Earnings release
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Mechanics Bancorp Reports Second Quarter 2026 Results Second Quarter Highlights $21.2 billion Total Assets $57.7 million Net Income 14.39% CET1 Ratio $12.15 Book Value Per Share $7.56 Tangible Book Value Per Share Walnut Creek, CA – July 29, 2026 – (BUSINESS WIRE) – 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 , 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 , 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. (1) (2) (3) (1) 1
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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. 2
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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. Six Months Ended June 30, 2026 vs. Six Months Ended June 30, 2025 Net interest income for the six months ended June 30, 2026 increased $97.6 million as compared to the six months ended June 30, 2025 due primarily to an increase of $4.7 billion in average interest-earning assets, as well as an increase in net interest margin from 3.44% in the six months ended June 30, 2025 to 3.61% in the six months ended June 30, 2026, as a result of the HomeStreet merger. Provision for Credit Losses Second Quarter of 2026 vs. First Quarter of 2026 The reversal of provision for credit losses in the second quarter of 2026, which consists of the provision for loans and unfunded commitments, was $2.8 million, compared to a provision of $7.8 million for the first quarter of 2026. The reversal of provision for the second quarter was primarily driven by the combination of an increase in modeled loss rates for multifamily loans, the elimination of economic qualitative adjustments now that the Middle East conflict and corresponding economic impact are embedded in expected loss rate modeling, and a reduction in residential construction and HELOC unfunded commitments. 3
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Six Months Ended June 30, 2026 vs. Six Months Ended June 30, 2025 The provision for credit losses was $5.0 million for the six months ended June 30, 2026, compared to a reversal of provision of $4.0 million for the six months ended June 30, 2025. The increase in provision for the six months ended June 30, 2026 was driven primarily by an increase in modeled loss rates for multifamily loans during 2026, offset slightly by downward qualitative adjustments and lower balances. The increase in provision was partially offset by a reduction in the unfunded commitments reserve. Noninterest Income Second Quarter of 2026 vs. First Quarter of 2026 Noninterest income in the second quarter of 2026 increased $2.8 million from the first quarter of 2026 primarily due to higher other noninterest income from the gain on sale of the Fannie Mae Multifamily Delegated Underwriting and Servicing (“DUS®”) business line and a mortgage servicing rights valuation adjustment. Six Months Ended June 30, 2026 vs. Six Months Ended June 30, 2025 Noninterest income for the six months ended June 30, 2026 increased $10.2 million from the six months ended June 30, 2025 primarily due to higher loan servicing income, ATM network fee income and other noninterest income, which were all driven by the HomeStreet merger. In addition, the increase in other noninterest income resulted from the gain on sale of the DUS business line and a mortgage servicing rights valuation adjustment. The increases in noninterest income were partially offset by lower gain on sales and calls of investment securities. Noninterest Expense Second Quarter of 2026 vs. First Quarter of 2026 Noninterest expense decreased $6.0 million in the second quarter of 2026 compared to the first quarter of 2026, primarily due to lower salaries and employee benefits expense from a decrease in headcount as a result of integration following the HomeStreet merger. Six Months Ended June 30, 2026 vs. Six Months Ended June 30, 2025 Noninterest expense increased $78.2 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 primarily due to higher salaries and employee benefits expense, occupancy costs, equipment expense, amortization of intangibles and acquisition and integration related costs from the HomeStreet merger. Income Taxes Second Quarter of 2026 vs. First Quarter of 2026 Our effective tax rate during the second quarter of 2026 was 27.2% as compared to 28.7% in the first quarter of 2026 and our federal statutory rate was 21.0%. The effective tax rate decreased compared to the prior quarter as a result of a $1.7 million remeasurement of deferred tax assets in the first quarter. Six Months Ended June 30, 2026 vs. Six Months Ended June 30, 2025 Our effective tax rate for the six months ended June 30, 2026 was 27.9% as compared to 28.4% for the six months ended June 30, 2025 and our federal statutory rate was 21.0%. The effective tax rate decreased compared to the six months ended June 30, 2025 as a result of a lower state tax rate due to more taxable income being apportioned to states with lower tax rates and an increase in tax exempt investments and loans, both a result of the HomeStreet merger. These were partially offset by the $1.7 million remeasurement of deferred tax assets in the current year. 4
