What changed in Mechanics Bancorp's 10-K — 2023 vs 2024
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Paragraph-level year-over-year comparison of Mechanics Bancorp's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.
+456 added−777 removedSource: 10-K (2025-03-07) vs 10-K (2024-03-06)
Top changes in Mechanics Bancorp's 2024 10-K
456 paragraphs added · 777 removed · 355 edited across 1 sections
- Item 1. Business+456 / −777 · 355 edited
Item 1. Business
Business — how the company describes what it does
355 edited+101 added−422 removed349 unchanged
Item 1. Business
Business — how the company describes what it does
355 edited+101 added−422 removed349 unchanged
2023 filing
2024 filing
Biggest changeThe risk rating classification for such loans are based on the non-homogenous definitions noted above. 92 The following table presents a vintage analysis of the commercial portfolio segment by loan sub-class and risk rating or delinquency status: At December 31, 2023 (in thousands) 2023 2022 2021 2020 2019 2018 and prior Revolving Revolving-term Total COMMERCIAL PORTFOLIO Non-owner occupied CRE Pass $ 1,499 $ 70,388 $ 71,217 $ 41,235 $ 118,900 $ 286,379 $ 601 $ — $ 590,219 Special Mention — — — — 686 34,177 — — 34,863 Substandard — — — — 16,230 — 573 — 16,803 Total 1,499 70,388 71,217 41,235 135,816 320,556 1,174 — 641,885 Multifamily Pass 108,274 1,813,647 1,151,677 475,708 189,567 177,712 — — 3,916,585 Special Mention — — 3,942 12,887 2,368 1,344 — — 20,541 Substandard — — — — — 3,063 — — 3,063 Total 108,274 1,813,647 1,155,619 488,595 191,935 182,119 — — 3,940,189 Multifamily construction Pass (198) 56,013 112,234 — — — — — 168,049 Special Mention — — — — — — — — — Substandard — — — — — — — — — Total (198) 56,013 112,234 — — — — — 168,049 CRE construction Pass 7 — 14,685 — — — — — 14,692 Special Mention — — — — — — — — — Substandard — — — 3,821 — — — — 3,821 Total 7 — 14,685 3,821 — — — — 18,513 Single family construction Pass 75,305 39,621 12,294 — — 72 146,758 — 274,050 Special Mention — — — — — — — — — Substandard — — — — — — — — — Total 75,305 39,621 12,294 — — 72 146,758 — 274,050 Single family construction to permanent Current 27,114 56,469 19,871 1,850 — — — — 105,304 Past due: 30-59 days — — — — — — — — — 60-89 days — — — — — — — — — 90+ days — — — — — — — — — Total 27,114 56,469 19,871 1,850 — — — — 105,304 Owner occupied CRE Pass 12,459 68,399 39,629 43,399 65,392 111,199 2 1,122 341,601 Special Mention 1,871 1,478 9,290 — 2,956 28,784 — — 44,379 Substandard 1 — — — 253 5,051 — — 5,305 Total 14,331 69,877 48,919 43,399 68,601 145,034 2 1,122 391,285 Commercial business Pass 17,970 45,892 27,227 33,404 16,198 24,903 157,656 973 324,223 Special Mention — 11,465 2,891 — 452 38 3,485 — 18,331 Substandard — — 2,134 7,601 3,788 1,886 1,021 65 16,495 Total 17,970 57,357 32,252 41,005 20,438 26,827 162,162 1,038 359,049 Total commercial portfolio $ 244,302 $ 2,163,372 $ 1,467,091 $ 619,905 $ 416,790 $ 674,608 $ 310,096 $ 2,160 $ 5,898,324 93 The following table presents a vintage analysis of the consumer portfolio segment by loan sub-class and delinquency status: At December 31, 2023 (in thousands) 2023 2022 2021 2020 2019 2018 and prior Revolving Revolving-term Total CONSUMER PORTFOLIO Single family Current $ 27,011 $ 354,691 $ 313,866 $ 147,183 $ 49,126 $ 245,574 $ — $ — $ 1,137,451 Past due: 30-59 days — — — — — 781 — — 781 60-89 days — — — — — 1,374 — — 1,374 90+ days — — — — — 673 — — 673 Total 27,011 354,691 313,866 147,183 49,126 248,402 — — 1,140,279 Home equity and other Current 2,165 2,493 311 121 46 1,631 370,462 5,483 382,712 Past due: 30-59 days 8 2 — — — — 802 162 974 60-89 days 1 3 — — — — 419 — 423 90+ days — — — — — 24 162 6 192 Total 2,174 2,498 311 121 46 1,655 371,845 5,651 384,301 Total consumer portfolio (1) $ 29,185 $ 357,189 $ 314,177 $ 147,304 $ 49,172 $ 250,057 $ 371,845 $ 5,651 $ 1,524,580 Total LHFI $ 273,487 $ 2,520,561 $ 1,781,268 $ 767,209 $ 465,962 $ 924,665 $ 681,941 $ 7,811 $ 7,422,904 (1) Includes $1.3 million of loans where a fair value option election was made at the time of origination and, therefore, are carried at fair value with changes in fair value recognized in the consolidated income statements. 94 The following table presents a vintage analysis of the commercial portfolio segment by loan sub-class and risk rating or delinquency status: At December 31, 2022 (in thousands) 2022 2021 2020 2019 2018 2017 and prior Revolving Revolving-term Total COMMERCIAL PORTFOLIO Non-owner occupied CRE Pass $ 68,301 $ 68,356 $ 42,181 $ 139,760 $ 87,197 $ 242,544 $ 2,016 $ 786 $ 651,141 Special Mention — — — — 2,702 4,242 — — 6,944 Substandard — — — — — — — — — Total 68,301 68,356 42,181 139,760 89,899 246,786 2,016 786 658,085 Multifamily Pass 1,828,568 1,165,434 528,077 221,974 59,340 140,126 — — 3,943,519 Special Mention — — 4,893 19,834 — 7,508 — — 32,235 Substandard — — — — — — — — — Total 1,828,568 1,165,434 532,970 241,808 59,340 147,634 — — 3,975,754 Multifamily construction Pass 18,110 63,394 13,613 — — — — — 95,117 Special Mention — — — — — — — — — Substandard — — — — — — — — — Total 18,110 63,394 13,613 — — — — — 95,117 CRE construction Pass 341 14,348 3,960 — — 305 — — 18,954 Special Mention — — — — — — — — — Substandard — — — — — — — — — Total 341 14,348 3,960 — — 305 — — 18,954 Single family construction Pass 149,133 50,936 24,807 519 — 74 123,303 — 348,772 Special Mention — — — — — — — — — Substandard — 6,782 — — — — — — 6,782 Total 149,133 57,718 24,807 519 — 74 123,303 — 355,554 Single family construction to permanent Current 66,034 76,814 11,128 3,268 794 — — — 158,038 Past due: 30-59 days — — — — — — — — — 60-89 days — — — — — — — — — 90+ days — — — — — — — — — Total 66,034 76,814 11,128 3,268 794 — — — 158,038 Owner occupied CRE Pass 70,192 51,919 44,778 71,652 36,457 139,691 3 1,104 415,796 Special Mention — 743 — — 6,179 13,485 — — 20,407 Substandard — — — — 2,149 5,011 — — 7,160 Total 70,192 52,662 44,778 71,652 44,785 158,187 3 1,104 443,363 Commercial business Pass 65,566 42,921 45,940 18,594 13,548 18,779 130,427 2,041 337,816 Special Mention — 612 — 3,577 9 3,444 403 — 8,045 Substandard — 338 2,638 4,449 2,591 2,206 1,563 101 13,886 Total 65,566 43,871 48,578 26,620 16,148 24,429 132,393 2,142 359,747 Total commercial portfolio $ 2,266,245 $ 1,542,597 $ 722,015 $ 483,627 $ 210,966 $ 577,415 $ 257,715 $ 4,032 $ 6,064,612 95 The following table presents a vintage analysis of the consumer portfolio segment by loan sub-class and delinquency