Mechanics Bancorp Reports Fourth Quarter and Full Year 2025 Results
WALNUT CREEK, Calif.--( BUSINESS WIRE)--Mechanics Bancorp (Nasdaq: MCHB):
Fourth Quarter Highlights
$22.4 billion
Total Assets
$124.3 million
Net Income
14.07%
CET1 Ratio (1)
$12.93
Book Value Per Share
$7.81
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 and year ended December 31, 2025. Mechanics reported net income of $124.3 million, or $0.54 per diluted share (3), for the fourth quarter of 2025, compared to $55.2 million, or $0.25 per diluted share, for the third quarter of 2025. For 2025, Mechanics reported net income of $265.7 million, or $1.22 per diluted share, compared to $29.0 million, or $0.14 per diluted share, for 2024. Mechanics’ financial results in 2025 were materially impacted by the merger of HomeStreet Bank with and into Mechanics Bank, 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. In addition, financial results for the fourth quarter of 2025 were impacted by the Company’s adoption of new accounting guidance for certain loans acquired in the HomeStreet merger. Refer to “Adoption of Purchased Seasoned Loans Accounting Standard” for additional discussion.
C.J. Johnson, President and CEO of Mechanics, said, “We had a very strong fourth quarter and I’m quite pleased with the progress that’s been made on our merger integration. More hard work remains, but I’m confident we’ll finish the job and be well-positioned for continued success in 2026 and beyond.”
Fourth Quarter and Year End 2025 Highlights:
(1)
Regulatory capital ratios at December 31, 2025 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.
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 year ended December 31, 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 from September 2, 2025 through December 31, 2025. 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 December 31, 2025, 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. The impact of the adjustments is reflected in the fourth quarter 2025 results presented in this earnings release. Required disclosures regarding the impact of the adoption and its impact on reported third quarter 2025 results will be presented when the Company files 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.
INCOME STATEMENT HIGHLIGHTS
Summary Income Statement
Quarter Ended
Year Ended
(in thousands)
December 31,
2025
September 30,
2025
December 31,
2024
December 31,
2025
December 31,
2024
Total interest income
$
255,138
$
204,888
$
176,852
$
811,764
$
735,718
Total interest expense
73,673
59,218
48,452
226,046
216,549
Net interest income
181,465
145,670
128,400
585,718
519,169
Provision (reversal of provision) for credit losses on loans
(22,160
)
46,058
(4,243
)
20,503
(1,559
)
Provision (reversal of provision) for credit losses on unfunded lending commitments
(1,316
)
960
(465
)
(987
)
52
Total provision (reversal of provision) for credit losses
(23,476
)
47,018
(4,708
)
19,516
(1,507
)
Net gain (loss) on sales and calls of investment securities
276
155
—
4,568
(207,203
)
Bargain purchase gain
55,097
90,363
—
145,460
—
Other noninterest income
23,148
19,260
18,535
72,877
68,083
Total noninterest income (loss)
78,521
109,778
18,535
222,905
(139,120
)
Acquisition and integration costs
3,507
63,869
—
73,365
—
Other noninterest expense
126,003
99,460
84,449
396,192
345,859
Total noninterest expense
129,510
163,329
84,449
469,557
345,859
Income before income tax expense (benefit)
153,952
45,101
67,194
319,550
35,697
Income tax expense (benefit)
29,650
(10,060
)
15,531
53,811
6,698
Net income
$
124,302
$
55,161
$
51,663
$
265,739
$
28,999
Net Interest Income
Q4 2025 vs. Q3 2025
Net interest income in the fourth quarter of 2025 was $35.8 million higher than the third quarter of 2025 primarily as a result of the merger with HomeStreet Bank in September 2025. Mechanics’ net interest margin increased from 3.36% to 3.47% primarily due to the full quarter of interest income on the HomeStreet acquired loans and slightly lower cost of deposits.
Full Year 2025 vs. Full Year 2024
Net interest income in 2025 increased $66.5 million as compared to 2024 due primarily to an increase in net interest margin from 3.31% in 2024 to 3.43% in 2025. The increase in net interest margin is primarily due to a 15 basis point reduction in the rates paid on interest-bearing liabilities and a 7 basis point increase on interest-earning asset yields. The decrease in rates paid on interest-bearing liabilities was primarily driven by the payoff of $750 million of Bank Term Funding Program (“BTFP”) borrowings in September 2024, partially offset by higher borrowing costs on acquired debt from the HomeStreet merger. The increase in earning asset yields was primarily driven by higher yields on the investment securities portfolio as a result of higher yields on purchases in 2025.
