans held for investment carried at fair value
|
|
|
|
|
|
|
5,246
|
|
|
231
|
|
|
5,477
|
|
(1)
|
|||||||||
Total loans held for investment
|
$
|
38,827
|
|
|
$
|
289
|
|
|
$
|
39,116
|
|
|
$
|
4,445,781
|
|
|
$
|
83,846
|
|
|
$
|
4,529,627
|
|
|
|
At December 31, 2016
|
|
||||||||||||||||||||||
(in thousands)
|
Allowance:
collectively
evaluated for
impairment
|
|
Allowance:
individually
evaluated for
impairment
|
|
Total
|
|
Loans:
collectively
evaluated for
impairment
|
|
Loans:
individually
evaluated for
impairment
|
|
Total
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Consumer loans
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Single family
|
$
|
7,871
|
|
|
$
|
325
|
|
|
$
|
8,196
|
|
|
$
|
985,219
|
|
|
$
|
80,676
|
|
|
$
|
1,065,895
|
|
|
Home equity and other
|
6,104
|
|
|
49
|
|
|
6,153
|
|
|
358,350
|
|
|
1,463
|
|
|
359,813
|
|
|
||||||
Total consumer loans
|
13,975
|
|
|
374
|
|
|
14,349
|
|
|
1,343,569
|
|
|
82,139
|
|
|
1,425,708
|
|
|
||||||
Commercial real estate loans
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Non-owner occupied commercial real estate
|
4,481
|
|
|
—
|
|
|
4,481
|
|
|
587,801
|
|
|
871
|
|
|
588,672
|
|
|
||||||
Multifamily
|
3,086
|
|
|
—
|
|
|
3,086
|
|
|
673,374
|
|
|
845
|
|
|
674,219
|
|
|
||||||
Construction/land development
|
8,553
|
|
|
—
|
|
|
8,553
|
|
|
634,427
|
|
|
1,893
|
|
|
636,320
|
|
|
||||||
Total commercial real estate loans
|
16,120
|
|
|
—
|
|
|
16,120
|
|
|
1,895,602
|
|
|
3,609
|
|
|
1,899,211
|
|
|
||||||
Commercial and industrial loans
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Owner occupied commercial real estate
|
2,199
|
|
|
—
|
|
|
2,199
|
|
|
281,424
|
|
|
1,467
|
|
|
282,891
|
|
|
||||||
Commercial business
|
2,591
|
|
|
5
|
|
|
2,596
|
|
|
220,360
|
|
|
3,293
|
|
|
223,653
|
|
|
||||||
Total commercial and industrial loans
|
4,790
|
|
|
5
|
|
|
4,795
|
|
|
501,784
|
|
|
4,760
|
|
|
506,544
|
|
|
||||||
Total loans evaluated for impairment
|
34,885
|
|
|
379
|
|
|
35,264
|
|
|
3,740,955
|
|
|
90,508
|
|
|
3,831,463
|
|
|
||||||
Loans held for investment carried at fair value
|
|
|
|
|
|
|
|
|
|
|
17,988
|
|
(1)
|
|||||||||||
Total loans held for investment
|
$
|
34,885
|
|
|
$
|
379
|
|
|
$
|
35,264
|
|
|
$
|
3,740,955
|
|
|
$
|
90,508
|
|
|
$
|
3,849,451
|
|
|
(1)
|
Comprised of single family loans where a fair value option election was made at the time of origination and, therefore, are carried at fair value with changes recognized in the consolidated statements of operations.
|
|
At December 31, 2017
|
||||||||||
(in thousands)
|
Recorded
investment (1)
|
|
Unpaid principal
balance (2)
|
|
Related
allowance
|
||||||
|
|
|
|
|
|
||||||
With no related allowance recorded:
|
|
|
|
|
|
||||||
Consumer loans
|
|
|
|
|
|
||||||
Single family
|
$
|
71,264
|
|
(4)
|
$
|
72,424
|
|
|
$
|
—
|
|
Home equity and other
|
782
|
|
|
807
|
|
|
—
|
|
|||
Total consumer loans
|
72,046
|
|
|
73,231
|
|
|
—
|
|
|||
Commercial real estate loans
|
|
|
|
|
|
||||||
Multifamily
|
809
|
|
|
837
|
|
|
—
|
|
|||
Construction/land development
|
454
|
|
|
454
|
|
|
—
|
|
|||
Total commercial real estate loans
|
1,263
|
|
|
1,291
|
|
|
—
|
|
|||
Commercial and industrial loans
|
|
|
|
|
|
||||||
Owner occupied commercial real estate
|
2,989
|
|
|
3,288
|
|
|
—
|
|
|||
Commercial business
|
2,398
|
|
|
3,094
|
|
|
—
|
|
|||
Total commercial and industrial loans
|
5,387
|
|
|
6,382
|
|
|
—
|
|
|||
|
$
|
78,696
|
|
|
$
|
80,904
|
|
|
$
|
—
|
|
With an allowance recorded:
|
|
|
|
|
|
||||||
Consumer loans
|
|
|
|
|
|
||||||
Single family
|
$
|
3,934
|
|
|
$
|
4,025
|
|
|
$
|
224
|
|
Home equity and other
|
508
|
|
|
508
|
|
|
45
|
|
|||
Total consumer loans
|
4,442
|
|
|
4,533
|
|
|
269
|
|
|||
Commercial and industrial loans
|
|
|
|
|
|
||||||
Commercial business
|
708
|
|
|
755
|
|
|
20
|
|
|||
Total commercial and industrial loans
|
708
|
|
|
755
|
|
|
20
|
|
|||
|
$
|
5,150
|
|
|
$
|
5,288
|
|
|
$
|
289
|
|
Total:
|
|
|
|
|
|
||||||
Consumer loans
|
|
|
|
|
|
||||||
Single family(3)
|
$
|
75,198
|
|
|
$
|
76,449
|
|
|
$
|
224
|
|
Home equity and other
|
1,290
|
|
|
1,315
|
|
|
45
|
|
|||
Total consumer loans
|
76,488
|
|
|
77,764
|
|
|
269
|
|
|||
Commercial real estate loans
|
|
|
|
|
|
||||||
Multifamily
|
809
|
|
|
837
|
|
|
—
|
|
|||
Construction/land development
|
454
|
|
|
454
|
|
|
—
|
|
|||
Total commercial real estate loans
|
1,263
|
|
|
1,291
|
|
|
—
|
|
|||
Commercial and industrial loans
|
|
|
|
|
|
||||||
Owner occupied commercial real estate
|
2,989
|
|
|
3,288
|
|
|
—
|
|
|||
Commercial business
|
3,106
|
|
|
3,849
|
|
|
20
|
|
|||
Total commercial and industrial loans
|
6,095
|
|
|
7,137
|
|
|
20
|
|
|||
Total impaired loans
|
$
|
83,846
|
|
|
$
|
86,192
|
|
|
$
|
289
|
|
(1)
|
Includes partial charge-offs and nonaccrual interest paid and purchase discounts and premiums.
|
(2)
|
Unpaid principal balance does not include partial charge-offs, purchase discounts and premiums or nonaccrual interest paid. Related allowance is calculated on net book balances not unpaid principal balances.
|
(3)
|
Includes $69.6 million in single family performing TDRs.
|
(4)
|
Includes $231 thousand of fair value option loans.
|
|
At December 31, 2016
|
||||||||||
(in thousands)
|
Recorded
investment (1)
|
|
Unpaid
principal
balance (2)
|
|
Related
allowance
|
||||||
|
|
|
|
|
|
||||||
With no related allowance recorded:
|
|
|
|
|
|
||||||
Consumer loans
|
|
|
|
|
|
||||||
Single family
|
$
|
77,756
|
|
|
$
|
80,573
|
|
|
$
|
—
|
|
Home equity and other
|
946
|
|
|
977
|
|
|
—
|
|
|||
Total consumer loans
|
78,702
|
|
|
81,550
|
|
|
—
|
|
|||
Commercial real estate loans
|
|
|
|
|
|
||||||
Non-owner occupied commercial real estate
|
871
|
|
|
898
|
|
|
—
|
|
|||
Multifamily
|
845
|
|
|
851
|
|
|
—
|
|
|||
Construction/land development
|
1,893
|
|
|
2,819
|
|
|
—
|
|
|||
Total commercial real estate loans
|
3,609
|
|
|
4,568
|
|
|
—
|
|
|||
Commercial and industrial loans
|
|
|
|
|
|
||||||
Owner occupied commercial real estate
|
1,467
|
|
|
1,948
|
|
|
—
|
|
|||
Commercial business
|
2,945
|
|
|
4,365
|
|
|
—
|
|
|||
Total commercial and industrial loans
|
4,412
|
|
|
6,313
|
|
|
—
|
|
|||
|
$
|
86,723
|
|
|
$
|
92,431
|
|
|
$
|
—
|
|
With an allowance recorded:
|
|
|
|
|
|
||||||
Consumer loans
|
|
|
|
|
|
||||||
Single family
|
$
|
2,920
|
|
|
$
|
3,011
|
|
|
$
|
325
|
|
Home equity and other
|
517
|
|
|
517
|
|
|
49
|
|
|||
Total consumer loans
|
3,437
|
|
|
3,528
|
|
|
374
|
|
|||
Commercial and industrial loans
|
|
|
|
|
|
||||||
Commercial business
|
348
|
|
|
347
|
|
|
5
|
|
|||
Total commercial and industrial loans
|
348
|
|
|
347
|
|
|
5
|
|
|||
|
$
|
3,785
|
|
|
$
|
3,875
|
|
|
$
|
379
|
|
Total:
|
|
|
|
|
|
||||||
Consumer loans
|
|
|
|
|
|
||||||
Single family(3)
|
$
|
80,676
|
|
|
$
|
83,584
|
|
|
$
|
325
|
|
Home equity and other
|
1,463
|
|
|
1,494
|
|
|
49
|
|
|||
Total consumer loans
|
82,139
|
|
|
85,078
|
|
|
374
|
|
|||
Commercial real estate loans
|
|
|
|
|
|
||||||
Non-owner occupied commercial real estate
|
871
|
|
|
898
|
|
|
—
|
|
|||
Multifamily
|
845
|
|
|
851
|
|
|
—
|
|
|||
Construction/land development
|
1,893
|
|
|
2,819
|
|
|
—
|
|
|||
Total commercial real estate loans
|
3,609
|
|
|
4,568
|
|
|
—
|
|
|||
Commercial and industrial loans
|
|
|
|
|
|
||||||
Owner occupied commercial real estate
|
1,467
|
|
|
1,948
|
|
|
—
|
|
|||
Commercial business
|
3,293
|
|
|
4,712
|
|
|
5
|
|
|||
Total commercial and industrial loans
|
4,760
|
|
|
6,660
|
|
|
5
|
|
|||
Total impaired loans
|
$
|
90,508
|
|
|
$
|
96,306
|
|
|
$
|
379
|
|
(1)
|
Includes partial charge-offs and nonaccrual interest paid and purchase discounts and premiums.
|
(2)
|
Unpaid principal balance does not include partial charge-offs, purchase discounts and premiums or nonaccrual interest paid. Related allowance is calculated on net book balances not unpaid principal balances.
|
(3)
|
Includes $73.1 million in single family performing TDRs.
|
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2016
|
|
Year Ended December 31, 2015
|
||||||||||||||||||
(in thousands)
|
Average Recorded Investment
|
|
Interest Income Recognized
|
|
Average Recorded Investment
|
|
Interest Income Recognized
|
|
Average Recorded Investment
|
|
Interest Income Recognized
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Consumer loans
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Single family
|
$
|
80,519
|
|
|
$
|
2,963
|
|
|
$
|
82,745
|
|
|
$
|
2,873
|
|
|
$
|
78,824
|
|
|
$
|
2,670
|
|
Home equity and other
|
1,432
|
|
|
80
|
|
|
1,408
|
|
|
68
|
|
|
1,922
|
|
|
83
|
|
||||||
Total consumer loans
|
81,951
|
|
|
3,043
|
|
|
84,153
|
|
|
2,941
|
|
|
80,746
|
|
|
2,753
|
|
||||||
Commercial real estate loans
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Non-owner occupied commercial real estate
|
686
|
|
|
—
|
|
|
435
|
|
|
—
|
|
|
10,862
|
|
|
375
|
|
||||||
Multifamily
|
824
|
|
|
25
|
|
|
1,299
|
|
|
47
|
|
|
4,035
|
|
|
111
|
|
||||||
Construction/land development
|
917
|
|
|
73
|
|
|
2,286
|
|
|
87
|
|
|
4,535
|
|
|
207
|
|
||||||
Total commercial real estate loans
|
2,427
|
|
|
98
|
|
|
4,020
|
|
|
134
|
|
|
19,432
|
|
|
693
|
|
||||||
Commercial and industrial loans
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Owner occupied commercial real estate
|
2,922
|
|
|
170
|
|
|
2,648
|
|
|
22
|
|
|
3,554
|
|
|
69
|
|
||||||
Commercial business
|
2,533
|
|
|
144
|
|
|
3,591
|
|
|
83
|
|
|
4,431
|
|
|
163
|
|
||||||
Total commercial and industrial loans
|
5,455
|
|
|
314
|
|
|
6,239
|
|
|
105
|
|
|
7,985
|
|
|
232
|
|
||||||
|
$
|
89,833
|
|
|
$
|
3,455
|
|
|
$
|
94,412
|
|
|
$
|
3,180
|
|
|
$
|
108,163
|
|
|
$
|
3,678
|
|
•
|
The borrower may be experiencing declining operating trends, strained cash flows or less-than anticipated performance. Cash flow should still be adequate to cover debt service, and the negative trends should be identified as being of a short-term or temporary nature.
|
•
|
The borrower may have experienced a minor, unexpected covenant violation.
|
•
|
Companies who may be experiencing tight working capital or have a cash cushion deficiency.
|
•
|
A loan may also be a watch if financial information is late, there is a documentation deficiency, the borrower has experienced unexpected management turnover, or if they face industry issues that, when combined with performance factors create uncertainty in their future ability to perform.
|
•
|
Delinquent payments, increasing and material overdraft activity, request for bulge and/or out- of-formula advances may be an indicator of inadequate working capital and may suggest a lower rating.
|
•
|
Failure of the intended repayment source to materialize as expected, or renewal of a loan (other than cash/marketable security secured or lines of credit) without reduction are possible indicators of a watch or worse risk rating.
|
•
|
Performance is poor or significantly less than expected. There may be a temporary debt-servicing deficiency or inadequate working capital as evidenced by a cash cushion deficiency, but not to the extent that repayment is compromised. Material violation of financial covenants is common.
|
•
|
Loans with unresolved material issues that significantly cloud the debt service outlook, even though a debt servicing deficiency does not currently exist.
|
•
|
Modest underperformance or deviation from plan for real estate loans where absorption of rental/sales units is necessary to properly service the debt as structured. Depth of support for interest carry provided by owner/guarantors may mitigate and provide for improved rating.
|
•
|
This rating may be assigned when a loan officer is unable to supervise the credit properly, an inadequate loan agreement, an inability to control collateral, failure to obtain proper documentation, or any other deviation from prudent lending practices.
|
•
|
Unlike a substandard credit, there should be a reasonable expectation that these temporary issues will be corrected within the normal course of business, rather than liquidation of assets, and in a reasonable period of time.
|
•
|
Cash flow deficiencies or trends are of a magnitude to jeopardize current and future payments with no immediate relief. A loss is not presently expected, however the outlook is sufficiently uncertain to preclude ruling out the possibility.
|
•
|
The borrower has been unable to adjust to prolonged and unfavorable industry or economic trends.
|
•
|
Material underperformance or deviation from plan for real estate loans where absorption of rental/sales units is necessary to properly service the debt and risk is not mitigated by willingness and capacity of owner/guarantor to support interest payments.
|
•
|
Management character or honesty has become suspect. This includes instances where the borrower has become uncooperative.
|
•
|
Due to unprofitable or unsuccessful business operations, some form of restructuring of the business, including liquidation of assets, has become the primary source of loan repayment. Cash flow has deteriorated, or been diverted, to the point that sale of collateral is now the Company’s primary source of repayment (unless this was the original source of repayment). If the collateral is under the Company’s control and is cash or other liquid, highly marketable securities and properly margined, then a more appropriate rating might be special mention or watch.
|
•
|
The borrower is involved in bankruptcy proceedings where collateral liquidation values are expected to fully protect the Company against loss.
|
•
|
There is material, uncorrectable faulty documentation or materially suspect financial information.