status: At December 31, 2022 (in thousands) 2022 2021 2020 2019 2018 2017 and prior Revolving Revolving-term Total CONSUMER PORTFOLIO Single family Current $ 273,786 $ 253,937 $ 152,773 $ 49,302 $ 43,511 $ 231,277 $ — $ — $ 1,004,586 Past due: 30-59 days — — — — 340 2,113 — — 2,453 60-89 days — — — — — 258 — — 258 90+ days — — — 290 273 1,141 — — 1,704 Total 273,786 253,937 152,773 49,592 44,124 234,789 — — 1,009,001 Home equity and other Current 4,156 692 220 150 72 1,593 340,567 4,017 351,467 Past due: 30-59 days — 6 — — — 9 446 — 461 60-89 days 6 24 — — — 48 517 — 595 90+ days — — — — — 151 33 — 184 Total 4,162 722 220 150 72 1,801 341,563 4,017 352,707 Total consumer portfolio (1) $ 277,948 $ 254,659 $ 152,993 $ 49,742 $ 44,196 $ 236,590 $ 341,563 $ 4,017 $ 1,361,708 Total LHFI $ 2,544,193 $ 1,797,256 $ 875,008 $ 533,369 $ 255,162 $ 814,005 $ 599,278 $ 8,049 $ 7,426,320 (1) Includes $5.9 million of loans where a fair value option election was made at the time of origination and, therefore, are carried at fair value with changes in fair value recognized in the consolidated income statements.
Biggest changeThe risk rating classification for such loans are based on the non-homogenous definitions noted above. 71 The following table presents a vintage analysis of the commercial portfolio segment by loan sub-class and risk rating or delinquency status: At December 31, 2024 (in thousands) 2024 2023 2022 2021 2020 2019 and prior Revolving Revolving-term Total COMMERCIAL PORTFOLIO Non-owner occupied CRE Pass $ — $ 1,441 $ 70,128 $ 71,493 $ 39,885 $ 347,058 $ (36) $ — $ 529,969 Special Mention — — — — — 24,551 — — 24,551 Substandard — — — — — 16,230 — — 16,230 Total — 1,441 70,128 71,493 39,885 387,839 (36) — 570,750 Multifamily Pass 1,650 106,415 1,538,855 643,044 257,110 255,643 — — 2,802,717 Special Mention — — 66,217 4,789 73,308 23,835 — — 168,149 Substandard — — 15,602 — — 6,207 — — 21,809 Total 1,650 106,415 1,620,674 647,833 330,418 285,685 — — 2,992,675 Multifamily construction Pass — 31,349 67,557 — — — — — 98,906 Special Mention — — — — — — — — — Substandard — — — — — — — — — Total — 31,349 67,557 — — — — — 98,906 CRE construction Pass 19 7,198 — — — — — — 7,217 Special Mention — — — — — — — — — Substandard — — — — 3,821 — — — 3,821 Total 19 7,198 — — 3,821 — — — 11,038 Single family construction Pass 121,305 22,412 5,346 7,252 — 69 164,442 — 320,826 Special Mention — — — — — — — — — Substandard — — — — — — — — — Total 121,305 22,412 5,346 7,252 — 69 164,442 — 320,826 Single family construction to permanent Current 6,153 9,719 17,598 7,977 523 — — — 41,970 Past due: 30-59 days — — — — — — — — — 60-89 days — — — — — — — — — 90+ days — — — — — — — — — Total 6,153 9,719 17,598 7,977 523 — — — 41,970 Owner occupied CRE Pass 5,431 10,501 58,423 33,371 41,533 168,082 3 43 317,387 Special Mention — 1,789 6,129 7,602 317 26,203 — — 42,040 Substandard — — 331 — — 2,239 — — 2,570 Total 5,431 12,290 64,883 40,973 41,850 196,524 3 43 361,997 Commercial business Pass 26,706 15,721 36,209 20,347 28,207 28,836 123,003 700 279,729 Special Mention — — 959 2,380 638 615 386 — 4,978 Substandard 243 406 11,885 — 7,192 4,628 2,920 23 27,297 Total 26,949 16,127 49,053 22,727 36,037 34,079 126,309 723 312,004 Total commercial portfolio $ 161,507 $ 206,951 $ 1,895,239 $ 798,255 $ 452,534 $ 904,196 $ 290,718 $ 766 $ 4,710,166 72 The following table presents a vintage analysis of the consumer portfolio segment by loan sub-class and delinquency status: At December 31, 2024 (in thousands) 2024 2023 2022 2021 2020 2019 and prior Revolving Revolving-term Total CONSUMER PORTFOLIO Single family Current $ 566 $ 30,940 $ 378,613 $ 303,920 $ 139,159 $ 251,322 $ — $ — $ 1,104,520 Past due: 30-59 days — — 452 — — 1,673 — — 2,125 60-89 days — — — — — 440 — — 440 90+ days — — — — — 2,010 — — 2,010 Total 566 30,940 379,065 303,920 139,159 255,445 — — 1,109,095 Home equity and other Current 1,606 936 1,528 126 85 1,932 399,531 4,449 410,193 Past due: 30-59 days 25 4 1 — — — 474 62 566 60-89 days — 3 4 — — — 626 — 633 90+ days — — — — — 10 1,127 6 1,143 Total 1,631 943 1,533 126 85 1,942 401,758 4,517 412,535 Total consumer portfolio (1) $ 2,197 $ 31,883 $ 380,598 $ 304,046 $ 139,244 $ 257,387 $ 401,758 $ 4,517 $ 1,521,630 Total LHFI $ 163,704 $ 238,834 $ 2,275,837 $ 1,102,301 $ 591,778 $ 1,161,583 $ 692,476 $ 5,283 $ 6,231,796 (1) Includes $1.3 million of loans where a fair value option election was made at the time of origination and, therefore, are carried at fair value with changes in fair value recognized in the consolidated income statements. 73 The following table presents a vintage analysis of the commercial portfolio segment by loan sub-class and risk rating or delinquency status: At December 31, 2023 (in thousands) 2023 2022 2021 2020 2019 2018 and prior Revolving Revolving-term Total COMMERCIAL PORTFOLIO Non-owner occupied CRE Pass $ 1,499 $ 70,388 $ 71,217 $ 41,235 $ 118,900 $ 286,379 $ 601 $ — $ 590,219 Special Mention — — — — 686 34,177 — — 34,863 Substandard — — — — 16,230 — 573 — 16,803 Total 1,499 70,388 71,217 41,235 135,816 320,556 1,174 — 641,885 Multifamily Pass 108,274 1,813,647 1,151,677 475,708 189,567 177,712 — — 3,916,585 Special Mention — — 3,942 12,887 2,368 1,344 — — 20,541 Substandard — — — — — 3,063 — — 3,063 Total 108,274 1,813,647 1,155,619 488,595 191,935 182,119 — — 3,940,189 Multifamily construction Pass (198) 56,013 112,234 — — — — — 168,049 Special Mention — — — — — — — — — Substandard — — — — — — — — — Total (198) 56,013 112,234 — — — — — 168,049 CRE construction Pass 7 — 14,685 — — — — — 14,692 Special Mention — — — — — — — — — Substandard — — — 3,821 — — — — 3,821 Total 7 — 14,685 3,821 — — — — 18,513 Single family construction Pass 75,305 39,621 12,294 — — 72 146,758 — 274,050 Special Mention — — — — — — — — — Substandard — — — — — — — — — Total 75,305 39,621 12,294 — — 72 146,758 — 274,050 Single family construction to permanent Current 27,114 56,469 19,871 1,850 — — — — 105,304 Past due: 30-59 days — — — — — — — — — 60-89 days — — — — — — — — — 90+ days — — — — — — — — — Total 27,114 56,469 19,871 1,850 — — — — 105,304 Owner occupied CRE Pass 12,459 68,399 39,629 43,399 65,392 111,199 2 1,122 341,601 Special Mention 1,871 1,478 9,290 — 2,956 28,784 — — 44,379 Substandard 1 — — — 253 5,051 — — 5,305 Total 14,331 69,877 48,919 43,399 68,601 145,034 2 1,122 391,285 Commercial business Pass 17,970 45,892 27,227 33,404 16,198 24,903 157,656 973 324,223 Special Mention — 11,465 2,891 — 