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BALANCE SHEET HIGHLIGHTS Selected Balance Sheet Items (in thousands) June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 Cash and cash equivalents $ 553,915 $ 483,513 $ 1,029,983 $ 1,442,647 $ 2,078,960 Trading securities 46,595 49,463 49,518 50,357 — Securities available-for-sale 4,119,215 3,933,705 3,993,385 3,490,478 2,562,438 Securities held-to-maturity 1,286,813 1,313,520 1,336,632 1,363,636 1,391,211 Loans held for investment (before ACL) 13,576,196 13,852,209 14,176,936 14,587,530 9,239,834 Total assets 21,230,839 21,388,955 22,351,475 22,721,935 16,571,173 Noninterest-bearing demand deposits $ 6,420,746 $ 6,511,998 $ 6,744,082 $ 6,748,479 $ 5,453,890 Total deposits 18,089,437 18,242,769 19,024,997 19,452,819 13,968,863 Borrowings 80,000 — — — — Long-term debt 130,420 128,815 192,014 190,123 — Total liabilities 18,540,908 18,597,563 19,489,100 19,934,686 14,154,556 Total shareholders’ equity 2,689,931 2,791,392 2,862,375 2,787,249 2,416,617 (1) Prior period comparative disclosures for September 30, 2025 reflect the impact of adoption of ASU 2025-08. Investment Securities Trading securities totaled $46.6 million and $49.5 million at June 30, 2026 and March 31, 2026. Securities available-for-sale increased by $185.5 million during the second quarter of 2026 to $4.1 billion at June 30, 2026, primarily due to purchases of agency MBS, partially offset by paydowns. Securities held-to-maturity decreased by $26.7 million in the second quarter of 2026, due to paydowns, and totaled $1.3 billion at June 30, 2026. Loans Total loans at June 30, 2026 were $13.6 billion, a decrease of $276.0 million from $13.9 billion at March 31, 2026, due primarily to loan repayments during the quarter, partially offset by originations. Deposits Total deposits decreased by $153.3 million during the second quarter of 2026 to $18.1 billion at June 30, 2026. The decrease was due to $199.2 million certificates of deposit runoff, partially offset by $45.9 million of core deposit growth. Noninterest-bearing demand deposits totaled $6.4 billion and represented 35% of total deposits at June 30, 2026, compared to $6.5 billion, or 36% of total deposits, at March 31, 2026. Borrowings Total borrowings were $80.0 million at June 30, 2026, compared to zero at March 31, 2026. The increase in the second quarter of 2026 was due to short-term Federal Reserve Discount Window borrowings during the quarter. (1) (1) (1) 5
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Equity During the second quarter of 2026, total shareholders’ equity decreased by $101.5 million to $2.7 billion and tangible common equity increased slightly by $5.9 million, and was $1.75 billion at June 30, 2026. The decrease in total shareholders’ equity for the second quarter of 2026 primarily resulted from a net decrease in retained earnings in the second quarter of 2026 from net income, less dividends paid to common shareholders. Tangible common equity remained relatively flat due to the reduction in intangibles from the sale of the DUS business line, which offset the decrease in total shareholders’ equity. At June 30, 2026, book value per common share decreased to $12.15, compared to $12.61 at March 31, 2026. At June 30, 2026, tangible book value per common share increased to $7.56, compared to $7.53 at March 31, 2026. (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 16.70% and a Tier 1 leverage ratio of 8.71% at June 30, 2026. The following table presents our regulatory capital ratios as of the dates indicated: June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 Mechanics Bancorp Tier 1 leverage capital (to average assets) 8.71 % 8.66 % 8.65 % 10.34 % n/a Common equity Tier 1 capital (to risk- weighted assets) 14.39 % 13.92 % 14.09 % 13.42 % n/a Tier 1 risk-based capital (to risk-weighted assets) 14.39 % 13.92 % 14.09 % 13.42 % n/a Total risk-based capital (to risk-weighted assets) 16.70 % 16.16 % 16.27 % 15.57 % n/a Mechanics Bank Tier 1 leverage capital (to average assets) 9.38 % 9.31 % 9.58 % 11.46 % 10.16 % Common equity Tier 1 capital (to risk- weighted assets) 15.48 % 14.96 % 15.59 % 14.87 % 18.27 % Tier 1 risk-based capital (to risk-weighted assets) 15.48 % 14.96 % 15.59 % 14.87 % 18.27 % Total risk-based capital (to risk-weighted assets) 16.74 % 16.21 % 16.81 % 16.13 % 19.10 % (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 June 30, 2026 are preliminary. At June 30, 2026, Mechanics had available borrowing capacity of $5.9 billion from the FHLB, $4.4 billion from the Federal Reserve and $5.0 billion under borrowing lines established with other financial institutions. (1) (1) (1),(2) (1) 6
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CREDIT QUALITY Asset Quality Information and Ratios (dollars in thousands) June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 Delinquent loans held for investment: 30-89 days past due $ 54,529 $ 43,556 $ 58,459 $ 55,899 $ 106,710 90+ days past due 40,888 33,447 34,686 38,316 10,660 Total delinquent loans $ 95,417 $ 77,003 $ 93,145 $ 94,215 $ 117,370 Total delinquent loans to loans held for investment 0.70 % 0.56 % 0.66 % 0.65 % 1.27 % Nonperforming assets: Nonaccrual loans $ 48,557 $ 44,379 $ 42,863 $ 60,586 $ 18,606 90+ days past due and accruing 6,543 4,098 3,943 2,653 717 Total nonperforming loans 55,100 48,477 46,806 63,239 19,323 Foreclosed assets 4,262 4,658 4,990 1,675 — Total nonperforming assets $ 59,362 $ 53,135 $ 51,796 $ 64,914 $ 19,323 Allowance for credit losses on loans $ 152,601 $ 156,796 $ 153,319 $ 168,959 $ 68,334 Allowance for credit losses on loans to total loans held for investment 1.12 % 1.13 % 1.08 % 1.16 % 0.74 % Allowance for credit losses on loans to nonaccrual loans 314.27 % 353.31 % 357.70 % 278.88 % 367.27 % Nonaccrual loans to total loans held for investment0.36 % 0.32 % 0.30 % 0.42 % 0.20 % Nonperforming assets to total assets 0.28 % 0.25 % 0.23 % 0.29 % 0.12 % (1) Prior period comparative disclosures for September 30, 2025 reflect the impact of adoption of ASU 2025-08. At June 30, 2026, total delinquent loans were $95.4 million, compared to $77.0 million at March 31, 2026. The increase was primarily due to two matured commercial real estate loans that became past due during the quarter and were in process of refinance or extension as of June 30, 2026. Total delinquent loans as a percentage of total loans were 0.70% at June 30, 2026, as compared to 0.56% at March 31, 2026. At June 30, 2026, nonperforming assets were $59.4 million, compared to $53.1 million at March 31, 2026. The slight increase was primarily due to additional single family, home equity and multifamily nonperforming loans during the quarter, partially offset by $2.4 million of foreclosed assets sold. Nonperforming assets as a percentage of total assets increased to 0.28% at June 30, 2026, as compared to 0.25% at March 31, 2026. (1) 7
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Allowance for Credit Losses Quarter Ended Six Months Ended (dollars in thousands) June 30, 2026 March 31, 2026 June 30, 2025 June 30, 2026 June 30, 2025 Allowance for credit losses on loans: Beginning balance $ 156,796 $ 153,319 $ 75,515 $ 153,319 $ 88,558 Provision (reversal of provision) for credit losses (904) 7,593 357 6,689 (3,395) Loans charged off (6,308) (7,205) (9,949) (13,513) (22,166) Recoveries 3,017 3,089 2,411 6,106 5,337 Ending balance $ 152,601 $ 156,796 $ 68,334 $ 152,601 $ 68,334 Allowance for credit losses on unfunded lending commitments: Beginning balance $ 7,289 $ 7,115 $ 4,460 $ 7,115 $ 4,366 Provision (reversal of provision) for credit losses (1,863) 174 (725) (1,689) (631) Ending balance $ 5,426 $ 7,289 $ 3,735 $ 5,426 $ 3,735 Net charge-offs to average loans 0.10 % 0.12 % 0.32 % 0.11% 0.36% (1) Ratios are annualized. The allowance for credit losses on loans totaled $152.6 million, or 1.12% of total loans at June 30, 2026, compared to $156.8 million, or 1.13% of total loans at March 31, 2026. The decrease in allowance was the result of a decrease in qualitative factors across loan types, with the greatest impact on commercial real estate loans due to the size of the portfolio, partially offset by higher expected loss rates due to a weaker economic outlook stemming from the conflict in the Middle East. Conference Call The Company will host a conference call and webcast to discuss its second quarter 2026 financial results at 11:00 a.m. Eastern Time (ET) on Wednesday, July 29, 2026. Investors and analysts interested in participating in the call are invited to dial 1-833- 461-5787 (international callers please dial 1-585-542-9983) approximately 10 minutes prior to the start of the call. The pin to access the call is 513809929. 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 through the webcast link: https://events.q4inc.com/attendee/513809929. About Mechanics Bancorp Mechanics Bancorp is headquartered in Walnut Creek, Calif., and is the financial holding company of Mechanics Bank, a full- service, FDIC-insured bank with $21.2 billion in assets as of June 30, 2026, 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. (1) 8
