Mechanics Bancorp Reports Third Quarter 2025 Results Following Completion of Merger with HomeStreet Bank

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

Third Quarter Highlights

$22.7 billion

Total Assets

$55.2 million

Net Income

13.42%

CET1 Ratio (1)

$12.54

Book Value Per Share

$7.73

Tangible Book Value Per Share (2)

Mechanics Bancorp (Nasdaq: MCHB) (“Mechanics”), the financial holding company of Mechanics Bank, today announced its financial results for the quarter ended September 30, 2025. Mechanics reported net income to common shareholders of $55.2 million, or $0.25 per diluted share, for the third quarter of 2025, compared to $42.5 million, or $0.20 per diluted share, for the second quarter of 2025. Mechanics’ financial results for the third quarter were materially impacted by its merger with HomeStreet, Inc. (“HomeStreet”), which was completed on September 2, 2025. Refer to “Presentation of Results – HomeStreet Bank Merger” below for additional information about the presentation of the financial statements following the merger.

C.J. Johnson, President and CEO of Mechanics, said, “We are pleased to close our acquisition of HomeStreet and create the premier West Coast community bank. This transaction was financially and strategically compelling and we are excited to add the attractive markets of Washington, Oregon and Hawaii to our unique California franchise. Mechanics Bank has been a pillar of financial strength since 1905 and I’m excited for what the future has in store for our Company.”

Third Quarter 2025 Highlights:

(1) Regulatory capital ratios at September 30, 2025 are preliminary.

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

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. In addition, Mechanics’ reported financial results for the quarter and nine months ended September 30, 2025 reflect Mechanics Bank’s financial results on a standalone basis until the closing of the merger on September 2, 2025 and results of the combined company for September 2, 2025 through September 30, 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 initial valuations at the merger date. These estimates are considered preliminary as of September 30, 2025, are subject to change for up to one year after the merger date, and any changes could be material.

INCOME STATEMENT HIGHLIGHTS

Summary Income Statement

Quarter Ended

Nine Months Ended

(in thousands)

September 30,

2025

June 30,

2025

September 30,

2024

September 30,

2025

September 30,

2024

Total interest income

204,888

178,153

192,119

556,626

558,866

Total interest expense

59,218

48,024

61,149

152,373

168,097

Net interest income

145,670

130,129

130,970

404,253

390,769

Provision (reversal of provision) for credit losses on loans and leases

46,058

357

6,730

42,663

2,684

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

960

(725

)

329

517

Total provision (reversal of provision) for credit losses

47,018

(368

)

6,743

42,992

3,201

Net gain (loss) on sale of investment securities

155

4,137

—

4,292

(207,203

)

Bargain purchase gain

90,363

—

90,363

—

Other noninterest income

19,260

15,488

16,904

49,729

49,548

Total noninterest income (loss)

109,778

19,625

16,904

144,384

(157,655

)

Acquisition and integration costs

63,869

5,639

—

69,858

—

Other noninterest expense

99,460

85,441

85,651

270,189

261,410

Total noninterest expense

163,329

91,080

85,651

340,047

261,410

Income (loss) before provision for income tax expense

45,101

59,042

55,480

165,598

(31,497

)

Provision for income taxes

(10,060

)

16,557

15,536

24,161

(8,833

)

Net income (loss)

55,161

42,485

39,944

141,437

(22,664

)

Net Interest Income

Net interest income in the third quarter of 2025 was $15.5 million higher than the second quarter of 2025 primarily as a result of the merger with HomeStreet Bank in September 2025. Mechanics’ net interest margin decreased from 3.44% to 3.36%. The decrease in the net interest margin was primarily due to the deposits and long-term debt acquired from HomeStreet and non-recurring interest recoveries recognized in the second quarter.

Nathan Duda, EVP and Chief Financial Officer of Mechanics, commented, “The legacy HomeStreet assets and liabilities have been fully marked to current market rates as of the merger date, which will provide accretion in interest income in addition to the contractual rates on the loans acquired.”

Provision for Credit Losses

The provision for credit losses in the third quarter of 2025, which consists of the provision for credit losses on loans and provision for unfunded commitments, was $47.0 million. The increase in provision for the third quarter of 2025 was primarily driven by reserves established on non-PCD acquired loans from HomeStreet and updates to ACL factors that were driven by a re-evaluation of future economic conditions and interest rate repricing risk.