|
|
At December 31, 2017
|
||||||||||||||||||
(in thousands)
|
Pass
|
|
Watch
|
|
Special mention
|
|
Substandard
|
|
Total
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Consumer loans
|
|
|
|
|
|
|
|
|
|
||||||||||
Single family
|
$
|
1,355,965
|
|
(1)
|
$
|
2,982
|
|
|
$
|
11,328
|
|
|
$
|
11,091
|
|
|
$
|
1,381,366
|
|
Home equity and other
|
451,194
|
|
|
143
|
|
|
751
|
|
|
1,401
|
|
|
453,489
|
|
|||||
|
1,807,159
|
|
|
3,125
|
|
|
12,079
|
|
|
12,492
|
|
|
1,834,855
|
|
|||||
Commercial real estate loans
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-owner occupied commercial real estate
|
613,181
|
|
|
8,801
|
|
|
—
|
|
|
800
|
|
|
622,782
|
|
|||||
Multifamily
|
693,190
|
|
|
34,038
|
|
|
507
|
|
|
302
|
|
|
728,037
|
|
|||||
Construction/land development
|
664,025
|
|
|
22,062
|
|
|
1,466
|
|
|
78
|
|
|
687,631
|
|
|||||
|
1,970,396
|
|
|
64,901
|
|
|
1,973
|
|
|
1,180
|
|
|
2,038,450
|
|
|||||
Commercial and industrial loans
|
|
|
|
|
|
|
|
|
|
||||||||||
Owner occupied commercial real estate
|
361,429
|
|
|
20,949
|
|
|
6,399
|
|
|
2,836
|
|
|
391,613
|
|
|||||
Commercial business
|
220,461
|
|
|
39,588
|
|
|
1,959
|
|
|
2,701
|
|
|
264,709
|
|
|||||
|
581,890
|
|
|
60,537
|
|
|
8,358
|
|
|
5,537
|
|
|
656,322
|
|
|||||
|
$
|
4,359,445
|
|
|
$
|
128,563
|
|
|
$
|
22,410
|
|
|
$
|
19,209
|
|
|
$
|
4,529,627
|
|
|
At December 31, 2016
|
||||||||||||||||||
(in thousands)
|
Pass
|
|
Watch
|
|
Special mention
|
|
Substandard
|
|
Total
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Consumer loans
|
|
|
|
|
|
|
|
|
|
||||||||||
Single family
|
$
|
1,051,463
|
|
(1)
|
$
|
4,348
|
|
|
$
|
15,172
|
|
|
$
|
12,839
|
|
|
$
|
1,083,822
|
|
Home equity and other
|
357,191
|
|
|
597
|
|
|
514
|
|
|
1,572
|
|
|
359,874
|
|
|||||
|
1,408,654
|
|
|
4,945
|
|
|
15,686
|
|
|
14,411
|
|
|
1,443,696
|
|
|||||
Commercial real estate loans
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-owner occupied commercial real estate
|
562,950
|
|
|
23,741
|
|
|
1,110
|
|
|
871
|
|
|
588,672
|
|
|||||
Multifamily
|
660,234
|
|
|
13,140
|
|
|
508
|
|
|
337
|
|
|
674,219
|
|
|||||
Construction/land development
|
615,675
|
|
|
16,074
|
|
|
3,083
|
|
|
1,488
|
|
|
636,320
|
|
|||||
|
1,838,859
|
|
|
52,955
|
|
|
4,701
|
|
|
2,696
|
|
|
1,899,211
|
|
|||||
Commercial and industrial loans
|
|
|
|
|
|
|
|
|
|
||||||||||
Owner occupied commercial real estate
|
247,046
|
|
|
28,778
|
|
|
6,055
|
|
|
1,012
|
|
|
282,891
|
|
|||||
Commercial business
|
171,883
|
|
|
42,767
|
|
|
3,385
|
|
|
5,618
|
|
|
223,653
|
|
|||||
|
418,929
|
|
|
71,545
|
|
|
9,440
|
|
|
6,630
|
|
|
506,544
|
|
|||||
|
$
|
3,666,442
|
|
|
$
|
129,445
|
|
|
$
|
29,827
|
|
|
$
|
23,737
|
|
|
$
|
3,849,451
|
|
(1)
|
Includes $5.5 million and $18.0 million of loans at December 31, 2017 and 2016, respectively, where a fair value option election was made at the time of origination and, therefore, are carried at fair value with changes recognized in the consolidated statements of operations.
|
|
At December 31, 2017
|
|
||||||||||||||||||||||||||
(in thousands)
|
30-59 days
past due
|
|
60-89 days
past due
|
|
90 days or
more
past due
|
|
Total past
due
|
|
Current
|
|
Total
loans
|
|
90 days or
more past
due and
accruing
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Consumer loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Single family
|
$
|
10,493
|
|
|
$
|
4,437
|
|
|
$
|
48,262
|
|
|
$
|
63,192
|
|
|
$
|
1,318,174
|
|
(1)
|
$
|
1,381,366
|
|
|
$
|
37,171
|
|
(2)
|
Home equity and other
|
750
|
|
|
20
|
|
|
1,404
|
|
|
2,174
|
|
|
451,315
|
|
|
453,489
|
|
|
—
|
|
|
|||||||
|
11,243
|
|
|
4,457
|
|
|
49,666
|
|
|
65,366
|
|
|
1,769,489
|
|
|
1,834,855
|
|
|
37,171
|
|
|
|||||||
Commercial real estate loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Non-owner occupied commercial real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
622,782
|
|
|
622,782
|
|
|
—
|
|
|
|||||||
Multifamily
|
—
|
|
|
—
|
|
|
302
|
|
|
302
|
|
|
727,735
|
|
|
728,037
|
|
|
—
|
|
|
|||||||
Construction/land development
|
641
|
|
|
—
|
|
|
78
|
|
|
719
|
|
|
686,912
|
|
|
687,631
|
|
|
—
|
|
|
|||||||
|
641
|
|
|
—
|
|
|
380
|
|
|
1,021
|
|
|
2,037,429
|
|
|
2,038,450
|
|
|
—
|
|
|
|||||||
Commercial and industrial loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Owner occupied commercial real estate
|
—
|
|
|
—
|
|
|
640
|
|
|
640
|
|
|
390,973
|
|
|
391,613
|
|
|
—
|
|
|
|||||||
Commercial business
|
377
|
|
|
—
|
|
|
1,526
|
|
|
1,903
|
|
|
262,806
|
|
|
264,709
|
|
|
—
|
|
|
|||||||
|
377
|
|
|
—
|
|
|
2,166
|
|
|
2,543
|
|
|
653,779
|
|
|
656,322
|
|
|
—
|
|
|
|||||||
|
$
|
12,261
|
|
|
$
|
4,457
|
|
|
$
|
52,212
|
|
|
$
|
68,930
|
|
|
$
|
4,460,697
|
|
|
$
|
4,529,627
|
|
|
$
|
37,171
|
|
|
|
At December 31, 2016
|
|
||||||||||||||||||||||||||
(in thousands)
|
30-59 days
past due |
|
60-89 days
past due |
|
90 days or
more past due |
|
Total past
due |
|
Current
|
|
Total
loans |
|
90 days or
more past due and accruing |
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Consumer loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Single family
|
$
|
4,310
|
|
|
$
|
5,459
|
|
|
$
|
53,563
|
|
|
$
|
63,332
|
|
|
$
|
1,020,490
|
|
(1)
|
$
|
1,083,822
|
|
|
$
|
40,846
|
|
(2)
|
Home equity and other
|
251
|
|
|
442
|
|
|
1,571
|
|
|
2,264
|
|
|
357,610
|
|
|
359,874
|
|
|
—
|
|
|
|||||||
|
4,561
|
|
|
5,901
|
|
|
55,134
|
|
|
65,596
|
|
|
1,378,100
|
|
|
1,443,696
|
|
|
40,846
|
|
|
|||||||
Commercial real estate loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Non-owner occupied commercial real estate
|
23
|
|
|
—
|
|
|
871
|
|
|
894
|
|
|
587,778
|
|
|
588,672
|
|
|
—
|
|
|
|||||||
Multifamily
|
—
|
|
|
—
|
|
|
337
|
|
|
337
|
|
|
673,882
|
|
|
674,219
|
|
|
—
|
|
|
|||||||
Construction/land development
|
—
|
|
|
—
|
|
|
1,376
|
|
|
1,376
|
|
|
634,944
|
|
|
636,320
|
|
|
—
|
|
|
|||||||
|
23
|
|
|
—
|
|
|
2,584
|
|
|
2,607
|
|
|
1,896,604
|
|
|
1,899,211
|
|
|
—
|
|
|
|||||||
Commercial and industrial loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Owner occupied commercial real estate
|
48
|
|
|
205
|
|
|
1,256
|
|
|
1,509
|
|
|
281,382
|
|
|
282,891
|
|
|
—
|
|
|
|||||||
Commercial business
|
202
|
|
|
—
|
|
|
2,414
|
|
|
2,616
|
|
|
221,037
|
|
|
223,653
|
|
|
—
|
|
|
|||||||
|
250
|
|
|
205
|
|
|
3,670
|
|
|
4,125
|
|
|
502,419
|
|
|
506,544
|
|
|
—
|
|
|
|||||||
|
$
|
4,834
|
|
|
$
|
6,106
|
|
|
$
|
61,388
|
|
|
$
|
72,328
|
|
|
$
|
3,777,123
|
|
|
$
|
3,849,451
|
|
|
$
|
40,846
|
|
|
(1)
|
Includes $5.5 million and $18.0 million of loans at December 31, 2017 and 2016 respectively, where a fair value option election was made at the time of origination and, therefore, are carried at fair value with changes recognized in the consolidated statements of operations.
|
(2)
|
FHA-insured and VA-guaranteed single family loans that are 90 days or more past due are maintained on accrual status if they are determined to have little to no risk of loss.
|
|
At December 31, 2017
|
||||||||||
(in thousands)
|
Accrual
|
|
Nonaccrual
|
|
Total
|
||||||
|
|
|
|
|
|
||||||
Consumer loans
|
|
|
|
|
|
||||||
Single family
|
$
|
1,370,275
|
|
(1)
|
$
|
11,091
|
|
|
$
|
1,381,366
|
|
Home equity and other
|
452,085
|
|
|
1,404
|
|
|
453,489
|
|
|||
|
1,822,360
|
|
|
12,495
|
|
|
1,834,855
|
|
|||
Commercial real estate loans
|
|
|
|
|
|
||||||
Non-owner occupied commercial real estate
|
622,782
|
|
|
—
|
|
|
622,782
|
|
|||
Multifamily
|
727,735
|
|
|
302
|
|
|
728,037
|
|
|||
Construction/land development
|
687,553
|
|
|
78
|
|
|
687,631
|
|
|||
|
2,038,070
|
|
|
380
|
|
|
2,038,450
|
|
|||
Commercial and industrial loans
|
|
|
|
|
|
||||||
Owner occupied commercial real estate
|
390,973
|
|
|
640
|
|
|
391,613
|
|
|||
Commercial business
|
263,183
|
|
|
1,526
|
|
|
264,709
|
|
|||
|
654,156
|
|
|
2,166
|
|
|
656,322
|
|
|||
|
$
|
4,514,586
|
|
|
$
|
15,041
|
|
|
$
|
4,529,627
|
|
|
At December 31, 2016
|
||||||||||
(in thousands)
|
Accrual
|
|
Nonaccrual
|
|
Total
|
||||||
|
|
|
|
|
|
||||||
Consumer loans
|
|
|
|
|
|
||||||
Single family
|
$
|
1,071,105
|
|
(1)
|
$
|
12,717
|
|
|
$
|
1,083,822
|
|
Home equity and other
|
358,303
|
|
|
1,571
|
|
|
359,874
|
|
|||
|
1,429,408
|
|
|
14,288
|
|
|
1,443,696
|
|
|||
Commercial real estate loans
|
|
|
|
|
|
||||||
Non-owner occupied commercial real estate
|
587,801
|
|
|
871
|
|
|
588,672
|
|
|||
Multifamily
|
673,882
|
|
|
337
|
|
|
674,219
|
|
|||
Construction/land development
|
634,944
|
|
|
1,376
|
|
|
636,320
|
|
|||
|
1,896,627
|
|
|
2,584
|
|
|
1,899,211
|
|
|||
Commercial and industrial loans
|
|
|
|
|
|
||||||
Owner occupied commercial real estate
|
281,635
|
|
|
1,256
|
|
|
282,891
|
|
|||
Commercial business
|
221,239
|
|
|
2,414
|
|
|
223,653
|
|
|||
|
502,874
|
|
|
3,670
|
|
|
506,544
|
|
|||
|
$
|
3,828,909
|
|
|
$
|
20,542
|
|
|
$
|
3,849,451
|
|
(1)
|
Includes $5.5 million and $18.0 million of loans at December 31, 2017 and 2016, respectively, where a fair value option election was made at the time of origination and, therefore, are carried at fair value with changes recognized in the consolidated statements of operations.
