HomeStreet, a Seattle bank that's lost about two-thirds of its market value this year, is exploring options including a potential sale, according to people familiar with the matter.
HomeStreet, which is working with a financial adviser, is also considering raising capital and selling assets, said the people, who asked to not be identified because the matter isn't public. No final decision has been made, and HomeStreet could opt to remain independent or keep its business intact, the people added.
"We decline to specifically comment on your article, however, we note that the board of directors and management of HomeStreet Inc. review the company's strategic options from time to time in pursuit of maximizing shareholder value," a representative for HomeStreet said in an emailed statement.
HomeStreet fell 0.5% to close at $9.15 in New York trading Tuesday, giving the company a market value of about $172 million. The stock is down about 67% this year.
HomeStreet and other lenders have been grappling with rising interest rates. That can be particularly painful for banks such as HomeStreet that rely on expensive forms of wholesale funding such as brokered deposits and borrowings from a Federal Home Loan bank or the Federal Reserve.
That's because they have to pay more for funding even as they make more money from lending at higher rates. Rising rates have also set off an expensive competition for deposits, as people look to move their money out of low-interest checking and savings accounts into products that pay better such as money-market accounts or certificates of deposit.
While HomeStreet has stable deposits and solid credit quality, those factors have hurt its profitability.
Its net interest income has fallen by more than a quarter in the past 12 months. It lost $31.4 million in the second quarter after earning $17.7 million a year earlier, largely due to a goodwill impairment charge tied to its declining share price, executives said during an analyst call discussing earnings last month.
