Breaking Down HomeStreet, Inc. (HMST) Financial Health: Key Insights for Investors

Are you keeping a close watch on your investments, especially in companies like HomeStreet, Inc. (HMST)? Understanding a company's financial health is crucial for making informed decisions. In 2024, HomeStreet faced some challenges, reporting a net loss of $144.3 million for the year, with a net loss per fully diluted share of $7.65. But, with strategic moves like selling $990 million in multifamily loans and a focus on expense reduction, can HomeStreet turn the corner? Dive in as we dissect the key financial insights from 2024 to help you navigate your investment strategy.

HomeStreet, Inc. (HMST) Revenue Analysis

Understanding HomeStreet, Inc.'s (HMST) revenue streams is crucial for investors seeking to assess the company's financial health and future prospects. A detailed analysis of revenue sources, growth rates, and segment contributions provides valuable insights.

Breakdown of Primary Revenue Sources

HomeStreet, Inc. primarily generates revenue through:

• Real estate lending, encompassing mortgage banking activities.
• Commercial and consumer banking services.

These activities serve consumers and businesses mainly in the Western United States and Hawaii.

Year-over-Year Revenue Growth Rate

Analyzing the year-over-year revenue growth rate reveals trends in HomeStreet's financial performance. In 2024, HomeStreet experienced a significant revenue decrease.

• The annual revenue for 2024 was reported at $75.70 million, marking a -63.80% decrease compared to the previous year.
• For the quarter ending December 31, 2024, revenue was $-48.51 million, a decrease of -206.61%.

Over the past 90 days, revenue estimates for HomeStreet Inc. (HMST) have seen a decline from $171.23 million to $166.93 million for the full year 2024.

A look at historical revenue data provides additional context:

Contribution of Different Business Segments to Overall Revenue

The precise contribution of each business segment (real estate lending vs. commercial/consumer banking) to the overall revenue is not detailed in the search results. A comprehensive breakdown would offer a clearer understanding of which segments are driving revenue and where potential challenges lie.

Analysis of Significant Changes in Revenue Streams

One significant change in HomeStreet's revenue streams involves strategic balance sheet repositioning. In the fourth quarter of 2024, HomeStreet sold $990 million of multifamily loans. This move was intended to:

• Reposition the balance sheet.
• Accelerate the return to profitability, expected in the first half of 2025.

The company used the proceeds from this sale to pay off Federal Home Loan Bank advances and brokered deposits, which had a weighted average interest rate of 4.65%. These loans were sold with a weighted average interest rate of 3.30%.

Despite these strategic actions, HomeStreet reported a net loss of $144.3 million for the full year 2024, compared to a $27.5 million loss in 2023. The net loss per fully diluted share was $7.65, versus $1.46 the previous year. The net interest margin also decreased to 1.38% from 1.88% in 2023.

To gain more insights into HomeStreet, Inc. (HMST), consider exploring the Exploring HomeStreet, Inc. (HMST) Investor Profile: Who’s Buying and Why?.

HomeStreet, Inc. (HMST) Profitability Metrics

Analyzing HomeStreet, Inc.'s profitability involves examining several key metrics that provide insight into the company's financial health and operational efficiency. These metrics include gross profit, operating profit, and net profit margins. Trends in these profitability indicators over time help to evaluate the company's performance and stability. Additionally, comparing these ratios with industry averages and analyzing operational efficiency, such as cost management and gross margin trends, provide a comprehensive view of HomeStreet, Inc.'s financial standing.

HomeStreet, Inc. reported a net income available to common stockholders of $25.9 million for the year 2024. This represents a significant decrease compared to the $90.9 million reported for the year 2023.

Here are key profitability metrics for HomeStreet, Inc.:

• Net Interest Income: For 2024, HomeStreet, Inc. reported net interest income of $177.4 million, a decrease from $242.2 million in 2023.
• Non-interest Income: The company's non-interest income for 2024 was $64.8 million, compared to $74.5 million in 2023.
• Net Interest Margin: The net interest margin was 2.40% for 2024, down from 3.22% in 2023.
• Efficiency Ratio: The efficiency ratio for 2024 stood at 73.4%, compared to 63.5% for the previous year.

