# EDGAR Filing Document

**Accession Number:** 0001518715
**File Stem:** 0001518715-25-000181
**Filing Date:** 2025-11
**Character Count:** 333523
**Document Hash:** dad784a0ad20f7e7ec423f9476745b4d
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001518715-25-000181.hdr.sgml**: 20251117

**ACCESSION NUMBER**: 0001518715-25-000181

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 118

**CONFORMED PERIOD OF REPORT**: 20250930

**FILED AS OF DATE**: 20251117

**DATE AS OF CHANGE**: 20251117

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Mechanics Bancorp
- **CENTRAL INDEX KEY:** 0001518715
- **STANDARD INDUSTRIAL CLASSIFICATION:** STATE COMMERCIAL BANKS [6022]
- **ORGANIZATION NAME:** 02 Finance
- **EIN:** 910186600
- **STATE OF INCORPORATION:** WA
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-35424
- **FILM NUMBER:** 251491046

**BUSINESS ADDRESS:**
- **STREET 1:** 1111 CIVIC DRIVE
- **STREET 2:** SUITE 390
- **CITY:** WALNUT CREEK
- **STATE:** CA
- **ZIP:** 94596
- **BUSINESS PHONE:** 206-623-3050

**MAIL ADDRESS:**
- **STREET 1:** 1111 CIVIC DRIVE
- **STREET 2:** SUITE 390
- **CITY:** WALNUT CREEK
- **STATE:** CA
- **ZIP:** 94596

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** HomeStreet, Inc.
- **DATE OF NAME CHANGE:** 20110420

?xml version='1.0' encoding='ASCII'? hmst-20250930

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

_______________________________

**FORM 10-Q**

________________________________

☒**QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT** 

**OF 1934**

**For the quarterly period ended: September 30, 2025**

**OR** 

**☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT** 

**OF 1934**

**For the transition period from _____ to _____**

**Commission file number: 001-35424**

________________________________

**MECHANICS BANCORP**

________________________________

**(Exact Name of Registrant as Specified in its Charter)**

---

| | |
|:---|:---|
| **Washington**  | **91-0186600** |
| (State of Incorporation) | (I.R.S. Employer Identification No.) |
| **1111 Civic Drive, Suite 390** |  |
| **Walnut Creek, California** | **94596** |
| (Address of principal executive offices) | (Zip Code) |

---

 **(925) 482-8000**

(Registrant's Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| Class A, Common Stock | MCHB | Nasdaq Global Select Market |

---

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the

Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required

to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be

submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such

shorter period that the registrant was required to submit such files).&nbsp;&nbsp;&nbsp;&nbsp;Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a

smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated

filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act:

---

| | | | |
|:---|:---|:---|:---|
| Large accelerated filer | ☐ | Accelerated filer | ☒ |
| Non-accelerated filer | ☐ | Smaller reporting company | ☒ |
|  |  | Emerging growth company | ☐ |

---

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition

period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the

Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐

No ☒

The number of outstanding shares of the registrant's Class A common stock as of November 12, 2025 was 220,099,202 and

Class B common stock was 1,114,448.