|
|
Year Ended December 31, 2017
|
|||||||||||
(dollars in thousands)
|
Concession type
|
|
Number of loan
modifications |
|
Recorded
investment |
|
Related charge-
offs |
|||||
|
|
|
|
|
|
|
|
|||||
Consumer loans
|
|
|
|
|
|
|
|
|||||
Single family
|
|
|
|
|
|
|
|
|||||
|
Interest rate reduction
|
|
56
|
|
|
$
|
10,040
|
|
|
$
|
—
|
|
|
Payment restructure
|
|
102
|
|
|
21,356
|
|
|
—
|
|
||
Home equity and other
|
|
|
|
|
|
|
|
|||||
|
Payment restructure
|
|
2
|
|
|
351
|
|
|
—
|
|
||
Total consumer
|
|
|
|
|
|
|
|
|||||
|
Interest rate reduction
|
|
56
|
|
|
10,040
|
|
|
—
|
|
||
|
Payment restructure
|
|
104
|
|
|
21,707
|
|
|
—
|
|
||
|
|
|
160
|
|
|
31,747
|
|
|
—
|
|
||
Commercial and industrial loans
|
|
|
|
|
|
|
|
|||||
Commercial business
|
|
|
|
|
|
|
|
|||||
|
Payment restructure
|
|
1
|
|
|
18
|
|
|
—
|
|
||
Total commercial and industrial
|
|
|
|
|
|
|
|
|||||
|
Payment restructure
|
|
1
|
|
|
18
|
|
|
—
|
|
||
|
|
|
1
|
|
|
18
|
|
|
—
|
|
||
Total loans
|
|
|
|
|
|
|
|
|||||
|
Interest rate reduction
|
|
56
|
|
|
10,040
|
|
|
—
|
|
||
|
Payment restructure
|
|
105
|
|
|
21,725
|
|
|
—
|
|
||
|
|
|
161
|
|
|
$
|
31,765
|
|
|
$
|
—
|
|
|
Year Ended December 31, 2016
|
|||||||||||
(dollars in thousands)
|
Concession type
|
|
Number of loan
modifications |
|
Recorded
investment |
|
Related charge-
offs |
|||||
|
|
|
|
|
|
|
|
|||||
Consumer loans
|
|
|
|
|
|
|
|
|||||
Single family
|
|
|
|
|
|
|
|
|||||
|
Interest rate reduction
|
|
36
|
|
|
$
|
7,453
|
|
|
$
|
—
|
|
|
Payment restructure
|
|
51
|
|
|
10,578
|
|
|
—
|
|
||
Home equity and other
|
|
|
|
|
|
|
|
|||||
|
Interest rate reduction
|
|
2
|
|
|
113
|
|
|
—
|
|
||
|
Payment restructure
|
|
1
|
|
|
192
|
|
|
—
|
|
||
Total consumer
|
|
|
|
|
|
|
|
|||||
|
Interest rate reduction
|
|
38
|
|
|
7,566
|
|
|
—
|
|
||
|
Payment restructure
|
|
52
|
|
|
10,770
|
|
|
—
|
|
||
|
|
|
90
|
|
|
18,336
|
|
|
—
|
|
||
Commercial and industrial loans
|
|
|
|
|
|
|
|
|||||
Commercial business
|
|
|
|
|
|
|
|
|||||
|
Payment restructure
|
|
1
|
|
|
51
|
|
|
—
|
|
||
Total commercial and industrial
|
|
|
|
|
|
|
|
|||||
|
Payment restructure
|
|
1
|
|
|
51
|
|
|
—
|
|
||
|
|
|
1
|
|
|
51
|
|
|
—
|
|
||
Total loans
|
|
|
|
|
|
|
|
|||||
|
Interest rate reduction
|
|
38
|
|
|
7,566
|
|
|
—
|
|
||
|
Payment restructure
|
|
53
|
|
|
10,821
|
|
|
—
|
|
||
|
|
|
91
|
|
|
$
|
18,387
|
|
|
$
|
—
|
|
|
Year Ended December 31, 2015
|
|||||||||||
(dollars in thousands)
|
Concession type
|
|
Number of loan
modifications |
|
Recorded
investment |
|
Related charge-
offs |
|||||
|
|
|
|
|
|
|
|
|||||
Consumer loans
|
|
|
|
|
|
|
|
|||||
Single family
|
|
|
|
|
|
|
|
|||||
|
Interest rate reduction
|
|
47
|
|
|
$
|
10,167
|
|
|
$
|
—
|
|
Home equity and other
|
|
|
|
|
|
|
|
|||||
|
Interest rate reduction
|
|
2
|
|
|
130
|
|
|
—
|
|
||
Total consumer
|
|
|
|
|
|
|
|
|||||
|
Interest rate reduction
|
|
49
|
|
|
10,297
|
|
|
—
|
|
||
|
|
|
49
|
|
|
10,297
|
|
|
—
|
|
||
Commercial and industrial loans
|
|
|
|
|
|
|
|
|||||
Commercial business
|
|
|
|
|
|
|
|
|||||
|
Interest rate reduction
|
|
2
|
|
|
482
|
|
|
—
|
|
||
Total commercial and industrial
|
|
|
|
|
|
|
|
|||||
|
Interest rate reduction
|
|
2
|
|
|
482
|
|
|
—
|
|
||
|
|
|
2
|
|
|
482
|
|
|
—
|
|
||
Total loans
|
|
|
|
|
|
|
|
|||||
|
Interest rate reduction
|
|
51
|
|
|
10,779
|
|
|
—
|
|
||
|
|
|
51
|
|
|
$
|
10,779
|
|
|
$
|
—
|
|
|
Years Ended December 31,
|
||||||||||||
|
2017
|
|
2016
|
||||||||||
(dollars in thousands)
|
Number of loan relationships that re-defaulted
|
|
Recorded
investment |
|
Number of loan relationships that re-defaulted
|
|
Recorded
investment |
||||||
|
|
|
|
|
|
|
|
||||||
Consumer loans
|
|
|
|
|
|
|
|
||||||
Single family
|
21
|
|
|
$
|
4,286
|
|
|
19
|
|
|
$
|
4,464
|
|
Home equity and other
|
—
|
|
|
—
|
|
|
1
|
|
|
93
|
|
||
|
21
|
|
|
$
|
4,286
|
|
|
20
|
|
|
$
|
4,557
|
|
|
At December 31,
|
||||||
(in thousands)
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Single family
|
$
|
664
|
|
|
$
|
2,133
|
|
Commercial real estate
|
—
|
|
|
552
|
|
||
Construction/land development
|
—
|
|
|
5,381
|
|
||
|
664
|
|
|
8,066
|
|
||
Valuation allowance
|
—
|
|
|
(2,823
|
)
|
||
|
$
|
664
|
|
|
$
|
5,243
|
|
|
Years Ended December 31,
|
||||||
(in thousands)
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Beginning balance
|
$
|
5,243
|
|
|
$
|
7,531
|
|
Additions
|
1,113
|
|
|
5,417
|
|
||
Loss provisions
|
(33
|
)
|
|
(1,553
|
)
|
||
Reductions related to sales
|
(5,659
|
)
|
|
(6,152
|
)
|
||
Ending balance
|
$
|
664
|
|
|
$
|
5,243
|
|
|
Years Ended December 31,
|
||||||||||
(in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
||||||
Beginning balance
|
$
|
3,095
|
|
|
$
|
1,764
|
|
|
$
|
1,303
|
|
Loss provisions
|
33
|
|
|
1,553
|
|
|
695
|
|
|||
(Charge-offs), net of recoveries
|
(3,128
|
)
|
|
(222
|
)
|
|
(234
|
)
|
|||
Ending balance
|
$
|
—
|
|
|
$
|
3,095
|
|
|
$
|
1,764
|
|
|
Years Ended December 31,
|
||||||||||
(in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
||||||
Maintenance (reimbursements) costs
|
$
|
(114
|
)
|
|
$
|
469
|
|
|
$
|
453
|
|
Loss provisions
|
—
|
|
|
1,332
|
|
|
695
|
|
|||
Net gain on sales
|
(416
|
)
|
|
(37
|
)
|
|
(447
|
)
|
|||
Net operating income (loss)
|
—
|
|
|
—
|
|
|
(41
|
)
|
|||
Net (income) cost from operation and sale of other real estate owned
|
$
|
(530
|
)
|
|
$
|
1,764
|
|
|
$
|
660
|
|
|
December 31,
|
||||||
(in thousands)
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Furniture and equipment
|
$
|
70,657
|
|
|
$
|
65,089
|
|
Leasehold improvements
|
57,402
|
|
|
45,075
|
|
||
Land and buildings
|
28,898
|
|
|
10,437
|
|
||
|
156,957
|
|
|
120,601
|
|
||
Less: accumulated depreciation
|
(52,303
|
)
|
|
(42,965
|
)
|
||
|
$
|
104,654
|
|
|
$
|
77,636
|
|
|
At December 31,
|
||||||
(in thousands)
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Noninterest-bearing accounts
|
$
|
980,902
|
|
|
$
|
964,829
|
|
NOW accounts, 0.00% to 1.98% at December 31, 2017 and 0.00% to 1.00% at December 31, 2016
|
461,349
|
|
|
468,812
|
|
||
Statement savings accounts, due on demand, 0.05% to 1.13% at December 31, 2017 and December 31, 2016
|
293,858
|
|
|
301,361
|
|
||
Money market accounts, due on demand, 0.00% to 1.80% and at December 31, 2017 and 0.00% to 1.70% at December 31, 2016
|
1,834,154
|
|
|
1,603,141
|
|
||
Certificates of deposit, 0.05% to 3.80% at December 31, 2017 and December 31, 2016
|
1,190,689
|
|
|
1,091,558
|
|
||
|
$
|
4,760,952
|
|
|
$
|
4,429,701
|
|
|
Years Ended December 31,
|
||||||||||
(in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
||||||
NOW accounts
|
$
|
1,964
|
|
|
$
|
1,950
|
|
|
$
|
1,773
|
|
Statement savings accounts
|
1,007
|
|
|
1,029
|
|
|
1,032
|
|
|||
Money market accounts
|
8,604
|
|
|
7,398
|
|
|
4,945
|
|
|||
Certificates of deposit
|
12,337
|
|
|
8,632
|
|
|
4,051
|
|
|||
|
$
|
23,912
|
|
|
$
|
19,009
|
|
|
$
|
11,801
|
|
(in thousands)
|
December 31, 2017
|
||
|
|
||
Within one year
|
$
|
889,790
|
|
One to two years
|
236,414
|
|
|
Two to three years
|
33,505
|
|
|
Three to four years
|
13,412
|
|
|
Four to five years
|
17,415
|
|
|
Thereafter
|
153
|
|
|
|
$
|
1,190,689
|
|
|
At December 31, 2017
|
|||||
(in thousands)
|
Advances
outstanding
|
|
Weighted-average
interest rate
|
|||
|
|
|
|
|||
2018
|
$
|
963,611
|
|
|
1.53
|
%
|
2019
|
10,000
|
|
|
4.27
|
|
|
2020
|
—
|
|
|
—
|
|
|
2021
|
—
|
|
|
—
|
|
|
2022 and thereafter
|
5,590
|
|
|
5.31
|
|
|
|
$
|
979,201
|
|
|
1.58
|
%
|
|
HomeStreet Statutory
|
||||||
(in thousands)
|
I
|
|
II
|
|
III
|
|
IV
|
|
|
|
|
|
|
|
|
Date issued
|
June 2005
|
|
September 2005
|
|
February 2006
|
|
March 2007
|
Amount
|
$5,155
|
|
$20,619
|
|
$20,619
|
|
$15,464
|
Interest rate
|
3 MO LIBOR + 1.70%
|
|
3 MO LIBOR + 1.50%
|
|
3 MO LIBOR + 1.37%
|
|
3 MO LIBOR + 1.68%
|
Maturity date
|
June 2035
|
|
December 2035
|
|
March 2036
|
|
June 2037
|
Call option(1)
|
5 years
|
|
5 years
|
|
5 years
|
|
5 years
|
|
At December 31, 2017
|
||||||||||
|
Notional amount
|
|
Fair value derivatives
|
||||||||
(in thousands)
|
|
|
Asset
|
|
Liability
|
||||||
|
|
|
|
|
|
||||||
Forward sale commitments
|
$
|
1,687,658
|
|
|
$
|
1,311
|
|
|
$
|
(1,445
|
)
|
Interest rate swaptions
|
120,000
|
|
|
—
|
|
|
—
|
|
|||
Interest rate lock and purchase loan commitments
|
472,733
|
|
|
12,950
|
|
|
(25
|
)
|
|||
Interest rate swaps
|
1,869,000
|
|
|
12,171
|
|
|
(23,654
|
)
|
|||
Eurodollar futures
|
$
|
3,287,000
|
|
|
—
|
|
|
(101
|
)
|
||
Total derivatives before netting
|
$
|
7,436,391
|
|
|
26,432
|
|
|
(25,225
|
)
|
||
Netting adjustment/Cash collateral (1)
|
|
|
(6,646
|
)
|
|
23,505
|
|
||||
Carrying value on consolidated statements of financial condition
|
|
|
$
|
19,786
|
|
|
$
|
(1,720
|
)
|
|
At December 31, 2016
|
||||||||||
|
Notional amount
|
|
Fair value derivatives
|
||||||||
(in thousands)
|
|
|
Asset
|
|
Liability
|
||||||
|
|
|
|
|
|
||||||
Forward sale commitments
|
$
|
3,596,677
|
|
|
$
|
24,623
|
|
|
$
|
(15,203
|
)
|
Interest rate swaptions
|
20,000
|
|
|
1
|
|
|
—
|
|
|||
Interest rate lock and purchase loan commitments
|
746,102
|
|
|
19,586
|
|
|
(367
|
)
|
|||
Interest rate swaps
|
1,689,850
|
|
|
15,016
|
|
|
(26,829
|
)
|
|||
Total derivatives before netting
|
$
|
6,052,629
|
|
|
59,226
|
|
|
(42,399
|
)
|
||
Netting adjustment/Cash collateral (1)
|
|
|
10,174
|
|
|
37,836
|
|
||||
Carrying value on consolidated statements of financial condition
|
|
|
$
|
69,400
|
|
|
$
|
(4,563
|
)
|
(1)
|
Includes cash collateral of $16.9 million and $48.0 million at December 31, 2017 and 2016, respectively, as part of netting adjustments which primarily consists of collateral transferred by the Company at the initiation of derivative transactions and held by the counterparty as security.
|
|
At December 31, 2017
|
||||||||||||||||||
(in thousands)
|
Gross fair value
|
|
Netting adjustments/Cash collateral(1)
|
|
Carrying value
|
|
Securities not offset in consolidated balance sheet (disclosure-only netting)
|
|
Net amount
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivative assets
|
$
|
26,432
|
|
|
$
|
(6,646
|
)
|
|
$
|
19,786
|
|
|
$
|
—
|
|
|
$
|
19,786
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivative liabilities
|
$
|
(25,225
|
)
|
|
$
|
23,505
|
|
|
$
|
(1,720
|
)
|
|
$
|
1,213
|
|
|
$
|
(507
|
)
|
|
At December 31, 2016
|
||||||||||||||||||
(in thousands)
|
Gross fair value
|
|
Netting adjustments/Cash collateral (1)
|
|
Carrying value
|
|
Securities not offset in consolidated balance sheet (disclosure-only netting)
|
|
Net amount
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivative assets
|
$
|
59,226
|
|
|
$
|
10,174
|
|
|
$
|
69,400
|
|
|
$
|
—
|
|
|
$
|
69,400
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivative liabilities
|
$
|
(42,399
|
)
|
|
$
|
37,836
|
|
|
$
|
(4,563
|
)
|
|
$
|
1,820
|
|
|
$
|
(2,743
|
)
|
(1)
|
Includes cash collateral of $16.9 million and $48.0 million at December 31, 2017 and 2016, respectively, as part of netting adjustments which primarily consists of collateral transferred by the Company at the initiation of derivative transactions and held by the counterparty as security.
|
|
Years Ended December 31,
|
||||||||||
(in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
||||||
Recognized in noninterest income:
|
|
|
|
|
|
||||||
Net (loss) gain on loan origination and sale activities (1)
|
$
|
(28,549
|
)
|
|
$
|
12,443
|
|
|
$
|
2,080
|
|
Loan servicing income (loss) (2)
|
9,732
|
|
|
(4,680
|
)
|
|
11,709
|
|
|||
Other (3)
|
—
|
|
|
735
|
|
|
—
|
|
|||
|
$
|
(18,817
|
)
|
|
$
|
8,498
|
|
|
$
|
13,789
|
|
(1)
|
Comprised of interest rate lock commitments ("IRLCs") and forward contracts used as an economic hedge of IRLCs and single family mortgage loans held for sale.
|
(2)
|
Comprised of interest rate swaps, interest rate swaptions and forward contracts used as an economic hedge of single family MSRs.
|
|
At December 31,
|
||||||
(in thousands)
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Single family
|
$
|
577,313
|
|
|
$
|
656,334
|
|
Multifamily DUS® (1)
|
29,651
|
|
|
35,506
|
|
||
SBA
|
3,938
|
|
|
5,207
|
|
||
CRE Non-DUS® (1)(2)
|
—
|
|
|
17,512
|
|
||
Total loans held for sale
|
$
|
610,902
|
|
|
$
|
714,559
|
|
(1)
|
Fannie Mae Multifamily Delegated Underwriting and Servicing Program (“DUS"®) is a registered trademark of Fannie Mae.
|
(2)
|
Loans originated as Held for Investment.
|
|
Years Ended December 31,
|
|||||||||||
(in thousands)
|
2017
|
|
2016
|
|
2015
|
|||||||
|
|
|
|
|
|
|||||||
Single family
|
$
|
7,508,949
|
|
|
$
|
8,785,412
|
|
|
$
|
7,038,635
|
|
|
Multifamily DUS ® (1)
|
347,084
|
|
|
301,442
|
|
|
204,744
|
|
||||
SBA
|
26,841
|
|
|
17,308
|
|
|
14,275
|
|
||||
CRE Non-DUS® (1)(2)
|
321,699
|
|
|
150,903
|
|
(3
|
)
|
15,038
|
|
|||
Total loans sold
|
$
|
8,204,573
|
|
|
$
|
9,255,065
|
|
|
$
|
7,272,692
|
|
(1)
|
Fannie Mae Multifamily DUS® is a registered trademark of Fannie Mae.
|
(2)
|
Loans originated as Held for Investment.
|
(3)
|
Included $63.2 million in single family loans sold transferred to held for investment during 2016.
|
|
Years Ended December 31,
|
||||||||||
(in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
||||||
Single family:
|
|
|
|
|
|
||||||
Servicing value and secondary market gains(1)
|
$
|
209,027
|
|
|
$
|
260,477
|
|
|
$
|
205,513
|
|
Loan origination and funding fees
|
26,822
|
|
|
29,966
|
|
|
22,221
|
|
|||
Total single family
|
235,849
|
|
|
290,443
|
|
|
227,734
|
|
|||
Multifamily DUS®
|
13,210
|
|
|
11,397
|
|
|
7,125
|
|
|||
SBA
|
2,439
|
|
|
1,414
|
|
|
1,070
|
|
|||
CRE Non-DUS® (2)
|
4,378
|
|
|
4,059
|
|
|
459
|
|
|||
Total gain on loan origination and sale activities
|
$
|
255,876
|
|
|
$
|
307,313
|
|
|
$
|
236,388
|
|
(1)
|
Comprised of gains and losses on interest rate lock and purchase loan commitments (which considers the value of servicing), single family loans held for sale, forward sale commitments used to economically hedge secondary market activities, and changes in the Company's repurchase liability for loans that have been sold.
|
(2)
|
Loan originated as held for investment.
|
|
At December 31,
|
||||||
(in thousands)
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Single family
|
|
|
|
||||
U.S. government and agency
|
$
|
22,123,710
|
|
|
$
|
18,931,835
|
|
Other
|
507,437
|
|
|
556,621
|
|
||
|
22,631,147
|
|
|
19,488,456
|
|
||
Commercial
|
|
|
|
||||
Multifamily DUS®
|
1,311,399
|
|
|
1,108,040
|
|
||
Other
|
79,797
|
|
|
69,323
|
|
||
|
1,391,196
|
|
|
1,177,363
|
|
||
Total loans serviced for others
|
$
|
24,022,343
|
|
|
$
|
20,665,819
|
|
|
Years Ended December 31,
|
||||||
(in thousands)
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Balance, beginning of period
|
$
|
3,382
|
|
|
$
|
2,922
|
|
Additions, net of adjustments(1)
|
174
|
|
|
1,542
|
|
||
Realized losses (2)
|
(541
|
)
|
|
(1,082
|
)
|
||
Balance, end of period
|
$
|
3,015
|
|
|
$
|
3,382
|
|
(1)
|
Includes additions for new loan sales and changes in estimated probable future repurchase losses on previously sold loans.
|
(2)
|
Includes principal losses and accrued interest on repurchased loans, “make-whole” settlements, settlements with claimants and certain related expense.
|
|
Years Ended December 31,
|
||||||||||
(in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
||||||
Servicing income, net:
|
|
|
|
|
|
||||||
Servicing fees and other
|
$
|
66,192
|
|
|
$
|
53,654
|
|
|
$
|
42,016
|
|
Changes in fair value of single family MSRs due to modeled amortization (1)
|
(35,451
|
)
|
|
(33,305
|
)
|
|
(34,038
|
)
|
|||
Amortization of multifamily and SBA MSRs
|
(3,932
|
)
|
|
(2,635
|
)
|
|
(1,992
|
)
|
|||
|
26,809
|
|
|
17,714
|
|
|
5,986
|
|
|||
Risk management, single family MSRs:
|
|
|
|
|
|
||||||
Changes in fair value of MSRs due to changes in market inputs and/or model updates (2)
|
(1,157
|
)
|
|
20,025
|
|
|
6,555
|
|
|||
Net gain (loss) from derivatives economically hedging MSR
|
9,732
|
|
|
(4,680
|
)
|
|
11,709
|
|
|||
|
8,575
|
|
|
15,345
|
|
|
18,264
|
|
|||
Loan servicing income
|
$
|
35,384
|
|
|
$
|
33,059
|
|
|
$
|
24,250
|
|
(1)
|
Represents changes due to collection/realization of expected cash flows and curtailments.
