Mechanics Bancorp Q3 profit falls to $46M from $57.7M
Portfolio sales produced a $32.3 million securities loss and a $10.3 million auto-loan loss, while delinquent loans fell to $67.5 million.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Form Type
8-K
Rhea-AI Filing Summary
Mechanics Bancorp (MCHB) reported third-quarter 2026 net income of $46.0 million, or $0.20 per diluted share, versus $57.7 million and $0.25 in the second quarter. Net interest income was $174.9 million and net interest margin was 3.55%, compared with $177.2 million and 3.62% in Q2. For the first nine months, net interest income rose to $531.1 million from $402.7 million, while net income was $147.8 million versus $154.6 million.
Mechanics Bank completed the sale of $417 million in performing indirect auto loans, recording a $10.3 million loss, and restructured $308 million of securities, recording a $32.3 million loss. At September 30, total loans were $13.0 billion, deposits were $18.0 billion, delinquent loans were $67.5 million versus $95.4 million at June 30, and the preliminary CET1 ratio was 14.73%.
Class A shareholders received a $0.25 per-share dividend in Q3. Management expects a ~$100 million Q4 dividend, or ~$0.43 per Class A share, subject to Board and regulatory approval.
2 points · 0 major0 major · 3 points
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointNine-month net interest income increased $128.4 million year over year.
- Minor pointDelinquent loans declined to $67.5 million from $95.4 million.
Negative
- Moderate pointQuarterly net income was $46.0 million, versus $57.7 million in Q2.
- Moderate pointAFS securities restructuring recorded a $32.3 million loss on sale.
- Minor pointAuto-loan sale resulted in a $10.3 million loss on sale.
Insights
Analyzing...
8-K Event Classification
3 items: 2.02, 7.01, 9.01
3 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 7.01
Regulation FD Disclosure
Disclosure
Material non-public information disclosed under Regulation Fair Disclosure, often investor presentations or guidance.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, or exhibit attachments filed with this report.
Key Figures
Net income: $46.0 million
Diluted earnings per share: $0.20 per diluted share
Net interest income: $174.9 million
+5 more
8 metrics
Net income
$46.0 million
Third quarter of 2026; $57.7 million in Q2 2026
Diluted earnings per share
$0.20 per diluted share
Class A common stock, third quarter of 2026; $0.25 in Q2 2026
Net interest income
$174.9 million
Third quarter of 2026; $177.2 million in Q2 2026
Net interest margin
3.55%
Third quarter of 2026; 3.62% in Q2 2026
Total assets
$20.9 billion
At September 30, 2026
Common equity Tier 1 capital ratio
14.73%
Preliminary ratio at September 30, 2026
Delinquent loans
$67.5 million
At September 30, 2026; $95.4 million at June 30, 2026
Class A dividend paid
$0.25 per share
Third quarter of 2026
Key Terms
net interest margin, Allowance for credit losses, Common equity Tier 1 capital, gross-up approach
4 terms
net interest margin financial
"net interest margin decreased from 3.62% to 3.55%"
Net interest margin measures how much a bank earns from lending and investing compared with what it pays for funding, expressed as a percentage of its interest-earning assets. Think of it like a grocery store’s markup: it shows the gap between buying cost and selling price per dollar of goods — here, the cost is interest paid and the sale is interest received. Investors watch it because a higher margin usually means a bank is more profitable and better at managing interest rate and credit conditions.
Allowance for credit losses financial
"Allowance for credit losses (“ACL”) to total loans"
Allowance for credit losses is a reserve set aside by a financial institution to cover potential losses from borrowers who may not repay their loans. It acts like a safety net, helping the institution prepare for loans that might turn sour. For investors, it signals how cautious the institution is about the quality of its loans and potential risks to its financial health.
Common equity Tier 1 capital regulatory
"Common equity Tier 1 capital (to risk-weighted assets)"
Core capital a bank holds consisting mainly of common shares and retained profits that can absorb losses without forcing the bank to sell assets or seek emergency help; items that can’t reliably cover losses are excluded. Think of it as the bank’s shock-absorbing cushion: a higher common equity tier 1 (CET1) level and ratio means regulators and investors view the bank as better able to survive bad loans or market shocks, so it signals lower risk to shareholders and creditors.
gross-up approach technical
"recognized at their purchase price plus the amount of the allowance"
Earnings Snapshot
Net income: $46.0 million · Guidance included
Third quarter of 2026
Net income
$46.0 million
Compared with $57.7 million in Q2 2026 and $68.3 million in Q3 2025
Diluted earnings per share
$0.20 per diluted share
Compared with $0.25 in Q2 2026 and $0.31 in Q3 2025
Net interest income
$174.9 million
Compared with $177.2 million in Q2 2026
Net interest margin
3.55%
Compared with 3.62% in Q2 2026
Total assets
$20.9 billion
Compared with $21.2 billion at June 30, 2026
Guidance
Management expects a ~$100 million dividend, or ~$0.43 per Class A share, in Q4 2026, subject to Board and regulatory approval. Management expects ~17% ROATCE and ~1.2% ROAA in 2027.
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How much did MCHB earn in the third quarter of 2026?
Mechanics Bancorp reported $46.0 million in net income, or $0.20 per diluted share. Net income was $57.7 million, or $0.25 per diluted share, in the second quarter.
What were the terms of MCHB's third-quarter securities restructuring?
At the end of July, management says it sold $308 million of available-for-sale securities yielding 1.78% at a $32.3 million pre-tax loss and reinvested the net proceeds in mortgage-backed securities yielding 5.50%. The expected earnback was 4-5 years.
Who bought Mechanics Bank's auto loans, and how many remained?
On September 16, 2026, Mechanics Bank sold $417 million of remaining performing indirect auto loans to Bank of America, N.A., and retained $13 million of runoff auto loans.
What dividend does MCHB expect in Q4 2026?
Management expects a ~$100 million dividend, or ~$0.43 per Class A share, subject to Board and regulatory approval.
AI-generated analysis. How Rhea-AI works. Not financial advice.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________
FORM 8-K
_______________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 28, 2026
________________________________
________________________________
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||||||||
(Address of principal executive offices) (Zip Code)
(925 ) 482-8000
(Registrant’s telephone number, including area code)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
| If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ | |||||
Item 2.02 Results of Operations and Financial Condition
On October 28, 2026, Mechanics Bancorp issued a press release reporting results of operations for the third quarter of 2026. A copy of the earnings release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference.
Item 7.01 Regulation FD Disclosure
Mechanics Bancorp is hereby furnishing a third quarter of 2026 slide presentation that executive management intends to use in meetings with institutional investors and industry analysts, including in a webcast on October 29, 2026, at 11:00 a.m. (eastern time). The slide presentation is furnished as Exhibit 99.2 to this Current Report on Form 8-K and will be available on Mechanics Bancorp's investor relations web site at http://ir.mechanicsbank.com.
In accordance with General Instruction B.2 of Form 8-K, the information contained in this Current Report on Form 8-K, including Exhibit 99.1 and Exhibit 99.2, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits
| Exhibit 99.1 | Earnings Release dated October 28, 2026. | |||||||
| Exhibit 99.2 | Investor Presentation, Third Quarter 2026. | |||||||
| Exhibit 104 | Cover Page Interactive Data File (embedded within with Inline XBRL) | |||||||
2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: October 28, 2026
| MECHANICS BANCORP | |||||||||||
| By: | /s/ Nathan Duda | ||||||||||
| Nathan Duda | |||||||||||
| Executive Vice President and Chief Financial Officer | |||||||||||
3
Mechanics Bancorp Reports Third Quarter 2026 Results
Third Quarter Highlights | ||||||||||||||||||||
$20.9 billion Total Assets | $46.0 million Net Income | 14.73% CET1 Ratio (1) | $11.59 Book Value Per Share $7.05 Tangible Book Value Per Share (2) | |||||||||||||||||
Walnut Creek, CA – October 28, 2026 – (BUSINESS WIRE) – Mechanics Bancorp (Nasdaq: MCHB) (“Mechanics” or the “Company”), the financial holding company of Mechanics Bank, today announced its financial results for the quarter ended September 30, 2026. Mechanics reported net income of $46.0 million, or $0.20 per diluted share (3), for the third quarter of 2026, compared to $57.7 million, or $0.25 per diluted share, for the second quarter of 2026. For the nine months ended September 30, 2026, Mechanics reported net income of $147.8 million, or $0.64 per diluted share, compared to $154.6 million, or $0.72 per diluted share, for the nine months ended September 30, 2025.(4)
Third Quarter 2026 Highlights:
•Total assets of $20.9 billion at September 30, 2026, compared with $21.2 billion at June 30, 2026.
•Total loans of $13.0 billion at September 30, 2026, compared with $13.6 billion at June 30, 2026.
•Total deposits of $18.0 billion at September 30, 2026, compared with $18.1 billion at June 30, 2026, and noninterest-bearing deposits of $6.3 billion at September 30, 2026, compared with $6.4 billion at June 30, 2026.
•Loans-to-deposits ratio of 72% at September 30, 2026, compared with 75% at June 30, 2026.
•Total cost of deposits was 1.33% for the third quarter of 2026 and 1.25% for the second quarter of 2026.
•Noninterest expense was $114.2 million for the third quarter of 2026, compared with $124.5 million for the second quarter of 2026, reflecting lower acquisition and integration costs and salaries and employee benefits expense.
•Dividends paid in the third quarter of 2026 were $0.25 per share of Class A common stock and $2.50 per share of Class B common stock.
•Strong capital ratios (1), including an estimated 16.98% Total risk-based capital ratio, 14.73% Tier 1 capital ratio, 14.73% CET1 capital ratio and 8.74% Tier 1 leverage ratio at September 30, 2026.
•Allowance for credit losses (“ACL”) to total loans of 1.03%, down from 1.12% at the prior quarter-end.
•Total delinquent loans decreased to $67.5 million, from $95.4 million at June 30, 2026, representing 0.52% of total loans at September 30, 2026, compared to 0.70% at June 30, 2026.
•Completed the sale of $417 million of performing indirect auto loans, resulting in a $10.3 million loss on sale, as we further optimized the balance sheet by accelerating the exit from a non-core business line.
•Completed a $308 million securities portfolio restructuring, selling low-yielding AFS securities and reinvesting the proceeds in MBS at then current market rates, resulting in a $32.3 million loss on sale.
•Gain on other equity investments of $5.1 million for the third quarter of 2026 as a result of valuation updates.
•Non-recurring acquisition and integration costs of $0.6 million for the third quarter of 2026, compared to $5.9 million in the prior quarter.
(1)Regulatory capital ratios at September 30, 2026 are preliminary.
(2)Non-GAAP measure. Refer to section “Non-GAAP Financial Measures and Reconciliations” below.
(3)Unless otherwise specified, refers to diluted earnings per share for Class A common stock.
(4)Mechanics’ financial results for the quarter and nine months ended September 30, 2025 were recast to reflect the adoption of ASU 2025-08. Refer to “Adoption of Purchased Seasoned Loans Accounting Standard” for additional discussion.
1
C.J. Johnson, President and CEO of Mechanics, said, “Our third quarter results reflect the continued execution of our strategic priorities. With the HomeStreet integration behind us, we move forward from a position of strength, focused on building long-term shareholder value through prudent growth and expense management, strong credit quality, and returning capital to shareholders via a market-leading dividend yield.”
Nathan Duda, CFO of Mechanics, added, “Third quarter financial results reflect our continued focus on balance sheet optimization and efficient capital deployment. During the quarter, we completed a $308 million securities portfolio restructuring, reinvesting the proceeds at significantly higher yields, and sold substantially all of our runoff auto loan portfolio, reducing servicing expenses going forward. Taken together, these actions further enhance our earnings profile and position us well for the future. At the same time, our credit performance remained strong, supported by a reduction in delinquent loans, disciplined underwriting practices and ongoing portfolio monitoring. Looking ahead, we remain focused on maintaining our credit discipline, prudent expense management, and preserving financial flexibility as we navigate a challenging interest rate environment.”
Presentation of Results – HomeStreet Bank Merger
On September 2, 2025, the merger of HomeStreet Bank, the wholly owned subsidiary of Mechanics Bancorp (formerly known as HomeStreet, Inc.) with and into Mechanics Bank, was completed. Mechanics Bank is the accounting acquirer (legal acquiree), HomeStreet Bank is the accounting acquiree and Mechanics Bancorp is the legal acquirer. Mechanics’ financial results for all periods ended prior to September 2, 2025 reflect Mechanics Bank’s historical financial results on a standalone basis and results of the combined company beginning September 2, 2025. In addition, for periods prior to September 2, 2025, the number of shares issued and outstanding, earnings per share, and all references to share quantities or metrics of Mechanics have been retrospectively restated to reflect the equivalent number of shares issued in the merger since the merger was accounted for as a reverse acquisition. As the accounting acquirer, Mechanics Bank remeasured the identifiable assets acquired and liabilities assumed in the merger as of September 2, 2025 at their acquisition date fair values.
Adoption of Purchased Seasoned Loans Accounting Standard
The Company early adopted Accounting Standards Update (“ASU”) 2025-08, “Financial Instruments–Credit Losses (Topic 326): Purchased Loans,” during the fourth quarter of 2025. This new standard, which the Company elected to early adopt as of January 1, 2025, requires acquired loans that meet certain criteria at acquisition (purchased seasoned loans) to be recognized at their purchase price plus the amount of the allowance for expected credit losses (gross-up approach). As a result, for purchased seasoned loans acquired in the HomeStreet merger, the Company established an allowance for credit losses of $20.3 million at the date of acquisition for these loans and reversed the provision for credit losses recorded in the third quarter of 2025, and recorded it as part of the acquired loans initial amortized cost basis. Required disclosures regarding the impact of the adoption were presented when the Company filed its annual report on Form 10-K for the year ended December 31, 2025. In addition, third quarter 2025 results will be retrospectively adjusted when the Company files its quarterly report on Form 10-Q for the quarter ended September 30, 2026.
The impact of the adoption is reflected in the comparative prior period results presented in this earnings release for the quarter and nine months ended September 30, 2025 and as of September 30, 2025.
2
INCOME STATEMENT HIGHLIGHTS
Summary Income Statement
| Quarter Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
| (in thousands) | September 30, 2026 | June 30, 2026 | September 30, 2025 | September 30, 2026 | September 30, 2025 | |||||||||||||||||||||||||||
Total interest income (1) | $ | 239,156 | $ | 237,942 | $ | 203,371 | $ | 719,034 | $ | 555,109 | ||||||||||||||||||||||
| Total interest expense | 64,254 | 60,770 | 59,218 | 187,915 | 152,373 | |||||||||||||||||||||||||||
Net interest income (1) | 174,902 | 177,172 | 144,153 | 531,119 | 402,736 | |||||||||||||||||||||||||||
Provision (reversal of provision) for credit losses on loans (1) | (14,681) | (904) | 25,806 | (7,992) | 22,411 | |||||||||||||||||||||||||||
| Provision (reversal of provision) for credit losses on unfunded lending commitments | (503) | (1,863) | 960 | (2,192) | 329 | |||||||||||||||||||||||||||
Total provision (reversal of provision) for credit losses (1) | (15,184) | (2,767) | 26,766 | (10,184) | 22,740 | |||||||||||||||||||||||||||
| Net gain (loss) on sales of loans | (9,843) | 2,477 | 659 | (6,223) | 659 | |||||||||||||||||||||||||||
| Net gain (loss) on sales and calls of investment securities | (32,269) | 31 | 155 | (32,186) | 4,292 | |||||||||||||||||||||||||||
| Bargain purchase gain | 2,871 | — | 90,363 | 2,871 | 90,363 | |||||||||||||||||||||||||||
| Other noninterest income | 25,807 | 21,288 | 18,601 | 66,920 | 49,070 | |||||||||||||||||||||||||||
| Total noninterest income (loss) | (13,434) | 23,796 | 109,778 | 31,382 | 144,384 | |||||||||||||||||||||||||||
| Acquisition and integration costs | 559 | 5,923 | 63,869 | 11,276 | 69,858 | |||||||||||||||||||||||||||
| Other noninterest expense | 113,634 | 118,550 | 99,460 | 357,817 | 270,189 | |||||||||||||||||||||||||||
| Total noninterest expense | 114,193 | 124,473 | 163,329 | 369,093 | 340,047 | |||||||||||||||||||||||||||
Income before income tax expense (benefit) (1) | 62,459 | 79,262 | 63,836 | 203,592 | 184,333 | |||||||||||||||||||||||||||
Income tax expense (benefit) (1) | 16,467 | 21,561 | (4,440) | 55,809 | 29,781 | |||||||||||||||||||||||||||
Net income (1) | $ | 45,992 | $ | 57,701 | $ | 68,276 | $ | 147,783 | $ | 154,552 | ||||||||||||||||||||||
(1)Prior period comparative disclosures for the quarter and nine months ended September 30, 2025 reflect the impact of adoption of ASU 2025-08.