**Table of Contents**

---

| | | |
|:---|:---|:---|
|  |  | **Page** |
| **<u>[PART I – FINANCIAL INFORMATION](#ie78365c54f3f4f5ca9a42145b0615bd2_13)</u>** | **<u>[PART I – FINANCIAL INFORMATION](#ie78365c54f3f4f5ca9a42145b0615bd2_13)</u>** | <u>[4](#ie78365c54f3f4f5ca9a42145b0615bd2_13)</u> |
| **<u>[ITEM 1.](#ie78365c54f3f4f5ca9a42145b0615bd2_16)</u>** | **<u>[FINANCIAL STATEMENTS](#ie78365c54f3f4f5ca9a42145b0615bd2_16)</u>** | <u>[5](#ie78365c54f3f4f5ca9a42145b0615bd2_16)</u> |
| <u>[Consolidated Balance Sheets at September 30, 2025 and December 31, 2024 (Unaudited)](#ie78365c54f3f4f5ca9a42145b0615bd2_19)</u> | <u>[Consolidated Balance Sheets at September 30, 2025 and December 31, 2024 (Unaudited)](#ie78365c54f3f4f5ca9a42145b0615bd2_19)</u> | <u>[5](#ie78365c54f3f4f5ca9a42145b0615bd2_19)</u> |
| <u>[Consolidated Income Statements for the Quarters and Nine Months Ended September 30, 2025 and 2024](#ie78365c54f3f4f5ca9a42145b0615bd2_22)</u><br><u>[(Unaudited)](#ie78365c54f3f4f5ca9a42145b0615bd2_22)</u> | <u>[Consolidated Income Statements for the Quarters and Nine Months Ended September 30, 2025 and 2024](#ie78365c54f3f4f5ca9a42145b0615bd2_22)</u><br><u>[(Unaudited)](#ie78365c54f3f4f5ca9a42145b0615bd2_22)</u> | <u>[6](#ie78365c54f3f4f5ca9a42145b0615bd2_22)</u> |
| <u>[Consolidated Statements of Comprehensive Income (Loss) for the Quarters and Nine Months Ended](#ie78365c54f3f4f5ca9a42145b0615bd2_25)</u><br><u>[September 30, 2025 and 2024 (Unaudited)](#ie78365c54f3f4f5ca9a42145b0615bd2_25)</u> | <u>[Consolidated Statements of Comprehensive Income (Loss) for the Quarters and Nine Months Ended](#ie78365c54f3f4f5ca9a42145b0615bd2_25)</u><br><u>[September 30, 2025 and 2024 (Unaudited)](#ie78365c54f3f4f5ca9a42145b0615bd2_25)</u> | <u>[7](#ie78365c54f3f4f5ca9a42145b0615bd2_25)</u> |
| <u>[Consolidated Statements of Changes in Shareholders' Equity for the Quarters and Nine Months Ended](#ie78365c54f3f4f5ca9a42145b0615bd2_28)</u><br><u>[September 30, 2025 and 2024 (Unaudited)](#ie78365c54f3f4f5ca9a42145b0615bd2_28)</u> | <u>[Consolidated Statements of Changes in Shareholders' Equity for the Quarters and Nine Months Ended](#ie78365c54f3f4f5ca9a42145b0615bd2_28)</u><br><u>[September 30, 2025 and 2024 (Unaudited)](#ie78365c54f3f4f5ca9a42145b0615bd2_28)</u> | <u>[8](#ie78365c54f3f4f5ca9a42145b0615bd2_28)</u> |
| <u>[Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024](#ie78365c54f3f4f5ca9a42145b0615bd2_31)</u><br><u>[(Unaudited)](#ie78365c54f3f4f5ca9a42145b0615bd2_31)</u> | <u>[Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024](#ie78365c54f3f4f5ca9a42145b0615bd2_31)</u><br><u>[(Unaudited)](#ie78365c54f3f4f5ca9a42145b0615bd2_31)</u> | <u>[9](#ie78365c54f3f4f5ca9a42145b0615bd2_31)</u> |
| <u>[Notes to Consolidated Financial Statements (Unaudited)](#ie78365c54f3f4f5ca9a42145b0615bd2_34)</u> | <u>[Notes to Consolidated Financial Statements (Unaudited)](#ie78365c54f3f4f5ca9a42145b0615bd2_34)</u> | <u>[11](#ie78365c54f3f4f5ca9a42145b0615bd2_34)</u> |
| **<u>[ITEM 2.](#ie78365c54f3f4f5ca9a42145b0615bd2_85)</u>** | **<u>[MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND](#ie78365c54f3f4f5ca9a42145b0615bd2_85)</u>**<br>**<u>[RESULTS OF OPERATIONS](#ie78365c54f3f4f5ca9a42145b0615bd2_85)</u>**<br>| <u>[58](#ie78365c54f3f4f5ca9a42145b0615bd2_85)</u> |
| **<u>[ITEM 3.](#ie78365c54f3f4f5ca9a42145b0615bd2_124)</u>** | **<u>[QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](#ie78365c54f3f4f5ca9a42145b0615bd2_124)</u>** | <u>[81](#ie78365c54f3f4f5ca9a42145b0615bd2_124)</u> |
| **<u>[ITEM 4.](#ie78365c54f3f4f5ca9a42145b0615bd2_127)</u>** | **<u>[CONTROLS AND PROCEDURES](#ie78365c54f3f4f5ca9a42145b0615bd2_127)</u>** | <u>[83](#ie78365c54f3f4f5ca9a42145b0615bd2_127)</u> |
| **<u>[PART II – OTHER INFORMATION](#ie78365c54f3f4f5ca9a42145b0615bd2_130)</u>** | **<u>[PART II – OTHER INFORMATION](#ie78365c54f3f4f5ca9a42145b0615bd2_130)</u>** | <u>[84](#ie78365c54f3f4f5ca9a42145b0615bd2_130)</u> |
| **<u>[ITEM 1.](#ie78365c54f3f4f5ca9a42145b0615bd2_133)</u>** | **<u>[LEGAL PROCEEDINGS](#ie78365c54f3f4f5ca9a42145b0615bd2_133)</u>** | <u>[84](#ie78365c54f3f4f5ca9a42145b0615bd2_133)</u> |
| **<u>[ITEM 1A.](#ie78365c54f3f4f5ca9a42145b0615bd2_136)</u>** | **<u>[RISK FACTORS](#ie78365c54f3f4f5ca9a42145b0615bd2_136)</u>** | <u>[84](#ie78365c54f3f4f5ca9a42145b0615bd2_136)</u> |
| **<u>[ITEM 2.](#ie78365c54f3f4f5ca9a42145b0615bd2_139)</u>** | **<u>[UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](#ie78365c54f3f4f5ca9a42145b0615bd2_139)</u>** | <u>[84](#ie78365c54f3f4f5ca9a42145b0615bd2_139)</u> |
| **<u>[ITEM 3.](#ie78365c54f3f4f5ca9a42145b0615bd2_142)</u>** | **<u>[DEFAULTS UPON SENIOR SECURITIES](#ie78365c54f3f4f5ca9a42145b0615bd2_142)</u>** | <u>[84](#ie78365c54f3f4f5ca9a42145b0615bd2_142)</u> |
| **<u>[ITEM 4.](#ie78365c54f3f4f5ca9a42145b0615bd2_145)</u>** | **<u>[MINE SAFETY DISCLOSURES](#ie78365c54f3f4f5ca9a42145b0615bd2_145)</u>** | <u>[84](#ie78365c54f3f4f5ca9a42145b0615bd2_145)</u> |
| **<u>[ITEM 5.](#ie78365c54f3f4f5ca9a42145b0615bd2_148)</u>** | **<u>[OTHER INFORMATION](#ie78365c54f3f4f5ca9a42145b0615bd2_148)</u>** | <u>[84](#ie78365c54f3f4f5ca9a42145b0615bd2_148)</u> |
| **<u>[ITEM 6.](#ie78365c54f3f4f5ca9a42145b0615bd2_151)</u>** | **<u>[EXHIBITS](#ie78365c54f3f4f5ca9a42145b0615bd2_151)</u>** |  |
| **<u>[SIGNATURES](#ie78365c54f3f4f5ca9a42145b0615bd2_154)</u>** | **<u>[SIGNATURES](#ie78365c54f3f4f5ca9a42145b0615bd2_154)</u>** | <u>[86](#ie78365c54f3f4f5ca9a42145b0615bd2_154)</u> |

---

**Introductory Note**

<u>Presentation of Results - HomeStreet Bank Merger</u>

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. In addition, Mechanics' reported financial results for the quarter and nine months ended September 30,

2025 reflect Mechanics Bank's financial results on a standalone basis until the closing of the Merger on September 2, 2025

and results of the combined company from September 2, 2025 through September 30, 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 initial valuations at the Merger date. These estimates are considered preliminary as of September

30, 2025, are subject to change for up to one year after the Merger date, and any changes could be material.