|
(2)
|
Principally reflects changes in market inputs, which include current market interest rates and prepayment model updates, both of which affect future prepayment speed and cash flow projections.
|
|
Years Ended December 31,
|
|||||||
(rates per annum) (1)
|
2017
|
|
2016
|
|
2015
|
|||
|
|
|
|
|
|
|||
Constant prepayment rate ("CPR") (2)
|
13.36
|
%
|
|
13.93
|
%
|
|
14.95
|
%
|
Discount rate (3)
|
10.27
|
%
|
|
10.28
|
%
|
|
10.29
|
%
|
(1)
|
Weighted average rates for sales during the period for sales of loans with similar characteristics.
|
(2)
|
Represents the expected lifetime average.
|
(3)
|
Discount rate is a rate based on market observations.
|
(dollars in thousands)
|
At December 31, 2017
|
||
|
|
||
Fair value of single family MSR
|
$
|
258,560
|
|
Expected weighted-average life (in years)
|
6.12
|
|
|
Constant prepayment rate (1)
|
12.40
|
%
|
|
Impact on 25 basis points adverse change in interest rates
|
$
|
(21,004
|
)
|
Impact on 50 basis points adverse change in interest rates
|
$
|
(42,036
|
)
|
Discount rate
|
10.40
|
%
|
|
Impact on fair value of 100 basis points increase
|
$
|
(8,958
|
)
|
Impact on fair value of 200 basis points increase
|
$
|
(17,567
|
)
|
(1)
|
Represents the expected lifetime average.
|
|
Years Ended December 31,
|
||||||||||
(in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
||||||
Beginning balance
|
$
|
226,113
|
|
|
$
|
156,604
|
|
|
$
|
112,439
|
|
Additions and amortization:
|
|
|
|
|
|
||||||
Originations
|
68,499
|
|
|
82,789
|
|
|
70,659
|
|
|||
Purchases
|
565
|
|
|
—
|
|
|
989
|
|
|||
Changes due to modeled amortization(1)
|
(35,451
|
)
|
|
(33,305
|
)
|
|
(34,038
|
)
|
|||
Net additions and amortization
|
33,613
|
|
|
49,484
|
|
|
37,610
|
|
|||
Changes in fair value of MSRs due to changes in market inputs and/or model updates (2)
|
(1,166
|
)
|
|
20,025
|
|
|
6,555
|
|
|||
Ending balance
|
$
|
258,560
|
|
|
$
|
226,113
|
|
|
$
|
156,604
|
|
(1)
|
Represents changes due to collection/realization of expected cash flows and curtailments.
|
(2)
|
Principally reflects changes in market inputs, which include current market interest rates and prepayment model updates, both of which affect future prepayment speed and cash flow projections.
|
(in thousands)
|
At December 31, 2017
|
||
|
|
||
2018
|
$
|
3,527
|
|
2019
|
3,429
|
|
|
2020
|
3,355
|
|
|
2021
|
3,146
|
|
|
2022
|
2,825
|
|
|
2023 and thereafter
|
9,811
|
|
|
Carrying value of multifamily MSR
|
$
|
26,093
|
|
(in thousands)
|
At December 31, 2017
|
||
|
|
||
2018
|
$
|
26,477
|
|
2019
|
23,685
|
|
|
2020
|
20,904
|
|
|
2021
|
17,757
|
|
|
2022
|
14,995
|
|
|
2023 and thereafter
|
48,752
|
|
|
Total minimum payments
|
$
|
152,570
|
|
|
Years Ended December 31,
|
||||||||||
(in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
||||||
Current (benefit) expense
|
|
|
|
|
|
||||||
Federal
|
$
|
(649
|
)
|
|
$
|
(1,154
|
)
|
|
$
|
(1,469
|
)
|
State and local
|
62
|
|
|
1,595
|
|
|
668
|
|
|||
Deferred expense (benefit)
|
|
|
|
|
|
||||||
Federal
|
17,637
|
|
|
27,538
|
|
|
15,301
|
|
|||
Revaluation of deferred items
|
(23,325
|
)
|
|
—
|
|
|
—
|
|
|||
State and local
|
528
|
|
|
3,058
|
|
|
602
|
|
|||
Tax credit investment amortization
|
2,990
|
|
|
1,589
|
|
|
486
|
|
|||
Total income tax (benefit) expense
|
$
|
(2,757
|
)
|
|
$
|
32,626
|
|
|
$
|
15,588
|
|
|
Years Ended December 31,
|
||||||||||
(in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
||||||
Income taxes at statutory rate
|
$
|
23,166
|
|
|
$
|
31,772
|
|
|
$
|
19,917
|
|
State income tax expense net of federal tax benefit
|
1,207
|
|
|
2,073
|
|
|
715
|
|
|||
Tax-exempt interest
|
(2,855
|
)
|
|
(2,177
|
)
|
|
(1,307
|
)
|
|||
Tax credits
|
(2,041
|
)
|
|
(1,389
|
)
|
|
(903
|
)
|
|||
Amortization of and pass-through losses from low income housing investments
|
1,716
|
|
|
1,018
|
|
|
658
|
|
|||
Change in state rate
|
(714
|
)
|
|
811
|
|
|
722
|
|
|||
Bargain purchase gain
|
—
|
|
|
—
|
|
|
(2,704
|
)
|
|||
Reversal of deferred tax consequences on historical AFS
|
(2
|
)
|
|
—
|
|
|
(1,107
|
)
|
|||
Impact from Federal Rate Change
|
(23,325
|
)
|
|
—
|
|
|
—
|
|
|||
Uncertain tax positions
|
76
|
|
|
—
|
|
|
—
|
|
|||
Other, net
|
15
|
|
|
518
|
|
|
(403
|
)
|
|||
Total income tax (benefit) expense
|
$
|
(2,757
|
)
|
|
$
|
32,626
|
|
|
$
|
15,588
|
|
|
At December 31,
|
||||||
(in thousands)
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Deferred tax assets:
|
|
|
|
||||
Provision for loan losses
|
$
|
11,844
|
|
|
$
|
18,123
|
|
Federal and state net operating loss carryforwards
|
3,914
|
|
|
7,073
|
|
||
Other real estate owned
|
—
|
|
|
1,196
|
|
||
Accrued liabilities
|
4,747
|
|
|
4,453
|
|
||
Other investments
|
145
|
|
|
283
|
|
||
Leases
|
2,336
|
|
|
3,121
|
|
||
Unrealized loss on investment available for sale securities
|
2,286
|
|
|
5,714
|
|
||
Tax credits
|
1,695
|
|
|
1,369
|
|
||
Stock-based compensation
|
993
|
|
|
1,164
|
|
||
Loan valuation
|
1,857
|
|
|
4,547
|
|
||
Other, net
|
1,158
|
|
|
2,163
|
|
||
|
30,975
|
|
|
49,206
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Mortgage servicing rights
|
(58,195
|
)
|
|
(76,680
|
)
|
||
FHLB dividends
|
(316
|
)
|
|
(522
|
)
|
||
Deferred loan fees and costs
|
(3,828
|
)
|
|
(3,653
|
)
|
||
Premises and equipment
|
(5,267
|
)
|
|
(6,960
|
)
|
||
Intangibles
|
(1,371
|
)
|
|
(2,813
|
)
|
||
Other, net
|
(141
|
)
|
|
(107
|
)
|
||
|
(69,118
|
)
|
|
(90,735
|
)
|
||
Net deferred tax liability
|
$
|
(38,143
|
)
|
|
$
|
(41,529
|
)
|
|
Years Ended December 31,
|
||||||||||
(in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
||||||
Balance, beginning of year
|
$
|
419
|
|
|
$
|
419
|
|
|
$
|
—
|
|
Increases related to prior year tax positions
|
76
|
|
|
—
|
|
|
419
|
|
|||
Balance, end of year
|
$
|
495
|
|
|
$
|
419
|
|
|
$
|
419
|
|
|
Number
|
|
Weighted
Average
Exercise Price
|
|
Weighted
Average
Remaining
Contractual
Term
|
|
Aggregate
Intrinsic Value (2)
(in thousands)
|
|||||
|
|
|
|
|
|
|
|
|||||
Options outstanding at December 31, 2016
|
268,547
|
|
|
$
|
12.00
|
|
|
5.2 years
|
|
$
|
5,263
|
|
Exercised
|
(1,000
|
)
|
|
11.00
|
|
|
0.0 years
|
|
15
|
|
||
Options outstanding at December 31, 2017
|
267,547
|
|
|
12.01
|
|
|
4.2 years
|
|
4,533
|
|
||
Options that are exercisable and expected to be exercisable (1)
|
267,547
|
|
|
12.01
|
|
|
4.2 years
|
|
4,533
|
|
||
Options exercisable
|
267,547
|
|
|
$
|
12.01
|
|
|
4.2 years
|
|
$
|
4,533
|
|
(1)
|
Adjusted for estimated forfeitures.
|
(2)
|
Intrinsic value is the amount by which fair value of the underlying stock exceeds the exercise price.
|
|
Number
|
|
Weighted
Average
Grant Date Fair Value
|
|||
|
|
|
|
|||
Restricted shares outstanding at December 31, 2016
|
256,454
|
|
|
$
|
19.34
|
|
Granted
|
163,070
|
|
|
27.06
|
|
|
Cancelled or forfeited
|
(38,146
|
)
|
|
22.36
|
|
|
Vested
|
(74,703
|
)
|
|
18.76
|
|
|
Restricted shares outstanding at December 31, 2017
|
306,675
|
|
|
23.21
|
|
•
|
Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date. An active market for the asset or liability is a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis.
|
•
|
Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. This includes quoted prices for similar assets and liabilities in active markets and inputs that are observable for the asset or liability for substantially the full term of the financial instrument.
|
•
|
Level 3 – Unobservable inputs for the asset or liability. These inputs reflect the Company’s assumptions of what market participants would use in pricing the asset or liability.
|
(in thousands)
|
Fair Value at December 31, 2017
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Investment securities available for sale
|
|
|
|
|
|
|
|
||||||||
Mortgage backed securities:
|
|
|
|
|
|
|
|
||||||||
Residential
|
$
|
130,090
|
|
|
$
|
—
|
|
|
$
|
130,090
|
|
|
$
|
—
|
|
Commercial
|
23,694
|
|
|
—
|
|
|
23,694
|
|
|
—
|
|
||||
Municipal bonds
|
388,452
|
|
|
—
|
|
|
388,452
|
|
|
—
|
|
||||
Collateralized mortgage obligations:
|
|
|
|
|
|
|
|
||||||||
Residential
|
160,424
|
|
|
—
|
|
|
160,424
|
|
|
—
|
|
||||
Commercial
|
98,569
|
|
|
—
|
|
|
98,569
|
|
|
—
|
|
||||
Corporate debt securities
|
24,737
|
|
|
—
|
|
|
24,737
|
|
|
—
|
|
||||
U.S. Treasury securities
|
10,652
|
|
|
—
|
|
|
10,652
|
|
|
—
|
|
||||
Agency debentures
|
9,650
|
|
|
—
|
|
|
9,650
|
|
|
—
|
|
||||
Single family mortgage servicing rights
|
258,560
|
|
|
—
|
|
|
—
|
|
|
258,560
|
|
||||
Single family loans held for sale
|
577,313
|
|
|
—
|
|
|
575,977
|
|
|
1,336
|
|
||||
Single family loans held for investment
|
5,477
|
|
|
—
|
|
|
—
|
|
|
5,477
|
|
||||
Derivatives
|
|
|
|
|
|
|
|
||||||||
Forward sale commitments
|
1,311
|
|
|
—
|
|
|
1,311
|
|
|
—
|
|
||||
Interest rate lock and purchase loan commitments
|
12,950
|
|
|
—
|
|
|
—
|
|
|
12,950
|
|
||||
Interest rate swaps
|
12,172
|
|
|
—
|
|
|
12,172
|
|
|
—
|
|
||||
Total assets
|
$
|
1,714,051
|
|
|
$
|
—
|
|
|
$
|
1,435,728
|
|
|
$
|
278,323
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivatives
|
|
|
|
|
|
|
|
||||||||
Eurodollar futures
|
$
|
101
|
|
|
$
|
101
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Forward sale commitments
|
1,445
|
|
|
—
|
|
|
1,445
|
|
|
—
|
|
||||
Interest rate lock and purchase loan commitments
|
25
|
|
|
—
|
|
|
—
|
|
|
25
|
|
||||
Interest rate swaps
|
23,654
|
|
|
—
|
|
|
23,654
|
|
|
—
|
|
||||
Total liabilities
|
$
|
25,225
|
|
|
$
|
101
|
|
|
$
|
25,099
|
|
|
$
|
25
|
|
(in thousands)
|
Fair Value at December 31, 2016
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Investment securities available for sale
|
|
|
|
|
|
|
|
||||||||
Mortgage backed securities:
|
|
|
|
|
|
|
|
||||||||
Residential
|
$
|
177,074
|
|
|
$
|
—
|
|
|
$
|
177,074
|
|
|
$
|
—
|
|
Commercial
|
25,536
|
|
|
—
|
|
|
25,536
|
|
|
—
|
|
||||
Municipal bonds
|
467,673
|
|
|
—
|
|
|
467,673
|
|
|
—
|
|
||||
Collateralized mortgage obligations:
|
|
|
|
|
|
|
|
||||||||
Residential
|
191,201
|
|
|
—
|
|
|
191,201
|
|
|
—
|
|
||||
Commercial
|
70,764
|
|
|
—
|
|
|
70,764
|
|
|
—
|
|
||||
Corporate debt securities
|
51,122
|
|
|
—
|
|
|
51,122
|
|
|
—
|
|
||||
U.S. Treasury securities
|
10,620
|
|
|
—
|
|
|
10,620
|
|
|
—
|
|
||||
Single family mortgage servicing rights
|
226,113
|
|
|
—
|
|
|
—
|
|
|
226,113
|
|
||||
Single family loans held for sale
|
656,334
|
|
|
—
|
|
|
614,524
|
|
|
41,810
|
|
||||
Single family loans held for investment
|
17,988
|
|
|
—
|
|
|
—
|
|
|
17,988
|
|
||||
Derivatives
|
|
|
|
|
|
|
|
||||||||
Forward sale commitments
|
24,623
|
|
|
—
|
|
|
24,623
|
|
|
—
|
|
||||
Interest rate swaptions
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Interest rate lock and purchase loan commitments
|
19,586
|
|
|
—
|
|
|
—
|
|
|
19,586
|
|
||||
Interest rate swaps
|
15,016
|
|
|
—
|
|
|
15,016
|
|
|
—
|
|
||||
Total assets
|
$
|
1,953,651
|
|
|
$
|
—
|
|
|
$
|
1,648,154
|
|
|
$
|
305,497
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivatives
|
|
|
|
|
|
|
|
||||||||
Forward sale commitments
|
$
|
15,203
|
|
|
$
|
—
|
|
|
$
|
15,203
|
|
|
$
|
—
|
|
Interest rate lock and purchase loan commitments
|
367
|
|
|
—
|
|
|
—
|
|
|
367
|
|
||||
Interest rate swaps
|
26,829
|
|
|
—
|
|
|
26,829
|
|
|
—
|
|
||||
Total liabilities
|
$
|
42,399
|
|
|
$
|
—
|
|
|
$
|
42,032
|
|
|
$
|
367
|
|
(dollars in thousands)
|
At December 31, 2017
|
||||||||||||
Fair Value
|
|
Valuation
Technique
|
|
Significant Unobservable
Input
|
|
Low
|
|
High
|
|
Weighted Average
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
||
Loans held for investment, fair value option
|
$
|
5,477
|
|
|
Income approach
|
|
Implied spread to benchmark interest rate curve
|
|
3.61%
|
|
4.96%
|
|
4.10%
|
(dollars in thousands)
|
At December 31, 2016
|
||||||||||||
Fair Value
|
|
Valuation
Technique
|
|
Significant Unobservable
Input
|
|
Low
|
|
High
|
|
Weighted Average
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
||
Loans held for investment, fair value option
|
$
|
17,988
|
|
|
Income approach
|
|
Implied spread to benchmark interest rate curve
|
|
3.62%
|
|
4.97%
|
|
4.49%
|
(dollars in thousands)
|
At December 31, 2017
|
||||||||||||
Fair Value
|
|
Valuation
Technique
|
|
Significant Unobservable
Input
|
|
Low
|
|
High
|
|
Weighted Average
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
||
Loans held for sale, fair value option
|
$
|
1,336
|
|
|
Income approach
|
|
Implied spread to benchmark interest rate curve
|
|
3.93%
|
|
3.93%
|
|
3.93%
|
|
|
|
|
|
Market price movement from comparable bond
|
|
(0.38)%
|
|
(0.10)%
|
|
(0.24)%
|
(dollars in thousands)
|
At December 31, 2016
|
||||||||||||
Fair Value
|
|
Valuation
Technique
|
|
Significant Unobservable
Input
|
|
Low
|
|
High
|
|
Weighted Average
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
||
Loans held for sale, fair value option
|
$
|
41,810
|
|
|
Income approach
|
|
Implied spread to benchmark interest rate curve
|
|
3.46%
|
|
6.14%
|
|
4.23%
|
|
|
|
|
|
Market price movement from comparable bond
|
|
(0.49)%
|
|
(0.11)%
|
|
(0.27)%
|
|
Years Ended December 31,
|
||||||
(in thousands)
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Beginning balance, net
|
$
|
19,219
|
|
|
$
|
17,711
|
|
Total realized/unrealized gains
|
126,082
|
|
|
146,462
|
|
||
Settlements
|
(132,376
|
)
|
|
(144,954
|
)
|
||
Ending balance, net
|
$
|
12,925
|
|
|
$
|
19,219
|
|
|
|
Year Ended December 31, 2017
|
||||||||||||||||||||||
|
|
Beginning balance
|
|
Additions
|
|
Transfers
|
|
Payoffs/Sales
|
|
Change in mark to market
|
|
Ending balance
|
||||||||||||
(in thousands)
|
|
|
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Loans held for sale
|
|
$
|
41,810
|
|
|
$
|
4,327
|
|
|
$
|
12,797
|
|
|
$
|
(58,396
|
)
|
|
$
|
798
|
|
|
$
|
1,336
|
|
Loans held for investment
|
|
17,988
|
|
|
127
|
|
|
(12,272
|
)
|
|
(480
|
)
|
|
114
|
|
|
5,477
|
|
|
|
Year Ended December 31, 2016
|
||||||||||||||||||||||
|
|
Beginning balance
|
|
Additions
|
|
Transfers
|
|
Payoffs/Sales
|
|
Change in mark to market
|
|
Ending balance
|
||||||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Loans held for sale
|
|
$
|
49,322
|
|
|
$
|
14,454
|
|
|
$
|
(4,913
|
)
|
|
$
|
(14,524
|
)
|
|
$
|
(2,529
|
)
|
|
$
|
41,810
|
|
Loans held for investment
|
|
21,544
|
|
|
357
|
|
|
4,913
|
|
|
(7,608
|
)
|
|
(1,218
|
)
|
|
17,988
|
|
(dollars in thousands)
|
At December 31, 2017
|
||||||||||||
Fair Value
|
|
Valuation
Technique
|
|
Significant Unobservable
Input
|
|
Low
|
|
High
|
|
Weighted Average
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
||
Interest rate lock and purchase loan commitments, net
|
$
|
12,925
|
|
|
Income approach
|
|
Fall out factor
|
|
—%
|
|
58.38%
|
|
12.05%
|
|
|
|
|
|
Value of servicing
|
|
0.69%
|
|
1.73%
|
|
1.09%
|
(dollars in thousands)
|
At December 31, 2016
|
||||||||||||
Fair Value
|
|
Valuation
Technique
|
|
Significant Unobservable
Input
|
|
Low
|
|
High
|
|
Weighted Average
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
||
Interest rate lock and purchase loan commitments, net
|
$
|
19,219
|
|
|
Income approach
|
|
Fall out factor
|
|
0.50%
|
|
60.34%
|
|
11.95%
|
|
|
|
|
|
Value of servicing
|
|
0.65%
|
|
2.27%
|
|
1.08%
|
|
Year Ended December 31, 2017
|
||||||||||||||||||
(in thousands)
|
Fair Value of Assets Held at December 31, 2017
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total Gains (Losses)
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Loans held for investment(1)
|
$
|
1,918
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,918
|
|
|
$
|
(163
|
)
|
Total
|
$
|
1,918
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,918
|
|
|
$
|
(163
|
)
|
|
Year Ended December 31, 2016
|
||||||||||||||||||
(in thousands)
|
Fair Value of Assets Held at December 31, 2016
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total Gains (Losses)
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Loans held for investment(1)
|
$
|
4,586
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,586
|
|
|
$
|
(881
|
)
|
Other real estate owned(2)
|
5,933
|
|
|
—
|
|
|
—
|
|
|
5,933
|
|
|
(1,332
|
)
|
|||||
Total
|
$
|
10,519
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,519
|
|
|
$
|
(2,213
|
)
|
(1)
|
Represents the carrying value of loans for which adjustments are based on the fair value of the collateral.
