Mechanics Bancorp · NASDAQ:MCHB
Mechanics Bancorp — Q2 2026 Earnings Presentation
33 slides from Mechanics Bancorp's earnings presentation, Jul 29, 2026
Slide 1: Mechanics Bancorp Second Quarter Earnings Presentation
Mechanics Bancorp Second Quarter Earnings Presentation July 29, 2026 Seattle, WA San Francisco, CA Los Angeles, CA 1
Slide 2: Disclaimer
Disclaimer FORWARD-LOOKING STATEMENTS AND OTHER 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
Slide 3: Disclaimer (cont’d)
Disclaimer (cont’d) FORWARD-LOOKING STATEMENTS AND OTHER (cont’d) For further discussion of such factors, see the risk factors described in our Annual Report on Form 10-K for the year ended December 31, 2025, Quarterly Reports on Form 10-Q and other reports that we have filed with the Securities and
Slide 4: Mechanics Bancorp 2nd Quarter 2026 Financial Highlights
Mechanics Bancorp 2nd Quarter 2026 Financial Highlights Condensed Balance Sheet 2nd Quarter 2026 Financial Highlights ($ in millions, except per share data) Q2 '26 Q1 '26 Q2 '25 Cash & Investments $ 6,007 $ 5,780 $ 6,033 Net Loans, including HFS 13,429 13,700 9,172 ▪ Mechanics Bancorp reported net i
Slide 5: Mechanics Bancorp Strategic Update
Mechanics Bancorp Strategic Update ➢ We substantially completed our HomeStreet merger integration during the second quarter ➢ A highly successful merger both financially and strategically, but a heavy operational lift across the enterprise and it’s good to get back to “business as usual” ➢ $5.9mm of
Slide 6: Mechanics Bancorp Overview
Mechanics Bancorp Overview 705 Everett Mechanics Bancorp Overview WA Seattle #4 / #4 $21.2bn 166 90 Tacoma 90 CA / West Coast market Seattle Olympia Total assets Branches 82 share by deposits1 5 182 5 Vancouver Portland 84 Key Stats vs. $10–100bn public U.S. banks 405 As of MRQ: As of MRQ: As of MRQ
Slide 7: 4th Largest California and 4th Largest West Coast Bank by Deposits
4th Largest California and 4th Largest West Coast Bank by Deposits Top West Coast Headquartered Banks by Deposits Top California Headquartered Banks by Deposits Includes banks headquartered in California, Oregon and Washington with less Includes banks headquartered in California with less than $250b
Slide 8: Top Deposit Share in Many Attractive West Coast Markets
Top 10 Deposit Share in Many Attractive West Coast Markets Top West Coast Markets California and Washington are Especially Attractive Markets Top 10 10–20 >20 Deposits ($bn) | Rank California is the 2nd largest deposit market in the U.S. San Francisco $3.8 | #10 Seattle $3.2 | #9 California has the
Slide 9: Exceptional Deposit Franchise
Exceptional Deposit Franchise Key Highlights of Mechanics’ Deposit Franchise Deposit Breakdown Since Rabobank Acquisition ▪ One of the most attractive, high-quality deposit franchises in the U.S. $bn USD Core deposits Non-core deposits Branches Cost of deposits 9/2/2025: ▪ Average account size of $4
Slide 10: Consistently Superior Credit Quality
Consistently Superior Credit Quality Mechanics’ loan portfolio has delivered consistently superior credit quality for the past decade Commercial NCOs / Average Loans Commercial banks 0.35% 0.30% 0.25% Related to legacy 0.20% HomeStreet loans (~$7mm) Related to two legacy 0.15% Rabobank N.A. loans (~
Slide 11: Low-Cost Deposits Deliver Superior Returns Despite Low-Risk Assets
Low-Cost Deposits Deliver Superior Returns Despite Low-Risk Assets LOW-COST LOW-RISK SUPERIOR MARKET-LEADING DEPOSIT BASE ASSET STRATEGY PROFITABILITY DIVIDEND YIELD Cost of Deposits of $10–100bn RWA / Assets of $10–100bn 2027E ROATCE of $10–100bn 2027E Dividend Yield of $10–100bn U.S. public banks