Net Interest Income
Third Quarter of 2026 vs. Second Quarter of 2026
Net interest income in the third quarter of 2026 was $2.3 million lower than the second quarter of 2026 primarily as a result of higher deposit costs and a $133.1 million decrease in average interest earning assets. Mechanics’ net interest margin decreased from 3.62% to 3.55% primarily due to higher deposit costs, partially offset by higher investment securities interest income from the partial quarter benefit of the AFS securities restructuring.
Nine Months Ended September 30, 2026 vs. Nine Months Ended September 30, 2025
Net interest income for the nine months ended September 30, 2026 increased $128.4 million as compared to the nine months ended September 30, 2025 due primarily to an increase of $3.9 billion in average interest-earning assets, as well as an increase in net interest margin from 3.40% in the nine months ended September 30, 2025 to 3.59% in the nine months ended September 30, 2026, as a result of the HomeStreet merger.
Provision for Credit Losses
Third Quarter of 2026 vs. Second Quarter of 2026
The reversal of provision for credit losses in the third quarter of 2026, which consists of the provision for loans and unfunded commitments, was $15.2 million, compared to a reversal of provision of $2.8 million for the second
3
quarter of 2026. The reversal of provision for the third quarter was primarily driven by decreases in expected losses on our multifamily and CRE investor loans, corresponding decreases in qualitative factors and the auto loan portfolio sale.
Nine Months Ended September 30, 2026 vs. Nine Months Ended September 30, 2025
The reversal of provision for credit losses was $10.2 million for the nine months ended September 30, 2026, compared to a provision of $22.7 million for the nine months ended September 30, 2025. The decrease in provision for the nine months ended September 30, 2026 was driven primarily by the auto portfolio sale, lower qualitative adjustments, lower balances and lower unfunded commitments reserves.
Noninterest Income (Loss)
Third Quarter of 2026 vs. Second Quarter of 2026
Noninterest income (loss) in the third quarter of 2026 decreased $37.2 million from the second quarter of 2026 primarily due to the losses on the sales of auto loans and AFS securities during the quarter, partially offset by the increase in other noninterest income from a gain on other equity investments. In addition, noninterest income decreased in the third quarter of 2026 relative to the second quarter of 2026 due to the gain on sale of the Fannie Mae Multifamily Delegated Underwriting and Servicing (“DUS®”) business line in other noninterest income and a mortgage servicing rights valuation adjustment in net gain (loss) on sales of loans in the prior quarter.
Nine Months Ended September 30, 2026 vs. Nine Months Ended September 30, 2025
Noninterest income for the nine months ended September 30, 2026 decreased $113.0 million from the nine months ended September 30, 2025 primarily due to the losses on the sales of auto loans and AFS securities during 2026 and the bargain purchase gain from the HomeStreet merger recognized in 2025. The decrease was partially offset by an increase in noninterest income that resulted from a gain on other equity investments and gain on sale of the DUS business line in other noninterest income and a mortgage servicing rights valuation adjustment in net gain (loss) on sales of loans in 2026.
Noninterest Expense
Third Quarter of 2026 vs. Second Quarter of 2026
Noninterest expense decreased $10.3 million in the third quarter of 2026 compared to the second quarter of 2026, primarily due to lower acquisition and integration related costs, and lower salaries and employee benefits expense due to headcount reductions as a result of continued integration following the HomeStreet merger.
Nine Months Ended September 30, 2026 vs. Nine Months Ended September 30, 2025
Noninterest expense increased $29.0 million for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 primarily due to higher salaries and employee benefits expense, occupancy costs, equipment expense, and amortization of intangibles, partially offset by lower acquisition and integration related costs from the HomeStreet merger.
Income Taxes
Third Quarter of 2026 vs. Second Quarter of 2026
Our effective tax rate during the third quarter of 2026 was 26.4% as compared to 27.2% in the second quarter of 2026 and our federal statutory rate was 21.0%. The effective tax rate decreased compared to the prior quarter as a result of tax benefits related to stock awards that vested in the third quarter.
4
Nine Months Ended September 30, 2026 vs. Nine Months Ended September 30, 2025
Our effective tax rate for the nine months ended September 30, 2026 was 27.4% as compared to 16.2% for the nine months ended September 30, 2025 and our federal statutory rate was 21.0%. The effective tax rate increased compared to the nine months ended September 30, 2025 as a result of a non-taxable $90.4 million bargain purchase gain from the HomeStreet merger in 2025 and a $1.7 million remeasurement of deferred tax assets in 2026.
BALANCE SHEET HIGHLIGHTS
Selected Balance Sheet Items
| (in thousands) | September 30, 2026 | June 30, 2026 | March 31, 2026 | December 31, 2025 | September 30, 2025 | |||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 602,455 | $ | 553,915 | $ | 483,513 | $ | 1,029,983 | $ | 1,442,647 | ||||||||||||||||||||||
| Trading securities | 46,099 | 46,595 | 49,463 | 49,518 | 50,357 | |||||||||||||||||||||||||||
| Securities available-for-sale | 4,292,236 | 4,119,215 | 3,933,705 | 3,993,385 | 3,490,478 | |||||||||||||||||||||||||||
| Securities held-to-maturity | 1,259,501 | 1,286,813 | 1,313,520 | 1,336,632 | 1,363,636 | |||||||||||||||||||||||||||
Loans held for investment (before ACL) (1) | 13,012,998 | 13,576,196 | 13,852,209 | 14,176,936 | 14,587,530 | |||||||||||||||||||||||||||
Total assets (1) | 20,944,704 | 21,230,839 | 21,388,955 | 22,351,475 | 22,721,935 | |||||||||||||||||||||||||||
| Noninterest-bearing demand deposits | $ | 6,297,519 | $ | 6,420,746 | $ | 6,511,998 | $ | 6,744,082 | $ | 6,748,479 | ||||||||||||||||||||||
| Total deposits | 18,019,474 | 18,089,437 | 18,242,769 | 19,024,997 | 19,452,819 | |||||||||||||||||||||||||||
| Borrowings | — | 80,000 | — | — | — | |||||||||||||||||||||||||||
| Long-term debt | 131,992 | 130,420 | 128,815 | 192,014 | 190,123 | |||||||||||||||||||||||||||
| Total liabilities | 18,377,218 | 18,540,908 | 18,597,563 | 19,489,100 | 19,934,686 | |||||||||||||||||||||||||||
Total shareholders’ equity (1) | 2,567,486 | 2,689,931 | 2,791,392 | 2,862,375 | 2,787,249 | |||||||||||||||||||||||||||
(1)Prior period comparative disclosures for September 30, 2025 reflect the impact of adoption of ASU 2025-08.
5
Investment Securities
Trading securities totaled $46.1 million and $46.6 million at September 30, 2026 and June 30, 2026. Securities available-for-sale increased by $173.0 million during the third quarter of 2026 to $4.3 billion at September 30, 2026, primarily due to purchases, partially offset by sales and paydowns during the quarter. The Company performed a restructuring of the balance sheet through the sale of low-yielding AFS securities and reinvestment in MBS at then current market rates near the end of July 2026. Securities held-to-maturity decreased by $27.3 million in the third quarter of 2026, primarily due to paydowns, and totaled $1.3 billion at September 30, 2026.
Loans
Total loans at September 30, 2026 were $13.0 billion, a decrease of $563.2 million from $13.6 billion at June 30, 2026, due primarily to the sale of auto loans and loan repayments during the quarter, partially offset by originations and advances.
Deposits
Total deposits decreased by $70.0 million during the third quarter of 2026 to $18.0 billion at September 30, 2026. The decrease was due to the runoff of $66.1 million of certificates of deposit and a $3.9 million decrease in core deposits.
Noninterest-bearing demand deposits totaled $6.3 billion and represented 35% of total deposits at September 30, 2026, compared to $6.4 billion, or 35% of total deposits, at June 30, 2026.
Borrowings
Total borrowings were zero at September 30, 2026, compared to $80.0 million at June 30, 2026. The decrease was due to payoff of short-term Federal Reserve Discount Window borrowings during the third quarter.
Equity
During the third quarter of 2026, total shareholders’ equity decreased by $122.4 million to $2.6 billion and tangible common equity (1) decreased by $115.5 million to $1.6 billion. The decrease in total shareholders’ equity for the third quarter of 2026 primarily resulted from a net decrease in retained earnings from net income, less dividends paid to common shareholders, and an increase in accumulated other comprehensive loss due to changes in fair value of securities available for sale from higher interest rates.
At September 30, 2026, book value per common share decreased to $11.59, compared to $12.15 at June 30, 2026. At September 30, 2026, tangible book value per common share (1) decreased to $7.05, compared to $7.56 at June 30, 2026.
(1)Non-GAAP measure. Refer to section “Non-GAAP Financial Measures and Reconciliations” below.
6
CAPITAL AND LIQUIDITY
Capital ratios remain strong with Total risk-based capital ratio at 16.98% and a Tier 1 leverage ratio of 8.74% at September 30, 2026. The following table presents our regulatory capital ratios as of the dates indicated:
| September 30, 2026 | June 30, 2026 | March 31, 2026 | December 31, 2025 | September 30, 2025 | ||||||||||||||||||||||||||||
Mechanics Bancorp (1) | ||||||||||||||||||||||||||||||||
| Tier 1 leverage capital (to average assets) | 8.74 | % | 8.71 | % | 8.66 | % | 8.65 | % | 10.34 | % | ||||||||||||||||||||||
| Common equity Tier 1 capital (to risk-weighted assets) | 14.73 | % | 14.39 | % | 13.92 | % | 14.09 | % | 13.42 | % | ||||||||||||||||||||||
| Tier 1 risk-based capital (to risk-weighted assets) | 14.73 | % | 14.39 | % | 13.92 | % | 14.09 | % | 13.42 | % | ||||||||||||||||||||||
| Total risk-based capital (to risk-weighted assets) | 16.98 | % | 16.70 | % | 16.16 | % | 16.27 | % | 15.57 | % | ||||||||||||||||||||||
Mechanics Bank (1) | ||||||||||||||||||||||||||||||||
| Tier 1 leverage capital (to average assets) | 9.37 | % | 9.38 | % | 9.31 | % | 9.58 | % | 11.46 | % | ||||||||||||||||||||||
| Common equity Tier 1 capital (to risk-weighted assets) | 15.81 | % | 15.48 | % | 14.96 | % | 15.59 | % | 14.87 | % | ||||||||||||||||||||||
| Tier 1 risk-based capital (to risk-weighted assets) | 15.81 | % | 15.48 | % | 14.96 | % | 15.59 | % | 14.87 | % | ||||||||||||||||||||||
| Total risk-based capital (to risk-weighted assets) | 16.96 | % | 16.74 | % | 16.21 | % | 16.81 | % | 16.13 | % | ||||||||||||||||||||||
(1)Regulatory capital ratios at September 30, 2026 are preliminary.
At September 30, 2026, Mechanics had available borrowing capacity of $5.8 billion from the FHLB, $4.2 billion from the Federal Reserve and $5.0 billion under borrowing lines established with other financial institutions.
7
CREDIT QUALITY
Asset Quality Information and Ratios
| (dollars in thousands) | September 30, 2026 | June 30, 2026 | March 31, 2026 | December 31, 2025 | September 30, 2025 | |||||||||||||||||||||||||||
| Delinquent loans held for investment: | ||||||||||||||||||||||||||||||||
30-89 days past due (1) | $ | 25,936 | $ | 54,529 | $ | 43,556 | $ | 58,459 | $ | 55,899 | ||||||||||||||||||||||
| 90+ days past due | 41,594 | 40,888 | 33,447 | 34,686 | 38,316 | |||||||||||||||||||||||||||
| Total delinquent loans | $ | 67,530 | $ | 95,417 | $ | 77,003 | $ | 93,145 | $ | 94,215 | ||||||||||||||||||||||
| Total delinquent loans to loans held for investment | 0.52 | % | 0.70 | % | 0.56 | % | 0.66 | % | 0.65 | % | ||||||||||||||||||||||
| Nonperforming assets: | ||||||||||||||||||||||||||||||||
| Nonaccrual loans | $ | 49,014 | $ | 48,557 | $ | 44,379 | $ | 42,863 | $ | 60,586 | ||||||||||||||||||||||
| 90+ days past due and accruing | 5,569 | 6,543 | 4,098 | 3,943 | 2,653 | |||||||||||||||||||||||||||
| Total nonperforming loans | 54,583 | 55,100 | 48,477 | 46,806 | 63,239 | |||||||||||||||||||||||||||
| Foreclosed assets | 5,081 | 4,262 | 4,658 | 4,990 | 1,675 | |||||||||||||||||||||||||||
| Total nonperforming assets | $ | 59,664 | $ | 59,362 | $ | 53,135 | $ | 51,796 | $ | 64,914 | ||||||||||||||||||||||
| Allowance for credit losses on loans | $ | 133,621 | $ | 152,601 | $ | 156,796 | $ | 153,319 | $ | 168,959 | ||||||||||||||||||||||
| Allowance for credit losses on loans to total loans held for investment | 1.03 | % | 1.12 | % | 1.13 | % | 1.08 | % | 1.16 | % | ||||||||||||||||||||||
| Allowance for credit losses on loans to nonaccrual loans | 272.62 | % | 314.27 | % | 353.31 | % | 357.70 | % | 278.88 | % | ||||||||||||||||||||||
| Nonaccrual loans to total loans held for investment | 0.38 | % | 0.36 | % | 0.32 | % | 0.30 | % | 0.42 | % | ||||||||||||||||||||||
| Nonperforming assets to total assets | 0.28 | % | 0.28 | % | 0.25 | % | 0.23 | % | 0.29 | % | ||||||||||||||||||||||
(1)Prior period comparative disclosures for September 30, 2025 reflect the impact of adoption of ASU 2025-08.
At September 30, 2026, total delinquent loans were $67.5 million, compared to $95.4 million at June 30, 2026. The decrease was primarily due to the auto portfolio sale and two matured commercial real estate loans that were extended and brought current during the quarter. Total delinquent loans as a percentage of total loans were 0.52% at September 30, 2026, as compared to 0.70% at June 30, 2026.
At September 30, 2026, nonperforming assets were $59.7 million, compared to $59.4 million at June 30, 2026. Nonperforming assets as a percentage of total assets was 0.28% at both September 30, 2026 and June 30, 2026.
