Wedbush downgrades HomeStreet to Neutral, lowers price target to $12

As previously reported, Wedbush downgraded HomeStreet to Neutral from Outperform with a price target of $12, down from $21, as funding pressures intensify. HomeStreet reported a challenging quarter driven by lower-than-expected net interest income driven by a compressing margin and increased funding costs. Management guided net interest margin to continue to decline until rates stabilize. Given the challenging funding environment, the company is reducing loan originations, increasing deposit promotions, and drawing on wholesale borrowings, Wedbush adds.