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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 (“Exchange Act”). 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. 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: • substantial non-recurring and integration costs, which may be greater than anticipated due to unexpected events; • failure to realize the anticipated benefits of the HomeStreet merger; • our ability to effectively manage our expanded operations; • negative developments and events impacting the financial services industry; • the soundness of other financial institutions; • our ability to maintain sufficient liquidity, or an increase in the cost of liquidity; • unpredictable economic, market and business conditions; • interest rate risk, and fluctuations in interest rates; • inflationary pressures and rising prices; • adverse changes in real estate market values; • the impact of climate change, including indirectly through impacts on our customers; • the adequacy of our allowances for credit losses for loans and debt securities; • incurring losses in our loan portfolio despite strict adherence to our underwriting practices; • fluctuations in our mortgage origination business based upon seasonal and other factors; • our geographic concentration, which may magnify the adverse effects and consequences of any regional or local economic downturn; • the accuracy of independent appraisals to determine the value of the real estate that secures a substantial portion of our loans; • the ability of our small- to medium-sized borrowers to weather adverse business developments; • our ability to fully identify and mitigate exposure to the various risks that we face, including interest rate, credit, liquidity and market risk; • our ability to mitigate our exposure to interest rate risk; • negative publicity regarding us, or financial institutions in general; • environmental liability risk associated with our lending activities; • our ability to manage risks associated with new lines of business, products, product enhancements and services; • our ability to adapt our services to changes in the marketplace related to mortgage servicing or origination, technology or in changes in the requirements of governmental authorities and customers; • our ability to develop, implement and maintain an effective system of internal control over financial reporting; 9
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• the potential that we may identify material weaknesses in our internal control over financial reporting in the future, which may result in material misstatements of our financial statements; • the potential that we may write off goodwill and other intangible assets resulting from business combinations; • dependence on our management team; • exposure to fraudulent and negligent acts by our customers and the parties they do business with, as well as from employees, contractors and vendors; • legal claims and litigation, including potential securities law liabilities; • employee class action lawsuits or other legal proceedings; • our ability to raise additional capital, if needed; • competition from other financial institutions and financial service companies; • regulatory restrictions that may delay, impede or prohibit our ability to consider certain acquisitions and opportunities; • extensive supervision and regulation that could restrict our activities and impose financial requirements or limitations on the conduct of our business and limit our ability to generate income; • our ability to comply with stringent capital requirements; • the impact of federal and state regulators’ examination of our business; • our ability to comply with the Bank Secrecy Act and other anti-money laundering statutes and regulations; • our reliance on dividends from Mechanics Bank; • our ability to raise debt or capital to pay off our debts upon maturity; • our level of indebtedness following the completion of the HomeStreet merger; • increasing and continually