Unless we state otherwise or the content otherwise requires, references in this Form 10-Q to "Mechanics," "we," "our,"

"us" or the "Company" refer collectively to Mechanics Bancorp, Mechanics Bank (Bank) and other direct and indirect

subsidiaries of Mechanics Bancorp, following completion of the Merger. In some instances, we refer to Mechanics Bank

prior to the effective time of the Merger as "legacy Mechanics Bank," HomeStreet Bank prior to the effective time of the

Merger as "legacy HomeStreet Bank," and HomeStreet, Inc. prior to the effective time of the Merger as "legacy

HomeStreet, Inc."

**PART I - FINANCIAL INFORMATION**

Glossary of Acronyms, Abbreviations, and Terms

The acronyms, abbreviations, and terms listed below are used in various sections of this Quarterly Report on Form 10-Q,

including "Item 1. Financial Statements" and "Item 2. Management's Discussion and Analysis of Financial Condition and

Results of Operations."

---

| | | | |
|:---|:---|:---|:---|
| ACL | Allowance for credit losses | LHFI | Loans held for investment |
| AFS | Available-for-sale | LHFS | Loans held for sale |
| AOCI | Accumulated other comprehensive income (loss) | LIHTC | Low income housing tax credit |
| ASU | Accounting standards update | LOCOM | Lower of amortized cost or fair value |
| AUM | Assets under management | MBFD | Modifications to borrowers experiencing financial <br>difficulty<br>|
| BOLI | Bank owned life insurance | MBS | Mortgage-backed securities |
| BTFP | Bank Term Funding Program | Merger | Merger on September 2, 2025 in which HomeStreet <br>Bank merged with and into Mechanics Bank, and <br>Mechanics Bank became a wholly-owned subsidiary <br>of Mechanics Bancorp (formerly HomeStreet, Inc.)<br>|
| C&I | Commercial and industrial loans | MSRs | Mortgage servicing rights |
| CECL | Current expected credit loss | OREO | Other real estate owned |
| CODM | Chief operating decision maker | PCD | Purchased credit deteriorated |
| CPI | Consumer Price Index | PD | Probability of default |
| CPR | Constant Prepayment Rate | LGD | Loss given default |
| CRA | Community Reinvestment Act | ROU | Right-of-use |
| CRE | Commercial real estate | RSUs | Restricted stock units |
| DFPI | California Department of Financial Protection and Innovation | SBA | Small Business Administration |
| DUS | Fannie Mae Multifamily Delegated Underwriting and <br>Servicing Program<br>| SEC | Securities and Exchange Commission |
| EPS | Earnings per share | SFR | Single family residential |
| FDIC | Federal Deposit Insurance Corporation | SOFR | Secured Overnight Financing Rate |
| FHLB | Federal Home Loan Bank | TRUPs | Trust preferred securities |
| FRB | Board of Governors of the Federal Reserve System | U.S. GAAP | U.S. Generally Accepted Accounting Principles |
| HTM | Held-to-maturity |  |  |
| IRLC | Interest rate lock commitment |  |  |

---

**ITEM 1. FINANCIAL STATEMENTS**

**MECHANICS BANCORP AND SUBSIDIARIES**

 **CONSOLIDATED BALANCE SHEETS**

**(Unaudited)**

---

| | | |
|:---|:---|:---|
| **(in thousands, except shares)** | **September 30,** <br>**2025**<br>| **December 31,** <br>**2024**<br>|
| **<u>ASSETS</u>** |  |  |
| Cash and cash equivalents  | $1442647 | $999711 |
| Trading securities | 50357 |  |
| Securities available-for-sale, at fair value  | 3490478 | 3065251 |
| Securities held-to-maturity, at amortized cost (fair value of $1,186,260 and $1,196,000 at <br>September 30, 2025 and December 31, 2024, respectively)<br>| 1363636 | 1440494 |
| Loans held for sale (includes $21,397 carried at fair value at September 30, 2025) | 54985 | 543 |
| Loan and lease receivables | 14568795 | 9643497 |
| Allowance for credit losses on loans and leases | (168959) | (88558) |
| Net loan and lease receivables | 14399836 | 9554939 |
| Mortgage servicing rights (includes $59,536 carried at fair value at September 30, 2025) | 88595 |  |
| Other real estate owned | 1675 | 15600 |
| Federal Home Loan Bank stock, at cost | 17294 | 17250 |
| Premises and equipment, net | 143917 | 117362 |
| Bank-owned life insurance | 169163 | 83741 |
| Goodwill | 843305 | 843305 |
| Other intangible assets, net | 143264 | 38744 |
| Right-of-use asset | 85657 | 53545 |
| Interest receivable and other assets | 414011 | 259627 |
| **TOTAL ASSETS** | $22708820 | $16490112 |
| **<u>LIABILITIES AND SHAREHOLDERS' EQUITY</u>** |  |  |
| **LIABILITIES** |  |  |
| Noninterest-bearing demand deposits | $6748479 | $5616116 |
| Interest-bearing transaction accounts | 7918670 | 6138909 |
| Savings and time deposits | 4785670 | 2186779 |
| Total deposits | 19452819 | 13941804 |
| Long-term debt | 190123 |  |
| Operating lease liability | 90796 | 56094 |
| Interest payable and other liabilities | 200948 | 190346 |
| **TOTAL LIABILITIES** | 19934686 | 14188244 |
| **SHAREHOLDERS' EQUITY** |  |  |
| Common stock, Class A, no par value, Authorized —1,897,500,000 shares, Issued and outstanding, <br>220,088,687 shares and 200,884,880 shares at September 30, 2025 and December 31, 2024, <br>respectively; Class B, no par value, Authorized — 2,500,000 shares, Issued and outstanding, <br>1,114,448 shares at September 30, 2025 and December 31, 2024.<br>| 2401989 | 2122117 |
| Retained earnings | 380954 | 239517 |
| Accumulated other comprehensive loss, net of tax | (8809) | (59766) |
| **TOTAL SHAREHOLDERS' EQUITY** | 2774134 | 2301868 |
| **TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY** | $22708820 | $16490112 |

