HomeStreet (HMST) AI Stock Analysis

• Market Cap: $2.88B
• Dividend Yield: 0.98%
• Average Volume (3M): 146.82K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.34
• Revenue Growth: -26.58%
• EPS Growth: -838.48%
• Country: US
• Employees: 766
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): -0.23
• Shares Outstanding: 219,822,190
• 10 Day Avg. Volume: 251,141
• 30 Day Avg. Volume: 146,818
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 0.46
• Enterprise Value/Revenue: 7.20
• Enterprise Value/Gross Profit: 13.47
• Enterprise Value/Ebitda: -13.64
• 1Y Price Target: $14.00
• Price Target Upside: 7.28% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 2

• Rating: 51 Neutral
• Price Target: $13.00 ▼(-0.38% Downside)

HomeStreet's overall stock score is primarily impacted by its weak financial performance, characterized by declining revenues, high leverage, and cash flow issues. The technical analysis shows limited positive momentum, while valuation metrics are poor due to negative earnings. However, the recent merger with Mechanics Bancorp is a significant positive development, potentially enhancing the company's strategic position and operational capabilities.

Positive Factors

Merger Benefits

The reverse merger with Mechanics Bank creates a highly profitable and diversified lender with branches in every major West Coast market.

Shareholder Returns

The combined company expects to return 90% of earnings to shareholders in the form of cash dividends.

Valuation and Asset Growth

The new fair value estimate reflects potential appreciation of 19.0%.

Negative Factors

Acquisition Interest

Another suitor could potentially acquire HomeStreet at a similar valuation as FSUN's offer, given the significant buyer interest.

Loan Sale Pricing

HomeStreet's planned sale of $800 million of multifamily loans could be executed at better pricing than previously assumed.

Market Valuation

HomeStreet is trading at a significant discount to peers and its tangible book value per share, both on a GAAP and fair value basis.

HomeStreet Business Overview & Revenue Model

Company Description

HomeStreet, Inc. operates as the bank holding company for HomeStreet Bank that provides commercial, mortgage, and consumer/retail banking services primarily in the Western United States. The company offers personal and business checking, savings accounts, interest-bearing negotiable order of withdrawal accounts, money market accounts, and time certificates of deposit; credit cards; insurance; and treasury management products and services. Its loan products include commercial business and agriculture loans, single family residential mortgages, consumer loans, commercial loans secured by residential and commercial real estate, and construction loans for residential and commercial real estate development, as well as consumer installment loans and permanent loans on commercial real estate and single-family residences. In addition, the company offers its products and services through bank branches, loan production offices, and ATMs, as well as through online, mobile, and telephone banking. As of December 31, 2021, it operated 60 full-service bank branches located in Washington state, Northern and Southern California, the Portland, Oregon, and Hawaii; and five primary stand-alone commercial lending centers in Central Washington, Oregon, Southern California, Idaho, and Utah. HomeStreet, Inc. serves small and medium sized businesses, real estate investors, professional firms, and individuals. The company was formerly known as Continental Mortgage and Loan Company. HomeStreet, Inc. was incorporated in 1921 and is headquartered in Seattle, Washington.

How the Company Makes Money

HomeStreet generates revenue primarily through the interest earned on loans, including commercial real estate loans, residential mortgages, and consumer loans. The bank also earns fee income from various services such as mortgage origination, deposit account fees, and transaction services. A significant portion of the company's income comes from the spread between the interest it pays on deposits and the interest it earns on loans. Additionally, HomeStreet engages in investment activities, which contribute to its earnings. The company has established partnerships with real estate developers and local businesses, enhancing its ability to offer competitive financing options and drive revenue growth. Market conditions, interest rates, and the overall economic environment also play crucial roles in influencing its financial performance.

HomeStreet Financial Statement Overview

Summary

HomeStreet is facing significant financial challenges with declining net profit margins and high operational leverage. While there was a revenue increase in 2024, profitability metrics are poor, and cash flow is inconsistent, indicating potential financial instability.

Income Statement

HomeStreet shows a significant decline in net profit margin, with substantial losses in recent years. Revenue growth has been volatile, with a notable increase in 2024, but profitability metrics like EBIT and EBITDA margins are concerning, reflecting operational challenges.

Balance Sheet

The balance sheet exhibits a relatively high debt-to-equity ratio, but there is an improvement with reduced debt in 2024. The equity ratio remains stable, albeit on the lower side, suggesting moderate financial leverage. Stability is a concern, with a consistent decrease in stockholders' equity.