Provision for Credit Losses
Q4 2025 vs. Q3 2025
The provision for credit losses in the fourth quarter of 2025, which consists of the provision for credit losses on loans and provision for unfunded commitments, was a reversal of provision of $23.5 million, compared to a provision of $47.0 million for the third quarter of 2025. The reversal of provision in the fourth quarter of 2025 was primarily the result of the adoption of ASU 2025-08, which eliminated the double count of the credit mark and the allowance for credit losses on the non-PCD HomeStreet purchased seasoned loans, in addition to lower loan balances due to repayments during the quarter.
Full Year 2025 vs. Full Year 2024
The provision for credit losses for loans and unfunded commitments was $19.5 million in 2025, compared to a $1.5 million reversal of provision in 2024. The increase in provision for 2025 was primarily driven by updates to ACL factors that were driven by a re-evaluation of future economic conditions and interest rate repricing risk.
Noninterest Income
Q4 2025 vs. Q3 2025
Noninterest income in the fourth quarter of 2025 decreased from the third quarter of 2025 primarily due to the bargain purchase gain from the HomeStreet merger, which was $90.4 million in the third quarter and $55.1 million in the fourth quarter.
Full Year 2025 vs. Full Year 2024
Noninterest income for 2025 increased from 2024 primarily due to the bargain purchase gain of $145.5 million from the HomeStreet merger in 2025 and the $207.2 million loss on the sale of lower yielding AFS investment securities as part of a balance sheet restructure in 2024.
Nathan Duda added, “With the updated valuation on the DUS intangible, our bargain purchase gain recognized on the HomeStreet acquisition has increased to a total of $145.5 million, which significantly exceeds our original expectations.”
Noninterest Expense
Q4 2025 vs. Q3 2025
Noninterest expense decreased $33.8 million in the fourth quarter of 2025 compared to the third quarter of 2025, primarily due to non-recurring acquisition and integration related costs of $63.9 million recognized with the HomeStreet merger in the third quarter, partially offset by a full quarter of legacy HomeStreet operating expenses in the fourth quarter.
Full Year 2025 vs. Full Year 2024
Noninterest expense increased $123.7 million for 2025 compared to 2024 primarily due to acquisition and integration related costs of $73.4 million, increases in salaries and employee benefits expense, and four months of legacy HomeStreet operating expenses after the merger.
C.J. Johnson said, “We continue to make progress eliminating redundant costs from the combined banks and are well on our way to achieving our expected cost saves by the fourth quarter of 2026.”
Income Taxes
Q4 2025 vs. Q3 2025
Our effective tax rate during the fourth quarter of 2025 was 19.3% as compared to (22.3)% in the third quarter of 2025 and our federal statutory rate was 21.0%. The bargain purchase gain from the merger with HomeStreet, which is an after-tax item, was $55.1 million in the fourth quarter and $90.4 million in the third quarter. The bargain purchase gain was the primary reason for the low effective tax rate in the fourth quarter and the negative effective tax rate in the third quarter.
Full Year 2025 vs. Full Year 2024
Our effective tax rate for 2025 was 16.8% as compared to 18.8% for 2024 and our federal statutory rate was 21.0%. The $145.5 million bargain purchase gain was the primary reason for the low effective tax rate in 2025.
BALANCE SHEET HIGHLIGHTS
Selected Balance Sheet Items
(in thousands)
December 31,
2025
September 30,
2025
June 30,
2025
March 31,
2025
December 31,
2024
Cash and cash equivalents
$
1,029,983
$
1,442,647
$
2,078,960
$
798,309
$
999,711
Trading securities
49,518
50,357
—
—
—
Securities available-for-sale
3,993,385
3,490,478
2,562,438
3,586,322
3,065,251
Securities held-to-maturity
1,336,632
1,363,636
1,391,211
1,416,914
1,440,494
Loans held for investment (before ACL)
14,176,936
14,568,795
9,239,834
9,416,024
9,643,497
Total assets
22,351,475
22,708,820
16,571,173
16,540,317
16,490,112
Noninterest-bearing demand deposits
$
6,744,082
$
6,748,479
$
5,453,890
$
5,495,994
$
5,616,116
Total deposits
19,024,997
19,452,819
13,968,863
13,986,226
13,941,804
Long-term debt
192,014
190,123
—
—
—
Total liabilities
19,489,100
19,934,686
14,154,556
14,166,227
14,188,244
Total shareholders’ equity
2,862,375
2,774,134
2,416,617
2,374,090
2,301,868
Investment Securities
Trading securities totaled $49.5 million at December 31, 2025, compared to $50.4 million at September 30, 2025 and were acquired in the HomeStreet merger. Securities available-for-sale increased by $502.9 million during the fourth quarter to $4.0 billion at December 31, 2025. Securities held-to-maturity decreased by $27.0 million in the fourth quarter and totaled $1.3 billion at December 31, 2025. The net increase in investment securities was primarily due to securities purchased during the quarter.
