Company: MCHB
Filing Date: 2025-08-06
Form Type: 10-Q
Source: 0001518715-25-000110
Chunk: 67

Company: Mechanics Bancorp
Filing Date: 2025-08-06
Form: 10-Q
Item: Item 8
Chunk 67
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%Borrowings:Borrowings1,031,292 11,712 4.49 %1,011,111 11,364 4.50 %Long-term debt225,270 2,946 5.21 %225,178 2,943 5.23 %Total interest-bearing liabilities5,901,443 49,172 3.33 %6,113,896 52,544 3.47 %Noninterest-bearing liabilities:Demand deposits (2)1,253,539 1,265,701 Other liabilities85,745 86,537 Total liabilities7,240,727 7,466,134 Shareholders' equity403,629 404,800 Total liabilities and shareholders' equity$7,644,356 $7,870,934 Net interest income $34,873 $34,243 Net interest rate spread1.27 %1.18 %Net interest margin1.90 %1.82 %

(1)    Includes taxable-equivalent adjustments primarily related to tax-exempt income on certain loans and securities of $1.0 million for both quarters ended June 30, 2025 and March 31, 2025. The estimated federal statutory tax rate 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