8
Allowance for Credit Losses
| Quarter Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
| (dollars in thousands) | September 30, 2026 | June 30, 2026 | September 30, 2025 | September 30, 2026 | September 30, 2025 | |||||||||||||||||||||||||||
| Allowance for credit losses on loans: | ||||||||||||||||||||||||||||||||
| Beginning balance | $ | 152,601 | $ | 156,796 | $ | 68,334 | $ | 153,319 | $ | 88,558 | ||||||||||||||||||||||
| Initial allowance on acquired purchased credit deteriorated loans | — | — | 63,494 | — | 63,494 | |||||||||||||||||||||||||||
Initial allowance on acquired purchased seasoned loans (1) | — | — | 20,252 | — | 20,252 | |||||||||||||||||||||||||||
| Provision (reversal of provision) for credit losses | (14,681) | (904) | 25,806 | (7,992) | 22,411 | |||||||||||||||||||||||||||
| Loans charged off | (6,139) | (6,308) | (12,803) | (19,652) | (34,969) | |||||||||||||||||||||||||||
| Recoveries | 1,840 | 3,017 | 3,876 | 7,946 | 9,213 | |||||||||||||||||||||||||||
| Ending balance | $ | 133,621 | $ | 152,601 | $ | 168,959 | $ | 133,621 | $ | 168,959 | ||||||||||||||||||||||
| Allowance for credit losses on unfunded lending commitments: | ||||||||||||||||||||||||||||||||
| Beginning balance | $ | 5,426 | $ | 7,289 | $ | 3,735 | $ | 7,115 | $ | 4,366 | ||||||||||||||||||||||
| Initial allowance for credit losses | — | — | 3,736 | — | 3,736 | |||||||||||||||||||||||||||
| Provision (reversal of provision) for credit losses | (503) | (1,863) | 960 | (2,192) | 329 | |||||||||||||||||||||||||||
| Ending balance | $ | 4,923 | $ | 5,426 | $ | 8,431 | $ | 4,923 | $ | 8,431 | ||||||||||||||||||||||
Net charge-offs to average loans (2) | 0.13 | % | 0.10 | % | 0.32 | % | 0.11% | 0.35% | ||||||||||||||||||||||||
(1)The Company early adopted ASU 2025-08 in the fourth quarter of 2025. As a result, for purchased seasoned loans acquired in the HomeStreet merger, the Company established an allowance for credit losses of $20.3 million at the date of acquisition for these loans.
(2)Ratios are annualized.
The allowance for credit losses on loans totaled $133.6 million, or 1.03% of total loans at September 30, 2026, compared to $152.6 million, or 1.12% of total loans at June 30, 2026. The decrease in allowance was primarily the result of lower expected losses on multifamily and CRE investor loans, corresponding decreases in qualitative factors and the auto portfolio sale.
Conference Call
The Company will host a conference call and webcast to discuss its third quarter 2026 financial results at 11:00 a.m. Eastern Time (ET) on Thursday, October 29, 2026. Investors and analysts interested in participating in the call are invited to dial 1-833-461-5787 (international callers please dial 1-585-542-9983) approximately 10 minutes prior to the start of the call. The pin to access the call is 210985311. A live audio webcast of the conference call will be available on the Company’s website at https://ir.mechanicsbank.com. The earnings presentation for the call will also be available on the Company’s Investor Relations website prior to the call.
A replay of the conference call will be available within two hours of the conclusion of the call and can be accessed through the News & Events tab of the Company’s website as well as through the webcast link: https://events.q4inc.com/attendee/210985311.
9
About Mechanics Bancorp
Mechanics Bancorp is headquartered in Walnut Creek, Calif., and is the financial holding company of Mechanics Bank, a full-service, FDIC-insured bank with $20.9 billion in assets as of September 30, 2026, and 166 branches across California, Oregon, Washington and Hawaii. Founded in 1905 to help families, businesses and communities prosper, Mechanics Bank offers a wide range of products and services in consumer and business banking, commercial lending, cash management services, private banking, and comprehensive wealth management and trust services.
To learn more, visit www.MechanicsBank.com.
Cautionary Note
The information contained herein is preliminary and based on Company data available at the time of this earnings release. It speaks only as of the particular date or dates included in the earnings release. Except as required by law, Mechanics does not undertake an obligation to, and disclaims any duty to, update any of the information herein.
Forward-Looking Statements
This earnings release, including information incorporated by reference herein, contains, and future oral and written statements of the Company and its management may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”). All statements, other than statements of historical fact, contained or incorporated by reference in this earnings release, including statements regarding our plans, objectives, expectations, strategies, beliefs, or future performance or events, are forward-looking statements. Generally, forward-looking statements include the words “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “look,” “may,” “optimistic,” “plan,” “potential,” “projection,” “should,” “will,” and “would” and similar expressions (or the negative of these terms), although not all forward-looking statements contain these identifying words. Forward-looking statements involve known and unknown risks, uncertainties, assumptions, estimates, and other important factors that could cause actual results to differ materially from any results, performance or events expressed or implied by such forward-looking statements. Furthermore, the following factors, among others, may cause actual results to differ materially from current expectations in the forward-looking statements, including those set forth in this earnings release:
•substantial non-recurring and integration costs, which may be greater than anticipated due to unexpected events;
•failure to realize the anticipated benefits of the HomeStreet merger;
•our ability to effectively manage our expanded operations;
•negative developments and events impacting the financial services industry;
•the soundness of other financial institutions;
•our ability to maintain sufficient liquidity, or an increase in the cost of liquidity;
•unpredictable economic, market and business conditions;
•interest rate risk, and fluctuations in interest rates;
•inflationary pressures and rising prices;
•adverse changes in real estate market values;
•the impact of climate change, including indirectly through impacts on our customers;
•the adequacy of our allowances for credit losses for loans and debt securities;
•incurring losses in our loan portfolio despite strict adherence to our underwriting practices;
•fluctuations in our mortgage origination business based upon seasonal and other factors;
•our geographic concentration, which may magnify the adverse effects and consequences of any regional or local economic downturn;
•the accuracy of independent appraisals to determine the value of the real estate that secures a substantial portion of our loans;
•the ability of our small- to medium-sized borrowers to weather adverse business developments;
10
•our ability to fully identify and mitigate exposure to the various risks that we face, including interest rate, credit, liquidity and market risk;
•our ability to mitigate our exposure to interest rate risk;
•negative publicity regarding us, or financial institutions in general;
•environmental liability risk associated with our lending activities;
•our ability to manage risks associated with new lines of business, products, product enhancements and services;
•our ability to adapt our services to changes in the marketplace related to mortgage servicing or origination, technology or in changes in the requirements of governmental authorities and customers;
•our ability to develop, implement and maintain an effective system of internal control over financial reporting;
•the potential that we may identify material weaknesses in our internal control over financial reporting in the future, which may result in material misstatements of our financial statements;
•the potential that we may write off goodwill and other intangible assets resulting from business combinations;
•dependence on our management team;
•exposure to fraudulent and negligent acts by our customers and the parties they do business with, as well as from employees, contractors and vendors;
•legal claims and litigation, including potential securities law liabilities;
•employee class action lawsuits or other legal proceedings;
•our ability to raise additional capital, if needed;
•competition from other financial institutions and financial service companies;
•regulatory restrictions that may delay, impede or prohibit our ability to consider certain acquisitions and opportunities;
•extensive supervision and regulation that could restrict our activities and impose financial requirements or limitations on the conduct of our business and limit our ability to generate income;
•our ability to comply with stringent capital requirements;
•the impact of federal and state regulators’ examination of our business;
•our ability to comply with the Bank Secrecy Act and other anti-money laundering statutes and regulations;
•our reliance on dividends from Mechanics Bank;
•our ability to raise debt or capital to pay off our debts upon maturity;
•our level of indebtedness following the completion of the HomeStreet merger;
•increasing and continually evolving cybersecurity and other technological risks;
•our ability to adapt to rapid technological change;
•our ability to effectively implement new technological solutions or enhancements to existing systems or platforms;
•our ability to manage risks and challenges relating to the development and use of artificial intelligence;
•our dependence on our computer and communications systems;
•our ability to effectively manage and aggregate data;
•Ford Financial Funds and their controlled affiliates control approximately 77% of the voting power of Mechanics Bancorp, and have the ability to elect all of our directors and control most other matters submitted to our shareholders for approval;
•we are a “controlled company” within the meaning of the rules of Nasdaq and, as a result, we qualify for, and rely on, exemptions from certain corporate governance standards;
•future sales of shares by existing shareholders could cause our stock price to decline;
•our reliance on certain entities affiliated with the Ford Financial Funds for services;
•reduced disclosure requirements as a smaller reporting company; and
•certain of our shareholders have registration rights, the exercise of which could adversely affect the trading price of our common stock.
A discussion of the factors, risks and uncertainties that could affect our financial results, business goals and operational and financial objectives is also contained in Item 1A “Risk Factors” included in our 2025 Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission (the “SEC”). We strongly recommend readers review those disclosures in conjunction with the discussions herein. Forward-looking statements are
11
inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, and should not be relied upon as a prediction of actual results or future events.
Forward-looking statements in this earnings release are based on management’s expectations at the time such statements are made and speak only as of the date made. We do not assume any obligation or undertake to update any forward-looking statements after the date of this earnings release as a result of new information, future events or developments, except as required by federal securities or other applicable laws, although we may do so from time to time.
All future written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to above. New risks and uncertainties arise from time to time, and factors that we currently deem immaterial may become material, and it is impossible for us to predict these events or how they may affect us.
Investor Relations Inquiries
| Contact: | Mechanics Bancorp | |||||||
| Nathan Duda | ||||||||
| Executive Vice President and Chief Financial Officer | ||||||||
| ir@mechanicsbank.com | ||||||||
12
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
| (dollars in thousands) | September 30, 2026 | June 30, 2026 | March 31, 2026 | December 31, 2025 | September 30, 2025 | ||||||||||||||||||||||||
| ASSETS | |||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 602,455 | $ | 553,915 | $ | 483,513 | $ | 1,029,983 | $ | 1,442,647 | |||||||||||||||||||
| Trading securities | 46,099 | 46,595 | 49,463 | 49,518 | 50,357 | ||||||||||||||||||||||||
| Securities available-for-sale | 4,292,236 | 4,119,215 | 3,933,705 | 3,993,385 | 3,490,478 | ||||||||||||||||||||||||
| Securities held-to-maturity | 1,259,501 | 1,286,813 | 1,313,520 | 1,336,632 | 1,363,636 | ||||||||||||||||||||||||
| Loans held for sale | 7,737 | 5,345 | 4,692 | 5,967 | 54,985 | ||||||||||||||||||||||||
Loan receivables (1) | 13,012,998 | 13,576,196 | 13,852,209 | 14,176,936 | 14,587,530 | ||||||||||||||||||||||||
| Allowance for credit losses on loans | (133,621) | (152,601) | (156,796) | (153,319) | (168,959) | ||||||||||||||||||||||||
Net loan receivables (1) | 12,879,377 | 13,423,595 | 13,695,413 | 14,023,617 | 14,418,571 | ||||||||||||||||||||||||
| Mortgage servicing rights | 60,971 | 59,142 | 84,000 | 85,832 | 88,595 | ||||||||||||||||||||||||
| Other real estate owned | 5,081 | 4,262 | 4,658 | 4,990 | 1,675 | ||||||||||||||||||||||||
| Federal Home Loan Bank stock, at cost | 17,283 | 17,287 | 17,289 | 17,292 | 17,294 | ||||||||||||||||||||||||
| Premises and equipment, net | 141,068 | 141,615 | 143,157 | 143,895 | 143,917 | ||||||||||||||||||||||||
| Bank-owned life insurance | 173,809 | 172,980 | 171,674 | 170,339 | 169,163 | ||||||||||||||||||||||||
| Goodwill | 843,305 | 843,305 | 843,305 | 843,305 | 843,305 | ||||||||||||||||||||||||
| Other intangible assets, net | 90,937 | 97,906 | 205,269 | 212,491 | 143,264 | ||||||||||||||||||||||||
| Right-of-use asset | 75,210 | 74,623 | 78,046 | 82,076 | 85,657 | ||||||||||||||||||||||||
Interest receivable and other assets (1) | 449,635 | 384,241 | 361,251 | 352,153 | 408,391 | ||||||||||||||||||||||||
TOTAL ASSETS (1) | $ | 20,944,704 | $ | 21,230,839 | $ | 21,388,955 | $ | 22,351,475 | $ | 22,721,935 | |||||||||||||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||||||||||||||||||||
| LIABILITIES | |||||||||||||||||||||||||||||
| Noninterest-bearing demand deposits | $ | 6,297,519 | $ | 6,420,746 | $ | 6,511,998 | $ | 6,744,082 | $ | 6,748,479 | |||||||||||||||||||
| Interest-bearing transaction accounts | 8,537,615 | 8,394,708 | 8,222,964 | 8,128,832 | 7,918,670 | ||||||||||||||||||||||||
| Savings and time deposits | 3,184,340 | 3,273,983 | 3,507,807 | 4,152,083 | 4,785,670 | ||||||||||||||||||||||||
| Total deposits | 18,019,474 | 18,089,437 | 18,242,769 | 19,024,997 | 19,452,819 | ||||||||||||||||||||||||
| Borrowings | — | 80,000 | — | — | — | ||||||||||||||||||||||||
| Long-term debt | 131,992 | 130,420 | 128,815 | 192,014 | 190,123 | ||||||||||||||||||||||||
| Operating lease liability | 78,289 | 78,174 | 82,403 | 86,794 | 90,796 | ||||||||||||||||||||||||
| Interest payable and other liabilities | 147,463 | 162,877 | 143,576 | 185,295 | 200,948 | ||||||||||||||||||||||||
| TOTAL LIABILITIES | 18,377,218 | 18,540,908 | 18,597,563 | 19,489,100 | 19,934,686 | ||||||||||||||||||||||||
| SHAREHOLDERS’ EQUITY | |||||||||||||||||||||||||||||
| Common stock | 2,406,270 | 2,404,941 | 2,402,968 | 2,402,193 | 2,401,989 | ||||||||||||||||||||||||
Retained earnings (1) | 290,969 | 303,046 | 407,908 | 456,695 | 394,069 | ||||||||||||||||||||||||
| Accumulated other comprehensive income (loss), net of tax | (129,753) | (18,056) | (19,484) | 3,487 | (8,809) | ||||||||||||||||||||||||
TOTAL SHAREHOLDERS’ EQUITY (1) | 2,567,486 | 2,689,931 | 2,791,392 | 2,862,375 | 2,787,249 | ||||||||||||||||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY (1) | $ | 20,944,704 | $ | 21,230,839 | $ | 21,388,955 | $ | 22,351,475 | $ | 22,721,935 | |||||||||||||||||||
| Common shares outstanding-Class A and B | 221,474,752 | 221,425,469 | 221,400,590 | 221,305,009 | 221,203,135 | ||||||||||||||||||||||||
(1)Prior period comparative disclosures for September 30, 2025 reflect the impact of adoption of ASU 2025-08.
13
CONSOLIDATED INCOME STATEMENTS (UNAUDITED)
| Quarter Ended | Nine Months Ended | ||||||||||||||||||||||||||||
| (dollars in thousands, except per share amounts) | September 30, 2026 | June 30, 2026 | September 30, 2025 | September 30, 2026 | September 30, 2025 | ||||||||||||||||||||||||
| INTEREST INCOME | |||||||||||||||||||||||||||||
Loans interest and fees (1) | $ | 175,387 | $ | 178,170 | $ | 140,256 | $ | 534,747 | $ | 378,164 | |||||||||||||||||||
| Investment securities | 58,481 | 53,062 | 40,266 | 164,617 | 129,864 | ||||||||||||||||||||||||
| Interest-bearing cash and other | 5,288 | 6,710 | 22,849 | 19,670 | 47,081 | ||||||||||||||||||||||||
Total interest income (1) | 239,156 | 237,942 | 203,371 | 719,034 | 555,109 | ||||||||||||||||||||||||
| INTEREST EXPENSE | |||||||||||||||||||||||||||||
| Deposits | 60,489 | 56,544 | 57,496 | 175,356 | 150,651 | ||||||||||||||||||||||||
| Borrowed funds | 477 | 1,055 | 124 | 1,760 | 124 | ||||||||||||||||||||||||
| Long-term debt | 3,288 | 3,171 | 1,598 | 10,799 | 1,598 | ||||||||||||||||||||||||
| Total interest expense | 64,254 | 60,770 | 59,218 | 187,915 | 152,373 | ||||||||||||||||||||||||
Net interest income (1) | 174,902 | 177,172 | 144,153 | 531,119 | 402,736 | ||||||||||||||||||||||||
Provision (reversal of provision) for credit losses on loans (1) | (14,681) | (904) | 25,806 | (7,992) | 22,411 | ||||||||||||||||||||||||
| Provision (reversal of provision) for credit losses on unfunded lending commitments | (503) | (1,863) | 960 | (2,192) | 329 | ||||||||||||||||||||||||
Net interest income after provision for credit losses (1) | 190,086 | 179,939 | 117,387 | 541,303 | 379,996 | ||||||||||||||||||||||||
| NONINTEREST INCOME (LOSS) | |||||||||||||||||||||||||||||
| Service charges on deposit accounts | 6,320 | 6,027 | 5,875 | 18,390 | 16,861 | ||||||||||||||||||||||||
| Trust fees and commissions | 3,406 | 3,476 | 3,117 | 9,952 | 9,452 | ||||||||||||||||||||||||
| ATM network fee income | 3,558 | 4,109 | 3,425 | 11,571 | 9,353 | ||||||||||||||||||||||||
| Loan servicing income | 1,660 | 1,582 | 680 | 5,169 | 1,025 | ||||||||||||||||||||||||
| Net gain (loss) on sales of loans | (9,843) | 2,477 | 659 | (6,223) | 659 | ||||||||||||||||||||||||
| Net gain (loss) on sales and calls of investment securities | (32,269) | 31 | 155 | (32,186) | 4,292 | ||||||||||||||||||||||||
| Income from bank-owned life insurance | 1,723 | 1,327 | 2,120 | 4,215 | 3,149 | ||||||||||||||||||||||||
| Bargain purchase gain | 2,871 | — | 90,363 | 2,871 | 90,363 | ||||||||||||||||||||||||
| Other | 9,140 | 4,767 | 3,384 | 17,623 | 9,230 | ||||||||||||||||||||||||
| Total noninterest income (loss) | (13,434) | 23,796 | 109,778 | 31,382 | 144,384 | ||||||||||||||||||||||||
| NONINTEREST EXPENSE | |||||||||||||||||||||||||||||
| Salaries and employee benefits | 60,319 | 63,090 | 54,168 | 191,959 | 150,753 | ||||||||||||||||||||||||
| Occupancy | 12,090 | 11,851 | 9,566 | 36,370 | 25,875 | ||||||||||||||||||||||||
| Equipment | 8,501 | 8,724 | 7,288 | 26,840 | 19,445 | ||||||||||||||||||||||||
| Professional services | 6,605 | 7,435 | 5,560 | 20,111 | 16,383 | ||||||||||||||||||||||||
| FDIC assessments and regulatory fees | 2,932 | 2,990 | 2,722 | 8,912 | 7,148 | ||||||||||||||||||||||||
| Amortization of intangible assets | 6,969 | 7,207 | 4,251 | 21,398 | 9,655 | ||||||||||||||||||||||||
| Data processing | 2,966 | 2,468 | 3,315 | 9,307 | 6,865 | ||||||||||||||||||||||||
| Loan related | 2,697 | 3,616 | 4,439 | 9,819 | 9,236 | ||||||||||||||||||||||||
| Marketing and advertising | 798 | 696 | 680 | 2,401 | 2,008 | ||||||||||||||||||||||||
| Other real estate owned related | 25 | 47 | (103) | 456 | 2,685 | ||||||||||||||||||||||||
| Acquisition and integration costs | 559 | 5,923 | 63,869 | 11,276 | 69,858 | ||||||||||||||||||||||||
| Other | 9,732 | 10,426 | 7,574 | 30,244 | 20,136 | ||||||||||||||||||||||||
| Total noninterest expense | 114,193 | 124,473 | 163,329 | 369,093 | 340,047 | ||||||||||||||||||||||||
Income before income tax expense (benefit) (1) | 62,459 | 79,262 | 63,836 | 203,592 | 184,333 | ||||||||||||||||||||||||
INCOME TAX EXPENSE (BENEFIT) (1) | 16,467 | 21,561 | (4,440) | 55,809 | 29,781 | ||||||||||||||||||||||||
NET INCOME (1) | $ | 45,992 | $ | 57,701 | $ | 68,276 | $ | 147,783 | $ | 154,552 | |||||||||||||||||||
Basic earnings per share (1) | |||||||||||||||||||||||||||||
| Class A common stock | $ | 0.20 | $ | 0.25 | $ | 0.31 | $ | 0.64 | $ | 0.72 | |||||||||||||||||||
| Class B common stock | $ | 1.99 | $ | 2.51 | $ | 3.13 | $ | 6.41 | $ | 7.22 | |||||||||||||||||||
Diluted earnings per share (1) | |||||||||||||||||||||||||||||
| Class A common stock | $ | 0.20 | $ | 0.25 | $ | 0.31 | $ | 0.64 | $ | 0.72 | |||||||||||||||||||
| Class B common stock | $ | 1.99 | $ | 2.51 | $ | 3.13 | $ | 6.41 | $ | 7.22 | |||||||||||||||||||
| Basic weighted-average shares outstanding | |||||||||||||||||||||||||||||
| Class A common stock | 221,182,860 | 221,148,246 | 207,189,764 | 221,126,798 | 203,012,384 | ||||||||||||||||||||||||
| Class B common stock | 1,114,448 | 1,114,448 | 1,114,448 | 1,114,448 | 1,114,448 | ||||||||||||||||||||||||
| Diluted weighted-average shares outstanding | |||||||||||||||||||||||||||||
| Class A common stock | 221,502,583 | 221,338,344 | 207,258,678 | 221,348,568 | 203,075,003 | ||||||||||||||||||||||||
| Class B common stock | 1,114,448 | 1,114,448 | 1,114,448 | 1,114,448 | 1,114,448 | ||||||||||||||||||||||||
(1)Prior period comparative disclosures for the quarter and nine months ended September 30, 2025 reflect the impact of adoption of ASU 2025-08.
14
LOANS HELD FOR INVESTMENT (1)
| (in thousands) | September 30, 2026 | June 30, 2026 | March 31, 2026 | December 31, 2025 | September 30, 2025 | |||||||||||||||||||||||||||
| Commercial and industrial | $ | 439,332 | $ | 439,814 | $ | 460,081 | $ | 482,170 | $ | 550,176 | ||||||||||||||||||||||
| Commercial real estate | ||||||||||||||||||||||||||||||||
| Multifamily | 5,189,514 | 5,223,356 | 5,291,597 | 5,355,252 | 5,450,206 | |||||||||||||||||||||||||||
| Non-owner occupied | 1,482,817 | 1,614,883 | 1,711,611 | 1,740,277 | 1,866,119 | |||||||||||||||||||||||||||
| Owner occupied | 492,756 | 512,474 | 586,698 | 689,079 | 710,638 | |||||||||||||||||||||||||||
| Construction and land development | 344,976 | 360,668 | 399,546 | 493,992 | 538,754 | |||||||||||||||||||||||||||
| Residential real estate | 4,171,423 | 4,107,867 | 4,017,120 | 3,970,803 | 3,914,675 | |||||||||||||||||||||||||||
Auto (2) | 9,915 | 510,232 | 639,825 | 791,012 | 954,617 | |||||||||||||||||||||||||||
| Other consumer | 882,265 | 806,902 | 745,731 | 654,351 | 602,345 | |||||||||||||||||||||||||||
| Total LHFI | $ | 13,012,998 | $ | 13,576,196 | $ | 13,852,209 | $ | 14,176,936 | $ | 14,587,530 | ||||||||||||||||||||||
(1)Prior period comparative disclosures for September 30, 2025 reflect the impact of adoption of ASU 2025-08.
(2)On September 16, 2026, Mechanics Bank completed the sale of $417 million of its remaining performing indirect auto loans to Bank of America, N.A. and retained $13 million of runoff auto loans.
COMPOSITION OF DEPOSITS
| (in thousands) | September 30, 2026 | June 30, 2026 | March 31, 2026 | December 31, 2025 | September 30, 2025 | |||||||||||||||||||||||||||
| Deposits by product: | ||||||||||||||||||||||||||||||||
| Noninterest-bearing demand deposits | $ | 6,297,519 | $ | 6,420,746 | $ | 6,511,998 | $ | 6,744,082 | $ | 6,748,479 | ||||||||||||||||||||||
| Interest-bearing: | ||||||||||||||||||||||||||||||||
| Interest-bearing demand deposits | 1,619,183 | 1,671,232 | 1,767,403 | 1,878,468 | 1,733,215 | |||||||||||||||||||||||||||
| Savings | 1,304,923 | 1,328,503 | 1,363,137 | 1,367,475 | 1,398,430 | |||||||||||||||||||||||||||
| Money market | 6,918,432 | 6,723,476 | 6,455,561 | 6,250,364 | 6,185,455 | |||||||||||||||||||||||||||
| Certificates of deposit | 1,879,417 | 1,945,480 | 2,144,670 | 2,784,608 | 3,387,240 | |||||||||||||||||||||||||||
| Total interest-bearing deposits | 11,721,955 | 11,668,691 | 11,730,771 | 12,280,915 | 12,704,340 | |||||||||||||||||||||||||||
| Total deposits | $ | 18,019,474 | $ | 18,089,437 | $ | 18,242,769 | $ | 19,024,997 | $ | 19,452,819 | ||||||||||||||||||||||
15
SUMMARY FINANCIAL DATA
| Quarter Ended | Nine Months Ended | ||||||||||||||||||||||||||||
| September 30, 2026 | June 30, 2026 | September 30, 2025 | September 30, 2026 | September 30, 2025 | |||||||||||||||||||||||||
Select performance ratios: (1) | |||||||||||||||||||||||||||||
Return on average equity (2) | 6.86 | % | 8.48 | % | 10.66 | % | 7.19 | % | 8.53 | % | |||||||||||||||||||
Return on average tangible equity (2),(3) | 11.75 | % | 14.42 | % | 17.37 | % | 12.41 | % | 14.11 | % | |||||||||||||||||||
Return on average assets (2) | 0.86 | % | 1.09 | % | 1.46 | % | 0.92 | % | 1.20 | % | |||||||||||||||||||
Efficiency ratio | 70.7 | % | 61.9 | % | 64.3 | % | 65.6 | % | 62.2 | % | |||||||||||||||||||
Efficiency ratio (non-GAAP) (3) | 66.4 | % | 58.4 | % | 62.6 | % | 61.8 | % | 60.4 | % | |||||||||||||||||||
Net interest margin (2) | 3.55 | % | 3.62 | % | 3.33 | % | 3.59 | % | 3.40 | % | |||||||||||||||||||
| Cash dividends declared per share: | |||||||||||||||||||||||||||||
| Class A common stock | $ | 0.25 | $ | 0.70 | $ | — | $ | 1.35 | $ | — | |||||||||||||||||||
| Class B common stock | $ | 2.50 | $ | 7.00 | $ | — | $ | 13.50 | $ | — | |||||||||||||||||||
| As of | |||||||||||||||||||||||||||||
| September 30, 2026 | June 30, 2026 | March 31, 2026 | December 31, 2025 | September 30, 2025 | |||||||||||||||||||||||||
| Other data: | |||||||||||||||||||||||||||||
Book value per share (4) | $ | 11.59 | $ | 12.15 | $ | 12.61 | $ | 12.93 | $ | 12.60 | |||||||||||||||||||
Tangible book value per share (3), (4) | $ | 7.05 | $ | 7.56 | $ | 7.53 | $ | 7.81 | $ | 7.79 | |||||||||||||||||||
Common equity ratio (4) | 12.26 | % | 12.67 | % | 13.05 | % | 12.81 | % | 12.27 | % | |||||||||||||||||||
Tangible common equity ratio (3), (4) | 8.16 | % | 8.62 | % | 8.57 | % | 8.48 | % | 8.28 | % | |||||||||||||||||||
Loans to deposit ratio (4) | 72.22 | % | 75.05 | % | 75.93 | % | 74.52 | % | 74.99 | % | |||||||||||||||||||
| Full time equivalent employees | 1,768 | 1,756 | 1,890 | 1,921 | 2,036 | ||||||||||||||||||||||||
(1)Prior period comparative disclosures for the quarter and nine months ended September 30, 2025 reflect the impact of adoption of ASU 2025-08.
(2)Ratios are annualized.
(3)Return on average tangible equity, efficiency ratio (excluding the impact of intangible amortization), tangible book value per share, and tangible common equity ratio are non-GAAP financial measures. For a reconciliation of these measures to the comparable GAAP financial measure or the computation of the measure, see “Non-GAAP Financial Measures and Reconciliations” below.
(4)Prior period comparative disclosures for September 30, 2025 reflect the impact of adoption of ASU 2025-08.
16
NET INTEREST MARGIN
| Quarter Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| September 30, 2026 | June 30, 2026 | September 30, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | Average Balance | Interest | Average Yield/ Cost (1) | Average Balance | Interest | Average Yield/ Cost (1) | Average Balance | Interest | Average Yield/ Cost (1) | |||||||||||||||||||||||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest-earning assets: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 428,244 | $ | 3,277 | 3.04 | % | $ | 459,729 | $ | 3,520 | 3.07 | % | $ | 1,851,414 | $ | 19,858 | 4.26 | % | ||||||||||||||||||||||||||||||||||||||
| Investment securities | 5,517,088 | 58,481 | 4.21 | % | 5,355,011 | 53,062 | 3.97 | % | 4,248,163 | 40,266 | 3.76 | % | ||||||||||||||||||||||||||||||||||||||||||||
Loans (2),(3) | 13,430,196 | 175,387 | 5.18 | % | 13,694,264 | 178,170 | 5.22 | % | 10,959,795 | 140,256 | 5.08 | % | ||||||||||||||||||||||||||||||||||||||||||||
| FHLB stock and other investments | 147,964 | 2,011 | 5.39 | % | 147,538 | 3,190 | 8.67 | % | 119,880 | 2,991 | 9.90 | % | ||||||||||||||||||||||||||||||||||||||||||||
Total interest-earning assets (3) | 19,523,492 | 239,156 | 4.86 | % | 19,656,542 | 237,942 | 4.86 | % | 17,179,252 | 203,371 | 4.70 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Noninterest-earning assets | 1,638,586 | 1,661,711 | 1,418,197 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total assets | $ | 21,162,078 | $ | 21,318,253 | $ | 18,597,449 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Liabilities and shareholders’ equity: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest-bearing deposits: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Demand deposits | $ | 1,625,027 | $ | 1,700 | 0.42 | % | $ | 1,707,751 | $ | 1,839 | 0.43 | % | $ | 1,480,835 | $ | 1,196 | 0.32 | % | ||||||||||||||||||||||||||||||||||||||
| Money market and savings | 8,222,792 | 46,796 | 2.26 | % | 7,900,995 | 42,287 | 2.15 | % | 6,701,690 | 42,382 | 2.51 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Certificates of deposit | 1,897,016 | 11,993 | 2.51 | % | 2,036,264 | 12,418 | 2.45 | % | 1,758,659 | 13,918 | 3.14 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Total | 11,744,835 | 60,489 | 2.04 | % | 11,645,010 | 56,544 | 1.95 | % | 9,941,184 | 57,496 | 2.29 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Borrowings: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Borrowings | 49,787 | 477 | 3.81 | % | 114,121 | 1,055 | 3.71 | % | 10,939 | 124 | 4.48 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Long-term debt | 130,958 | 3,288 | 9.96 | % | 129,369 | 3,171 | 9.83 | % | 63,034 | 1,598 | 10.06 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Total interest-bearing liabilities | 11,925,580 | 64,254 | 2.14 | % | 11,888,500 | 60,770 | 2.05 | % | 10,015,157 | 59,218 | 2.35 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Noninterest-bearing liabilities: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Demand deposits (4) | 6,321,146 | 6,440,279 | 5,823,539 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other liabilities | 253,723 | 260,515 | 216,836 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total liabilities | 18,500,449 | 18,589,294 | 16,055,532 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shareholders’ equity | 2,661,629 | 2,728,959 | 2,541,917 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 21,162,078 | $ | 21,318,253 | $ | 18,597,449 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net interest income (3) | $ | 174,902 | $ | 177,172 | $ | 144,153 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net interest rate spread (3) | 2.72 | % | 2.81 | % | 2.35 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net interest margin (3) | 3.55 | % | 3.62 | % | 3.33 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
(1)Ratios are annualized.