Loans
Total loans at December 31, 2025 were $14.2 billion, a decrease of $391.9 million from $14.6 billion at September 30, 2025, due primarily to loan repayments during the quarter.
Deposits
Total deposits decreased by $427.8 million during the fourth quarter of 2025 to $19.0 billion at December 31, 2025, due primarily to maturities of certificates of deposits acquired in the HomeStreet merger.
Noninterest-bearing accounts totaled $6.7 billion and represented 35% of total deposits at December 31, 2025, compared to $6.7 billion, or 35% of total deposits, at September 30, 2025.
Insured deposits of $12.2 billion represented 64% of total deposits at December 31, 2025, compared to insured deposits of $12.8 billion, or 66% of total deposits at September 30, 2025.
Borrowings
Total borrowings were $192.0 million at December 31, 2025, compared to $190.1 million at September 30, 2025, and includes subordinated notes, senior notes and trust preferred debt acquired in the HomeStreet merger.
Equity
During the fourth quarter of 2025, total shareholders’ equity increased by $88.2 million to $2.9 billion and tangible common equity (1) increased by $19.0 million to $1.8 billion at December 31, 2025. The increase in total shareholders’ equity for the fourth quarter resulted from net income in the fourth quarter of 2025, less dividends paid to common shareholders.
At December 31, 2025, book value per common share increased to $12.93, compared to $12.54 at September 30, 2025. At December 31, 2025, tangible book value per common share (1) increased to $7.81, compared to $7.73 at September 30, 2025.
(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 16.28% and a Tier 1 leverage ratio of 8.65% at December 31, 2025. The following table presents our regulatory capital ratios as of the dates indicated:
December 31,
2025
September 30,
2025
June 30,
2025
March 31,
2025
December 31,
2024
Mechanics Bancorp (1),(2)
Tier 1 leverage capital (to average assets)
8.65
%
10.34
%
n/a
n/a
n/a
Common equity Tier 1 capital (to risk-weighted assets)
14.07
%
13.42
%
n/a
n/a
n/a
Tier 1 risk-based capital (to risk-weighted assets)
14.07
%
13.42
%
n/a
n/a
n/a
Total risk-based capital (to risk-weighted assets)
16.28
%
15.57
%
n/a
n/a
n/a
Mechanics Bank (1)
Tier 1 leverage capital (to average assets)
9.58
%
11.46
%
10.16
%
9.91
%
9.66
%
Common equity Tier 1 capital (to risk-weighted assets)
15.59
%
14.87
%
18.27
%
16.89
%
16.14
%
Tier 1 risk-based capital (to risk-weighted assets)
15.59
%
14.87
%
18.27
%
16.89
%
16.14
%
Total risk-based capital (to risk-weighted assets)
16.88
%
16.13
%
19.10
%
17.77
%
17.14
%
(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 December 31, 2025 are preliminary.
At December 31, 2025, Mechanics had available borrowing capacity of $6.2 billion from the FHLB, $4.4 billion from the Federal Reserve and $5.3 billion under borrowing lines established with other financial institutions.
CREDIT QUALITY
Asset Quality Information and Ratios
(dollars in thousands)
December 31, 2025
September 30,
2025
June 30,
2025
March 31, 2025
December 31,
2024
Delinquent loans held for investment:
30-89 days past due
$
58,459
$
55,883
$
106,710
$
100,225
$
91,337
90+ days past due
34,686
38,316
10,660
5,248
6,082
Total delinquent loans
$
93,145
$
94,199
$
117,370
$
105,473
$
97,419
Total delinquent loans to loans held for investment
0.66
%
0.65
%
1.27
%
1.12
%
1.01
%
Nonperforming assets
Nonaccrual loans
$
42,863
$
60,586
$
18,606
$
9,905
$
10,693
90+ days past due and accruing
3,943
2,653
717
211
211
Total nonperforming loans
46,806
63,239
19,323
10,116
10,904
Foreclosed assets
4,990
1,675
—
13,400
15,600
Total nonperforming assets
$
51,796
$
64,914
$
19,323
$
23,516
$
26,504
Allowance for credit losses on loans
$
153,319
$
168,959
$
68,334
$
75,515
$
88,558
Allowance for credit losses on loans to total loans held for investment
1.08
%
1.16
%
0.74
%
0.80
%
0.92
%
Allowance for credit losses on loans to nonaccrual loans
357.70
%
278.88
%
367.27
%
762.38
%
828.22
%
Nonaccrual loans to total loans held for investment
0.30
%
0.42
%
0.20
%
0.11
%
0.11
%
Nonperforming assets to total assets
0.23
%
0.29
%
0.12
%
0.14
%
0.16
%
At December 31, 2025, total delinquent loans were $93.1 million, compared to $94.2 million at September 30, 2025. Total delinquent loans as a percentage of total loans were 0.66% at December 31, 2025, as compared to 0.65% at September 30, 2025.
