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Mar 31, 2025
Homestreet Q1 2025 Earnings Report
HomeStreet reported its financial results for the first quarter ended March 31, 2025, showing a significant reduction in net loss and improved interest margin compared to the previous quarter.
Key Takeaways
HomeStreet, Inc. reported a net loss of $4.5 million for the first quarter of 2025, a substantial improvement from the $123.3 million net loss in the fourth quarter of 2024. The company's core net loss decreased by 44% quarter-over-quarter, and the net interest margin improved from 1.38% to 1.82%. Total deposits, excluding brokered deposits, increased by $131 million, and loans held for investment decreased by $169 million, enhancing funding and liquidity.
Net loss significantly decreased to $4.5 million in Q1 2025 from $123.3 million in Q4 2024.
Core net loss improved by 44% quarter-over-quarter, reaching $2.9 million.
Net interest margin increased to 1.82% in Q1 2025 from 1.38% in Q4 2024.
Total deposits (excluding brokered) grew by $131 million, and loans held for investment decreased by $169 million, strengthening liquidity.
Forward Guidance
HomeStreet anticipates a return to profitability during 2025, driven by continued growth in earnings from scheduled repricing of loans, reductions in higher cost borrowings, and effective noninterest expense management. The company does not expect to recognize income tax expense for the next few years due to a deferred tax asset valuation allowance.
Positive Outlook
- Anticipated return to profitability during 2025.
- Continuous growth in earnings expected from scheduled repricing of remaining multifamily and other commercial real estate loans.
- Future anticipated reductions in higher cost borrowings.
- Repricing of term deposits to lower rates.
- Continued effective noninterest expense management.
Challenges Ahead
- No income tax expense expected for the next few years due to deferred tax asset valuation allowance.
- Potential difficulties in maintaining customer, associate, or business partner relationships due to the pending merger.
- Changes in interest rate environment and expectations of short-term rate reductions could impact results.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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