Noninterest Income

Noninterest income in the third quarter of 2025 increased from the second quarter of 2025 primarily due to the bargain purchase gain of $90.4 million recognized on the HomeStreet merger.

Nathan Duda added, “Bargain purchase gains are rare and only occur in unique circumstances. The bargain purchase gain reflects the fair value of the net assets acquired less the consideration paid.”

Noninterest Expense

Noninterest expense increased $72.2 million in the third quarter of 2025 compared to the second quarter of 2025, primarily due to non-recurring acquisition and integration related costs of $63.9 million and increases in salaries and employee benefits expense.

C.J. Johnson said, “Mechanics has already incurred a significant amount of our estimated restructuring charges related to the merger and these one-time expenses will decrease materially moving forward.”

Income Taxes

Our effective tax rate during the third quarter of 2025 was (22.3)% as compared to 28.0% in the second quarter of 2025. The $90.4 million bargain purchase gain from the merger with HomeStreet was an after-tax item. Excluding the bargain purchase gain,we would have recorded a pre-tax loss of $45.3 million, which was the primary reason for the negative effective tax rate.

BALANCE SHEET HIGHLIGHTS

Selected Balance Sheet Items

(in thousands)

September 30,

2025

June 30,

2025

March 31,

2025

December 31,

2024

September 30,

2024

Cash and cash equivalents

1,442,647

2,078,960

798,309

999,711

1,178,161

Trading securities

50,357

—

Securities available-for-sale

3,490,478

2,562,438

3,586,322

3,065,251

2,709,754

Securities held-to-maturity

1,363,636

1,391,211

1,416,914

1,440,494

1,464,775

Loans held for investment (before ACL)

14,568,795

9,239,834

9,416,024

9,643,497

9,924,444

Total assets

22,708,820

16,571,173

16,540,317

16,490,112

16,602,757

Noninterest-bearing demand deposits

6,748,479

5,453,890

5,495,994

5,616,116

5,595,703

Total deposits

19,452,819

13,968,863

13,986,226

13,941,804

14,108,506

Long-term debt

190,123

—

7,245

Total liabilities

19,934,686

14,154,556

14,166,227

14,188,244

14,303,493

Total shareholders’ equity

2,774,134

2,416,617

2,374,090

2,301,868

2,299,264

Investment Securities

Trading securities totaled $50.4 million at September 30, 2025 and were acquired in the HomeStreet merger. Securities held-to-maturity decreased by $27.6 million in the third quarter and totaled $1.4 billion at September 30, 2025. Securities available-for-sale increased by $928.0 million during the third quarter to $3.5 billion at September 30, 2025. The net increase in investment securities was primarily due to securities acquired in the HomeStreet merger.

Loans

Total loans and leases at September 30, 2025 were $14.6 billion, up $5.3 billion from $9.2 billion at June 30, 2025, due primarily to the addition of $5.6 billion of legacy HomeStreet Bank loans recorded at fair value.

Deposits

Total deposits increased by $5.5 billion during the third quarter of 2025 to $19.5 billion at September 30, 2025, due primarily to balances acquired in the merger.

Noninterest-bearing accounts totaled $6.7 billion and represented 35% of total deposits at September 30, 2025, compared to $5.5 billion, or 39% of total deposits, at June 30, 2025. Noninterest-bearing deposit balances increased in the quarter primarily due to balances acquired in the merger.

Insured deposits of $12.8 billion represented 66% of total deposits at September 30, 2025, compared to insured deposits of $7.6 billion, or 55% of total deposits at June 30, 2025.

Borrowings

Total borrowings were $190.1 million at September 30, 2025, representing subordinated notes, senior notes and trust preferred debt acquired in the merger.

Equity

During the third quarter 2025, total shareholders’ equity increased by $357.5 million to $2.8 billion and tangible common equity (1) increased by $247.6 million to $1.8 billion at September 30, 2025. The increase in total shareholders’ equity for the third quarter resulted from Mechanics Bancorp shares issued as merger consideration, and net income in the third quarter of 2025.

