Seattle-based HomeStreet Bank, which has had a small Spokane office for 20 years, is on a four-state growth tear after returning to good health through an infusion of cash earlier this year, following three years of regulatory intensive care.

The bank is expanding its mortgage operations here, where its staff is approaching 40 people, up from nine earlier this year, says Rich Bennion, HomeStreet's Seattle-based executive vice president and regional lending director.

To make room for that growth, HomeStreet is moving its longtime office in the Rock Pointe Corporate Center office to larger quarters closer to downtown, where it will occupy 9,000 square feet of space on the top floor of the six-story Red Lion Hotels corporate building, at 201 W. North River Drive.

HomeStreet also occupies 1,800 square feet of office space at 16114 E. Indiana in Spokane Valley, formerly occupied by MetLife Home Loans, which exited the mortgage business earlier this year, Bennion says. HomeStreet then hired 17 MetLife loan officers here.

Natalie Overturf, a former MetLife employee, is HomeStreet's east region manager, overseeing Eastern Washington and Idaho operations.

HomeStreet has continued to increase personnel here in anticipation of a rebound in the housing market, Overturf says.

"We're adding people at a pretty rapid pace, and I expect that to continue," she says.

Overturf, who's logged 20 years in the mortgage business, says many of the loan officers that HomeStreet has picked up this year also are veterans in the business.

In addition to the Spokane and Spokane Valley locations, HomeStreet also is negotiating a lease for a smaller office in Coeur d'Alene, which it expects to open by fall.

Overturf, a Coeur d'Alene resident, says she'll maintain office space in all three locations.

Bennion says, "We've tripled our capacity in the Spokane market."

HomeStreet's long-range plans include opening deposit-taking branches in Spokane, he says.

"We do plan to expand our full-service presence to Spokane," Bennion says. "We don't have a timeline, but it's definitely in our plans for the future. We see Spokane as an attractive(banking) market that goes along with our mortgage lending."

HomeStreet's bankwide strategic plan, however, calls for opening two to four new branches a year. "It's a process of finding suitable locations, which is challenging," Bennion says.

HomeStreet Bank operates more than 30 full-service branches in Washington, Idaho, Oregon, and Hawaii. Bankwide, HomeStreet has grown to 900 employees, up from 600 earlier this year, largely through picking up former MetLife loan officers throughout the Pacific Northwest, Bennion says.

Mortgage activity throughout HomeStreet's service area and nationwide has been strong in regard to both purchase and refinance transactions, he says.

"Prices are considerably lower than they were at the peak," Bennion says. Home prices combined with historically low mortgage rates make this an opportune time for HomeStreet to strengthen its position in the market, he says.

"In Spokane, we do lot of Federal Housing Administration and Veterans Affairs-guaranteed loans and conventional loans to sell to Fannie Mae or Freddie Mac," Bennion says.

The bank typically sells the loans it makes, but continues to service them.

"HomeStreet services close to $8 billion in mortgages," he says. "We collect payments, insurance, and taxes on mortgages. Ifborrowers have questions about payments or taxes, they call us."

Most customers come in contact with HomeStreet via referrals through relationships loan officers build within the residential construction and real estate industries.

"We don't run ads on radio or TV," Bennion says. "Our business is dependent on referrals from builders and real estate agents."

HomeStreet also relies on word-of-mouth referrals and repeat business from customers.

Bennion asserts HomeStreet's rate of return customers is one of the highest of any mortgage servicer in the industry.

"We attribute that to a number of things," he says. "Loan officers keep in touch with customers, and customers are aware we are a community bank. Customers often call their loan officer and seek financing from us when they move."

HomeStreet is in good health now, Bennion says, although the residential construction and mortgage crisis took its toll on the bank. Earlier this year, it emerged from a three-year struggle to regain a well-capitalized position in the eyes of federal and state regulators.

In 2009, the Federal Deposit Insurance Corp. and the Washington Department of Financial Institutions ordered HomeStreet to raise capital and reduce its risky construction loans. The bank concentrated on conventional and federally guaranteed home mortgages, and earlier this year raised $89 million through its first stock offering.

"HomeStreet is a publicly held company now," Bennion says. "We completed our initial public offering on Feb. 15."

A month later, regulators lifted their order.

The bank reported net income of $19 million in the first quarter of 2012 ended March 31, up from a loss of $7.5 million in the year-earlier quarter. Deposits as of March 31 totaled $2 billion, relatively flat with the year-earlier total.

Loans held for sale and loans held for investment totaled $1.6 billion as of March 31, an increase of $135 million compared with the year-earlier total. Total assets were $2.4 billion, up from $2.3 billion.

"I feel good about it," Bennion says of the bank's fiscal fitness.

Bennion declined to discuss HomeStreet's second-quarter earnings prior to their release, which was scheduled for earlier this week.