At December 31, 2025, nonperforming assets were $51.8 million, compared to $64.9 million at September 30, 2025. The decrease was mostly due to loan charge-offs and repayments. Nonperforming assets as a percentage of total assets decreased to 0.23% at December 31, 2025 as compared to 0.29% at September 30, 2025.
Allowance for Credit Losses
Quarter Ended
Year Ended
(dollars in thousands)
December 31,
2025
September 30,
2025
December 31,
2024
December 31,
2025
December 31,
2024
Allowance for credit losses on loans:
Beginning balance
$
168,959
$
68,334
$
103,481
$
88,558
$
133,778
Initial allowance on acquired purchased credit deteriorated (“PCD”) loans
—
63,494
—
63,494
—
Initial allowance on acquired purchased seasoned loans (“PSL”) (1)
20,252
—
—
20,252
—
Provision (reversal of provision) for credit losses (1)
(22,160
)
46,058
(4,243
)
20,503
(1,559
)
Loans charged off
(17,052
)
(12,803
)
(13,512
)
(52,021
)
(59,546
)
Recoveries
3,320
3,876
2,832
12,533
15,885
Ending balance
$
153,319
$
168,959
$
88,558
$
153,319
$
88,558
Allowance for credit losses on unfunded lending commitments:
Beginning balance
$
8,431
$
3,735
$
4,831
$
4,366
$
4,314
Initial allowance on acquired loans
—
3,736
—
3,736
—
Provision (reversal of provision) for credit losses
(1,316
)
960
(465
)
(987
)
52
Ending balance
$
7,115
$
8,431
$
4,366
$
7,115
$
4,366
Net charge-offs to average loans (2)
0.38
%
0.32
%
0.43
%
0.36
%
0.43
%
(1)
The third quarter of 2025 included a provision for credit losses of $20.2 million for non-PCD loans, which are also considered purchased seasoned loans, acquired in the HomeStreet merger. As discussed in “Adoption of Purchased Seasoned Loans Accounting Standard,” in the fourth quarter of 2025, 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. Required disclosures regarding the impact of the adoption and its impact on reported third quarter 2025 results will be presented when the Company files 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.
(2)
For periods less than a year, ratios are annualized.
The allowance for credit losses on loans totaled $153.3 million, or 1.08% of total loans at December 31, 2025, compared to $169.0 million, or 1.16% of total loans at September 30, 2025. The allowance decreased due to repayments in the auto portfolio, which has a higher level of reserves, and the charge off of a specific reserve associated with an acquired syndicated loan.
Conference Call
The Company will host a conference call and webcast to discuss its fourth quarter 2025 financial results at 11:00 a.m. Eastern Time (ET) on Friday, January 30, 2026. 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 763176 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 196939. The replay will be available until 11:59 p.m. (Eastern Time) on February 6, 2026.
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 $22.4 billion in assets as of December 31, 2025, 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. All statements, other than statements of historical fact, contained or incorporated by reference in this Annual Report, 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 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. 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. 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)
(dollars in thousands)
December 31, 2025
September 30,
2025
June 30,
2025
March 31,
2025
December 31,
2024
ASSETS
Cash and cash equivalents
$
1,029,983
$
1,442,647
$
2,078,960
$
798,309
$
999,711
Trading securities
49,518
50,357
—
—
—
Securities available-for-sale
3,993,385
3,490,478
2,562,438
3,586,322
3,065,251
Securities held-to-maturity
1,336,632
1,363,636
1,391,211
1,416,914
1,440,494
Loans held for sale
5,967
54,985
415
219
543
Loan receivables
14,176,936
14,568,795
9,239,834
9,416,024
9,643,497