---

See accompanying notes to consolidated financial statements

**MECHANICS BANCORP AND SUBSIDIARIES**

**CONSOLIDATED INCOME STATEMENTS**

**(Unaudited)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Quarter Ended September 30,** | **Quarter Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
| **(in thousands, except share and per share data)** | **2025** | **2024** | **2025** | **2024** |
| **INTEREST INCOME** |  |  |  |  |
| Loans and leases interest and fees  | $141773 | $130830 | $379681 | $404010 |
| Investment securities | 40266 | 37060 | 129864 | 91238 |
| Interest-bearing cash and other | 22849 | 24229 | 47081 | 63618 |
| **Total interest income** | 204888 | 192119 | 556626 | 558866 |
| **INTEREST EXPENSE** |  |  |  |  |
| Deposits | 57496 | 52408 | 150651 | 140859 |
| Borrowed funds | 124 | 8607 | 124 | 26428 |
| Long-term debt | 1598 | 134 | 1598 | 810 |
| **Total interest expense** | 59218 | 61149 | 152373 | 168097 |
| **Net interest income** | 145670 | 130970 | 404253 | 390769 |
| Provision for credit losses on loans and leases | 46058 | 6730 | 42663 | 2684 |
| Provision for credit losses on unfunded lending commitments | 960 | 13 | 329 | 517 |
| **Net interest income after provision for credit losses** | 98652 | 124227 | 361261 | 387568 |
| **NONINTEREST INCOME (LOSS)** |  |  |  |  |
| Service charges on deposit accounts | 5875 | 6007 | 16861 | 17854 |
| Trust fees and commissions | 3117 | 3176 | 9452 | 8841 |
| ATM network fee income | 3425 | 3109 | 9353 | 9084 |
| Loan servicing income | 680 | 202 | 1025 | 786 |
| Net gain (loss) on sales and calls of investment securities | 155 |  | 4292 | (207203) |
| Income from bank-owned life insurance | 2120 | 1010 | 3149 | 2144 |
| Bargain purchase gain | 90363 |  | 90363 |  |
| Other  | 4043 | 3400 | 9889 | 10839 |
| **Total noninterest income (loss)** | 109778 | 16904 | 144384 | (157655) |
| **NONINTEREST EXPENSE** |  |  |  |  |
| Salaries and employee benefits | 54168 | 47072 | 150753 | 147717 |
| Occupancy | 9566 | 8028 | 25875 | 24113 |
| Equipment | 7288 | 5807 | 19445 | 17643 |
| Professional services | 5560 | 7091 | 16383 | 15398 |
| FDIC assessments and regulatory fees | 2722 | 2917 | 7148 | 8679 |
| Amortization of intangible assets | 4251 | 3302 | 9655 | 10705 |
| Data processing | 3315 | 2294 | 6865 | 6734 |
| Loan related | 4439 | 1577 | 9236 | 5416 |
| Marketing and advertising | 680 | 963 | 2008 | 2603 |
| Other real estate owned related | (103) | 201 | 2685 | 1888 |
| Acquisition and integration costs | 63869 |  | 69858 |  |
| Other | 7574 | 6399 | 20136 | 20514 |
| **Total noninterest expense** | 163329 | 85651 | 340047 | 261410 |
| **Income (loss) before provision for income tax** <br>**expense**<br>| 45101 | 55480 | 165598 | (31497) |
| **PROVISION (BENEFIT) FOR INCOME TAXES** | (10060) | 15536 | 24161 | (8833) |
| **NET INCOME (LOSS)** | $55161 | $39944 | $141437 | $(22664) |
| **Basic earnings per share** |  |  |  |  |
| Class A common stock | $0.25 | $0.19 | $0.66 | $(0.11) |
| Class B common stock | $2.53 | $1.88 | $6.60 | $(1.07) |
| **Diluted earnings per share** |  |  |  |  |
| Class A common stock | $0.25 | $0.19 | $0.66 | $(0.11) |
| Class B common stock | $2.53 | $1.88 | $6.60 | $(1.07) |
| **Basic weighted-average shares outstanding** |  |  |  |  |
| Class A common stock | 207189764 | 200884880 | 203012384 | 200876688 |
| Class B common stock | 1114448 | 1114448 | 1114448 | 1114448 |
| **Diluted weighted-average shares outstanding** |  |  |  |  |
| Class A common stock | 207258678 | 200977311 | 203075003 | 200876688 |
| Class B common stock | 1114448 | 1114448 | 1114448 | 1114448 |

---

See accompanying notes to consolidated financial statements

**MECHANICS BANCORP AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)**

**(Unaudited)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Quarter Ended September 30,** | **Quarter Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
| **(in thousands)** | **2025** | **2024** | **2025** | **2024** |
| **NET INCOME (LOSS)** | $55161 | $39944 | $141437 | $(22664) |
| Other comprehensive income (loss) |  |  |  |  |
| Net change in unrealized gain on investment securities <br>available-for-sale<br>| 31772 | 62777 | 74273 | 44512 |
| Reclassification adjustment for accretion of unrealized <br>holding loss from the transfer of securities from <br>available-for-sale to held-to-maturity debt <br>securities<br>| 627 | 648 | 1880 | 1943 |
| Reclassification adjustment for net realized (gain) loss <br>on securities available-for-sale included in net <br>income<br>| (155) |  | (4292) | 207203 |
| Change in defined benefit pension liability obligations | 72 | (31) | 217 | (94) |
| Other comprehensive income before tax | 32316 | 63394 | 72078 | 253564 |
| Income tax impact of: |  |  |  |  |
| Net change in unrealized gain on investment securities <br>available-for-sale<br>| 9366 | 17944 | 21718 | 12234 |
| Reclassification adjustment for accretion of unrealized <br>holding loss from the transfer of securities from <br>available-for-sale to held-to-maturity debt <br>securities<br>| 284 | 185 | 645 | 555 |
| Reclassification adjustment for net realized (gain) loss <br>on securities available-for-sale included in net <br>income<br>| (46) |  | (1255) | 59716 |
| Change in defined benefit pension liability obligations | (29) | (9) | 13 | (27) |
| Total | 9575 | 18120 | 21121 | 72478 |
| Other comprehensive income | 22741 | 45274 | 50957 | 181086 |
| **Total comprehensive income**  | $77902 | $85218 | $192394 | $158422 |