Cash Flow

Operating cash flow has been inconsistent, with free cash flow showing a downward trend, particularly in 2024. The operating cash flow to net income ratio suggests challenges in converting profits to cash, exacerbating liquidity concerns.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	182.11M	328.32M	178.77M	254.90M	319.12M	328.02M
Gross Profit	97.33M	45.83M	178.77M	254.90M	319.12M	328.02M
EBITDA	-96.12M	-105.82M	0.00	103.02M	165.35M	118.36M
Net Income	-141.31M	-144.34M	-27.51M	66.54M	115.42M	79.99M
Balance Sheet
Total Assets	7.80B	8.12B	9.39B	9.36B	7.20B	7.24B
Cash, Cash Equivalents and Short-Term Investments	1.31B	1.46B	209.26M	66.13M	65.21M	58.05M
Total Debt	225.22M	1.23B	1.97B	2.26B	167.03M	448.64M
Total Liabilities	7.40B	7.73B	8.85B	8.80B	6.49B	6.52B
Stockholders Equity	400.75M	397.00M	538.39M	562.15M	715.34M	717.75M
Cash Flow
Free Cash Flow	-56.71M	-46.41M	4.21M	211.54M	170.09M	-28.84M
Operating Cash Flow	-62.23M	-45.92M	8.02M	218.33M	173.03M	-25.55M
Investing Cash Flow	1.49B	1.32B	484.05M	-2.65B	-125.64M	-232.62M
Financing Cash Flow	-1.50B	-1.10B	-349.24M	2.44B	-40.23M	258.34M

HomeStreet Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 13.05
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HMST, the sentiment is Neutral. The current price of 13.05 is below the 20-day moving average (MA) of 13.41, below the 50-day MA of 13.23, and above the 200-day MA of 11.58, indicating a neutral trend. The MACD of 0.05 indicates Positive momentum. The RSI at 46.04 is Neutral, neither overbought nor oversold. The STOCH value of 35.29 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for HMST.

HomeStreet Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JMSB	74 Outperform	$286.80M	15.20	7.72%	1.49%	23.76%	682.33%
OVLY	72 Outperform	$247.44M	10.09	13.54%	2.03%	5.11%	-2.77%
CHMG	72 Outperform	$250.61M	22.05	5.18%	2.41%	-6.64%	-51.99%
INBK	69 Neutral	$212.86M	13.88	4.06%	0.98%	17.13%	-16.81%
Sector *	68 Neutral	$17.80B	11.87	10.23%	3.74%	9.69%	1.18%
FRST	57 Neutral	$275.26M	93.08	0.79%	3.58%	4.72%	―
HMST	51 Neutral	$2.88B	―	-30.22%	0.98%	-26.58%	-838.48%

HomeStreet Corporate Events

HomeStreet Finalizes Merger with Mechanics Bancorp

On September 2, 2025, Mechanics Bancorp announced the completion of its merger with HomeStreet Bank, significantly expanding its footprint on the West Coast. The merger resulted in Mechanics Bank becoming a wholly owned subsidiary of Mechanics Bancorp, with the combined entity now operating 166 branches and holding over $22 billion in assets. The merger has led to a major restructuring of the company’s leadership, with several resignations and new appointments, including C.J. Johnson as the new President and CEO. The merger positions Mechanics Bancorp as a premier community bank on the West Coast, with a strong presence from San Diego to Seattle.

HomeStreet Shareholders Discuss Merger with Mechanics Bank

On August 21, 2025, HomeStreet, Inc. held a special meeting of its shareholders to discuss proposals related to a merger agreement with Mechanics Bank, a California banking corporation. The proposals included amending HomeStreet’s articles of incorporation to change its name to Mechanics Bancorp, increase authorized shares, and authorize two classes of common stock, indicating significant strategic changes for the company.

HomeStreet and Mechanics Bank Merger Receives Approval

On August 19, 2025, HomeStreet, Inc. and Mechanics Bank announced they received all necessary regulatory approvals for their strategic merger, initially agreed upon on March 28, 2025. The merger, which involves HomeStreet Bank merging into Mechanics Bank, is expected to close on or around September 2, 2025, pending customary closing conditions and shareholder approvals. This merger will result in Mechanics Bank becoming a wholly owned subsidiary of HomeStreet, which will be renamed Mechanics Bancorp and remain publicly traded.

HomeStreet SEC Approval Advances Mechanics Bank Merger

On March 28, 2025, HomeStreet, Inc. and Mechanics Bank entered into a merger agreement for an all-stock business combination, with HomeStreet Bank merging into Mechanics. The merger will result in Mechanics becoming a wholly owned subsidiary of HomeStreet. The SEC declared the registration statement effective on July 16, 2025, facilitating the transaction’s progress.

HomeStreet Reports Q2 2025 Loss Ahead of Merger

HomeStreet, Inc. reported a net loss of $4.4 million for the second quarter of 2025, with a core net loss of $3.1 million. Despite the losses, HomeStreet Bank achieved a net income of $0.7 million, and the company maintained stable deposit balances with a slight increase in noninterest-bearing deposits. The merger with Mechanics Bank is anticipated to close in the third quarter of 2025, which is expected to help HomeStreet return to core profitability. The company has a diversified deposit base and continues to attract new deposit clients, with uninsured deposits accounting for 10% of total deposits as of June 30, 2025.

HomeStreet Sells Ginnie Mae Servicing Portfolio

On July 16, 2025, HomeStreet, Inc. announced an agreement to sell its Ginnie Mae mortgage servicing portfolio, valued at $794 million as of June 30, 2025, to a specialized loan servicing entity. The sale, expected to close on August 1, 2025, is not anticipated to result in any gain or loss for HomeStreet, as the portfolio was carried at market value, and it includes customary transaction provisions and conditions.