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HomeStreet execs see margin decline in early 2017

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HomeStreet execs see margin decline in early 2017

HomeStreet Inc.'s executives are projecting the company will see a decline in its net interest margin during the first half of the year.

That projection was one piece of guidance company executives gave to analysts and investors during a Jan. 24 quarterly earnings conference call. Company Chairman, President and CEO Mark Mason said during the call that HomeStreet expects its margin will be between 3.20% and 3.25% during the first half of the year, before rising to between 3.35% and 3.40% as interest rates climb, the yield curve steepens and the company originates higher-yielding loans.

The company reported a net interest margin of 3.42% for the fourth quarter of 2016, higher than the 3.34% level during the third quarter of last year, but well below its 3.61% margin in the fourth quarter of 2015.

Mason also said HomeStreet projects $1.8 billion in single-family mortgage locked and full sale commitments in the first quarter and $2.8 billion in the second quarter. He said the company's quarterly net loan portfolio in its commercial and consumer banking segment is likely to grow by approximately 4% to 6% in 2017.

The company is exploring M&A deals throughout California, Colorado and the Pacific Northwest, as well as metropolitan Phoenix and Salt Lake City, Mason said during the call. The company closed its acquisition of two branches from Boston Private Financial Holdings Inc. in November 2016 and opened its first Northern California commercial banking office in San Jose, Calif., which HomeStreet plans to augment with its first Northern California retail deposit branch in the third quarter.