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Homestreet Inc. (HMST)
NASDAQ:HMST
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HomeStreet
(NASDAQ:HMST)
Rating:48Neutral
Price Target:
$12.50
▼(-4.51%Downside)
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 (HMST) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$247.86M
Dividend Yield0.98%
Average Volume (3M)67.51K
Price to Earnings (P/E)―
Beta (1Y)1.42
Revenue Growth-22.46%
EPS Growth-251.47%
CountryUS
Employees766
SectorFinancial
Sector Strength81
IndustryBanks - Regional
Share Statistics
EPS (TTM)-0.24
Shares Outstanding18,920,809
10 Day Avg. Volume78,226
30 Day Avg. Volume67,506
Financial Highlights & Ratios
PEG Ratio-0.21
Price to Book (P/B)0.93
Price to Sales (P/S)0.00
P/FCF Ratio2.47
Enterprise Value/Market Cap10.92
Enterprise Value/Revenue2.83
Enterprise Value/Gross Profit27.80
Enterprise Value/Ebitda-12.57
Forecast
1Y Price Target
$13.50Price Target Upside3.13% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
HomeStreet Business Overview & Revenue Model
Company DescriptionHomeStreet, Inc. (HMST) is a diversified financial services company headquartered in Seattle, Washington. Established in 1921, HomeStreet provides a wide range of banking and financial services focused primarily on community banking and commercial real estate lending. The company operates through various segments, including commercial and consumer banking, mortgage banking, and insurance services. Through its network of branches and lending offices, HomeStreet offers products such as home loans, personal and business banking services, and insurance solutions tailored to meet the needs of individuals and businesses in its operating regions.
How the Company Makes MoneyHomeStreet makes money primarily through its commercial and consumer banking operations, which include interest income from loans and deposits. The company generates revenue by providing various loan products, including residential mortgages, commercial real estate loans, and consumer loans, earning interest and fees in the process. Additionally, HomeStreet earns income from its deposit services, where the spread between interest paid on deposits and interest earned on loans contributes to its net interest margin. The mortgage banking segment also plays a significant role by originating and selling home loans, generating fee income. While insurance services add another revenue stream by offering a variety of insurance products, partnerships with other financial institutions and businesses further enhance HomeStreet's revenue capabilities through collaboration and shared services.
HomeStreet Earnings Call Summary
Earnings Call Date:Apr 28, 2025
(Q4-2024)
| % Change Since: 17.93%|
Next Earnings Date:Jul 28, 2025
Earnings Call Sentiment Negative
The earnings call reveals significant financial challenges faced by HomeStreet Bank, including a major net loss and increased nonperforming assets. However, there are positive strategic steps being taken, such as improving liquidity and reducing noninterest expenses, with an expectation of returning to profitability in the near future.Q4-2024 Updates
Positive Updates
Decrease in Noninterest Expenses
Noninterest expenses were $5.2 million lower in the fourth quarter of 2024 due to a decrease in compensation benefits and administrative expenses.
Improved Liquidity Position
Following the sale of $990 million in multifamily loans, the bank improved its liquidity position, increasing cash and securities balances to $1.5 billion, which is 18% of total assets.
Continued Loan Repricing and Profitability Expectations
The bank anticipates returning to profitability in the first half of the next year due to loan repricing, reduction in borrowings, and expected reductions in short-term interest rates.
Strong Deposit Loyalty
Despite various challenges, the bank maintained a high roll rate on certificates of deposit and reported low levels of uninsured deposits at 9%.
Negative Updates
Significant Net Loss
The bank reported a net loss of $123.3 million for the fourth quarter of 2024, a significant increase from the $7.3 million loss in the previous quarter.
Multifamily Loan Sale Loss
The bank incurred an $88.8 million loss on the sale of multifamily loans, which contributed significantly to the overall financial loss.
Deferred Tax Asset Valuation Allowance
A $53.3 million deferred tax asset valuation allowance was recorded, negatively impacting the reported income tax expense.
Increase in Nonperforming Assets
Nonperforming assets to total assets ratio increased, partly due to the sale of multifamily loans and a downgraded syndicated commercial loan.
