Mechanics Bancorp — Annual Report 2020

Jun 27, 2020

11-K 1 hmst-201911xk401kplan.htm FORM 11-K html PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN" "http://www.w3.org/TR/html4/loose.dtd" Document created using Wdesk 1 Copyright 2020 Workiva Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

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FORM 11-K

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(Mark One)

x ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2019

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-35424

HomeStreet, Inc. 401(k) Savings Plan

(Full title of the plan)

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HOMESTREET, INC.

(Name of issuer of the securities held pursuant to the plan)

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Washington	91-0186600
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

601 Union Street, Ste. 2000

Seattle, WA 98101

(Address of the plan and address of issuer's principal executive offices)

HOMESTREET, INC. 401(k) SAVINGS PLAN

TABLE OF CONTENTS

	Page
REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS	1
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits as of December 31, 2019 and 2018	3
Statement of Changes in Net Assets Available for Benefits for the Year Ended December 31, 2019	4
Notes to Financial Statements as of December 31, 2019 and 2018 and for the Year Ended December 31, 2019	5
SUPPLEMENTAL SCHEDULE:
Form 5500, Schedule H, Part IV, Line 4i - Schedule of Assets (Held at End of Year) as of December 31, 2019	13
SIGNATURES	14

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Plan Administrator and Participants

HomeStreet, Inc. 401(k) Savings Plan

Seattle, Washington

Opinion on the Financial Statements

We have audited the accompanying statement of net assets available for benefits of HomeStreet, Inc. 401(k) Savings Plan (the "Plan") as of December 31, 2019, the related statement of changes in net assets available for benefits for the year ended December 31, 2019, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2019, and the changes in net assets available for benefits for the year ended December 31, 2019, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on the Plan's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Plan in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

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. The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit 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 audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

Supplemental Information

The supplemental Schedule H, Line 4i - Schedule of Assets (Held at End of Year) as of December 31, 2019 has been subjected to audit procedures performed in conjunction with the audit of the Plan’s financial statements. The supplemental schedule is the responsibility of the Plan’s management. Our audit procedures included determining whether the information presented in the supplemental schedule reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental schedule. In forming our opinion on the supplemental schedule, we evaluated whether the supplemental schedule, including its form and content, is presented in conformity with the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. In our opinion, the supplemental schedule is fairly stated in all material respects in relation to the financial statements as a whole.

/s/ Crowe LLP

We have served as the Plan's auditor since 2020.

South Bend, Indiana

June 26, 2020

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Report of Independent Registered Public Accounting Firm

Plan Administrator and Participants

HomeStreet, Inc. 401(k) Savings Plan

Seattle, Washington

Opinion on the Financial Statements

We have audited the accompanying statement of net assets available for benefits of the HomeStreet, Inc. 401(k) Savings Plan (the “Plan”) as of December 31, 2018. In our opinion, the statement of net assets presents fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2018 in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

The statement of net assets is the responsibility of the Plan’s management. Our responsibility is to express an opinion on the Plan’s statement of net assets based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Plan in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

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 statement of net assets is free of material misstatement, whether due to error or fraud. The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risk 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 statement of net assets. Our audit also included evaluating the accounting principles used and significant estimates made by the Plan’s management, as well as evaluating the overall presentation of the statement of net assets. We believe that our audit provides a reasonable basis for our opinion.

/s/ BDO USA, LLP

Seattle, Washington

June 25, 2019

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HOMESTREET, INC.

401(k) SAVINGS PLAN

STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS

AS OF DECEMBER 31, 2019 AND 2018

	2019	2018
ASSETS:
Participant directed investments, at fair value	$ 149,417,960	$ 143,513,305
Cash	10,846	—
Total investments	149,428,806	143,513,305
Receivables:
Notes receivable from participants	1,411,948	3,707,796
Employer contributions	483,769	462,522
Participant contributions	783	3,942
Total receivables	1,896,500	4,174,260
Total assets	151,325,306	147,687,565
LIABILITIES:
Benefit claims payable	10,833	1,296
Accrued administrative expenses	—	81,726
Total liabilities	10,833	83,022
NET ASSETS AVAILABLE FOR BENEFITS	$ 151,314,473	$ 147,604,543

See accompanying notes to the financial statements.