---

See accompanying notes to consolidated financial statements

**MECHANICS BANCORP AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY**

**(Unaudited)**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Class A and Class B** <br>**Common Stock** | **Class A and Class B** <br>**Common Stock** | | **Accumulated Other** <br>**Comprehensive Income** <br>**(Loss), Net** | **Accumulated Other** <br>**Comprehensive Income** <br>**(Loss), Net** | |
| **(in thousands, except share data)** | **Shares** | **Amount** | <br>**Retained**<br>**Earnings**<br>| **Securities** | **Defined** <br>**Benefit** <br>**Obligations**<br>| <br>**Total** <br>**Shareholders'**<br>**Equity**<br>|
| **For the quarter ended September 30, 2024** |  |  |  |  |  |  |
| Balance, June 30, 2024 | 201999328 | $2122117 | $177906 | $(63768) | $7787 | $2244042 |
| Net income |  |  | 39944 |  |  | 39944 |
| Other comprehensive income (loss), net of tax |  |  |  | 45296 | (22) | 45274 |
| Cash dividends declared Class A common stock <br>($0.14 per share)<br>|  |  | (28419) |  |  | (28419) |
| Cash dividends declared Class B common stock <br>($1.41 per share)<br>|  |  | (1577) |  |  | (1577) |
| Balance, September 30, 2024 | 201999328 | $2122117 | $187854 | $(18472) | $7765 | $2299264 |
| **For the nine months ended September 30, 2024** |  |  |  |  |  |  |
| Balance, December 31, 2023 | 201982823 | $2121888 | $305510 | $(199625) | $7832 | $2235605 |
| Net loss |  |  | (22664) |  |  | (22664) |
| Other comprehensive income (loss), net of tax |  |  |  | 181153 | (67) | 181086 |
| Common stock issued - stock awards | 16505 | 229 |  |  |  | 229 |
| Cash dividends declared Class A common stock <br>($0.45 per share)<br>|  |  | (89999) |  |  | (89999) |
| Cash dividends declared Class B common stock <br>($4.48 per share)<br>|  |  | (4993) |  |  | (4993) |
| Balance, September 30, 2024 | 201999328 | $2122117 | $187854 | $(18472) | $7765 | $2299264 |
| **For the quarter ended September 30, 2025** |  |  |  |  |  |  |
| Balance, June 30, 2025 | 202015832 | $2122374 | $325793 | $(35945) | $4395 | $2416617 |
| Net income  |  |  | 55161 |  |  | 55161 |
| Other comprehensive income, net of tax |  |  |  | 22640 | 101 | 22741 |
| Share-based compensation expense |  | 785 |  |  |  | 785 |
| Common stock issued from Merger | 19163904 | 265803 |  |  |  | 265803 |
| Common stock issued from stock awards, net | 23399 | (616) |  |  |  | (616) |
| Reclassification of liability classified awards to <br>equity<br>|  | 13643 |  |  |  | 13643 |
| Balance, September 30, 2025 | 221203135 | $2401989 | $380954 | $(13305) | $4496 | $2774134 |
| **For the nine months ended September 30, 2025** |  |  |  |  |  |  |
| Balance, December 31, 2024 | 201999328 | $2122117 | $239517 | $(64058) | $4292 | $2301868 |
| Net income  |  |  | 141437 |  |  | 141437 |
| Other comprehensive income, net of tax |  |  |  | 50753 | 204 | 50957 |
| Share-based compensation expense |  | 785 |  |  |  | 785 |
| Common stock issued from Merger | 19163904 | 265803 |  |  |  | 265803 |
| Common stock issued from stock awards, net | 39903 | (359) |  |  |  | (359) |
| Reclassification of liability classified awards to <br>equity<br>|  | 13643 |  |  |  | 13643 |
| Balance, September 30, 2025 | 221203135 | $2401989 | $380954 | $(13305) | $4496 | $2774134 |