452 38 3,485 — 18,331 Substandard — — 2,134 7,601 3,788 1,886 1,021 65 16,495 Total 17,970 57,357 32,252 41,005 20,438 26,827 162,162 1,038 359,049 Total commercial portfolio $ 244,302 $ 2,163,372 $ 1,467,091 $ 619,905 $ 416,790 $ 674,608 $ 310,096 $ 2,160 $ 5,898,324 74 The following table presents a vintage analysis of the consumer portfolio segment by loan sub-class and delinquency status: At December 31, 2023 (in thousands) 2023 2022 2021 2020 2019 2018 and prior Revolving Revolving-term Total CONSUMER PORTFOLIO Single family Current $ 27,011 $ 354,691 $ 313,866 $ 147,183 $ 49,126 $ 245,574 $ — $ — $ 1,137,451 Past due: 30-59 days — — — — — 781 — — 781 60-89 days — — — — — 1,374 — — 1,374 90+ days — — — — — 673 — — 673 Total 27,011 354,691 313,866 147,183 49,126 248,402 — — 1,140,279 Home equity and other Current 2,165 2,493 311 121 46 1,631 370,462 5,483 382,712 Past due: 30-59 days 8 2 — — — — 802 162 974 60-89 days 1 3 — — — — 419 — 423 90+ days — — — — — 24 162 6 192 Total 2,174 2,498 311 121 46 1,655 371,845 5,651 384,301 Total consumer portfolio (1) $ 29,185 $ 357,189 $ 314,177 $ 147,304 $ 49,172 $ 250,057 $ 371,845 $ 5,651 $ 1,524,580 Total LHFI $ 273,487 $ 2,520,561 $ 1,781,268 $ 767,209 $ 465,962 $ 924,665 $ 681,941 $ 7,811 $ 7,422,904 (1) Includes $1.3 million of loans where a fair value option election was made at the time of origination and, therefore, are carried at fair value with changes in fair value recognized in the consolidated income statements.
In addition, changes to market interest rates may impact the demand for loans, levels of deposits and investments and the credit quality of existing loans. These rate changes have and may further adversely impact our liquidity, financial condition, results of operations and capital position.
In addition, changes to market interest rates may impact the demand for loans, levels of deposits and investments and the credit quality of existing loans. These rate changes have and may further adversely impact our liquidity, results of operations, financial condition and capital position.
Our sale agreements generally require us to either repurchase loans if we have breached any of these representations or warranties, which may result in recording a loss and/or bearing any subsequent loss on the loan, or pay monetary penalties.
Our sale agreements generally require us to either repurchase loans if we have breached any of these representations or warranties, which may result in recording a loss and/or bearing any subsequent loss on the loan, and/or pay monetary penalties.
We may not be able to recover our losses from a borrower or other third party in the event of such a breach of representation or warranty due to a lack of remedies or lack of financial resources of the borrower, and may be required to bear the full amount of the related loss.
We may not be able to recover our losses from a borrower or other third party in the event of such a breach of representation or warranty due to a lack of remedies or lack of financial resources of the borrower, and we may be required to bear the full amount of the related loss.
Other than those we lease, we own eight of the retail deposit branches, the call center and operations support facility in Federal Way, and we own 50% of a retail branch through a joint venture.
Other than those we lease, we own eight retail deposit branches, the call center and operations support facility in Federal Way, and we own 50% of a retail branch through a joint venture.
(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.
(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.
(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.
(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.
(2) Principally reflects changes in model assumptions, including prepayment speed assumptions, which are primarily affected by changes in mortgage interest rates.
(2) Principally reflects changes in model assumptions, including prepayment speed assumptions, which are primarily affected by changes in mortgage interest rates.
The Q-Factor methodology is based on a blend of quantitative analysis and management judgment and reviewed on a quarterly basis. 76 Each of the thirteen factors in the FASB standard were analyzed for common risk characteristics and grouped into seven consolidated Q-Factors as listed below: Qualitative Factor Financial Instruments - Credit Losses Portfolio Credit Quality The borrower's financial condition, credit rating, credit score, asset quality or business prospects The borrower's ability to make scheduled interest or principal payments The volume and severity of past due financial assets and the volume and severity of adversely classified or rated financial assets Remaining Payments The remaining payment terms of the financial assets The remaining time to maturity and the timing and extent of payments on the financial assets Volume & Nature The nature and volume of the entity's financial assets Collateral Values The value of underlying collateral on financial assets in which the collateral-dependent practical expedient has not been utilized Economic The environmental factors of a borrower and the areas in which the entity's credit is concentrated, such as: changes and expected changes in national, regional and local economic and business conditions and developments in which the entity operates, including the condition and expected condition of various market segments Credit Culture The entity's lending policies and procedures, including changes in lending strategies, underwriting standards, collection, write-off and recovery practices, as well as knowledge of the borrower's operations or the borrower's standing in the community The quality of the entity's credit review system The experience, ability and depth of the entity's management, lending staff, and other relevant staff Business Environment The environmental factors of a borrower and the areas in which the entity's credit is concentrated, such as: regulatory, legal, or technological environment to which the entity has exposure The environmental factors of a borrower and the areas in which the entity's credit is concentrated, such as: changes and expected changes in the general market condition of either the geographical area or the industry to which the entity has exposure An eighth Q-Factor, Management Overlay, allows the Bank to adjust specific pools when conditions exist that were not contemplated in the model design that warrant an adjustment.