Slide 12: Compelling Investment Thesis
Compelling Investment Thesis ✓ Premier community bank in attractive West Coast markets (#4 CA and #4 West Coast bank by deposits¹) ✓ Leading profitability (~17% 2027E ROATCE) despite low-risk assets (58% RWA / Assets) ✓ Simple and efficient business model – straightforward asset strategy powered by
Slide 13: Second Quarter 2026 Financial Drivers
Second Quarter 2026 Financial Drivers 13
Slide 14: Net Interest Income & Margin
Net Interest Income & Margin Average Earning Assets and NIM Trends 1 Key Highlights ($ in billions) 3.61% 3.62% ➢ Q2‘26 net interest income decreased $1.9 million, or 3.50% 1.0%, to $177.2 million from $179.0 million for Q1‘26 3.44% 3.33% $20.7 $20.1 $19.7 ➢ Net interest margin increased 1 bp during
Slide 15: Low-Yielding Legacy Earning Asset Re-Pricing Forecast
Low-Yielding Legacy Earning Asset Re-Pricing Forecast ➢ Legacy unmarked earning asset repricing remains a key driver of future net interest income growth as ~$4.8 billion of low-yielding, COVID-era assets (weighted average yield of 3.12%) run off and are reinvested at current market rates 2033 & 2H
Slide 16: Net Interest Income Analysis – Variable Assets / Deposits
Net Interest Income Analysis – Variable Assets / Deposits ➢ Net interest income remains sensitive to changes in short-term interest rates, as we have ~$4.6 billion in greater balances of rate sensitive deposits than we do floating rate assets As of 06/30/26 Rates Up and Down Monthly NII Increase / (
Slide 17: Non-Interest Income
Non-Interest Income Non-Interest Income Trend Key Highlights ($ in millions) $109.8 ➢ Q2’26 non-interest income increased $2.8 million, or 13%, to $23.8 million from $21.0 million in Q1’26 $78.5 ➢ Q2’26 included $2.2 million of non-recurring income $90.4 $55.1 • $1.8mm MSR valuation adjustment • $0.
Slide 18: Non-Interest Expense
Non-Interest Expense Non-Interest Expense Trend 1, 2 Key Highlights ($ in millions) $163.3 ➢ Q2’26 non-interest expense decreased $6.0 million, or $130.4 $124.5 4.6%, to $124.5 million from $130.4 million in Q1’26 59.0% 62.6% 61.6% 58.4% $129.5 $63.9 $3.5 $4.8 $5.9 ➢ Merger-related costs during Q2‘2
Slide 19: Loan Portfolio Overview
Loan Portfolio Overview Loan Balance and Yield Trends 1 Key Highlights ($ in billions) ➢ Q2‘26 loan interest income decreased $3.0 million, or 1.7%, to $178.2 million from $181.2 million in Q1‘26 14.6 14.2 14.4 13.9 14.0 13.6 13.7 ➢ Loan yields decreased 3 bps in Q2‘26, driven by 5.34% slightly lowe
Slide 20: Granular, Low-Risk Commercial Lending with a Multifamily Focus
Granular, Low-Risk Commercial Lending with a Multifamily Focus ✓ Mechanics Bank’s commercial lending is highly granular and well-diversified across both collateral types and geography ✓ Focus on multifamily lending, with an emphasis on Southern California (54% of total multifamily) ▪ Average multifa
Slide 21: Asset Quality
Asset Quality NCOs / Average Loans NPAs / Assets 0.38% 0.29% 0.28% 0.32% 0.32% 0.25% 0.02% 0.23% 0.02% 0.01% 0.04% 0.02% 0.23% 0.02% 0.12% 0.31% 0.12% 0.26% 0.26% 0.28% 0.10% 0.21% 0.23% 0.06% 0.01% 0.15% 0.12% 0.09% 0.06% Q2 '25 Q3 '25 Q4 '25 Q1 '26 Q2 '26 Q2 '25 Q3 '25 Q4 '25 Q1 '26 Q2 '26 Auto NC
Slide 22: Securities Portfolio
Securities Portfolio Securities Balance and Yield Trends Key Highlights ($ in billions) 3.97% 3.97% ➢ Q2‘26 securities interest income, yield and average 3.88% 3.86% balances were consistent with Q1’26 3.76% ➢ The ending securities portfolio increased $156 million 5.4 5.3 5.4 5.5 5.4 5.1 during the
Slide 23: Deposits Overview