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HOMESTREET, INC.

401(k) SAVINGS PLAN

STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS

FOR THE YEAR ENDED DECEMBER 31, 2019

	2019
ADDITIONS:
Contributions:
Participant contributions	$ 11,337,714
Rollover contributions	746,489
Employer matching contributions	5,548,836
Total contributions	17,633,039
Investment income/(loss):
Net appreciation in fair value of investments	28,171,663
Dividends	4,361,362
Interest	260,740
Net investment gain	32,793,765
Interest on notes receivable from participants	121,565
Total additions	50,548,369
DEDUCTIONS:
Benefits paid to participants	46,672,230
Administrative expenses	166,209
Total deductions	46,838,439
INCREASE IN NET ASSETS	3,709,930
NET ASSETS AVAILABLE FOR BENEFITS
Beginning of year	147,604,543
End of year	$ 151,314,473

See accompanying notes to the financial statements.

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HOMESTREET, INC. 401(k) SAVINGS PLAN

NOTES TO FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2019 AND 2018 AND FOR THE YEAR ENDED DECEMBER 31, 2019

1. DESCRIPTION OF PLAN

The following description of the HomeStreet, Inc. 401(k) Savings Plan (the “Plan”) provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plan’s provisions.

General - The Plan is a trusteed defined contribution 401(k) savings plan for employee retirement. The Plan is administered by the HomeStreet, Inc. Retirement Benefits Committee, which is comprised of certain officers and employees of HomeStreet, Inc. (the “Company” or “Plan Sponsor”). Charles Schwab Bank serves as trustee for all Plan assets. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA).

On March 31, 2019, the Board adopted a Resolution of Exit or Disposal of Home Loan Center (“HLC”) Based Mortgage Banking Operations to sell or abandon the assets and related personnel associated with those operations. Subsequently, on April 4, 2019 the Company entered into a plan of sale of the HLC-based mortgage origination business assets and transfer of personnel to Homebridge Financial Services, Inc. (“Homebridge”). On April 9 and 10, 2019, the Company notified personnel impacted by the exit or disposal plan. The affected personnel were either transferred to the buyer or offered a severance package, which included a one-time cash payment depending on length of service and, if applicable, amendments to outstanding equity awards that modified forfeiture provisions on separation from the Company. On June 17, 2019 the second closing of the sale and transfer of employees to Homebridge was completed. Total transfers of assets from the savings plan of $6,152,246 are included in Benefits paid to participants line.

The workforce reduction of approximately 33% of the Company’s personnel constituted a partial plan termination, which occurs if 20% or more of plan participants are terminated. Partial plan termination results in affected participants becoming fully vested in the accrued benefits at the termination date. Participants of the Plan are fully vested immediately in their contributions to the Plan, the Company’s matching contributions, and actual earnings thereon; therefore, the partial plan termination had minimal effect on the Plan or its participants.

Eligibility - Employees of the Company and its wholly owned subsidiaries, HomeStreet Bank and HomeStreet Capital, are eligible to participate in the Plan. Participants are eligible for plan participation after attainment of 18 years of age. Eligibility to make employee contributions begins immediately upon date of hire.

Contributions - Contributions to the Plan include (i) salary reduction contributions authorized by participants, (ii) matching contributions made by the Company, and (iii) participant rollovers from another plan.