---

See accompanying notes to consolidated financial statements

**MECHANICS BANCORP AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(Unaudited)** 

---

| | | |
|:---|:---|:---|
|  | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
| **(in thousands)** | **2025** | **2024** |
| **CASH FLOWS FROM OPERATING ACTIVITIES:** |  |  |
| **Net income (loss)** | $141437 | $(22664) |
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: |  |  |
| Provision for credit losses on loans and leases | 42663 | 2684 |
| Originations of loans held for sale | (61287) | (4093) |
| Proceeds from sales and principal collected on loans held for sale | 46993 | 4072 |
| Net fair value adjustment and gain on sale of loans held for sale | (659) | (42) |
| Provision for credit losses on unfunded lending commitments | 329 | 517 |
| Amortization of premiums and discounts on investment securities | 3178 | 7565 |
| Depreciation of premises and equipment | 7108 | 7063 |
| Amortization of intangible assets | 9655 | 10705 |
| Amortization of premiums and discounts on debt and deposits | 700 | 30 |
| Net loss on debt extinguishment | 835 |  |
| Share-based compensation expense | 785 |  |
| Increase in cash surrender value of bank-owned life insurance | (3198) | (2130) |
| Net (gain) loss on sales and calls of investment securities | (4292) | 207203 |
| Net loss on sale, disposal and write-down of other real estate owned | 3442 | 1226 |
| Net loss (gain) on sale and disposal of premises and equipment | 100 | (856) |
| Deferred income tax expense | (3844) | 9418 |
| Amortization of deferred loan fees and costs | 9909 | 15428 |
| Amortization of premiums and discounts on purchased loans | (7959) | (3327) |
| Origination, amortization and change in fair value of MSRs, net | 1108 |  |
| Change in fair value of trading securities | (98) |  |
| Bargain purchase gain | (90363) |  |
| Changes in: |  |  |
| Interest receivable and other assets | 53598 | 571 |
| Interest payable and other liabilities | (70471) | (16012) |
| Net cash provided by operating activities | 79669 | 217358 |
| **CASH FLOWS FROM INVESTING ACTIVITIES:** |  |  |
| Securities available-for-sale: |  |  |
| Purchases | (561139) | (2154513) |
| Sales | 930123 | 1629111 |
| Maturities, calls and paydowns | 252179 | 199226 |
| Securities held-to-maturity: |  |  |
| Maturities, calls and paydowns | 77720 | 75828 |
| Loan originations and principal collections, net | 835542 | 1016794 |
| Purchases of loans | (172296) | (223900) |
| Recoveries of loans charged-off | 9213 | 13053 |
| Proceeds from the settlement of bank-owned life insurance | 6748 | 1113 |
| Proceeds from sales of other real estate owned | 13303 | 186 |
| Proceeds from sales of premises and equipment | 887 | 2621 |
| Purchases of premises and equipment | (3023) | (3907) |
| Proceeds from sale of Federal Home Loan Bank stock | 49873 |  |
| Net cash acquired in Merger | 156890 |  |
| Net cash provided by investing activities | 1596020 | 555612 |

---

---

| | | |
|:---|:---|:---|
|  | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
| **(in thousands)** | **2025** | **2024** |
| **CASH FLOWS FROM FINANCING ACTIVITIES:** |  |  |
| Net decrease in deposits | (232753) | (189636) |
| Repayment of long-term FHLB advances | (1000000) |  |
| Net decrease in bank term funding |  | (750000) |
| Repayment of subordinated debt |  | (17750) |
| Cash dividends paid  |  | (94992) |
| Net cash used by financing activities | (1232753) | (1052378) |
| Net increase (decrease) in cash and cash equivalents | 442936 | (279408) |
| Cash and cash equivalents at beginning of period | 999711 | 1457569 |
| Cash and cash equivalents at end of period | $1442647 | $1178161 |
| **SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:** |  |  |
| Cash paid during the period for: |  |  |
| Interest paid | $148355 | $167462 |
| Income taxes paid, net of refunds | 31243 | 3515 |
| Non-cash activities: |  |  |
| Transfer from loans to other real estate owned |  | 2282 |
| Lease liabilities arising from obtaining right-of-use assets | 14415 | 10889 |
| Stock awards reclassified from liability to equity-based | 13643 |  |
| Merger related items: |  |  |
| Stock consideration | 265803 |  |
| Fair value of assets acquired | 7387493 |  |
| Fair value of liabilities assumed | 7031327 |  |

---

See accompanying notes to consolidated financial statements

**Mechanics Bancorp and Subsidiaries**

**Notes to Consolidated Financial Statements (Unaudited)**

**NOTE 1–SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

**<u>Nature of Operations:</u>**Founded in 1921, Mechanics Bancorp, a Washington corporation, is a financial holding company

and primarily operates through Mechanics Bank, its wholly-owned subsidiary. Mechanics Bank is a full-service

community bank that was founded in 1905, with 166 banking branches throughout California, Washington, the Portland,

Oregon area and Hawaii. Following the Merger on September 2, 2025 of HomeStreet Bank with and into Mechanics Bank,

with Mechanics Bank surviving the Merger as a wholly-owned subsidiary of the Company, the assets, liabilities and

operations of HomeStreet Bank became the assets, liabilities and operations of Mechanics Bank. Headquartered in Walnut

Creek, California, Mechanics Bank provides personal banking, business banking, trust and estate, brokerage and wealth

management products and services. Mechanics Bank's retail banking products include a wide range of personal checking,

savings and loan products (including credit card, home equity, home mortgage and secured/unsecured loans), as well as

online banking and a variety of wealth management services (including trust and estate, investment management and

financial planning services). Mechanics Bank's banking products and services for businesses include business checking

and savings accounts, business debit cards, online banking, cash management services, wealth management services,

business credit cards, commercial real estate loans, equipment leasing and loans guaranteed by the Small Business

Administration.

Legacy HomeStreet Bank, which was merged with and into Mechanics Bank and whose business is now part of the

business of Mechanics Bank, was principally engaged in commercial banking, consumer banking, and real estate lending,

including construction and permanent loans on commercial real estate and single-family residences. HomeStreet Insurance

Agency, a division of HomeStreet, Inc. (now Mechanics Bancorp), also sold insurance products for consumer clients. It

provided these financial products and services to its customers through bank branches, loan production offices, ATMs,

online, mobile and telephone banking channels.

The Company's business is conducted primarily through its wholly-owned subsidiaries, Mechanics Bank and HomeStreet

Statutory Trusts (I, II, III and IV), as well as Mechanics Bank's subsidiaries: MacDonald Auxiliary Corporation,

Mechanics Real Estate Holdings Inc., 3190 Klose Way, LLC, Hydrox Properties XXVI, LLC, Continental Escrow

Company, HS Properties, Inc., HS Evergreen Corporate Center LLC, Union Street Holdings LLC, HomeStreet Foundation

and 16389 Redmond Way LLC.

The Company ceased originating auto loans in February 2023, but continued to service the portfolio through April 30,

2025. Effective May 1, 2025, the Company entered into a servicing agreement with a third-party servicer to oversee and

manage the Company's active portfolio of auto loans. The portfolio consisted of new and pre-owned retail automobile sales

contracts purchased from both franchised and independent automobile dealerships in the United States.

