Good day and welcome to the HomeStreet Third Quarter 2014 Earnings Conference Call. All participants will be in listen-only mode. (Operator Instructions) After today’s presentation, there will be an opportunity to ask questions. (Operator Instructions) Please note this event is being recorded. I would now like to turn the conference over to Mark Mason, President and CEO. Please go ahead.

Thank you. Hello and thank you for joining us for our third quarter earnings call. Before we begin, I’d like to remind you that our earnings release was furnished this morning with the SEC on Form 8-K and is available on our website at ir.homestreet.com. In addition, a recording of this call will be available today at the same address. On today’s call, we will make some forward-looking statements. Any statement that isn’t a description of historical fact is probably forward-looking and these statements are subject to many risks and uncertainties. Our actual performance may fall short of our expectations or we may take actions different from those we currently anticipate. Factors that may cause actual results to differ from expectations or that may cause us to deviate from our current plans are detailed in our SEC filings, including our quarterly reports on Form 10-Q and our annual report on Form 10-K for 2013 as well as our various other SEC reports. Additionally, any non-GAAP financial measures referenced in today’s call, including a reconciliation of those measures to GAAP measures may be found in our SEC filings and in the earnings release available on our website. Today I’d like to update you on recent events, talk about our progress and executing our business strategy and highlight key financial results. I’ll also share a few thoughts about current market conditions. Please refer to our earnings release for a more detailed discussion of our financial condition and results of operations. In the third quarter, we took important steps to execute our strategy to grow our business and diversify earnings. We have our best quarter yet for new loan commitments and our loans held for investment portfolio, an increase of 19% from the second quarter. We are very pleased with the strong growth…

We will now begin the question-and-answer session. (Operator Instructions) First question comes from Paul Miller of FBR Capital Markets. Please go ahead.

Hey Mark, it’s Jessica in for Paul, how are you?

Good Jessica.

We have one question, how can we think about capital management going forward given your capital levels adjusted for the Simplicity merger and just maybe -- dividend or a buyback or even saving that capital for more acquisitions?

Thanks for the question. Important benefit of the Simplicity acquisition is the additional free capital. Today, Simplicity has extra capital that they have been utilizing to buy back stock over recent periods. We will utilize that additional capital to mitigate any potential need to raise additional capital in the near term. That opportunity is limited not simply to any calculable excess capital on their balance sheet today but we may restructure components of their loan portfolio to provide additional lending room that would not require additional capital and so we’re pretty happy with the opportunity to take off the table any considerations of capital raise in the near term. The other aspect of the Simplicity acquisition for us what’s important is being able to build a significant amount of our earnings in basic spread earnings, basic net interest income that should allow some time we hope next year after we have completed the acquisition and stabilized the consolidated group post-acquisition to contemplate the adoption of a regular quarterly dividend because we will have a very significant base of durable spread income and so we would hope to have that conversation internally sometime in the second half of next year with the hope for expectation of initiating regular quarterly dividends.

(Operator Instructions) The next question comes from Tim Coffey of FIG Partners. Please go ahead.

Hey, can you give us an idea of kind of what the pipeline of – on the commercial banking side going into 4Q?

That’s a good question. I don’t have the pipeline numbers in front of me though I would say on balance we expect to close more in terms of dollars in the fourth quarter than this quarter both in the loan portfolio and with respect to our Fannie Mae DUS business. We have as you seen from the commitment detail over the last several quarters a building portfolio of unfunded construction loans which are funding up plus permit loan closings that are anticipated for the fourth quarter. So, as a directional statement I think we expected to be higher than the third quarter as a consequence of not just prior activity and existing commitments but other loans scheduled close in the quarter.

Okay, and what is that – how should we read into that in regards to the provision expense because for the first three quarters of the year is almost nothing, what we see for the fourth quarter into ’15?

Well, we’ve been fortunate that notwithstanding our loan growth our improvement in credit quality and much lower than expected charge offs has prevented the need for a provision so far this year. We expect that to change in the fourth quarter for us to settle it coverage ratios, similar to those at the end of the third quarter and so to the extent that our loan portfolio grows and/or we experience charge offs that would create a need for provisioning and we think that fourth quarter is going to be the time that we the first time we experience that in the recent past. So if you’re thinking about the coverage levels today with some levels of anticipated charge-offs in the quarter. You can probably calculate the expected provision for the quarter and similarly next year if you think about a level of charge-offs is probably still smaller than current year despite current year charge-offs hasn’t come down quite a bit.

Okay. And as I hear your comments say that loan fee margin on the mortgage side of the business you see those going up?