Participants may elect to contribute a percentage of their compensation to the Plan each year, subject to the limitations, as defined in the plan document. Such contributions are excluded from the participant’s taxable income for federal income tax purposes until received as a withdrawal or distribution from the Plan. The Plan includes an auto-enrollment provision whereby all newly eligible employees are automatically enrolled in the Plan unless they affirmatively elect not to participate in the Plan. Automatically enrolled participants have their deferral rate set at 3% of eligible compensation a

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nd their contributions invested in a designated balanced fund until changed by the participant. Participants who have attained age 50 before the end of the plan year are eligible to make catch-up contributions; these additional contributions are ineligible for a Company matching contribution.

The Company makes a matching contribution of 100% on the first 3% and 50% on the next 2% of eligible compensation. The maximum contribution amount eligible to be matched is 80% of eligible compensation as defined by the Plan.

Participants may also contribute amounts representing distributions from other qualified defined benefit or defined contribution plans. Contributions are subject to certain Internal Revenue Code (IRC) limitations.

Participant Accounts - Each participant’s account is credited with the participant’s contribution, the Company’s matching contribution and Plan earnings, and charged with an allocation of administrative expenses. Expenses are allocated equally to participants with an account balance not less than $2,000. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account.

Investments - Participants direct the investment of their contributions, the Company matching contributions and the additional discretionary employer contributions in the Plan and earnings thereon into employer stock or any of the mutual and collective investment trust fund investment options of the Plan.

Participants may not acquire additional shares of HomeStreet, Inc. stock if more than 10% of their total account balance is in HomeStreet, Inc. shares.

Contributions may be temporarily held as cash balances prior to the execution of the investment according to participants’ direction.

Vesting - Participants are vested 100% immediately in their contributions to the Plan, the Company’s matching contributions, plus actual earnings thereon.

Forfeitures - Forfeitures in participants’ Employer Matching Contribution Account will be used first to reduce eligible Plan expenses and then to reinstate any non-vested benefits required to be reinstated for rehired participants. Any remaining forfeitures will be used to reduce future Employer contributions to the Plan. During 2019, forfeitures used to pay plan expenses and reduce employer matching contributions were $3,321 and $0, respectively. At December 31, 2019 and 2018, there were $1,084 and $392, respectively, of unallocated forfeitures in the Plan.

Notes Receivable from Participants - Participants may borrow, first, from their rollover account, second, from their employee contribution accounts and, third, from their vested employer matching contribution account under the Plan. Participants may borrow from their account a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50% of their vested account balance, excluding the value of HomeStreet, Inc. stock. The loan term may not exceed 5 years unless the loan is used to acquire the participant’s principal residence. The loans are secured by the balance in the participant’s account and the outstanding loans as of December 31, 2019, bear interest at rates that range from 4.25% to 8.75%, which are commensurate with local prevailing rates as determined quarterly by the Plan administrator. Principal and interest are paid ratably through semi-monthly payroll deductions. As of December 31, 2019, the loans mature through 2033.

Payment of Benefits - The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account. For termination of service with vested benefits of $1,000 or less, a participant or beneficiary will automatically receive the value of the vested interest in his or her account as a lump sum distribution. If the total vested balance is greater than $1,000, a participant may r

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equest a lump sum distribution, roll over the vested Plan account balance into an IRA or new employer’s eligible retirement plan, or leave the balance with the Plan until April 1 of the calendar year following the calendar year in which they reach age 70-1/2 (or, until April 1 of the calendar year following the calendar year in which the participant terminates employment, if later).

Hardship Withdrawals - Under certain conditions, participants, while still employed by the Company, are permitted to withdraw, in a single sum, the employee contribution portions of their account balance. These conditions include un-reimbursed medical expenses, the purchase of the participant’s principal residence, the payment of burial or funeral expenses for the participant’s deceased parent, spouse, child, dependent or designated beneficiary, certain expenses for the repair or damage to the participant’s principal residence, the payment of postsecondary education tuition or to prevent eviction or foreclosure from the participant’s principal residence. A participant’s right to make deferrals to the Plan will be suspended for six months after the receipt of a hardship withdrawal. During 2019, the Company adopted Internal Revenue Service regulations related to hardship withdrawals. These regulations include elimination of six-month suspension period, elimination of requirement to first take a loan and expansion of amounts eligible, among others.