**<u>Basis of Presentation:</u>** The consolidated financial statements include the accounts of the Company and its wholly-owned

subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Unless the

context requires otherwise, all references to the Company include its wholly-owned subsidiaries. The accounting and

reporting policies of the Company are based upon U.S. GAAP and conform to predominant practices within the financial

services industry.

The Merger is considered a reverse acquisition in accordance with ASC 805-40, "Business Combinations-Reverse

Acquisitions." Mechanics Bank is the accounting acquirer (legal acquiree), HomeStreet Bank is the accounting acquiree

and Mechanics Bancorp is the legal acquirer. Mechanics Bancorp's financial results for all periods ended prior to

September 2, 2025 reflect legacy Mechanics Bank's results only on a standalone basis. In addition, Mechanics Bancorp's

reported financial results for the quarter and nine months ended September 30, 2025 reflect legacy Mechanics Bank's

financial results only on a standalone basis until the closing of the Merger on September 2, 2025 and results of the

combined company for September 2, 2025 through September 30, 2025. The number of shares issued and outstanding,

earnings per share, and all references to share quantities or metrics of Mechanics Bancorp 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. Refer to Note 2, "Business

Combination," for additional information on the transaction.

Certain prior period amounts have been reclassified to conform to the current quarter's presentation. These reclassifications

had no impact on the Company's prior year net income or shareholders' equity.

These unaudited interim financial statements reflect all adjustments that are, in the opinion of management, necessary for a

fair statement of the results for the periods presented. These adjustments are of a normal recurring nature, unless otherwise

disclosed in these accompanying notes to the financial statements. The results of operations in the interim financial

statements do not necessarily indicate the results that may be expected for the full year. Certain disclosures normally

included in annual financial statements prepared in accordance with GAAP have been condensed or omitted in the interim

financial statements, as permitted under GAAP. The unaudited interim financial statements should be read in conjunction

with Mechanics Bank's audited Consolidated Financial Statements and Notes to Consolidated Financial Statements for the

years ended December 31, 2024, 2023 and 2022 included as Exhibit 99.1 to Mechanics Bancorp's Amendment No. 1 to its

Current Report on Form 8-K, as filed with the SEC on September 25, 2025.

**<u>Use of Estimates:</u>** The preparation of financial statements in conformity with GAAP requires management to make

estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in

the financial statements and disclosures provided, and actual results could differ. A material estimate that is particularly

susceptible to significant change relates to the determination of the allowance for credit losses. Other significant estimates

that may be subject to change include fair value determinations and disclosures, evaluation of goodwill and other intangible

assets for impairment, and the realization of deferred tax assets. These estimates may be adjusted as more current

information becomes available, and any adjustments may be significant.

**<u>Business Combinations:</u>**Purchase accounting requires that the assets purchased, the liabilities assumed, and non-

controlling interests all be reported on the acquirer's financial statements at their fair value, with any excess of purchase

consideration over the net assets being reported as goodwill. A bargain purchase gain is realized when the excess of the fair

value of identifiable net assets acquired over the consideration paid and it recognized in earnings on the acquisition date.

**<u>Acquisitions of Legacy Mechanics Bank:</u>** The following are historical acquisitions of legacy Mechanics Bank that were

accounted for as business combinations under ASC 805:

Effective October 1, 2016 (the CRB Acquisition Date), the Bank completed its acquisition of California Republic Bancorp

(CRB) pursuant to the Agreement and Plan of Merger and Reorganization (the CRB Agreement), dated as of April 28,

2016, between Coast Acquisition Corporation (CAC), a wholly-owned subsidiary of Mechanics Bank and into CRB (the

CRB Merger), with CRB being the surviving corporation, followed by the merger of CRB with and into MB (the CRB

Acquisition), with MB being the surviving corporation.

On February 12, 2018 (the SVB Acquisition Date), Gold Rush Acquisition Corporation (a wholly-owned subsidiary of

Ford Financial Fund II, L.P. formed for this sole purpose), Mechanics Bank and Learner Financial Corporation, the bank

holding company for Scott Valley Bank (SVB), entered into a definitive agreement for Mechanics Bank to acquire Learner

Financial Corporation and its wholly-owned subsidiary, Scott Valley Bank, which acquisition (the SVB Acquisition) was

completed and became effective on June 1, 2018.

On March 15, 2019, Mechanics Bank and Rabobank International Holding B.V. (Rabo), entered into a definitive agreement

for Mechanics Bank to acquire Rabobank, N.A. (RNA), a subsidiary of Rabo, in a strategic business combination (the RNA

Acquisition), which became effective on August 31, 2019 (the RNA Acquisition Date).

**<u>Merger with HomeStreet:</u>** On September 2, 2025, Mechanics Bancorp (formerly known as HomeStreet, Inc.), a

Washington corporation (the Company), consummated the previously announced Merger pursuant to the terms of the

Agreement and Plan of Merger, dated as of March 28, 2025, by and among the Company, HomeStreet Bank, a Washington

state-chartered commercial bank and a wholly-owned subsidiary of the Company, and Mechanics Bank. In connection with

the Merger, HomeStreet Bank merged with and into Mechanics Bank, with Mechanics Bank surviving the Merger and

becoming a wholly-owned subsidiary of the Company. As a result of the Merger, the Company's business became

primarily the business conducted by Mechanics Bank. Immediately following the Merger, (1) legacy Mechanics Bank

shareholders owned approximately 91.7% of the Company on an economic basis and 91.3% of the voting power of the

Company and (2) legacy Company shareholders owned approximately 8.3% of the Company on an economic basis and

8.7% of the voting power of the Company. Please see Note 9, "Shareholders' Equity and Dividend Limitations" for details

of the Company's Class A and Class B common stock, including further information on the economic rights of the Class B

shares.