The Q-Factor methodology is based on a blend of quantitative analysis and management judgment and reviewed on a quarterly basis. 54 Each of the thirteen factors in the FASB standard were analyzed for common risk characteristics and grouped into seven consolidated Q-Factors as listed below: Qualitative Factor Financial Instruments - Credit Losses Portfolio Credit Quality The borrower's financial condition, credit rating, credit score, asset quality or business prospects The borrower's ability to make scheduled interest or principal payments The volume and severity of past due financial assets and the volume and severity of adversely classified or rated financial assets Remaining Payments The remaining payment terms of the financial assets The remaining time to maturity and the timing and extent of payments on the financial assets Volume & Nature The nature and volume of the entity's financial assets Collateral Values The value of underlying collateral on financial assets in which the collateral-dependent practical expedient has not been utilized Economic The environmental factors of a borrower and the areas in which the entity's credit is concentrated, such as: changes and expected changes in national, regional and local economic and business conditions and developments in which the entity operates, including the condition and expected condition of various market segments Credit Culture The entity's lending policies and procedures, including changes in lending strategies, underwriting standards, collection, write-off and recovery practices, as well as knowledge of the borrower's operations or the borrower's standing in the community The quality of the entity's credit review system The experience, ability and depth of the entity's management, lending staff, and other relevant staff Business Environment The environmental factors of a borrower and the areas in which the entity's credit is concentrated, such as: regulatory, legal, or technological environment to which the entity has exposure The environmental factors of a borrower and the areas in which the entity's credit is concentrated, such as: changes and expected changes in the general market condition of either the geographical area or the industry to which the entity has exposure An eighth Q-Factor, Management Overlay, allows the Bank to adjust specific pools when conditions exist that were not contemplated in the model design that warrant an adjustment.
(7) Amended in the fourth quarter of 2018 to make administrative revisions that were not material and did not require shareholder approval. An updated version was filed as an exhibit to HomeStreet’s Annual Report on Form 10-K (SEC File No. 001-35424) filed on March 6, 2019, and incorporated herein by reference.
(6) Amended in the fourth quarter of 2018 to make administrative revisions that were not material and did not require shareholder approval. An updated version was filed as an exhibit to HomeStreet’s Annual Report on Form 10-K (SEC File No. 001-35424) filed on March 6, 2019, and incorporated herein by reference.
Further, the volatility inherent in some of these funding sources, particularly brokered deposits, may increase our exposure to liquidity risk. Risks Related to Operations Our employees hybrid-remote work schedules may create failure or circumvention of our controls and procedures, including safeguarding our confidential information. Many of our employees work from home in a hybrid-remote work schedule.
Further, the volatility inherent in some of these funding sources, particularly brokered deposits, may increase our exposure to liquidity risk. Risks Related to Operations Our employees' hybrid-remote work schedules may create failure or circumvention of our controls and procedures, including safeguarding our confidential information. Many of our employees work from home in a hybrid-remote work schedule.
The laws, rules and regulations to which we are subject evolve and change frequently, including changes that come from 31 judicial or administrative agency interpretations of laws and regulations outside of the legislative process that may be more difficult to anticipate, and changes to our regulatory environment are often driven by shifts of political power in the federal government.
The laws, rules and regulations to which we are subject evolve and change frequently, including changes that come from judicial or administrative agency interpretations of laws and regulations outside of the legislative process that may be more difficult to anticipate, and changes to our regulatory environment are often driven by shifts of political power in the federal government.
We also create active partnerships with hundreds of local organizations, and our employees provide leadership, educational support, hands-on service, expertise, and financial support to those organizations. We focus primarily on organizations within the scope of the Community Reinvestment Act ("CRA") that provide support for housing, basic needs, and economic development for those of low and moderate income.
We also create active partnerships with 5 hundreds of local organizations, and our employees provide leadership, educational support, hands-on service, expertise, and financial support to those organizations. We focus primarily on organizations within the scope of the Community Reinvestment Act ("CRA") – those that provide support for housing, basic needs, and economic development for those of low and moderate income.
Our success depends, in part, on the ability to adapt products and services to evolving industry standards and customer preferences and trends and provide consistent customer service while keeping costs in line. We sometimes experience increasing pressure to provide products and services at lower prices, which could reduce net interest income and noninterest income from fee-based products and services.
Our success depends, in part, on our ability to adapt products and services to evolving industry standards and customer preferences and trends and provide consistent customer service while keeping costs in line. We sometimes experience increasing pressure to provide products and services at lower prices, which could reduce net interest income and noninterest income from fee-based products and services.
The model assumptions and the MSR fair value estimates are also compared to observable trades of similar portfolios as well as to MSR broker valuations and industry surveys, as available. We also utilize a third-party valuation firm to value our MSRs on a periodic basis, the results of which we use to evaluate the reasonableness of our modeled values.
The model assumptions and the MSR fair value estimates are also compared to observable trades of similar portfolios as well as to MSR broker valuations and industry surveys, as available. We also utilize a separate third-party valuation firm to value our MSRs on a periodic basis, the results of which we use to evaluate the reasonableness of the modeled values.
The inputs used to determine quantitative factors include estimates based on historical experience of probability of default and loss given default. Inputs used to determine qualitative factors include changes in current portfolio characteristics and operating environments such as current and forecasted unemployment rates, capitalization rates used to value properties securing loans, rental rates and single family pricing indexes.
The inputs used to determine quantitative factors include estimates based on historical experience of probability of default and loss given 19 default. Inputs used to determine qualitative factors include changes in current portfolio characteristics and operating environments such as current and forecasted unemployment rates, capitalization rates used to value properties securing loans, rental rates and single family pricing indexes.
Closed-end homogenous loans secured by real estate and all open-end homogenous loans are risk rated 10 when past due 180 cumulative days or more from the contractual due date. These loans, or the portion of these loans classified as loss, are generally charged-off in the month in which the applicable past due period elapses.
Closed-end homogenous loans secured by real estate and all open-end homogenous loans are risk rated 10 when past due 180 cumulative days or more 70 from the contractual due date. These loans, or the portion of these loans classified as loss, are generally charged-off in the month in which the applicable past due period elapses.
Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances.
Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances.
(11) 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. (12) 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.
(10) 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. (11) 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.
While we historically have maintained capital ratios at a level higher than the regulatory minimums to be “well-capitalized”, our capital ratios in the future may decrease due to economic changes, utilization of capital to take advantage of growth or investment opportunities, or the return of additional capital to our shareholders.