evolving cybersecurity and other technological risks; • our ability to adapt to rapid technological change; • our ability to effectively implement new technological solutions or enhancements to existing systems or platforms; • our ability to manage risks and challenges relating to the development and use of artificial intelligence; • our dependence on our computer and communications systems; • our ability to effectively manage and aggregate data; • Ford Financial Funds and their controlled affiliates control approximately 77% of the voting power of Mechanics Bancorp, and have the ability to elect all of our directors and control most other matters submitted to our shareholders for approval; • we are a “controlled company” within the meaning of the rules of Nasdaq and, as a result, we qualify for, and rely on, exemptions from certain corporate governance standards; • future sales of shares by existing shareholders could cause our stock price to decline; • our reliance on certain entities affiliated with the Ford Financial Funds for services; • reduced disclosure requirements as a smaller reporting company; and • certain of our shareholders have registration rights, the exercise of which could adversely affect the trading price of our common stock. 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 Item 1A “Risk Factors” included in our 2025 Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission (the “SEC”). 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. We do 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 we may do so from time to time. All future written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to above. New risks and 10
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uncertainties arise from time to time, and factors that we currently deem immaterial may become material, and it is impossible for us to predict these events or how they may affect us. Investor Relations Inquiries Contact: Mechanics Bancorp Nathan Duda Executive Vice President and Chief Financial Officer ir@mechanicsbank.com 11
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CONSOLIDATED BALANCE SHEETS (UNAUDITED) (dollars in thousands) June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 ASSETS Cash and cash equivalents $ 553,915 $ 483,513 $ 1,029,983 $ 1,442,647 $ 2,078,960 Trading securities 46,595 49,463 49,518 50,357 — Securities available-for-sale 4,119,215 3,933,705 3,993,385 3,490,478 2,562,438 Securities held-to-maturity 1,286,813 1,313,520 1,336,632 1,363,636 1,391,211 Loans held for sale 5,345 4,692 5,967 54,985 415 Loan receivables 13,576,196 13,852,209 14,176,936 14,587,530 9,239,834 Allowance for credit losses on loans (152,601) (156,796) (153,319) (168,959) (68,334) Net loan receivables 13,423,595 13,695,413 14,023,617 14,418,571 9,171,500 Mortgage servicing rights 59,142 84,000 85,832 88,595 — Other real estate owned 4,262 4,658 4,990 1,675 — Federal Home Loan Bank stock, at cost 17,287 17,289 17,292 17,294 17,250 Premises and equipment, net 141,615 143,157 143,895 143,917 114,715 Bank-owned life insurance 172,980 171,674 170,339 169,163 84,786 Goodwill 843,305 843,305 843,305 843,305 843,305 Other intangible assets, net 97,906 205,269 212,491 143,264 33,309 Right-of-use asset 74,623 78,046 82,076 85,657 56,696 Interest receivable and other assets 384,241 361,251 352,153 408,391 216,588 TOTAL ASSETS $ 21,230,839 $ 21,388,955 $ 22,351,475 $ 22,721,935 $ 16,571,173 LIABILITIES AND SHAREHOLDERS’ EQUITY LIABILITIES Noninterest-bearing demand deposits $ 6,420,746 $ 6,511,998 $ 6,744,082 $ 6,748,479 $ 5,453,890 Interest-bearing transaction accounts 8,394,708 8,222,964 8,128,832 7,918,670 6,359,590 Savings and time deposits 3,273,983 3,507,807 4,152,083 4,785,670 2,155,383 Total deposits 18,089,437 18,242,769 19,024,997 19,452,819 13,968,863 Borrowings 80,000 — — — — Long-term debt 130,420 128,815 192,014 190,123 — Operating lease liability 78,174 82,403 86,794 90,796 59,233 Interest payable and other liabilities 162,877 143,576 185,295 200,948 126,460 TOTAL LIABILITIES 18,540,908 18,597,563 19,489,100 19,934,686 14,154,556 SHAREHOLDERS’ EQUITY Common stock 2,404,941 2,402,968 2,402,193 2,401,989 2,122,374 Retained earnings 303,046 407,908 456,695 394,069 325,793 Accumulated other comprehensive income (loss), net of tax (18,056) (19,484) 3,487 (8,809) (31,550) TOTAL SHAREHOLDERS’ EQUITY 2,689,931 2,791,392 2,862,375 2,787,249 2,416,617 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 21,230,839 $ 21,388,955 $ 22,351,475 $ 22,721,935 $ 16,571,173 Common shares outstanding-Class A and B 221,425,469 221,400,590 221,305,009 221,203,135 202,015,832 (1) Prior period comparative disclosures for September 30, 2025 reflect the impact of adoption of ASU 2025-08. (1) (1) (1) (1) (1) (1) (1) 12