|
(2)
|
Represents other real estate owned where an updated fair value of collateral is used to adjust the carrying amount subsequent to the initial classification as other real estate owned.
|
|
At December 31, 2017
|
||||||||||||||||||
(in thousands)
|
Carrying
Value
|
|
Fair
Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
72,718
|
|
|
$
|
72,718
|
|
|
$
|
72,718
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Investment securities held to maturity
|
58,036
|
|
|
58,128
|
|
|
—
|
|
|
58,128
|
|
|
—
|
|
|||||
Loans held for investment
|
4,500,989
|
|
|
4,497,884
|
|
|
—
|
|
|
—
|
|
|
4,497,884
|
|
|||||
Loans held for sale – multifamily and other
|
33,589
|
|
|
33,589
|
|
|
—
|
|
|
33,589
|
|
|
—
|
|
|||||
Mortgage servicing rights – multifamily
|
26,093
|
|
|
28,362
|
|
|
—
|
|
|
—
|
|
|
28,362
|
|
|||||
Federal Home Loan Bank stock
|
46,639
|
|
|
46,639
|
|
|
—
|
|
|
46,639
|
|
|
—
|
|
|||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Deposits
|
$
|
4,760,952
|
|
|
$
|
4,739,563
|
|
|
$
|
—
|
|
|
$
|
4,739,563
|
|
|
$
|
—
|
|
Federal Home Loan Bank advances
|
979,201
|
|
|
981,441
|
|
|
—
|
|
|
981,441
|
|
|
—
|
|
|||||
Long-term debt
|
125,274
|
|
|
108,530
|
|
|
—
|
|
|
108,530
|
|
|
—
|
|
|
At December 31, 2016
|
||||||||||||||||||
(in thousands)
|
Carrying
Value
|
|
Fair
Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
53,932
|
|
|
$
|
53,932
|
|
|
$
|
53,932
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Investment securities held to maturity
|
49,861
|
|
|
49,488
|
|
|
—
|
|
|
49,488
|
|
|
—
|
|
|||||
Loans held for investment
|
3,801,039
|
|
|
3,840,990
|
|
|
—
|
|
|
—
|
|
|
3,840,990
|
|
|||||
Loans held for sale – transferred from held for investment
|
17,512
|
|
|
17,512
|
|
|
—
|
|
|
—
|
|
|
17,512
|
|
|||||
Loans held for sale – multifamily and other
|
40,712
|
|
|
40,712
|
|
|
—
|
|
|
40,712
|
|
|
—
|
|
|||||
Mortgage servicing rights – multifamily
|
19,747
|
|
|
21,610
|
|
|
—
|
|
|
—
|
|
|
21,610
|
|
|||||
Federal Home Loan Bank stock
|
40,347
|
|
|
40,347
|
|
|
—
|
|
|
40,347
|
|
|
—
|
|
|||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Deposits
|
$
|
4,429,701
|
|
|
$
|
4,410,213
|
|
|
$
|
—
|
|
|
$
|
4,410,213
|
|
|
$
|
—
|
|
Federal Home Loan Bank advances
|
868,379
|
|
|
870,782
|
|
|
—
|
|
|
870,782
|
|
|
—
|
|
|||||
Long-term debt
|
125,147
|
|
|
122,357
|
|
|
—
|
|
|
122,357
|
|
|
—
|
|
|
Years Ended December 31,
|
||||||||||
(in thousands, except share and per share data)
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
||||||
Net income
|
$
|
68,946
|
|
|
$
|
58,151
|
|
|
$
|
41,319
|
|
Weighted average shares:
|
|
|
|
|
|
||||||
Basic weighted-average number of common shares outstanding
|
26,864,657
|
|
|
24,615,990
|
|
|
20,818,045
|
|
|||
Dilutive effect of outstanding common stock equivalents (1)
|
227,362
|
|
|
227,693
|
|
|
241,156
|
|
|||
Diluted weighted-average number of common stock outstanding
|
27,092,019
|
|
|
24,843,683
|
|
|
21,059,201
|
|
|||
Earnings per share:
|
|
|
|
|
|
||||||
Basic earnings per share
|
$
|
2.57
|
|
|
$
|
2.36
|
|
|
$
|
1.98
|
|
Diluted earnings per share
|
$
|
2.54
|
|
|
$
|
2.34
|
|
|
$
|
1.96
|
|
(1)
|
Excluded from the computation of diluted earnings per share (due to their antidilutive effect) for the years ended December 31, 2017, 2016 and 2015 were certain stock options and unvested restricted stock issued to key senior management personnel and directors of the Company. The aggregate number of common stock equivalents related to such options and unvested restricted shares, which could potentially be dilutive in future periods, was 3,224, zero and zero at December 31, 2017, 2016 and 2015, respectively.
|
•
|
a funds transfer pricing (“FTP”) system, which allocates interest income credits and funding charges between the segments, assigning to each segment a funding credit for its liabilities, such as deposits, and a charge to fund its assets;
|
•
|
an allocation of charges for services rendered to the segments by centralized functions, such as corporate overhead, which are generally based on each segment’s consumption patterns; and
|
•
|
an allocation of the Company's consolidated income taxes which are based on the effective tax rate applied to the segment's pretax income or loss.
|
|
Year Ended December 31, 2017
|
||||||||||
(in thousands)
|
Mortgage
Banking
|
|
Commercial and
Consumer Banking
|
|
Total
|
||||||
|
|
|
|
|
|
||||||
Condensed income statement:
|
|
|
|
|
|
||||||
Net interest income (1)
|
$
|
19,896
|
|
|
$
|
174,542
|
|
|
$
|
194,438
|
|
Provision for credit losses
|
—
|
|
|
750
|
|
|
750
|
|
|||
Noninterest income
|
269,794
|
|
|
42,360
|
|
|
312,154
|
|
|||
Noninterest expense
|
290,676
|
|
|
148,977
|
|
|
439,653
|
|
|||
(Loss) income before income taxes
|
(986
|
)
|
|
67,175
|
|
|
66,189
|
|
|||
Income tax (benefit) expense
|
(27,871
|
)
|
|
25,114
|
|
|
(2,757
|
)
|
|||
Net income
|
$
|
26,885
|
|
|
$
|
42,061
|
|
|
$
|
68,946
|
|
Total assets
|
$
|
866,712
|
|
|
$
|
5,875,329
|
|
|
$
|
6,742,041
|
|
|
Year Ended December 31, 2016
|
||||||||||
(in thousands)
|
Mortgage
Banking
|
|
Commercial and
Consumer Banking
|
|
Total
|
||||||
|
|
|
|
|
|
||||||
Condensed income statement:
|
|
|
|
|
|
||||||
Net interest income (1)
|
$
|
26,034
|
|
|
$
|
154,015
|
|
|
$
|
180,049
|
|
Provision for credit losses
|
—
|
|
|
4,100
|
|
|
4,100
|
|
|||
Noninterest income
|
323,468
|
|
|
35,682
|
|
|
359,150
|
|
|||
Noninterest expense
|
305,937
|
|
|
138,385
|
|
|
444,322
|
|
|||
Income before income taxes
|
43,565
|
|
|
47,212
|
|
|
90,777
|
|
|||
Income tax expense
|
16,214
|
|
|
16,412
|
|
|
32,626
|
|
|||
Net income
|
$
|
27,351
|
|
|
$
|
30,800
|
|
|
$
|
58,151
|
|
Total assets
|
$
|
974,248
|
|
|
$
|
5,269,452
|
|
|
$
|
6,243,700
|
|
|
Year Ended December 31, 2015
|
||||||||||
(in thousands)
|
Mortgage
Banking
|
|
Commercial and
Consumer Banking
|
|
Total
|
||||||
|
|
|
|
|
|
||||||
Condensed income statement:
|
|
|
|
|
|
||||||
Net interest income (1)
|
$
|
28,318
|
|
|
$
|
120,020
|
|
|
$
|
148,338
|
|
Provision for credit losses
|
—
|
|
|
6,100
|
|
|
6,100
|
|
|||
Noninterest income
|
251,870
|
|
|
29,367
|
|
|
281,237
|
|
|||
Noninterest expense
|
243,970
|
|
|
122,598
|
|
|
366,568
|
|
|||
Income before income taxes
|
36,218
|
|
|
20,689
|
|
|
56,907
|
|
|||
Income tax expense
|
12,916
|
|
|
2,672
|
|
|
15,588
|
|
|||
Net income
|
$
|
23,302
|
|
|
$
|
18,017
|
|
|
$
|
41,319
|
|
Total assets
|
$
|
848,445
|
|
|
$
|
4,046,050
|
|
|
$
|
4,894,495
|
|
(1)
|
Net interest income is the difference between interest earned on assets and the cost of liabilities to fund those assets. Interest earned includes actual interest earned on segment assets and, if the segment has excess liabilities, interest credits for providing funding to the other segment. The cost of liabilities includes interest expense on segment liabilities and, if the segment does not have enough liabilities to fund its assets, a funding charge based on the cost of excess liabilities from another segment.