At September 30, 2025, book value per common share increased to $12.54, compared to $11.96 at June 30, 2025. The linked-quarter change in book value per share reflects Mechanics Bancorp shares issued as merger consideration. Tangible book value per common share (1) increased to $7.73, compared to $7.26 at June 30, 2025, mainly as a result of Mechanics Bancorp shares issued as merger consideration, combined with $108.3 million of intangibles added as part of the merger.

(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 15.59% and a Tier 1 leverage ratio of 10.33% at September 30, 2025. The following table presents our regulatory capital ratios as of the dates indicated:

September 30,

2025

June 30,

2025

March 31,

2025

December 31,

2024

September 30,

2024

Mechanics Bancorp (1),(2)

Tier 1 leverage capital (to average assets)

10.33

n/a

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

13.42

n/a

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

13.42

n/a

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

15.59

n/a

Mechanics Bank (1)

Tier 1 leverage capital (to average assets)

11.46

10.16

9.91

9.66

8.93

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

14.87

18.27

16.89

16.14

15.29

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

14.87

18.27

16.89

16.14

15.29

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

16.13

19.10

17.77

17.14

16.42

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.

Regulatory capital ratios at September 30, 2025 are preliminary.

At September 30, 2025, Mechanics had available borrowing capacity of $3.8 billion from the FHLB, $4.0 billion from the FRBSF and $5.3 billion under borrowing lines established with other financial institutions.

Nathan Duda commented, “Mechanics Bank’s deposit base permits the Bank to be core funded without wholesale funding. We have already paid down the acquired HomeStreet FHLB advances, and our borrowing capacity with the FHLB will increase in the fourth quarter when the legacy HomeStreet loans are pledged.”

CREDIT QUALITY

Asset Quality Information and Ratios

(dollars in thousands)

September 30,

2025

June 30,

2025

March 31,

2025

December 31,

2024

September 30,

2024

Delinquent loans held for investment:

30-89 days past due

55,883

106,710

100,225

91,337

107,460

90+ days past due

38,316

10,660

5,248

6,082

6,314

Total delinquent loans

94,199

117,370

105,473

97,419

113,774

Total delinquent loans to loans held for investment

0.65

1.27

1.12

1.01

1.15

Nonperforming assets

Nonaccrual loans

60,586

18,606

9,905

10,693

11,642

90+ days past due and accruing

2,653

717

211

214

Total nonperforming loans

63,239

19,323

10,116

10,904

11,856

Foreclosed assets

1,675

—

13,400

15,600

17,882

Total nonperforming assets

64,914

19,323

23,516

26,504

29,738

Allowance for credit losses on loans and leases

168,959

68,334

75,515

88,558

103,481

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

1.16

0.74

0.80

0.92

1.04

Allowance for credit losses on loans and leases to nonaccrual loans

278.88

367.27

762.38

828.22

888.88

Nonaccrual loans to total loans and leases held for investment

0.42

0.20

0.11

0.12

Nonperforming assets to total assets

0.29

0.12

0.14

0.16

0.18

At September 30, 2025, total delinquent loans and leases were $94.2 million, compared to $117.4 million at June 30, 2025. The decrease was primarily due to decreases in the auto loan portfolio and loans that improved to current status during the third quarter. Total delinquent loans and leases as a percentage of total loans and leases declined to 0.65% at September 30, 2025, as compared to 1.27% at June 30, 2025.

At September 30, 2025, nonperforming assets were $64.9 million, compared to $19.3 million at June 30, 2025. The increase was mostly due to nonperforming loans and leases and foreclosed assets acquired from legacy HomeStreet Bank. Nonperforming assets as a percentage of total assets increased to 0.29% at September 30, 2025 as compared to 0.12% at June 30, 2025.

Allowance for Credit Losses

Quarter Ended

Nine Months Ended

(dollars in thousands)

September 30,

2025

June 30,

2025

September 30,

2024

September 30,

2025

September 30,

2024

Allowance for credit losses on loans and leases:

Beginning balance

68,334

75,515

108,021

88,558

133,778

Initial allowance on acquired PCD loans

63,494

—

63,494

—

Provision (reversal of provision) for credit losses

46,058

357

6,730

42,663

2,684

Loans charged off

(12,803

)

(9,949

)

(14,572

)

(34,969

)

(46,034

)

Recoveries

3,876

2,411

3,302

9,213

13,053

Ending balance

168,959

68,334

103,481

168,959

103,481

Allowance for credit losses on unfunded lending commitments:

Beginning balance

3,735

4,460

4,818

4,366

4,314

Initial allowance on acquired loans

3,736

—

3,736

—

Provision (reversal of provision) for credit losses

960

(725

)

329

517

Ending balance

8,431

3,735

4,831

8,431

4,831

Net charge-offs to average loans (1)

0.32

0.45

0.35

0.43

(1) Ratios are annualized.

