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HomeStreet plans out expense growth, branch increase

In the first quarter, HomeStreet Inc. opened two de novo branches inCalifornia and one in Hawaii, plus a single family loan center in Arizona, acommercial lending office in Washington, and commercial real estate lendingcenter in Texas. According to the Seattle-based company's investorpresentation, it intends to continue to expand through the acquisition ofbranches and smaller firms both in and outside its current footprint.Investments in general are expected to increase noninterest expenses by anaverage of 3% each quarter.

HomeStreet, which had an overall efficiency ratio of 84.27%at the end of March, also aims to push the long-term efficiency ratio at itsmortgage banking division to below 80% and at its commercial and consumerbanking unit to less than 65%. Long-term return on equity, meanwhile, istargeted at more than 25% for mortgage banking and 8%-12% for commercial andconsumer banking. It also plans to grow the latter's loan portfolio by 4%-6%every quarter.

HomeStreet expects its net interest margin to decrease tothe 3.40%-to-3.45% range. It reported NIM of 3.55% for the first quarter, downsequentially from 3.61%.