A Message from our CEO

May 6, 2010

I would like to take this opportunity to share a few thoughts as I look back on my first quarter as CEO of HomeStreet Bank.

Like many financial institutions, HomeStreet has been working through challenges brought on by the recession. We have made significant progress in addressing these challenges, particularly during the first quarter of this year, and our financial condition is steadily improving with the recovery of the economy and housing markets.

HomeStreet continues to be adequately capitalized and our liquidity is very strong. In fact, our capital ratios improved during the first quarter of this year.

We have been focusing diligently on reducing the risk in our loan portfolios, and I’m pleased to report that we’ve made great progress. Our problem loans peaked in mid-2009 and, in the months since then, we have seen significant improvement in our portfolios.

We continue to be an active lender in the communities we serve. HomeStreet is one of the leading home loan lenders in our markets, and we are proud to be the oldest and one of the best Fannie Mae originators in the nation. We are also a long-time provider of home loans through the FHA, VA and the USDA’s rural loan program. Our expertise in these loan programs is unique to community banks and especially important to our customers during this unprecedented period of turmoil in the mortgage markets. In the first four months of 2010, we arranged over 2,000 home loans for customers who purchased or refinanced a home. Many of the people we helped were first-time homebuyers.

We have also had great success with our consumer banking products and promotions, such as our checking account that pays up to $215 in cash awards, our “Flex CD” that allows periodic withdrawals, and our $50 customer incentive for referring new checking account customers. As a result of our great products and our personalized service, we have been able to attract new checking and savings customers and we’ve seen our deposits grow.

HomeStreet Bank is a great institution with a long history of serving our communities. We have a customer service ethic that is very strong and a great group of talented and committed people on staff. I’m excited to be here and look forward to the coming year.

Mark Mason
Chairman & CEO
HomeStreet Bank