Other - Certain administrative functions are performed by officers and employees of the Company, by Schwab Retirement Plan Services, Inc., the record-keeper, and by Charles Schwab Bank, the trustee. No Company officer or employee receives compensation from the Plan. All other expenses for administration of the Plan including legal, investment management, recordkeeping and audit fees are paid out of the assets of the Plan.

1. SUMMARY OF ACCOUNTING POLICIES

Basis of Accounting - The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP), using the accrual basis of accounting.

Use of Estimates - The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and changes therein, and disclosure of contingent assets and liabilities. Actual results could differ from those estimates.

Risks and Uncertainties - The Plan provides various investment options to its participants. Investment securities, in general, are exposed to various risks, such as interest rate risk, credit risk, and overall market volatility. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such change could materially affect the value of the participants’ account balances and the amounts reported in the financial statements.

Concentration of Investments - Included in investments at December 31, 2019 and 2018, are shares of the Plan Sponsor’s common stock totaling $7,399,046 and $7,263,908, respectively. This investment represents 5 percent and 5.1 percent of total investments at December 31, 2019 and 2018, respectively. A significant decline in the market value of the Plan Sponsor’s stock would significantly affect the net assets available for benefits.

Investment Valuation - The Plan’s investments are stated at fair value. Fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. See Note 3, “Fair Value Measurements” for discussion on fair value measurements.

Income Recognition - Net appreciation (depreciation) in fair value of investments represents realized gains and losses and the change in fair value of investments from one period to the next. Purchases a

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nd sales of securities are recorded on a trade date basis. Interest income is recorded as earned. Dividends are recorded on the ex-dividend date.

Notes Receivable from Participants - Participant loans are classified as notes receivable from participants, which are segregated from plan investments and measured at the unpaid principal balance plus any accrued but unpaid interest. Delinquent participant loans with distributable events are recorded as distributions based on the terms of the plan document. No allowance for credit losses has been recorded as of December 31, 2019 and 2018.

Administrative Expenses - All Administrative expenses, investment management and transaction fees directly related to the Plan investments are paid by the Plan. Management fees and operating expenses charged to the Plan for investments are deducted from income earned on a daily basis and are not separately reflected. Consequently, management fees and operating expenses are reflected as a reduction of investment return for such investments.

Payment of Benefits - Benefit payments to participants are recorded upon distribution. Amounts allocated to accounts of persons who have elected to withdraw from the Plan, but have not yet been paid, were $10,833 and $1,296 at December 31, 2019 and 2018, respectively.

Excess Contributions Payable - The Plan is required to return contributions received during the Plan year in excess of the IRC limits.

1. FAIR VALUE MEASUREMENTS

Financial Accounting Standards Board Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures , provides a framework for measuring fair value. Fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value, as follows: Level 1, which refers to securities valued using unadjusted quoted prices from active markets for identical assets; Level 2, which refers to securities not traded on an active market but for which observable market inputs are readily available; and Level 3, which refers to securities valued based on significant unobservable inputs. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

Asset Valuation Techniques - Valuation techniques maximize the use of relevant observable inputs and minimize the use of unobservable inputs. The following is a description of the valuation methodologies used for assets measured at fair value.

HomeStreet, Inc. Common Stock - Valued at the closing price reported on the active market on which the individual securities are traded.

Mutual Funds - Valued at the daily closing price as reported by the fund. Mutual funds held by the Plan are open-ended mutual funds that are registered with the Securities and Exchange Commission. These funds are required to publish their daily net asset value and to transact at that price. The mutual funds held by the Plan are deemed to be actively traded.