The allowance for credit losses on loans totaled $169.0 million, or 1.16% of total loans at September 30, 2025, compared to $68.3 million, or 0.74% of total loans at June 30, 2025. The increase in the allowance includes the addition of $63.5 million related to legacy HomeStreet Bank’s PCD loans booked at the merger’s close, which did not flow through the income statement. The ACL provision for the third quarter was $46.1 million, which includes an initial provision of $20.2 million for the acquired HomeStreet Bank’s non-PCD loans.

Conference Call

The Company will host a conference call and webcast to discuss its third quarter 2025 financial results at 11:00 a.m. Eastern Time (ET) on Friday, October 31, 2025. Investors and analysts interested in participating in the call are invited to dial 1-833-470-1428 (international callers please dial 1-646-844-6383) and use access code 320554 approximately 10 minutes prior to the start of the call. 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 by dialing 1-866-813-9403 (international callers please dial 1-929-458-6194). The pin to access the telephone replay is 352137. The replay will be available until 11:59 p.m. (Eastern Time) on November 7, 2025.

About Mechanics Bancorp

Mechanics Bancorp (NASDAQ: MCHB) is headquartered in Walnut Creek, Calif., and is the financial holding company of Mechanics Bank, a full-service bank with $22.7 billion in assets 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.

Learn more at 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. 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. These statements are subject to known and unknown risks, uncertainties, assumptions, estimates, and other important factors that change over time, many of which may be beyond our control. Our future performance and actual results may differ materially from those expressed or implied in such forward-looking statements. Forward-looking statements should not be relied upon as a prediction of actual results.

We caution readers that actual results may differ materially from those expressed in or implied by the Company’s forward-looking statements. Other important factors could affect the Company’s future results from those expressed or implied in any forward-looking statements include, but are not limited to:

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 the Risk Factors included on Exhibit 99.2 to the Company’s Current Report on Form 8-K, filed with the U.S. Securities and Exchange Commission (the “SEC”) on September 2, 2025. We strongly recommend readers review those disclosures in conjunction with the discussions herein. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of 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. The Company does 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 the Company may do so from time to time. All future written and oral forward-looking statements attributable to the Company or any person acting on its 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 the Company currently deems immaterial may become material, and it is impossible for the Company to predict these events or how they may affect the Company.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in thousands, except share data)

September 30,

2025

June 30,

2025

March 31,

2025

December 31,

2024

September 30,

2024

ASSETS

Cash and cash equivalents

1,442,647

2,078,960

798,309

999,711

1,178,161

Trading securities

50,357

—

Securities available-for-sale

3,490,478

2,562,438

3,586,322

3,065,251

2,709,754

Securities held-to-maturity

1,363,636

1,391,211

1,416,914

1,440,494

1,464,775

Loans held for sale

54,985

415

219

543

504

Loan and lease receivables

14,568,795

9,239,834

9,416,024

9,643,497

9,924,444

Allowance for credit losses on loans and leases

(168,959

)

(68,334

)

(75,515

)

(88,558

)

(103,481

)