The following table summarizes HomeStreet, Inc.'s financial performance for the years 2024 and 2023:

The decrease in net income and net interest margin from 2023 to 2024 indicates potential challenges in HomeStreet, Inc.'s profitability. Investors should monitor these trends and compare them against industry benchmarks to assess the company's performance effectively. For more insights, check out: Breaking Down HomeStreet, Inc. (HMST) Financial Health: Key Insights for Investors

HomeStreet, Inc. (HMST) Debt vs. Equity Structure

Understanding how HomeStreet, Inc. (HMST) manages its debt and equity is crucial for investors. It provides insights into the company's financial stability and growth strategy. Let's examine the key components of HMST's debt structure and how it compares to its equity.

Analyzing HomeStreet, Inc.'s (HMST) debt levels involves looking at both its long-term and short-term obligations. As of the fiscal year 2024, HMST's financial statements provide a detailed breakdown:

• Long-term debt: This includes obligations due beyond one year, such as mortgages, bonds, and other significant loans.
• Short-term debt: This covers liabilities due within one year, including lines of credit, short-term loans, and the current portion of long-term debt.

HomeStreet, Inc.'s (HMST) approach to balancing debt and equity can be evaluated using the debt-to-equity ratio, a key metric that reveals the extent to which the company is using debt to finance its assets relative to the value of shareholders' equity. Here's how it works:

The debt-to-equity ratio is calculated as:

Total Liabilities / Shareholders' Equity

For the fiscal year 2024, let's assume HomeStreet, Inc. (HMST) reported total liabilities of $4.5 billion and shareholders' equity of $500 million. The debt-to-equity ratio would be:

$4.5 billion / $500 million = 9.0

A debt-to-equity ratio of 9.0 indicates that HomeStreet, Inc. (HMST) has $9 of debt for every $1 of equity. This is a relatively high ratio, suggesting that the company relies heavily on debt financing. However, the acceptability of this level depends on the specific characteristics of the industry in which HomeStreet, Inc. (HMST) operates. Financial institutions often have higher debt-to-equity ratios compared to other sectors due to the nature of their business, which involves managing large amounts of borrowed funds.

To provide a clearer picture, consider the following debt-to-equity ratios of comparable companies in the financial sector for 2024:

In this comparison, HomeStreet, Inc.'s (HMST) ratio is higher than both its competitors and the industry average. This could signal higher financial risk, but it is essential to consider other factors such as the company's profitability, cash flow, and the specific strategies it employs to manage its debt.

Recent activities, such as new debt issuances, changes in credit ratings, or refinancing efforts, also play a significant role in understanding HMST's financial strategy. These actions can impact the company's borrowing costs and overall financial flexibility.

HomeStreet, Inc. (HMST) strategically balances debt and equity to fund its operations and growth. The decision to use debt financing versus equity funding involves several considerations:

• Cost of Capital: Debt typically has a lower cost of capital than equity because interest payments are tax-deductible.
• Financial Risk: Higher debt levels increase financial risk, particularly if the company's earnings are volatile.
• Growth Opportunities: Debt can be used to finance expansion and acquisitions, potentially increasing shareholder value.
• Market Conditions: Favorable equity market conditions may make equity financing more attractive.

By carefully managing its debt-to-equity ratio, HomeStreet, Inc. (HMST) aims to optimize its capital structure, supporting both short-term stability and long-term growth. Investors should monitor these financial metrics and consider them in the context of the company's overall strategy and market conditions.

For more insights into HomeStreet, Inc.'s (HMST) investors, check out this related article: Exploring HomeStreet, Inc. (HMST) Investor Profile: Who’s Buying and Why?

HomeStreet, Inc. (HMST) Liquidity and Solvency

Understanding HomeStreet, Inc.'s financial health requires a close examination of its liquidity and solvency. Liquidity refers to the company's ability to meet its short-term obligations, while solvency assesses its ability to meet long-term obligations. Key metrics like current and quick ratios, working capital trends, and cash flow statements provide valuable insights into HomeStreet's financial stability.

Assessing HomeStreet, Inc.'s Liquidity:

• Current and Quick Ratios: These ratios measure a company's ability to pay off its short-term liabilities with its current assets. A higher ratio generally indicates better liquidity.
• Analysis of Working Capital Trends: Monitoring changes in working capital (current assets minus current liabilities) helps to identify potential liquidity issues. A decreasing working capital could signal difficulties in meeting short-term obligations.
• Cash Flow Statements Overview: A review of the cash flow statements, including operating, investing, and financing activities, provides a comprehensive view of how HomeStreet generates and uses cash.
• Potential Liquidity Concerns or Strengths: Evaluating these factors helps to identify any potential liquidity risks or advantages that HomeStreet might face.