Stable Value Fund -Composed primarily of fully benefit-responsive investment contracts and is reported at fair value using net asset value (“NAV”) as a practical expedient. The stable value fund calculates NAV per share in a manner consistent with the measurement principles in ASC 946, Financial Services - Investment Companies. Those measurement principles indicate that, in the determination of a stable value fund’s NAV, the relevant measurement is net assets, which include the fully benefit responsive investment contracts held by the fund at contract value. This NAV represents the Plan’s fair value since this is the NAV at which the Plan transacts with the fund. This practical e

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xpedient is not used when it is determined to be probable that the fund will sell the investment for an amount different than the reported net asset value.

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

The following table sets forth by level within the fair value hierarchy a summary of the Plan’s investments measured at fair value on a recurring basis at December 31, 2019 and 2018:

	December 31, 2019 — Active Markets for Identical Assets (Level 1)	Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Total
HomeStreet, Inc. common stock	$ 7,399,046	$ —	$ —	$ 7,399,046
Mutual funds	129,822,368	—	—	129,822,368
Total	$ 137,221,414	$ —	$ —	137,221,414
Investments measured at NAV (1)				12,196,546
Total investments				$ 149,417,960

	December 31, 2018 — Active Markets for Identical Assets (Level 1)	Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Total
HomeStreet, Inc. common stock	$ 7,263,908	$ —	$ —	$ 7,263,908
Mutual funds	124,913,135	—	—	124,913,135
Total	$ 132,177,043	$ —	$ —	132,177,043
Investments measured at NAV (1)				11,336,262
Total investments				$ 143,513,305

(1) Investments measured at fair value using net asset value per share (or its equivalent) as a practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in the hierarchy tables for such investments are intended to permit reconciliation of the fair value hierarchy to the investments at fair value line item presented in the statement of net assets available for benefits

A summary of the Plan’s investments at December 31, 2019 and 2018, where fair value is estimated based on the NAV is presented below:

Investment	2019 Fair Value	2018 Fair Value	Unfunded Commitment	Redemption Frequency	Redemption Restrictions	Notice Period
Stable value fund	$ 12,196,546	$ 11,336,262	$ —	Same day	None	None

Transfers Between Levels - The availability of observable market data is monitored to assess the appropriate classification of financial instruments within the fair value hierarchy. Changes in economic conditions or model-based valuation techniques may require the transfer of financial instruments from one fair value level to another. In such instances, the transfer is reported at the beginning of the reporting period.

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We evaluate the significance of transfers between levels based upon the nature of the financial instrument and size of the transfer relative to total net assets available for benefits. For the year ended December 31, 2019, there were no transfers between levels.

1. STABLE VALUE FUND

The Wells Fargo stable value fund (the “Fund”) is a collective trust fund sponsored by Wells Fargo Bank, N.A. The beneficial interest of each participant is represented by units. Units are issued and redeemed daily at the Fund’s constant NAV of $1 per unit. Distribution to the Fund’s unit holders is declared daily from the net investment income and automatically reinvested in the Fund on a monthly basis, when paid. It is the policy of the Fund to use its best efforts to maintain a stable net asset value of $1 per unit; although there is no guarantee that the Fund will be able to maintain this value.

1. PLAN TERMINATION

Although the Company does not have intent to do so, it has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become 100% vested in their accounts.

1. FEDERAL INCOME TAX STATUS

The Internal Revenue Service has determined and informed the Company by letter dated March 30, 2017, that the Plan and related trust are designed in accordance with applicable sections of the Internal Revenue Code (IRC). The Plan has been amended since receiving the determination letter. However, the Plan administrator believes that the Plan is designed and is currently being operated in compliance with the applicable provisions of the IRC. Therefore, no income tax provision has been included in these financial statements.

GAAP requires plan management to evaluate tax positions taken by the Plan and recognize a tax liability (or asset) if the Plan has taken an uncertain position that more likely than not would not be sustained upon examination by the Internal Revenue Service. The plan administrator has analyzed the tax positions taken by the Plan, and has concluded that as of December 31, 2019 and 2018, there are no uncertain positions taken or expected to be taken that would require recognition of a liability (or asset) or disclosure in the financial statements. The Plan is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress. The plan administrator believes it is no longer subject to income tax examinations for years prior to 2016.

