Mechanics Bancorp Reports Third Quarter 2026 Results

Company Release - 10/28/2026

WALNUT CREEK, Calif.--(BUSINESS WIRE)-- Mechanics Bancorp (Nasdaq: MCHB):

Third Quarter Highlights

$20.9 billion

Total Assets

$46.0 million

Net Income

14.73%

CET1 Ratio(1)

$11.59

Book Value Per Share

$7.05

Tangible Book Value Per Share(2)

Mechanics Bancorp (Nasdaq: MCHB) (“Mechanics” or the “Company”), the financial holding company of Mechanics Bank, today announced its financial results for the quarter ended September 30, 2026. Mechanics reported net income of $46.0 million, or $0.20 per diluted share(3), for the third quarter of 2026, compared to $57.7 million, or $0.25 per diluted share, for the second quarter of 2026. For the nine months ended September 30, 2026, Mechanics reported net income of $147.8 million, or $0.64 per diluted share, compared to $154.6 million, or $0.72 per diluted share, for the nine months ended September 30, 2025.(4)

Third Quarter 2026 Highlights:

  • Total assets of $20.9 billion at September 30, 2026, compared with $21.2 billion at June 30, 2026.
  • Total loans of $13.0 billion at September 30, 2026, compared with $13.6 billion at June 30, 2026.
  • Total deposits of $18.0 billion at September 30, 2026, compared with $18.1 billion at June 30, 2026, and noninterest-bearing deposits of $6.3 billion at September 30, 2026, compared with $6.4 billion at June 30, 2026.
  • Loans-to-deposits ratio of 72% at September 30, 2026, compared with 75% at June 30, 2026.
  • Total cost of deposits was 1.33% for the third quarter of 2026 and 1.25% for the second quarter of 2026.
  • Noninterest expense was $114.2 million for the third quarter of 2026, compared with $124.5 million for the second quarter of 2026, reflecting lower acquisition and integration costs and salaries and employee benefits expense.
  • Dividends paid in the third quarter of 2026 were $0.25 per share of Class A common stock and $2.50 per share of Class B common stock.
  • Strong capital ratios(1), including an estimated 16.98% Total risk-based capital ratio, 14.73% Tier 1 capital ratio, 14.73% CET1 capital ratio and 8.74% Tier 1 leverage ratio at September 30, 2026.
  • Allowance for credit losses (“ACL”) to total loans of 1.03%, down from 1.12% at the prior quarter-end.
  • Total delinquent loans decreased to $67.5 million, from $95.4 million at June 30, 2026, representing 0.52% of total loans at September 30, 2026, compared to 0.70% at June 30, 2026.
  • Completed the sale of $417 million of performing indirect auto loans, resulting in a $10.3 million loss on sale, as we further optimized the balance sheet by accelerating the exit from a non-core business line.
  • Completed a $308 million securities portfolio restructuring, selling low-yielding AFS securities and reinvesting the proceeds in MBS at then current market rates, resulting in a $32.3 million loss on sale.
  • Gain on other equity investments of $5.1 million for the third quarter of 2026 as a result of valuation updates.
  • Non-recurring acquisition and integration costs of $0.6 million for the third quarter of 2026, compared to $5.9 million in the prior quarter.

(1)

Regulatory capital ratios at September 30, 2026 are preliminary.

(2)

Non-GAAP measure. Refer to section “Non-GAAP Financial Measures and Reconciliations” below.

(3)

Unless otherwise specified, refers to diluted earnings per share for Class A common stock.

(4)

Mechanics’ financial results for the quarter and nine months ended September 30, 2025 were recast to reflect the adoption of ASU 2025-08. Refer to “Adoption of Purchased Seasoned Loans Accounting Standard” for additional discussion.

C.J. Johnson, President and CEO of Mechanics, said, “Our third quarter results reflect the continued execution of our strategic priorities. With the HomeStreet integration behind us, we move forward from a position of strength, focused on building long-term shareholder value through prudent growth and expense management, strong credit quality, and returning capital to shareholders via a market-leading dividend yield.”

Nathan Duda, CFO of Mechanics, added, “Third quarter financial results reflect our continued focus on balance sheet optimization and efficient capital deployment. During the quarter, we completed a $308 million securities portfolio restructuring, reinvesting the proceeds at significantly higher yields, and sold substantially all of our runoff auto loan portfolio, reducing servicing expenses going forward. Taken together, these actions further enhance our earnings profile and position us well for the future. At the same time, our credit performance remained strong, supported by a reduction in delinquent loans, disciplined underwriting practices and ongoing portfolio monitoring. Looking ahead, we remain focused on maintaining our credit discipline, prudent expense management, and preserving financial flexibility as we navigate a challenging interest rate environment.”

Presentation of Results – HomeStreet Bank Merger

On September 2, 2025, the merger of HomeStreet Bank, the wholly owned subsidiary of Mechanics Bancorp (formerly known as HomeStreet, Inc.) with and into Mechanics Bank, was completed. Mechanics Bank is the accounting acquirer (legal acquiree), HomeStreet Bank is the accounting acquiree and Mechanics Bancorp is the legal acquirer. Mechanics’ financial results for all periods ended prior to September 2, 2025 reflect Mechanics Bank’s historical financial results on a standalone basis and results of the combined company beginning September 2, 2025. In addition, for periods prior to September 2, 2025, the number of shares issued and outstanding, earnings per share, and all references to share quantities or metrics of Mechanics have been retrospectively restated to reflect the equivalent number of shares issued in the merger since the merger was accounted for as a reverse acquisition. As the accounting acquirer, Mechanics Bank remeasured the identifiable assets acquired and liabilities assumed in the merger as of September 2, 2025 at their acquisition date fair values.

Adoption of Purchased Seasoned Loans Accounting Standard

The Company early adopted Accounting Standards Update (“ASU”) 2025-08, “Financial Instruments–Credit Losses (Topic 326): Purchased Loans,” during the fourth quarter of 2025. This new standard, which the Company elected to early adopt as of January 1, 2025, requires acquired loans that meet certain criteria at acquisition (purchased seasoned loans) to be recognized at their purchase price plus the amount of the allowance for expected credit losses (gross-up approach). As a result, for purchased seasoned loans acquired in the HomeStreet merger, the Company established an allowance for credit losses of $20.3 million at the date of acquisition for these loans and reversed the provision for credit losses recorded in the third quarter of 2025, and recorded it as part of the acquired loans initial amortized cost basis. Required disclosures regarding the impact of the adoption were presented when the Company filed its annual report on Form 10-K for the year ended December 31, 2025. In addition, third quarter 2025 results will be retrospectively adjusted when the Company files its quarterly report on Form 10-Q for the quarter ended September 30, 2026.

The impact of the adoption is reflected in the comparative prior period results presented in this earnings release for the quarter and nine months ended September 30, 2025 and as of September 30, 2025.

