HomeStreet (HMST) shares rallied 26.2% in the last trading session to close at $11.74. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 7.4% loss over the past four weeks.

HomeStreet and Mechanics Bank announced an all-stock business combination between the two. Existing shareholders of Mechanics Bank will receive common stock in HomeStreet in exchange for their Mechanics Bank shares. Upon closure, HomeStreet will be renamed Mechanics Bancorp and remain a publicly traded company.

The merger will expand Mechanics Bank’s West Coast footprint and create a combined lender with 168 branches and $23 billion in assets. The transaction is projected to close in the third quarter of 2025.

This real estate lender is expected to post quarterly loss of $0.07 per share in its upcoming report, which represents a year-over-year change of +75.9%. Revenues are expected to be $45.59 million, up 9.6% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For HomeStreet, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on HMST going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

HomeStreet is part of the Zacks Financial - Savings and Loan industry. Berkshire Hills Bancorp (BHLB), another stock in the same industry, closed the last trading session 0.2% lower at $26.09. BHLB has returned -8.2% in the past month.

Berkshire Hills' consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.54. Compared to the company's year-ago EPS, this represents a change of +10.2%. Berkshire Hills currently boasts a Zacks Rank of #2 (Buy).

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This article originally published on Zacks Investment Research (zacks.com).

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