Net loan and lease receivables

14,399,836

9,171,500

9,340,509

9,554,939

9,820,963

Mortgage servicing rights

88,595

—

Other real estate owned

1,675

—

13,400

15,600

17,882

Federal Home Loan Bank stock, at cost

17,294

17,250

Premises and equipment, net

143,917

114,715

115,509

117,362

117,291

Bank-owned life insurance

169,163

84,786

84,300

83,741

83,968

Goodwill

843,305

Other intangible assets, net

143,264

33,309

35,975

38,744

41,491

Right-of-use asset

85,657

56,696

56,268

53,545

55,263

Interest receivable and other assets

414,011

216,588

232,037

259,627

252,150

TOTAL ASSETS

22,708,820

16,571,173

16,540,317

16,490,112

16,602,757

LIABILITIES AND SHAREHOLDERS’ EQUITY

LIABILITIES

Noninterest-bearing demand deposits

6,748,479

5,453,890

5,495,994

5,616,116

5,595,703

Interest-bearing transaction accounts

7,918,670

6,359,590

6,357,909

6,138,909

6,193,735

Savings and time deposits

4,785,670

2,155,383

2,132,323

2,186,779

2,319,068

Total deposits

19,452,819

13,968,863

13,986,226

13,941,804

14,108,506

Long-term debt

190,123

—

7,245

Operating lease liability

90,796

59,233

58,914

56,094

57,785

Interest payable and other liabilities

200,948

126,460

121,087

190,346

129,957

TOTAL LIABILITIES

19,934,686

14,154,556

14,166,227

14,188,244

14,303,493

SHAREHOLDERS’ EQUITY

Common stock

2,401,989

2,122,374

2,122,117

Retained earnings

380,954

325,793

283,308

239,517

187,854

Accumulated other comprehensive income (loss), net of tax

(8,809

)

(31,550

)

(31,335

)

(59,766

)

(10,707

)

TOTAL SHAREHOLDERS’ EQUITY

2,774,134

2,416,617

2,374,090

2,301,868

2,299,264

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

22,708,820

16,571,173

16,540,317

16,490,112

16,602,757

Common shares outstanding-Class A and B

221,203,135

202,015,832

201,999,328

CONSOLIDATED INCOME STATEMENTS (UNAUDITED)

Quarter Ended

Nine Months Ended

(in thousands, except share and per share data)

September 30,

2025

June 30,

2025

September 30,

2024

September 30,

2025

September 30,

2024

INTEREST INCOME

Loans and leases interest and fees

141,773

120,116

130,830

379,681

404,010

Investment securities

40,266

42,013

37,060

129,864

91,238

Interest-bearing cash and other

22,849

16,024

24,229

47,081

63,618

Total interest income

204,888

178,153

192,119

556,626

558,866

INTEREST EXPENSE

Deposits

57,496

48,024

52,408

150,651

140,859

Borrowed funds

124

—

8,607

124

26,428

Long-term debt

1,598

—

134

1,598

810

Total interest expense

59,218

48,024

61,149

152,373

168,097

Net interest income

145,670

130,129

130,970

404,253

390,769

Provision (reversal of provision) for credit losses on loans and leases

46,058

357

6,730

42,663

2,684

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

960

(725

)

329

517

Net interest income after provision for credit losses

98,652

130,497

124,227

361,261

387,568

NONINTEREST INCOME

Service charges on deposit accounts

5,875

5,492

6,007

16,861

17,854

Trust fees and commissions

3,117

3,216

3,176

9,452

8,841

ATM network fee income

3,425

3,040

3,109

9,353

9,084

Loan servicing income

680

168

202

1,025

786

Net gain (loss) on sale of investment securities

155

4,137

—

4,292

(207,203

)

Income from bank-owned life insurance

2,120

502

1,010

3,149

2,144

Bargain purchase gain

90,363

—

90,363

—

Other

4,043

3,070

3,400

9,889

10,839

Total noninterest income (loss)

109,778

19,625

16,904

144,384

(157,655

)

NONINTEREST EXPENSE

Salaries and employee benefits

54,168

47,734

47,072

150,753

147,717

Occupancy

9,566

8,337

8,028

25,875

24,113

Equipment

7,288

6,288

5,807

19,445

17,643

Professional services

5,560

5,907

7,091

16,383

15,398

FDIC assessments and regulatory fees

2,722

2,213

2,917

7,148

8,679

Amortization of intangible assets

4,251

2,666

3,302

9,655

10,705

Data processing

3,315

2,200

2,294

6,865

6,734

Loan related

4,439

3,220

1,577

9,236

5,416

Marketing and advertising

680

744

963

2,008

2,603

Other real estate owned related

(103

)

104

201

2,685

1,888

Acquisition and integration costs

63,869

5,639

—

69,858

—

Other

7,574

6,028

6,399

20,136

20,514

Total noninterest expense

163,329

91,080

85,651

340,047

261,410

Income (loss) before provision for income tax expense

45,101

59,042

55,480

165,598

(31,497

)

PROVISION FOR INCOME TAXES

(10,060

)

16,557

15,536

24,161

(8,833

)

NET INCOME (LOSS)