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CONSOLIDATED INCOME STATEMENTS (UNAUDITED)
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Quarter Ended Six Months Ended (dollars in thousands, except per share amounts) June 30, 2026 March 31, 2026 June 30, 2025 June 30, 2026 June 30, 2025 INTEREST INCOME Loans interest and fees $ 178,170 $ 181,190 $ 120,116 $ 359,360 $ 237,908 Investment securities 53,062 53,074 42,013 106,136 89,598 Interest-bearing cash and other 6,710 7,672 16,024 14,382 24,232 Total interest income 237,942 241,936 178,153 479,878 351,738 INTEREST EXPENSE Deposits 56,544 58,323 48,024 114,867 93,155 Borrowed funds 1,055 228 — 1,283 — Long-term debt 3,171 4,340 — 7,511 — 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) Net interest income after provision for credit losses 179,939 171,278 130,497 351,217 262,609 NONINTEREST INCOME Service charges on deposit accounts 6,027 6,043 5,492 12,070 10,986 Trust fees and commissions 3,476 3,070 3,216 6,546 6,335 ATM network fee income 4,109 3,904 3,040 8,013 5,928 Loan servicing income 1,582 1,927 168 3,509 345 Net gain on sales and calls of investment securities 31 52 4,137 83 4,137 Income from bank-owned life insurance 1,327 1,165 502 2,492 1,029 Other 7,244 4,859 3,070 12,103 5,846 Total noninterest income 23,796 21,020 19,625 44,816 34,606 NONINTEREST EXPENSE Salaries and employee benefits 63,090 68,550 47,734 131,640 96,585 Occupancy 11,851 12,429 8,337 24,280 16,309 Equipment 8,724 9,615 6,288 18,339 12,157 Professional services 7,435 6,071 5,907 13,506 10,823 FDIC assessments and regulatory fees 2,990 2,990 2,213 5,980 4,426 Amortization of intangible assets 7,207 7,222 2,666 14,429 5,404 Data processing 2,468 3,873 2,200 6,341 3,550 Loan related 3,616 3,506 3,220 7,122 4,797 Marketing and advertising 696 907 744 1,603 1,328 Other real estate owned related 47 384 104 431 2,788 Acquisition and integration costs 5,923 4,794 5,639 10,717 5,989 Other 10,426 10,086 6,028 20,512 12,562 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 Basic earnings per share Class A common stock $ 0.25 $ 0.19 $ 0.20 $ 0.44 $ 0.41 Class B common stock $ 2.51 $ 1.91 $ 2.00 $ 4.42 $ 4.07 Diluted earnings per share Class A common stock $ 0.25 $ 0.19 $ 0.20 $ 0.44 $ 0.41 Class B common stock $ 2.51 $ 1.91 $ 2.00 $ 4.42 $ 4.07 Basic weighted-average shares outstanding Class A common stock 221,148,246 221,047,803 200,893,223 221,098,302 200,889,074 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 221,338,344 221,203,293 200,952,643 221,271,096 200,948,494 Class B common stock 1,114,448 1,114,448 1,114,448 1,114,448 1,114,448
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LOANS HELD FOR INVESTMENT (in thousands) June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 Commercial and industrial $ 439,814 $ 460,081 $ 482,170 $ 550,176 $ 280,551 Commercial real estate Multifamily 5,223,356 5,291,597 5,355,252 5,450,206 2,826,750 Non-owner occupied 1,614,883 1,711,611 1,740,277 1,866,119 1,551,617 Owner occupied 512,474 586,698 689,079 710,638 323,419 Construction and land development 360,668 399,546 493,992 538,754 135,013 Residential real estate 4,107,867 4,017,120 3,970,803 3,914,675 2,438,271 Auto 510,232 639,825 791,012 954,617 1,147,967 Other consumer 806,902 745,731 654,351 602,345 536,246 Total LHFI $ 13,576,196 $ 13,852,209 $ 14,176,936 $ 14,587,530 $ 9,239,834 (1) Prior period comparative disclosures for September 30, 2025 reflect the impact of adoption of ASU 2025-08. COMPOSITION OF DEPOSITS (in thousands) June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 Deposits by product: Noninterest-bearing demand deposits $ 6,420,746 $ 6,511,998 $ 6,744,082 $ 6,748,479 $ 5,453,890 Interest-bearing: Interest-bearing demand deposits 1,671,232 1,767,403 1,878,468 1,733,215 1,331,785 Savings 1,328,503 1,363,137 1,367,475 1,398,430 1,173,943 Money market 6,723,476 6,455,561 6,250,364 6,185,455 5,027,805 Certificates of deposit 1,945,480 2,144,670 2,784,608 3,387,240 981,440 Total interest-bearing deposits 11,668,691 11,730,771 12,280,915 12,704,340 8,514,973 Total deposits $ 18,089,437 $ 18,242,769 $ 19,024,997 $ 19,452,819 $ 13,968,863 (1) 14
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SUMMARY FINANCIAL DATA Quarter Ended Six Months Ended June 30, 2026 March 31, 2026 June 30, 2025 June 30, 2026 June 30, 2025 Select performance ratios: Return on average equity 8.48 % 6.25 % 7.15 % 7.35 % 7.37 % Return on average tangible equity 14.42 % 11.07 % 11.82 % 12.73 % 12.28 % Return on average assets 1.09 % 0.82 % 1.03 % 0.95 % 1.06 % Efficiency ratio 61.9 % 65.2 % 60.8 % 63.6 % 60.3 % Efficiency ratio (non-GAAP) 58.4 % 61.6 % 59.0 % 60.0 % 58.4 % Net interest margin 3.62 % 3.61 % 3.44 % 3.61 % 3.44 % Cash dividends declared per share: Class A common stock $ 0.70 $ 0.40 $ — $ 1.10 $ — Class B common stock $ 7.00 $ 4.00 $ — $ 11.00 $ — As of June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 Other data: Book value per share $ 12.15 $ 12.61 $ 12.93 $ 12.60 $ 11.96 Tangible book value per share $ 7.56 $ 7.53 $ 7.81 $ 7.79 $ 7.26 Common equity ratio 12.67 % 13.05 % 12.81 % 12.27 % 14.58 % Tangible common equity ratio 8.62 % 8.57 % 8.48 % 8.28 % 9.81 % Loans to deposit ratio 75.05 % 75.93 % 74.52 % 74.99 % 66.15 % Full time equivalent employees 1,756 1,890 1,921 2,036 1,303 (1) 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. (3) Prior period comparative disclosures for September 30, 2025 reflect the impact of adoption of ASU 2025-08. (1) (1),(2) (1) (2) (1) (3) (2), (3) (3) (2), (3) (3) 15
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NET INTEREST MARGIN Quarter Ended June 30, 2026 March 31, 2026 June 30, 2025 (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 $ 459,729 $ 3,520 3.07 % $ 549,799 $ 4,162 3.07 % $ 1,390,355 $ 14,668 4.23 % Investment securities 5,355,011 53,062 3.97 % 5,425,705 53,074 3.97 % 4,342,666 42,013 3.88 % Loans 13,694,264 178,170 5.22 % 14,002,665 181,190 5.25 % 9,337,910 120,116 5.16 % FHLB stock and other investments 147,538 3,190 8.67 % 146,776 3,510 9.70 % 103,468 1,356 5.26 % Total interest-earning assets 19,656,542 237,942 4.86 % 20,124,945 241,936 4.88 % 15,174,399 178,153 4.71 % Noninterest-earning assets 1,661,711 1,697,660 1,294,772 Total assets $ 21,318,253 $ 21,822,605 $ 16,469,171 Liabilities and shareholders’ equity: Interest-bearing liabilities: Interest-bearing deposits: Demand deposits $ 1,707,751 $ 1,839 0.43 % $ 1,804,524 $ 2,176 0.49 % $ 1,344,397 $ 1,045 0.31 % Money market and savings 7,900,995 42,287 2.15 % 7,740,958 39,060 2.05 % 6,231,772 40,956 2.64 % Certificates of deposit 2,036,264 12,418 2.45 % 2,472,421 17,087 2.80 % 960,431 6,023 2.52 % Total 11,645,010 56,544 1.95 % 12,017,903 58,323 1.97 % 8,536,600 48,024 2.26 % Borrowings: Borrowings 114,121 1,055 3.71 % 24,667 228 3.75 % 13 — 4.61 % Long-term debt 129,369 3,171 9.83 % 170,987 4,340 10.29 % — — — % Total interest-bearing liabilities 11,888,500 60,770 2.05 % 12,213,557 62,891 2.09 % 8,536,613 48,024 2.26 % Noninterest-bearing liabilities: Demand deposits 6,440,279 6,448,090 5,355,287 Other liabilities 260,515 300,464 193,089 Total liabilities 18,589,294 18,962,111 14,084,989 Shareholders’ equity 2,728,959 2,860,494 2,384,182 Total liabilities and shareholders’ equity $ 21,318,253 $ 21,822,605 $ 16,469,171 Net interest income $ 177,172 $ 179,045 $ 130,129 Net interest rate spread 2.81 % 2.79 % 2.45 % Net interest margin 3.62 % 3.61 % 3.44 % (1) Ratios are annualized. (2) Includes loans held for sale. (3) Cost of all deposits, including noninterest-bearing demand deposits, was 1.25%, 1.28% and 1.39% for the quarters ended June 30, 2026, March 31, 2026 and June 30,2025, respectively. (1) (1) (1) (2) (3) 16
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Six Months Ended June 30, 2026 June 30, 2025 (dollars in thousands) Average Balance Interest Average Yield/Cost Average Balance Interest Average Yield/Cost Assets: Interest-earning assets: Cash and cash equivalents $ 504,515 $ 7,681 3.07 % $ 1,064,256 $ 21,856 4.14 % Investment securities 5,390,163 106,136 3.97 % 4,561,015 89,598 3.96 % Loans 13,847,613 359,360 5.23 % 9,414,385 237,908 5.10 % FHLB stock and other investments 147,159 6,701 9.18 % 102,355 2,376 4.68 % Total interest-earning assets 19,889,450 479,878 4.87 % 15,142,011 351,738 4.68 % Noninterest-earning assets 1,679,586 1,297,427 Total assets $ 21,569,036 $ 16,439,438 Liabilities and shareholders’ equity: Interest-bearing liabilities: Interest-bearing deposits: Demand deposits $ 1,755,870 $ 4,015 0.46 % $ 1,373,563 $ 2,344 0.34 % Money market and savings 7,821,419 81,347 2.10 % 6,142,341 79,096 2.60 % Certificates of deposit 2,253,137 29,505 2.64 % 949,911 11,715 2.49 % Total 11,830,426 114,867 1.96 % 8,465,815 93,155 2.22 % Borrowings: Borrowings 69,641 1,283 3.71 % 7 — 4.61 % Long-term debt 150,064 7,511 10.09 % — — — % Total interest-bearing liabilities 12,050,131 123,661 2.07 % 8,465,822 93,155 2.22 % Noninterest-bearing liabilities: Demand deposits 6,444,163 5,398,473 Other liabilities 280,379 215,532 Total liabilities 18,774,673 14,079,827 Shareholders’ equity 2,794,363 2,359,611 Total liabilities and shareholders’ equity $ 21,569,036 $ 16,439,438 Net interest income $ 356,217 $ 258,583 Net interest spread 2.80 % 2.47 % Net interest margin 3.61 % 3.44 % (1) Ratios are annualized. (2) Includes loans held for sale. (3) Cost of all deposits, including noninterest-bearing demand deposits, was 1.27% and 1.35% for the six months ended June 30, 2026 and 2025, respectively. (1) (1) (2) (3) 17