Company Guidance
In the fourth quarter of 2024, HomeStreet Bank reported a significant net loss of $123.3 million, equivalent to $6.54 per share, compared to a net loss of $7.3 million or $0.39 per share in the previous quarter. This loss was primarily driven by an $88.8 million pretax loss on the sale of $990 million in multifamily loans, alongside a $53.3 million deferred tax asset valuation allowance. However, on a core basis, excluding these impacts and merger-related expenses, the net loss was reduced to $5.1 million or $0.27 per share. The bank's net interest income increased by $1 million due to a rise in the net interest margin from 1.33% to 1.38%, despite a decrease in noninterest income. The ratio of nonperforming assets to total assets increased to 71 basis points, and loans delinquent over 30 days rose to 106 basis points. HomeStreet Bank's restructuring efforts, including the loan sale, improved liquidity and lowered the loan-to-deposit ratio to 97.4%, with expectations of a return to profitability in the first half of 2025.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.45
Neutral
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.60
Neutral
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.50
Neutral
| 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
Positive
13.09
Price Trends
12.28
Positive
11.16
Positive
11.69
Positive
Market Momentum
0.16
Negative
61.81
Neutral
83.31
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HMST, the sentiment is Positive. The current price of 13.09 is above the 20-day moving average (MA) of 12.65, above the 50-day MA of 12.28, and above the 200-day MA of 11.69, indicating a bullish trend. The MACD of 0.16 indicates Negative momentum. The RSI at 61.81 is Neutral, neither overbought nor oversold. The STOCH value of 83.31 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HMST.
HomeStreet Risk Analysis
HomeStreet disclosed 25 risk factors in its most recent earnings report. HomeStreet reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
HomeStreet Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $272.72M | 15.36 | 7.25% | 1.31% | 25.96% | 484.74% | |
72 Outperform | $229.42M | 9.23 | 13.99% | 2.19% | 0.40% | -10.62% | |
71 Outperform | $239.06M | 10.53 | 10.65% | 2.56% | 6.05% | -9.27% | |
68 Neutral | $241.04M | 11.52 | 5.58% | 0.86% | 22.97% | 27.73% | |
61 Neutral | C$14.56B | 6.16 | 20.17% | 5.70% | 26.93% | -38.21% | |
56 Neutral | $272.94M | 68.83 | 1.06% | 3.62% | 5.36% | ― | |
48 Neutral | $247.86M | ― | -30.45% | 0.98% | -22.46% | -251.47% |
* Financial Sector Average
Performance Comparison
HMST
HomeStreet
13.09
2.09
19.00%
OVLY
Oak Valley Bancorp [Ca]
27.28
4.27
18.56%
FRST
Primis Financial
11.04
1.04
10.40%
CHMG
Chemung Financial
49.90
6.49
14.95%
INBK
First Internet Bancorp
27.81
0.75
2.77%
JMSB
John Marshall Bancorp
19.15
2.91
17.92%
HomeStreet Corporate Events
Executive/Board ChangesShareholder Meetings
HomeStreet Elects Board at Annual Shareholder Meeting
Neutral
Jun 2, 2025
On May 29, 2025, HomeStreet Inc. held its 2025 Annual Meeting of Shareholders, where all eight director candidates nominated by the Board were elected. Additionally, shareholders approved Proposals 2 and 3, which included the advisory approval of executive compensation for 2024.
The most recent analyst rating on (HMST) stock is a Buy with a $13.50 price target. To see the full list of analyst forecasts on HomeStreet stock, see the HMST Stock Forecast page.
M&A TransactionsFinancial Disclosures
HomeStreet Reports Q1 2025 Net Loss Amid Merger News
Negative
Apr 28, 2025
HomeStreet, Inc. has announced a first-quarter 2025 net loss of $4.5 million, or $0.24 per share, with a core net loss of $2.9 million. Despite this, HomeStreet Bank reported a net income of $1.1 million, and the company saw an increase in total deposits by $131 million from December 31, 2024, to March 31, 2025. The company has also announced a merger agreement with Mechanics Bank, expected to close in the third quarter of 2025, which could potentially impact its market positioning and stakeholder interests.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.