Company: MCHB
Filing Date: 2025-08-06
Form Type: 10-Q
Source: 0001518715-25-000110
Chunk: 100

Company: Mechanics Bancorp
Filing Date: 2025-08-06
Form: 10-Q
Item: Item 2
Chunk 100
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 was 21% for the periods presented.

(2)    Cost of all deposits, including noninterest-bearing demand deposits was 2.34% and 2.52% for the quarters ended June 30, 2025 and March 31, 2025, respectively.

Our net interest income in the second quarter of 2025 was $0.6 million higher than the first quarter of 2025 due to an increase in our net interest margin from 1.82% to 1.90%. The increase in the net interest margin was due primarily to a 14 basis point decrease in the rates paid on interest-bearing liabilities, partially offset by a 5 basis point decrease in the yield on interest earning assets. The decrease in rates on interest bearing liabilities are primarily due to a decrease in rates paid on certificates of deposits resulting from decreases in market interest rates. The decrease in the yield on interest earning assets is primarily due to a decrease in yields on Fed Funds due to decreases in short term market rates.

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Provision for Credit Losses: The $6.0 million provision for credit losses in the second quarter of 2025 was primarily due to the impact of adverse credit migration of certain multifamily loans. The $1.0 million provision for credit losses in the first quarter of 2025 was primarily due to a $3.3 million increase in specific reserves which was partially offset by lower general reserves resulting in part from lower loan balances.

Noninterest income (loss) consisted of the following: 

 Quarter Ended (in thousands)June 30, 2025March 31, 2025Noninterest income (loss)Gain (loss) on loan origination and sale activities (1)Single family$3,182 $2,283 CRE, multifamily and SBA 53 933 Loan servicing income7,550 4,858 Deposit fees2,116 2,071 Other2,199 1,991 Total noninterest income (loss)$15,100 $12,136 

(1)   May include loans originated as held for investment. 

Loan servicing income, a component of noninterest income, consisted of the following: 

 Quarter Ended(in thousands)June 30, 2025March 31, 2025Single family servicing income, netServicing fees and other$3,684 $3,725 Changes - amortization (1)(1,598)(1,582)