INCOME STATEMENT HIGHLIGHTS

Summary Income Statement

Quarter Ended

Nine Months Ended

(in thousands)

September 30,
2026

June 30,
2026

September 30,
2025

September 30,
2026

September 30,
2025

Total interest income(1)

$

239,156

$

237,942

$

203,371

$

719,034

$

555,109

Total interest expense

64,254

60,770

59,218

187,915

152,373

Net interest income(1)

174,902

177,172

144,153

531,119

402,736

Provision (reversal of provision) for credit losses on loans(1)

(14,681

)

(904

)

25,806

(7,992

)

22,411

Provision (reversal of provision) for credit losses on unfunded lending commitments

(503

)

(1,863

)

960

(2,192

)

329

Total provision (reversal of provision) for credit losses(1)

(15,184

)

(2,767

)

26,766

(10,184

)

22,740

Net gain (loss) on sales of loans

(9,843

)

2,477

659

(6,223

)

659

Net gain (loss) on sales and calls of investment securities

(32,269

)

31

155

(32,186

)

4,292

Bargain purchase gain

2,871

—

90,363

2,871

90,363

Other noninterest income

25,807

21,288

18,601

66,920

49,070

Total noninterest income (loss)

(13,434

)

23,796

109,778

31,382

144,384

Acquisition and integration costs

559

5,923

63,869

11,276

69,858

Other noninterest expense

113,634

118,550

99,460

357,817

270,189

Total noninterest expense

114,193

124,473

163,329

369,093

340,047

Income before income tax expense (benefit)(1)

62,459

79,262

63,836

203,592

184,333

Income tax expense (benefit)(1)

16,467

21,561

(4,440

)

55,809

29,781

Net income(1)

$

45,992

$

57,701

$

68,276

$

147,783

$

154,552

(1)

Prior period comparative disclosures for the quarter and nine months ended September 30, 2025 reflect the impact of adoption of ASU 2025-08.

Net Interest Income

Third Quarter of 2026 vs. Second Quarter of 2026

Net interest income in the third quarter of 2026 was $2.3 million lower than the second quarter of 2026 primarily as a result of higher deposit costs and a $133.1 million decrease in average interest earning assets. Mechanics’ net interest margin decreased from 3.62% to 3.55% primarily due to higher deposit costs, partially offset by higher investment securities interest income from the partial quarter benefit of the AFS securities restructuring.

Nine Months Ended September 30, 2026 vs. Nine Months Ended September 30, 2025

Net interest income for the nine months ended September 30, 2026 increased $128.4 million as compared to the nine months ended September 30, 2025 due primarily to an increase of $3.9 billion in average interest-earning assets, as well as an increase in net interest margin from 3.40% in the nine months ended September 30, 2025 to 3.59% in the nine months ended September 30, 2026, as a result of the HomeStreet merger.

Provision for Credit Losses

Third Quarter of 2026 vs. Second Quarter of 2026

The reversal of provision for credit losses in the third quarter of 2026, which consists of the provision for loans and unfunded commitments, was $15.2 million, compared to a reversal of provision of $2.8 million for the second quarter of 2026. The reversal of provision for the third quarter was primarily driven by decreases in expected losses on our multifamily and CRE investor loans, corresponding decreases in qualitative factors and the auto loan portfolio sale.

Nine Months Ended September 30, 2026 vs. Nine Months Ended September 30, 2025

The reversal of provision for credit losses was $10.2 million for the nine months ended September 30, 2026, compared to a provision of $22.7 million for the nine months ended September 30, 2025. The decrease in provision for the nine months ended September 30, 2026 was driven primarily by the auto portfolio sale, lower qualitative adjustments, lower balances and lower unfunded commitments reserves.

Noninterest Income (Loss)

Third Quarter of 2026 vs. Second Quarter of 2026

Noninterest income (loss) in the third quarter of 2026 decreased $37.2 million from the second quarter of 2026 primarily due to the losses on the sales of auto loans and AFS securities during the quarter, partially offset by the increase in other noninterest income from a gain on other equity investments. In addition, noninterest income decreased in the third quarter of 2026 relative to the second quarter of 2026 due to the gain on sale of the Fannie Mae Multifamily Delegated Underwriting and Servicing (“DUS®”) business line in other noninterest income and a mortgage servicing rights valuation adjustment in net gain (loss) on sales of loans in the prior quarter.

Nine Months Ended September 30, 2026 vs. Nine Months Ended September 30, 2025

Noninterest income for the nine months ended September 30, 2026 decreased $113.0 million from the nine months ended September 30, 2025 primarily due to the losses on the sales of auto loans and AFS securities during 2026 and the bargain purchase gain from the HomeStreet merger recognized in 2025. The decrease was partially offset by an increase in noninterest income that resulted from a gain on other equity investments and gain on sale of the DUS business line in other noninterest income and a mortgage servicing rights valuation adjustment in net gain (loss) on sales of loans in 2026.

Noninterest Expense

Third Quarter of 2026 vs. Second Quarter of 2026

Noninterest expense decreased $10.3 million in the third quarter of 2026 compared to the second quarter of 2026, primarily due to lower acquisition and integration related costs, and lower salaries and employee benefits expense due to headcount reductions as a result of continued integration following the HomeStreet merger.

Nine Months Ended September 30, 2026 vs. Nine Months Ended September 30, 2025

Noninterest expense increased $29.0 million for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 primarily due to higher salaries and employee benefits expense, occupancy costs, equipment expense, and amortization of intangibles, partially offset by lower acquisition and integration related costs from the HomeStreet merger.

Income Taxes

Third Quarter of 2026 vs. Second Quarter of 2026

Our effective tax rate during the third quarter of 2026 was 26.4% as compared to 27.2% in the second quarter of 2026 and our federal statutory rate was 21.0%. The effective tax rate decreased compared to the prior quarter as a result of tax benefits related to stock awards that vested in the third quarter.

Nine Months Ended September 30, 2026 vs. Nine Months Ended September 30, 2025

Our effective tax rate for the nine months ended September 30, 2026 was 27.4% as compared to 16.2% for the nine months ended September 30, 2025 and our federal statutory rate was 21.0%. The effective tax rate increased compared to the nine months ended September 30, 2025 as a result of a non-taxable $90.4 million bargain purchase gain from the HomeStreet merger in 2025 and a $1.7 million remeasurement of deferred tax assets in 2026.