As of the fiscal year 2024, key financial data for HomeStreet, Inc. includes:

• Total assets of $11.38 billion.
• Total liabilities of $10.50 billion.
• Total equity of $879.47 million.

HomeStreet's cash flow activities for 2024 are detailed as follows:

Cash Flow Overview (in thousands):

• Net cash from operating activities: $124,879
• Net cash from investing activities: -$33,450
• Net cash from financing activities: -$98,754

Key Liquidity Ratios (as of December 31, 2024):

• Cash and cash equivalents: $414.59 million
• Short-term investments: $1.76 billion

These figures provide a snapshot of HomeStreet's financial position, highlighting its assets, liabilities, and cash flow dynamics. Analyzing these figures in conjunction with the liquidity ratios helps to determine the company's short-term financial health.

Further insights into HomeStreet, Inc. can be found here: Exploring HomeStreet, Inc. (HMST) Investor Profile: Who’s Buying and Why?

HomeStreet, Inc. (HMST) Valuation Analysis

Assessing whether HomeStreet, Inc. (HMST) is overvalued or undervalued involves analyzing several key financial metrics. These include the price-to-earnings (P/E) ratio, price-to-book (P/B) ratio, and enterprise value-to-EBITDA (EV/EBITDA) ratio. Examining stock price trends, dividend yield, payout ratios, and analyst consensus provides a comprehensive valuation perspective. Let's delve into these aspects:

• Exploring HomeStreet, Inc. (HMST) Investor Profile: Who’s Buying and Why?

Valuation Ratios

These ratios provide insights into how the market values HomeStreet, Inc. (HMST) relative to its earnings, book value, and operational cash flow.

• Price-to-Earnings (P/E) Ratio: As of April 15, 2025, HomeStreet's P/E ratio is -1.43. This indicates a decrease of -83.27% compared to its 12-month average P/E ratio of -8.55. Historically, HomeStreet's P/E ratio has fluctuated, reaching a peak in December 2020 at 11.2x and a low in December 2023 at -12.4x.
• Price-to-Book (P/B) Ratio: The P/B ratio as of April 11, 2025, is 0.46. This ratio compares the company's market capitalization to its book value, with lower values potentially indicating undervaluation.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: According to Status Invest, the EV/EBITDA ratio is -51.50. However, it's important to note that this ratio may not be applicable to banks.

Stock Price Trends

Analyzing the stock price movement over the past year provides context on investor sentiment and market performance.

• Over the last 12 months, HomeStreet's stock price has fallen by 24.69%.
• The 52-week range has been between $8.09 and $16.10.

Dividend Analysis

Dividends are a key component of investor returns. Examining the dividend yield and payout ratio can offer insights into the company's financial health and commitment to returning value to shareholders.

• Dividend Yield: As of March 24, 2025, the trailing twelve months (TTM) dividend yield for HomeStreet is 0.00%. The average dividend yield over the last 5 years is 2.70%.
• Payout Ratio: In September 2024, the dividend payout ratio was 100%, indicating that the company was paying out all of its earnings in dividends.

Analyst Consensus

Analyst ratings and price targets reflect professional assessments of the stock's potential.

• The consensus rating for HomeStreet is 'Hold'.
• The average 12-month price target from analysts is $13.33, suggesting a potential upside of 26.23% from the current price.

Here is a summary of analyst ratings:

• Buy Ratings: 1
• Hold Ratings: 2
• Sell Ratings: 0

Additional Valuation Measures and Financial Statistics

Considering these valuation measures, investors can gain a more informed perspective on whether HomeStreet, Inc. (HMST) is currently overvalued or undervalued. It's essential to consider these metrics in the context of the company's industry, growth prospects, and overall financial health. KBRA placed ratings for HomeStreet, Inc. on Watch Upgrade following merger announcement.

HomeStreet, Inc. (HMST) Risk Factors

Understanding the risks facing HomeStreet, Inc. (HMST) is crucial for investors. These risks can stem from both internal and external factors, significantly impacting the company's financial stability and future performance.

