FBR analyst Paul Miller in a note to clients on Dec. 5 wrote, "we remain positive on the shares and believe a current valuation just above existing [tangible book value] of $18.57 provides meaningful upside opportunity."

Miller's note followed a presentation by HomeStreet at an FBR conference, where HomeStreet projected that gain-on-sale margins would stabilize following the fourth quarter of 2013.  HomeStreet also said most of its expansion was in new markets in California.

HomeStreet on Nov. 1 completed two small acquisiitnos the acquisitions of Fortune Bank of Seattle and Yakima Bank of Yakima, Wash.

HomeStreet is seeking to grow its commercial lending business to provide about 40% of its revenue within the next few years, with the split between mortgage and commercial eventually being equal. 

In a previous note in October following HomeStreet's announcement of its third-quarter results, Miller wrote, "Overall, we believe that if HomeStreet can build its balance sheet, successfully diversify its revenue stream, and maintain strong returns, shares should garner a higher multiple from investors."

The following chart shows the performance of HomeStreet's stock over the past 12 months, against the KBW Bank Index:

HMST ChartHMST data by YCharts

Interested in more on HomeStreet? See TheStreet Ratings' report card for this stock.

- - Written by Philip van Doorn in Jupiter, Fla.

Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.

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