Mechanics Bancorp Reports Second Quarter 2026 Results
WALNUT CREEK, Calif.--( BUSINESS WIRE)--Mechanics Bancorp (NASDAQ: MCHB):
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)
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:
(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.
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.
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.
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.
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.
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.
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.
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.
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:
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)
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.
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
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
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.
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.
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.
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.
(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.