BALANCE SHEET HIGHLIGHTS

Selected Balance Sheet Items

(in thousands)

September 30,
2026

June 30,
2026

March 31,
2026

December 31,
2025

September 30,
2025

Cash and cash equivalents

$

602,455

$

553,915

$

483,513

$

1,029,983

$

1,442,647

Trading securities

46,099

46,595

49,463

49,518

50,357

Securities available-for-sale

4,292,236

4,119,215

3,933,705

3,993,385

3,490,478

Securities held-to-maturity

1,259,501

1,286,813

1,313,520

1,336,632

1,363,636

Loans held for investment (before ACL)(1)

13,012,998

13,576,196

13,852,209

14,176,936

14,587,530

Total assets(1)

20,944,704

21,230,839

21,388,955

22,351,475

22,721,935

Noninterest-bearing demand deposits

$

6,297,519

$

6,420,746

$

6,511,998

$

6,744,082

$

6,748,479

Total deposits

18,019,474

18,089,437

18,242,769

19,024,997

19,452,819

Borrowings

—

80,000

—

—

—

Long-term debt

131,992

130,420

128,815

192,014

190,123

Total liabilities

18,377,218

18,540,908

18,597,563

19,489,100

19,934,686

Total shareholders’ equity(1)

2,567,486

2,689,931

2,791,392

2,862,375

2,787,249

(1)

Prior period comparative disclosures for September 30, 2025 reflect the impact of adoption of ASU 2025-08.

Investment Securities

Trading securities totaled $46.1 million and $46.6 million at September 30, 2026 and June 30, 2026. Securities available-for-sale increased by $173.0 million during the third quarter of 2026 to $4.3 billion at September 30, 2026, primarily due to purchases, partially offset by sales and paydowns during the quarter. The Company performed a restructuring of the balance sheet through the sale of low-yielding AFS securities and reinvestment in MBS at then current market rates near the end of July 2026. Securities held-to-maturity decreased by $27.3 million in the third quarter of 2026, primarily due to paydowns, and totaled $1.3 billion at September 30, 2026.

Loans

Total loans at September 30, 2026 were $13.0 billion, a decrease of $563.2 million from $13.6 billion at June 30, 2026, due primarily to the sale of auto loans and loan repayments during the quarter, partially offset by originations and advances.

Deposits

Total deposits decreased by $70.0 million during the third quarter of 2026 to $18.0 billion at September 30, 2026. The decrease was due to the runoff of $66.1 million of certificates of deposit and a $3.9 million decrease in core deposits.

Noninterest-bearing demand deposits totaled $6.3 billion and represented 35% of total deposits at September 30, 2026, compared to $6.4 billion, or 35% of total deposits, at June 30, 2026.

Borrowings

Total borrowings were zero at September 30, 2026, compared to $80.0 million at June 30, 2026. The decrease was due to payoff of short-term Federal Reserve Discount Window borrowings during the third quarter.

Equity

During the third quarter of 2026, total shareholders’ equity decreased by $122.4 million to $2.6 billion and tangible common equity (1) decreased by $115.5 million to $1.6 billion. The decrease in total shareholders’ equity for the third quarter of 2026 primarily resulted from a net decrease in retained earnings from net income, less dividends paid to common shareholders, and an increase in accumulated other comprehensive loss due to changes in fair value of securities available for sale from higher interest rates.

At September 30, 2026, book value per common share decreased to $11.59, compared to $12.15 at June 30, 2026. At September 30, 2026, tangible book value per common share (1) decreased to $7.05, compared to $7.56 at June 30, 2026.

(1)

Non-GAAP measure. Refer to section “Non-GAAP Financial Measures and Reconciliations” below.

CAPITAL AND LIQUIDITY

Capital ratios remain strong with Total risk-based capital ratio at 16.98% and a Tier 1 leverage ratio of 8.74% at September 30, 2026. The following table presents our regulatory capital ratios as of the dates indicated:

September 30,
2026

June 30,
2026

March 31,
2026

December 31,
2025

September 30,
2025

Mechanics Bancorp(1)

Tier 1 leverage capital (to average assets)

8.74 %

8.71 %

8.66 %

8.65 %

10.34 %

Common equity Tier 1 capital (to risk-weighted assets)

14.73 %

14.39 %

13.92 %

14.09 %

13.42 %

Tier 1 risk-based capital (to risk-weighted assets)

14.73 %

14.39 %

13.92 %

14.09 %

13.42 %

Total risk-based capital (to risk-weighted assets)

16.98 %

16.70 %

16.16 %

16.27 %

15.57 %

Mechanics Bank(1)

Tier 1 leverage capital (to average assets)

9.37 %

9.38 %

9.31 %

9.58 %

11.46 %

Common equity Tier 1 capital (to risk-weighted assets)

15.81 %

15.48 %

14.96 %

15.59 %

14.87 %

Tier 1 risk-based capital (to risk-weighted assets)

15.81 %

15.48 %

14.96 %

15.59 %

14.87 %

Total risk-based capital (to risk-weighted assets)

16.96 %

16.74 %

16.21 %

16.81 %

16.13 %

(1)

Regulatory capital ratios at September 30, 2026 are preliminary.

At September 30, 2026, Mechanics had available borrowing capacity of $5.8 billion from the FHLB, $4.2 billion from the Federal Reserve and $5.0 billion under borrowing lines established with other financial institutions.

CREDIT QUALITY

Asset Quality Information and Ratios

(dollars in thousands)

September 30,
2026

June 30,
2026

March 31,
2026

December 31,
2025

September 30,
2025

Delinquent loans held for investment:

30-89 days past due(1)

$

25,936

$

54,529

$

43,556

$

58,459

$

55,899

90+ days past due

41,594

40,888

33,447

34,686

38,316

Total delinquent loans

$

67,530

$

95,417

$

77,003

$

93,145

$

94,215

Total delinquent loans to loans held for investment

0.52

%

0.70

%

0.56

%

0.66

%

0.65

%

Nonperforming assets:

Nonaccrual loans

$

49,014

$

48,557

$

44,379

$

42,863

$

60,586

90+ days past due and accruing

5,569

6,543

4,098

3,943

2,653

Total nonperforming loans

54,583

55,100

48,477

46,806

63,239

Foreclosed assets

5,081

4,262

4,658

4,990

1,675

Total nonperforming assets

$

59,664

$

59,362

$

53,135

$

51,796

$

64,914

Allowance for credit losses on loans

$

133,621

$

152,601

$

156,796

$

153,319

$

168,959

Allowance for credit losses on loans to total loans held for investment

1.03

%

1.12

%

1.13

%

1.08

%

1.16

%

Allowance for credit losses on loans to nonaccrual loans

272.62

%

314.27

%

353.31

%

357.70

%

278.88

%

Nonaccrual loans to total loans held for investment

0.38

%

0.36

%

0.32

%

0.30

%

0.42

%

Nonperforming assets to total assets

0.28

%

0.28

%

0.25

%

0.23

%

0.29

%

(1)

Prior period comparative disclosures for September 30, 2025 reflect the impact of adoption of ASU 2025-08.

