Company: MCHB
Filing Date: 2025-08-06
Form Type: 10-Q
Source: 0001518715-25-000110
Chunk: 102

Company: Mechanics Bancorp
Filing Date: 2025-08-06
Form: 10-Q
Item: Item 2
Chunk 102
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, 2024, non-core items include $5.0 million of merger related expenses.  

General: Our net loss and loss before income taxes were $8.9 million and $9.5 million, respectively, in the six months ended June 30, 2025, as compared to $13.7 million and $18.6 million, respectively, in the six months ended June 30, 2024. Our core net loss and core loss before income taxes, which exclude the impact of merger related expenses, were $5.9 million and $5.7 million in the six months ended June 30, 2025, as compared to $9.8 million and $13.5 million in the six months ended June 30, 2024. The $7.8 million decrease in core loss before income taxes was primarily due to higher net interest income and noninterest income and lower noninterest expenses, partially offset by an increase in the provision for credit losses.

Income Taxes: Due to our cumulative losses over the three year period ended December 31, 2024, accounting rules required us to provide a valuation allowance for the balance of our deferred tax assets in the fourth quarter of 2024. As a result, we do not expect to recognize tax expense until the deferred tax assets valuation allowance no longer exists. The $0.7 million income tax benefit recognized in the six months ended June 30, 2025 primarily relates to the reversal of the disparate tax effects on our AOCI resulting from recording a valuation allowance for the deferred tax assets related to AOCI in the fourth quarter of 2024. Our effective tax rate in the six months ended June 30, 2024 of 26.0% was higher than our statutory rate of 24.6% due to the impact of tax advantaged investments which creates a higher benefit due to our taxable loss. 

50

Net Interest Income: The following tables set forth, for the periods indicated, information regarding (i) the total dollar amount of interest income from interest-earning assets and the resultant average yields on those assets; (ii) the total dollar amount of interest expense and the average rate of interest on our interest-bearing liabilities; (iii) net interest income; (iv) net interest rate spread; and (v) net interest margin:

Six Months Ended June 30, 20252024(dollars in thousands)AverageBalanceInterestAverageYield/CostAverageBalanceInterestAverageYield/CostAssets: