Mechanics Bancorp (OTC: MCHB) lifts Q2 2026 profit with solid margins and capital
Rhea-AI Filing Summary
Mechanics Bancorp reported solid results for the quarter ended June 30, 2026, with net income of $57.7 million, or $0.25 per diluted Class A share, up from $44.1 million in the prior quarter. Return on average assets was 1.09% and return on average tangible equity was 14.42%.
Net interest income was $177.2 million as net interest margin inched up to 3.62%, while the total cost of deposits declined to 1.25%. A net $2.8 million reversal of credit loss provisions and higher noninterest income, including gains tied to the sale of the Fannie Mae DUS business line and a mortgage servicing rights valuation adjustment, supported earnings. Noninterest expense fell to $124.5 million despite $5.9 million of merger-related costs as HomeStreet integration progressed.
Total assets were $21.2 billion with total loans of $13.6 billion and deposits of $18.1 billion, reflecting runoff of $199.2 million of higher-cost certificates of deposit and modest core deposit growth. Capital remained strong, with an estimated 14.39% Common Equity Tier 1 ratio, 16.70% total risk-based capital ratio and 8.71% Tier 1 leverage ratio. Asset quality metrics stayed conservative: the allowance for credit losses was 1.12% of loans and nonperforming assets were 0.28% of total assets, though delinquent loans rose to 0.70% of loans, partly from two maturing commercial real estate relationships.
Positive
- Q2 2026 net income rose to $57.7 million ($0.25 diluted EPS for Class A), up from $44.1 million in Q1 2026, with ROAA at 1.09% and ROATCE at 14.42%, indicating stronger profitability.
- Capital and liquidity remain robust, with a 14.39% CET1 ratio, 16.70% total risk-based capital, 8.71% Tier 1 leverage, and combined available borrowing capacity of $15.3 billion from FHLB, Federal Reserve and other bank lines.
Negative
- None.
Filing Explained
A planned $310 million securities repositioning could create a $25 million after-tax third-quarter loss, while proposed dividends remain approval-dependent.
The filing states that the HomeStreet Bank merger completed on
Merger fair-value estimates remain preliminary through one year after the merger date, and the filing says changes to those estimates could be material.
Management plans to sell about
The company says it paid
A named resolution point is the quarterly report for the period ending
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, and exhibit attachments filed with this report.
Key Figures
Net Income Q2 2026: $57.7 million
Diluted EPS Class A Q2 2026: $0.25 per share
Net Interest Margin: 3.62%
+5 more
8 metrics
Net Income Q2 2026
$57.7 million
Quarter ended June 30, 2026
Diluted EPS Class A Q2 2026
$0.25 per share
Quarter ended June 30, 2026
Net Interest Margin
3.62%
Q2 2026, up from 3.61% in Q1 2026
Total Assets
$21.2 billion
Balance at June 30, 2026
Total Deposits
$18.1 billion
Balance at June 30, 2026; down $153.3 million in Q2
Total Loans Held for Investment
$13.6 billion
Balance at June 30, 2026; down $276.0 million from March 31, 2026
Common Equity Tier 1 Capital Ratio
14.39%
Mechanics Bancorp regulatory capital at June 30, 2026 (preliminary)
Allowance for Credit Losses to Loans
1.12%
Allowance coverage of total loans at June 30, 2026
Key Terms
Common equity Tier 1 capital, allowance for credit losses, purchased seasoned loans, net interest margin, +2 more
6 terms
Common equity Tier 1 capital financial
"Common equity Tier 1 capital (to risk-weighted assets) 14.39 % at June 30, 2026"
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.
allowance for credit losses financial
"Allowance for credit losses on loans totaled $152.6 million, or 1.12% of 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.
purchased seasoned loans financial
"ASU 2025-08 requires acquired loans meeting criteria (purchased seasoned loans) to be recognized at purchase price plus ACL"
Purchased seasoned loans are existing loans that an investor buys after they have been outstanding for some time and have a track record of payments. Like buying a used car with a known service history, these loans give buyers clearer information about how likely borrowers are to keep paying, which helps investors estimate future cash flow, potential losses, and the returns they can expect.
net interest margin financial
"Mechanics’ net interest margin increased from 3.61% to 3.62% primarily due to runoff of higher cost CDs"
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.
nonperforming assets financial
"Nonperforming assets as a percentage of total assets increased to 0.28% at June 30, 2026"
Nonperforming assets are loans or investments that are not generating expected payments or returns because the borrower has fallen behind on payments or the investment has lost value. They matter to investors because a high level of nonperforming assets can indicate financial trouble for a bank or institution, potentially affecting its stability and profitability.
efficiency ratio financial
"Efficiency ratio (non-GAAP) was 58.4% in Q2 2026"
A measure of how much a company spends to produce each dollar of revenue, usually shown as operating expenses divided by revenue and expressed as a percentage. Think of it as a household’s budget: a lower percentage means more of each dollar earned stays as profit, while a higher number means costs are eating into returns. Investors use it to judge cost control and compare how efficiently companies turn revenue into earnings, especially in banks and financial firms.
Earnings Snapshot
Net income Q2 2026: $57.7 million · Guidance included
Quarter and six months ended June 30, 2026
Net income Q2 2026
$57.7 million
up from $44.1 million in Q1 2026 and $42.5 million in Q2 2025
Diluted EPS Class A Q2 2026
$0.25
up from $0.19 in Q1 2026 and $0.20 in Q2 2025
Net interest income H1 2026
$356.2 million
up from $258.6 million for the six months ended June 30, 2025
Net interest margin Q2 2026
3.62%
slightly higher than 3.61% in Q1 2026 and 3.44% in Q2 2025
Return on average assets Q2 2026
1.09%
compared with 0.82% in Q1 2026
Guidance
Management materials state an expectation of approximately 17–18% return on average tangible common equity and 1.3–1.4% return on average assets in 2027 and beyond.
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
How did Mechanics Bancorp (MCHB) perform financially in Q2 2026?
Mechanics Bancorp reported Q2 2026 net income of $57.7 million, or $0.25 diluted EPS for Class A shares. This compares with $44.1 million in Q1 2026 and $42.5 million in Q2 2025, driven by stable net interest margin, a provision reversal, and higher fee income.
What were the key balance sheet trends for Mechanics Bancorp (MCHB) at June 30, 2026?
At June 30, 2026, Mechanics Bancorp had $21.2 billion in total assets, $13.6 billion in total loans and $18.1 billion in deposits. Deposits fell $153.3 million in the quarter, mainly from $199.2 million of certificate of deposit runoff, partly offset by $45.9 million of core deposit growth.
How strong are Mechanics Bancorp’s (MCHB) capital ratios after Q2 2026?
Capital levels are high, with an estimated 14.39% Common Equity Tier 1 ratio, 14.39% Tier 1 capital ratio, 16.70% total risk-based capital ratio, and an 8.71% Tier 1 leverage ratio at June 30, 2026, providing a sizable capital cushion above regulatory minimums.
What was Mechanics Bancorp’s (MCHB) net interest margin and funding cost in Q2 2026?
Net interest margin was 3.62% in Q2 2026, slightly above 3.61% in Q1 2026. The total cost of deposits was 1.25% for the quarter, down from 1.28% in Q1, aided by runoff of higher-cost certificates of deposit and relatively stable noninterest-bearing balances.
How did asset quality at Mechanics Bancorp (MCHB) evolve in Q2 2026?
Asset quality remained conservative, with the allowance for credit losses at 1.12% of total loans and nonperforming assets at 0.28% of total assets. Total delinquent loans increased to $95.4 million, or 0.70% of loans, largely due to two maturing commercial real estate loans under refinance or extension review.
What dividends did Mechanics Bancorp (MCHB) pay in Q2 2026?
In Q2 2026 Mechanics Bancorp paid cash dividends of $0.70 per share on Class A common stock and $7.00 per share on Class B common stock. For the first six months of 2026, total dividends reached $1.10 per Class A share and $11.00 per Class B share.
How is the HomeStreet merger affecting Mechanics Bancorp’s (MCHB) results?
Management reports that merger integration is substantially complete and Q2 2026 merger and integration costs were $5.9 million. The HomeStreet combination has increased average earning assets, contributed to higher net interest income and fee income, and is expected to support further cost savings as integration-related expenses decline.
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): July 29, 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 July 29, 2026, Mechanics Bancorp issued a press release reporting results of operations for the second 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 second quarter of 2026 slide presentation that executive management intends to use in meetings with institutional investors and industry analysts, including in a webcast on July 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 July 29, 2026. | |||||||
| Exhibit 99.2 | Investor Presentation, Second 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: July 29, 2026
| MECHANICS BANCORP | |||||||||||
| By: | /s/ Nathan Duda | ||||||||||
| Nathan Duda | |||||||||||
| Executive Vice President and Chief Financial Officer | |||||||||||
3
Mechanics Bancorp Reports Second Quarter 2026 Results
Second Quarter Highlights | ||||||||||||||||||||
$21.2 billion Total Assets | $57.7 million Net Income | 14.39% CET1 Ratio (1) | $12.15 Book Value Per Share $7.56 Tangible Book Value Per Share (2) | |||||||||||||||||
Walnut Creek, CA – July 29, 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 June 30, 2026. Mechanics reported net income of $57.7 million, or $0.25 per diluted share (3), for the second quarter of 2026, compared to $44.1 million, or $0.19 per diluted share, for the first quarter of 2026. For the six months ended June 30, 2026, Mechanics reported net income of $101.8 million, or $0.44 per diluted share, compared to $86.3 million, or $0.41 per diluted share, for the six months ended June 30, 2025.
Second Quarter 2026 Highlights:
•Total assets of $21.2 billion at June 30, 2026, compared with $21.4 billion at March 31, 2026.
•Total loans of $13.6 billion at June 30, 2026, compared with $13.9 billion at March 31, 2026.
•Loans-to-deposits ratio of 75% at June 30, 2026, compared with 76% at March 31, 2026.
•Total deposits of $18.1 billion at June 30, 2026, compared with $18.2 billion at March 31, 2026, and noninterest-bearing deposits of $6.4 billion at June 30, 2026, compared with $6.5 billion at March 31, 2026.
•Total cost of deposits was 1.25% for the second quarter of 2026 and 1.28% for the first quarter of 2026.
•Dividends paid in the second quarter of 2026 were $0.70 per share of Class A common stock and $7.00 per share of Class B common stock.
•Strong capital ratios (1), including an estimated 16.70% Total risk-based capital ratio, 14.39% Tier 1 capital ratio, 14.39% CET1 capital ratio and 8.71% Tier 1 leverage ratio at June 30, 2026.
•Allowance for credit losses (“ACL”) to total loans of 1.12%, down from 1.13% at the prior quarter-end.
•Non-recurring acquisition and integration costs of $5.9 million for the second quarter of 2026, compared to $4.8 million in the prior quarter.
(1)Regulatory capital ratios at June 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.
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C.J. Johnson, President and CEO of Mechanics, said, “We had a strong second quarter financially and substantially completed our merger with HomeStreet. We also successfully sold our Fannie Mae DUS business line and paid $162 million in cash dividends during the quarter. Our merger was an unqualified success and I am very grateful to our employees for a job well-done on the integration. I look forward to getting back to “business as usual” and believe Mechanics is well-positioned for future growth.”
Nathan Duda, CFO of Mechanics, added, “Our second quarter results demonstrated the underlying earnings power of the franchise as we continued to realize merger-related cost savings, reduced our funding costs and maintained a stable net interest margin. While we continue to incur certain integration-related expenses, the benefits of the HomeStreet merger are increasingly evident in our results.”
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. The estimates of fair value were recorded based on valuations as of the merger date. These estimates are considered preliminary as of June 30, 2026, are subject to change for up to one year after the merger date, and any changes could be material.
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 as of September 30, 2025 presented in this earnings release.
2
INCOME STATEMENT HIGHLIGHTS
Summary Income Statement
| Quarter Ended | Six Months Ended | |||||||||||||||||||||||||||||||
| (in thousands) | June 30, 2026 | March 31, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | |||||||||||||||||||||||||||
| Total interest income | $ | 237,942 | $ | 241,936 | $ | 178,153 | $ | 479,878 | $ | 351,738 | ||||||||||||||||||||||
| Total interest expense | 60,770 | 62,891 | 48,024 | 123,661 | 93,155 | |||||||||||||||||||||||||||
| Net interest income | 177,172 | 179,045 | 130,129 | 356,217 | 258,583 | |||||||||||||||||||||||||||
| Provision (reversal of provision) for credit losses on loans | (904) | 7,593 | 357 | 6,689 | (3,395) | |||||||||||||||||||||||||||
| Provision (reversal of provision) for credit losses on unfunded lending commitments | (1,863) | 174 | (725) | (1,689) | (631) | |||||||||||||||||||||||||||
| Total provision (reversal of provision) for credit losses | (2,767) | 7,767 | (368) | 5,000 | (4,026) | |||||||||||||||||||||||||||
| Total noninterest income | 23,796 | 21,020 | 19,625 | 44,816 | 34,606 | |||||||||||||||||||||||||||
| Acquisition and integration costs | 5,923 | 4,794 | 5,639 | 10,717 | 5,989 | |||||||||||||||||||||||||||
| Other noninterest expense | 118,550 | 125,633 | 85,441 | 244,183 | 170,729 | |||||||||||||||||||||||||||
| Total noninterest expense | 124,473 | 130,427 | 91,080 | 254,900 | 176,718 | |||||||||||||||||||||||||||
| Income before income tax expense | 79,262 | 61,871 | 59,042 | 141,133 | 120,497 | |||||||||||||||||||||||||||
| Income tax expense | 21,561 | 17,781 | 16,557 | 39,342 | 34,221 | |||||||||||||||||||||||||||
| Net income | $ | 57,701 | $ | 44,090 | $ | 42,485 | $ | 101,791 | $ | 86,276 | ||||||||||||||||||||||
Net Interest Income
Second Quarter of 2026 vs. First Quarter of 2026
Net interest income in the second quarter of 2026 was $1.9 million lower than the first quarter of 2026 primarily as a result of a decrease in average interest earning assets of $468.4 million, partially offset by lower interest expense on certificates of deposit. Mechanics’ net interest margin increased from 3.61% to 3.62% primarily due to runoff of higher cost certificates of deposit.
Six Months Ended June 30, 2026 vs. Six Months Ended June 30, 2025
Net interest income for the six months ended June 30, 2026 increased $97.6 million as compared to the six months ended June 30, 2025 due primarily to an increase of $4.7 billion in average interest-earning assets, as well as an increase in net interest margin from 3.44% in the six months ended June 30, 2025 to 3.61% in the six months ended June 30, 2026, as a result of the HomeStreet merger.
Provision for Credit Losses
Second Quarter of 2026 vs. First Quarter of 2026
The reversal of provision for credit losses in the second quarter of 2026, which consists of the provision for loans and unfunded commitments, was $2.8 million, compared to a provision of $7.8 million for the first quarter of 2026. The reversal of provision for the second quarter was primarily driven by the combination of an increase in modeled loss rates for multifamily loans, the elimination of economic qualitative adjustments now that the Middle East conflict and corresponding economic impact are embedded in expected loss rate modeling, and a reduction in residential construction and HELOC unfunded commitments.
3
Six Months Ended June 30, 2026 vs. Six Months Ended June 30, 2025
The provision for credit losses was $5.0 million for the six months ended June 30, 2026, compared to a reversal of provision of $4.0 million for the six months ended June 30, 2025. The increase in provision for the six months ended June 30, 2026 was driven primarily by an increase in modeled loss rates for multifamily loans during 2026, offset slightly by downward qualitative adjustments and lower balances. The increase in provision was partially offset by a reduction in the unfunded commitments reserve.
Noninterest Income
Second Quarter of 2026 vs. First Quarter of 2026
Noninterest income in the second quarter of 2026 increased $2.8 million from the first quarter of 2026 primarily due to higher other noninterest income from the gain on sale of the Fannie Mae Multifamily Delegated Underwriting and Servicing (“DUS®”) business line and a mortgage servicing rights valuation adjustment.
Six Months Ended June 30, 2026 vs. Six Months Ended June 30, 2025
Noninterest income for the six months ended June 30, 2026 increased $10.2 million from the six months ended June 30, 2025 primarily due to higher loan servicing income, ATM network fee income and other noninterest income, which were all driven by the HomeStreet merger. In addition, the increase in other noninterest income resulted from the gain on sale of the DUS business line and a mortgage servicing rights valuation adjustment. The increases in noninterest income were partially offset by lower gain on sales and calls of investment securities.
Noninterest Expense
Second Quarter of 2026 vs. First Quarter of 2026
Noninterest expense decreased $6.0 million in the second quarter of 2026 compared to the first quarter of 2026, primarily due to lower salaries and employee benefits expense from a decrease in headcount as a result of integration following the HomeStreet merger.
Six Months Ended June 30, 2026 vs. Six Months Ended June 30, 2025
Noninterest expense increased $78.2 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 primarily due to higher salaries and employee benefits expense, occupancy costs, equipment expense, amortization of intangibles and acquisition and integration related costs from the HomeStreet merger.
Income Taxes
Second Quarter of 2026 vs. First Quarter of 2026
Our effective tax rate during the second quarter of 2026 was 27.2% as compared to 28.7% in the first 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 a $1.7 million remeasurement of deferred tax assets in the first quarter.
Six Months Ended June 30, 2026 vs. Six Months Ended June 30, 2025
Our effective tax rate for the six months ended June 30, 2026 was 27.9% as compared to 28.4% for the six months ended June 30, 2025 and our federal statutory rate was 21.0%. The effective tax rate decreased compared to the six months ended June 30, 2025 as a result of a lower state tax rate due to more taxable income being apportioned to states with lower tax rates and an increase in tax exempt investments and loans, both a result of the HomeStreet merger. These were partially offset by the $1.7 million remeasurement of deferred tax assets in the current year.
4
BALANCE SHEET HIGHLIGHTS
Selected Balance Sheet Items
| (in thousands) | June 30, 2026 | March 31, 2026 | December 31, 2025 | September 30, 2025 | June 30, 2025 | |||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 553,915 | $ | 483,513 | $ | 1,029,983 | $ | 1,442,647 | $ | 2,078,960 | ||||||||||||||||||||||
| Trading securities | 46,595 | 49,463 | 49,518 | 50,357 | — | |||||||||||||||||||||||||||
| Securities available-for-sale | 4,119,215 | 3,933,705 | 3,993,385 | 3,490,478 | 2,562,438 | |||||||||||||||||||||||||||
| Securities held-to-maturity | 1,286,813 | 1,313,520 | 1,336,632 | 1,363,636 | 1,391,211 | |||||||||||||||||||||||||||
Loans held for investment (before ACL) (1) | 13,576,196 | 13,852,209 | 14,176,936 | 14,587,530 | 9,239,834 | |||||||||||||||||||||||||||
Total assets (1) | 21,230,839 | 21,388,955 | 22,351,475 | 22,721,935 | 16,571,173 | |||||||||||||||||||||||||||
| | ||||||||||||||||||||||||||||||||
| Noninterest-bearing demand deposits | $ | 6,420,746 | $ | 6,511,998 | $ | 6,744,082 | $ | 6,748,479 | $ | 5,453,890 | ||||||||||||||||||||||
| Total deposits | 18,089,437 | 18,242,769 | 19,024,997 | 19,452,819 | 13,968,863 | |||||||||||||||||||||||||||
| Borrowings | 80,000 | — | — | — | — | |||||||||||||||||||||||||||
| Long-term debt | 130,420 | 128,815 | 192,014 | 190,123 | — | |||||||||||||||||||||||||||
| Total liabilities | 18,540,908 | 18,597,563 | 19,489,100 | 19,934,686 | 14,154,556 | |||||||||||||||||||||||||||
Total shareholders’ equity (1) | 2,689,931 | 2,791,392 | 2,862,375 | 2,787,249 | 2,416,617 | |||||||||||||||||||||||||||
(1)Prior period comparative disclosures for September 30, 2025 reflect the impact of adoption of ASU 2025-08.
Investment Securities
Trading securities totaled $46.6 million and $49.5 million at June 30, 2026 and March 31, 2026. Securities available-for-sale increased by $185.5 million during the second quarter of 2026 to $4.1 billion at June 30, 2026, primarily due to purchases of agency MBS, partially offset by paydowns. Securities held-to-maturity decreased by $26.7 million in the second quarter of 2026, due to paydowns, and totaled $1.3 billion at June 30, 2026.
Loans
Total loans at June 30, 2026 were $13.6 billion, a decrease of $276.0 million from $13.9 billion at March 31, 2026, due primarily to loan repayments during the quarter, partially offset by originations.
Deposits
Total deposits decreased by $153.3 million during the second quarter of 2026 to $18.1 billion at June 30, 2026. The decrease was due to $199.2 million certificates of deposit runoff, partially offset by $45.9 million of core deposit growth.
Noninterest-bearing demand deposits totaled $6.4 billion and represented 35% of total deposits at June 30, 2026, compared to $6.5 billion, or 36% of total deposits, at March 31, 2026.
Borrowings
Total borrowings were $80.0 million at June 30, 2026, compared to zero at March 31, 2026. The increase in the second quarter of 2026 was due to short-term Federal Reserve Discount Window borrowings during the quarter.
5
Equity
During the second quarter of 2026, total shareholders’ equity decreased by $101.5 million to $2.7 billion and tangible common equity (1) increased slightly by $5.9 million, and was $1.75 billion at June 30, 2026. The decrease in total shareholders’ equity for the second quarter of 2026 primarily resulted from a net decrease in retained earnings in the second quarter of 2026 from net income, less dividends paid to common shareholders. Tangible common equity remained relatively flat due to the reduction in intangibles from the sale of the DUS business line, which offset the decrease in total shareholders’ equity.
At June 30, 2026, book value per common share decreased to $12.15, compared to $12.61 at March 31, 2026. At June 30, 2026, tangible book value per common share (1) increased to $7.56, compared to $7.53 at March 31, 2026.
(1)Non-GAAP measure. Refer to section “Non-GAAP Financial Measures and Reconciliations” below.
CAPITAL AND LIQUIDITY
Capital ratios remain strong with Total risk-based capital at 16.70% and a Tier 1 leverage ratio of 8.71% at June 30, 2026. The following table presents our regulatory capital ratios as of the dates indicated:
| June 30, 2026 | March 31, 2026 | December 31, 2025 | September 30, 2025 | June 30, 2025 | ||||||||||||||||||||||||||||
Mechanics Bancorp (1),(2) | ||||||||||||||||||||||||||||||||
| Tier 1 leverage capital (to average assets) | 8.71 | % | 8.66 | % | 8.65 | % | 10.34 | % | n/a | |||||||||||||||||||||||
| Common equity Tier 1 capital (to risk-weighted assets) | 14.39 | % | 13.92 | % | 14.09 | % | 13.42 | % | n/a | |||||||||||||||||||||||
| Tier 1 risk-based capital (to risk-weighted assets) | 14.39 | % | 13.92 | % | 14.09 | % | 13.42 | % | n/a | |||||||||||||||||||||||
| Total risk-based capital (to risk-weighted assets) | 16.70 | % | 16.16 | % | 16.27 | % | 15.57 | % | n/a | |||||||||||||||||||||||
Mechanics Bank (1) | ||||||||||||||||||||||||||||||||
| Tier 1 leverage capital (to average assets) | 9.38 | % | 9.31 | % | 9.58 | % | 11.46 | % | 10.16 | % | ||||||||||||||||||||||
| Common equity Tier 1 capital (to risk-weighted assets) | 15.48 | % | 14.96 | % | 15.59 | % | 14.87 | % | 18.27 | % | ||||||||||||||||||||||
| Tier 1 risk-based capital (to risk-weighted assets) | 15.48 | % | 14.96 | % | 15.59 | % | 14.87 | % | 18.27 | % | ||||||||||||||||||||||
| Total risk-based capital (to risk-weighted assets) | 16.74 | % | 16.21 | % | 16.81 | % | 16.13 | % | 19.10 | % | ||||||||||||||||||||||
(1)On September 2, 2025, HomeStreet Bank merged with and into Mechanics Bank, with Mechanics Bank surviving the merger and becoming a wholly-owned subsidiary of Mechanics Bancorp. As a result, for periods prior to September 30, 2025, regulatory capital ratios are only presented for Mechanics Bank.
(2)Regulatory capital ratios at June 30, 2026 are preliminary.
At June 30, 2026, Mechanics had available borrowing capacity of $5.9 billion from the FHLB, $4.4 billion from the Federal Reserve and $5.0 billion under borrowing lines established with other financial institutions.
6
CREDIT QUALITY
Asset Quality Information and Ratios
| (dollars in thousands) | June 30, 2026 | March 31, 2026 | December 31, 2025 | September 30, 2025 | June 30, 2025 | |||||||||||||||||||||||||||
| Delinquent loans held for investment: | ||||||||||||||||||||||||||||||||
30-89 days past due (1) | $ | 54,529 | $ | 43,556 | $ | 58,459 | $ | 55,899 | $ | 106,710 | ||||||||||||||||||||||
| 90+ days past due | 40,888 | 33,447 | 34,686 | 38,316 | 10,660 | |||||||||||||||||||||||||||
| Total delinquent loans | $ | 95,417 | $ | 77,003 | $ | 93,145 | $ | 94,215 | $ | 117,370 | ||||||||||||||||||||||
| Total delinquent loans to loans held for investment | 0.70 | % | 0.56 | % | 0.66 | % | 0.65 | % | 1.27 | % | ||||||||||||||||||||||
| Nonperforming assets: | ||||||||||||||||||||||||||||||||
| Nonaccrual loans | $ | 48,557 | $ | 44,379 | $ | 42,863 | $ | 60,586 | $ | 18,606 | ||||||||||||||||||||||
| 90+ days past due and accruing | 6,543 | 4,098 | 3,943 | 2,653 | 717 | |||||||||||||||||||||||||||
| Total nonperforming loans | 55,100 | 48,477 | 46,806 | 63,239 | 19,323 | |||||||||||||||||||||||||||
| Foreclosed assets | 4,262 | 4,658 | 4,990 | 1,675 | — | |||||||||||||||||||||||||||
| Total nonperforming assets | $ | 59,362 | $ | 53,135 | $ | 51,796 | $ | 64,914 | $ | 19,323 | ||||||||||||||||||||||
| Allowance for credit losses on loans | $ | 152,601 | $ | 156,796 | $ | 153,319 | $ | 168,959 | $ | 68,334 | ||||||||||||||||||||||
| Allowance for credit losses on loans to total loans held for investment | 1.12 | % | 1.13 | % | 1.08 | % | 1.16 | % | 0.74 | % | ||||||||||||||||||||||
| Allowance for credit losses on loans to nonaccrual loans | 314.27 | % | 353.31 | % | 357.70 | % | 278.88 | % | 367.27 | % | ||||||||||||||||||||||
| Nonaccrual loans to total loans held for investment | 0.36 | % | 0.32 | % | 0.30 | % | 0.42 | % | 0.20 | % | ||||||||||||||||||||||
| Nonperforming assets to total assets | 0.28 | % | 0.25 | % | 0.23 | % | 0.29 | % | 0.12 | % | ||||||||||||||||||||||
(1)Prior period comparative disclosures for September 30, 2025 reflect the impact of adoption of ASU 2025-08.
At June 30, 2026, total delinquent loans were $95.4 million, compared to $77.0 million at March 31, 2026. The increase was primarily due to two matured commercial real estate loans that became past due during the quarter and were in process of refinance or extension as of June 30, 2026. Total delinquent loans as a percentage of total loans were 0.70% at June 30, 2026, as compared to 0.56% at March 31, 2026.
At June 30, 2026, nonperforming assets were $59.4 million, compared to $53.1 million at March 31, 2026. The slight increase was primarily due to additional single family, home equity and multifamily nonperforming loans during the quarter, partially offset by $2.4 million of foreclosed assets sold. Nonperforming assets as a percentage of total assets increased to 0.28% at June 30, 2026, as compared to 0.25% at March 31, 2026.
7
Allowance for Credit Losses
| Quarter Ended | Six Months Ended | |||||||||||||||||||||||||||||||
| (dollars in thousands) | June 30, 2026 | March 31, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | |||||||||||||||||||||||||||
| Allowance for credit losses on loans: | ||||||||||||||||||||||||||||||||
| Beginning balance | $ | 156,796 | $ | 153,319 | $ | 75,515 | $ | 153,319 | $ | 88,558 | ||||||||||||||||||||||
| Provision (reversal of provision) for credit losses | (904) | 7,593 | 357 | 6,689 | (3,395) | |||||||||||||||||||||||||||
| Loans charged off | (6,308) | (7,205) | (9,949) | (13,513) | (22,166) | |||||||||||||||||||||||||||
| Recoveries | 3,017 | 3,089 | 2,411 | 6,106 | 5,337 | |||||||||||||||||||||||||||
| Ending balance | $ | 152,601 | $ | 156,796 | $ | 68,334 | $ | 152,601 | $ | 68,334 | ||||||||||||||||||||||
| Allowance for credit losses on unfunded lending commitments: | ||||||||||||||||||||||||||||||||
| Beginning balance | $ | 7,289 | $ | 7,115 | $ | 4,460 | $ | 7,115 | $ | 4,366 | ||||||||||||||||||||||
| Provision (reversal of provision) for credit losses | (1,863) | 174 | (725) | (1,689) | (631) | |||||||||||||||||||||||||||
| Ending balance | $ | 5,426 | $ | 7,289 | $ | 3,735 | $ | 5,426 | $ | 3,735 | ||||||||||||||||||||||
Net charge-offs to average loans (1) | 0.10 | % | 0.12 | % | 0.32 | % | 0.11% | 0.36% | ||||||||||||||||||||||||
(1) Ratios are annualized.
The allowance for credit losses on loans totaled $152.6 million, or 1.12% of total loans at June 30, 2026, compared to $156.8 million, or 1.13% of total loans at March 31, 2026. The decrease in allowance was the result of a decrease in qualitative factors across loan types, with the greatest impact on commercial real estate loans due to the size of the portfolio, partially offset by higher expected loss rates due to a weaker economic outlook stemming from the conflict in the Middle East.
Conference Call
The Company will host a conference call and webcast to discuss its second quarter 2026 financial results at 11:00 a.m. Eastern Time (ET) on Wednesday, July 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 513809929. 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/513809929.
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 $21.2 billion in assets as of June 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.
8
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;
•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;
9
•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 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
10
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 | ||||||||
11
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
| (dollars in thousands) | June 30, 2026 | March 31, 2026 | December 31, 2025 | September 30, 2025 | June 30, 2025 | ||||||||||||||||||||||||
| ASSETS | |||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 553,915 | $ | 483,513 | $ | 1,029,983 | $ | 1,442,647 | $ | 2,078,960 | |||||||||||||||||||
| Trading securities | 46,595 | 49,463 | 49,518 | 50,357 | — | ||||||||||||||||||||||||
| Securities available-for-sale | 4,119,215 | 3,933,705 | 3,993,385 | 3,490,478 | 2,562,438 | ||||||||||||||||||||||||
| Securities held-to-maturity | 1,286,813 | 1,313,520 | 1,336,632 | 1,363,636 | 1,391,211 | ||||||||||||||||||||||||
| Loans held for sale | 5,345 | 4,692 | 5,967 | 54,985 | 415 | ||||||||||||||||||||||||
Loan receivables (1) | 13,576,196 | 13,852,209 | 14,176,936 | 14,587,530 | 9,239,834 | ||||||||||||||||||||||||
| Allowance for credit losses on loans | (152,601) | (156,796) | (153,319) | (168,959) | (68,334) | ||||||||||||||||||||||||
Net loan receivables (1) | 13,423,595 | 13,695,413 | 14,023,617 | 14,418,571 | 9,171,500 | ||||||||||||||||||||||||
| Mortgage servicing rights | 59,142 | 84,000 | 85,832 | 88,595 | — | ||||||||||||||||||||||||
| Other real estate owned | 4,262 | 4,658 | 4,990 | 1,675 | — | ||||||||||||||||||||||||
| Federal Home Loan Bank stock, at cost | 17,287 | 17,289 | 17,292 | 17,294 | 17,250 | ||||||||||||||||||||||||
| Premises and equipment, net | 141,615 | 143,157 | 143,895 | 143,917 | 114,715 | ||||||||||||||||||||||||
| Bank-owned life insurance | 172,980 | 171,674 | 170,339 | 169,163 | 84,786 | ||||||||||||||||||||||||
| Goodwill | 843,305 | 843,305 | 843,305 | 843,305 | 843,305 | ||||||||||||||||||||||||
| Other intangible assets, net | 97,906 | 205,269 | 212,491 | 143,264 | 33,309 | ||||||||||||||||||||||||
| Right-of-use asset | 74,623 | 78,046 | 82,076 | 85,657 | 56,696 | ||||||||||||||||||||||||
Interest receivable and other assets (1) | 384,241 | 361,251 | 352,153 | 408,391 | 216,588 | ||||||||||||||||||||||||
TOTAL ASSETS (1) | $ | 21,230,839 | $ | 21,388,955 | $ | 22,351,475 | $ | 22,721,935 | $ | 16,571,173 | |||||||||||||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||||||||||||||||||||
| LIABILITIES | |||||||||||||||||||||||||||||
| Noninterest-bearing demand deposits | $ | 6,420,746 | $ | 6,511,998 | $ | 6,744,082 | $ | 6,748,479 | $ | 5,453,890 | |||||||||||||||||||
| Interest-bearing transaction accounts | 8,394,708 | 8,222,964 | 8,128,832 | 7,918,670 | 6,359,590 | ||||||||||||||||||||||||
| Savings and time deposits | 3,273,983 | 3,507,807 | 4,152,083 | 4,785,670 | 2,155,383 | ||||||||||||||||||||||||
| Total deposits | 18,089,437 | 18,242,769 | 19,024,997 | 19,452,819 | 13,968,863 | ||||||||||||||||||||||||
| Borrowings | 80,000 | — | — | — | — | ||||||||||||||||||||||||
| Long-term debt | 130,420 | 128,815 | 192,014 | 190,123 | — | ||||||||||||||||||||||||
| Operating lease liability | 78,174 | 82,403 | 86,794 | 90,796 | 59,233 | ||||||||||||||||||||||||
| Interest payable and other liabilities | 162,877 | 143,576 | 185,295 | 200,948 | 126,460 | ||||||||||||||||||||||||
| TOTAL LIABILITIES | 18,540,908 | 18,597,563 | 19,489,100 | 19,934,686 | 14,154,556 | ||||||||||||||||||||||||
| SHAREHOLDERS’ EQUITY | |||||||||||||||||||||||||||||
| Common stock | 2,404,941 | 2,402,968 | 2,402,193 | 2,401,989 | 2,122,374 | ||||||||||||||||||||||||
Retained earnings (1) | 303,046 | 407,908 | 456,695 | 394,069 | 325,793 | ||||||||||||||||||||||||
| Accumulated other comprehensive income (loss), net of tax | (18,056) | (19,484) | 3,487 | (8,809) | (31,550) | ||||||||||||||||||||||||
TOTAL SHAREHOLDERS’ EQUITY (1) | 2,689,931 | 2,791,392 | 2,862,375 | 2,787,249 | 2,416,617 | ||||||||||||||||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY (1) | $ | 21,230,839 | $ | 21,388,955 | $ | 22,351,475 | $ | 22,721,935 | $ | 16,571,173 | |||||||||||||||||||
| Common shares outstanding-Class A and B | 221,425,469 | 221,400,590 | 221,305,009 | 221,203,135 | 202,015,832 | ||||||||||||||||||||||||
(1)Prior period comparative disclosures for September 30, 2025 reflect the impact of adoption of ASU 2025-08.
12
CONSOLIDATED INCOME STATEMENTS (UNAUDITED)
| Quarter Ended | Six Months Ended | ||||||||||||||||||||||||||||
| (dollars in thousands, except per share amounts) | June 30, 2026 | March 31, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | ||||||||||||||||||||||||
| INTEREST INCOME | |||||||||||||||||||||||||||||
| Loans interest and fees | $ | 178,170 | $ | 181,190 | $ | 120,116 | $ | 359,360 | $ | 237,908 | |||||||||||||||||||
| Investment securities | 53,062 | 53,074 | 42,013 | 106,136 | 89,598 | ||||||||||||||||||||||||
| Interest-bearing cash and other | 6,710 | 7,672 | 16,024 | 14,382 | 24,232 | ||||||||||||||||||||||||
| Total interest income | 237,942 | 241,936 | 178,153 | 479,878 | 351,738 | ||||||||||||||||||||||||
| INTEREST EXPENSE | |||||||||||||||||||||||||||||
| Deposits | 56,544 | 58,323 | 48,024 | 114,867 | 93,155 | ||||||||||||||||||||||||
| Borrowed funds | 1,055 | 228 | — | 1,283 | — | ||||||||||||||||||||||||
| Long-term debt | 3,171 | 4,340 | — | 7,511 | — | ||||||||||||||||||||||||
| Total interest expense | 60,770 | 62,891 | 48,024 | 123,661 | 93,155 | ||||||||||||||||||||||||
| Net interest income | 177,172 | 179,045 | 130,129 | 356,217 | 258,583 | ||||||||||||||||||||||||
| Provision (reversal of provision) for credit losses on loans | (904) | 7,593 | 357 | 6,689 | (3,395) | ||||||||||||||||||||||||
| Provision (reversal of provision) for credit losses on unfunded lending commitments | (1,863) | 174 | (725) | (1,689) | (631) | ||||||||||||||||||||||||
| Net interest income after provision for credit losses | 179,939 | 171,278 | 130,497 | 351,217 | 262,609 | ||||||||||||||||||||||||
| NONINTEREST INCOME | |||||||||||||||||||||||||||||
| Service charges on deposit accounts | 6,027 | 6,043 | 5,492 | 12,070 | 10,986 | ||||||||||||||||||||||||
| Trust fees and commissions | 3,476 | 3,070 | 3,216 | 6,546 | 6,335 | ||||||||||||||||||||||||
| ATM network fee income | 4,109 | 3,904 | 3,040 | 8,013 | 5,928 | ||||||||||||||||||||||||
| Loan servicing income | 1,582 | 1,927 | 168 | 3,509 | 345 | ||||||||||||||||||||||||
| Net gain on sales and calls of investment securities | 31 | 52 | 4,137 | 83 | 4,137 | ||||||||||||||||||||||||
| Income from bank-owned life insurance | 1,327 | 1,165 | 502 | 2,492 | 1,029 | ||||||||||||||||||||||||
| Other | 7,244 | 4,859 | 3,070 | 12,103 | 5,846 | ||||||||||||||||||||||||
| Total noninterest income | 23,796 | 21,020 | 19,625 | 44,816 | 34,606 | ||||||||||||||||||||||||
| NONINTEREST EXPENSE | |||||||||||||||||||||||||||||
| Salaries and employee benefits | 63,090 | 68,550 | 47,734 | 131,640 | 96,585 | ||||||||||||||||||||||||
| Occupancy | 11,851 | 12,429 | 8,337 | 24,280 | 16,309 | ||||||||||||||||||||||||
| Equipment | 8,724 | 9,615 | 6,288 | 18,339 | 12,157 | ||||||||||||||||||||||||
| Professional services | 7,435 | 6,071 | 5,907 | 13,506 | 10,823 | ||||||||||||||||||||||||
| FDIC assessments and regulatory fees | 2,990 | 2,990 | 2,213 | 5,980 | 4,426 | ||||||||||||||||||||||||
| Amortization of intangible assets | 7,207 | 7,222 | 2,666 | 14,429 | 5,404 | ||||||||||||||||||||||||
| Data processing | 2,468 | 3,873 | 2,200 | 6,341 | 3,550 | ||||||||||||||||||||||||
| Loan related | 3,616 | 3,506 | 3,220 | 7,122 | 4,797 | ||||||||||||||||||||||||
| Marketing and advertising | 696 | 907 | 744 | 1,603 | 1,328 | ||||||||||||||||||||||||
| Other real estate owned related | 47 | 384 | 104 | 431 | 2,788 | ||||||||||||||||||||||||
| Acquisition and integration costs | 5,923 | 4,794 | 5,639 | 10,717 | 5,989 | ||||||||||||||||||||||||
| Other | 10,426 | 10,086 | 6,028 | 20,512 | 12,562 | ||||||||||||||||||||||||
| Total noninterest expense | 124,473 | 130,427 | 91,080 | 254,900 | 176,718 | ||||||||||||||||||||||||
| Income before income tax expense | 79,262 | 61,871 | 59,042 | 141,133 | 120,497 | ||||||||||||||||||||||||
| INCOME TAX EXPENSE | 21,561 | 17,781 | 16,557 | 39,342 | 34,221 | ||||||||||||||||||||||||
| NET INCOME | $ | 57,701 | $ | 44,090 | $ | 42,485 | $ | 101,791 | $ | 86,276 | |||||||||||||||||||
| Basic earnings per share | |||||||||||||||||||||||||||||
| Class A common stock | $ | 0.25 | $ | 0.19 | $ | 0.20 | $ | 0.44 | $ | 0.41 | |||||||||||||||||||
| Class B common stock | $ | 2.51 | $ | 1.91 | $ | 2.00 | $ | 4.42 | $ | 4.07 | |||||||||||||||||||
| Diluted earnings per share | |||||||||||||||||||||||||||||
| Class A common stock | $ | 0.25 | $ | 0.19 | $ | 0.20 | $ | 0.44 | $ | 0.41 | |||||||||||||||||||
| Class B common stock | $ | 2.51 | $ | 1.91 | $ | 2.00 | $ | 4.42 | $ | 4.07 | |||||||||||||||||||
| Basic weighted-average shares outstanding | |||||||||||||||||||||||||||||
| Class A common stock | 221,148,246 | 221,047,803 | 200,893,223 | 221,098,302 | 200,889,074 | ||||||||||||||||||||||||
| 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 | 221,338,344 | 221,203,293 | 200,952,643 | 221,271,096 | 200,948,494 | ||||||||||||||||||||||||
| Class B common stock | 1,114,448 | 1,114,448 | 1,114,448 | 1,114,448 | 1,114,448 | ||||||||||||||||||||||||
13
LOANS HELD FOR INVESTMENT (1)
| (in thousands) | June 30, 2026 | March 31, 2026 | December 31, 2025 | September 30, 2025 | June 30, 2025 | |||||||||||||||||||||||||||
| Commercial and industrial | $ | 439,814 | $ | 460,081 | $ | 482,170 | $ | 550,176 | $ | 280,551 | ||||||||||||||||||||||
| Commercial real estate | ||||||||||||||||||||||||||||||||
| Multifamily | 5,223,356 | 5,291,597 | 5,355,252 | 5,450,206 | 2,826,750 | |||||||||||||||||||||||||||
| Non-owner occupied | 1,614,883 | 1,711,611 | 1,740,277 | 1,866,119 | 1,551,617 | |||||||||||||||||||||||||||
| Owner occupied | 512,474 | 586,698 | 689,079 | 710,638 | 323,419 | |||||||||||||||||||||||||||
| Construction and land development | 360,668 | 399,546 | 493,992 | 538,754 | 135,013 | |||||||||||||||||||||||||||
| Residential real estate | 4,107,867 | 4,017,120 | 3,970,803 | 3,914,675 | 2,438,271 | |||||||||||||||||||||||||||
| Auto | 510,232 | 639,825 | 791,012 | 954,617 | 1,147,967 | |||||||||||||||||||||||||||
| Other consumer | 806,902 | 745,731 | 654,351 | 602,345 | 536,246 | |||||||||||||||||||||||||||
| Total LHFI | $ | 13,576,196 | $ | 13,852,209 | $ | 14,176,936 | $ | 14,587,530 | $ | 9,239,834 | ||||||||||||||||||||||
(1)Prior period comparative disclosures for September 30, 2025 reflect the impact of adoption of ASU 2025-08.
COMPOSITION OF DEPOSITS
| (in thousands) | June 30, 2026 | March 31, 2026 | December 31, 2025 | September 30, 2025 | June 30, 2025 | |||||||||||||||||||||||||||
| Deposits by product: | ||||||||||||||||||||||||||||||||
| Noninterest-bearing demand deposits | $ | 6,420,746 | $ | 6,511,998 | $ | 6,744,082 | $ | 6,748,479 | $ | 5,453,890 | ||||||||||||||||||||||
| Interest-bearing: | ||||||||||||||||||||||||||||||||
| Interest-bearing demand deposits | 1,671,232 | 1,767,403 | 1,878,468 | 1,733,215 | 1,331,785 | |||||||||||||||||||||||||||
| Savings | 1,328,503 | 1,363,137 | 1,367,475 | 1,398,430 | 1,173,943 | |||||||||||||||||||||||||||
| Money market | 6,723,476 | 6,455,561 | 6,250,364 | 6,185,455 | 5,027,805 | |||||||||||||||||||||||||||
| Certificates of deposit | 1,945,480 | 2,144,670 | 2,784,608 | 3,387,240 | 981,440 | |||||||||||||||||||||||||||
| Total interest-bearing deposits | 11,668,691 | 11,730,771 | 12,280,915 | 12,704,340 | 8,514,973 | |||||||||||||||||||||||||||
| Total deposits | $ | 18,089,437 | $ | 18,242,769 | $ | 19,024,997 | $ | 19,452,819 | $ | 13,968,863 | ||||||||||||||||||||||
14
SUMMARY FINANCIAL DATA
| Quarter Ended | Six Months Ended | ||||||||||||||||||||||||||||
| June 30, 2026 | March 31, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | |||||||||||||||||||||||||
| Select performance ratios: | |||||||||||||||||||||||||||||
Return on average equity (1) | 8.48 | % | 6.25 | % | 7.15 | % | 7.35 | % | 7.37 | % | |||||||||||||||||||
Return on average tangible equity (1),(2) | 14.42 | % | 11.07 | % | 11.82 | % | 12.73 | % | 12.28 | % | |||||||||||||||||||
Return on average assets (1) | 1.09 | % | 0.82 | % | 1.03 | % | 0.95 | % | 1.06 | % | |||||||||||||||||||
Efficiency ratio | 61.9 | % | 65.2 | % | 60.8 | % | 63.6 | % | 60.3 | % | |||||||||||||||||||
Efficiency ratio (non-GAAP) (2) | 58.4 | % | 61.6 | % | 59.0 | % | 60.0 | % | 58.4 | % | |||||||||||||||||||
Net interest margin (1) | 3.62 | % | 3.61 | % | 3.44 | % | 3.61 | % | 3.44 | % | |||||||||||||||||||
| Cash dividends declared per share: | |||||||||||||||||||||||||||||
| Class A common stock | $ | 0.70 | $ | 0.40 | $ | — | $ | 1.10 | $ | — | |||||||||||||||||||
| Class B common stock | $ | 7.00 | $ | 4.00 | $ | — | $ | 11.00 | $ | — | |||||||||||||||||||
| As of | |||||||||||||||||||||||||||||
| June 30, 2026 | March 31, 2026 | December 31, 2025 | September 30, 2025 | June 30, 2025 | |||||||||||||||||||||||||
| Other data: | |||||||||||||||||||||||||||||
Book value per share (3) | $ | 12.15 | $ | 12.61 | $ | 12.93 | $ | 12.60 | $ | 11.96 | |||||||||||||||||||
Tangible book value per share (2), (3) | $ | 7.56 | $ | 7.53 | $ | 7.81 | $ | 7.79 | $ | 7.26 | |||||||||||||||||||
Common equity ratio (3) | 12.67 | % | 13.05 | % | 12.81 | % | 12.27 | % | 14.58 | % | |||||||||||||||||||
Tangible common equity ratio (2), (3) | 8.62 | % | 8.57 | % | 8.48 | % | 8.28 | % | 9.81 | % | |||||||||||||||||||
Loans to deposit ratio (3) | 75.05 | % | 75.93 | % | 74.52 | % | 74.99 | % | 66.15 | % | |||||||||||||||||||
| Full time equivalent employees | 1,756 | 1,890 | 1,921 | 2,036 | 1,303 | ||||||||||||||||||||||||
(1)Ratios are annualized.
(2)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.
(3)Prior period comparative disclosures for September 30, 2025 reflect the impact of adoption of ASU 2025-08.
15
NET INTEREST MARGIN
| Quarter Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| June 30, 2026 | March 31, 2026 | June 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 | $ | 459,729 | $ | 3,520 | 3.07 | % | $ | 549,799 | $ | 4,162 | 3.07 | % | $ | 1,390,355 | $ | 14,668 | 4.23 | % | ||||||||||||||||||||||||||||||||||||||
| Investment securities | 5,355,011 | 53,062 | 3.97 | % | 5,425,705 | 53,074 | 3.97 | % | 4,342,666 | 42,013 | 3.88 | % | ||||||||||||||||||||||||||||||||||||||||||||
Loans (2) | 13,694,264 | 178,170 | 5.22 | % | 14,002,665 | 181,190 | 5.25 | % | 9,337,910 | 120,116 | 5.16 | % | ||||||||||||||||||||||||||||||||||||||||||||
| FHLB stock and other investments | 147,538 | 3,190 | 8.67 | % | 146,776 | 3,510 | 9.70 | % | 103,468 | 1,356 | 5.26 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Total interest-earning assets | 19,656,542 | 237,942 | 4.86 | % | 20,124,945 | 241,936 | 4.88 | % | 15,174,399 | 178,153 | 4.71 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Noninterest-earning assets | 1,661,711 | 1,697,660 | 1,294,772 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total assets | $ | 21,318,253 | $ | 21,822,605 | $ | 16,469,171 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Liabilities and shareholders’ equity: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest-bearing deposits: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Demand deposits | $ | 1,707,751 | $ | 1,839 | 0.43 | % | $ | 1,804,524 | $ | 2,176 | 0.49 | % | $ | 1,344,397 | $ | 1,045 | 0.31 | % | ||||||||||||||||||||||||||||||||||||||
| Money market and savings | 7,900,995 | 42,287 | 2.15 | % | 7,740,958 | 39,060 | 2.05 | % | 6,231,772 | 40,956 | 2.64 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Certificates of deposit | 2,036,264 | 12,418 | 2.45 | % | 2,472,421 | 17,087 | 2.80 | % | 960,431 | 6,023 | 2.52 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Total | 11,645,010 | 56,544 | 1.95 | % | 12,017,903 | 58,323 | 1.97 | % | 8,536,600 | 48,024 | 2.26 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Borrowings: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Borrowings | 114,121 | 1,055 | 3.71 | % | 24,667 | 228 | 3.75 | % | 13 | — | 4.61 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Long-term debt | 129,369 | 3,171 | 9.83 | % | 170,987 | 4,340 | 10.29 | % | — | — | — | % | ||||||||||||||||||||||||||||||||||||||||||||
| Total interest-bearing liabilities | 11,888,500 | 60,770 | 2.05 | % | 12,213,557 | 62,891 | 2.09 | % | 8,536,613 | 48,024 | 2.26 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Noninterest-bearing liabilities: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Demand deposits (3) | 6,440,279 | 6,448,090 | 5,355,287 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other liabilities | 260,515 | 300,464 | 193,089 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total liabilities | 18,589,294 | 18,962,111 | 14,084,989 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shareholders’ equity | 2,728,959 | 2,860,494 | 2,384,182 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 21,318,253 | $ | 21,822,605 | $ | 16,469,171 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net interest income | $ | 177,172 | $ | 179,045 | $ | 130,129 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Net interest rate spread | 2.81 | % | 2.79 | % | 2.45 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Net interest margin | 3.62 | % | 3.61 | % | 3.44 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
(1)Ratios are annualized.
(2)Includes loans held for sale.
(3)Cost of all deposits, including noninterest-bearing demand deposits, was 1.25%, 1.28% and 1.39% for the quarters ended June 30, 2026, March 31, 2026 and June 30, 2025, respectively.
16
| Six Months Ended | |||||||||||||||||||||||||||||||||||
| June 30, 2026 | June 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 | $ | 504,515 | $ | 7,681 | 3.07 | % | $ | 1,064,256 | $ | 21,856 | 4.14 | % | |||||||||||||||||||||||
| Investment securities | 5,390,163 | 106,136 | 3.97 | % | 4,561,015 | 89,598 | 3.96 | % | |||||||||||||||||||||||||||
Loans (2) | 13,847,613 | 359,360 | 5.23 | % | 9,414,385 | 237,908 | 5.10 | % | |||||||||||||||||||||||||||
| FHLB stock and other investments | 147,159 | 6,701 | 9.18 | % | 102,355 | 2,376 | 4.68 | % | |||||||||||||||||||||||||||
| Total interest-earning assets | 19,889,450 | 479,878 | 4.87 | % | 15,142,011 | 351,738 | 4.68 | % | |||||||||||||||||||||||||||
| Noninterest-earning assets | 1,679,586 | 1,297,427 | |||||||||||||||||||||||||||||||||
| Total assets | $ | 21,569,036 | $ | 16,439,438 | |||||||||||||||||||||||||||||||
| Liabilities and shareholders’ equity: | |||||||||||||||||||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||||
| Interest-bearing deposits: | |||||||||||||||||||||||||||||||||||
| Demand deposits | $ | 1,755,870 | $ | 4,015 | 0.46 | % | $ | 1,373,563 | $ | 2,344 | 0.34 | % | |||||||||||||||||||||||
| Money market and savings | 7,821,419 | 81,347 | 2.10 | % | 6,142,341 | 79,096 | 2.60 | % | |||||||||||||||||||||||||||
| Certificates of deposit | 2,253,137 | 29,505 | 2.64 | % | 949,911 | 11,715 | 2.49 | % | |||||||||||||||||||||||||||
| Total | 11,830,426 | 114,867 | 1.96 | % | 8,465,815 | 93,155 | 2.22 | % | |||||||||||||||||||||||||||
| Borrowings: | |||||||||||||||||||||||||||||||||||
| Borrowings | 69,641 | 1,283 | 3.71 | % | 7 | — | 4.61 | % | |||||||||||||||||||||||||||
| Long-term debt | 150,064 | 7,511 | 10.09 | % | — | — | — | % | |||||||||||||||||||||||||||
| Total interest-bearing liabilities | 12,050,131 | 123,661 | 2.07 | % | 8,465,822 | 93,155 | 2.22 | % | |||||||||||||||||||||||||||
| Noninterest-bearing liabilities: | |||||||||||||||||||||||||||||||||||
Demand deposits (3) | 6,444,163 | 5,398,473 | |||||||||||||||||||||||||||||||||
| Other liabilities | 280,379 | 215,532 | |||||||||||||||||||||||||||||||||
| Total liabilities | 18,774,673 | 14,079,827 | |||||||||||||||||||||||||||||||||
| Shareholders’ equity | 2,794,363 | 2,359,611 | |||||||||||||||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 21,569,036 | $ | 16,439,438 | |||||||||||||||||||||||||||||||
Net interest income | $ | 356,217 | $ | 258,583 | |||||||||||||||||||||||||||||||
| Net interest spread | 2.80 | % | 2.47 | % | |||||||||||||||||||||||||||||||
| Net interest margin | 3.61 | % | 3.44 | % | |||||||||||||||||||||||||||||||
(1)Ratios are annualized.
(2)Includes loans held for sale.
(3)Cost of all deposits, including noninterest-bearing demand deposits, was 1.27% and 1.35% for the six months ended June 30, 2026 and 2025, respectively.
17
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS
This document contains non-GAAP financial measures of our financial performance, including 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, its 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 | Six Months Ended | ||||||||||||||||||||||||||||||||||||
| Return on Average Equity and Return on Average Tangible Equity | Ref. | June 30, 2026 | March 31, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | ||||||||||||||||||||||||||||||||
Net income | (a) | $ | 57,701 | $ | 44,090 | $ | 42,485 | $ | 101,791 | $ | 86,276 | |||||||||||||||||||||||||||
Add: intangibles amortization, net of tax (1) | 5,243 | 5,254 | 1,906 | 10,497 | 3,864 | |||||||||||||||||||||||||||||||||
| Net income, excluding the impact of intangible amortization, net of tax | (b) | $ | 62,944 | $ | 49,344 | $ | 44,391 | $ | 112,288 | $ | 90,140 | |||||||||||||||||||||||||||
| Average shareholders’ equity | (c) | $ | 2,728,959 | $ | 2,860,494 | $ | 2,384,182 | $ | 2,794,363 | $ | 2,359,611 | |||||||||||||||||||||||||||
| Less: average goodwill and other intangible assets | 978,184 | 1,052,479 | 878,190 | 1,015,126 | 879,494 | |||||||||||||||||||||||||||||||||
| Average tangible shareholders’ equity | (d) | $ | 1,750,775 | $ | 1,808,015 | $ | 1,505,992 | $ | 1,779,237 | $ | 1,480,117 | |||||||||||||||||||||||||||
Return on average equity (2) | (a) / (c) | 8.48 | % | 6.25 | % | 7.15 | % | 7.35 | % | 7.37 | % | |||||||||||||||||||||||||||
Return on average tangible equity (non-GAAP) (2) | (b) / (d) | 14.42 | % | 11.07 | % | 11.82 | % | 12.73 | % | 12.28 | % | |||||||||||||||||||||||||||
| Quarter Ended | Six Months Ended | |||||||||||||||||||||||||||||||||||||
| Efficiency Ratio | Ref. | June 30, 2026 | March 31, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | ||||||||||||||||||||||||||||||||
| Noninterest expense | (e) | $ | 124,473 | $ | 130,427 | $ | 91,080 | $ | 254,900 | $ | 176,718 | |||||||||||||||||||||||||||
| Less: intangibles amortization | 7,207 | 7,222 | 2,666 | 14,429 | 5,404 | |||||||||||||||||||||||||||||||||
| Noninterest expense, excluding the impact of intangible amortization | (f) | $ | 117,266 | $ | 123,205 | $ | 88,414 | $ | 240,471 | $ | 171,314 | |||||||||||||||||||||||||||
| Net interest income | (g) | $ | 177,172 | $ | 179,045 | $ | 130,129 | $ | 356,217 | $ | 258,583 | |||||||||||||||||||||||||||
| Noninterest income | (h) | $ | 23,796 | $ | 21,020 | $ | 19,625 | $ | 44,816 | $ | 34,606 | |||||||||||||||||||||||||||
| Efficiency ratio | (e) / (g+h) | 61.9 | % | 65.2 | % | 60.8 | % | 63.6 | % | 60.3 | % | |||||||||||||||||||||||||||
| Efficiency ratio (non-GAAP) | (f) / (g+h) | 58.4 | % | 61.6 | % | 59.0 | % | 60.0 | % | 58.4 | % | |||||||||||||||||||||||||||
(1)Estimated statutory tax rate of 27.25%, 27.25% and 28.50% for the quarters ended and June 30, 2026, March 31, 2026 and June 30, 2025, respectively and 27.25% and 28.50% for the six months ended June 30, 2026 and 2025, respectively.
(2)Ratios are annualized.
18
| (dollars in thousands, except per share amounts) | As of | |||||||||||||||||||||||||||||||||||||
Book Value per Share and Tangible Book Value per Share (3) | Ref. | June 30, 2026 | March 31, 2026 | December 31, 2025 | September 30, 2025 | June 30, 2025 | ||||||||||||||||||||||||||||||||
| Total shareholders’ equity | (i) | $ | 2,689,931 | $ | 2,791,392 | $ | 2,862,375 | $ | 2,787,249 | $ | 2,416,617 | |||||||||||||||||||||||||||
| Less: goodwill and other intangible assets | 941,211 | 1,048,574 | 1,055,796 | 986,569 | 876,614 | |||||||||||||||||||||||||||||||||
| Total tangible shareholders’ equity | (j) | $ | 1,748,720 | $ | 1,742,818 | $ | 1,806,579 | $ | 1,800,680 | $ | 1,540,003 | |||||||||||||||||||||||||||
| Common shares outstanding-Class A and B | (k) | 221,425,469 | 221,400,590 | 221,305,009 | 221,203,135 | 202,015,832 | ||||||||||||||||||||||||||||||||
| Common shares outstanding-Class A | 220,311,021 | 220,286,142 | 220,190,561 | 220,088,687 | 200,901,384 | |||||||||||||||||||||||||||||||||
| 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 (4) | (l) | 231,455,501 | 231,430,622 | 231,335,041 | 231,233,167 | 212,045,864 | ||||||||||||||||||||||||||||||||
| Book value per share | (i) / (k) | $ | 12.15 | $ | 12.61 | $ | 12.93 | $ | 12.60 | $ | 11.96 | |||||||||||||||||||||||||||
Tangible book value per share (non-GAAP) | (j) / (l) | $ | 7.56 | $ | 7.53 | $ | 7.81 | $ | 7.79 | $ | 7.26 | |||||||||||||||||||||||||||
| As of | ||||||||||||||||||||||||||||||||||||||
Common Equity Ratio and Tangible Common Equity Ratio (3) | Ref. | June 30, 2026 | March 31, 2026 | December 31, 2025 | September 30, 2025 | June 30, 2025 | ||||||||||||||||||||||||||||||||
| Total shareholders’ equity | (m) | $ | 2,689,931 | $ | 2,791,392 | $ | 2,862,375 | $ | 2,787,249 | $ | 2,416,617 | |||||||||||||||||||||||||||
| Less: goodwill and other intangible assets | 941,211 | 1,048,574 | 1,055,796 | 986,569 | 876,614 | |||||||||||||||||||||||||||||||||
| Total tangible shareholders’ equity | (n) | $ | 1,748,720 | $ | 1,742,818 | $ | 1,806,579 | $ | 1,800,680 | $ | 1,540,003 | |||||||||||||||||||||||||||
| Total assets | (o) | $ | 21,230,839 | $ | 21,388,955 | $ | 22,351,475 | $ | 22,721,935 | $ | 16,571,173 | |||||||||||||||||||||||||||
| Less: goodwill and other intangible assets | 941,211 | 1,048,574 | 1,055,796 | 986,569 | 876,614 | |||||||||||||||||||||||||||||||||
| Total tangible assets | (p) | $ | 20,289,628 | $ | 20,340,381 | $ | 21,295,679 | $ | 21,735,366 | $ | 15,694,559 | |||||||||||||||||||||||||||
| Common equity ratio | (m) / (o) | 12.67 | % | 13.05 | % | 12.81 | % | 12.27 | % | 14.58 | % | |||||||||||||||||||||||||||
Tangible common equity ratio (non-GAAP) | (n) / (p) | 8.62 | % | 8.57 | % | 8.48 | % | 8.28 | % | 9.81 | % | |||||||||||||||||||||||||||
(3)Prior period comparative disclosures for September 30, 2025 reflect the impact of adoption of ASU 2025-08.
(4)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.
19
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 Second Quarter Earnings Presentation July 29, 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 Equity, Return on Average Tangible Equity, Efficiency Ratio, Book Value and Tangible Book Value per Share and Common Equity Ratio 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. The estimates of fair value were recorded based on valuations as of the merger date. These estimates are considered preliminary as of June 30, 2026, are subject to change for up to one year after the merger date, and any changes could be material. 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 $57.7mm in Q2’26 ▪ Fully diluted EPS of $0.25, BVPS of $12.15 and TBVPS of $7.561 ▪ ROAA of 1.09% and ROATCE of 14.4%1 ▪ $0.70 per share of dividends paid in Q2’26 (Class A) and $1.10 per share of dividends paid YTD (Class A) ▪ Q2’26 had several non-core gains and expenses: ▪ ~$2.2mm of one-time non-interest income items: ▪ $1.8mm MSR valuation adjustment, $0.9mm DUS business line sale true-up and ($0.6mm) loss on sale of property ▪ ~$5.9mm of merger expenses, primarily severance ▪ $59.0mm of core net income (core ROAA of 1.11% and core ROATCE of 14.7%)1 ▪ Total assets of $21.2bn, total gross loans of $13.6bn, total deposits of $18.1bn and tangible common equity of $1.75bn1 ▪ Deposits decreased $153mm in Q2’26, with $199mm of the decline in higher-cost CDs; non-maturity deposits grew modestly, but with some mix shift out of non-interest-bearing ▪ Intangibles decreased $107mm, driven by DUS business line sale closing during the quarter ▪ 14.4% CET1 ratio and 8.7% Tier 1 Leverage ratio ▪ 0.6 basis points ($220k) of non-auto NCOs ▪ ACL equal to 1.12% of total loans; 2.57x ACL / NPAs ▪ 1.25% cost of deposits in Q2’26 and 1.28% spot cost at 6/30/26 ▪ 3.62% NIM in Q2’26 (1bp increase) with 75% L/D ratio ▪ 342% CRE concentration ratio at 6/30/2026; 97% ex MF Mechanics Bancorp 2nd Quarter 2026 Financial Highlights 4 1 Non-GAAP measure. Refer to section “Non-GAAP Financial Measures and Reconciliations” in the back of this presentation 2nd Quarter 2026 Financial Highlights Condensed Balance Sheet ($ in millions, except per share data) Q2 '26 Q1 '26 Q2 '25 Cash & Investments 6,007$ 5,780$ 6,033$ Net Loans, including HFS 13,429 13,700 9,172 Goodwill & Intangible Assets 941 1,049 877 Other Assets 854 860 490 Total Assets 21,231$ 21,389$ 16,571$ Total Deposits 18,089$ 18,243$ 13,969$ Long-Term Debt and Other Borrowings 210 129 - Other Liabilities 241 226 186 Total Shareholders' Equity 2,690 2,791 2,417 Total Liabilities & Equity 21,231$ 21,389$ 16,571$ Book value per share 12.15$ 12.61$ 11.96$ Tangible book value per share 1 7.56$ 7.53$ 7.26$ Condensed Income Statement (in thousands, except per share data) Q2 '26 Q1 '26 Q2 '25 Net Interest Income 177,173$ 179,045$ 130,128$ Provision / (Reversal of Provision) (2,767) 7,767 (369) Non-Interest Income 23,796 21,020 19,625 Non-Interest Expense 124,474 130,427 91,080 Pre-Tax Income 79,262$ 61,871$ 59,042$ Taxes 21,561 17,781 16,557 Net Income 57,701$ 44,090$ 42,485$ Diluted weighted-average shares outstanding * 221,338 221,203 200,953 Diluted earnings per share * 0.25$ 0.19$ 0.20$ * Class A Financial Ratios Q2 '26 Q1 '26 Q2 '25 ROAA 1.09% 0.82% 1.03% ROATCE 1 14.4% 11.1% 11.8% Net Interest Margin 3.62% 3.61% 3.44% Efficiency Ratio 1 58.4% 61.6% 59.0% Ending FTE 1,756 1,890 1,303 Loans to Deposits 75% 76% 66% ACL / Total Loans 1.12% 1.13% 0.74% Tier 1 Leverage Ratio 8.7% 8.7% 10.2%
97 22 45 215 163 54 197 103 52 228 191 138 205 192 183 70 97 131 0 32 96 51 63 80 Mechanics Bancorp Strategic Update 5 ➢ We substantially completed our HomeStreet merger integration during the second quarter ➢ A highly successful merger both financially and strategically, but a heavy operational lift across the enterprise and it’s good to get back to “business as usual” ➢ $5.9mm of merger expenses during the 2nd quarter, primarily due to severance as FTE declined from 1,890 to 1,756 ➢ Non-interest expense will continue to decline and we still expect ~$430mm run-rate NIE (ex. CDI amort.) by Q4 ➢ Legacy HomeStreet CD runoff continues, but we expect the pace of CD declines to slow and stabilize in the next two quarters; non-maturity deposit attrition remains minimal post core conversion ➢ The sale of our Fannie Mae DUS business line to Fifth Third closed in the second quarter for ~$126mm ➢ Strong earnings, deleveraging of the balance sheet post-merger and the successful DUS business line sale generated substantial capital in the first half of 2026, with $255mm, or $1.10 per share (Class A), in dividends paid so far this year ➢ In addition, we still have ~$100mm of excess capital above our 8.25% Tier 1 Leverage ratio target at 6/30 ➢ We expect to pay a ~$56mm dividend, or $0.25 per share (Class A), in Q3 and then a ~$75mm to ~$100mm dividend in Q4, subject to Board and regulatory approval ➢ We can also efficiently use the excess capital generated by a smaller, lower-risk balance sheet to enhance future earnings and expect to execute a modest restructuring of our remaining low-yielding AFS securities in Q3 ➢ Plan to sell ~$310mm of ~1.78% yield AFS securities and re-invest in MBS at current market rates (~5.50%), which will result in a ~$25mm after-tax loss in Q3 that will be earned back in 4-5 years ➢ The AFS restructure will improve our near-term NIM, but we expect that benefit to be somewhat offset over time by increased deposit pricing pressure and continued auto runoff (we continue to assume a flat forward rate environment) ➢ We will evaluate a sale of our remaining auto loans in the coming quarters and, if it happens, it will be at a modest loss ➢ We continue to expect a ~17-18% ROATCE and ~1.3-1.4% ROAA in 2027 and beyond
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 June 30, 2026, unless otherwise specified; market data as of 7/13/2026 1 Includes banks headquartered in California, Oregon and Washington with less than $250bn in total assets CoD: 1.25% U.S. banks: 1.76% #11 of 79 NIB: 35% U.S. banks: 25% #4 of 79 Dividend yield: ~7% U.S. banks: 3% #1 of 79 ROATCE: ~17% U.S. banks: 14.3% #9 of 79 As of MRQ: CET1: 14.4% U.S. banks: 12.3% #13 of 79 RWA / assets: 58% U.S. banks: 77% #2 of 79 $21.2bn Total assets 166 Branches #4 / #4 CA / West Coast market share by deposits1 Mechanics Bancorp Overview 6 2027E: 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 16% 38% 30% 6% 4% $13.6bn CRE C&I 1-4 Family Cons. / Other Auto 35% 46% 7% 11% $18.1bn Noninterest- bearing Interest-bearing transaction Savings Time Loans Multifamily C&D Deposits 3% 3% In runoff
97 22 45 215 163 54 197 103 52 228 191 138 205 192 183 70 97 131 0 32 96 51 63 80 4th Largest California and 4th Largest West Coast Bank by Deposits Top West Coast Headquartered Banks by Deposits Top California Headquartered Banks by Deposits Significant Scarcity Value in Desirable West Coast and California Markets $47.5 $21.8 $16.7 $15.3 $14.8 $9.7 $8.7 $5.7 $5.4 $5.2 $53.5 $49.7 $21.8 $19.0 $16.7 $15.7 $15.5 $14.0 $10.3 $8.7 Includes banks headquartered in California, Oregon and Washington with less than $250bn total assets; California, Oregon and Washington deposits shown Includes banks headquartered in California with less than $250bn total assets; California deposits shown 7Source: S&P Global Market Intelligence; Note: Deposit data as of June 30, 2025
97 22 45 215 163 54 197 103 52 228 191 138 205 192 183 70 97 131 0 32 96 51 63 80 Top 10 Deposit Share in Many Attractive West Coast Markets Top West Coast Markets Seattle San Francisco Los Angeles San Luis Obispo Santa Barbara Salinas Ventura Riverside El Centro Siskiyou county $3.8 | #10 $1.1 | #6 $3.2 | #9 $2.1 | #29 $1.5 | #2 $1.0 | #4 $0.8 | #17 $0.6 | #7 $0.4 | #1 $0.8 | #6 Top 10 10–20 >20 California and Washington are Especially Attractive Markets Deposits ($bn) | Rank California is the 2nd largest deposit market in the U.S. California and Washington are in top 10 states for household income¹: WA (#6): $105,600 CA (#5): $105,700 California and Washington are central hubs for leading technology, media and healthcare companies California and Washington are home to many exceptional universities and academic institutions California has the 5th largest economy in the world by GDP Seattle is one of the fastest growing large cities in the United States 8 Honolulu $0.6 | #1 Sacramento $0.4 | #18 Chico $0.4 | #9Bakersfield $0.3 | #8 Merced $0.3 | #5 Source: Public Policy Institute of California; S&P Global Market Intelligence; Note: Branch and deposit data as of June 30, 2025 ¹ Represents current median household income; excludes District of Columbia
97 22 45 215 163 54 197 103 52 228 191 138 205 192 183 70 97 131 0 32 96 51 63 80 49 144 144 130 115 115 112 112 166 166 4.6 13.3 13.5 15.7 16.8 15.5 14.3 13.9 18.0 18.1 0.1 1.4 1.1 0.7 1.5 $4.7 $14.7 $14.6 $16.3 $16.8 $15.5 $14.3 $13.9 $19.5 $18.1 0.25% 0.38% 0.36% 0.14% 0.04% 0.25% 1.04% 1.38% 1.45% 1.25% Pre- Rabo¹ Post- Rabo¹ Q4'19 Q4'20 Q4'21 Q4'22 Q4'23 Q4'24 Q3'25 Q2'26 9/2/2025: HMST acquisition closes 0.00% 2.00% 4.00% 6.00% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Exceptional Deposit Franchise ▪ One of the most attractive, high-quality deposit franchises in the U.S. ▪ Average account size of $43k and an average account tenure of 19 years ▪ Well-balanced mix of deposits (49% consumer, 43% commercial, 8% public) with no brokered deposits ▪ Prior to the HomeStreet acquisition, core deposits increased by over $0.6 billion (5%) since Rabobank deal despite closing 32 branches (22%) ▪ Following HomeStreet acquisition, $1.5 billion of “hot” CDs have run off, creating excess capital that can be deployed elsewhere ▪ Mechanics ranks as one of the top banks nationally² on cost of deposits and non-interest-bearing deposits (%) – #31 and #13 out of 245 banks, respectively ▪ Cumulative deposit beta meaningfully below the top quartile of KRX banks Core deposits Non-core deposits Cost of deposits 0.25% 0.10% 0.15% Fed Funds KRX³ cost of deposits Key Highlights of Mechanics’ Deposit Franchise Deposit Breakdown Since Rabobank Acquisition Deposit Costs and Non-interest-Bearing Balances Cost of Deposits in Current Rate Cycle $bn USD 2021 20232022 2024 3.75% 1.25% 1.85% Percentage Non-Interest-Bearing Deposits (MRQ)² Industry² Rank: 13 of 245 35% Cost of Deposits (MRQ)² 1.25% Industry² Rank: 31 of 245 Branches 8/31/2019: Rabobank acquisition closes 9 Source: FactSet, S&P Global Market Intelligence; Note: Financial data as of most recent quarter available; ¹ Pre-Rabo represents Q4’18, post-Rabo represents Q3’19; ² Includes U.S. publicly traded banks above $2bn in total assets; ³ Represents the Nasdaq Regional Banking Index; ⁴ Represents change in cost of deposits as percentage of change in Fed Funds target from December 31, 2021 to September 17, 2024 (525 bps) 2025 2026 Cost of deposits Cumulative Deposit Beta⁴ Beta 22% KRX Beta 32% 25th Percentile of Bank Cohort 26% 50th Percentile of Bank Cohort 32% 75th Percentile of Bank Cohort 38%
97 22 45 215 163 54 197 103 52 228 191 138 205 192 183 70 97 131 0 32 96 51 63 80 (0.05%) 0.00% 0.05% 0.10% 0.15% 0.20% 0.25% 0.30% 0.35% 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Consistently Superior Credit Quality Commercial banks 10 0.13% 0.01% Commercial NCOs / Average Loans Related to two legacy Rabobank N.A. loans (~$6mm) Mechanics’ loan portfolio has delivered consistently superior credit quality for the past decade Source: FactSet, S&P Global Market Intelligence; Note: Financial data as of most recent quarter available Related to legacy HomeStreet loans (~$7mm)
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 11 Exceptional funding base and enterprise efficiency results in leading performance and capital returns despite low-risk asset strategy 58% RWA / Assets of $10–100bn U.S. public banks Cost of Deposits of $10–100bn U.S. public banks Rank: #2 of 79 LOW-RISK ASSET STRATEGY LOW-COST DEPOSIT BASE 1.25% Rank: #11 of 79 17% 2027E ROATCE of $10–100bn U.S. public banks Rank: #9 of 79 SUPERIOR PROFITABILITY 7% 2027E Dividend Yield of $10–100bn U.S. public banks Rank: #1 of 79 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 7/13/2026
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) Leading profitability (~17% 2027E ROATCE) despite low-risk assets (58% 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 (~70% 2027E L/D, ~14% 2027E CET1) Capital efficient with market-leading dividend yield (~7% projected for 2027E) 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 $250bn total assets 12
Second Quarter 2026 Financial Drivers 26 13
Net Interest Income & Margin Average Earning Assets and NIM Trends 1 Key Highlights 14 Average Earning Assets Mix Trend ($ in billions) ➢ Q2‘26 net interest income decreased $1.9 million, or 1.0%, to $177.2 million from $179.0 million for Q1‘26 ➢ Net interest margin increased 1 bp during the second quarter, driven primarily by deliberate run off of high- cost CDs ➢ Q2’26 interest income included $13.2 million of discount accretion on the loans acquired in the HomeStreet acquisition (~$136 million of remaining discount on acquired HomeStreet loans at 6/30/2026) * 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 $15.2 $17.2 $20.7 $20.1 $19.7 3.44% 3.33% 3.50% 3.61% 3.62% Q2 '25 Q3 '25 Q4 '25 Q1 '26 Q2 '26 Average Earning Assets NIM 62% 64% 69% 70% 70% 29% 25% 25% 28% 28% 9% 11% 5% 3% 2% Q2 '25 Q3 '25 Q4 '25 Q1 '26 Q2 '26 Loans Investments Cash
Low-Yielding Legacy Earning Asset Re-Pricing Forecast 15 ➢ Legacy unmarked earning asset repricing remains a key driver of future net interest income growth as ~$4.8 billion of low-yielding, COVID-era assets (weighted average yield of 3.12%) run off and are reinvested at current market rates 2H '26 2027 2028 2029 2030 2031 2032 2033 & Later Total Principal Cash Flows HTM Securities $53 $101 $100 $115 $243 $221 $78 $373 $1,284 SFR Loans 63 123 129 131 118 113 110 858 1,647 Multifamily Loans 237 417 451 294 194 131 136 8 1,869 Total Principal Cash Flows $353 $641 $680 $541 $556 $465 $324 $1,239 $4,799 Cumulative Principal Cash Flows 353 994 1,674 2,215 2,770 3,236 3,560 4,799 4,799 Cumulative Principal Cash Flows / Total 7% 21% 35% 46% 58% 67% 74% 100% 100% Roll-Off Yields HTM Securities 1.74% 1.73% 1.70% 1.66% 1.35% 1.60% 1.68% 1.70% 1.62% SFR Loans 2.54% 2.81% 3.21% 3.42% 3.24% 3.37% 3.56% 3.71% 3.47% Multifamily Loans 4.30% 3.64% 3.58% 3.88% 3.83% 3.97% 4.41% 4.91% 3.85% Total Roll-Off Yields 3.61% 3.17% 3.24% 3.29% 2.62% 2.70% 3.46% 3.11% 3.12% Replacement Yields New Securities 5.50% 5.50% 5.50% 5.50% 5.50% 5.50% 5.50% 5.50% 5.50% New SFR Loans 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% New Multifamily Loans 5.80% 5.80% 5.80% 5.80% 5.80% 5.80% 5.80% 5.80% 5.80% Total Replacement Yields 5.79% 5.79% 5.79% 5.78% 5.71% 5.71% 5.80% 5.85% 5.79% Earnings Pickup Annual Run-Rate Pre-tax Income Pickup $7.7 $16.8 $17.4 $13.5 $17.2 $14.0 $7.6 $33.9 $128.0 Cumulative Annual Run-Rate Pre-tax Income Pickup $7.7 $24.5 $41.9 $55.4 $72.5 $86.5 $94.1 $128.0 $128.0 Tax Effect (@ 26.5%) 2.0 6.5 11.1 14.7 19.2 22.9 24.9 33.9 33.9 Cumulative Annual Run-Rate Net Income Pickup $5.7 $18.0 $30.8 $40.7 $53.3 $63.6 $69.1 $94.1 $94.1 Notes: Management estimates based on contractual cash flows and internal asset-liability modeling prepay assumptions. Multifamily loans assumed to re-finance at reset dates. Assumes static forward rate environment
Net Interest Income Analysis – Variable Assets / Deposits 16 ➢ 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 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 06/30/26 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 313,398 3.65% 953 3.15% 3.40% 3.65% 3.90% 4.15% (131) (65) - 65 131 Floating Rate Securities 873,105 4.79% 3,485 4.29% 4.54% 4.79% 5.04% 5.29% (364) (182) - 182 364 Floating Rate Loans 2,675,197 5.82% 12,984 5.32% 5.57% 5.82% 6.07% 6.32% (1,115) (557) - 557 1,115 Total Floating Assets 3,861,700 5.41% 17,422 4.91% 5.16% 5.41% 5.66% 5.91% (1,609) (805) - 805 1,609 Rate Sensitive Deposits 8,422,008 2.74% 19,230 2.40% 2.57% 2.74% 2.91% 3.09% (2,397) (1,189) - 1,189 2,397 Non-Rate Sensitive Deposits 9,667,429 0.01% 57 0.01% 0.01% 0.01% 0.01% 0.01% - - - - - Total Deposits 18,089,437 1.28% 19,287 1.12% 1.20% 1.28% 1.36% 1.44% (2,397) (1,189) - 1,189 2,397 Monthly Net Interest Income - Increase / (Decrease) 788 385 - (385) (788) Annual Net Interest Income - Increase / (Decrease) 9,452 4,620 - (4,620) (9,452)
Non-Interest Income Non-Interest Income Trend Non-Interest Income Mix (ex Bargain Purchase Gain) Key Highlights 17 ($ in millions) ➢ Q2’26 non-interest income increased $2.8 million, or 13%, to $23.8 million from $21.0 million in Q1’26 ➢ Q2’26 included $2.2 million of non-recurring income • $1.8mm MSR valuation adjustment • $0.9mm FNMA DUS true-up • ($0.6mm) loss on sale of property ➢ The remaining increase was driven by $0.4 million of higher trust fees and $0.5 million of greater bankcard royalty income, partially offset by $0.3 million of lower loan servicing income *Other includes income from bank-owned life insurance and other income $19.4 $23.4 $90.4 $55.1 $19.6 $109.8 $78.5 $21.0 $23.8 Q2 '25 Q3 '25 Q4 '25 Q1 '26 Q2 '26 Non-Interest Income Bargain Purchase Gain 28% 30% 27% 29% 25% 16% 16% 15% 15% 15% 1% 4% 8% 9% 7% 15% 18% 18% 19% 17% 39% 33% 32% 29% 36% Q2 '25 Q3 '25 Q4 '25 Q1 '26 Q2 '26 Deposit Charges Trust Fees Servicing Income ATM Network Fees Other
Non-Interest Expense Non-Interest Expense Trend 1, 2 Non-Interest Expense (ex Acquisition and Integration Costs) Key Highlights 18 ($ in millions) ➢ Q2’26 non-interest expense decreased $6.0 million, or 4.6%, to $124.5 million from $130.4 million in Q1’26 ➢ Merger-related costs during Q2‘26 were $5.9 million compared to $4.8 million in Q1’26, primarily comprised of merger-related severance ➢ Excluding merger-related costs, non-interest expense decreased $7.1 million during Q2’26 primarily due to staffing and core conversion synergies realized during the quarter ➢ Q2’26 Efficiency Ratio decreased to 58.4%, compared to 61.6% in Q1’26 ➢ $445 million of annualized core non-interest expense in Q2’26 (excluding CDI amortization) ➢ $7.2 million of CDI amortization in Q2’26 (reduces GAAP net income but increases regulatory capital) *Other includes FDIC assessments and regulatory fees, data processing, loan related, marketing and advertising, other real estate owned related and other expense $85.4 $99.5 $126.0 $125.6 $118.6 $5.6 $63.9 $3.5 $4.8 $5.9 $91.1 $163.3 $129.5 $130.4 $124.5 59.0% 62.6% 46.7% 61.6% 58.4% Q2 '25 Q3 '25 Q4 '25 Q1 '26 Q2 '26 Total NIE Acquisition and Integration Costs Non-Interest Expense, excl Acq Costs Efficiency Ratio 1 Efficiency Ratio is a Non-GAAP measure. Refer to section “Non-GAAP Financial Measures and Reconciliations” in the back of this presentation 2 Prior period comparative disclosure for the third and fourth quarter of 2025 have been adjusted to reflect the impact of the adoption of ASU 2025-08 56% 54% 54% 55% 53% 17% 17% 17% 18% 17% 7% 6% 5% 5% 6% 3% 4% 6% 6% 6% 17% 19% 17% 17% 17% Q2 '25 Q3 '25 Q4 '25 Q1 '26 Q2 '26 Salaries & Benefits Occupancy & Equipment Professional Services Amortization of Intangibles Other
Loan Portfolio Overview Loan Balance and Yield Trends 1 Quarter-over-Quarter Loan Metrics Key Highlights Quarter-over-Quarter Loan etrics 1 19 ($ in billions) ($ in millions) ➢ Q2‘26 loan interest income decreased $3.0 million, or 1.7%, to $178.2 million from $181.2 million in Q1‘26 ➢ Loan yields decreased 3 bps in Q2‘26, driven by slightly lower contractual yields from mix shift ➢ Multifamily and SFR loan yields decreased by 8 bps and 11 bps, respectively, due to lower discount accretion and lower contractual yields ➢ C&I yields increased as a result of $1 million of discount accretion recognized on a small subset of loans ➢ The Bank’s CRE concentration ratio decreased to 342% in Q2‘26 from 348% at the end of the Q1’26 ➢ The Bank originated $756 million of loan commitments predominantly in Construction, SFR and Other Consumer (Inclined – loans against the cash surrender value of whole life insurance policies) ➢ The Bank sold $32 million of loans during the quarter ($8 million of Multifamily DUS and $24 million of SFR) Q1 '26 Q2 '26 Balance Avg Yield Balance Avg Yield Loans HFS 5 4.97% 5 6.07% Commercial and Industrial 460 6.04% 440 7.08% Multifamily 5,292 5.03% 5,223 4.95% CRE Non-owner Occupied 1,712 5.00% 1,615 5.04% CRE Owner Occupied 587 5.65% 512 5.89% Construction and Land 400 6.82% 361 6.87% Residential Real Estate 4,017 5.08% 4,108 4.97% Auto 640 6.46% 510 6.47% Other Consumer 746 5.35% 807 5.37% Total Loans 13,857 5.25% 13,582 5.22% 9.2 14.6 14.2 13.9 13.6 9.3 11.0 14.4 14.0 13.7 5.16% 5.08% 5.34% 5.25% 5.22% Q2 '25 Q3 '25 Q4 '25 Q1 '26 Q2 '26 Loans Avg Loans Loan Yield 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
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 (54% of total multifamily) ▪ Average multifamily loan size of $4.0 million, with average LTV¹ of 56% and average DCR² of 1.55x ✓ Modest CRE concentrations in retail and office ▪ Average size of CRE retail and office loans are $3.3 and $1.9 million, respectively ▪ Average CRE retail LTV¹ of 49% and DCR² of 1.94x; average CRE office LTV¹ of 52% and DCR² of 1.72x ▪ CRE office decreased by $85 million in Q2’26 (13%) ✓ Total CRE3 of ~$7.3bn, with 71% in lower risk-profile multifamily loans ▪ CRE concentration of 342% as of June 30, 2026; 97% 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, ~$69 million at 06/30/26) ✓ 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: Q2’26C&I breakdown: Q2’26 CRE geography: Q2’26 20 Multifamily, 71% Retail, 9% Office, 8% Industrial, 7% Special Purpose, 3% Hotel, 2% Mixed use, 1% ~$7.3bn Note: Financial data as of June 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 Los Angeles, 32% Central Valley, 5% East Bay, 7% Central Coast, 7% San Diego, 5% Inland Empire, 7% South Bay, 5% North Bay, 2% Sacramento, 3% San Francisco, 2% Other States, 6% Orange, 4% Northern California, 2% ~$7.3bn Washington, 10% Retail, 5% Gov’t & Education, 5% Comm’l Serv, 2% Manufacture, 3% Utilities, 10% Real Estate Activities, 11% Equipment & Machinery, 5% Entertainment & Recreation, 9% Construction / Contractor, 22% Pharmaceuticals / Healthcare, 12% ~$0.4bn Oregon, 5% Other4, 16%
Asset Quality NCOs / Average Loans Loan Loss Reserves / NPAs NPAs / Assets Loan Loss Reserves / Loans HFI 21 * Ratios are annualized 3.54x 2.60x 2.96x 2.95x 2.57x Q2 '25 Q3 '25 Q4 '25 Q1 '26 Q2 '26 Loan Loss Reserves / NPAs 0.74% 1.16% 1.08% 1.13% 1.12% Q2 '25 Q3 '25 Q4 '25 Q1 '26 Q2 '26 Loan Loss Reserves / Loans HFI 0.31% 0.28% 0.15% 0.12% 0.09% 0.01% 0.04% 0.23% 0.01% 0.32% 0.32% 0.38% 0.12% 0.10% Q2 '25 Q3 '25 Q4 '25 Q1 '26 Q2 '26 Auto NCOs / Avg Loans Non-Auto NCOs / Avg Loans 0.06% 0.26% 0.21% 0.23% 0.26% 0.06% 0.02% 0.02% 0.02% 0.02% 0.12% 0.29% 0.23% 0.25% 0.28% Q2 '25 Q3 '25 Q4 '25 Q1 '26 Q2 '26 Non-Auto NPAs / Assets Auto NPAs / Assets
Securities Portfolio Securities Balance and Yield Trends Quarter-over-Quarter Loan Metrics Key Highlights Quarte -over-Quarte Securities Metrics 22 4.0 4.9 5.4 5.3 5.5 4.3 4.2 5.1 5.4 5.4 3.88% 3.76% 3.86% 3.97% 3.97% Q2 '25 Q3 '25 Q4 '25 Q1 '26 Q2 '26 Securities Avg Securities Securities Yield ($ in billions) ($ in millions) Q1 '26 Q2 '26 Balance Avg Yield Balance Avg Yield Agency MBS/CMO 3,797 4.08% 3,964 4.08% Agency CMBS 669 2.71% 664 2.62% Municipals 473 4.16% 476 4.21% Corporates 51 6.33% 45 6.58% CLOs 230 4.85% 231 5.08% Treasuries 70 3.78% 67 3.92% Agency Debentures 7 5.18% 6 5.23% Total Securities 5,297 3.97% 5,453 3.97% ➢ Q2‘26 securities interest income, yield and average balances were consistent with Q1’26 ➢ The ending securities portfolio increased $156 million during the quarter primarily due to additional agency MBS securities purchases.
