Mechanics Bancorp · NASDAQ:MCHB
Mechanics Bancorp — Q3 2025 Earnings Presentation
30 slides from Mechanics Bancorp's earnings presentation, Oct 30, 2025
Slide 1: Mechanics Bancorp Third Quarter Earnings Presentation
Mechanics Bancorp Third Quarter Earnings Presentation October 30, 2025 Seattle, WA San Francisco, CA Los Angeles, CA 1
Slide 2: Disclaimer
Disclaimer FORWARD-LOOKING STATEMENTS This presentation and statements made by representatives of Mechanics Bancorp (“Mechanics” or the “Company”) during the course of this presentation include “forward- looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.
Slide 3: Disclaimer (cont'd): Presentation of Results – HomeStreet Bank Merger
Disclaimer (cont’d) 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 (lega
Slide 4: Mechanics Bancorp 3rd Quarter 2025 Financial Highlights
Mechanics Bancorp 3rd Quarter 2025 Financial Highlights 4 3rd Quarter Financial Highlights 9/30/2025 Summary Balance Sheet ▪ Mechanics Bancorp reported net income of $55.2mm in Q3’25 ▪ Fully diluted EPS of $0.25, BVPS of $12.54 and TBVPS of $7.731 ▪ ROAA of 1.18% and ROATCE of 14.2%1 ▪ $90.4mm barga
Slide 5: HomeStreet Merger Update
HomeStreet Merger Update Overview of Financials Highlights 5 Expected at Announcement 3Q25 / Updated ExpectationsMetric • Successful acquisition of HomeStreet, with transaction closing September 2, 2025 • Regulatory approval received promptly • Core systems conversion on track for March 2026 • On tr
Slide 6: Mechanics Bancorp Overview
Key Stats2 vs. KRX3 Regional Banking Index Mechanics Bancorp Overview Source: S&P Global Market Intelligence; Note: Financial data as of September 30, 2025, unless otherwise specified; 1 Includes banks headquartered in California with less than $250bn in total assets. 2 2026E ROATCE and ROAA fully s
Slide 7: Strong Profitability and Capital vs. West Coast Peers
Strong Profitability and Capital vs. West Coast Peers¹ 2026E ROATCE2 ~1.4% 1.34% 1.21% 1.17% 1.17% 1.04% 1.00% 0.92% 0.89% 0.87% 0.84% 0.73% 2026E CVBF GBCI BANR TCBK FHB FIBK HTBK HFWA WAFD BOH BANC 2026E ROAA2 Source: FactSet, S&P Global Market Intelligence; Note: Financial data as of most recent
Slide 8: 4th Largest West Coast and 3rd Largest California Bank by Deposits
4th Largest West Coast and 3rd Largest California Bank by Deposits Top West Coast Headquartered Banks by Deposits Top California Headquartered Banks by Deposits Significant Scarcity Value in Highly Desirable West Coast and California Markets $47.7 $21.8 $15.4 $14.8 $12.0 $9.9 $8.7 $8.4 $5.7 $5.5 $53
Slide 9: Top Deposit Share in Many Attractive West Coast Markets
Top 10 Deposit Share in Many Attractive West Coast Markets Top West Coast MSAs Seattle San Francisco Los Angeles San Luis Obispo Santa Barbara Salinas Ventura Riverside El Centro Siskiyou County $3.8 | #10 $1.1 | #6 $3.2 | #9 $2.1 | #29 $1.5 | #2 $1.0 | #4 $0.8 | #17 $0.6 | #7 $0.4 | #1 $0.8 | #6 To
Slide 10: Top Decile Deposit Franchise
Top Decile Deposit Franchise ▪ One of the most attractive, high-quality deposit franchises in the U.S. ▪ Average deposit account size of $43k and an average relationship tenure of nearly 18 years ▪ Highly diversified deposit book (52% consumer, 41% business, 7% public) ▪ Prior to HomeStreet acquisit