At September 30, 2026, total delinquent loans were $67.5 million, compared to $95.4 million at June 30, 2026. The decrease was primarily due to the auto portfolio sale and two matured commercial real estate loans that were extended and brought current during the quarter. Total delinquent loans as a percentage of total loans were 0.52% at September 30, 2026, as compared to 0.70% at June 30, 2026.

At September 30, 2026, nonperforming assets were $59.7 million, compared to $59.4 million at June 30, 2026. Nonperforming assets as a percentage of total assets was 0.28% at both September 30, 2026 and June 30, 2026.

Allowance for Credit Losses

Quarter Ended

Nine Months Ended

(dollars in thousands)

September 30,
2026

June 30,
2026

September 30,
2025

September 30,
2026

September 30,
2025

Allowance for credit losses on loans:

Beginning balance

$

152,601

$

156,796

$

68,334

$

153,319

$

88,558

Initial allowance on acquired purchased credit deteriorated loans

—

—

63,494

—

63,494

Initial allowance on acquired purchased seasoned loans(1)

—

—

20,252

—

20,252

Provision (reversal of provision) for credit losses

(14,681

)

(904

)

25,806

(7,992

)

22,411

Loans charged off

(6,139

)

(6,308

)

(12,803

)

(19,652

)

(34,969

)

Recoveries

1,840

3,017

3,876

7,946

9,213

Ending balance

$

133,621

$

152,601

$

168,959

$

133,621

$

168,959

Allowance for credit losses on unfunded lending commitments:

Beginning balance

$

5,426

$

7,289

$

3,735

$

7,115

$

4,366

Initial allowance for credit losses

—

—

3,736

—

3,736

Provision (reversal of provision) for credit losses

(503

)

(1,863

)

960

(2,192

)

329

Ending balance

$

4,923

$

5,426

$

8,431

$

4,923

$

8,431

Net charge-offs to average loans(2)

0.13

%

0.10

%

0.32

%

0.11

%

0.35

%

(1)

The Company early adopted ASU 2025-08 in the fourth quarter of 2025. As a result, for purchased seasoned loans acquired in the HomeStreet merger, the Company established an allowance for credit losses of $20.3 million at the date of acquisition for these loans.

(2)

Ratios are annualized.

The allowance for credit losses on loans totaled $133.6 million, or 1.03% of total loans at September 30, 2026, compared to $152.6 million, or 1.12% of total loans at June 30, 2026. The decrease in allowance was primarily the result of lower expected losses on multifamily and CRE investor loans, corresponding decreases in qualitative factors and the auto portfolio sale.

Conference Call

The Company will host a conference call and webcast to discuss its third quarter 2026 financial results at 11:00 a.m. Eastern Time (ET) on Thursday, October 29, 2026. Investors and analysts interested in participating in the call are invited to dial 1-833-461-5787 (international callers please dial 1-585-542-9983) approximately 10 minutes prior to the start of the call. The pin to access the call is 210985311. A live audio webcast of the conference call will be available on the Company’s website at https://ir.mechanicsbank.com. The earnings presentation for the call will also be available on the Company’s Investor Relations website prior to the call.

A replay of the conference call will be available within two hours of the conclusion of the call and can be accessed through the News & Events tab of the Company’s website as well as through the webcast link: https://events.q4inc.com/attendee/210985311.

About Mechanics Bancorp

Mechanics Bancorp is headquartered in Walnut Creek, Calif., and is the financial holding company of Mechanics Bank, a full-service, FDIC-insured bank with $20.9 billion in assets as of September 30, 2026, and 166 branches across California, Oregon, Washington and Hawaii. Founded in 1905 to help families, businesses and communities prosper, Mechanics Bank offers a wide range of products and services in consumer and business banking, commercial lending, cash management services, private banking, and comprehensive wealth management and trust services.

To learn more, visit www.MechanicsBank.com.

Cautionary Note

The information contained herein is preliminary and based on Company data available at the time of this earnings release. It speaks only as of the particular date or dates included in the earnings release. Except as required by law, Mechanics does not undertake an obligation to, and disclaims any duty to, update any of the information herein.

Forward-Looking Statements

This earnings release, including information incorporated by reference herein, contains, and future oral and written statements of the Company and its management may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”). All statements, other than statements of historical fact, contained or incorporated by reference in this earnings release, including statements regarding our plans, objectives, expectations, strategies, beliefs, or future performance or events, are forward-looking statements. Generally, forward-looking statements include the words “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “look,” “may,” “optimistic,” “plan,” “potential,” “projection,” “should,” “will,” and “would” and similar expressions (or the negative of these terms), although not all forward-looking statements contain these identifying words. Forward-looking statements involve known and unknown risks, uncertainties, assumptions, estimates, and other important factors that could cause actual results to differ materially from any results, performance or events expressed or implied by such forward-looking statements. Furthermore, the following factors, among others, may cause actual results to differ materially from current expectations in the forward-looking statements, including those set forth in this earnings release:

  • substantial non-recurring and integration costs, which may be greater than anticipated due to unexpected events;
  • failure to realize the anticipated benefits of the HomeStreet merger;
  • our ability to effectively manage our expanded operations;
  • negative developments and events impacting the financial services industry;
  • the soundness of other financial institutions;
  • our ability to maintain sufficient liquidity, or an increase in the cost of liquidity;
  • unpredictable economic, market and business conditions;
  • interest rate risk, and fluctuations in interest rates;
  • inflationary pressures and rising prices;
  • adverse changes in real estate market values;
  • the impact of climate change, including indirectly through impacts on our customers;
  • the adequacy of our allowances for credit losses for loans and debt securities;
  • incurring losses in our loan portfolio despite strict adherence to our underwriting practices;
  • fluctuations in our mortgage origination business based upon seasonal and other factors;
  • our geographic concentration, which may magnify the adverse effects and consequences of any regional or local economic downturn;
  • the accuracy of independent appraisals to determine the value of the real estate that secures a substantial portion of our loans;
  • the ability of our small- to medium-sized borrowers to weather adverse business developments;
  • our ability to fully identify and mitigate exposure to the various risks that we face, including interest rate, credit, liquidity and market risk;
  • our ability to mitigate our exposure to interest rate risk;
  • negative publicity regarding us, or financial institutions in general;
  • environmental liability risk associated with our lending activities;
  • our ability to manage risks associated with new lines of business, products, product enhancements and services;
  • our ability to adapt our services to changes in the marketplace related to mortgage servicing or origination, technology or in changes in the requirements of governmental authorities and customers;
  • our ability to develop, implement and maintain an effective system of internal control over financial reporting;
  • the potential that we may identify material weaknesses in our internal control over financial reporting in the future, which may result in material misstatements of our financial statements;
  • the potential that we may write off goodwill and other intangible assets resulting from business combinations;
  • dependence on our management team;
  • exposure to fraudulent and negligent acts by our customers and the parties they do business with, as well as from employees, contractors and vendors;
  • legal claims and litigation, including potential securities law liabilities;
  • employee class action lawsuits or other legal proceedings;
  • our ability to raise additional capital, if needed;
  • competition from other financial institutions and financial service companies;
  • regulatory restrictions that may delay, impede or prohibit our ability to consider certain acquisitions and opportunities;
  • extensive supervision and regulation that could restrict our activities and impose financial requirements or limitations on the conduct of our business and limit our ability to generate income;
  • our ability to comply with stringent capital requirements;
  • the impact of federal and state regulators’ examination of our business;
  • our ability to comply with the Bank Secrecy Act and other anti-money laundering statutes and regulations;
  • our reliance on dividends from Mechanics Bank;
  • our ability to raise debt or capital to pay off our debts upon maturity;
  • our level of indebtedness following the completion of the HomeStreet merger;
  • increasing and continually evolving cybersecurity and other technological risks;
  • our ability to adapt to rapid technological change;
  • our ability to effectively implement new technological solutions or enhancements to existing systems or platforms;
  • our ability to manage risks and challenges relating to the development and use of artificial intelligence;
  • our dependence on our computer and communications systems;
  • our ability to effectively manage and aggregate data;
  • Ford Financial Funds and their controlled affiliates control approximately 77% of the voting power of Mechanics Bancorp, and have the ability to elect all of our directors and control most other matters submitted to our shareholders for approval;
  • we are a “controlled company” within the meaning of the rules of Nasdaq and, as a result, we qualify for, and rely on, exemptions from certain corporate governance standards;
  • future sales of shares by existing shareholders could cause our stock price to decline;
  • our reliance on certain entities affiliated with the Ford Financial Funds for services;
  • reduced disclosure requirements as a smaller reporting company; and
  • certain of our shareholders have registration rights, the exercise of which could adversely affect the trading price of our common stock.