Allowance for credit losses on loans
(153,319
)
(168,959
)
(68,334
)
(75,515
)
(88,558
)
Net loan receivables
14,023,617
14,399,836
9,171,500
9,340,509
9,554,939
Mortgage servicing rights
85,832
88,595
—
—
—
Other real estate owned
4,990
1,675
—
13,400
15,600
Federal Home Loan Bank stock, at cost
17,292
17,294
17,250
17,250
17,250
Premises and equipment, net
143,895
143,917
114,715
115,509
117,362
Bank-owned life insurance
170,339
169,163
84,786
84,300
83,741
Goodwill
843,305
843,305
843,305
843,305
843,305
Other intangible assets, net
212,491
143,264
33,309
35,975
38,744
Right-of-use asset
82,076
85,657
56,696
56,268
53,545
Interest receivable and other assets
352,153
414,011
216,588
232,037
259,627
TOTAL ASSETS
$
22,351,475
$
22,708,820
$
16,571,173
$
16,540,317
$
16,490,112
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES
Noninterest-bearing demand deposits
$
6,744,082
$
6,748,479
$
5,453,890
$
5,495,994
$
5,616,116
Interest-bearing transaction accounts
8,128,832
7,918,670
6,359,590
6,357,909
6,138,909
Savings and time deposits
4,152,083
4,785,670
2,155,383
2,132,323
2,186,779
Total deposits
19,024,997
19,452,819
13,968,863
13,986,226
13,941,804
Long-term debt
192,014
190,123
—
—
—
Operating lease liability
86,794
90,796
59,233
58,914
56,094
Interest payable and other liabilities
185,295
200,948
126,460
121,087
190,346
TOTAL LIABILITIES
19,489,100
19,934,686
14,154,556
14,166,227
14,188,244
SHAREHOLDERS’ EQUITY
Common stock
2,402,193
2,401,989
2,122,374
2,122,117
2,122,117
Retained earnings
456,695
380,954
325,793
283,308
239,517
Accumulated other comprehensive income (loss), net of tax
3,487
(8,809
)
(31,550
)
(31,335
)
(59,766
)
TOTAL SHAREHOLDERS’ EQUITY
2,862,375
2,774,134
2,416,617
2,374,090
2,301,868
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
$
22,351,475
$
22,708,820
$
16,571,173
$
16,540,317
$
16,490,112
Common shares outstanding-Class A and B
221,305,009
221,203,135
202,015,832
201,999,328
201,999,328
CONSOLIDATED INCOME STATEMENTS (UNAUDITED)
Quarter Ended
Year Ended
(dollars in thousands, except per share amounts)
December 31, 2025
September 30, 2025
December 31, 2024
December 31, 2025
December 31, 2024
INTEREST INCOME
Loans interest and fees
$
192,591
$
141,773
$
124,504
$
572,272
$
528,514
Investment securities
49,529
40,266
40,572
179,393
131,810
Interest-bearing cash and other
13,018
22,849
11,776
60,099
75,394
Total interest income
255,138
204,888
176,852
811,764
735,718
INTEREST EXPENSE
Deposits
68,967
57,496
48,399
219,618
189,258
Borrowed funds
—
124
1
124
26,429
Long-term debt
4,706
1,598
52
6,304
862
Total interest expense
73,673
59,218
48,452
226,046
216,549
Net interest income
181,465
145,670
128,400
585,718
519,169
Provision (reversal of provision) for credit losses on loans
(22,160
)
46,058
(4,243
)
20,503
(1,559
)
Provision (reversal of provision) for credit losses on unfunded lending commitments
(1,316
)
960
(465
)
(987
)
52
Net interest income after provision for credit losses
204,941
98,652
133,108
566,202
520,676
NONINTEREST INCOME (LOSS)
Service charges on deposit accounts
6,360
5,875
5,796
23,221
23,650
Trust fees and commissions
3,565
3,117
3,478
13,017
12,319
ATM network fee income
4,137
3,425
3,074
13,490
12,158
Loan servicing income
1,873
680
182
2,898
968
Net gain (loss) on sales and calls of investment securities
276
155
—
4,568
(207,203
)
Income from bank-owned life insurance
1,699
2,120
456
4,848
2,600
Bargain purchase gain
55,097
90,363
—
145,460
—
Other
5,514
4,043
5,549
15,403
16,388
Total noninterest income (loss)
78,521
109,778
18,535
222,905
(139,120
)
NONINTEREST EXPENSE
Salaries and employee benefits
68,566
54,168
43,456
219,319
191,173
Occupancy
11,967
9,566
8,200
37,842
32,313
Equipment
9,826
7,288
5,771
29,271
23,414
Professional services
6,816
5,560
5,976
23,199
21,374
FDIC assessments and regulatory fees