1. PARTY IN INTEREST AND RELATED PARTY TRANSACTIONS

Certain Plan investments are shares of HomeStreet, Inc. stock and Charles Schwab mutual funds trusteed by Charles Schwab Bank. Charles Schwab Bank is the trustee for these investments as defined by the Plan and HomeStreet, Inc. stock is issued by the employer. The Plan issues loans to participants, which are secured by the vested balances in the participants’ accounts. These transactions qualify as party-in-interest transactions.

At December 31, 2019 and 2018, the Plan held 217,619 and 342,153 shares, respectively, of common stock of the Company, the sponsoring employer, with a cost basis of $4,542,713 and $6,844,475, respectively. During the year ended December 31, 2019, the Plan recorded no dividend income related to the common stock of the Company.

1. SUBSEQUENT EVENTS

In early 2020, an outbreak of the novel strain of coronavirus (COVID-19) emerged globally. As a result, there have been mandates from federal, state and local authorities resulting in an overall decline

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in economic activity. The ultimate impact of COVID-19 on the financial performance of the Plan’s investments is not reasonably estimable at this time.

On March 27, 2020, Congress passed the Coronavirus, Aid, Relief, and Economic Security (“CARES”) Act which is intended to provide economic relief to retirement plan sponsors and participants in the midst of the global COVID-19 pandemic. Under the CARES Act, changes were made impacting certain provisions of qualified retirement plans, including participant loans and distributions. Among other things, the CARES Act provisions, which were adopted by the Plan, increased the limit on participant loans, extended repayment terms, and waived penalties for certain early withdrawals.

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SUPPLEMENTAL SCHEDULE

12

HOMESTREET, INC.

401(k) SAVINGS PLAN

Employer ID No: 91-0186600

Plan No: 001

FORM 5500, Schedule H, Part IV, Line 4i - Schedule of Assets (Held at End of Year)

As of December 31, 2019

(a)	(b) Issuer, identity of borrower, lessor, or similar party	(c) Description of investment, including maturity date, rate of interest, collateral, and par or maturity value	(d) Cost	(e) Current value
*	HomeStreet	HomeStreet, Inc Common Stock	**	$ 7,399,046
	Wells Fargo	Wells Fargo Stable Value Fund	**	12,196,546
	Dodge & Cox	Dodge & Cox Income Fund	**	11,772,033
	Dodge & Cox	Dodge & Cox International Stock Fund	**	7,458,295
	Fidelity	Fidelity Spartan Ext Mkt Indx Fund	**	12,969,033
	Harbor	Harbor Capital Appreciation Fund	**	13,033,598
	Loomis	Loomis Sayles Bond Fund	**	5,163,764
	PIMCO	PIMCO Commodity Real Return Instl	**	4,518,987
*	Schwab	Schwab S&P 500 Index Fund	**	23,059,392
*	Schwab	Schwab US Treasury Money Fund	**	754
	T Rowe Price	T Rowe Price Value Fund	**	11,621,807
	JP Morgan	Undiscovered Mgrs Behavioral Value C	**	6,050,310
	Vanguard	Vanguard Developed Markets Index Adm	**	5,651,674
	Vanguard	Vanguard REIT Index Adm	**	4,777,776
	Vanguard	Vanguard Small Cap Growth Index Admi	**	10,435,017
	Vanguard	Vanguard Total Bond Mkt Index Signal	**	7,298,219
	Investment Mgrs Series Trust	WCM Focused International Growth Ins	**	6,011,709
*	Various Participants	Participant loans with interest rates ranging from 4.25% to 8.75% maturing through 2033		1,411,948
				$ 150,829,908
*	Party-in-interest
**	Cost information not required for participant-directed investments and therefore is not included.

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SIGNATURES

The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: June 26, 2020

HomeStreet, Inc. 401(k) Savings Plan
/s/ Katy O'Connor
Katy O'Connor
SVP, Human Resources Director

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