A discussion of the factors, risks and uncertainties that could affect our financial results, business goals and operational and financial objectives is also contained in Item 1A “Risk Factors” included in our 2025 Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission (the “SEC”). We strongly recommend readers review those disclosures in conjunction with the discussions herein. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, and should not be relied upon as a prediction of actual results or future events.

Forward-looking statements in this earnings release are based on management’s expectations at the time such statements are made and speak only as of the date made. We do not assume any obligation or undertake to update any forward-looking statements after the date of this earnings release as a result of new information, future events or developments, except as required by federal securities or other applicable laws, although we may do so from time to time.

All future written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to above. New risks and uncertainties arise from time to time, and factors that we currently deem immaterial may become material, and it is impossible for us to predict these events or how they may affect us.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(dollars in thousands)

September 30,
2026

June 30,
2026

March 31,
2026

December 31,
2025

September 30,
2025

ASSETS

Cash and cash equivalents

$

602,455

$

553,915

$

483,513

$

1,029,983

$

1,442,647

Trading securities

46,099

46,595

49,463

49,518

50,357

Securities available-for-sale

4,292,236

4,119,215

3,933,705

3,993,385

3,490,478

Securities held-to-maturity

1,259,501

1,286,813

1,313,520

1,336,632

1,363,636

Loans held for sale

7,737

5,345

4,692

5,967

54,985

Loan receivables (1)

13,012,998

13,576,196

13,852,209

14,176,936

14,587,530

Allowance for credit losses on loans

(133,621

)

(152,601

)

(156,796

)

(153,319

)

(168,959

)

Net loan receivables(1)

12,879,377

13,423,595

13,695,413

14,023,617

14,418,571

Mortgage servicing rights

60,971

59,142

84,000

85,832

88,595

Other real estate owned

5,081

4,262

4,658

4,990

1,675

Federal Home Loan Bank stock, at cost

17,283

17,287

17,289

17,292

17,294

Premises and equipment, net

141,068

141,615

143,157

143,895

143,917

Bank-owned life insurance

173,809

172,980

171,674

170,339

169,163

Goodwill

843,305

843,305

843,305

843,305

843,305

Other intangible assets, net

90,937

97,906

205,269

212,491

143,264

Right-of-use asset

75,210

74,623

78,046

82,076

85,657

Interest receivable and other assets (1)

449,635

384,241

361,251

352,153

408,391

TOTAL ASSETS (1)

$

20,944,704

$

21,230,839

$

21,388,955

$

22,351,475

$

22,721,935

LIABILITIES AND SHAREHOLDERS’ EQUITY

LIABILITIES

Noninterest-bearing demand deposits

$

6,297,519

$

6,420,746

$

6,511,998

$

6,744,082

$

6,748,479

Interest-bearing transaction accounts

8,537,615

8,394,708

8,222,964

8,128,832

7,918,670

Savings and time deposits

3,184,340

3,273,983

3,507,807

4,152,083

4,785,670

Total deposits

18,019,474

18,089,437

18,242,769

19,024,997

19,452,819

Borrowings

—

80,000

—

—

—

Long-term debt

131,992

130,420

128,815

192,014

190,123

Operating lease liability

78,289

78,174

82,403

86,794

90,796

Interest payable and other liabilities

147,463

162,877

143,576

185,295

200,948

TOTAL LIABILITIES

18,377,218

18,540,908

18,597,563

19,489,100

19,934,686

SHAREHOLDERS’ EQUITY

Common stock

2,406,270

2,404,941

2,402,968

2,402,193

2,401,989

Retained earnings (1)

290,969

303,046

407,908

456,695

394,069

Accumulated other comprehensive income (loss), net of tax

(129,753

)

(18,056

)

(19,484

)

3,487

(8,809

)

TOTAL SHAREHOLDERS’ EQUITY (1)

2,567,486

2,689,931

2,791,392

2,862,375

2,787,249

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY (1)

$

20,944,704

$

21,230,839

$

21,388,955

$

22,351,475

$

22,721,935

Common shares outstanding-Class A and B

221,474,752

221,425,469

221,400,590

221,305,009

221,203,135

(1)

Prior period comparative disclosures for September 30, 2025 reflect the impact of adoption of ASU 2025-08.