55,161

42,485

39,944

141,437

(22,664

)

Basic earnings per share

Class A common stock

0.25

0.20

0.19

0.66

(0.11

)

Class B common stock

2.53

2.00

1.88

6.60

(1.07

)

Diluted earnings per share

Class A common stock

0.25

0.20

0.19

0.66

(0.11

)

Class B common stock

2.53

2.00

1.88

6.60

(1.07

)

Basic weighted-average shares outstanding

Class A common stock

207,189,764

200,893,223

200,884,880

203,012,384

200,876,688

Class B common stock

1,114,448

Diluted weighted-average shares outstanding

Class A common stock

207,277,786

200,952,643

200,977,311

203,081,443

200,988,925

Class B common stock

1,114,448

LOANS HELD FOR INVESTMENT

(in thousands)

September 30,

2025

June 30,

2025

March 31,

2025

December 31,

2024

September 30,

2024

Commercial and industrial

547,311

280,551

352,267

410,040

416,407

Commercial real estate

Multifamily

5,448,374

2,826,750

2,833,328

2,794,581

2,808,199

Non-owner occupied

1,864,040

1,551,617

1,618,001

1,657,597

1,713,472

Owner occupied

709,239

323,419

341,446

360,100

367,111

Construction and land development

535,776

135,013

119,089

104,430

108,965

Residential real estate

3,907,101

2,438,271

2,336,268

2,280,963

2,221,038

Auto

954,615

1,147,967

1,363,084

1,596,935

1,841,062

Other consumer

602,339

536,246

452,541

438,851

448,190

Total LHFI

14,568,795

9,239,834

9,416,024

9,643,497

9,924,444

COMPOSITION OF DEPOSITS

(in thousands)

September 30,

2025

June 30,

2025

March 31,

2025

December 31,

2024

September 30,

2024

Deposits by product:

Noninterest-bearing demand deposits

6,748,479

5,453,890

5,495,994

5,616,116

5,595,703

Interest-bearing:

Interest-bearing demand deposits

1,733,215

1,331,785

1,384,081

1,435,266

1,417,938

Savings

1,398,430

1,173,943

1,201,988

1,216,900

1,247,408

Money market

6,185,455

5,027,805

4,973,828

4,703,643

4,775,797

Certificates of deposit

3,387,240

981,440

930,335

969,879

1,071,660

Total interest-bearing deposits

12,704,340

8,514,973

8,490,232

8,325,688

8,512,803

Total deposits

19,452,819

13,968,863

13,986,226

13,941,804

14,108,506

SUMMARY FINANCIAL DATA

Quarter Ended

Nine Months Ended

September 30,

2025

June 30,

2025

September 30,

2024

September 30,

2025

September 30,

2024

Select Performance Ratios:

Return on average equity (1)

8.61

7.15

6.99

7.81

(1.35

Return on average tangible equity (1), (2)

14.17

11.82

12.13

12.96

(1.48

Return on average assets (1)

1.18

1.03

0.92

1.10

(0.18

Efficiency ratio

63.9

60.8

57.9

62.0

112.1

Efficiency ratio (non-GAAP) (2)

62.3

59.0

55.7

60.2

107.6

Net interest margin (1)

3.36

3.44

3.28

3.41

3.29

As of

September 30,

2025

June 30,

2025

March 31,

2025

December 31,

2024

September 30,

2024

Other data:

Book value per share

12.54

11.96

11.75

11.40

11.38

Tangible book value per share (2)

7.73

7.26

7.05

6.70

6.67

Common equity ratio

12.22

14.58

14.35

13.96

13.85

Tangible common equity ratio (2)

8.23

9.81

9.54

9.10

9.00

Loans to deposit ratio

74.89

66.15

67.32

69.17

70.34

Full time equivalent employees

2,036

1,303

1,426

1,439

1,432

(1)

Ratios are annualized.

(2)

Return on average tangible equity, efficiency ratio, 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.