Deposits Overview Deposit Balance and Cost Trends Quarter-over-Quarter Loan Metrics Key Highlights Quarter-over-Quarter Deposit Metrics 23 14.0 19.5 19.0 18.2 18.1 13.9 15.8 19.2 18.5 18.1 1.39% 1.45% 1.43% 1.28% 1.25% Q2 '25 Q3 '25 Q4 '25 Q1 '26 Q2 '26 Deposits Avg Deposits Deposits Rate ($ in billions) ($ in millions) ➢ Q2‘26 deposit interest expense decreased $1.8 million, or 3%, to $56.5 million from $58.3 million for Q1 ’26 ➢ Cost of deposits decreased 3 bps in Q2’26, driven primarily by the deliberate run off of high-cost Legacy HomeStreet time deposits ➢ Non-maturity deposits increased $46 million in Q2’26 driven by growth in money market deposits ➢ Deposit balances decreased $153 million during the second quarter, with $199 million of the decline in high-cost time deposits ➢ Spot cost of deposits at 6/30/2026 was 1.28% (see next page for a detailed stratification) Q1 '26 Q2 '26 Balance Avg Cost Balance Avg Cost Noninterest-bearing Demand 6,512 - 6,421 - Savings 1,363 0.03% 1,329 0.02% Interest-bearing Demand 1,767 0.49% 1,671 0.43% Money Market 6,456 2.48% 6,723 2.58% Time Deposits 2,145 2.80% 1,945 2.45% Total Deposits 18,243 1.28% 18,089 1.25%
97 22 45 215 163 54 197 103 52 228 191 138 205 192 183 70 97 131 0 32 96 51 63 80 Mechanics Bank Deposit Stratification at 6/30/2026 24Note: Financial data as of June 30, 2026; ¹ Represents spot rate as of June 30, 2026 Mechanics Bank Deposits ($ in millions, except account data) Segment Number of Accounts Deposit Balance ($) Deposit Balance (%) Avg Account Size ($) Relationship Weighted Age (yrs) Cost1 (%) Consumer 346,311 8,883 49% 25,650 19.9 1.23% Business 68,148 7,829 43% 114,878 16.2 1.11% Public 1,148 1,378 8% 1,200,310 28.5 2.56% Total 415,607 18,089 100% 43,525 19.0 1.28%
➢ Mechanics Bancorp’s capital ratios exceed minimums to be “well-capitalized” and meet all regulatory capital requirements and internal policy limits ➢ The sale of the DUS business line in Q2’26 significantly reduced risk-weighted assets, bolstering risk-based capital ratios ➢ Available liquidity totaled approximately $15.9 billion at 6/30/26, a decrease of $0.4 billion relative to 3/31/26 Capital and Liquidity Update Capital Ratios Trend (%) 1 Quarter-over-Quarter Loan Metrics Key Highlights Av ilable Funding Capacity Trend 25 ($ in billions) Q2 '25 Q3 '25 Q4 '25 Q1 '26 Q2 '26 Excess Reserves at FRB 1.9 1.2 0.8 0.3 0.3 FHLB, FRB & Other borrowing lines 10.6 13.2 15.8 15.4 15.3 Other Unencumbered Securities 0.7 0.4 0.4 0.6 0.3 Total 13.2$ 14.8$ 17.0$ 16.3$ 15.9$ 1 Regulatory capital ratios at June 30, 2026 are preliminary 10.2 10.3 8.7 8.7 8.7 18.3 13.4 14.1 13.9 14.4 19.1 15.6 16.3 16.2 16.7 Q2 '25 Q3 '25 Q4 '25 Q1 '26 Q2 '26 Tier 1 Leverage Tier 1 Risk-based Total Risk-based
Appendix 26 26
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 27 Collateral Type Balance % of Owner-occupied LTV1 Avg Size Total classified Non-owner classified Owner classified Total NPL Multifamily $5,223 0% 56% $4.0 $121 $121 $0 $2 Retail 648 6% 49% 3.3 13 12 1 0 Office 561 24% 52% 1.9 42 40 2 5 Industrial / Warehouse 487 40% 45% 2.0 3 3 0 0 Special Purpose 226 59% 42% 2.9 12 0 12 0 Hotel / Motel 131 0% 48% 4.7 14 14 0 0 Mixed Use 75 16% 42% 1.4 0 0 0 0 Total $7,351 7% 53% $3.4 $204 $189 $15 $7 Collateral Type Balance 2026 2025 2024 2023 2022 2021 2020 or earlier Multifamily $5,223 2% 1% 3% 8% 44% 23% 20% Retail 648 0% 2% 1% 1% 17% 6% 73% Office 561 0% 1% 1% 2% 22% 13% 62% Industrial / Warehouse 487 1% 5% 3% 3% 30% 11% 47% Special Purpose 226 2% 1% 0% 5% 31% 6% 55% Hotel / Motel 131 0% 0% 0% 10% 5% 22% 63% Mixed Use 75 0% 0% 0% 2% 15% 0% 82% Total $7,351 1% 1% 3% 7% 37% 19% 32% CRE by collateral ($mm) CRE by collateral and origination vintage ($mm) Source: Mechanics management; Note: Financial data as of June 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) 28 Collateral Type Multifamily Retail Office Industrial / Warehouse Special Purpose Hotel / Motel Mixed Use Total Collateral Type Multifamily Retail Office Industrial Special Purpose Hotel/Motel Mixed Use Total Greater than $20MM $638 $21 $45 $20 $41 $0 $0 $765 $10MM - $20MM 1,323 163 145 72 43 58 0 1,802 $5MM - $10MM 1,128 202 119 122 75 47 28 1,722 $1MM - $5MM 2,003 232 182 220 52 23 33 2,744 Less than $1MM 132 29 71 53 15 2 14 317 Total $5,223 $648 $561 $487 $226 $131 $75 $7,351 Count 1,296 199 289 247 77 28 55 2,191 Average size $4.0 $3.3 $1.9 $2.0 $2.9 $4.7 $1.4 $3.4 Source: Mechanics management; Note: Financial data as of June 30, 2026 1632 78 CRE by collateral and reset/maturity ($mm) 24% 44% 38% 26% $1,188 43 35 46 178 245 82 59% 52% 28% 36 $729 0 3 $1,331 CRE by loan size and collateral ($mm) Balance Balance maturing next 24 months First rate resets next 24 months Maturing & rate reset % of loans $5,223 648 561 487 226 131 75 $7,351 $79 21%
97 22 45 215 163 54 197 103 52 228 191 138 205 192 183 70 97 131 0 32 96 51 63 80 Non-GAAP Financial Measures and Reconciliations 29 1 Estimated statutory tax rate of 27.25% for quarters ended June 30, 2026, and March 31, 2026, and 28.5% for all other periods 2 Ratios are annualized Return on Average Equity and June 30, March 31, June 30, Return on Average Tangible Equity Ref 2026 2026 2025 Net Income (a) 57,701$ 44,090$ 42,485$ Add: intangibles amortization, net of tax 1 5,243 5,254 1,906 Net income, excluding the impact of intangible amortization, net of tax (b) 62,945$ 49,344$ 44,391$ Average Shareholders' Equity (c) 2,728,959$ 2,860,494$ 2,384,182$ Less: average goodwill and other intangible assets 978,184 1,052,479 878,191 Average tangible shareholders' equity (d) 1,750,775$ 1,808,015$ 1,505,992$ Return on average equity 2 (a)/(c) 8.5% 6.3% 7.1% Return on average tangible equity (non-GAAP) 2 (b)/(d) 14.4% 11.1% 11.8% Quarter Ended Return on Average Equity and Return on Average Tangible Equity ($ in thousands)
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) 30 Efficiency Ratio ($ 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 June 30, March 31, December 31, September 30, June 30, Efficiency Ratio 1 Ref 2026 2026 2025 2025 2025 Noninterest expense (e) 124,474$ 130,427$ 129,510$ 163,329$ 91,080$ Less: intangibles amortization 7,207 7,222 7,480 4,251 2,666 Noninterest expense, excluding the impact of intangible amortization (f) 117,266$ 123,206$ 122,031$ 159,078$ 88,414$ Net interest income (g) 177,173 179,045 182,982 144,154 130,128 Noninterest income (h) 23,796 21,020 78,520 109,779 19,625 Efficiency ratio (unadjusted) (e)/(g+h) 61.9% 65.2% 49.5% 64.3% 60.8% Efficiency ratio (non-GAAP) (f)/(g+h) 58.4% 61.6% 46.7% 62.6% 59.0% 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) 31 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. As of June 30, March 31, June 30, Book Value and Tangible Book Value Per Share Ref 2026 2026 2025 Total shareholders’ equity (i) 2,689,931$ 2,791,392$ 2,416,617$ Less: goodwill and other intangible assets 941,211 1,048,574 876,614 Total tangible shareholders’ equity (j) 1,748,720$ 1,742,818$ 1,540,004$ Common shares outstanding-Class A and B (k) 221,425,469 221,400,590 202,015,832 Common shares outstanding-Class A 220,311,021 220,286,142 200,901,384 Common shares outstanding-Class B-adjusted 11,144,480 11,144,480 11,144,480 Shares outstanding at period end-adjusted 1 (l) 231,455,501 231,430,622 212,045,864 Book value per share (i)/(k) 12.15$ 12.61$ 11.96$ Tangible book value per share (non-GAAP) (j)/(l) 7.56$ 7.53$ 7.26$ Book Value and Tangible Book Value Per Share ($ in thousands, except shares and per share data)
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 32 ($ in thousands) As of Common Equity Ratio and June 30, March 31, June 30, Tangible Common Equity Ratio Ref 2026 2026 2025 Total shareholders’ equity (m) 2,689,931$ 2,791,392$ 2,416,617$ Less: goodwill and other intangible assets 941,211 1,048,574 876,614 Total tangible shareholders’ equity (n) 1,748,720$ 1,742,818$ 1,540,004$ Total assets (o) 21,230,839$ 21,388,955$ 16,571,174$ Less: goodwill and other intangible assets 941,211 1,048,574 876,614 Total tangible assets (p) 20,289,628$ 20,340,382$ 15,694,561$ Common equity ratio (m)/(o) 12.67% 13.05% 14.58% Tangible common equity ratio (non-GAAP) (n)/(p) 8.62% 8.57% 9.81%
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 33 ($ in thousands) 1 $2.8mm provision release 2 $2.2mm non-core income 3 $5.9mm non-core merger expenses 4 Non-core adjustments and core net income reflect estimated FY 2026 book tax rate of 26.50% 5 Ratios are annualized As Non-Core Core Core Net Income Ref Reported Adjustments Net Income Net Interest Income before Provision 177,173$ -$ 177,173$ Provision / (Reversal of Provision) 1 (2,767) (2,767) - Net Interest Income After Provision 179,940 2,767 177,173 Non-Interest Income 2 23,796 2,184 21,611 Non-Interest Expense 3 124,474 5,923 118,551 Pre-Tax Income 79,262 (972) 80,234 Taxes 4 21,561 21,262 Net Income (a) 57,701$ 58,972$ Add: intangibles amortization, net of tax 5,243 5,243 Net income, excluding the impact of intangible amortization, net of tax (b) 62,945 64,215 Average Assets (c) 21,318,253 21,318,253 Average tangible shareholders' equity (d) 1,750,775 1,750,775 Return on average assets 5 (a)/(c) 1.09% 1.11% Return on average tangible equity (non-GAAP) 5 (b)/(d) 14.4% 14.7% Quarter Ended June 30, 2026