CONSOLIDATED INCOME STATEMENTS (UNAUDITED)

Quarter Ended

Nine Months Ended

(dollars in thousands, except per share amounts)

September 30,
2026

June 30,
2026

September 30,
2025

September 30,
2026

September 30,
2025

INTEREST INCOME

Loans interest and fees(1)

$

175,387

$

178,170

$

140,256

$

534,747

$

378,164

Investment securities

58,481

53,062

40,266

164,617

129,864

Interest-bearing cash and other

5,288

6,710

22,849

19,670

47,081

Total interest income(1)

239,156

237,942

203,371

719,034

555,109

INTEREST EXPENSE

Deposits

60,489

56,544

57,496

175,356

150,651

Borrowed funds

477

1,055

124

1,760

124

Long-term debt

3,288

3,171

1,598

10,799

1,598

Total interest expense

64,254

60,770

59,218

187,915

152,373

Net interest income(1)

174,902

177,172

144,153

531,119

402,736

Provision (reversal of provision) for credit losses on loans(1)

(14,681

)

(904

)

25,806

(7,992

)

22,411

Provision (reversal of provision) for credit losses on unfunded lending commitments

(503

)

(1,863

)

960

(2,192

)

329

Net interest income after provision for credit losses(1)

190,086

179,939

117,387

541,303

379,996

NONINTEREST INCOME (LOSS)

Service charges on deposit accounts

6,320

6,027

5,875

18,390

16,861

Trust fees and commissions

3,406

3,476

3,117

9,952

9,452

ATM network fee income

3,558

4,109

3,425

11,571

9,353

Loan servicing income

1,660

1,582

680

5,169

1,025

Net gain (loss) on sales of loans

(9,843

)

2,477

659

(6,223

)

659

Net gain (loss) on sales and calls of investment securities

(32,269

)

31

155

(32,186

)

4,292

Income from bank-owned life insurance

1,723

1,327

2,120

4,215

3,149

Bargain purchase gain

2,871

—

90,363

2,871

90,363

Other

9,140

4,767

3,384

17,623

9,230

Total noninterest income (loss)

(13,434

)

23,796

109,778

31,382

144,384

NONINTEREST EXPENSE

Salaries and employee benefits

60,319

63,090

54,168

191,959

150,753

Occupancy

12,090

11,851

9,566

36,370

25,875

Equipment

8,501

8,724

7,288

26,840

19,445

Professional services

6,605

7,435

5,560

20,111

16,383

FDIC assessments and regulatory fees

2,932

2,990

2,722

8,912

7,148

Amortization of intangible assets

6,969

7,207

4,251

21,398

9,655

Data processing

2,966

2,468

3,315

9,307

6,865

Loan related

2,697

3,616

4,439

9,819

9,236

Marketing and advertising

798

696

680

2,401

2,008

Other real estate owned related

25

47

(103

)

456

2,685

Acquisition and integration costs

559

5,923

63,869

11,276

69,858

Other

9,732

10,426

7,574

30,244

20,136

Total noninterest expense

114,193

124,473

163,329

369,093

340,047

Income before income tax expense (benefit)(1)

62,459

79,262

63,836

203,592

184,333

INCOME TAX EXPENSE (BENEFIT)(1)

16,467

21,561

(4,440

)

55,809

29,781

NET INCOME(1)

$

45,992

$

57,701

$

68,276

$

147,783

$

154,552

Basic earnings per share(1)

Class A common stock

$

0.20

$

0.25

$

0.31

$

0.64

$

0.72

Class B common stock

$

1.99

$

2.51

$

3.13

$

6.41

$

7.22

Diluted earnings per share(1)

Class A common stock

$

0.20

$

0.25

$

0.31

$

0.64

$

0.72

Class B common stock

$

1.99

$

2.51

$

3.13

$

6.41

$

7.22

Basic weighted-average shares outstanding

Class A common stock

221,182,860

221,148,246

207,189,764

221,126,798

203,012,384

Class B common stock

1,114,448

1,114,448

1,114,448

1,114,448

1,114,448

Diluted weighted-average shares outstanding

Class A common stock

221,502,583

221,338,344

207,258,678

221,348,568

203,075,003

Class B common stock

1,114,448

1,114,448

1,114,448

1,114,448

1,114,448

(1)

Prior period comparative disclosures for the quarter and nine months ended September 30, 2025 reflect the impact of adoption of ASU 2025-08.

LOANS HELD FOR INVESTMENT(1)

(in thousands)

September 30,
2026

June 30,
2026

March 31,
2026

December 31,
2025

September 30,
2025

Commercial and industrial

$

439,332

$

439,814

$

460,081

$

482,170

$

550,176

Commercial real estate

Multifamily

5,189,514

5,223,356

5,291,597

5,355,252

5,450,206

Non-owner occupied

1,482,817

1,614,883

1,711,611

1,740,277

1,866,119

Owner occupied

492,756

512,474

586,698

689,079

710,638

Construction and land development

344,976

360,668

399,546

493,992

538,754

Residential real estate

4,171,423

4,107,867

4,017,120

3,970,803

3,914,675

Auto (2)

9,915

510,232

639,825

791,012

954,617

Other consumer

882,265

806,902

745,731

654,351

602,345

Total LHFI

$

13,012,998

$

13,576,196

$

13,852,209

$

14,176,936

$

14,587,530

(1)

Prior period comparative disclosures for September 30, 2025 reflect the impact of adoption of ASU 2025-08.

(2)

On September 16, 2026, Mechanics Bank completed the sale of $417 million of its remaining performing indirect auto loans to Bank of America, N.A. and retained $13 million of runoff auto loans.

COMPOSITION OF DEPOSITS

(in thousands)

September 30,
2026

June 30,
2026

March 31,
2026

December 31,
2025

September 30,
2025

Deposits by product:

Noninterest-bearing demand deposits

$

6,297,519

$

6,420,746

$

6,511,998

$

6,744,082

$

6,748,479

Interest-bearing:

Interest-bearing demand deposits

1,619,183

1,671,232

1,767,403

1,878,468

1,733,215

Savings

1,304,923

1,328,503

1,363,137

1,367,475

1,398,430

Money market

6,918,432

6,723,476

6,455,561

6,250,364

6,185,455

Certificates of deposit

1,879,417

1,945,480

2,144,670

2,784,608

3,387,240

Total interest-bearing deposits

11,721,955

11,668,691

11,730,771

12,280,915

12,704,340

Total deposits

$

18,019,474

$

18,089,437

$

18,242,769

$

19,024,997

$

19,452,819

SUMMARY FINANCIAL DATA

Quarter Ended

Nine Months Ended

September 30,
2026

June 30,
2026

September 30,
2025

September 30,
2026

September 30,
2025

Select performance ratios:(1)

Return on average equity(2)

6.86

%

8.48

%

10.66

%

7.19

%

8.53

%

Return on average tangible equity (2),(3)

11.75

%

14.42

%

17.37

%

12.41

%

14.11

%

Return on average assets(2)

0.86

%

1.09

%

1.46

%

0.92

%

1.20

%

Efficiency ratio

70.7

%

61.9

%

64.3

%

65.6

%

62.2

%

Efficiency ratio (non-GAAP)(3)

66.4

%

58.4

%

62.6

%

61.8

%

60.4

%

Net interest margin (2)

3.55

%

3.62

%

3.33

%

3.59

%

3.40

%

Cash dividends declared per share:

Class A common stock

$

0.25

$

0.70

$

—

$

1.35

$

—

Class B common stock

$

2.50

$

7.00

$

—

$

13.50

$

—

As of

September 30,
2026

June 30,
2026

March 31,
2026

December 31,
2025

September 30,
2025

Other data:

Book value per share(4)

$

11.59

$

12.15

$

12.61

$

12.93

$

12.60

Tangible book value per share (3), (4)

$

7.05

$

7.56

$

7.53

$

7.81

$

7.79

Common equity ratio(4)

12.26

%

12.67

%

13.05

%

12.81

%

12.27

%

Tangible common equity ratio(3), (4)

8.16

%

8.62

%

8.57

%

8.48

%

8.28

%

Loans to deposit ratio(4)

72.22

%

75.05

%

75.93

%

74.52

%

74.99

%

Full time equivalent employees

1,768

1,756

1,890

1,921

2,036

(1)

Prior period comparative disclosures for the quarter and nine months ended September 30, 2025 reflect the impact of adoption of ASU 2025-08.

