Company: MCHB
Filing Date: 2025-07-03
Form Type: S-4
Source: 0001140361-25-024872
Chunk: 164

Company: Mechanics Bancorp
Filing Date: 2025-07-03
Form: S-4
Chunk 164
---
 |     |          |     | 2.48%      |     |                   |     |          |     | 2.36%      |     |                |     |          |     | 2.09%      |
| Net interest margin                        |     |                |     |          |     | 3.45%      |     |                   |     |          |     | 3.38%      |     |                |     |          |     | 3.09%      |

| (1) | Includes loans held for sale. |

Net interest income in the first quarter of 2025 increased by $54 thousand as compared to the fourth quarter of 2024 as our net interest margin remained relatively stable. Our net interest margin increased from 3.38% in the fourth quarter of 2024 to 3.45% in the first quarter of 2025 due to a 1 basis point increase in the yield on interest earning assets and an 11 basis point decrease in the rates paid on interest-bearing liabilities. Yields on interest-earning assets

97

TABLE OF CONTENTS

increased due to higher yields on investment securities as a result of a securities restructure that occurred in early 2024. The decrease in the rates paid on our interest-bearing liabilities was primarily due to lower market rates on deposits, as well as lower borrowing costs. Net interest income in the first quarter of 2025 increased by $6.7 million as compared to the first quarter of 2024 due primarily to an increase in our net interest margin. Our net interest margin increased from 3.09% in the first quarter of 2024 to 3.45% in the first quarter of 2025 due to a 26 basis point increase in the yield on interest earning assets and a 13 basis point decrease in the rates paid on interest-bearing liabilities. Yields on interest-earning assets increased as yields on investment securities increased due to a securities restructure that occurred in early 2024. The decrease in the rates paid on our interest-bearing liabilities was primarily due to no borrowings during the first quarter of 2025, partially offset by higher deposit rates paid due to higher market rates on deposits. Provision for Credit Losses on Loans and Leases: There was a $3.8 million reversal of provision for credit losses on loans and leases recognized during the first quarter of 2025 as compared to a $4.2 million reversal of provision in the fourth quarter of