1,851
2,722
5,946
8,999
14,625
Amortization of intangible assets
7,479
4,251
2,742
17,134
13,447
Data processing
4,876
3,315
2,167
11,741
8,901
Loan related
3,802
4,439
1,559
13,038
6,975
Marketing and advertising
1,123
680
666
3,131
3,269
Other real estate owned related
(221
)
(103
)
617
2,464
2,505
Acquisition and integration costs
3,507
63,869
—
73,365
—
Other
9,918
7,574
7,349
30,054
27,863
Total noninterest expense
129,510
163,329
84,449
469,557
345,859
Income before income tax expense (benefit)
153,952
45,101
67,194
319,550
35,697
INCOME TAX EXPENSE (BENEFIT)
29,650
(10,060
)
15,531
53,811
6,698
NET INCOME
$
124,302
$
55,161
$
51,663
$
265,739
$
28,999
Basic earnings per share
Class A common stock
$
0.54
$
0.25
$
0.24
$
1.22
$
0.14
Class B common stock
$
5.36
$
2.53
$
2.44
$
12.03
$
1.37
Diluted earnings per share
Class A common stock
$
0.54
$
0.25
$
0.24
$
1.22
$
0.14
Class B common stock
$
5.36
$
2.53
$
2.44
$
12.03
$
1.37
Basic weighted-average shares outstanding
Class A common stock
220,865,980
207,189,764
200,884,880
207,512,468
200,878,747
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
221,095,493
207,258,678
200,977,311
207,617,154
200,938,167
Class B common stock
1,114,448
1,114,448
1,114,448
1,114,448
1,114,448
LOANS HELD FOR INVESTMENT
(in thousands)
December 31,
2025
September 30,
2025
June 30,
2025
March 31,
2025
December 31,
2024
Commercial and industrial
$
482,170
$
547,311
$
280,551
$
352,267
$
410,040
Commercial real estate
Multifamily
5,355,252
5,448,374
2,826,750
2,833,328
2,794,581
Non-owner occupied
1,740,277
1,864,040
1,551,617
1,618,001
1,657,597
Owner occupied
689,079
709,239
323,419
341,446
360,100
Construction and land development
493,992
535,776
135,013
119,089
104,430
Residential real estate
3,970,803
3,907,101
2,438,271
2,336,268
2,280,963
Auto
791,012
954,615
1,147,967
1,363,084
1,596,935
Other consumer
654,351
602,339
536,246
452,541
438,851
Total LHFI
$
14,176,936
$
14,568,795
$
9,239,834
$
9,416,024
$
9,643,497
COMPOSITION OF DEPOSITS
(in thousands)
December 31,
2025
September 30,
2025
June 30,
2025
March 31,
2025
December 31,
2024
Deposits by product:
Noninterest-bearing demand deposits
$
6,744,082
$
6,748,479
$
5,453,890
$
5,495,994
$
5,616,116
Interest-bearing:
Interest-bearing demand deposits
1,878,468
1,733,215
1,331,785
1,384,081
1,435,266
Savings
1,367,475
1,398,430
1,173,943
1,201,988
1,216,900
Money market
6,250,364
6,185,455
5,027,805
4,973,828
4,703,643
Certificates of deposit
2,784,608
3,387,240
981,440
930,335
969,879
Total interest-bearing deposits
12,280,915
12,704,340
8,514,973
8,490,232
8,325,688
Total deposits
$
19,024,997
$
19,452,819
$
13,968,863
$
13,986,226
$
13,941,804
SUMMARY FINANCIAL DATA
Quarter Ended
Year Ended
December 31,
2025
September 30,
2025
December 31,
2024
December 31,
2025
December 31,
2024
Select performance ratios:
Return on average equity (1)
17.66
%
8.61
%
8.95
%
10.57
%
1.29
%
Return on average tangible equity (1) , (2)
28.47
%
14.17
%
15.09
%
17.37
%
2.83
%
Return on average assets (1)
2.20
%
1.18
%
1.25
%
1.44
%
0.17
%
Efficiency ratio
49.8
%
63.9
%
57.5
%
58.1
%
91.0
%
Efficiency ratio (non-GAAP) (2)
46.9
%
62.3
%
55.6
%
55.9
%
87.5
%
Net interest margin (1)
3.47
%
3.36
%
3.38
%
3.43
%
3.31
%
As of
December 31, 2025
September 30,
2025
June 30,
2025
March 31, 2025
December 31, 2024
Other data:
Book value per share
$
12.93
$
12.54
$
11.96
$
11.75
$
11.40
Tangible book value per share (2)
$
7.81
$
7.73
$
7.26
$
7.05
$
6.70
Common equity ratio
12.81
%
12.22
%
14.58
%
14.35
%
13.96
%
Tangible common equity ratio (2)
8.48
%
8.23
%
9.81
%
9.54
%
9.10
%
Loans to deposit ratio
74.52
%
74.89
%
66.15
%
67.32
%
69.17
%
Full time equivalent employees
1,921
2,036
1,303
1,426
1,439
(1)
For periods less than a year, 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.