No, I think one comment that the margins have deteriorated a little bit on our composite margin a few basis points this quarter. I don’t think I commented on our forward look but I can’t. We are being conservative in our internal forecasting about the forward margin. We’re expecting growth in our loan volume to mitigate that next year, but we expect to still see some softening in margins. We said that last year about this and frankly margins have been much higher this year that we had forecast them coming into this year. I think the probability of a significant decline in our composite margin is probably not great. When you consider the number of companies that are breaking even for losing money on mortgage origination today what that reflect is the cost of production for everyone has grown dramatically over the last several years with increasing credit in underwriting requirements and very substantial increases in data and file quality requirements by the agencies and even in securitization. And so the cost of production must be near the revenue today if people breaking even a losing money. So we think the probability of people being interested in even greater price competition from here is probably less likely than it was a year ago.

Okay. Great, thanks, that’s good color. And then turning to Simplicity, do you have any updates on the quarter?

They have not yet released earnings I think they’re schedule to release early in November in the first week of November. So I can’t comment on that yet. I would ask that question to Simplicity management.

Okay. And then as relates to deal cost on the Simplicity deal, do you still -- putting those between 1Q and 2Q provided the closes the timeline how do you think you have got those into one quarter?

We estimate the total deal cost just over $19 million, some of that we’ve already taken in this quarter of approximately $570,000 of merger related expenses in the quarter and 700,000 a little over or about 570 some related to Simplicity merger. So those are already been incurred. We’re going to incur maybe another 400,000 in the fourth quarter. So that’s going to leave us approximately $18 million of cost that we have estimated yet to incur. To the extent that the transaction closes in the first quarter and the system conversions occur subsequent to that say in the second quarter. We would expect to incur somewhere around $10 million in the first quarter and $8 million in the second quarter for total of 18. To the extent that the systems conversions might occur concurrent with the legal closing that would shift quite a bit of that $8 million into first quarter and that would be great right, because we want to get pass those expenses as quickly as possible and start pretty clean quarters. But it’s going to rely on the timing of closing and the timing of those conversions.

And any updates on regulatory approvals or conversions like that?

No early promises other than to-date we have not run into any hurdles or any concerns from any of the agencies. So at this junction we don’t have reason to believe that our estimated first quarter closing is in danger though we have yet to file the proxy, the joint proxy that we’ll be filing for the two related shareholder votes. And of course there has been a couple of lawsuits now filed which is common unfortunately in the transaction. I don’t know if it’s two or one, actually is kind of confusing we have notices if you look in the Press Release of all these law firms they look like two lawsuits they maybe actually the same suit but there is at least one lawsuit which has become common unfortunately and transactions today, they appear to act at the end of the day as transaction tax because at least today the history of these pieces of litigation has been a settlement that didn’t impair the intended closing date of the transaction. Too early to give an opinion on the status of that litigation, though I am very comfortable in saying that we do not see anything that is transpired in the marketing of Simplicity nor the negotiation of the proposed merger that we think is actionable on any basis and we think all these parties have acted in the best interest of the respective companies. So I expect this litigation to conclude in the same manner as others.

(Operator Instructions) This concludes our question-and-answer session. I would like to turn the conference back over to Mark Mason for any closing remarks. Actually sir a question is just coming from Tim O’Brein from Sandler O’Neil. Please go ahead. Tim O’Brein - Sandler O’Neil: Hey could you talk a little bit more about the Arizona expansion?

Sure. Our basic strategy is to expand our mortgage market share in existing markets wherever possible, and do expand to other major mortgage markets in the Western United States to subsequently grow a meaningful mortgage market share, and then follow that with full service banking probably through acquisitions. We have done this opportunistically today that is to say that in hiring teams and we generally don’t hire individuals in new markets, we hire teams of high performing individuals. We first find teams that we think would be added into our system and then open offices in their markets. We don’t choose a market and then go look for a team other than knowing there are major markets we generally like to be in. So we recently got an opportunity to hire teams of significant successful track record in Arizona. And since this a market that is on our list markets that we would ultimately like to operate in we are opening offices for them. This is the same exercise that predated our entry into Northern California and Southern California, similarly in Idaho and in other markets in Oregon and Washington. And the fact that it’s in Arizona this time is only significant and that we’re yet in the state of Arizona physically but we have been originating loans in Arizona for some period of time related to borrowers who may have second homes or loan officers who may have existing relationships in the state of Arizona. Tim O’Brein - Sandler O’Neil: So you said several more branches by the end of the year did you say by end of 2015?

We are hoping to add several more by the end of this year, end of fourth quarter of 2014. Tim O’Brein - Sandler O’Neil: And what markets are we talking about besides Phoenix if any Tucson?

I really shouldn’t say yet. I think you know the major market. Tim O’Brein - Sandler O’Neil: Sure, thanks for the color.

Thank you Tim. Operator would you pull for questions one more time.

Certainly. (Operator Instructions) Seeing that there are no questions, I will turn the call back over to you, Mark Mason for any closing remarks sir.

Again we appreciate your patience and listening to our prepared remarks and the great questions from analysts following our company. Thank you all. Good day.

The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.