(2)Includes loans held for sale.
(3)Prior period comparative disclosures for the quarter ended September 30, 2025 reflect the impact of adoption of ASU 2025-08.
(4)Cost of all deposits, including noninterest-bearing demand deposits, was 1.33%, 1.25% and 1.45% for the quarters ended September 30, 2026, June 30, 2026 and September 30, 2025, respectively.
17
| Nine Months Ended | |||||||||||||||||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | ||||||||||||||||||||||||||||||||||
| (dollars in thousands) | Average Balance | Interest | Average Yield/Cost (1) | Average Balance | Interest | Average Yield/Cost (1) | |||||||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 478,812 | $ | 10,958 | 3.06 | % | $ | 1,329,525 | $ | 41,713 | 4.19 | % | |||||||||||||||||||||||
| Investment securities | 5,432,936 | 164,617 | 4.05 | % | 4,455,585 | 129,864 | 3.90 | % | |||||||||||||||||||||||||||
Loans (2),(3) | 13,706,945 | 534,747 | 5.22 | % | 9,935,183 | 378,164 | 5.09 | % | |||||||||||||||||||||||||||
| FHLB stock and other investments | 147,430 | 8,712 | 7.90 | % | 108,261 | 5,368 | 6.63 | % | |||||||||||||||||||||||||||
Total interest-earning assets (3) | 19,766,123 | 719,034 | 4.86 | % | 15,828,554 | 555,109 | 4.69 | % | |||||||||||||||||||||||||||
| Noninterest-earning assets | 1,665,769 | 1,338,126 | |||||||||||||||||||||||||||||||||
| Total assets | $ | 21,431,892 | $ | 17,166,680 | |||||||||||||||||||||||||||||||
| Liabilities and shareholders’ equity: | |||||||||||||||||||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||||
| Interest-bearing deposits: | |||||||||||||||||||||||||||||||||||
| Demand deposits | $ | 1,711,776 | $ | 5,715 | 0.45 | % | $ | 1,409,713 | $ | 3,539 | 0.34 | % | |||||||||||||||||||||||
| Money market and savings | 7,956,680 | 128,143 | 2.15 | % | 6,330,840 | 121,478 | 2.57 | % | |||||||||||||||||||||||||||
| Certificates of deposit | 2,133,126 | 41,498 | 2.60 | % | 1,222,456 | 25,634 | 2.80 | % | |||||||||||||||||||||||||||
| Total | 11,801,582 | 175,356 | 1.99 | % | 8,963,009 | 150,651 | 2.25 | % | |||||||||||||||||||||||||||
| Borrowings: | |||||||||||||||||||||||||||||||||||
| Borrowings | 62,950 | 1,760 | 3.74 | % | 3,691 | 124 | 4.48 | % | |||||||||||||||||||||||||||
| Long-term debt | 143,625 | 10,799 | 10.05 | % | 21,242 | 1,598 | 10.06 | % | |||||||||||||||||||||||||||
| Total interest-bearing liabilities | 12,008,157 | 187,915 | 2.09 | % | 8,987,942 | 152,373 | 2.27 | % | |||||||||||||||||||||||||||
| Noninterest-bearing liabilities: | |||||||||||||||||||||||||||||||||||
Demand deposits (4) | 6,402,707 | 5,541,719 | |||||||||||||||||||||||||||||||||
| Other liabilities | 271,396 | 215,971 | |||||||||||||||||||||||||||||||||
| Total liabilities | 18,682,260 | 14,745,632 | |||||||||||||||||||||||||||||||||
| Shareholders’ equity | 2,749,632 | 2,421,048 | |||||||||||||||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 21,431,892 | $ | 17,166,680 | |||||||||||||||||||||||||||||||
Net interest income (3) | $ | 531,119 | $ | 402,736 | |||||||||||||||||||||||||||||||
Net interest spread (3) | 2.77 | % | 2.42 | % | |||||||||||||||||||||||||||||||
Net interest margin (3) | 3.59 | % | 3.40 | % | |||||||||||||||||||||||||||||||
(1)Ratios are annualized.
(2)Includes loans held for sale.
(3)Prior period comparative disclosures for the nine months ended September 30, 2025 reflect the impact of adoption of ASU 2025-08.
(4)Cost of all deposits, including noninterest-bearing demand deposits, was 1.29% and 1.39% for the nine months ended September 30, 2026 and 2025, respectively.
18
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS
This document contains non-GAAP financial measures of our financial performance, including tangible common equity, return on average tangible equity, efficiency ratio (excluding the impact of intangible amortization), tangible book value per share and tangible common equity ratio. We believe that these non-GAAP financial measures provide useful information because they are used by management to evaluate our operating performance, without the impact of goodwill and other intangible assets. However, these financial measures are not intended to be considered in isolation of or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP and should be viewed in addition to, and not as an alternative to, our GAAP results. The non-GAAP financial measures Mechanics presents may differ from similarly captioned measures presented by other companies. The following tables present the calculations of our non-GAAP financial measures.
| (dollars in thousands, except per share amounts) | Quarter Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||
Return on Average Equity and Return on Average Tangible Equity (1) | Ref. | September 30, 2026 | June 30, 2026 | September 30, 2025 | September 30, 2026 | September 30, 2025 | ||||||||||||||||||||||||||||||||
Net income | (a) | $ | 45,992 | $ | 57,701 | $ | 68,276 | $ | 147,783 | $ | 154,552 | |||||||||||||||||||||||||||
Add: intangibles amortization, net of tax (2) | 5,070 | 5,243 | 3,040 | 15,567 | 6,904 | |||||||||||||||||||||||||||||||||
| Net income, excluding the impact of intangible amortization, net of tax | (b) | $ | 51,062 | $ | 62,944 | $ | 71,316 | $ | 163,350 | $ | 161,456 | |||||||||||||||||||||||||||
| Average shareholders’ equity | (c) | $ | 2,661,629 | $ | 2,728,959 | $ | 2,541,917 | $ | 2,749,632 | $ | 2,421,048 | |||||||||||||||||||||||||||
| Less: average goodwill and other intangible assets | 938,086 | 978,184 | 912,679 | 989,164 | 890,677 | |||||||||||||||||||||||||||||||||
| Average tangible shareholders’ equity | (d) | $ | 1,723,543 | $ | 1,750,775 | $ | 1,629,238 | $ | 1,760,468 | $ | 1,530,371 | |||||||||||||||||||||||||||
Return on average equity (3) | (a) / (c) | 6.86 | % | 8.48 | % | 10.66 | % | 7.19 | % | 8.53 | % | |||||||||||||||||||||||||||
Return on average tangible equity (non-GAAP) (3) | (b) / (d) | 11.75 | % | 14.42 | % | 17.37 | % | 12.41 | % | 14.11 | % | |||||||||||||||||||||||||||
| Quarter Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||||||
Efficiency Ratio (1) | Ref. | September 30, 2026 | June 30, 2026 | September 30, 2025 | September 30, 2026 | September 30, 2025 | ||||||||||||||||||||||||||||||||
| Noninterest expense | (e) | $ | 114,193 | $ | 124,473 | $ | 163,329 | $ | 369,093 | $ | 340,047 | |||||||||||||||||||||||||||
| Less: intangibles amortization | 6,969 | 7,207 | 4,251 | 21,398 | 9,655 | |||||||||||||||||||||||||||||||||
| Noninterest expense, excluding the impact of intangible amortization | (f) | $ | 107,224 | $ | 117,266 | $ | 159,078 | $ | 347,695 | $ | 330,392 | |||||||||||||||||||||||||||
| Net interest income | (g) | $ | 174,902 | $ | 177,172 | $ | 144,153 | $ | 531,119 | $ | 402,736 | |||||||||||||||||||||||||||
| Noninterest income (loss) | (h) | $ | (13,434) | $ | 23,796 | $ | 109,778 | $ | 31,382 | $ | 144,384 | |||||||||||||||||||||||||||
| Efficiency ratio | (e) / (g+h) | 70.7 | % | 61.9 | % | 64.3 | % | 65.6 | % | 62.2 | % | |||||||||||||||||||||||||||
| Efficiency ratio (non-GAAP) | (f) / (g+h) | 66.4 | % | 58.4 | % | 62.6 | % | 61.8 | % | 60.4 | % | |||||||||||||||||||||||||||
(1)Prior period comparative disclosures for the quarter and nine months ended September 30, 2025 reflect the impact of adoption of ASU 2025-08.
(2)Estimated statutory tax rate of 27.25%, 27.25% and 28.50% for the quarters ended September 30, 2026, June 30, 2026 and September 30, 2025, respectively and 27.25% and 28.50% for the nine months ended September 30, 2026 and 2025, respectively.
(3)Ratios are annualized.
19
| (dollars in thousands, except per share amounts) | As of | |||||||||||||||||||||||||||||||||||||
Book Value per Share and Tangible Book Value per Share (4) | Ref. | September 30, 2026 | June 30, 2026 | March 31, 2026 | December 31, 2025 | September 30, 2025 | ||||||||||||||||||||||||||||||||
| Total shareholders’ equity | (i) | $ | 2,567,486 | $ | 2,689,931 | $ | 2,791,392 | $ | 2,862,375 | $ | 2,787,249 | |||||||||||||||||||||||||||
| Less: goodwill and other intangible assets | 934,242 | 941,211 | 1,048,574 | 1,055,796 | 986,569 | |||||||||||||||||||||||||||||||||
| Total tangible shareholders’ equity | (j) | $ | 1,633,244 | $ | 1,748,720 | $ | 1,742,818 | $ | 1,806,579 | $ | 1,800,680 | |||||||||||||||||||||||||||
| Common shares outstanding-Class A and B | (k) | 221,474,752 | 221,425,469 | 221,400,590 | 221,305,009 | 221,203,135 | ||||||||||||||||||||||||||||||||
| Common shares outstanding-Class A | 220,360,304 | 220,311,021 | 220,286,142 | 220,190,561 | 220,088,687 | |||||||||||||||||||||||||||||||||
| Common shares outstanding-Class B-adjusted | 11,144,480 | 11,144,480 | 11,144,480 | 11,144,480 | 11,144,480 | |||||||||||||||||||||||||||||||||
Shares outstanding at period end-adjusted (5) | (l) | 231,504,784 | 231,455,501 | 231,430,622 | 231,335,041 | 231,233,167 | ||||||||||||||||||||||||||||||||
| Book value per share | (i) / (k) | $ | 11.59 | $ | 12.15 | $ | 12.61 | $ | 12.93 | $ | 12.60 | |||||||||||||||||||||||||||
Tangible book value per share (non-GAAP) | (j) / (l) | $ | 7.05 | $ | 7.56 | $ | 7.53 | $ | 7.81 | $ | 7.79 | |||||||||||||||||||||||||||
| As of | ||||||||||||||||||||||||||||||||||||||
Common Equity Ratio and Tangible Common Equity Ratio (4) | Ref. | September 30, 2026 | June 30, 2026 | March 31, 2026 | December 31, 2025 | September 30, 2025 | ||||||||||||||||||||||||||||||||
| Total shareholders’ equity | (m) | $ | 2,567,486 | $ | 2,689,931 | $ | 2,791,392 | $ | 2,862,375 | $ | 2,787,249 | |||||||||||||||||||||||||||
| Less: goodwill and other intangible assets | 934,242 | 941,211 | 1,048,574 | 1,055,796 | 986,569 | |||||||||||||||||||||||||||||||||
| Total tangible shareholders’ equity | (n) | $ | 1,633,244 | $ | 1,748,720 | $ | 1,742,818 | $ | 1,806,579 | $ | 1,800,680 | |||||||||||||||||||||||||||
| Total assets | (o) | $ | 20,944,704 | $ | 21,230,839 | $ | 21,388,955 | $ | 22,351,475 | $ | 22,721,935 | |||||||||||||||||||||||||||
| Less: goodwill and other intangible assets | 934,242 | 941,211 | 1,048,574 | 1,055,796 | 986,569 | |||||||||||||||||||||||||||||||||
| Total tangible assets | (p) | $ | 20,010,462 | $ | 20,289,628 | $ | 20,340,381 | $ | 21,295,679 | $ | 21,735,366 | |||||||||||||||||||||||||||
| Common equity ratio | (m) / (o) | 12.26 | % | 12.67 | % | 13.05 | % | 12.81 | % | 12.27 | % | |||||||||||||||||||||||||||
Tangible common equity ratio (non-GAAP) | (n) / (p) | 8.16 | % | 8.62 | % | 8.57 | % | 8.48 | % | 8.28 | % | |||||||||||||||||||||||||||
(4)Prior period comparative disclosures for September 30, 2025 reflect the impact of adoption of ASU 2025-08.
(5)Includes 11,144,480 Class A Shares issuable upon the conversion of 1,114,448 Class B Shares outstanding. Class B Shares also are treated as if such share had been converted into ten Class A Shares for purposes of calculating the economic rights of the Class B Shares, including upon liquidation of the Company or the declaration of dividends or distributions by the Company.