Slide 11: Consistently Superior Credit Quality
2016 2019 2022 2025 Consistently Superior Credit Quality Commercial banks 0.59% 0.26% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 2016 2019 2022 2025 11 (0.05%) 0.00% 0.05% 0.10% 0.15% 0.20% 0.25% 0.30% 0.35% 2016 2019 2022 2025 2016 2019 2022 2025 0.10% 0.17% 0.22% 0.00% 0.00% 0.02% NCOs / Average Loans NP
Slide 12: Granular, Low-Risk Commercial Lending with a Multifamily Focus
Granular, Low-Risk Commercial Lending with a Multifamily Focus ✓ Mechanics Bank’s commercial lending is highly granular and well-diversified across both collateral types and geography ✓ Focus on multifamily lending, with an emphasis on Southern California (54% of total multifamily) ▪ Average multifa
Slide 13: Dual-Pronged Strategy: Acquisitions and Operational Excellence
Dual-Pronged Strategy: Acquisitions and Operational Excellence 13 PREMIER DEPOSIT FRANCHISES: Focus on leveraging Mechanics platform to acquire high-quality, core deposit franchises that provide low-cost funding ADDRESSABLE CHALLENGES: Opportunistic acquiror focused on companies with addressable iss
Slide 14: Mechanics Bank Strategy
Mechanics Bank Strategy 14 Efficiently integrate HomeStreet acquisition, including carefully planned core systems conversion in Q1 2026✓ Continued prudence with mortgage and commercial real estate lending✓ Continued runoff and likely sale of the remaining auto book✓ Maintain single family constructi
Slide 15: Third Quarter 2025 Financial Highlights
Third Quarter 2025 Financial Highlights 15
Slide 16: Third Quarter 2025 Financial Highlights
Third Quarter 2025 Financial Highlights 16 ➢ Q3‘25 net income was $55.2 million, up from $42.5 million in Q2’25, and up from $39.9 million in Q3‘24 ➢ Q3‘25 ROAA and ROATCE were 1.18% and 14.2%1, respectively ➢ Net loans increased $5.3 billion during Q3‘25, driven primarily by increases of $2.6 billi
Slide 17: Net Interest Income & Margin
$15.9 $15.1 $15.1 $15.2 $17.2 3.28% 3.38% 3.45% 3.44% 3.36% Q3 '24 Q4 '24 Q1 '25 Q2 '25 Q3 '25 Average Earning Assets NIM Net Interest Income & Margin Average Earning Assets and NIM Trends Key Highlights 17 Average Earning Assets Mix Trend ($ in billions) ➢ Q3‘25 net interest income increased $15.5
Slide 18: Non-Interest Income
Non-Interest Income Non-Interest Income Trend Non-Interest Income Mix (ex Bargain Purchase Gain) Key Highlights 18 ($ in millions) ➢ Q3’25 non-interest income increased $90.2 million, or 459.4%, to $109.8 million from $19.6 million in Q2’25, primarily from the $90.4 million bargain purchase gain rel
Slide 19: Non-Interest Expense
Non-Interest Expense Non-Interest Expense Trend Non-Interest Expense (ex Acquisition and Integration Costs) Key Highlights 19 ($ in millions) ➢ Q3’25 non-interest expense increased $72.2 million, or 79.3%, to $163.3 million from $91.1 million in Q2’25 ➢ Merger-related costs during Q3‘25 were $63.9 m
Slide 20: Loan Portfolio Overview
Loan Portfolio Overview Loan Balance and Yield Trends Quarter-over-Quarter Loan Metrics Key Highlights 20 9.9 9.6 9.4 9.2 14.6 10.0 9.8 9.5 9.3 11.0 5.19% 5.07% 5.03% 5.16% 5.13% Q3 '24 Q4 '24 Q1 '25 Q2 '25 Q3 '25 Loans Avg Loans Loan Yield ($ in billions) ($ in millions) ➢ Q3‘25 loan interest incom