NET INTEREST MARGIN
Quarter Ended
December 31, 2025
September 30, 2025
December 31, 2024
(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
$
1,094,743
$
10,262
3.72
%
$
1,851,414
$
19,858
4.26
%
$
935,774
$
10,348
4.40
%
Investment securities
5,090,812
49,529
3.86
%
4,248,163
40,266
3.76
%
4,319,572
40,572
3.74
%
Loans (2)
14,412,244
192,591
5.30
%
10,959,795
141,773
5.13
%
9,777,388
124,504
5.07
%
FHLB stock and other investments
149,275
2,756
7.33
%
119,880
2,991
9.90
%
98,779
1,428
5.75
%
Total interest-earning assets
20,747,074
255,138
4.88
%
17,179,252
204,888
4.73
%
15,131,513
176,852
4.65
%
Noninterest-earning assets
1,686,765
1,418,197
1,300,345
Total assets
$
22,433,839
$
18,597,449
$
16,431,858
Liabilities and shareholders’ equity:
Interest-bearing liabilities:
Interest-bearing deposits:
Demand deposits
$
1,789,672
$
2,815
0.62
%
$
1,480,835
$
1,196
0.32
%
$
1,389,096
$
1,575
0.45
%
Money market and savings
7,637,068
40,636
2.11
%
6,701,690
42,382
2.51
%
6,012,678
39,718
2.63
%
Certificates of deposit
3,089,704
25,516
3.28
%
1,758,659
13,918
3.14
%
1,021,815
7,106
2.77
%
Total
12,516,444
68,967
2.19
%
9,941,184
57,496
2.29
%
8,423,589
48,399
2.29
%
Borrowings:
Borrowings
—
—
—
%
10,939
124
4.48
%
—
—
—
%
Long-term debt
190,783
4,706
9.79
%
63,034
1,598
10.06
%
3,545
53
5.88
%
Total interest-bearing liabilities
12,707,227
73,673
2.30
%
10,015,157
59,218
2.35
%
8,427,134
48,452
2.29
%
Noninterest-bearing liabilities:
Demand deposits (3)
6,634,915
5,823,539
5,503,664
Other liabilities
299,387
216,836
203,884
Total liabilities
19,641,529
16,055,532
14,134,682
Shareholders’ equity
2,792,310
2,541,917
2,297,176
Total liabilities and shareholders’ equity
$
22,433,839
$
18,597,449
$
16,431,858
Net interest income
$
181,465
$
145,670
$
128,400
Net interest rate spread
2.58
%
2.38
%
2.36
%
Net interest margin
3.47
%
3.36
%
3.38
%
(1)
For periods less than a year, ratios are annualized.
(2)
Includes loans held for sale.
(3)
Cost of all deposits, including noninterest-bearing demand deposits, was 1.43%, 1.45% and 1.38% for the quarters ended December 31, 2025, September 30, 2025 and December 31, 2024, respectively.
Year Ended December 31,
2025
2024
(dollars in thousands)
Average
Balance
Interest
Average
Yield/Cost
Average
Balance
Interest
Average
Yield/Cost
Assets:
Interest-earning assets:
Cash and cash equivalents
$
1,270,348
$
51,975
4.09
%
$
1,377,338
$
69,662
5.06
%
Investment securities
4,615,697
179,393
3.89
%
4,016,215
131,810
3.28
%
Loans (1)
11,063,647
572,272
5.17
%
10,177,692
528,514
5.19
%
FHLB stock and other investments
118,599
8,124
6.85
%
101,598
5,732
5.64
%
Total interest-earning assets
17,068,291
811,764
4.76
%
15,672,843
735,718
4.69
%
Noninterest-earning assets
1,426,002
1,330,445
Total assets
$
18,494,293
$
17,003,288
Liabilities and shareholders’ equity:
Interest-bearing liabilities:
Interest-bearing deposits:
Demand deposits
$
1,505,484
$
6,354
0.42
%
$
1,474,428
$
9,177
0.62
%
Money market and savings
6,660,081
162,114
2.43
%
5,835,061
151,689
2.60
%
Certificates of deposit
1,693,105
51,150
3.02
%
1,021,679
28,392
2.78
%
Total
9,858,670
219,618
2.23
%
8,331,168
189,258
2.27
%
Borrowings:
Borrowings
2,760
124
4.48
%
553,284
26,429
4.78
%
Long-term debt
63,976
6,304
9.85
%
15,809
862
5.45
%
Total interest-bearing liabilities
9,925,406
226,046
2.28
%
8,900,261
216,549
2.43
%
Noninterest-bearing liabilities:
Demand deposits (2)
5,817,264
5,640,938
Other liabilities
236,997
206,823
Total liabilities
15,979,667
14,748,022
Shareholders’ equity
2,514,626
2,255,266
Total liabilities and shareholders’ equity
$
18,494,293
$
17,003,288
Net interest income
$
585,718
$
519,169
Net interest spread
2.48
%
2.26
%
Net interest margin
3.43
%
3.31
%
(1)
Includes loans held for sale.