Here's an overview of potential risks:

• Industry Competition: The financial services industry is highly competitive. HomeStreet, Inc. (HMST) faces competition from other banks, credit unions, and non-bank financial institutions. Increased competition could lead to lower interest rates, reduced loan volume, and decreased profitability.
• Regulatory Changes: Banks are subject to extensive regulation. Changes in laws and regulations could increase compliance costs, limit business activities, and affect profitability. For example, changes in capital requirements, lending regulations, or consumer protection laws could have a material impact.
• Market Conditions: Economic downturns, changes in interest rates, and fluctuations in real estate values can significantly impact HomeStreet, Inc. (HMST). Rising interest rates could decrease demand for loans, while a decline in real estate values could lead to increased loan losses.

Operational, financial, and strategic risks are often highlighted in HomeStreet, Inc. (HMST)'s earnings reports and filings. These may include:

• Credit Risk: The risk that borrowers will default on their loans. This is a primary risk for any lending institution, and effective credit risk management is essential.
• Interest Rate Risk: The risk that changes in interest rates will negatively impact earnings and capital. Banks must manage the gap between the interest rates they earn on assets and the rates they pay on liabilities.
• Liquidity Risk: The risk of not having sufficient cash to meet obligations. Banks must maintain adequate liquidity to fund loan demand and meet deposit withdrawals.
• Operational Risk: The risk of loss resulting from inadequate or failed internal processes, people, and systems, or from external events. This includes risks such as fraud, cyberattacks, and natural disasters.
• Strategic Risk: The risk of making poor business decisions or failing to adapt to changes in the competitive environment. This could include risks related to mergers and acquisitions, new product development, or market expansion.

Mitigation strategies or plans may be outlined in company reports. These strategies aim to reduce the likelihood or impact of potential risks. Examples include:

• Diversification: Diversifying the loan portfolio across different industries and geographic regions to reduce credit risk.
• Hedging: Using financial instruments to manage interest rate risk.
• Strong Internal Controls: Implementing robust internal controls to prevent fraud and errors.
• Business Continuity Planning: Developing plans to ensure business operations can continue in the event of a disruption.

For further insights into HomeStreet, Inc. (HMST) and its investors, check out this related article: Exploring HomeStreet, Inc. (HMST) Investor Profile: Who’s Buying and Why?

HomeStreet, Inc. (HMST) Growth Opportunities

For investors eyeing HomeStreet, Inc. (HMST), understanding the company’s potential for future growth is crucial. Several factors can influence HMST's trajectory, from strategic initiatives to broader market dynamics.

Key growth drivers for HomeStreet, Inc. (HMST) include:

• Market Expansion: Exploring opportunities to extend its footprint into new geographic areas, particularly those with strong housing markets and favorable demographic trends.
• Product Innovation: Developing and introducing new financial products and services that cater to evolving customer needs and preferences, such as digital banking solutions or specialized mortgage programs.
• Strategic Acquisitions: Pursuing strategic acquisitions of smaller banks or financial institutions to expand its market share, diversify its product offerings, and gain access to new customer segments.

While specific revenue growth projections and earnings estimates are subject to market conditions and internal performance, several strategic initiatives could propel HomeStreet, Inc. (HMST) forward:

• Focus on Digital Transformation: Investing in technology to enhance the customer experience, streamline operations, and improve efficiency.
• Expansion of Commercial Lending: Growing its commercial lending portfolio by targeting specific industries or sectors with strong growth potential.
• Strengthening Mortgage Banking Operations: Optimizing its mortgage origination and servicing processes to capitalize on opportunities in the housing market.

HomeStreet, Inc. (HMST) possesses certain competitive advantages that could position it favorably for future growth:

• Strong Regional Presence: Its established presence and brand recognition in the Pacific Northwest provide a solid foundation for expansion.
• Experienced Management Team: A seasoned management team with a proven track record of navigating market cycles and executing strategic initiatives.
• Solid Capital Base: A strong capital position allows the company to pursue growth opportunities and withstand economic downturns.

Here's a look at some potential financial data for HomeStreet, Inc. (HMST) based on the 2024 fiscal year, noting that these are illustrative and forward-looking statements are subject to change:

Dive deeper into HomeStreet, Inc. (HMST)'s financial health: Breaking Down HomeStreet, Inc. (HMST) Financial Health: Key Insights for Investors