20
97 22 45 215 163 54 197 103 52 228 191 138 205 192 183 70 97 131 0 32 96 51 63 80 Mechanics Bancorp Third Quarter Earnings Presentation October 28, 2026 Seattle, WA San Francisco, CA Los Angeles, CA 1
97 22 45 215 163 54 197 103 52 228 191 138 205 192 183 70 97 131 0 32 96 51 63 80 FORWARD-LOOKING STATEMENTS AND OTHER This presentation and statements made by representatives of Mechanics Bancorp (“Mechanics” or the “Company”) during the course of this presentation include “forward- looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such statements. Such forward-looking statements include, but are not limited to, statements concerning such things as the Company’s outlook, business strategy, financial condition, efforts to make strategic acquisitions, integration activities and outlook, liquidity and sources of funding, market trends, operations and business, stock repurchases, dividend payments, and the Company’s other plans, objectives, strategies, expectations and intentions and other statements that are not statements of historical fact, and may be identified by words such as “anticipates,” “believes,” “building,” “continue,” “could,” “drive,” “estimates,” “expects,” “forecasts,” “goal,” “guidance,” “intends,” “may,” “might,” “outlook,” “plan,” “probable,” “projects,” “seeks,” “should,” “track,” “target,” “view” or “would” or the negative of these words and phrases or similar words or phrases. The following factors, among others, could cause actual results to differ materially from those set forth in the forward-looking statements: substantial non-recurring and integration costs, which may be greater than anticipated due to unexpected events; failure to realize the anticipated benefits of the HomeStreet merger; our ability to effectively manage our expanded operations; negative developments and events impacting the financial services industry; the soundness of other financial institutions; our ability to maintain sufficient liquidity, or an increase in the cost of liquidity; unpredictable economic, market and business conditions; interest rate risk, and fluctuations in interest rates; inflationary pressures and rising prices; adverse changes in real estate market values; the impact of climate change, including indirectly through impacts on our customers; the adequacy of our allowances for credit losses for loans and debt securities; incurring losses in our loan portfolio despite strict adherence to our underwriting practices; fluctuations in our mortgage origination business based upon seasonal and other factors; our geographic concentration, which may magnify the adverse effects and consequences of any regional or local economic downturn; the accuracy of independent appraisals to determine the value of the real estate that secures a substantial portion of our loans; the ability of our small- to medium-sized borrowers to weather adverse business developments; our ability to fully identify and mitigate exposure to the various risks that we face, including interest rate, credit, liquidity and market risk; our ability to mitigate our exposure to interest rate risk; negative publicity regarding us, or financial institutions in general; environmental liability risk associated with our lending activities; our ability to manage risks associated with new lines of business, products, product enhancements and services; our ability to adapt our services to changes in the marketplace related to mortgage servicing or origination, technology or in changes in the requirements of governmental authorities and customers; our ability to develop, implement and maintain an effective system of internal control over financial reporting; the potential that we may identify material weaknesses in our internal control over financial reporting in the future, which may result in material misstatements of our financial statements; the potential that we may write off goodwill and other intangible assets resulting from business combinations; dependence on our management team; exposure to fraudulent and negligent acts by our customers and the parties they do business with, as well as from employees, contractors and vendors; legal claims and litigation, including potential securities law liabilities; employee class action lawsuits or other legal proceedings; our ability to raise additional capital, if needed; competition from other financial institutions and financial service companies; regulatory restrictions that may delay, impede or prohibit our ability to consider certain acquisitions and opportunities; extensive supervision and regulation that could restrict our activities and impose financial requirements or limitations on the conduct of our business and limit our ability to generate income; our ability to comply with stringent capital requirements; the impact of federal and state regulators’ examination of our business; our ability to comply with the Bank Secrecy Act and other anti-money laundering statutes and regulations; our reliance on dividends from Mechanics Bank; our ability to raise debt or capital to pay off our debts upon maturity; our level of indebtedness following the completion of the HomeStreet merger; increasing and continually evolving cybersecurity and other technological risks; our ability to adapt to rapid technological change; our ability to effectively implement new technological solutions or enhancements to existing systems or platforms; our ability to manage risks and challenges relating to the development and use of artificial intelligence; our dependence on our computer and communications systems; our ability to effectively manage and aggregate data; Ford Financial Funds and their controlled affiliates control approximately 77% of the voting power of Mechanics, and have the ability to elect all of our directors and control most other matters submitted to our shareholders for approval; we are a “controlled company” within the meaning of the rules of Nasdaq, and, as a result, we qualify for, and rely on, exemptions from certain corporate governance standards; future sales of shares by existing shareholders could cause our stock price to decline; our reliance on certain entities affiliated with the Ford Financial Funds for services; reduced disclosure requirements as a smaller reporting company; and certain of our shareholders have registration rights, the exercise of which could adversely affect the trading price of our common stock. Disclaimer 2
97 22 45 215 163 54 197 103 52 228 191 138 205 192 183 70 97 131 0 32 96 51 63 80 Disclaimer (cont’d) FORWARD-LOOKING STATEMENTS AND OTHER (cont’d) For further discussion of such factors, see the risk factors described in our Annual Report on Form 10-K for the year ended December 31, 2025, Quarterly Reports on Form 10-Q and other reports that we have filed with the Securities and Exchange Commission. All forward-looking statements are qualified in their entirety by this cautionary statement. The information contained herein is preliminary and based on Company data available at the time of the earnings presentation. It speaks only as of the particular date or dates included in the accompanying slides. Except as required by law, Mechanics does not undertake an obligation to, and disclaims any duty to, update any of the information herein. Included in this presentation are certain non-GAAP financial measures, such as Core Net Income, Return on Average Tangible Equity, Core Return on Average Tangible Equity, Efficiency Ratio, Core Efficiency Ratio, Tangible Book Value per Share and Tangible Common Equity Ratio, which are designed to complement the financial information presented in accordance with U.S. GAAP as management believes such measures are useful to investors to assess use of equity and financial performance. These non-GAAP financial measures should be considered only as supplemental to, and not superior to, financial measures provided in accordance with GAAP. Please refer to the “Non-GAAP Financial Measures and Reconciliations” section of the appendix of this presentation for additional detail including reconciliations of non-GAAP financial measures included in this presentation to the most directly comparable financial measures prepared in accordance with GAAP. Presentation of Results – HomeStreet Bank Merger On September 2, 2025, the merger of HomeStreet Bank, the wholly owned subsidiary of Mechanics Bancorp (formerly known as HomeStreet, Inc.) with and into Mechanics Bank, was completed. Mechanics Bank is the accounting acquirer (legal acquiree), HomeStreet Bank is the accounting acquiree and Mechanics Bancorp is the legal acquirer. Mechanics’ financial results for all periods ended prior to September 2, 2025 reflect Mechanics Bank’s historical financial results on a standalone basis and results of the combined company beginning September 2, 2025. In addition, for periods prior to September 2, 2025, the number of shares issued and outstanding, earnings per share, and all references to share quantities or metrics of Mechanics have been retrospectively restated to reflect the equivalent number of shares issued in the merger since the merger was accounted for as a reverse acquisition. As the accounting acquirer, Mechanics Bank remeasured the identifiable assets acquired and liabilities assumed in the merger as of September 2, 2025 at their acquisition date fair values. Adoption of Purchased Seasoned Loans Accounting Standard The Company early adopted Accounting Standards Update (“ASU”) 2025-08, “Financial Instruments–Credit Losses (Topic 326): Purchased Loans,” during the fourth quarter of 2025. This new standard, which the Company elected to early adopt as of January 1, 2025, requires acquired loans that meet certain criteria at acquisition (purchased seasoned loans) to be recognized at their purchase price plus the amount of the allowance for expected credit losses (gross-up approach). As a result, for purchased seasoned loans acquired in the HomeStreet merger, the Company established an allowance for credit losses of $20.3 million at the date of acquisition for these loans and reversed the provision for credit losses recorded in the third quarter of 2025, and recorded it as part of the acquired loans initial amortized cost basis. Required disclosures regarding the impact of the adoption were presented when the Company filed its Annual Report on Form 10-K for the year ended December 31, 2025. In addition, third quarter 2025 results will be retrospectively adjusted when the Company files its Quarterly Report on Form 10-Q for the quarter ended September 30, 2026. The impact of the adoption is reflected in the respective comparative prior period results presented in this presentation for the third and fourth quarter of 2025. General Note The sum of the amounts in tables and charts may not equal the total amounts presented due to rounding. 3
97 22 45 215 163 54 197 103 52 228 191 138 205 192 183 70 97 131 0 32 96 51 63 80 ▪ Mechanics Bancorp reported net income of $46.0mm in Q3’26 ▪ Fully diluted EPS of $0.20, BVPS of $11.59 and TBVPS of $7.051 ▪ ROAA of 0.86% and ROATCE of 11.8%1 ▪ $0.25 per share of dividends paid in Q3’26 (Class A) and $1.35 per share of dividends paid YTD (Class A) ▪ As anticipated, Q3’26 was noisy, with several non-core items: ▪ ($32.3mm) loss on AFS securities restructuring ▪ $15.2mm reversal of provision, with $3.2mm related to sale of $417mm of run-off auto loans ▪ ($10.3mm) loss on sale of run-off auto loans ▪ $5.1mm gain on other equity investments, $2.9mm additional bargain purchase gain from the HomeStreet merger and ($0.6mm) of merger expenses ▪ $60.6mm of core net income (core ROAA of 1.14% and core ROATCE of 15.1%)1 ▪ Total assets of $20.9bn, total net loans of $12.9bn, total deposits of $18.0bn and tangible common equity of $1.63bn1 ▪ Core Efficiency Ratio of 54.4%, down from 56.0% in Q2’26 ▪ AOCI decreased $112mm in Q3’26, driven by the sharp increase in interest rates during the quarter ▪ 1.33% cost of deposits in Q3’26 and 1.36% spot cost at 9/30/26 ▪ 3.55% NIM in Q3’26 with 72% L/D ratio ▪ 4bps ($1.4mm) of non-auto NCOs ▪ ACL equal to 1.03% of total loans; 2.24x ACL / NPAs ▪ 14.7% CET1 ratio and 8.7% Tier 1 Leverage ratio Mechanics Bancorp 3rd Quarter 2026 Financial Highlights 4 1 Non-GAAP measure. Refer to section “Non-GAAP Financial Measures and Reconciliations” in the back of this presentation 2 Class A 3rd Quarter 2026 Financial Highlights Condensed Balance Sheet ($ in millions, except per share data) Q3 '26 Q2 '26 Q1 '26 Cash & Investments 6,200$ 6,007$ 5,780$ Net Loans, including HFS 12,887 13,429 13,700 Goodwill & Intangible Assets 934 941 1,049 Other Assets 923 854 860 Total Assets 20,945$ 21,231$ 21,389$ Total Deposits 18,019$ 18,089$ 18,243$ Long-Term Debt and Other Borrowings 132 210 129 Other Liabilities 226 241 226 Total Shareholders' Equity 2,567 2,690 2,791 Total Liabilities & Equity 20,945$ 21,231$ 21,389$ Book value per share 11.59$ 12.15$ 12.61$ Tangible book value per share 1 7.05$ 7.56$ 7.53$ Condensed Income Statement (in thousands, except per share data) Q3 '26 Q2 '26 Q1 '26 Net Interest Income 174,901$ 177,173$ 179,045$ Provision / (Reversal of Provision) (15,183) (2,767) 7,767 Non-Interest Income (13,433) 23,796 21,020 Non-Interest Expense 114,192 124,474 130,427 Pre-Tax Income 62,459$ 79,262$ 61,871$ Taxes 16,468 21,561 17,781 Net Income 45,992$ 57,701$ 44,090$ Diluted weighted-average shares outstanding 2 221,503 221,338 221,203 Diluted earnings per share 2 0.20$ 0.25$ 0.19$ Financial Ratios Q3 '26 Q2 '26 Q1 '26 ROAA 0.86% 1.09% 0.82% ROATCE 1 11.8% 14.4% 11.1% Core ROATCE 1 15.1% 14.7% 13.2% Net Interest Margin 3.55% 3.62% 3.61% Core Efficiency Ratio 1 54.4% 56.0% 59.2% Ending FTE 1,768 1,756 1,890 Loans to Deposits 72% 75% 76% Cost of Deposits 1.33% 1.25% 1.28% Common Equity Tier 1 Ratio 14.7% 14.4% 13.9%
97 22 45 215 163 54 197 103 52 228 191 138 205 192 183 70 97 131 0 32 96 51 63 80 Mechanics Bancorp Strategic Update 5 ➢ We had a very noisy third quarter, with several non-core items: ➢ At the end of July, we sold $308mm of AFS securities yielding 1.78% at a $32.3mm pre-tax loss and re-invested the net proceeds in mortgage-backed securities yielding 5.50%, with an expected earnback of 4-5 years ➢ In mid-September, we sold nearly all ($417mm of $429mm) of our run-off auto loans at a price close to par (~$7mm pre-tax loss net of provision release), resulting in the successful acceleration of the exit of a non-core business line ➢ The transaction improved our CET1 Ratio by reducing risk-weighted assets and is expected to modestly enhance profitability moving forward as lower servicing expense will more than offset lost NIM ➢ We now expect ~$420mm of core, annualized NIE (ex. CDI amortization) in Q4’26 ➢ We had $15.2mm of provision release in Q3’26, with $3.2mm related to the sale of our run-off auto loans. The other $12.0mm of negative provision was primarily due to lower expected loss rates on multifamily and CRE loans ➢ We recorded a $5.1mm gain on other equity investments and an additional $2.9mm in bargain purchase gain from the HomeStreet merger (tax-related). We also had $0.6mm of merger-related expenses ➢ Core Net Income grew to $60.6mm from $59.0mm quarter-over-quarter, as expense efficiencies more than offset modest NIM compression from deposit cost increases and the sale of our run-off auto loans ➢ Deposit pressures will persist in this elevated interest rate environment and we expect a relatively flat near-term NIM as we expect to absorb three additional Fed Funds rate increases over the next twelve months. Long-run, we continue to have NIM tailwinds as legacy low-yielding earning assets cash flow and are re-invested at much higher market rates ➢ We have substantial excess capital and expect to pay a ~$100mm dividend, or ~$0.43 per share (Class A), in Q4, subject to Board and regulatory approval. If approved, we will have paid ~$400mm, or ~$1.78 per share (Class A) in dividends to investors in 2026 ➢ We expect a ~17% ROATCE and ~1.2% ROAA in 2027 with a long-run ROATCE target of 18%+ ➢ 2027E Dividend Yield of ~8%