NET INTEREST MARGIN

Quarter Ended

September 30, 2025

June 30, 2025

September 30, 2024

(dollars in thousands)

Average

Balance

Interest

Average

Yield/Cost

Average

Balance

Interest

Average

Yield/Cost

Average

Balance

Interest

Average

Yield/Cost

Assets:

Interest-earning assets:

Cash and cash equivalents

1,851,414

19,858

4.26

1,390,355

14,668

4.23

1,691,753

22,020

5.18

Investment securities

4,248,163

40,266

3.76

4,342,666

42,013

3.88

4,040,510

37,060

3.65

Loans (1)

10,959,795

141,773

5.13

9,337,910

120,116

5.16

10,032,238

130,830

5.19

FHLB Stock and other investments

119,880

2,991

9.90

103,468

1,356

5.26

100,150

2,209

8.77

Total interest-earning assets

17,179,252

204,888

4.73

15,174,399

178,153

4.71

15,864,651

192,119

4.82

Noninterest-earning assets

1,418,197

1,294,772

1,322,435

Total assets

18,597,449

16,469,171

17,187,086

Liabilities and shareholders’ equity:

Interest-bearing liabilities:

Interest-bearing deposits:

Demand deposits

1,480,835

1,196

0.32

1,344,397

1,045

0.31

1,444,564

2,631

0.72

Money market and savings

6,701,690

42,382

2.51

6,231,772

40,956

2.64

5,990,216

41,913

2.78

Certificates of deposit

1,758,659

13,918

3.14

960,431

6,023

2.52

1,055,430

7,864

2.96

Total

9,941,184

57,496

2.29

8,536,600

48,024

2.26

8,490,210

52,408

2.46

Borrowings:

Borrowings

10,939

124

4.48

4.61

717,395

8,607

4.77

Long-term debt

63,034

1,598

10.06

—

9,941

134

5.34

Total interest-bearing liabilities

10,015,157

59,218

2.35

8,536,613

48,024

2.26

9,217,546

61,149

2.64

Noninterest-bearing liabilities:

Demand deposits (2)

5,823,539

5,355,287

5,480,808

Other liabilities

216,836

193,089

214,422

Total liabilities

16,055,532

14,084,989

14,912,776

Shareholders’ equity

2,541,917

2,384,182

2,274,310

Total liabilities and shareholders’ equity

18,597,449

16,469,171

17,187,086

Net interest income

145,670

130,129

130,970

Net interest rate spread

2.38

2.45

2.18

Net interest margin

3.36

3.44

3.28

(1)

Includes loans held for sale.

(2)

Cost of all deposits, including noninterest-bearing demand deposits, was 1.45%, 1.39% and 1.49% for the quarters ended September 30, 2025, June 30, 2025 and September 30, 2024, respectively.

Nine Months Ended

September 30, 2025

September 30, 2024

(dollars in thousands)

Average

Balance

Interest

Average

Yield/Cost

Average

Balance

Interest

Average

Yield/Cost

Assets:

Interest-earning assets:

Cash and cash equivalents

1,329,525

41,713

4.19

1,525,600

59,315

5.19

Investment securities

4,455,585

129,864

3.90

3,914,358

91,238

3.11

Loans (1)

9,935,183

379,681

5.11

10,312,101

404,010

5.23

FHLB Stock and other investments

108,261

5,368

6.63

102,545

4,303

5.61

Total interest-earning assets

15,828,554

556,626

4.70

15,854,604

558,866

4.71

Noninterest-earning assets

1,338,126

1,340,551

Total assets

17,166,680

17,195,155

Liabilities and shareholders’ equity:

Interest-bearing liabilities:

Interest-bearing deposits:

Demand deposits

1,409,713

3,539

0.34

1,503,080

7,602

0.68

Money market and savings

6,330,840

121,478

2.57

5,775,423

111,971

2.59

Certificates of deposit

1,222,456

25,634

2.80

1,021,633

21,286

2.78

Total

8,963,009

150,651

2.25

8,300,136

140,859

2.27

Borrowings:

Borrowings

3,691

124

4.48

739,058

26,428

4.78

Long-term debt

21,242

1,598

10.06

19,927

810

5.43

Total interest-bearing liabilities

8,987,942

152,373

2.27

9,059,121

168,097

2.48

Noninterest-bearing liabilities:

Demand deposits (2)

5,541,719

5,687,029

Other liabilities

215,971

207,811

Total liabilities

14,745,632

14,953,961

Shareholders’ equity

2,421,048

2,241,194

Total liabilities and shareholders’ equity

17,166,680

17,195,155

Net interest income

404,253

390,769

Net interest spread

2.43

2.23

Net interest margin

3.41

3.29

(1)

Includes loans held for sale.