(2)
Cost of deposits including noninterest-bearing deposits, was 1.40% and 1.35% for the years ended December 31, 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 (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.
(dollars in thousands, except per share amounts)
Quarter Ended
Year Ended
Return on Average Equity and Return on Average Tangible Equity
Ref.
December 31, 2025
September 30,
2025
December 31, 2024
December 31, 2025
December 31, 2024
Net income
(a)
$
124,302
$
55,161
$
51,663
$
265,739
$
28,999
Add: intangibles amortization, net of tax (1)
5,442
3,040
1,961
12,305
9,615
Net income, excluding the impact of intangible amortization, net of tax
(b)
$
129,744
$
58,201
$
53,624
$
278,044
$
38,614
Average shareholders’ equity
(c)
$
2,792,310
$
2,541,917
$
2,297,176
$
2,514,626
$
2,255,266
Less: average goodwill and other intangible assets
984,105
912,679
883,522
914,226
888,462
Average tangible shareholders’ equity
(d)
$
1,808,205
$
1,629,238
$
1,413,654
$
1,600,400
$
1,366,804
Return on average equity (2)
(a) / (c)
17.66
%
8.61
%
8.95
%
10.57
%
1.29
%
Return on average tangible equity (non-GAAP) (2)
(b) / (d)
28.47
%
14.17
%
15.09
%
17.37
%
2.83
%
(1) Estimated statutory tax rate of 27.25% and 28.19% for the quarter and year ended December 31, 2025, respectively, and 28.50% for all other periods presented.
(2) For periods less than a year, ratios are annualized.
Quarter Ended
Year Ended
Efficiency Ratio
December 31, 2025
September 30,
2025
December 31, 2024
December 31, 2025
December 31, 2024
Noninterest expense
(e)
$
129,510
$
163,329
$
84,449
$
469,557
$
345,859
Less: intangibles amortization
7,479
4,251
2,742
17,134
13,447
Noninterest expense, excluding the impact of intangible amortization
(f)
122,031
159,078
81,707
452,423
332,412
Net interest income
(g)
181,465
145,670
128,400
585,718
519,169
Noninterest income (loss)
(h)
78,521
109,778
18,535
222,905
(139,120
)
Efficiency ratio
(e) / (g+h)
49.8
%
63.9
%
57.5
%
58.1
%
91.0
%
Efficiency ratio (non-GAAP)
(f) / (g+h)
46.9
%
62.3
%
55.6
%
55.9
%
87.5
%
As of
Book Value per Share and Tangible Book Value per Share
December 31, 2025
September 30,
2025
June 30,
2025
March 31, 2025
December 31, 2024
Total shareholders’ equity
(i)
$
2,862,375
$
2,774,134
$
2,416,617
$
2,374,090
$
2,301,868
Less: goodwill and other intangible assets
1,055,796
986,569
876,614
879,280
882,049
Total tangible shareholders’ equity
(j)
$
1,806,579
$
1,787,565
$
1,540,003
$
1,494,810
$
1,419,819
Common shares outstanding-Class A and B
(k)
221,305,009
221,203,135
202,015,832
201,999,328
201,999,328
Common shares outstanding-Class A
220,190,561
220,088,687
200,901,384
200,884,880
200,884,880
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 (3)
(l)
231,335,041
231,233,167
212,045,864
212,029,360
212,029,360
Book value per share
(i) / (k)
$
12.93
$
12.54
$
11.96
$
11.75
$
11.40
Tangible book value per share (non-GAAP)
(j) / (l)
$
7.81
$
7.73
$
7.26
$
7.05
$
6.70
(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
December 31, 2025
September 30,
2025
June 30,
2025
March 31, 2025
December 31, 2024
Total shareholders’ equity
(m)
$
2,862,375
$
2,774,134
$
2,416,617
$
2,374,090
$
2,301,868
Less: goodwill and other intangible assets
1,055,796
986,569
876,614
879,280
882,049
Total tangible shareholders’ equity
(n)
$
1,806,579
$
1,787,565
$
1,540,003
$
1,494,810
$
1,419,819
Total assets
(o)
$
22,351,475
$
22,708,820
$
16,571,173
$
16,540,317
$
16,490,112
Less: goodwill and other intangible assets
1,055,796
986,569
876,614
879,280
882,049
Total tangible assets
(p)
$
21,295,679
$
21,722,251
$
15,694,559
$
15,661,037
$
15,608,063
Common equity ratio
(m) / (o)
12.81
%
12.22
%
14.58
%
14.35
%
13.96
%
Tangible common equity ratio (non-GAAP)
(n) / (p)
8.48
%
8.23
%
9.81
%
9.54
%
9.10
%