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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. The following tables present the calculations of our non-GAAP financial measures. (dollars in thousands, except per share amounts) Quarter Ended Six Months Ended Return on Average Equity and Return on Average Tangible Equity Ref. June 30, 2026 March 31, 2026 June 30, 2025 June 30, 2026 June 30, 2025 Net income (a) $ 57,701 $ 44,090 $ 42,485 $ 101,791 $ 86,276 Add: intangibles amortization, net of tax 5,243 5,254 1,906 10,497 3,864 Net income, excluding the impact of intangible amortization, net of tax (b) $ 62,944 $ 49,344 $ 44,391 $ 112,288 $ 90,140 Average shareholders’ equity (c) $ 2,728,959 $ 2,860,494 $ 2,384,182 $ 2,794,363 $ 2,359,611 Less: average goodwill and other intangible assets 978,184 1,052,479 878,190 1,015,126 879,494 Average tangible shareholders’ equity (d) $ 1,750,775 $ 1,808,015 $ 1,505,992 $ 1,779,237 $ 1,480,117 Return on average equity (a) / (c) 8.48 % 6.25 % 7.15 % 7.35 % 7.37 % Return on average tangible equity (non-GAAP) (b) / (d) 14.42 % 11.07 % 11.82 % 12.73 % 12.28 % Quarter Ended Six Months Ended Efficiency Ratio Ref. June 30, 2026 March 31, 2026 June 30, 2025 June 30, 2026 June 30, 2025 Noninterest expense (e) $ 124,473 $ 130,427 $ 91,080 $ 254,900 $ 176,718 Less: intangibles amortization 7,207 7,222 2,666 14,429 5,404 Noninterest expense, excluding the impact of intangible amortization (f) $ 117,266 $ 123,205 $ 88,414 $ 240,471 $ 171,314 Net interest income (g) $ 177,172 $ 179,045 $ 130,129 $ 356,217 $ 258,583 Noninterest income (h) $ 23,796 $ 21,020 $ 19,625 $ 44,816 $ 34,606 Efficiency ratio (e) / (g+h) 61.9 % 65.2 % 60.8 % 63.6 % 60.3 % Efficiency ratio (non-GAAP) (f) / (g+h) 58.4 % 61.6 % 59.0 % 60.0 % 58.4 % (1) Estimated statutory tax rate of 27.25%, 27.25% and 28.50% for the quarters ended and June 30, 2026, March 31, 2026 and June 30, 2025, respectively and 27.25% and 28.50% for the six months ended June 30, 2026 and 2025, respectively. (2) Ratios are annualized. (1) (2) (2) 18
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(dollars in thousands, except per share amounts) As of Book Value per Share and Tangible Book Value per Share Ref. June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 Total shareholders’ equity (i) $ 2,689,931 $ 2,791,392 $ 2,862,375 $ 2,787,249 $ 2,416,617 Less: goodwill and other intangible assets 941,211 1,048,574 1,055,796 986,569 876,614 Total tangible shareholders’ equity (j) $ 1,748,720 $ 1,742,818 $ 1,806,579 $ 1,800,680 $ 1,540,003 Common shares outstanding-Class A and B (k) 221,425,469 221,400,590 221,305,009 221,203,135 202,015,832 Common shares outstanding-Class A 220,311,021 220,286,142 220,190,561 220,088,687 200,901,384 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 (l) 231,455,501 231,430,622 231,335,041 231,233,167 212,045,864 Book value per share (i) / (k) $ 12.15 $ 12.61 $ 12.93 $ 12.60 $ 11.96 Tangible book value per share (non-GAAP) (j) / (l) $ 7.56 $ 7.53 $ 7.81 $ 7.79 $ 7.26 As of Common Equity Ratio and Tangible Common Equity Ratio Ref. June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 Total shareholders’ equity (m) $ 2,689,931 $ 2,791,392 $ 2,862,375 $ 2,787,249 $ 2,416,617 Less: goodwill and other intangible assets 941,211 1,048,574 1,055,796 986,569 876,614 Total tangible shareholders’ equity (n) $ 1,748,720 $ 1,742,818 $ 1,806,579 $ 1,800,680 $ 1,540,003 Total assets (o) $ 21,230,839 $ 21,388,955 $ 22,351,475 $ 22,721,935 $ 16,571,173 Less: goodwill and other intangible assets 941,211 1,048,574 1,055,796 986,569 876,614 Total tangible assets (p) $ 20,289,628 $ 20,340,381 $ 21,295,679 $ 21,735,366 $ 15,694,559 Common equity ratio (m) / (o) 12.67 % 13.05 % 12.81 % 12.27 % 14.58 % Tangible common equity ratio (non-GAAP) (n) / (p) 8.62 % 8.57 % 8.48 % 8.28 % 9.81 % (3) Prior period comparative disclosures for September 30, 2025 reflect the impact of adoption of ASU 2025-08. (4) 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. (3) (4) (3) 19