|
|
Years Ended December 31,
|
||||||||||
(in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
||||||
Beginning balance
|
$
|
(10,412
|
)
|
|
$
|
(2,449
|
)
|
|
$
|
1,546
|
|
Other comprehensive income (loss) before reclassifications
|
3,607
|
|
|
(6,313
|
)
|
|
(1,325
|
)
|
|||
Amounts reclassified from accumulated other comprehensive income (loss)
|
(317
|
)
|
|
(1,650
|
)
|
|
(2,670
|
)
|
|||
Net current-period other comprehensive income (loss)
|
3,290
|
|
|
(7,963
|
)
|
|
(3,995
|
)
|
|||
Ending balance
|
$
|
(7,122
|
)
|
|
$
|
(10,412
|
)
|
|
$
|
(2,449
|
)
|
Affected Line Item in the Consolidated Statements of Operations
|
|
Amount Reclassified from Accumulated
Other Comprehensive Income (Loss)
|
||||||||||
|
|
Years Ended December 31,
|
||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
|
||||||
Gain on sale of investment securities available for sale
|
|
$
|
489
|
|
|
$
|
2,539
|
|
|
$
|
2,406
|
|
Income tax expense (benefit)
|
|
172
|
|
|
889
|
|
|
(264
|
)
|
|||
Total, net of tax
|
|
$
|
317
|
|
|
$
|
1,650
|
|
|
$
|
2,670
|
|
Condensed Statements of Financial Condition
|
At December 31,
|
||||||
(in thousands)
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
14,101
|
|
|
$
|
12,260
|
|
Other assets
|
7,319
|
|
|
9,700
|
|
||
Investment in stock of subsidiaries
|
807,398
|
|
|
732,135
|
|
||
Total assets
|
$
|
828,818
|
|
|
$
|
754,095
|
|
Liabilities:
|
|
|
|
||||
Other liabilities
|
$
|
1,021
|
|
|
$
|
1,521
|
|
Long-term debt
|
123,417
|
|
|
123,290
|
|
||
Total liabilities
|
124,438
|
|
|
124,811
|
|
||
Shareholders’ Equity:
|
|
|
|
||||
Preferred stock, no par value
|
—
|
|
|
—
|
|
||
Common stock, no par value
|
511
|
|
|
511
|
|
||
Additional paid-in capital
|
339,009
|
|
|
336,149
|
|
||
Retained earnings
|
371,982
|
|
|
303,036
|
|
||
Accumulated other comprehensive loss
|
(7,122
|
)
|
|
(10,412
|
)
|
||
Total stockholder's equity
|
704,380
|
|
|
629,284
|
|
||
Total liabilities and stockholder's equity
|
$
|
828,818
|
|
|
$
|
754,095
|
|
Condensed Statements of Operations
|
Years Ended December 31,
|
||||||||||
(in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
||||||
Net interest expense
|
$
|
(4,625
|
)
|
|
$
|
(2,680
|
)
|
|
$
|
(1,036
|
)
|
Noninterest income
|
1,904
|
|
|
1,622
|
|
|
1,686
|
|
|||
(Loss) income before income tax benefit and equity in income of subsidiaries
|
(2,721
|
)
|
|
(1,058
|
)
|
|
650
|
|
|||
Dividend from subsidiaries to parent
|
4,000
|
|
|
4,697
|
|
|
13,181
|
|
|||
|
1,279
|
|
|
3,639
|
|
|
13,831
|
|
|||
Noninterest expense
|
6,681
|
|
|
7,746
|
|
|
7,239
|
|
|||
(Loss) income before income tax benefit
|
(5,402
|
)
|
|
(4,107
|
)
|
|
6,592
|
|
|||
Income tax benefit
|
(3,381
|
)
|
|
(4,656
|
)
|
|
(561
|
)
|
|||
Income from subsidiaries
|
70,967
|
|
|
57,602
|
|
|
34,166
|
|
|||
Net income
|
$
|
68,946
|
|
|
$
|
58,151
|
|
|
$
|
41,319
|
|
|
|
|
|
|
|
||||||
Other comprehensive income (loss)
|
3,290
|
|
|
(7,963
|
)
|
|
(3,995
|
)
|
|||
Comprehensive income
|
$
|
72,236
|
|
|
$
|
50,188
|
|
|
$
|
37,324
|
|
Condensed Statements of Cash Flows
|
Years Ended December 31,
|
||||||||||
(in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
||||||
Net cash (used in) provided by operating activities
|
$
|
(3,395
|
)
|
|
$
|
990
|
|
|
$
|
2,654
|
|
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Net purchases of and proceeds from investment securities
|
2,546
|
|
|
(5,029
|
)
|
|
673
|
|
|||
Net payments for investments in and advances to subsidiaries
|
2,685
|
|
|
(116,090
|
)
|
|
(992
|
)
|
|||
Net cash provided by (used in) investing activities
|
5,231
|
|
|
(121,119
|
)
|
|
(319
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Proceeds from issuance of common stock
|
11
|
|
|
2,713
|
|
|
177
|
|
|||
Proceeds from issuance of long-term debt
|
—
|
|
|
63,184
|
|
|
—
|
|
|||
Proceeds from equity raise
|
—
|
|
|
58,713
|
|
|
—
|
|
|||
Dividends paid
|
—
|
|
|
—
|
|
|
(5
|
)
|
|||
Proceeds from and repayment of advances from subsidiaries
|
—
|
|
|
2
|
|
|
—
|
|
|||
Other, net
|
(6
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash provided by financing activities
|
5
|
|
|
124,612
|
|
|
172
|
|
|||
Increase in cash and cash equivalents
|
1,841
|
|
|
4,483
|
|
|
2,507
|
|
|||
Cash and cash equivalents at beginning of year
|
12,260
|
|
|
7,777
|
|
|
5,270
|
|
|||
Cash and cash equivalents at end of year
|
$
|
14,101
|
|
|
$
|
12,260
|
|
|
$
|
7,777
|
|
|
Quarter Ended
|
||||||||||||||||||||||||||||||
(in thousands, except share data)
|
Dec. 31, 2017
|
|
Sept. 30, 2017
|
|
June 30, 2017
|
|
Mar. 31, 2017
|
|
Dec. 31, 2016
|
|
Sept. 30, 2016
|
|
June 30, 2016
|
|
Mar. 31, 2016
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest income
|
$
|
63,686
|
|
|
$
|
61,981
|
|
|
$
|
56,742
|
|
|
$
|
55,274
|
|
|
$
|
56,862
|
|
|
$
|
55,330
|
|
|
$
|
51,291
|
|
|
$
|
46,054
|
|
Interest expense
|
12,607
|
|
|
11,141
|
|
|
9,874
|
|
|
9,623
|
|
|
8,788
|
|
|
8,528
|
|
|
6,809
|
|
|
5,363
|
|
||||||||
Net interest income
|
51,079
|
|
|
50,840
|
|
|
46,868
|
|
|
45,651
|
|
|
48,074
|
|
|
46,802
|
|
|
44,482
|
|
|
40,691
|
|
||||||||
Provision for credit losses
|
—
|
|
|
250
|
|
|
500
|
|
|
—
|
|
|
350
|
|
|
1,250
|
|
|
1,100
|
|
|
1,400
|
|
||||||||
Net interest income after provision for credit losses
|
51,079
|
|
|
50,590
|
|
|
46,368
|
|
|
45,651
|
|
|
47,724
|
|
|
45,552
|
|
|
43,382
|
|
|
39,291
|
|
||||||||
Noninterest income
|
72,801
|
|
|
83,884
|
|
|
81,008
|
|
|
74,461
|
|
|
73,221
|
|
|
111,745
|
|
|
102,476
|
|
|
71,708
|
|
||||||||
Noninterest expense
|
106,838
|
|
|
114,697
|
|
|
111,244
|
|
|
106,874
|
|
|
117,539
|
|
|
114,399
|
|
|
111,031
|
|
|
101,353
|
|
||||||||
Income before income tax (benefit) expense
|
17,042
|
|
|
19,777
|
|
|
16,132
|
|
|
13,238
|
|
|
3,406
|
|
|
42,898
|
|
|
34,827
|
|
|
9,646
|
|
||||||||
Income tax (benefit) expense
|
(17,873
|
)
|
|
5,938
|
|
|
4,923
|
|
|
4,255
|
|
|
1,112
|
|
|
15,197
|
|
|
13,078
|
|
|
3,239
|
|
||||||||
Net income
|
$
|
34,915
|
|
|
$
|
13,839
|
|
|
$
|
11,209
|
|
|
$
|
8,983
|
|
|
$
|
2,294
|
|
|
$
|
27,701
|
|
|
$
|
21,749
|
|
|
$
|
6,407
|
|
Basic earnings per share
|
$
|
1.30
|
|
|
$
|
0.51
|
|
|
$
|
0.42
|
|
|
$
|
0.33
|
|
|
$
|
0.09
|
|
|
$
|
1.12
|
|
|
$
|
0.88
|
|
|
$
|
0.27
|
|
Diluted earnings per share
|
$
|
1.29
|
|
|
$
|
0.51
|
|
|
$
|
0.41
|
|
|
$
|
0.33
|
|
|
$
|
0.09
|
|
|
$
|
1.11
|
|
|
$
|
0.87
|
|
|
$
|
0.27
|
|
(in thousands)
|
|
Facility related costs
|
|
Personnel related costs
|
|
Total
|
||||||
Balance at December 31, 2016
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Restructuring charges
|
|
3,072
|
|
|
648
|
|
|
3,720
|
|
|||
Costs paid or otherwise settled
|
|
(1,686
|
)
|
|
(648
|
)
|
|
(2,334
|
)
|
|||
Balance at December 31, 2017
|
|
$
|
1,386
|
|
|
$
|
—
|
|
|
$
|
1,386
|
|
ITEM 9
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A
|
CONTROLS AND PROCEDURES
|
ITEM 10
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11
|
EXECUTIVE COMPENSATION
|
ITEM 12
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
Plan Category
|
(a) Number of
Securities to be
Issued Upon
Exercise of
Outstanding
Options,
Warrants and
Rights
|
|
(b) Weighted
Average Exercise
Price of
Outstanding
Options,
Warrants, and
Rights
|
|
(c) Number of
Securities
Remaining
Available for
Future Issuance
Under Equity
Compensation
Plans (Excluding
Securities Reflected
in Column (a))
|
|
||||||
|
|
|
|
|
|
|
||||||
Plans approved by shareholders
|
640,247
|
|
(1
|
)
|
$
|
10.16
|
|
(2
|
)
|
1,074,890
|
|
(3)
|
Plans not approved by shareholders (4)
|
10,800
|
|
(4
|
)
|
$
|
1.07
|
|
|
N/A
|
|
|
|
Total
|
651,047
|
|
|
$
|
9.80
|
|
(2
|
)
|
1,074,890
|
|
|
(1)
|
Consists of 267,547 shares subject to option grants awarded pursuant to the HomeStreet, Inc. 2010 Equity Incentive Plan (the "2010 Plan"), 152,209 shares subject to Restricted Stock Units awarded under the 2014 Plan and 231,291 shares issuable under Performance Share Units awarded under the 2014 Plan, assuming maximum performance goals are met under such awards, resulting in the issuance of the maximum number of shares allowed under those awards. The 2010 Plan was terminated when the 2014 Plan was approved by our shareholders on May 29, 2014. While the terms of the 2010 Plan remain in effect for any awards issued under that plan that are still outstanding, new awards may not be granted under the 2010 Plan.
|
(2)
|
Shares issued on vesting of Restricted Stock Units and Performance Share Units under the 2014 Plan are done without payment by the participant of any additional consideration and therefore have been excluded from this calculation. The weighted average exercise price reflects only the exercise price of the options issued under the 2010 Plan that are still outstanding as of the date of this table.
|
(3)
|
Consists of shares remaining available for issuance under the 2014 Plan.
|
(4)
|
Consists of retention equity awards granted in 2010 outside of the 2010 Plan but subject to its terms and conditions.
|
ITEM 13
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
|
ITEM 14
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
ITEM 15
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
(a)
|
Financial Statements and Financial Statement Schedules
|
(i)
|
Financial Statements
|
(ii)
|
Financial Statement Schedules
|
(iii)
|
Exhibits
|
Exhibit
Number
|
|
Description
|
|
|
|
3.1 (1)
|
|
|
|
|
|
3.2 (2)
|
|
|
|
|
|
3.3 (3)
|
|
|
|
|
|
3.4 (4)
|
|
|
|
|
|
4.1 (5)
|
|
|
|
|
|
4.2
|
|
|
|
|
|
4.3 (6) ††
|
|
|
|
|
|
10.1 * (7)
|
|
|
|
|
|
10.2 *(8)
|
|
|
|
|
|
10.3 * (8)
|
|
|
|
|
|
10.4 * (8)
|
|
|
|
|
|
10.5 * (9)
|
|
|
|
|
|
10.6 * (9)
|
|
|
|
|
|
10.7 * (7)
|
|
|
|
|
|
10.8 * (7)
|
|
|
|
|
|
10.9 * (10)
|
|
|
|
|
|
10.10 *
|
|
|
|
|
|
10.11 *
|
|
|
|
|
|
10.12 * (11)
|
|
|
|
|
|
10.13 *
|
|
|
|
|
|
10.14 (7)
|
|
|
|
|
|
10.15 (7)
|
|
|
|
|
|
10.16 (7)
|
|
|
|
|
|
10.17 (12)†
|
|
|
|
|
|
10.18 (8)
|
|
|
|
|
|
10.19 (9)
|
|
|
|
|
|
10.20 (12)
|
|
|
|
|
|
10.21 (7)
|
|
|
|
|
|
10.22 (7) †
|
|
|
|
|
|
10.23 (7)
|
|
|
|
|
|
10.24 (7) †
|
|
|
|
|
|
10.25 (10)
|
|
|
|
|
|
10.26 (14)
|
|
|
|
|
|
10.27 (8)
|
|
|
|
|
|
10.28 (9)
|
|
|
|
|
|
10.28 (10)
|
|
|
|
|
|
10.30 (15)
|
|
|
|
|
|
10.31 (13)
|
|
|
|
|
|
10.32 (16)
|
|
|
|
|
|
12.1
|
|
|
|
|
|
21
|
|
|
|
|
|
23.1
|
|
|
|
|
|
24.1
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32(17)
|
|
|
|
|
|
101.INS (18)
|
|
XBRL Instance Document
|
|
|
|
101.SCH (18)
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL (18)
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF (18)
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.LAB (18)
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
101.PRE (18)
|
|
XBRL Taxonomy Extension Definitions Linkbase Document
|
(1)
|
Filed as an exhibit to HomeStreet, Inc.’s Current Report on Form 8-K (SEC File No. 001-35424) filed on August 2, 2016, and incorporated herein by reference.
|
|
|
(2)
|
Filed as an exhibit to HomeStreet, Inc.’s Amendment No. 4 to Registration Statement on Form S-1 (SEC File No. 333-173980) filed on July 26, 2011, and incorporated herein by reference.
|
|
|
(3)
|
Filed as an exhibit to HomeStreet, Inc.’s Current Report on Form 8-K (SEC File No. 001-35424) filed on February 29, 2012, and incorporated herein by reference.
|
|
|
(4)
|
Filed as an exhibit to HomeStreet, Inc.’s Current Report on Form 8-K (SEC File No. 001-35424) filed on October 25, 2012, and incorporated herein by reference.
|
|
|
(5)
|
Filed as an exhibit to HomeStreet, Inc.’s Amendment No. 5 to Registration Statement on Form S-1 (SEC File No. 333-173980) filed on August 9, 2011, and incorporated herein by reference.
|
|
|
(6)
|
Filed as an exhibit to HomeStreet, Inc.’s Current Report on Form 8-K (SEC File No. 001-35424) filed on May 20, 2016, and incorporated herein by reference.
|
|
|
(7)
|
Filed as an exhibit to HomeStreet, Inc.’s Amendment No. 1 to Registration Statement on Form S-1 (SEC File No. 333-173980) filed on May 19, 2011, and incorporated herein by reference.
|
|
|
(8)
|
Filed as an exhibit to HomeStreet, Inc.’s Annual Report on Form 10-K (SEC File No. 001-35424) filed on March 25, 2015, and incorporated herein by reference.
|
|
|
(9)
|
Filed as an exhibit to HomeStreet, Inc.’s Annual Report on Form 10-K (SEC File No. 001-35424) filed on March 11, 2016, and incorporated herein by reference.
|
|
|
(10)
|
Filed as an exhibit to HomeStreet, Inc.’s Amendment No. 2 to Registration Statement on Form S-1 (SEC File No. 333-173980) filed on June 21, 2011, and incorporated herein by reference.
|
|
|
(11)
|
Filed as an exhibit to HomeStreet, Inc.’s current Report on Form 8-K (SEC File No. 001-35424) filed on September 12, 2017, and incorporated herein by reference.
|
|
|
(12)
|
Filed as an exhibit to HomeStreet, Inc.’s Annual Report on Form 10-K (SEC File No. 001-35424) filed on March 17, 2014, and incorporated herein by reference.
|
|
|
(13)
|
Filed as an exhibit to HomeStreet Inc.’s Current Report on Form 8-K (SEC File No. 001-35424) filed on May 20, 2016, and incorporated herein by reference.
|
|
|
(14)
|
Filed as an exhibit to HomeStreet, Inc.’s Amendment No. 3 to Registration Statement on Form S-1 (SEC File No. 333-173980) filed on July 8, 2011, and incorporated herein by reference.
|
|
|
(15)
|
Filed as an exhibit to HomeStreet Inc.’s Current Report on Form 8-K (SEC File No. 001-35424) filed on September 28, 2015, and incorporated herein by reference.
|
|
|
(16)
|
Filed as an exhibit to HomeStreet Inc.’s Current Report on Form 8-K (SEC File No. 001-35424) filed on December 6, 2016, and incorporated herein by reference.
|
|
|
(17)
|
This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that Section. Such exhibit shall not be deemed incorporated into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.
|
|
|
(18)
|
As provided in Rule 406T of Regulation S-T, this information shall not be deemed “filed” for purposes of Section 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934 or otherwise subject to liability under those sections.
|
|
|
|
Pursuant to Rule 405 of Regulation S-T, includes the following financial information included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, formatted in XBRL (eXtensible Business Reporting Language) interactive data files: (i) the Consolidated Statements of Operations for the three years ended December 31, 2017, (ii) the Consolidated Statements of Financial Condition as of December 31, 2017 and December 31, 2016, (iii) the Consolidated Statements of Shareholders’ Equity and Comprehensive Income for the three years ended December 31, 2017, (iv) the Consolidated Statements of Cash Flows for the three years ended December 31, 2017, and (v) the Notes to Consolidated Financial Statements.
|
|
|
†
|
Portions of this exhibit have been omitted pursuant to a confidential treatment order by the Securities and Exchange Commission.
|
|
|
††
|
Instruments with respect to any other long-term debt of HomeStreet, Inc. and its consolidated subsidiaries are omitted pursuant to Item 601(b)(4)(iii) of Regulation S-K since the total amount of securities authorized thereunder does not exceed 10 percent of the total assets of HomeStreet, Inc. and its subsidiaries on a consolidated basis. HomeStreet, Inc. hereby agrees to furnish a copy of any such instrument to the Securities and Exchange Commission upon request.
|
|
|
*
|
Management contract or compensation plan or arrangement.
|
|
HomeStreet, Inc.
|
|
|
|
|
|
By:
|
/s/ Mark K. Mason
|
|
|
Mark K. Mason
|
|
|
President and Chief Executive Officer
|
|
HomeStreet, Inc.
|
|
|
|
|
|
By:
|
/s/ Mark R. Ruh
|
|
|
Mark R. Ruh
|
|
|
Executive Vice President,
Chief Financial Officer and Principal Accounting Officer |
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Mark K. Mason
|
|
Chairman of the Board, President and Chief Executive Officer (Principal Executive Officer)
|
|
March 6, 2018
|
Mark K. Mason, Chairman
|
|
|
|
|
|
|
|
|
|
/s/ David A. Ederer
|
|
Chairman Emeritus of the Board
|
|
March 6, 2018
|
David A. Ederer, Chairman Emeritus
|
|
|
|
|
|
|
|
|
|
/s/ Mark R. Ruh
|
|
Executive Vice President, Chief Financial Officer and Principal Accounting Officer
|
|
March 6, 2018
|
Mark R. Ruh
|
|
|
|
|
|
|
|
|
|
/s/ Scott M. Boggs
|
|
Director
|
|
March 6, 2018
|
Scott M. Boggs
|
|
|
|
|
|
|
|
|
|
/s/ Mark R. Patterson
|
|
Director
|
|
March 6, 2018
|
Mark R. Patterson
|
|
|
|
|
|
|
|
|
|
/s/ Victor H. Indiek
|
|
Director
|
|
March 6, 2018
|
Victor H. Indiek
|
|
|
|
|
|
|
|
|
|
/s/ Thomas E. King
|
|
Director
|
|
March 6, 2018
|
Thomas E. King
|
|
|
|
|
|
|
|
|
|
/s/ George W. Kirk
|
|
Director
|
|
March 6, 2018
|
George W. Kirk
|
|
|
|
|
|
|
|
|
|
/s/ Douglas I. Smith
|
|
Director
|
|
March 6, 2018
|
Douglas I. Smith
|
|
|
|
|
|
|
|
|
|
/s/ Donald R. Voss
|
|
Director
|
|
March 6, 2018
|
Donald R. Voss
|
|
|
|
|
I.