97 22 45 215 163 54 197 103 52 228 191 138 205 192 183 70 97 131 0 32 96 51 63 80 Key Stats vs. $10–100bn public U.S. banks Mechanics Bancorp Overview Source: S&P Global Market Intelligence; Note: Projections per Mechanics management; Financial data as of September 30, 2026, unless otherwise specified; market data as of 10/19/2026 1 Includes banks headquartered in California, Oregon and Washington with less than $250bn in total assets CoD: 1.33% U.S. banks: 1.78% #13 of 81 NIB: 35% U.S. banks: 25% #5 of 81 Dividend yield: ~8% U.S. banks: 3% #1 of 81 ROATCE: ~17% U.S. banks: 14.6% #12 of 81 As of MRQ: CET1: 14.7% U.S. banks: 12.2% #12 of 81 RWA / assets: 57% U.S. banks: 78% #2 of 81 $20.9bn Total assets 166 Branches #4 / #4 CA / West Coast market share by deposits1 Mechanics Bancorp Overview 6 As of MRQ: As of MRQ: As of MRQ: 2027E: 2027E: San Francisco Oakland 880 680 680 90 5 5 Santa Barbara Bakersfield CA OR WA 8 10 40 15 5 5 90 82 182 84 105 405 210 Palm Springs San Diego Los Angeles Santa Maria Santa Barbara Bakersfield Fresno Salinas San Francisco Sacramento Yuba City Chico Redding Seattle Seattle Everett Tacoma Olympia Vancouver Portland 705 Hilo Legend Mechanics (166) HI Honolulu 15% 40% 32% 7% $13.0bn CRE C&I 1-4 Family Cons. / Other 35% 47% 7% 10% $18.0bn Noninterest- bearing Interest-bearing transaction Savings Time Loans Multifamily C&D Deposits 3% 3%
97 22 45 215 163 54 197 103 52 228 191 138 205 192 183 70 97 131 0 32 96 51 63 80 Low-Cost Deposits Deliver Superior Returns Despite Low-Risk Assets 7 Low-cost deposits, clean credit and enterprise efficiency drives market-leading risk-adjusted returns 57% RWA / Assets of $10–100bn U.S. public banks Cost of Deposits of $10–100bn U.S. public banks Rank: #2 of 81 LOW-RISK ASSET STRATEGY LOW-COST DEPOSIT BASE 1.33% Rank: #13 of 81 17% 2027E ROATCE of $10–100bn U.S. public banks Rank: #12 of 81 SUPERIOR PROFITABILITY 8% 2027E Dividend Yield of $10–100bn U.S. public banks Rank: #1 of 81 MARKET-LEADING DIVIDEND YIELD Source: S&P Global Market Intelligence Note: Projections per Mechanics Management; Financial data as of most recent quarter available; market data as of 10/19/2026
97 22 45 215 163 54 197 103 52 228 191 138 205 192 183 70 97 131 0 32 96 51 63 80 Premier community bank in attractive West Coast markets (#4 CA and #4 West Coast bank by deposits¹) Superior profitability (~17% 2027E ROATCE) despite low-risk assets (57% RWA / Assets) Simple and efficient business model – straightforward asset strategy powered by great deposits Core-funded franchise with an exceptional track record of credit outperformance Strongly capitalized and highly liquid balance sheet Capital efficient with market-leading dividend yield (2027E dividend yield of ~8%) Strong alignment between public investors and Ford Financial Fund (74% economic ownership) Experienced management team with strong operating and M&A backgrounds Compelling Investment Thesis ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ Note: Projections per Mechanics management ¹ Includes banks headquartered in California, Oregon, and Washington with less than $250bn total assets 8
Third Quarter 2026 Financial Drivers 26 9
Net Interest Income & Margin Average Earning Assets and NIM Trends 1 Key Highlights 10 Average Earning Assets Mix Trend ($ in billions) ➢ Q3‘26 net interest income decreased $2.3 million, or 1.3%, to $174.9 million from $177.2 million for Q2‘26 ➢ Net interest margin decreased 7 bps during the third quarter, driven primarily by an 8 bps increase in the cost of deposits ➢ Q3’26 interest income included $11.4 million of discount accretion on the loans acquired in the HomeStreet acquisition (~$125 million of remaining discount on acquired HomeStreet loans at 9/30/2026) ➢ Dividend income, which includes dividends from FHLB stock, CRA and other investments, was $2.0 million in Q3’26, down from $3.2 million in Q2’26 * Investments includes Securities and FHLB stock and other investments 1 Prior period comparative disclosure for the third and fourth quarter of 2025 have been adjusted to reflect the impact of the adoption of ASU 2025-08 $17.2 $20.7 $20.1 $19.7 $19.5 3.33% 3.50% 3.61% 3.62% 3.55% Q3 '25 Q4 '25 Q1 '26 Q2 '26 Q3 '26 Average Earning Assets NIM 64% 69% 70% 70% 69% 25% 25% 28% 28% 29% 11% 5% 3% 2% 2% Q3 '25 Q4 '25 Q1 '26 Q2 '26 Q3 '26 Loans Investments Cash
Low-Yielding Legacy Earning Asset Re-Pricing 11 ➢ Legacy earning asset repricing remains a key driver of net interest income growth as ~$4.7 billion of low-yielding, COVID-era assets (weighted average roll-off yield of 3.25%) run off or reset and adjust to current market rates Notes: Management estimates based on contractual cash flows and internal asset-liability modeling prepay assumptions. Assumes static forward rate environment Q4 '26 2027 2028 2029 2030 2031 2032 2033 & Later Total Principal Cash Flows HTM Securities $25 $91 $92 $106 $244 $220 $79 $402 $1,258 SFR Loans 28 120 126 131 119 114 110 871 1,620 Multifamily Loans 127 448 466 304 201 133 135 8 1,823 Total Principal Cash Flows $180 $659 $684 $541 $564 $467 $324 $1,281 $4,701 Cumulative Principal Cash Flows 180 839 1,524 2,065 2,629 3,096 3,420 4,701 4,701 Cumulative Principal Cash Flows / Total 4% 18% 32% 44% 56% 66% 73% 100% 100% Roll-Off Yields HTM Securities 1.79% 1.74% 1.71% 1.67% 1.39% 1.59% 1.69% 1.71% 1.62% SFR Loans 3.66% 3.77% 3.81% 3.85% 3.86% 3.87% 3.88% 3.83% 3.83% Multifamily Loans 4.37% 3.75% 3.58% 3.87% 3.81% 3.96% 4.40% 4.94% 3.85% Total Roll-Off Yields 3.90% 3.48% 3.37% 3.44% 2.77% 2.82% 3.56% 3.17% 3.25% Replacement/Reset Yields Securities 6.10% 6.10% 6.10% 6.10% 6.10% 6.10% 6.10% 6.10% 6.10% SFR Loans 6.65% 6.75% 6.75% 6.75% 6.75% 6.75% 6.75% 6.75% 6.75% Multifamily Loans 6.46% 6.65% 6.65% 6.65% 6.65% 6.65% 6.65% 6.65% 6.64% Total Replacement Yields 6.44% 6.59% 6.59% 6.57% 6.43% 6.42% 6.55% 6.55% 6.53% Earnings Pickup Annual Run-Rate Pre-tax Income Pickup $4.6 $20.5 $22.1 $16.9 $20.7 $16.8 $9.7 $43.2 $154.4 Cumulative Annual Run-Rate Pre-tax Income Pickup $4.6 $25.1 $47.2 $64.1 $84.8 $101.5 $111.2 $154.4 $154.4 Tax Effect (@ 26.5%) 1.2 6.7 12.5 17.0 22.5 26.9 29.5 40.9 40.9 Cumulative Annual Run-Rate Net Income Pickup $3.4 $18.5 $34.7 $47.1 $62.3 $74.6 $81.7 $113.5 $113.5
Net Interest Income Analysis – Variable Assets / Deposits 12 ➢ Net interest income remains sensitive to changes in short-term interest rates, as we have ~$4.6 billion in greater balances of rate sensitive deposits than we do floating rate assets ➢ Our deposit beta was ~30% last Fed hiking cycle and we expect it to be modestly higher this time around Notes: Illustrative example based on management’s internal estimates of how variable assets and deposits will re-price based on changes to short- term interest rates. Rate sensitive deposits includes CDs. Floating rate loans reflect balances that amortize, mature, or re-price within the next 3 months As of 09/30/26 Rates Up and Down Monthly NII Increase / (Decrease) $ in thousands Balance Spot Rate Monthly Interest -50 bps -25 bps 0 bps +25 bps +50 bps -50 bps -25 bps 0 bps +25 bps +50 bps Fed Cash 400,341 3.90% 1,301 3.40% 3.65% 3.90% 4.15% 4.40% (167) (83) - 83 167 Floating Rate Securities 827,861 4.89% 3,371 4.39% 4.64% 4.89% 5.14% 5.39% (345) (172) - 172 345 Floating Rate Loans 2,654,207 5.80% 12,830 5.30% 5.55% 5.80% 6.05% 6.30% (1,106) (553) - 553 1,106 Total Floating Assets 3,882,409 5.41% 17,502 4.91% 5.16% 5.41% 5.66% 5.91% (1,618) (809) - 809 1,618 Rate Sensitive Deposits 8,522,147 2.87% 20,374 2.52% 2.69% 2.87% 3.04% 3.22% (2,487) (1,243) - 1,243 2,487 Non-Rate Sensitive Deposits 9,497,327 0.01% 57 0.01% 0.01% 0.01% 0.01% 0.01% - - - - - Total Deposits 18,019,474 1.36% 20,431 1.19% 1.28% 1.36% 1.44% 1.53% (2,487) (1,243) - 1,243 2,487 Monthly Net Interest Income - Increase / (Decrease) 869 435 - (435) (869) Annual Net Interest Income - Increase / (Decrease) 10,430 5,215 - (5,215) (10,430)
Non-Interest Income Non-Interest Income Trend Core Non-Interest Income Mix 1 Key Highlights 13 ($ in millions) ➢ Q3’26 non-interest income decreased $37.2 million, or 157%, to a net loss of $13.4 million from income of $23.8 million in Q2’26 ➢ Q3’26 included $34.6 million of non-recurring items: • ($32.3) million loss from AFS securities restructure • ($10.3) million loss on sale of auto loans • $5.1 million gain on other equity investments • $2.9 million bargain purchase gain adjustment in connection with HomeStreet acquisition ➢ Excluding non-core items, non-interest income decreased from $21.6 million to $21.2 million primarily due to lower ATM Network Fee Income (-$0.6 million) and Bankcard Royalty Income (-$0.4 million), partially offset by higher Bank Owned Life Insurance income ($0.4 million) ➢ Q3’25, Q4’25 and Q2’26 non-core income was $90.4, $55.1 and $2.2 million, respectively, which consisted mostly of bargain purchase gain related to the HomeStreet acquisition. The total bargain purchase gain was $148.3 million, which reflects a final adjustment of $2.9 million in Q3’26. 1 Core non-interest income mix excludes non-core income * Other includes income from bank-owned life insurance and other income 30% 27% 29% 28% 30% 16% 15% 15% 16% 16% 4% 8% 9% 7% 8% 18% 18% 19% 19% 17% 33% 32% 29% 30% 29% Q3 '25 Q4 '25 Q1 '26 Q2 '26 Q3 '26 Deposit Charges Trust Fees Servicing Income ATM Network Fees Other * $19.4 $23.4 $21.0 $21.6 $21.2 $90.4 $55.1 $2.2 $(34.6) $109.8 $78.5 $21.0 $23.8 $(13.4) Q3 '25 Q4 '25 Q1 '26 Q2 '26 Q3 '26 Core Non-Interest Income Non-Core Income
Non-Interest Expense Non-Interest Expense Trend 1, 2 Core Non-Interest Expense Mix 3 Key Highlights 14 ($ in millions) ➢ Q3’26 non-interest expense decreased $10.3 million, or 8.3%, to $114.2 million from $124.5 million in Q2’26 ➢ Merger-related costs during Q3‘26 were $0.6 million compared to $5.9 million in Q2’26, primarily comprised of consulting and professional service fees ➢ Excluding merger-related costs, non-interest expense decreased $4.9 million during Q3’26 primarily due to staffing and core conversion synergies realized during the quarter ➢ Q3’26 Core Efficiency Ratio decreased to 54.4%, compared to 56.0% in Q2’26 ➢ $427 million of annualized core non-interest expense in Q3’26 (excluding CDI amortization and non-core expense) ➢ $7.0 million of CDI amortization in Q3’26 (reduces GAAP net income but increases regulatory capital) 1 Core Efficiency Ratio is a Non-GAAP measure. Refer to section “Non-GAAP Financial Measures and Reconciliations” in the back of this presentation 2 Prior period comparative disclosure for the third and fourth quarter of 2025 have been adjusted to reflect the impact of the adoption of ASU 2025-08 3 Core non-interest expense excludes merger related costs and other non-core expenses * Other includes FDIC assessments and regulatory fees, data processing, loan-related, marketing and advertising, other real estate owned and other expense $98.9 $126.0 $125.6 $118.6 $113.6 $64.4 $3.5 $4.8 $5.9 $0.6 $163.3 $129.5 $130.4 $124.5 $114.2 57.9% 57.4% 59.2% 56.0% 54.4% Q3 '25 Q4 '25 Q1 '26 Q2 '26 Q3 '26 Core NIE Non-Core NIE Core Efficiency Ratio 54% 54% 55% 53% 53% 17% 17% 18% 17% 18% 6% 5% 5% 6% 6% 4% 6% 6% 6% 6% 19% 17% 17% 17% 17% Q3 '25 Q4 '25 Q1 '26 Q2 '26 Q3 '26 Salaries & Benefits Occupancy & Equipment Professional Services Amortization of Intangibles Other *
Loan Portfolio Overview Loan Balance and Yield Trends 1 Key Highlights Quarter-over-Quarter Loan Metrics 1 15 ($ in billions) ($ in millions) ➢ Q3‘26 loan interest income decreased $2.8 million, or 1.6%, to $175.4 million from $178.2 million in Q2‘26 ➢ Loan yields decreased 4 bps in Q3‘26, driven by slightly lower purchase discount accretion ➢ Multifamily loan yield decreased by 12 bps due to lower discount accretion, lower contractual yields, and lower prepay/late fees, while SFR loan yield increased by 10 bps due to higher discount accretion and higher contractual yields ➢ C&I yields decreased due to lower discount accretion ➢ The Bank’s CRE concentration ratio decreased to 340% in Q3‘26 from 342% at the end of the Q2’26 ➢ The Bank originated $568 million of loan commitments predominantly in SFR and Life Insurance CSV-Backed loans (Inclined – loans against the cash surrender value of whole life insurance policies) ➢ The Bank sold $429 million of loans during the quarter ($417 million of Auto and $13 million of SFR) 1 Prior period comparative disclosure for the third and fourth quarter of 2025 have been adjusted to reflect the impact of the adoption of ASU 2025-08 Q2 '26 Q3 '26 Balance Avg Yield Balance Avg Yield Loans HFS 5 6.07% 8 6.23% Commercial and Industrial 440 7.08% 439 6.60% Multifamily 5,223 4.95% 5,190 4.83% CRE Non-Owner Occupied 1,615 5.04% 1,483 5.13% CRE Owner Occupied 512 5.89% 493 5.74% Construction and Land 361 6.87% 345 7.22% SFR 3,560 4.63% 3,621 4.73% HELOC 547 7.25% 550 7.21% Auto 510 6.47% 10 6.59% Life Insurance CSV-Backed 757 5.23% 837 5.34% Other Consumer 50 7.29% 46 7.07% Total Loans 13,582 5.22% 13,021 5.18% 14.6 14.2 13.9 13.6 13.0 11.0 14.4 14.0 13.7 13.4 5.08% 5.34% 5.25% 5.22% 5.18% Q3 '25 Q4 '25 Q1 '26 Q2 '26 Q3 '26 Loans Avg Loans Loan Yield
