Mechanics Bancorp Reports Second Quarter 2026 Results

By Business Wire | July 29, 2026, 5:45 AM

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:

Total assets of $21.2 billion at June 30, 2026, compared with $21.4 billion at March 31, 2026.
Total loans of $13.6 billion at June 30, 2026, compared with $13.9 billion at March 31, 2026.
Loans-to-deposits ratio of 75% at June 30, 2026, compared with 76% at March 31, 2026.
Total deposits of $18.1 billion at June 30, 2026, compared with $18.2 billion at March 31, 2026, and noninterest-bearing deposits of $6.4 billion at June 30, 2026, compared with $6.5 billion at March 31, 2026.
Total cost of deposits was 1.25% for the second quarter of 2026 and 1.28% for the first quarter of 2026.
Dividends paid in the second quarter of 2026 were $0.70 per share of Class A common stock and $7.00 per share of Class B common stock.
Strong capital ratios ⁽¹⁾, including an estimated 16.70% Total risk-based capital ratio, 14.39% Tier 1 capital ratio, 14.39% CET1 capital ratio and 8.71% Tier 1 leverage ratio at June 30, 2026.
Allowance for credit losses (“ACL”) to total loans of 1.12%, down from 1.13% at the prior quarter-end.
Non-recurring acquisition and integration costs of $5.9 million for the second quarter of 2026, compared to $4.8 million in the prior quarter.

(1)		Regulatory capital ratios at June 30, 2026 are preliminary.
(2)		Non-GAAP measure. Refer to section “Non-GAAP Financial Measures and Reconciliations” below.
(3)		Unless otherwise specified, refers to diluted earnings per share for Class A common stock.

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.