|
EMPLOYMENT
|
B.
|
Term of Agreement
|
II.
|
COMPENSATION AND BENEFITS
|
C.
|
Equity Compensation
|
D.
|
Benefits
|
E.
|
Business Expenses
|
F.
|
Allocation of Payments
|
III.
|
TERMINATION
|
A.
|
Employment Termination
|
B.
|
Automatic Termination on Death or Total Disability
|
C.
|
Termination Without Cause or Executive Resigns for Good Reason Immediately Before or Following a Change of Control
|
D.
|
Termination with Cause or Resignation Without Good Reason
|
E.
|
Termination Without Cause or Executive Resigns for Good Reason
|
F.
|
Definitions of “Cause”, “Good Reason” and “Change of Control”
|
1.
|
Cause
|
2.
|
Good Reason
|
3.
|
Change of Control
|
IV.
|
CONFIDENTIALITY; NON-SOLICITATION;
|
A.
|
Confidentiality Agreement
|
B.
|
Non-Competition
|
C.
|
Non-Solicitation
|
D.
|
Competing Business
|
V.
|
ASSIGNMENT
|
VI.
|
MISCELLANEOUS
|
|
|
|
Date
|
|
Mark Mason
|
1.
|
“Confidential Information” means information concerning the business, operations, strategies, financial status, products, services, customer names, customer lists and customer information of HomeStreet, which is confidential or proprietary to HomeStreet.
|
2.
|
Confidential Information does not include information that: (a) is or becomes generally available to the public through no fault or act of Recipient or any of his Representatives in violation of this Agreement; (b) is or becomes available to Recipient or his representatives on a non-confidential basis from a source other than HomeStreet not known to Recipient or such Representatives to be prohibited from disclosing such information by a contractual, legal or fiduciary obligation of confidentiality; (c) is independently developed by the Recipient or his representatives without use of or reliance on, either directly or indirectly, Confidential
|
3.
|
After the termination of his services or employment agreement, Recipient agrees not to disclose any Confidential Information to any third party, unless such third party is a fiduciary, affiliate or HomeStreet vendor and such vendor and HomeStreet have signed a similar confidentiality agreement, or such disclosure of Confidential Information is required by lawful judicial or governmental order or is covered by paragraph 4 below. Recipient agrees to give HomeStreet reasonable notice in writing in advance of releasing Confidential Information pursuant to any judicial or governmental order, except for disclosures described in paragraph 4, below. Recipient additionally agrees to implement and maintain at all times reasonably appropriate procedures and controls to ensure at all times the security and confidentiality of all of HomeStreet’s Confidential Information, to protect against any anticipated threats or hazards to the security or integrity of such information; and to protect against unauthorized access to or use of such information that could result in substantial harm or inconvenience to Home Street or any customer of HomeStreet. Recipient agrees to notify HomeStreet of any known security breach, any known unauthorized release of Confidential Information, or any known unauthorized attempt to access Confidential Information of which it becomes aware within a reasonable time of the occurrence of such event. Such notice will include, at a minimum, the date and time of any such event, the nature and extent of Confidential Information involved in any such event, and the corrective measures taken by Recipient in response to any such event.
|
4.
|
Executive understands and acknowledges that nothing in this Agreement prohibits or limits Executive or Executive’s counsel from initiating communications directly with, responding to any inquiry from, volunteering information to, or providing testimony before, the Securities and Exchange Commission regarding this agreement and its underlying facts and circumstances, or any reporting of, investigation into, or proceeding regarding suspected violations of law, and that Executive is not required to advise or seek permission from HomeStreet before engaging in any such activity. Executive recognizes that, in connection with any such activity, Executive must inform such authority that the information Executive is providing is confidential. Despite the foregoing, Executive is not permitted to reveal to any third-party, including any governmental, law enforcement, or regulatory authority, information Executive came to learn during the course of employment with HomeStreet that is protected from disclosure by any applicable privilege, including but not limited to the attorney-client privilege, attorney work product doctrine and/or other applicable legal privileges. HomeStreet does not waive any applicable privileges or the right to continue to protect its privileged attorney-client information, attorney work product, and other privileged information. Additionally, Executive recognizes that Executive’s ability to disclose information may be limited or prohibited by applicable law and the Company does not consent to disclosures that would violate applicable law. Such applicable laws include, without limitation, laws and regulations restricting disclosure of confidential supervisory information (any information or materials relating to the examination and supervision of the
|
5.
|
All Confidential Information is and shall remain the property of HomeStreet. No license or conveyance of any right is granted or implied by the distribution of any Confidential Information to Recipient. Recipient agrees not to use, duplicate, or reproduce in any way any Confidential Information for Recipient’s own benefit or financial gain, or for any third party’s benefit or financial gain except to the extent reasonably necessary to analyze and prepare a business proposal to HomeStreet, in connection with rendering services to HomeStreet and to prepare and maintain his internal files in the ordinary course of its business. All documents (originals and copies, including electronic versions) containing Confidential Information shall either be destroyed or disposed of in a manner consistent with the Fair and Accurate Credit Transactions Act of 2003 or, if directed by HomeStreet, returned to HomeStreet upon termination of the rendering of services to HomeStreet by Recipient. Recipient agrees that HomeStreet may take reasonable actions as deemed appropriate by HomeStreet to confirm that Recipient has satisfied these obligations. It is understood that Recipient may retain one archival copy of such information for his internal files except for Bank customer loan files and documents containing private customer information.
|
6.
|
Executive understands that pursuant to the federal Defense of Trade Secrets Act, an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret in the court proceeding, if the individual (A) files any document containing the trade secret under seal; and (B) does not disclose the trade secret, except pursuant to court order. Nothing in the foregoing provision shall be construed to authorize or limit liability for, an act that is otherwise prohibited by law, such as the unlawful access of material by unauthorized means.
|
7.
|
By making any Confidential Information available to Recipient, HomeStreet makes no representation, warranty or guarantee, either express or implied, as to the accuracy or completeness of any Confidential Information or to the format in which such Confidential Information is provided to Recipient. Except as otherwise provided in any engagement letter, HomeStreet shall not be liable to any party for damages, of whatever kind, as a result of Recipient’s reliance on any Confidential Information or any format in which Confidential Information is made available to Recipient.
|
8.
|
Recipient acknowledges that due to the highly sensitive nature of the Confidential Information, Recipient will be liable to HomeStreet for all losses suffered by HomeStreet as a result of Recipient’s intentional and material breach of this Agreement. In addition to any other remedies available to HomeStreet, Recipient agrees that, if Recipient breaches this Agreement, HomeStreet may seek injunctive relief against Recipient to stop any such breach.
|
9.
|
If either Party to this Agreement commences legal action to enforce any rights arising out of or relating to this Agreement, the prevailing Party in any such action shall be entitled to recover reasonable attorneys’ fees and costs, including fees and costs on appeal. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Washington and the venue for any legal action shall be Seattle, Washington.
|
10.
|
If Recipient and HomeStreet have entered into any other agreement, the terms of this Agreement shall, by this reference, be incorporated into and made a part of such other agreement, except to the extent otherwise specifically provided in such other agreement. The terms of this Agreement shall survive the termination of rendering of services to HomeStreet by Recipient for a period of ten years.
|
I.
|
EMPLOYMENT
|
B.
|
Term of Agreement
|
II.
|
COMPENSATION AND BENEFITS
|
C.
|
Equity Compensation
|
D.
|
Benefits
|
E.
|
Business Expenses
|
III.
|
TERMINATION
|
A.
|
Employment Termination
|
B.
|
Automatic Termination on Death or Total Disability
|
C.
|
Termination with Cause or Resignation Without Good Reason
|
D.
|
Termination Without Cause or Executive Resigns for Good Reason
|
E.
|
Definitions of “Cause”, “Good Reason”
|
1.
|
Cause
|
2.
|
Good Reason
|
IV.
|
CONFIDENTIALITY; NON-SOLICITATION;
|
V.
|
ASSIGNMENT
|
VI.
|
MISCELLANEOUS
|
WILLIAM ENDRESEN
|
|
/s/ William Endresen
|
|
Date February 27, 2018
|
|
|
|
HOMESTREET BANK
|
|
By Pam Taylor
|
|
Its EVP/ HR Director
|
|
Date February 27, 2018
|
|
|
|
HOMESTREET, INC.
|
|
By Pam Taylor
|
|
Its EVP/ HR Director
|
|
Date February 27, 2018
|
|
1.
|
Employee is employed as Commercial Real Estate and Commercial Capital President and an Executive Vice President for HomeStreet. By virtue of his/her position with the Company, Employee has access to Confidential Information (defined below), which must remain confidential during and after his/her employment. Employee also has access to important customer and employee relationships that must be protected from unfair competition or misuse that might advantage others to the detriment of HomeStreet.
|
2.
|
With this agreement, the Company is providing Employee a Change in Control benefit to which he/she is not otherwise entitled. The Change in Control benefits, Employee’s continuing employment with HomeStreet, and access to Confidential Information and relationships with HomeStreet customers and employees all serve as consideration for the obligations stated in this Agreement.
|
1.
|
“Confidential Information” means information concerning the business, operations, strategies, financial status, products, services, customer names, customer lists and customer information of HomeStreet, which is confidential or proprietary to HomeStreet. Confidential Information does not include information that: (a) is or becomes generally available to the public through no fault or act of Employee in violation of this Agreement; (b) is or becomes available to Employee on a non-confidential basis from a source other than HomeStreet not known to Employee to be prohibited from disclosing such information by a contractual, legal or fiduciary obligation of confidentiality; (c) is independently developed by the Employee without use of or reliance on, either directly or indirectly, Confidential Information; or (d) was known to or in the possession of Employee on a non-confidential basis prior to disclosure by HomeStreet.
|
2.
|
All Confidential Information is and shall remain the property of HomeStreet. No license or conveyance of any right is granted or implied by the distribution of any Confidential Information to Employee. Employee agrees not to use, duplicate, or reproduce in any way any Confidential Information for Employee’s own benefit or financial gain, or for any third party’s benefit or financial gain, except in connection with rendering services to HomeStreet. All documents (originals and copies, including electronic versions) containing Confidential Information shall be returned to HomeStreet upon termination.
|
3.
|
During, and after the termination of, his/her employment, Employee agrees not to disclose any of HomeStreet’s Confidential Information to any person or entity or use such Confidential Information to his/her own benefit or the benefit of any person or entity other than HomeStreet. This provision shall not prohibit disclosure of Confidential Information during Employee’s employment to an officer, employee, fiduciary or affiliate of HomeStreet, or a HomeStreet vendor, provided a third party outside HomeStreet (such as a vendor) has signed a similar confidentiality agreement, or such disclosure of Confidential Information is required by lawful judicial or governmental order. Employee agrees to give HomeStreet reasonable notice in writing in advance of releasing Confidential Information pursuant to any judicial or governmental order. Employee additionally agrees to implement and maintain at all times reasonably appropriate procedures and controls to ensure at all times the security and confidentiality of all of HomeStreet’s Confidential Information, to protect against any anticipated threats or hazards to the security or integrity of such information; and to protect against unauthorized access to or use of such information that could result in substantial harm or inconvenience to Home Street or any customer of HomeStreet. Employee agrees to notify HomeStreet of any known security breach, any known unauthorized release of Confidential Information, or any known unauthorized attempt to access Confidential Information of which it becomes aware within a reasonable time of the occurrence of such event. Such notice will include, at a minimum, the date and time of any such event, the nature and extent of Confidential Information involved in any such event, and the corrective measures taken by Employee in response to any such event.
|
4.
|
During Employee’s employment with the Company and/or a successor employer and for eighteen (18) months after the termination of such employment, Employee will not, directly or indirectly, on his own or on behalf of any other entity: (1) induce, or attempt to induce, any employee, executive, or independent contractor of the Company to cease such employment or relationship with HomeStreet; (2) engage, employ, contract with, or participate in ownership with any person who was an employee, executive, or independent contractor for HomeStreet within the six (6) months immediately prior to such engagement, employment, contract or other business relationship on behalf of any Competing Business (defined below); or (3) solicit, divert, appropriate to or accept on behalf of any Competing Business, any business or account from any customer of the Company with whom Employee has interacted as part of his/her duties with the Company or about whom Employee has acquired confidential information in the course of his employment, or encourage or entice any such customer to cease its business or banking relationship with the Company; or (4) engage or participate in, contract with or become employed by or render advisory or consulting or other services to any Competing Business, or otherwise compete with the Company on his own behalf or for the benefit of any other entity.
|
5.
|
For the purposes of this Agreement, “Competing Business” means any bank or thrift with an office or branch in Alaska, Arizona, California, Colorado, Hawaii, Idaho, Nevada, Oregon, Utah or Washington.
|
6.
|
Employee acknowledges and agrees that the restrictive covenants in this Agreement are reasonable and necessary to protect HomeStreet’s goodwill, confidential and proprietary information, trade secrets, business strategies, customer relationships and other legitimate
|
7.
|
Nothing in this Agreement alters the at-will nature of Employee’s employment with HomeStreet. If the Company or Employee should terminate the employment relationship, this Agreement shall remain in full force and effect.
|
8.
|
Employee agrees that a successor in interest to HomeStreet may enforce the rights set forth in this Agreement following a change of control, without further express consent by Employee and that HomeStreet may, at its option, assign its rights to any successor or assign. Any amendment to or modification of this Agreement, or waiver of any obligation hereunder, shall be in writing signed by the party to be bound thereby. Any waiver by HomeStreet of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach of the provision or as a waiver of a breach of any other provision of this Agreement.
|
9.
|
This Agreement shall be governed by the law of the State of Washington. This Agreement sets forth the entire agreement, and supersedes any prior agreements, with regard to the subject matter hereof. Employee acknowledges that he/she has carefully read all of the provisions of this Agreement and agree that (a) the same are necessary for the reasonable and proper protection of the Company’s business, (b) every provision of this Agreement is reasonable with respect to its scope and duration and (c) he/she has received a copy of this Agreement and had the opportunity to review it with legal counsel, at his/her option. If either Party to this Agreement commences legal action to enforce any rights arising out of or relating to this Agreement, the prevailing Party in any such action shall be entitled to recover reasonable attorneys’ fees and costs, including fees and costs on appeal. The venue for any legal action shall be Seattle, Washington. If a court of law holds any provision of this Agreement to be illegal, invalid or unenforceable, (a) that provision shall be deemed amended to achieve an economic effect that is as near as possible to that provided by the original provision and (b) the legality, validity and enforceability of the remaining provisions of this Agreement shall not be affected.
|
HomeStreet Bank
|
|
Employee
|
/s/ Pam Taylor
|
|
/s/ William Endresen
|
|
|
|
A.
|
Assets means all or substantially all of the assets of the Company, as they shall be held by the Company from time to time, including the assets of all divisions, segments, and business units in existence at such time.
|
B.
|
Change in Control means except for a sale of the Company’s stock in a broad-based public offering:
|
1.
|
One person or entity acquiring or otherwise becoming the owner of fifty percent (50%) or more of the Company’s outstanding shares; or
|
2.
|
Dissolution or sale of fifty percent (50%) or more in value of the assets of either HomeStreet, Inc. or HomeStreet Bank; or
|
3.
|
A change “in the ownership or effective control” or “in the ownership of a substantial portion of the assets” of Employer, within the meaning of Section 280G or the Internal Revenue Code.
|
C.
|
Good Reason means any of the following, provided (a) Employee first gives written notice of such Good Reason to Employer within 60 days of the occurrence of the circumstances constituting Good Reason, (b) Employer has at least thirty (30) days to cure such condition or circumstance and (c) Employee’s separation from service occurs no later than six (6) months following the initial existence of the circumstances giving rise to Good Reason:
|
1.
|
A change in Employee’s duties, responsibilities or reporting relationships which represents a material adverse change from those in effect immediately prior to such change; or
|
2.
|
A reduction of more than fifteen percent (15%) of Employee’s base compensation without Employee’s prior agreement; or
|
3.
|
Relocation of Employee’s primary workplace outside of the Orange County of Southern California.
|
D.
|
Control means owning, and having the present and continuing right to exercise control over, a majority of the voting power of, and right to exercise control over management of, any entity, which right is not subject to any material limitations, qualifications, or exceptions (whether temporary or permanent).
|
E.
|
Termination for Cause means a termination of Employee’s employment by reason of Employee’s :
|
1.
|
Breach of any contractual obligation to the Company (including violation of any Confidentiality, Nonsolicitation and Noncompetition Agreement that Employee has executed), provided Employee has not cured such breach
|
2.
|
Willful breach or neglect of duties he/she is required to perform, provided Employee has not cured such breach within fourteen (14) days of receipt of written notice of such breach from the Company;
|
3.
|
Commission of act(s) of dishonesty, theft, embezzlement, fraud, misrepresentation or other act(s) of moral turpitude against the Company, its subsidiaries or affiliates, its shareholders or employees or which adversely impact the interest of Employer;
|
4.