While we historically have maintained capital ratios at a level higher than the regulatory minimums to be “well-capitalized”, our capital ratios in the future may decrease due to losses, economic changes, utilization of capital to take advantage of growth or investment opportunities, or the return of additional capital to our shareholders.
We use a variety of estimates in our accounting processes which may prove to be imprecise and result in significant changes in valuation and inaccurate financial reporting. We use a variety of estimates in our accounting policies and methods, including complex financial models designed to value certain of our assets and liabilities, including our allowance for credit losses.
We use a variety of estimates in our accounting processes which may prove to be imprecise and result in significant changes in valuation and inaccurate financial reporting. We use a variety of estimates in our accounting policies and methods, including complex financial models designed to value certain of our assets and liabilities, including our allowance for credit losses and MSRs.
For 2023, cash of $484 million was provided by investing activities primarily from the cash acquired from an acquisition of branches and the related deposits, principal repayments on AFS investment securities and LHFI repayments in excess of originations, partially offset by the purchase of AFS investment securities and net FHLB stock purchases.
For 2023, cash of $484 million was provided by investing activities primarily from the cash acquired from an acquisition of branches and the related deposits, principal repayments on AFS investment securities and LHFI repayments in excess of originations, partially offset by the purchase of AFS investments securities and net FHLB stock purchases.
(5) Filed as an exhibit to HomeStreet, Inc.’s Annual Report on Form 10-K (SEC File No. 001-35424) filed on March 6, 2020 and incorporated herein by reference (6) 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.
(4) Filed as an exhibit to HomeStreet, Inc.’s Annual Report on Form 10-K (SEC File No. 001-35424) filed on March 6, 2020 and incorporated herein by reference (5) 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.
We rely on a number of key employees who are highly sought after in the industry. If a key employee or a substantial number of employees depart or become unable to perform their duties, it may negatively impact our ability to conduct business as usual.
We rely on a number of key employees who are highly sought after in the industry. If a key employee or a substantial number of employees depart or become unable to perform their duties, it may 11 negatively impact our ability to conduct business as usual.
We are also subject to legal proceedings in the ordinary course of business related to employment matters. We do not expect that these proceedings, taken as a whole, will have a material adverse effect on our business, financial position or our results of operations.
We are also subject to legal proceedings in the ordinary course of business related to employment matters. We do not expect that these proceedings, taken individually or as a whole, will have a material adverse effect on our business, financial position or our results of operations.
The Company's risk rating methodology assigns risk ratings ranging from 1 to 10, where a higher rating represents higher risk. The risk rating of 9 is not used. 91 Per the Company's policies, most commercial loans pools are non-homogenous and are regularly assessed for credit quality.
The Company's risk rating methodology assigns risk ratings ranging from 1 to 10, where a higher rating represents higher risk. The risk rating of 9 is not used. Per the Company's policies, most commercial loans pools are non-homogenous and are regularly assessed for credit quality.
Net gain or loss on trading securities are included in loan servicing income in the consolidated income statements. 73 The Company evaluates AFS securities in an unrealized loss position at the end of each quarter to determine whether the decline in value is temporary or permanent.
Net gain or loss on trading securities are included in loan servicing income in the consolidated income statements. The Company evaluates AFS securities in an unrealized loss position at the end of each quarter to determine whether the decline in value is temporary or permanent.
The Company monitors and reviews the LHP on an annual basis to determine appropriate time frames to be included based on economic indicators. 75 Under current expected credit losses methodology ("CECL"), the Company groups pools of loans by similar risk characteristics.
The Company monitors and reviews the LHP on an annual basis to determine appropriate time frames to be included based on economic indicators. Under current expected credit losses methodology ("CECL"), the Company groups pools of loans by similar risk characteristics.
While we have experienced and continue to experience various forms of these cyber incidents in the past, we have not been materially impacted by them. Cyber incidents may not occur again, and they could occur more frequently and on a more significant scale.
While we have experienced and continue to experience various forms of these cyber incidents in the past, we have not been materially impacted by them. However, cyber incidents may occur again and they could occur more frequently and on a more significant scale.
The significant model inputs used to measure the fair value of MSRs include assumptions regarding market interest rates, projected prepayment speeds, discount rates, estimated costs of servicing and other income and additional expenses associated with the collection of delinquent loans.
The significant 57 model inputs used to measure the fair value of MSRs include assumptions regarding market interest rates, projected prepayment speeds, discount rates, estimated costs of servicing and other income and additional expenses associated with the collection of delinquent loans.
Varying interest rate environments can create unexpected changes in prepayment levels of assets and liabilities that are not reflected in the interest rate sensitivity analysis. These prepayments may have a significant impact on 61 our net interest margin.
Varying interest rate environments can create unexpected changes in prepayment levels of assets and liabilities that are not reflected in the interest rate sensitivity analysis. These prepayments may have a significant impact on our net interest margin.
Many of our vendors also allow their workforce to work from home, which may create similar issues if our confidential information is being accessed by employees of those vendors in connection with their performance of services for us.
Many of our vendors also allow their workforce to work from home, which create similar issues if our confidential information is being accessed by employees of those vendors in connection with their performance of services for us.
We describe whether and how risks from identified cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition, under the heading "Risks Related to Information Technology" included as part of our risk factor disclosures in Item 1A of this Form 10-K. 37 In the last three fiscal years, we have not experienced any material cybersecurity incidents and the expenses we have incurred from cybersecurity incidents were immaterial.
We describe whether and how risks from identified cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition, under the heading "Risks Related to Information Technology" included as part of our risk factor disclosures in Item 1A of this Form 10-K. 16 In the last three fiscal years, we have not experienced any material cybersecurity incidents and the expenses we have incurred from cybersecurity incidents were immaterial.
The Company's ACL model methodology is to build a reserve rate using historical life of loan default rates combined with assessments of current loan portfolio information and current and forecasted economic environment and business cycle information.
The Company's ACL model methodology is to build a reserve rate using historical life of loan default rates combined with assessments of current loan portfolio information and current and forecasted economic environment and business cycle 53 information.
(9) Filed as an exhibit to HomeStreet, Inc.’s Annual Report on Form 10-K (SEC File No. 001-35424) filed on March 6, 2018 and incorporated herein by reference (10) 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.
(8) Filed as an exhibit to HomeStreet, Inc.’s Annual Report on Form 10-K (SEC File No. 001-35424) filed on March 6, 2018 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 17, 2014, and incorporated herein by reference.
The TRUPS outstanding as of December 31, 2023 and 2022 are as follows: HomeStreet Statutory Trust (dollars 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 (1) 3 MO SOFR + 1.96% 3 MO SOFR + 1.76% 3 MO SOFR + 1.63% 3 MO SOFR + 1.94% Maturity date June 2035 December 2035 March 2036 June 2037 Call option (2) Quarterly Quarterly Quarterly Quarterly (1) These rates reflect the floating rates as of December 31, 2023.
The TRUPS outstanding as of December 31, 2024 and 2023 are as follows: HomeStreet Statutory Trust (dollars 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 (1) 3 MO SOFR + 1.96% 3 MO SOFR + 1.76% 3 MO SOFR + 1.63% 3 MO SOFR + 1.94% Maturity date June 2035 December 2035 March 2036 June 2037 Call option (2) Quarterly Quarterly Quarterly Quarterly (1) These rates reflect the floating rates as of December 31, 2024.