Slide 21: Securities Portfolio
Securities Portfolio Securities Balance and Yield Trends Quarter-over-Quarter Loan Metrics Key Highlights Quarte -over-Quarte Securities Metrics 21 4.2 4.5 5.0 4.0 4.9 4.0 4.3 4.8 4.3 4.2 3.65% 3.74% 4.04% 3.88% 3.76% Q3 '24 Q4 '24 Q1 '25 Q2 '25 Q3 '25 Securities Avg Securities Securities Yield ($ i
Slide 22: Deposits Overview
Deposits Overview Deposit Balance and Cost Trends Quarter-over-Quarter Loan Metrics Key Highlights Quarter-over-Quarter Deposit Metrics 22 14.1 13.9 14.0 14.0 19.5 14.0 13.9 13.8 13.9 15.8 1.49% 1.38% 1.32% 1.39% 1.45% Q3 '24 Q4 '24 Q1 '25 Q2 '25 Q3 '25 Deposits Avg Deposits Deposits Rate ($ in bill
Slide 23: Capital and Liquidity Update
➢ Mechanics Bank is well-capitalized and meets all internal policy limits ➢ Available liquidity totaled approximately $14.8 billion at 9/30/25, an increase of $1.6 billion relative to 6/30/25 ➢ Available funding capacity will significantly increase in Q4 as the Bank completes pledging the HomeStreet
Slide 24: Asset Quality
Asset Quality NCOs / Average Loans Loan Loss Reserves / NPAs NPAs / Assets Loan Loss Reserves / Loans HFI 24 0.41% 0.39% 0.37% 0.31% 0.28% 0.04% 0.05% 0.02% 0.01% 0.04% 0.45% 0.43% 0.40% 0.32% 0.32% Q3 '24 Q4 '24 Q1 '25 Q2 '25 Q3 '25 Auto NCOs / Avg Loans Non-Auto NCOs / Avg Loans 1.04% 0.92% 0.80%
Slide 25: Appendix
& Mechanics Appendix
Slide 26: Details on Mechanics Bank Deposits at 9/30/2025
Details on Mechanics Bank Deposits at 9/30/2025 26Source: Mechanics management; Note: Financial data as of September 30, 2025; ¹ Represents spot rate as of September 30, 2025; ² Assumes runoff of $930mm of high-cost CDs. Mechanics Bank Deposits ($ in millio ns , except acco unt da ta) Segment Number
Slide 27: Non-GAAP Financial Measures and Reconciliations
Non-GAAP Financial Measures and Reconciliations Return on Average Equity and Return on Average Tangible Equity 27 Return on Average Equity and Return on Average Tangible Equity Ref September 30, 2025 June 30, 2025 September 30, 2024 Net Income (loss) (a) 55,161$ 42,485$ 39,944$ Add: intangibles amor
Slide 28: Non-GAAP Reconciliations (cont'd): Efficiency Ratio
Non-GAAP Financial Measures and Reconciliations (cont’d) Efficiency Ratio 28 Efficiency Ratio Ref September 30, 2025 June 30, 2025 March 31, 2025 December 31, 2024 September 30, 2024 Noninterest expense (e) 163,329$ 91,080$ 85,638$ 84,449$ 85,651$ Less: intangibles amortization 4,251 2,666 2,738 2,7
Slide 29: Non-GAAP Reconciliations (cont'd): Book Value and Tangible Book Value Per Share
Non-GAAP Financial Measures and Reconciliations (cont’d) Book Value and Tangible Book Value Per Share 29 As of Book Value and Tangible Book Value Per Share Ref September 30, 2025 June 30, 2025 September 30, 2024 Total shareholders’ equity (i) 2,774,134$ 2,416,617$ 2,299,264$ Less: goodwill and other
Slide 30: Non-GAAP Reconciliations (cont'd): Common Equity Ratio and Tangible Common Equity Ratio
Non-GAAP Financial Measures and Reconciliations (cont’d) Common Equity Ratio and Tangible Common Equity Ratio 30 As of Common Equity Ratio and Tangible Common Equity Ratio Ref September 30, 2025 June 30, 2025 September 30, 2024 Total shareholders’ equity (m) 2,774,134$ 2,416,617$ 2,299,264$ Less: go