HomeStreet Bank’s strategy to go after more home-mortgage business is paying off.
The Seattle bank reported net income of $18 million for the second quarter, up from $1.3 million a year ago. In an earnings report filed Monday with the Securities and Exchange Commission, HomeStreet said the income jump was driven by record mortgage-lending revenue.
HomeStreet said it closed on $1 billion in mortgage loans in the quarter that ended June 30. That was a 50 percent increase from the first quarter of 2012. The bank said it saw $1.23 billion of interest-rate lock commitments by borrowers, up 33 percent from the first quarter.
“We made considerable progress in improving our risk profile and profitability in the second quarter,” President and Chief Executive Officer Mark Mason said in a statement.
HomeStreet continues to reduce its stockpile of bad loans. The bank said at the end of the most recent quarter that its nonperforming assets declined to $73.7 million, or 3 percent of total assets, down $33.5 million, or 31 percent, from the prior quarter.
Loan delinquencies declined to 6.6 percent of total loans, down from 11.3 percent of total loans in the prior quarter.
In February, HomeStreet went public, raising $88.7 million from shareholders.
In June, I wrote about how HomeStreet is flush with cash and betting big on home lending. The article highlighted the bank’s beefing up of its mortgage-lending business and the opening of new loan centers.
In the first three months of 2012, the bank spent $4.9 million to hire 170 mortgage origination and support staff who previously worked at MetLife Home Loans, after MetLife exited the mortgage business.
HomeStreet said that mortgage-origination and support staff previously employed by MetLife contributed about 32 percent of HomeStreet’s single-family mortgage production during the second quarter.