A loan may be returned to accrual status if all delinquent principal and interest payments are brought current and the collectability of the remaining principal and interest payments in accordance with the loan agreement is reasonably assured.
Generally, a loan may be returned to accrual status if all delinquent principal and interest payments are brought current and the collectability of the remaining principal and interest payments in accordance with the loan agreement is reasonably assured.
In addition, the simulation model does not take into account any future actions that we could undertake to mitigate an adverse impact due to changes in interest rates from those expected, in the actual level of market interest rates or competitive influences on our deposits. 62 ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Shareholders and the Board of Directors of HomeStreet, Inc.
In addition, the simulation model does not take into account any future actions that we could undertake to mitigate an adverse impact due to changes in interest rates from those expected, in the actual level of market interest rates or competitive influences on our deposits. 41 ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Shareholders and the Board of Directors of HomeStreet, Inc.
The increase in the rates paid on our interest-bearing liabilities was due to an increase in the proportion of higher cost borrowings and a decrease in the proportion of noninterest-bearing deposits to the total balance of interest-bearing liabilities, higher deposit costs and higher borrowing costs.
The increase in the rates paid on our interest-bearing liabilities was due to an increase in the proportion of higher cost borrowings and a decrease in the proportion of noninterest-bearing deposits to the total balance of interest-bearing liabilities and higher deposit rates and higher borrowing rates.
Municipal bonds are comprised of general obligation bonds (i.e., backed by the general credit of the issuer) and revenue bonds (i.e., backed by either collateral or revenues from the specific project being financed) issued by various municipal organizations.
Municipal bonds are comprised of general obligation bonds (i.e., backed by the general credit of the issuer) and revenue bonds (i.e., backed by 63 either collateral or revenues from the specific project being financed) issued by various municipal organizations.
Changes in the fair value of MSRs result from changes in (1) model inputs and assumptions and (2) modeled 79 amortization, representing the collection and realization of expected cash flows and curtailments over time.
Changes in the fair value of MSRs result from changes in (1) model inputs and assumptions and (2) modeled amortization, representing the collection and realization of expected cash flows and curtailments over time.
ASU 2023-09 will not have an impact on the Company's financial position or results of operation as it impacts disclosures only. We are assessing the impact on our disclosures.
The adoption of ASU 2023-09 will not have an impact on the Company's financial position or results of operation as it impacts disclosures only. We are assessing the impact on our disclosures.
We face risks associated with having a significant portion of our employees working from home as we may have less oversight over certain internal controls and the confidentiality requirements of our compliance and contractual obligations may be more challenging to meet as confidential information is being accessed from a wider range of locations and there may be more opportunity for inadvertent disclosure or malicious interception.
We face risks associated with having a significant portion of our employees working from home as we may have less oversight over certain internal controls and the confidentiality requirements of our compliance and contractual obligations are more challenging to meet as confidential information is being accessed from a wider range of locations and there is more opportunity for inadvertent disclosure or malicious interception.
The following table presents the capital and capital ratios of the Company (on a consolidated basis) and the Bank (on a stand-alone basis) as of the respective dates and as compared to the respective regulatory requirements applicable to them: At December 31, 2023 Actual For Minimum Capital Adequacy Purposes To Be Categorized As “Well Capitalized” Under Prompt Corrective Action Provisions (dollars in thousands) Amount Ratio Amount Ratio Amount Ratio HomeStreet, Inc.
The following table presents the capital and capital ratios of the Company (on a consolidated basis) and the Bank (on a stand-alone basis) as of the respective dates and as compared to the respective regulatory requirements applicable to them: At December 31, 2024 Actual For Minimum Capital Adequacy Purposes To Be Categorized As “Well Capitalized” Under Prompt Corrective Action Provisions (dollars in thousands) Amount Ratio Amount Ratio Amount Ratio HomeStreet, Inc.
After consensus is reached on all Q-Factor ratings, the results are input into the Q-Factor model and applied to the pooled loans which are reviewed to determine the adequacy of the reserve. 77 Additional details describing the model by portfolio are below: Consumer Loan Portfolio The consumer loan portfolio is comprised of the single family and home equity loan classes, which are underwritten after evaluating a borrower's capacity, credit and collateral.
After consensus is reached on all Q-Factor ratings, the results are input into the Q-Factor model and applied to the pooled loans which are reviewed to determine the adequacy of the reserve. 55 Additional details describing the model by portfolio are below: Consumer Loan Portfolio The consumer loan portfolio is comprised of the single family and home equity loan classes, which are underwritten after evaluating a borrower's capacity, credit and collateral.
Although we presently have retail deposit branches in four states, with lending offices in these states and two others, a substantial majority of our revenues are derived from operations in the Puget Sound region of Washington, the Portland, Oregon metropolitan area, the San Francisco Bay Area, and the Los Angeles, Orange County, Riverside and San Diego metropolitan areas in Southern California.
Although we presently have retail deposit branches in four states, with lending offices in these states and two others, a substantial majority of our revenues are derived from operations in the Puget Sound region of Washington, the Portland, Oregon metropolitan area, and the Los Angeles, Orange County, Riverside and San Diego metropolitan areas in Southern California.
Our business and operations rely on the secure processing, transmission, protection and storage of confidential, private and personal information by our computer operation systems and networks, as well as our online banking or reporting systems used by customers to effect certain financial transactions, all of which are either managed directly by us or through our third-party data processing vendors.
Our business and operations rely on the secure processing, transmission, protection and storage of confidential, private and personal information by our computer operation systems and networks, as well as our online banking or reporting systems used by customers to perform certain financial transactions, all of which are either managed directly by us or through our third-party data processing vendors.
There are currently no matters that, in the opinion of management, would have a material adverse effect on our consolidated financial position, results of operation or liquidity, or for which there would be a reasonable possibility of such a loss based on information known at this time. 38 ITEM 4 MINE SAFETY DISCLOSURES Not applicable.
There are currently no matters that, in the opinion of management, would have a material adverse effect on our consolidated financial position, results of operation or liquidity, or for which there would be a reasonable possibility of such a loss based on information known at this time. 17 ITEM 4 MINE SAFETY DISCLOSURES Not applicable.
For indemnifications provided in sales agreements, a portion of the sale proceeds is allocated to the guarantee, which adjusts the gain or loss that would otherwise result from the transaction. 83 Earnings per Share Earnings per share of common stock is calculated on both a basic and diluted basis, based on the weighted average number of common and common equivalent shares outstanding.
For indemnifications provided in sales agreements, a portion of the sale proceeds is allocated to the guarantee, which adjusts the gain or loss that would otherwise result from the transaction. 61 Earnings per Share Earnings per share of common stock is calculated on both a basic and diluted basis, based on the weighted average number of common and common equivalent shares outstanding.
In March 2023, the FASB issued ASU 2023-02, “Investments – Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method.” ASU 2023-02 permits reporting entities to elect to account for their tax equity investments, regardless of the tax credit program from which the income tax credits are received, using the proportional amortization method if certain conditions are met.