(2)

Cost of deposits including noninterest-bearing deposits, was 1.39% and 1.35% for the nine months ended September 30, 2025 and 2024, 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, 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.

(in thousands, except shares and per share data)

Quarter Ended

Nine Months Ended

Return on Average Equity and Return on Average Tangible Equity

Ref.

September 30, 2025

June 30,

2025

September 30, 2024

September 30, 2025

September 30, 2024

Net income (loss)

(a)

55,161

42,485

39,944

141,437

(22,664

)

Add: intangibles amortization, net of tax (1)

3,040

1,906

2,361

6,904

7,654

Net income (loss), excluding the impact of intangible amortization, net of tax

(b)

58,201

44,391

42,305

148,341

(15,010

)

Average shareholders’ equity

(c)

2,541,917

2,384,182

2,274,310

2,421,048

2,241,194

Less: average goodwill and other intangible assets

912,679

878,190

886,389

890,677

890,120

Average tangible shareholders' equity

(d)

1,629,238

1,505,992

1,387,921

1,530,371

1,351,074

Return on average equity (2)

(a) / (c)

8.61

7.15

6.99

7.81

(1.35

Return on average tangible equity (non-GAAP) (2)

(b) / (d)

14.17

11.82

12.13

12.96

(1.48

(1) Effective tax rate of 28.5% used in computations above.

(2) Ratios are annualized.

Quarter Ended

Nine Months Ended

Efficiency Ratio

September 30, 2025

June 30,

2025

September 30, 2024

September 30, 2025

September 30, 2024

Noninterest expense

(e)

163,329

91,080

85,651

340,047

261,410

Less: intangibles amortization

4,251

2,666

3,302

9,655

10,705

Noninterest expense, excluding the impact of intangible amortization

(f)

159,078

88,414

82,349

330,392

250,705

Net interest income

(g)

145,670

130,129

130,970

404,253

390,769

Noninterest income (loss)

(h)

109,778

19,625

16,904

144,384

(157,655

)

Efficiency ratio

(e) / (g+h)

63.9

60.8

57.9

62.0

112.1

Efficiency ratio (non-GAAP)

(f) / (g+h)

62.3

59.0

55.7

60.2

107.6

As of

Book Value per Share and Tangible Book Value per Share

September 30, 2025

June 30,

2025

March 31,

2025

December 31, 2024

September 30, 2024

Total shareholders’ equity

(i)

2,774,134

2,416,617

2,374,090

2,301,868

2,299,264

Less: goodwill and other intangible assets

986,569

876,614

879,280

882,049

884,796

Total tangible shareholders’ equity

(j)

1,787,565

1,540,003

1,494,810

1,419,819

1,414,468

Common shares outstanding-Class A and B

(k)

221,203,135

202,015,832

201,999,328

Common shares outstanding-Class A

220,088,687

200,901,384

200,884,880

Common shares outstanding-Class B-adjusted

11,144,480

Shares outstanding at period end-adjusted (3)

(l)

231,233,167

212,045,864

212,029,360

Book value per share

(i) / (k)

12.54

11.96

11.75

11.40

11.38

Tangible book value per share (non-GAAP)

(j) / (l)

7.73

7.26

7.05

6.70

6.67

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

As of

Common Equity Ratio and Tangible Common Equity Ratio

September 30, 2025

June 30,

2025

March 31,

2025

December 31, 2024

September 30, 2024

Total shareholders’ equity

(m)

2,774,134

2,416,617

2,374,090

2,301,868

2,299,264

Less: goodwill and other intangible assets

986,569

876,614

879,280

882,049

884,796

Total tangible shareholders’ equity

(n)

1,787,565

1,540,003

1,494,810

1,419,819

1,414,468

Total assets

(o)

22,708,820

16,571,173

16,540,317

16,490,112

16,602,757

Less: goodwill and other intangible assets

986,569

876,614

879,280

882,049

884,796

Total tangible assets

(p)

21,722,251

15,694,559

15,661,037

15,608,063

15,717,961

Common equity ratio

(m) / (o)

12.22

14.58

14.35

13.96

13.85

Tangible common equity ratio (non-GAAP)

(n) / (p)

8.23

9.81

9.54

9.10

9.00