|
Willful and continual failure to comply with any law, rule or regulation (other than traffic violations or similar offenses), provided that Employee has been given written notice of such failure and has not complied within fourteen (14) days after receipt of such notice (from the Company or a regulator or other authoritative source), or final cease and desist order of a regulatory agency having jurisdiction over Employer;
|
5.
|
Failure to follow direction, which failure is not corrected within fourteen (14) days after receipt by Employee of written notice outlining the corrective action required;
|
6.
|
Death or disability (“disability” is defined as the inability to perform the duties of his position for a consecutive period of 120 days or for any 150 days in any calendar year); or
|
7.
|
Other conduct or omission by Employee that Employer concludes is materially injurious to the Employer’s interests.
|
F.
|
Transfer shall mean the sale, transfer, or disposition of all or substantially all of the Assets in a single transaction or group of related transactions, but shall not include the sale, transfer, or disposition of any of the Assets in the ordinary course of business.
|
A.
|
Death. Should Employee die after becoming entitled to but before receipt of the Change in Control Payment under Section I of this agreement, then such payment will be made to the executors or administrators of his/her estate.
|
B.
|
General Creditor Status. The payment to which Employee may become entitled hereunder will be paid, when due, from the general assets of the Company, and no trust fund, escrow arrangement or other segregated account will be established as a funding vehicle for such payment. Accordingly, Employee’s right (or the right of the personal representatives or beneficiaries of Employee’s estate) to receive any payment hereunder will at all times be that of a general creditor of the Company and will have no priority over the claims of other general creditors.
|
C.
|
Regulatory Effect. The terms of this CIC Agreement and the payment of any Change in Control Payment is subject to and may be limited by applicable statutory, regulatory, contractual or other legal restriction binding on the Company or any required regulatory approval.
|
D.
|
Miscellaneous. This CIC Agreement will be binding upon the Company, its successors and assigns (including, without limitation, the surviving entity in any Change in Control) and is to be construed and interpreted under the laws of the State of Washington. This CIC Agreement shall be interpreted and administered in order to be an exempt “short term deferral” under Section 409A of the Internal Revenue Code and the regulations thereunder. This CIC Agreement may be amended only by written instrument signed by Employee and an authorized officer of the Company other than Employee. It supersedes all other Change in Control agreements executed by Employee and the Company. If any provision of this CIC Agreement as applied to Employee or the Company or to any circumstance should be adjudged by a court of competent jurisdiction to be void or unenforceable for any reason, the invalidity of that provision will in no way affect (to the maximum extent permissible by law) the application of such provision under circumstances different from those adjudicated by the court, the application of any other provision of this CIC Agreement, or the enforceability or invalidity of this CIC Agreement as a whole. Should any provision of this CIC Agreement become or be deemed invalid, illegal or unenforceable in any jurisdiction by reason of the scope, extent or duration of its coverage, then such provision will be deemed amended to the extent necessary to conform to applicable law so as to be valid and enforceable or, if such provision cannot be so amended without materially altering the intention of the parties, then such provision will be stricken and the remainder of this CIC Agreement will continue in full force and effect.
|
E.
|
Attorneys’ Fees. In the event of any legal proceeding with respect to any controversy, claim or dispute relating to the interpretation or application of the provisions of this letter agreement or any benefits payable hereunder, the prevailing party in such proceedings will be entitled to recover from the losing
|
|
|
HOMESTREET BANK
|
|
|
|
|
|
/s/ William Endresen
|
|
By /s/ Pam Taylor
|
|
Employee
|
|
Its EVP/ HR Director
|
|
Date February 27, 2018
|
|
Date February 27, 2018
|
|
|
|
|
|
|
|
HOMESTREET, INC.
|
|
|
|
|
|
|
|
By /s/ Pam Taylor
|
|
|
|
Its EVP/ HR Director
|
|
I.
|
EMPLOYMENT
|
B.
|
Term of Agreement
|
II.
|
COMPENSATION AND BENEFITS
|
C.
|
Equity Compensation
|
D.
|
Benefits
|
E.
|
Business Expenses
|
F.
|
Allocation of Payments
|
III.
|
TERMINATION
|
A.
|
Employment Termination
|
B.
|
Automatic Termination on Death or Total Disability
|
C.
|
Termination Without Cause or Executive Resigns for Good Reason Immediately Before or Following a Change of Control
|
D.
|
Termination with Cause or Resignation Without Good Reason
|
E.
|
Termination Without Cause or Executive Resigns for Good Reason
|
F.
|
Definitions of “Cause”, “Good Reason” and “Change of Control”
|
1.
|
Cause
|
2.
|
Good Reason
|
3.
|
Change of Control
|
IV.
|
CONFIDENTIALITY; NON-SOLICITATION;
|
A.
|
Confidentiality Agreement
|
B.
|
Non-Competition
|
C.
|
Non-Solicitation
|
D.
|
Competing Business
|
V.
|
ASSIGNMENT
|
VI.
|
MISCELLANEOUS
|
GODRFEY EVANS
|
/s/ Godfrey Evans
|
Date January 26, 2018
|
|
HOMESTREET, INC.
|
By Mark K. Mason
|
Its CEO and President
|
Date January 26, 2018
|
|
HOMESTREET, INC.
|
By Mark K. Mason
|
Its CEO and President
|
Date January 26, 2018
|
|
|
|
Date
|
|
Godfrey Evans
|
1.
|
“Confidential Information” means information concerning the business, operations, strategies, financial status, products, services, customer names, customer lists and customer information of HomeStreet, which is confidential or proprietary to HomeStreet.
|
2.
|
Confidential Information does not include information that: (a) is or becomes generally available to the public through no fault or act of Recipient or any of his Representatives in violation of this Agreement; (b) is or becomes available to Recipient or his representatives on a non-confidential basis from a source other than HomeStreet not known to Recipient or such Representatives to be prohibited from disclosing such information by a contractual, legal or fiduciary obligation of confidentiality; (c) is independently developed by the Recipient or his representatives without use of or reliance on, either directly or indirectly, Confidential Information; or (d) was known to or in the possession of Recipient or one of his representatives on a non-confidential basis prior to disclosure by HomeStreet under the terms of this Agreement; or (e) is developed primarily through the efforts or work product of Executive.
|
3.
|
After the termination of his services or employment agreement, Recipient agrees not to disclose any Confidential Information to any third party, unless such third party is a fiduciary, affiliate or HomeStreet vendor and such vendor and HomeStreet have signed a similar confidentiality agreement, or such disclosure of Confidential Information is required by lawful judicial or governmental order or is covered by paragraph 4 below. Recipient agrees to give HomeStreet reasonable notice in writing in advance of releasing Confidential Information pursuant to any judicial or governmental order, except for disclosures described in paragraph 4, below. Recipient additionally agrees to implement and maintain at all times reasonably appropriate procedures and controls to ensure at all times the security and confidentiality of all of HomeStreet’s Confidential Information, to protect against any anticipated threats or hazards to the security or integrity of such information; and to protect against unauthorized access to or use of such information that could result in substantial harm or inconvenience to Home Street or any customer of HomeStreet. Recipient agrees to notify HomeStreet of any known security breach, any known unauthorized release of Confidential Information, or any known unauthorized attempt to access Confidential Information of which it becomes aware within a reasonable time of the occurrence of such event. Such notice will include, at a minimum, the date and time of any such event, the nature and extent of Confidential Information involved in any such event, and the corrective measures taken by Recipient in response to any such event.
|
4.
|
Executive understands and acknowledges that nothing in this Agreement prohibits or limits Executive or Executive’s counsel from initiating communications directly with, responding to any inquiry from, volunteering information to, or providing testimony before, the Securities and Exchange Commission regarding this agreement and its underlying facts and circumstances, or any reporting of, investigation into, or proceeding regarding suspected violations of law, and that Executive is not required to advise or seek permission from HomeStreet before engaging in any such activity. Executive recognizes that, in connection with any such activity, Executive must inform such authority that the information Executive is providing is confidential. Despite the foregoing, Executive is not permitted to reveal to any third-party, including any governmental, law enforcement, or regulatory authority, information Executive came to learn during the course of employment with HomeStreet that is protected from disclosure by any applicable privilege, including but not limited to the attorney-client privilege, attorney work product doctrine and/or other applicable legal privileges. HomeStreet does not waive any applicable privileges or the right to continue to protect its privileged attorney-client information, attorney work product, and other privileged information. Additionally, Executive recognizes that Executive’s ability to disclose information may be limited or prohibited by applicable law and the Company does not consent to disclosures that would violate applicable law. Such applicable laws include, without limitation, laws and regulations restricting disclosure of confidential supervisory information (any information or materials relating to the examination and supervision of the Company by applicable bank regulatory agencies, Company materials responding to or referencing non-public information relating to examinations or supervision by bank regulatory agencies and correspondence to or from applicable banking regulators) or
|
5.
|
All Confidential Information is and shall remain the property of HomeStreet. No license or conveyance of any right is granted or implied by the distribution of any Confidential Information to Recipient. Recipient agrees not to use, duplicate, or reproduce in any way any Confidential Information for Recipient’s own benefit or financial gain, or for any third party’s benefit or financial gain except to the extent reasonably necessary to analyze and prepare a business proposal to HomeStreet, in connection with rendering services to HomeStreet and to prepare and maintain his internal files in the ordinary course of its business. All documents (originals and copies, including electronic versions) containing Confidential Information shall either be destroyed or disposed of in a manner consistent with the Fair and Accurate Credit Transactions Act of 2003 or, if directed by HomeStreet, returned to HomeStreet upon termination of the rendering of services to HomeStreet by Recipient. Recipient agrees that HomeStreet may take reasonable actions as deemed appropriate by HomeStreet to confirm that Recipient has satisfied these obligations. It is understood that Recipient may retain one archival copy of such information for his internal files except for Bank customer loan files and documents containing private customer information.
|
6.
|
Executive understands that pursuant to the federal Defense of Trade Secrets Act, an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret in the court proceeding, if the individual (A) files any document containing the trade secret under seal; and (B) does not disclose the trade secret, except pursuant to court order. Nothing in the foregoing provision shall be construed to authorize or limit liability for, an act that is otherwise prohibited by law, such as the unlawful access of material by unauthorized means.
|
7.
|
By making any Confidential Information available to Recipient, HomeStreet makes no representation, warranty or guarantee, either express or implied, as to the accuracy or completeness of any Confidential Information or to the format in which such Confidential Information is provided to Recipient. Except as otherwise provided in any engagement letter, HomeStreet shall not be liable to any party for damages, of whatever kind, as a result of Recipient’s reliance on any Confidential Information or any format in which Confidential Information is made available to Recipient.
|
8.
|
Recipient acknowledges that due to the highly sensitive nature of the Confidential Information, Recipient will be liable to HomeStreet for all losses suffered by HomeStreet as a result of Recipient’s intentional and material breach of this Agreement. In addition to any other remedies available to HomeStreet, Recipient agrees that, if Recipient breaches this Agreement, HomeStreet may seek injunctive relief against Recipient to stop any such breach.
|
9.
|
If either Party to this Agreement commences legal action to enforce any rights arising out of or relating to this Agreement, the prevailing Party in any such action shall be entitled to recover reasonable attorneys’ fees and costs, including fees and costs on appeal. This
|
10.
|
If Recipient and HomeStreet have entered into any other agreement, the terms of this Agreement shall, by this reference, be incorporated into and made a part of such other agreement, except to the extent otherwise specifically provided in such other agreement. The terms of this Agreement shall survive the termination of rendering of services to HomeStreet by Recipient for a period of ten years.
|
|
Years Ended December 31,
|
||||||||||||||
(Dollars in thousands)
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||
Fixed Charges
|
|
|
|
|
|
|
|
||||||||
Interest expense, excluding deposits
|
$
|
19,333
|
|
|
$
|
10,479
|
|
|
$
|
4,975
|
|
|
$
|
3,193
|
|
Amortization of premiums
|
4,065
|
|
|
4,671
|
|
|
3,461
|
|
|
1,068
|
|
||||
Estimated interest on rental expense (1)
|
8,705
|
|
|
7,346
|
|
|
6,628
|
|
|
5,049
|
|
||||
Preferred stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total Fixed Charges
|
$
|
32,103
|
|
|
$
|
22,496
|
|
|
$
|
15,064
|
|
|
$
|
9,310
|
|
Earnings
|
|
|
|
|
|
|
|
||||||||
Income before income taxes
|
$
|
66,189
|
|
|
$
|
90,777
|
|
|
$
|
56,907
|
|
|
$
|
33,315
|
|
Add: distributed income of equity investees
|
1,042
|
|
|
2,753
|
|
|
2,512
|
|
|
1,306
|
|
||||
Add: fixed charges
|
32,103
|
|
|
22,496
|
|
|
15,064
|
|
|
9,310
|
|
||||
Less: minority interest in pre-tax income of subsidiaries that have not incurred fixed charges
|
598
|
|
|
2,333
|
|
|
1,624
|
|
|
101
|
|
||||
Total earnings
|
$
|
98,736
|
|
|
$
|
113,693
|
|
|
$
|
72,859
|
|
|
$
|
43,830
|
|
Ratio of Earnings to fixed charges, excluding interest on deposits
|
3.08
|
|
|
5.05
|
|
|
4.84
|
|
|
4.71
|
|
|
Years Ended December 31,
|
||||||||||||||
(Dollars in thousands)
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||
Fixed Charges
|
|
|
|
|
|
|
|
||||||||
Interest expense, including deposits
|
$
|
43,245
|
|
|
$
|
29,488
|
|
|
$
|
16,776
|
|
|
$
|
12,624
|
|
Amortization of premiums
|
4,065
|
|
|
4,671
|
|
|
3,461
|
|
|
1,068
|
|
||||
Estimated interest on rental expense (1)
|
8,705
|
|
|
7,346
|
|
|
6,628
|
|
|
5,049
|
|
||||
Preferred stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total Fixed Charges
|
$
|
56,015
|
|
|
$
|
41,505
|
|
|
$
|
26,865
|
|
|
$
|
18,741
|
|
Earnings
|
|
|
|
|
|
|
|
||||||||
Income before income taxes
|
$
|
66,189
|
|
|
$
|
90,777
|
|
|
$
|
56,907
|
|
|
$
|
33,315
|
|
Add: distributed income of equity investees
|
1,042
|
|
|
2,753
|
|
|
2,512
|
|
|
1,306
|
|
||||
Add: fixed charges
|
56,015
|
|
|
41,505
|
|
|
26,865
|
|
|
18,741
|
|
||||
Subtract: minority interest in pre-tax income of subsidiaries that have not incurred fixed charges
|
598
|
|
|
2,333
|
|
|
1,624
|
|
|
101
|
|
||||
Total earnings
|
$
|
122,648
|
|
|
$
|
132,702
|
|
|
$
|
84,660
|
|
|
$
|
53,261
|
|
Ratio of Earnings to fixed charges, including interest on deposits
|
2.19
|
|
|
3.20
|
|
|
3.15
|
|
|
2.84
|
|
Subsidiaries of HomeStreet, Inc.
|
|
|
|
Subsidiary
|
Jurisdiction of Incorporation or Organization
|
HomeStreet Bank
|
WA
|
HomeStreet Statutory Trust I
|
DE
|
HomeStreet Statutory Trust II
|
DE
|
HomeStreet Statutory Trust III
|
DE
|
HomeStreet Statutory Trust IV
|
DE
|
HomeStreet Capital Corporation
|
WA
|
|
|
Subsidiaries of HomeStreet Bank
|
|
|
|
Subsidiary
|
Jurisdiction of Incorporation or Organization
|
HomeStreet Reinsurance Ltd.
|
Turks & Caicos Islands
|
Continental Escrow Company
|
WA
|
HomeStreet/WMS, Inc.
|
WA
|
Union Street Holdings LLC
|
WA
|
HS Cascadia Holdings LLC
|
WA
|
HS Properties Inc.
|
WA
|
YNB Real Estate LLC
|
WA
|
16389 Redmond Way LLC
|
WA
|
HomeStreet Foundation
|
WA
|
HS Evergreen Corporate Center LLC
|
WA
|
1.
|
I have reviewed this annual report on Form 10-K of HomeStreet, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Dated:
|
March 6, 2018
|
By:
|
/s/ Mark K. Mason
|
|
|
|
Mark K. Mason
|
|
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form10-K of HomeStreet, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Dated:
|
March 6, 2018
|
By:
|
/s/ Mark R. Ruh
|
|
|
|
Mark R. Ruh
|
|
|
|
Executive Vice President, Chief Financial Officer and Principal Accounting Officer
|
|
|
|
|
|
|
|
1.
|
The Annual Report on Form 10-K for the year ended December 31, 2017 (the "Report") of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Dated:
|
March 6, 2018
|
By:
|
/s/ Mark K. Mason
|
|
|
|
Mark K. Mason
|
|
|
|
President and Chief Executive Officer
|
1.
|
The Annual Report on Form 10-K for the year ended December 31, 2017 (the "Report") of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Dated:
|
March 6, 2018
|
By:
|
/s/ Mark R. Ruh
|
|
|
|
Mark R. Ruh
|
|
|
|
Executive Vice President, Chief Financial Officer and Principal Accounting Officer
|
|
|
|
|
|
|
|