(2)

Ratios are annualized.

(3)

Return on average tangible equity, efficiency ratio (excluding the impact of intangible amortization), tangible book value per share, and tangible common equity ratio are non-GAAP financial measures. For a reconciliation of these measures to the comparable GAAP financial measure or the computation of the measure, see “Non-GAAP Financial Measures and Reconciliations” below.

(4)

Prior period comparative disclosures for September 30, 2025 reflect the impact of adoption of ASU 2025-08.

NET INTEREST MARGIN

Quarter Ended

September 30, 2026

June 30, 2026

September 30, 2025

(dollars in thousands)

Average

Balance

Interest

Average

Yield/

Cost(1)

Average

Balance

Interest

Average

Yield/

Cost(1)

Average

Balance

Interest

Average

Yield/

Cost(1)

Assets:

Interest-earning assets:

Cash and cash equivalents

$

428,244

$

3,277

3.04

%

$

459,729

$

3,520

3.07

%

$

1,851,414

$

19,858

4.26

%

Investment securities

5,517,088

58,481

4.21

%

5,355,011

53,062

3.97

%

4,248,163

40,266

3.76

%

Loans(2),(3)

13,430,196

175,387

5.18

%

13,694,264

178,170

5.22

%

10,959,795

140,256

5.08

%

FHLB stock and other investments

147,964

2,011

5.39

%

147,538

3,190

8.67

%

119,880

2,991

9.90

%

Total interest-earning assets(3)

19,523,492

239,156

4.86

%

19,656,542

237,942

4.86

%

17,179,252

203,371

4.70

%

Noninterest-earning assets

1,638,586

1,661,711

1,418,197

Total assets

$

21,162,078

$

21,318,253

$

18,597,449

Liabilities and shareholders’ equity:

Interest-bearing liabilities:

Interest-bearing deposits:

Demand deposits

$

1,625,027

$

1,700

0.42

%

$

1,707,751

$

1,839

0.43

%

$

1,480,835

$

1,196

0.32

%

Money market and savings

8,222,792

46,796

2.26

%

7,900,995

42,287

2.15

%

6,701,690

42,382

2.51

%

Certificates of deposit

1,897,016

11,993

2.51

%

2,036,264

12,418

2.45

%

1,758,659

13,918

3.14

%

Total

11,744,835

60,489

2.04

%

11,645,010

56,544

1.95

%

9,941,184

57,496

2.29

%

Borrowings:

Borrowings

49,787

477

3.81

%

114,121

1,055

3.71

%

10,939

124

4.48

%

Long-term debt

130,958

3,288

9.96

%

129,369

3,171

9.83

%

63,034

1,598

10.06

%

Total interest-bearing liabilities

11,925,580

64,254

2.14

%

11,888,500

60,770

2.05

%

10,015,157

59,218

2.35

%

Noninterest-bearing liabilities:

Demand deposits (4)

6,321,146

6,440,279

5,823,539

Other liabilities

253,723

260,515

216,836

Total liabilities

18,500,449

18,589,294

16,055,532

Shareholders’ equity

2,661,629

2,728,959

2,541,917

Total liabilities and shareholders’ equity

$

21,162,078

$

21,318,253

$

18,597,449

Net interest income (3)

$

174,902

$

177,172

$

144,153

Net interest rate spread(3)

2.72

%

2.81

%

2.35

%

Net interest margin(3)

3.55

%

3.62

%

3.33

%

(1)

Ratios are annualized.

(2)

Includes loans held for sale.

(3)

Prior period comparative disclosures for the quarter ended September 30, 2025 reflect the impact of adoption of ASU 2025-08.

(4)

Cost of all deposits, including noninterest-bearing demand deposits, was 1.33%, 1.25% and 1.45% for the quarters ended September 30, 2026, June 30, 2026 and September 30, 2025, respectively.

Nine Months Ended

September 30, 2026

September 30, 2025

(dollars in thousands)

Average

Balance

Interest

Average

Yield/Cost (1)

Average

Balance

Interest

Average

Yield/Cost (1)

Assets:

Interest-earning assets:

Cash and cash equivalents

$

478,812

$

10,958

3.06

%

$

1,329,525

$

41,713

4.19

%

Investment securities

5,432,936

164,617

4.05

%

4,455,585

129,864

3.90

%

Loans(2),(3)

13,706,945

534,747

5.22

%

9,935,183

378,164

5.09

%

FHLB stock and other investments

147,430

8,712

7.90

%

108,261

5,368

6.63

%

Total interest-earning assets(3)

19,766,123

719,034

4.86

%

15,828,554

555,109

4.69

%

Noninterest-earning assets

1,665,769

1,338,126

Total assets

$

21,431,892

$

17,166,680

Liabilities and shareholders’ equity:

Interest-bearing liabilities:

Interest-bearing deposits:

Demand deposits

$

1,711,776

$

5,715

0.45

%

$

1,409,713

$

3,539

0.34

%

Money market and savings

7,956,680

128,143

2.15

%

6,330,840

121,478

2.57

%

Certificates of deposit

2,133,126

41,498

2.60

%

1,222,456

25,634

2.80

%

Total

11,801,582

175,356

1.99

%

8,963,009

150,651

2.25

%

Borrowings:

Borrowings

62,950

1,760

3.74

%

3,691

124

4.48

%

Long-term debt

143,625

10,799

10.05

%

21,242

1,598

10.06

%

Total interest-bearing liabilities

12,008,157

187,915

2.09

%

8,987,942

152,373

2.27

%

Noninterest-bearing liabilities:

Demand deposits (4)

6,402,707

5,541,719

Other liabilities

271,396

215,971

Total liabilities

18,682,260

14,745,632

Shareholders’ equity

2,749,632

2,421,048

Total liabilities and shareholders’ equity

$

21,431,892

$

17,166,680

Net interest income (3)

$

531,119

$

402,736

Net interest spread(3)

2.77

%

2.42

%

Net interest margin(3)

3.59

%

3.40

%

(1)

Ratios are annualized.