Recent Accounting Developments In March 2023, the FASB issued ASU 2023-02, “Investments – Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method.” ASU 2023-02 permits reporting entities to elect to account for their tax equity investments, regardless of the tax credit program from which the income tax credits are received, using the proportional amortization method if certain conditions are met.
Our customers may be negatively impacted by a pandemic, which may result in adverse impacts to our financial position and results of operations. In the event of future public health crises, epidemics, pandemics or similar events, the communities where we do business may be put under varying degrees of restrictions on social gatherings and retail operations.
Our customers may be negatively impacted by a public health crisis, which may result in adverse impacts to our financial position and results of operations. In the event of future public health crises, epidemics, pandemics or similar events, the communities where we do business may be put under varying degrees of restrictions on social gatherings and retail operations.
Changes in Internal Control Over Financial Reporting As required by Rule 13a-15(d), our management, including our CEO and CFO, also conducted an evaluation of our internal control over financial reporting to determine whether any changes occurred during the quarter ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Changes in Internal Control Over Financial Reporting As required by Rule 13a-15(d), our management, including our CEO and CFO, also conducted an evaluation of our internal control over financial reporting to determine whether any changes occurred during the quarter ended December 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
(2) Call options are exercisable at par and are callable, without penalty on a quarterly basis. 104 NOTE 8–DERIVATIVES AND HEDGING ACTIVITIES: To reduce the risk of significant interest rate fluctuations on the value of certain assets and liabilities, such as single family mortgage LHFS and MSRs, the Company utilizes derivatives as economic hedges.
(2) Call options are exercisable at par and are callable, without penalty, on a quarterly basis. 83 NOTE 8–DERIVATIVES AND HEDGING ACTIVITIES: To reduce the risk of significant interest rate fluctuations on the value of certain assets and liabilities, such as single family mortgage LHFS and MSRs, the Company utilizes derivatives as economic hedges.
Based upon the evaluation, the CEO and CFO concluded that the Company's disclosure controls and procedures were effective at December 31, 2023. Management's Report on Internal Control Over Financial Reporting Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) for the Company.
Based upon the evaluation, the CEO and CFO concluded that the Company's disclosure controls and procedures were effective at December 31, 2024. Management's Report on Internal Control Over Financial Reporting Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) for the Company.
Michel Executive Vice President and Chief Financial Officer (Principal Financial Officer and Accounting Officer) 134 POWERS OF ATTORNEY Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date /s/ Mark K.
Michel Executive Vice President and Chief Financial Officer (Principal Financial Officer and Accounting Officer) 114 POWERS OF ATTORNEY Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date /s/ Mark K.
(2) Assumes 100% of interest-bearing non-maturity deposits are subject to repricing in three months or less. (3) Based on contractual maturity. As of December 31, 2023, the Company is considered liability sensitive as exhibited by the gap table above and our net interest income sensitivity analysis.
(2) Assumes 100% of interest-bearing non-maturity deposits are subject to repricing in three months or less. (3) Based on contractual maturity. As of December 31, 2024, the Company is considered liability sensitive as exhibited by the gap table above and our net interest income sensitivity analysis.
As a part of our liquidity management, we use a number of funding sources in addition to deposit growth and repayments and maturities of loans and investments, including Federal Home Loan Bank advances, proceeds from the sale of loans, federal funds purchased, brokered certificates of deposit and issuance of equity or debt securities.
As a part of our liquidity management, we use a number of funding sources in addition to deposit growth and repayments and maturities of loans and investments, including Federal Home Loan Bank advances, borrowings from the Federal Reserve, proceeds from the sale of loans, federal funds purchased, brokered certificates of deposit and issuance of equity or debt securities.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
They have well-defined weaknesses and have unsatisfactory characteristics causing unacceptable levels of risk. 78 Commercial portfolio cohorts are established by grouping each ACL sub-pool at a point in time. Once historical cohorts are established, the loans in the cohort are tracked moving forward for default events.
They have well-defined weaknesses and have unsatisfactory characteristics causing unacceptable levels of risk. 56 Commercial portfolio cohorts are established by grouping each ACL sub-pool at a point in time. Once historical cohorts are established, the loans in the cohort are tracked moving forward for default events.
(on a consolidated basis) and HomeStreet Bank as of the dates indicated below, as compared to the respective regulatory requirements applicable to them: At December 31, 2023 Actual For Minimum Capital Adequacy Purposes To Be Categorized As "Well Capitalized" (dollars in thousands) Amount Ratio Amount Ratio Amount Ratio HomeStreet, Inc.
(on a consolidated basis) and HomeStreet Bank as of the dates indicated below, as compared to the respective regulatory requirements applicable to them: At December 31, 2024 Actual For Minimum Capital Adequacy Purposes To Be Categorized As "Well Capitalized" (dollars in thousands) Amount Ratio Amount Ratio Amount Ratio HomeStreet, Inc.
The Company issued trust preferred securities ("TRUPS") during the period from 2005 through 2007, resulting in a debt balance of $62 million outstanding at December 31, 2023 and 2022. In connection with the issuance of trust preferred securities, HomeStreet, Inc. issued to HomeStreet Statutory Trust, Junior Subordinated Deferrable Interest Debentures.
The Company issued trust preferred securities ("TRUPS") during the period from 2005 through 2007, resulting in a debt balance of $62 million outstanding at December 31, 2024 and 2023. In connection with the issuance of trust preferred securities, HomeStreet, Inc. issued to HomeStreet Statutory Trust, Junior Subordinated Deferrable Interest Debentures.
ITEM 14 PRINCIPAL ACCOUNTANT FEES AND SERVICES The information required by this item will be set forth in the 2024 Proxy Statement under the caption "Advisory (Non-Binding) Vote on Ratification of Appointment of Independent Registered Public Accounting Firm," which information is incorporated herein by reference.
ITEM 14 PRINCIPAL ACCOUNTANT FEES AND SERVICES The information required by this item will be set forth in the 2025 Proxy Statement under the caption "Advisory (Non-Binding) Vote on Ratification of Appointment of Independent Registered Public Accounting Firm," which information is incorporated herein by reference.
Michel, effective May 11, 2020 10.19 (14) * Amendment to Executive Employment Agreement, between HomeStreet, Inc., HomeStreet Bank, and Mark K. Mason, dated July 29, 2020 10.20 (15) * HomeStreet Bank Performance-Based Annual Incentive Plan, effective January 1, 2022 10.21 (16) * Amended and Restated Executive Employment Agreement, between HomeStreet, Inc., HomeStreet Bank, and John M.
Michel, effective May 11, 2020 10.19 (13) * Amendment to Executive Employment Agreement, between HomeStreet, Inc., HomeStreet Bank, and Mark K. Mason, dated July 29, 2020 10.20 (14) * HomeStreet Bank Performance-Based Annual Incentive Plan, effective January 1, 2022 10.21 (15) * Amended and Restated Executive Employment Agreement, between HomeStreet, Inc., HomeStreet Bank, and John M.