Deposits Overview Deposit Balance and Cost Trends Key Highlights ($ in billions) 19.5 ➢ Q2‘26 deposit interest expense decreased $1.8 million, 19.0 19.2 or 3%, to $56.5 million from $58.3 million for Q1 ’26 1.45% 1.43% 18.2 18.5 18.1 18.1 1.39% 1.28% 1.25% ➢ Cost of deposits decreased 3 bps in Q2’26
Slide 24: Mechanics Bank Deposit Stratification at 6/30/2026
Mechanics Bank Deposit Stratification at 6/30/2026 Mechanics Bank Deposits ($ in millions, except account data) Avg Relationship Number of Deposit Deposit Account Weighted Segment Accounts Balance ($) Balance (%) Size ($) Age (yrs) Cost1 (%) Consumer 346,311 8,883 49% 25,650 19.9 1.23% Business 68,1
Slide 25: Capital and Liquidity Update
Capital and Liquidity Update Capital Ratios Trend (%) 1 Key Highlights 18.3 19.1 ➢ Mechanics Bancorp’s capital ratios exceed minimums 15.6 16.3 16.2 16.7 to be “well-capitalized” and meet all regulatory 14.1 14.4 13.4 13.9 capital requirements and internal policy limits 10.2 10.3 8.7 8.7 8.7 ➢ The s
Slide 26: Appendix
& Mechanics Appendix
Slide 27: Details on Mechanics Bank Standalone CRE Portfolio
Details on Mechanics Bank Standalone CRE Portfolio CRE by collateral ($mm) % of Avg Total Non-owner Owner Total Collateral Type Balance Owner-occupied LTV1 Size classified classified classified NPL Multifamily $5,223 0% 56% $4.0 $121 $121 $0 $2 Re tail 648 6% 49% 3.3 13 12 1 0 Office 561 24% 52% 1.9
Slide 28: Details on Mechanics Bank Standalone CRE Portfolio (cont’d)
Details on Mechanics Bank Standalone CRE Portfolio (cont’d) CRE by collateral and reset/maturity ($mm) Balance maturing First rate resets next Maturing & rate reset Collateral Type Balance next 24 months 24 months % of loans Multifamily $5,223 $79 $1,188 24% Re tail 648 245 43 44% Office 561 178 35
Slide 29: Non-GAAP Financial Measures and Reconciliations
Non-GAAP Financial Measures and Reconciliations Return on Average Equity and Return on Average Tangible Equity ($ in thousands) Quarter Ended Return on Average Equity and June 30, March 31, June 30, Return on Average Tangible Equity Ref 2026 2026 2025 Net Income (a) $ 57,701 $ 44,090 $ 42,485 Add: i
Slide 30: Non-GAAP Financial Measures and Reconciliations (cont’d)
Non-GAAP Financial Measures and Reconciliations (cont’d) Efficiency Ratio ($ in thousands) Quarter Ended June 30, March 31, December 31, September 30, June 30, Efficiency Ratio 1 Ref 2026 2026 2025 2025 2025 Noninterest expense (e) $ 124,474 $ 130,427 $ 129,510 $ 163,329 $ 91,080 Less: intangibles a
Slide 31: Non-GAAP Financial Measures and Reconciliations (cont’d)
Non-GAAP Financial Measures and Reconciliations (cont’d) Book Value and Tangible Book Value Per Share ($ in thousands, except shares and per share data) As of June 30, March 31, June 30, Book Value and Tangible Book Value P er Share Ref 2026 2026 2025 Total shareholders’ equity (i) $ 2,689,931 $ 2,7
Slide 32: Non-GAAP Financial Measures and Reconciliations (cont’d)
Non-GAAP Financial Measures and Reconciliations (cont’d) Common Equity Ratio and Tangible Common Equity Ratio ($ in thousands) As of Common Equity Ratio and June 30, March 31, June 30, Tangible Common Equity Ratio Ref 2026 2026 2025 Total shareholders’ equity (m) $ 2,689,931 $ 2,791,392 $ 2,416,617
Slide 33: Non-GAAP Financial Measures and Reconciliations (cont’d)
Non-GAAP Financial Measures and Reconciliations (cont’d) Core Net Income ($ in thousands) Quarter Ended June 30, 2026 As Non-Core Core Core Net Income Ref Reported Adjustments Net Income Net Interest Income before Provision $ 177,173 $ - $ 177,173 Provision / (Reversal of Provision) 1 (2,767) (2,767