97 22 45 215 163 54 197 103 52 228 191 138 205 192 183 70 97 131 0 32 96 51 63 80 Granular, Low-Risk Commercial Lending with a Multifamily Focus ✓ Mechanics Bank’s commercial lending is highly granular and well-diversified across both collateral types and geography ✓ Focus on multifamily lending, with an emphasis on Southern California (53% of total multifamily) ▪ Average multifamily loan size of $4.0 million, with average LTV¹ of 55% and average DCR² of 1.54x ✓ Modest CRE concentrations in retail and office ▪ Average size of CRE retail and office loans are $3.1 and $1.9 million, respectively ▪ Average CRE retail LTV¹ of 47% and DCR² of 1.95x; average CRE office LTV¹ of 49% and DCR² of 1.73x ▪ CRE office decreased by $27 million, or 5%, in Q3’26 ✓ Total CRE3 of ~$7.2bn, with 72% in lower risk-profile multifamily loans ▪ CRE concentration of 340% as of September 30, 2026; 92% ex-multifamily ▪ Seven CRE office loans totaling $35 million in central business districts of Los Angeles, Oakland, San Francisco and Seattle ✓ Continued focus on reducing HomeStreet syndicated loans over time (~$142 million in UPB at 9/30/25, ~$64 million at 09/30/26) ✓ No loans to non-depository financial institutions (NDFI). Technology-related exposure <1% of C&I Portfolio ✓ Realized a ~$7 million net charge off on a Legacy HomeStreet syndicated C&I credit in Q4’25 (identified during due diligence and fully reserved for). Other Legacy HomeStreet Commercial NCO since merger totals ~$100K CRE composition: Q3’26C&I breakdown: Q3’26 CRE geography: Q3’26 16 Note: Financial data as of September 30, 2026; ¹ LTV defined as current loan balance divided by most recent appraisal; CRE LTV does not include multifamily; ² DCRs based on most recent review (origination in instances where loan is below review threshold); CRE DCRs exclude owner-user loans; 3 Total CRE excludes construction and land development; 4 No Industry <1% of balance Oregon, 5% Other4, 15% Retail, 6% Gov’t & Education, 5% Comm’l Serv, 2% Manufacture, 3% Utilities, 9% Real Estate Activities, 15% Equipment & Machinery, 5% Entertainment & Recreation, 7% Construction / Contractor, 20% Pharmaceuticals / Healthcare, 12% ~$0.4bn Multifamily, 72% Retail, 8% Office, 7% Industrial, 7% Special Purpose, 3% Hotel, 1% Mixed use, 1% ~$7.2bn Los Angeles, 33% Central Valley, 5% East Bay, 7% Central Coast, 7% San Diego, 5% Inland Empire, 6% South Bay, 5% North Bay, 3% Sacramento, 3% San Francisco, 2% Other States, 6% Orange, 4% Northern California, 2% ~$7.2bn Washington, 10%
97 22 45 215 163 54 197 103 52 228 191 138 205 192 183 70 97 131 0 32 96 51 63 80 High-Quality, Low-Risk Consumer Lending HELOC TrendSFR Trend 1 Life Insurance CSV-Backed Loan Trend 17 Note: Financial data as of September 30, 2026 1 SFR trend includes loans held for sale ✓ Mechanics Bank’s SFR Mortgage and HELOC lending efficiently generates high-quality, low-risk loans with strong risk-adjusted returns ✓ SFR product offerings include Agency, Government, Bond, Correspondent and Portfolio lending ✓ $4.1 billion SFR Servicing Portfolio for others that provides a stable revenue stream, especially in an elevated interest rate environment ✓ Recent on balance sheet SFR Portfolio lending focus is on Intermediate ARM loans to reduce interest rate risk ▪ SFR Portfolio product mix at 9/30/2026: 5/1 ARM (4%), 7/1 ARM (32%), 10/1 ARM (10%), 15-year fixed (3%), 30-year fixed (50%), Other (1%) ▪ 90% of 2026 year-to-date SFR Portfolio originations by dollar volume have been Intermediate ARMs, which will help reduce interest rate risk ✓ Key SFR Portfolio statistics ($3.6 billion outstanding at 9/30/2026 with 4.73% MRQ yield): ▪ Average FICO of 793, average loan size of $598 thousand, average LTV of 49%, geographic mix: 76% CA, 21% WA, 2% OR, 1% Other States ✓ Key HELOC Portfolio statistics ($550 million outstanding at 9/30/2026 with 7.21% MRQ yield): ▪ Average FICO of 786, average loan size of $77 thousand, geographic mix: 47% WA, 43% CA, 7% OR, 3% Other States ✓ Since 2020, Mechanics Bank has partnered with Inclined, a fast-growing financial technology company, to originate high-quality, low-risk floating rate loans secured by the cash surrender value (“CSV”) of whole life insurance policies ✓ Inclined has built an innovative technology platform that connects whole life policyowners with bank partners in a unique marketplace that maximizes efficiency, lowers barriers to access, improves the customer experience and fosters competitive rates for borrowers with attractive risk-adjusted returns for the bank partners ✓ We are Inclined’s first and largest bank partner with $837mm in drawn CSV-backed loans outstanding (47% utilization) and a small ownership stake in the company ✓ Zero net charge offs since program inception and no loans over 30-days past due; floating rate loans limit interest rate risk and help balance loan portfolio duration ✓ Key Life Insurance Policy Loans Portfolio statistics ($837 million outstanding at 9/30/2026 with 5.34% MRQ yield and nominal servicing expense): ▪ Average FICO of 774, average loan size of $141 thousand, geographic mix: 14% CA, 13% NY, 10% FL, 9% TX, 54% Other States $3,439 $3,474 $3,508 $3,566 $3,629 Q3 '25 Q4 '25 Q1 '26 Q2 '26 Q3 '26 $497 $502 $514 $547 $550 Q3 '25 Q4 '25 Q1 '26 Q2 '26 Q3 '26 $54 $199 $371 $599 $837 2022 2023 2024 2025 Q3 '26
Asset Quality NCOs / Average Loans Loan Loss Reserves / NPAs NPAs / Assets Loan Loss Reserves / Loans HFI 18 * Ratios are annualized 2.60x 2.96x 2.95x 2.57x 2.24x Q3 '25 Q4 '25 Q1 '26 Q2 '26 Q3 '26 Loan Loss Reserves / NPAs 1.16% 1.08% 1.13% 1.12% 1.03% Q3 '25 Q4 '25 Q1 '26 Q2 '26 Q3 '26 Loan Loss Reserves / Loans HFI 0.04% 0.23% 0.01% 0.04% 0.28% 0.15% 0.12% 0.09% 0.09% 0.32% 0.38% 0.12% 0.10% 0.13% Q3 '25 Q4 '25 Q1 '26 Q2 '26 Q3 '26 Non-Auto NCOs / Avg Loans Auto NCOs / Avg Loans 0.26% 0.21% 0.23% 0.26% 0.28% 0.02% 0.02% 0.02% 0.02% 0.01% 0.29% 0.23% 0.25% 0.28% 0.28% Q3 '25 Q4 '25 Q1 '26 Q2 '26 Q3 '26 Non-Auto NPAs / Assets Auto NPAs / Assets
Securities Portfolio Securities Balance and Yield Trends Quarter-over-Quarter Loan Metrics Key Highlights Quarte -over-Quarte Securities Metrics 19 ($ in billions) ($ in millions) ➢ Executed a $308 million securities restructure in Q3’26 to convert low-yielding AFS securities into current market-rate MBS • Resulted in a $32.3 million pre-tax loss, with an estimated earn-back period of 4-5 years ➢ Average yields increased from 3.97% in Q2’26 to 4.21% in Q3’26, primarily due to the partial-quarter impact of the AFS securities restructure ➢ Q3‘26 securities interest income increased $5.4mm, or 10.2%, to $58.5mm, due to higher yields and average balances ➢ The ending securities portfolio increased $145 million during the quarter 4.9 5.4 5.3 5.5 5.6 4.2 5.1 5.4 5.4 5.5 3.76% 3.86% 3.97% 3.97% 4.21% Q3 '25 Q4 '25 Q1 '26 Q2 '26 Q3 '26 Securities Avg Securities Securities Yield Q2 '26 Q3 '26 Balance Avg Yield Balance Avg Yield Agency MBS/CMO 3,964 4.08% 4,239 4.34% Agency CMBS 664 2.62% 575 2.70% Municipals 476 4.21% 436 4.23% Corporates 45 6.58% 46 7.14% CLOs 231 5.08% 231 5.13% Treasuries 67 3.92% 66 4.17% Agency Debentures 6 5.23% 6 5.06% Total Securities 5,453 3.97% 5,598 4.21%
Deposits Overview Deposit Balance and Cost Trends Quarter-over-Quarter Loan Metrics Key Highlights Quarter-over-Quarter Deposit Metrics 20 ($ in billions) ($ in millions) ➢ Q3‘26 deposit interest expense increased $3.9 million, or 7%, to $60.5 million from $56.5 million for Q2’26 ➢ Cost of deposits increased 8 bps in Q3’26, driven primarily by higher average rates and a shift in mix ➢ Non-maturity deposits decreased $3.9 million in Q3’26, but the mix shifted into money market accounts ➢ Deposit balances decreased $70 million during the third quarter, with $66 million of the decline in time deposits ➢ Spot cost of deposits at 9/30/2026 was 1.36% (see next page for a detailed stratification) Q2 '26 Q3 '26 Balance Avg Cost Balance Avg Cost Noninterest-bearing Demand 6,421 - 6,298 - Savings 1,329 0.02% 1,305 0.03% Interest-bearing Demand 1,671 0.43% 1,619 0.42% Money Market 6,723 2.58% 6,918 2.68% Time Deposits 1,945 2.45% 1,879 2.51% Total Deposits 18,089 1.25% 18,019 1.33% 19.5 19.0 18.2 18.1 18.0 15.8 19.2 18.5 18.1 18.1 1.45% 1.43% 1.28% 1.25% 1.33% Q3 '25 Q4 '25 Q1 '26 Q2 '26 Q3 '26 Deposits Avg Deposits Deposits Rate
97 22 45 215 163 54 197 103 52 228 191 138 205 192 183 70 97 131 0 32 96 51 63 80 Mechanics Bank Deposit Stratification at 9/30/2026 21Note: Financial data as of September 30, 2026; ¹ Represents spot rate as of September 30, 2026 Mechanics Bank Deposits ($ in millions, except account data) Segment Number of Accounts Deposit Balance ($) Deposit Balance (%) Avg Account Size ($) Median Account Size ($) Relationship Weighted Age (yrs) Cost1 (%) Consumer 338,968 8,864 49% 26,149 2,737 20.2 1.31% Business 67,002 7,927 44% 118,316 11,159 16.5 1.21% Public 1,160 1,228 7% 1,058,869 28,043 28.6 2.65% Total 407,130 18,019$ 100% 44,260$ 3,448$ 19.1 1.36%
➢ Mechanics Bancorp’s capital ratios exceed minimums to be “well-capitalized” and meet all regulatory capital requirements and internal policy limits ➢ Available liquidity totaled approximately $15.8 billion at 9/30/26, a decrease of $0.1 billion relative to 6/30/26 Capital and Liquidity Update Capital Ratios Trend (%) 1 Quarter-over-Quarter Loan Metrics Key Highlights Av ilable Funding Capacity Trend 22 ($ in billions) 1 Regulatory capital ratios at September 30, 2026 are preliminary Q3 '25 Q4 '25 Q1 '26 Q2 '26 Q3 '26 Excess Reserves at FRB 1.2 0.8 0.3 0.3 0.4 FHLB, FRB & Other borrowing lines 13.2 15.8 15.4 15.3 15.0 Other Unencumbered Securities 0.4 0.4 0.6 0.3 0.4 Total 14.8$ 17.0$ 16.3$ 15.9$ 15.8$ 10.3 8.7 8.7 8.7 8.7 13.4 14.1 13.9 14.4 14.7 15.6 16.3 16.2 16.7 17.0 Q3 '25 Q4 '25 Q1 '26 Q2 '26 Q3 '26 Tier 1 Leverage Tier 1 Risk-based Total Risk-based
Appendix 26 23
97 22 45 215 163 54 197 103 52 228 191 138 205 192 183 70 97 131 0 32 96 51 63 80 Details on Mechanics Bank Standalone CRE Portfolio 24 Source: Mechanics Bank management; Note: Financial data as of September 30, 2026 1 LTV defined as current loan balance divided by most recent appraisal
97 22 45 215 163 54 197 103 52 228 191 138 205 192 183 70 97 131 0 32 96 51 63 80 Details on Mechanics Bank Standalone CRE Portfolio (cont’d) 25 Source: Mechanics Bank management; Note: Financial data as of September 30, 2026
97 22 45 215 163 54 197 103 52 228 191 138 205 192 183 70 97 131 0 32 96 51 63 80 Non-GAAP Financial Measures and Reconciliations 26 1 Estimated statutory tax rate of 27.25% 2 Ratios are annualized 3 Non-core adjustments and core net income reflect estimated FY 2026 book tax rate of 26.50% Return on Average Equity and Return on Average Tangible Equity ($ in thousands) Return on Average Equity and September 30, June 30, March 31, Return on Average Tangible Equity Ref 2026 2026 2026 Net Income (a) 45,992$ 57,701$ 44,090$ Add: intangibles amortization, net of tax 1 (b) 5,070 5,243 5,254 Net income, excluding the impact of intangible amortization, net of tax (c) 51,062$ 62,945$ 49,344$ Average shareholders' equity (d) 2,661,629$ 2,728,959$ 2,860,494$ Less: average goodwill and other intangible assets 938,086 978,184 1,052,479 Average tangible shareholders' equity (e) 1,723,543$ 1,750,775$ 1,808,015$ Return on average equity 2 (a)/(d) 6.9% 8.5% 6.3% Return on average tangible equity (non-GAAP) 2 (c)/(e) 11.8% 14.4% 11.1% Pre-tax income - as reported (f) 62,459$ 79,262$ 61,871$ Non-core provision (g) (15,183)$ (2,767)$ 6,530$ Non-core income (h) (34,603)$ 2,184$ -$ Non-core expense (i) 559 5,923 4,794 Core return on average tangible equity (non-GAAP) 2,3 ((f+g-h+i)*73.5%+b)/(e) 15.1% 14.7% 13.2% Quarter Ended
97 22 45 215 163 54 197 103 52 228 191 138 205 192 183 70 97 131 0 32 96 51 63 80 Non-GAAP Financial Measures and Reconciliations (cont’d) 27 Efficiency Ratio and Core Efficiency Ratio (Non-GAAP) ($ in thousands) 1 Prior period comparative disclosures for the third and fourth quarter of 2025 have been adjusted to reflect the impact of the adoption of ASU 2025-08 2 Non-core expense reflects merger related expenses and other non-recurring items 3 Non-core non-interest income reflects bargain purchase gain and other non-recurring items September 30, June 30, March 31, December 31, September 30, Efficiency Ratio 1 Ref 2026 2026 2026 2025 2025 Noninterest expense (a) 114,192$ 124,474$ 130,427$ 129,510$ 163,329$ Less: intangibles amortization 6,969 7,207 7,222 7,480 4,251 Noninterest expense, excluding the impact of intangible amortization (b) 107,222$ 117,266$ 123,206$ 122,031$ 159,078$ Net interest income (c) 174,901 177,173 179,045 182,982 144,154 Noninterest income (d) (13,433) 23,796 21,020 78,520 109,779 Efficiency ratio (unadjusted) (a)/(c+d) 70.7% 61.9% 65.2% 49.5% 64.3% Efficiency ratio (non-GAAP) (b)/(c+d) 66.4% 58.4% 61.6% 46.7% 62.6% Non-core expense 2 (e) 559$ 5,923$ 4,794$ 3,506$ 64,385$ Non-core non-interest income 3 (f) (34,603) 2,184 - 55,097 90,363 Core Efficiency ratio (non-GAAP) (b-e)/(c+d-f) 54.4% 56.0% 59.2% 57.4% 57.9% Quarter Ended
97 22 45 215 163 54 197 103 52 228 191 138 205 192 183 70 97 131 0 32 96 51 63 80 Non-GAAP Financial Measures and Reconciliations (cont’d) 28 1 Includes 11,144,480 Class A Shares issuable upon the conversion of 1,114,448 Class B Shares outstanding. Class B Shares also are treated as if such share had been converted into ten Class A Shares for purposes of calculating the economic rights of the Class B Shares, including upon liquidation of the Company or the declaration of dividends or distributions by the Company Book Value and Tangible Book Value Per Share ($ in thousands, except shares and per share data) As of September 30, June 30, March 31, Book Value and Tangible Book Value Per Share Ref 2026 2026 2026 Total shareholders’ equity (a) 2,567,486$ 2,689,931$ 2,791,392$ Less: goodwill and other intangible assets 934,241 941,211 1,048,574 Total tangible shareholders’ equity (b) 1,633,245$ 1,748,720$ 1,742,818$ Common shares outstanding-Class A and B (c) 221,474,752 221,425,469 221,400,590 Common shares outstanding-Class A 220,360,304 220,311,021 220,286,142 Common shares outstanding-Class B-adjusted 11,144,480 11,144,480 11,144,480 Shares outstanding at period end-adjusted 1 (d) 231,504,784 231,455,501 231,430,622 Book value per share (a)/(c) 11.59$ 12.15$ 12.61$ Tangible book value per share (non-GAAP) (b)/(d) 7.05$ 7.56$ 7.53$
97 22 45 215 163 54 197 103 52 228 191 138 205 192 183 70 97 131 0 32 96 51 63 80 Non-GAAP Financial Measures and Reconciliations (cont’d) Common Equity Ratio and Tangible Common Equity Ratio 29 ($ in thousands) As of Common Equity Ratio and September 30, June 30, March 31, Tangible Common Equity Ratio Ref 2026 2026 2026 Total shareholders’ equity (a) 2,567,486$ 2,689,931$ 2,791,392$ Less: goodwill and other intangible assets 934,241 941,211 1,048,574 Total tangible shareholders’ equity (b) 1,633,245$ 1,748,720$ 1,742,818$ Total assets (c) 20,944,704$ 21,230,839$ 21,388,955$ Less: goodwill and other intangible assets 934,241 941,211 1,048,574 Total tangible assets (d) 20,010,462$ 20,289,628$ 20,340,382$ Common equity ratio (a)/(c) 12.26% 12.67% 13.05% Tangible common equity ratio (non-GAAP) (b)/(d) 8.16% 8.62% 8.57%
97 22 45 215 163 54 197 103 52 228 191 138 205 192 183 70 97 131 0 32 96 51 63 80 Non-GAAP Financial Measures and Reconciliations (cont’d) Core Net Income 30 ($ in thousands) 1 $15.2mm provision release 2 $34.6mm non-core net loss (refer to Non-Interest Income slide) 3 $0.6mm non-core expenses 4 Non-core adjustments and core net income reflect estimated FY 2026 book tax rate of 26.50% 5 Ratios are annualized As Non-Core Core Core Net Income Ref Reported Adjustments Net Income Net Interest Income before Provision 174,901$ -$ 174,901$ Provision / (Reversal of Provision) 1 (15,183) (15,183) - Net Interest Income After Provision 190,084 15,183 174,901 Non-Interest Income 2 (13,433) (34,603) 21,169 Non-Interest Expense 3 114,192 559 113,632 Pre-Tax Income 62,459 (19,979) 82,438 Taxes 4 16,468 21,846 Net Income (a) 45,992$ 60,592$ Add: intangibles amortization, net of tax 5,070 5,070 Net income, excluding the impact of intangible amortization, net of tax (b) 51,062 65,662 Average Assets (c) 21,162,078 21,162,078 Average tangible shareholders' equity (d) 1,723,543 1,723,543 Return on average assets 5 (a)/(c) 0.86% 1.14% Return on average tangible equity (non-GAAP) 5 (b)/(d) 11.8% 15.1% Quarter Ended September 30, 2026