Our most direct competition comes from other banks, credit unions, mortgage banking companies and finance companies, and more recently, competition has also come from companies that rely heavily on technology to provide financial services, are moving to provide cryptocurrency products and offerings, and often target a younger customer demographic.
Our most direct competition comes from other banks, credit unions, mortgage banking companies and finance companies. Competition has also come from companies that rely heavily on technology to provide financial services, are moving to provide cryptocurrency products and offerings, and often target a younger customer demographic.
The Company recognizes an allowance for credit loss ("ACL") if a loss is considered to exist, measured as the difference between the present value of expected cash flows and the amortized cost basis of the security, limited by the amount that the security’s fair value is less than its amortized cost basis.
The Company recognizes an allowance for credit loss ("ACL") if a loss is determined to exist, measured as the difference between the present value of expected cash flows and the amortized cost basis of the security, limited by the amount that the security’s fair value is less than its amortized cost basis.
In October 2023, the FASB issued ASU 2023-06, "Disclosure Improvements - Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative." The amendments in ASU 2023-06 modify the disclosure or presentation requirements of a variety of Topics in the Codification, with the intention of clarifying or improving them and align the requirements in the codification with the SEC's regulations (and will be removed from the SEC regulations).
In October 2023, the FASB issued ASU 2023-06, "Disclosure Improvements - Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative." The amendments in ASU 2023-06 modify the disclosure or presentation requirements of a variety of Topics in the Codification, with the intention of clarifying or improving them and aligning the requirements in the codification with the SEC's regulations (and will be removed from the SEC regulations).
If a hedged forecasted transaction is no longer probable, hedge accounting is ceased and any gain or loss included in other 82 comprehensive income (loss) is reported in earnings immediately, unless the forecasted transaction is at least reasonably possible of occurring, whereby the amounts remain within other comprehensive income (loss).
If a 60 hedged forecasted transaction is no longer probable, hedge accounting is ceased and any gain or loss included in other comprehensive income (loss) is reported in earnings immediately, unless the forecasted transaction is at least reasonably possible of occurring, whereby the amounts remain within other comprehensive income (loss).
Advances are also made to fund the foreclosure and collection costs of delinquent loans prior to the recovery of reimbursable amounts from investors or borrowers. Advances of $2.9 million and $1.6 million were recorded in other assets as of December 31, 2023 and 2022, respectively.
Advances are also made to fund the foreclosure and collection costs of delinquent loans prior to the recovery of reimbursable amounts from investors or borrowers. Advances of $1.6 million and $2.9 million were recorded in other assets as of December 31, 2024 and 2023, respectively.
In the event of recapture, the Company will incur both federal and state tax liabilities on this pre-1988 bad debt reserve balance at the then prevailing corporate tax rates. The Company had no recorded unrecognized tax position as of December 31, 2023 or 2022.
In the event of recapture, the Company will incur both federal and state tax liabilities on this pre-1988 bad debt reserve balance at the then prevailing corporate tax rates. The Company had no recorded unrecognized tax position as of December 31, 2024 or 2023.
Compensation of Employees As part of our goal of providing high-quality banking and financial services to our customers while creating a positive impact in the local communities in which we do business, we designed our compensation program with the intention of attracting and retaining well-qualified employees.
Compensation of Employees As part of our goal of providing high-quality banking and financial services to our customers while creating a positive impact in the local communities in which we do business, we designed our compensation program with the intention of attracting and retaining highly qualified employees.
If we are required to rely more heavily on more expensive funding sources to support future growth, our revenues may not increase proportionately to cover our costs. In that case, our results of operations and capital position would be adversely affected.
If we are required to rely more heavily on more expensive funding sources to support future growth, our revenues may not increase proportionately to cover our costs. In that case, our results of operations, financial condition and capital position would be adversely affected.
The Company does not believe any of these securities that were in an unrealized loss position at December 31, 2023 or 2022 have a credit loss impairment. The Company evaluates HTM securities at the end of each quarter to determine if any expected credit losses exist.
The Company does not believe any of these securities that were in an unrealized loss position at December 31, 2024 or 2023 have a credit loss impairment. The Company evaluates HTM securities at the end of each quarter to determine if any expected credit losses exist.
Credit Loss Measurement The ACL level is influenced by current conditions related to loan volumes, loan asset quality ratings ("AQR") migration or delinquency status, historic loss experience and other conditions influencing loss expectations, such as reasonable and supportable forecasts of economic conditions.
Credit Loss Measurement The ACL level is influenced by current conditions related to loan volumes, loan asset quality ratings ("AQR") migration or delinquency status, historical loss experience and other conditions influencing loss expectations, such as reasonable and supportable forecasts of economic conditions.
The Company periodically evaluates premises and equipment for impairment. 80 Leases We determine if an arrangement is a lease at inception. Operating and finance leases are included in lease right-of-use ("ROU") assets, and lease liabilities in our consolidated balance sheets.
The Company periodically evaluates premises and equipment for impairment. 58 Leases We determine if an arrangement is a lease at inception. Operating and finance leases are included in lease right-of-use ("ROU") assets, and lease liabilities in our consolidated balance sheets.
For loans that have been sold through this program, a liability is recorded for this loss sharing arrangement under the accounting guidance for guarantees. As of December 31, 2023 and 2022, the total unpaid principal balance of loans sold under this program was $1.8 billion.
For loans that have been sold through this program, a liability is recorded for this loss sharing arrangement under the accounting guidance for guarantees. As of December 31, 2024 and 2023, the total unpaid principal balance of loans sold under this program was $1.8 billion.
Management has made a comprehensive review, evaluation, and assessment of the Company's internal control over financial reporting at December 31, 2023. In making its assessment of internal control over financial reporting, management utilized the framework issued in 2013 by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") in Internal Control - Integrated Framework.
Management has made a comprehensive review, evaluation, and assessment of the Company's internal control over financial reporting at December 31, 2024. In making its assessment of internal control over financial reporting, management utilized the framework issued in 2013 by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") in Internal Control - Integrated Framework.
For claims determined to be reasonably possible but not probable of resulting in a loss, there may be a range of possible losses in excess of the established liability. The Company did not have any material amounts reserved for legal claims as of December 31, 2023.
For claims determined to be reasonably possible but not probable of resulting in a loss, there may be a range of possible losses in excess of the established liability. The Company did not have any material amounts reserved for legal claims as of December 31, 2024.
Our audit of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE The information required by this item will be set forth in the 2024 Proxy Statement under the caption "HomeStreet Corporate Governance and Other Matters" which information is incorporated herein by reference.
ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE The information required by this item will be set forth in the 2025 Proxy Statement under the caption "HomeStreet Corporate Governance and Other Matters" which information is incorporated herein by reference.
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. The Company has recorded an ACL on unfunded loan commitments, included in accounts payable and other liabilities on the consolidated balance sheets of $1.8 million and $2.2 million at December 31, 2023 and 2022, 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. The Company has recorded an ACL on unfunded loan commitments, included in accounts payable and other liabilities on the consolidated balance sheets of $1.1 million and $1.8 million at December 31, 2024 and 2023, respectively.
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