(2)

Includes loans held for sale.

(3)

Prior period comparative disclosures for the nine months ended September 30, 2025 reflect the impact of adoption of ASU 2025-08.

(4)

Cost of all deposits, including noninterest-bearing demand deposits, was 1.29% and 1.39% for the nine months ended September 30, 2026 and 2025, respectively.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

This document contains non-GAAP financial measures of our financial performance, including tangible common equity, return on average tangible equity, efficiency ratio (excluding the impact of intangible amortization), tangible book value per share and tangible common equity ratio. We believe that these non-GAAP financial measures provide useful information because they are used by management to evaluate our operating performance, without the impact of goodwill and other intangible assets. However, these financial measures are not intended to be considered in isolation of or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP and should be viewed in addition to, and not as an alternative to, our GAAP results. The non-GAAP financial measures Mechanics presents may differ from similarly captioned measures presented by other companies. The following tables present the calculations of our non-GAAP financial measures.

(dollars in thousands, except per share amounts)

Quarter Ended

Nine Months Ended

Return on Average Equity and Return on Average Tangible Equity(1)

Ref.

September 30,
2026

June 30,
2026

September 30,
2025

September 30,
2026

September 30,
2025

Net income

(a)

$

45,992

$

57,701

$

68,276

$

147,783

$

154,552

Add: intangibles amortization, net of tax(2)

5,070

5,243

3,040

15,567

6,904

Net income, excluding the impact of intangible amortization, net of tax

(b)

$

51,062

$

62,944

$

71,316

$

163,350

$

161,456

Average shareholders’ equity

(c)

$

2,661,629

$

2,728,959

$

2,541,917

$

2,749,632

$

2,421,048

Less: average goodwill and other intangible assets

938,086

978,184

912,679

989,164

890,677

Average tangible shareholders’ equity

(d)

$

1,723,543

$

1,750,775

$

1,629,238

$

1,760,468

$

1,530,371

Return on average equity (3)

(a) / (c)

6.86

%

8.48

%

10.66

%

7.19

%

8.53

%

Return on average tangible equity (non-GAAP) (3)

(b) / (d)

11.75

%

14.42

%

17.37

%

12.41

%

14.11

%

Quarter Ended

Nine Months Ended

Efficiency Ratio(1)

Ref.

September 30,
2026

June 30,
2026

September 30,
2025

September 30,
2026

September 30,
2025

Noninterest expense

(e)

$

114,193

$

124,473

$

163,329

$

369,093

$

340,047

Less: intangibles amortization

6,969

7,207

4,251

21,398

9,655

Noninterest expense, excluding the impact of intangible amortization

(f)

$

107,224

$

117,266

$

159,078

$

347,695

$

330,392

Net interest income

(g)

$

174,902

$

177,172

$

144,153

$

531,119

$

402,736

Noninterest income (loss)

(h)

$

(13,434

)

$

23,796

$

109,778

$

31,382

$

144,384

Efficiency ratio

(e) / (g+h)

70.7

%

61.9

%

64.3

%

65.6

%

62.2

%

Efficiency ratio (non-GAAP)

(f) / (g+h)

66.4

%

58.4

%

62.6

%

61.8

%

60.4

%

(1)

Prior period comparative disclosures for the quarter and nine months ended September 30, 2025 reflect the impact of adoption of ASU 2025-08.

(2)

Estimated statutory tax rate of 27.25%, 27.25% and 28.50% for the quarters ended September 30, 2026, June 30, 2026 and September 30, 2025, respectively and 27.25% and 28.50% for the nine months ended September 30, 2026 and 2025, respectively.

(3)

Ratios are annualized.

(dollars in thousands, except per share amounts)

As of

Book Value per Share and Tangible Book Value per Share(4)

Ref.

September 30,
2026

June 30,
2026

March 31,
2026

December 31,
2025

September 30,
2025

Total shareholders’ equity

(i)

$

2,567,486

$

2,689,931

$

2,791,392

$

2,862,375

$

2,787,249

Less: goodwill and other intangible assets

934,242

941,211

1,048,574

1,055,796

986,569

Total tangible shareholders’ equity

(j)

$

1,633,244

$

1,748,720

$

1,742,818

$

1,806,579

$

1,800,680

Common shares outstanding-Class A and B

(k)

221,474,752

221,425,469

221,400,590

221,305,009

221,203,135

Common shares outstanding-Class A

220,360,304

220,311,021

220,286,142

220,190,561

220,088,687

Common shares outstanding-Class B-adjusted

11,144,480

11,144,480

11,144,480

11,144,480

11,144,480

Shares outstanding at period end-adjusted(5)

(l)

231,504,784

231,455,501

231,430,622

231,335,041

231,233,167

Book value per share

(i) / (k)

$

11.59

$

12.15

$

12.61

$

12.93

$

12.60

Tangible book value per share (non-GAAP)

(j) / (l)

$

7.05

$

7.56

$

7.53

$

7.81

$

7.79

As of

Common Equity Ratio and Tangible Common Equity Ratio(4)

Ref.

September 30,
2026

June 30,
2026

March 31,
2026

December 31,
2025

September 30,
2025

Total shareholders’ equity

(m)

$

2,567,486

$

2,689,931

$

2,791,392

$

2,862,375

$

2,787,249

Less: goodwill and other intangible assets

934,242

941,211

1,048,574

1,055,796

986,569

Total tangible shareholders’ equity

(n)

$

1,633,244

$

1,748,720

$

1,742,818

$

1,806,579

$

1,800,680

Total assets

(o)

$

20,944,704

$

21,230,839

$

21,388,955

$

22,351,475

$

22,721,935

Less: goodwill and other intangible assets

934,242

941,211

1,048,574

1,055,796

986,569

Total tangible assets

(p)

$

20,010,462

$

20,289,628

$

20,340,381

$

21,295,679

$

21,735,366

Common equity ratio

(m) / (o)

12.26

%

12.67

%

13.05

%

12.81

%

12.27

%

Tangible common equity ratio (non-GAAP)

(n) / (p)

8.16

%

8.62

%

8.57

%

8.48

%

8.28

%

(4)

Prior period comparative disclosures for September 30, 2025 reflect the impact of adoption of ASU 2025-08.

(5)

Includes 11,144,480 Class A Shares issuable upon the conversion of 1,114,448 Class B Shares outstanding. Class B Shares also are treated as if such share had been converted into ten Class A Shares for purposes of calculating the economic rights of the Class B Shares, including upon liquidation of the Company or the declaration of dividends or distributions by the Company.

Investor Relations Inquiries
Mechanics Bancorp
Nathan Duda
Executive Vice President and Chief Financial Officer
ir@mechanicsbank.com

Source: Mechanics Bancorp