The Merger is considered a reverse acquisition. Mechanics Bank is the accounting acquirer (legal acquiree), HomeStreet

Bank is the accounting acquiree and Mechanics Bancorp is the legal acquirer. As the accounting acquirer, Mechanics Bank

remeasured the identifiable assets acquired and liabilities assumed in the Merger at their acquisition date fair values. These

estimates are considered preliminary as of September 30, 2025, are subject to change for up to one year after the Merger

date, and any changes could be material.

**<u>Trading Securities:</u>**Trading securities, consisting of U.S. Treasury notes, are carried at fair value and are used as

economic hedges of our single family mortgage servicing rights. Net gain or loss on trading securities are included in loan

servicing income in the consolidated income statements.

**<u>LHFS:</u>**Loans originated for sale in the secondary market or designated for whole loan sales are classified as LHFS.

Management has elected the fair value option for all single family LHFS (originated with the intent to market for sale) and

records these loans at fair value. Gains and losses from changes in fair value on LHFS are recognized in net gain on

mortgage loan origination and sale activities within other noninterest income. Direct loan origination costs and fees for

single family loans originated as held for sale are recognized as noninterest expenses.

Multifamily and SBA LHFS are accounted for at the lower of amortized cost or fair value (LOCOM). LOCOM valuations

are performed quarterly or at the time of transfer to or from LHFS. Related gains and losses are recognized in net gain on

mortgage loan origination and sale activities. Direct loan origination costs and fees for multifamily and SBA loans

classified as held for sale are deferred at origination and recognized in gain on sale in earnings at the time of sale.

**<u>Allowances for Credit Losses on Loans Held for Investment:</u>**The Company accounts for its allowance for credit losses

with an expected loss methodology that is referred to as the current expected credit loss (CECL) methodology. The

following discussion represents the allowance for credit losses under the CECL methodology.

Credit quality within the loans held for investment portfolio is continuously monitored by management and is reflected

within the allowance for credit losses for loans. The allowance for credit losses, or reserve, is an estimate of expected

losses over the lifetime of a loan within the Company's existing loans held for investment portfolio. The allowance for

credit losses for loans held for investment is adjusted by a provision for (reversal of) credit losses, which is reported in

earnings, and reduced by the charge-off of loan amounts, net of recoveries.

The credit loss estimation process involves procedures to appropriately consider the unique characteristics of the

Company's loan portfolio segments, which are further disaggregated into loan classes, the level at which credit risk is

monitored. The allowance for credit losses for loans not evaluated for specific reserves is calculated using statistical credit

factors, including PD and LGD, to the amortized cost of pools of loan exposures with similar risk characteristics over its

contractual life, adjusted for prepayments, to arrive at an estimate of expected credit losses. Third-party provided economic

forecasts are applied over the period management believes it can estimate reasonable and supportable forecasts. Reasonable

and supportable forecast periods and reversion assumptions to historical data are credit model specific. Prepayments are

estimated by loan type using historical information and adjusted for current and future conditions.

When computing allowance levels, credit loss assumptions are estimated primarily using third-party models that analyze

loans according to credit risk ratings, historic loss experience, past due status and other credit trends and risk

characteristics, including current conditions and reasonable and supportable forecasts about the future. Determining the

appropriateness of the allowance is complex and requires judgment by management about the effect of matters that are

inherently uncertain. Future factors and forecasts may result in significant changes in the allowance and provision

(reversal) for credit losses in those future periods. The allowance for credit losses will primarily reflect estimated losses for

pools of loans that share similar risk characteristics but will also consider individual loans that do not share risk

characteristics with other loans.

***Collectively Evaluated Loans***

In estimating the allowance for credit losses for collectively evaluated loans, segments are derived based on loans pooled

by product types and similar risk characteristics or areas of risk concentration. In determining the allowance for credit

losses, the Company utilizes third-party models for loss forecasting for the majority of the Company's portfolio. These

models ensure that we employ methodologies and analytics for our credit loss estimations. Economic forecasts are a crucial

component of our estimation process, applied over a period deemed reasonable and supportable by management. These

forecasts, alongside historical data, credit model-specific reversion assumptions and management judgment, inform our

credit loss assumptions. The following models are utilized for the Company's portfolios:

*Auto Loans.* The Company uses models which incorporate macroeconomic forecasts and loan level models for estimating

PD and prepayment. While the Company has access to national data, we use a custom model based on the Company's

internal historical data and apply them to a blend of forecasted scenarios. Based on the portfolio's composition of loans and

their respective credit characteristics and delinquencies, a cash flow schedule of losses is produced providing the expected

loss rate for the segment. Model outputs are back-tested on an ongoing basis to determine adequacy and accuracy on a

quarterly basis.

*Commercial Real Estate – Non-Owner Occupied CRE and Multifamily Loans*. The Company uses models specific to non-

owner occupied CRE and multifamily loans. The model addresses traditional commercial real estate products dependent on

cash flow generated from rents. Based on property information (DSC, LTV, geography, property type), the model

generates a PD and LGD at the individual loan level over the life of the loan, producing an expected loss rate for each

instrument across all future periods. Collectively, these form the overall loss rate for the portfolio segment. For each

scenario, all future year losses for each instrument are calculated using adjusted PD and LGD. The sum of the discounted

future losses is the allowance. When multiple scenarios are considered, the results are weighted.

*Single Family Residential and Home Equity Loans.* The Company uses a specific model for the SFR and home equity

portfolios. These portfolios represent traditional residential real estate products dependent on the borrower's ability to

service debt. Based on borrower ability to repay and underwriting metrics (FICO, LTV, loan type, geography, origination

year, collateral type), the model generates loan level PD, prepayment, and LGD vectors which are then simulated through

various scenario forecasts to calculate an allowance. Past due status post-origination is also a key input in the models.

Current and future changes in economic conditions, including unemployment rates, home prices, index rates, and mortgage

rates, are also considered.

*Commercial & Industrial, Commercial Real Estate – Owner Occupied, and Consumer Loans.*A loss rate model is utilized

for the C&I, CRE Owner Occupied, and Consumer portfolios other than Auto Loans and Loans secured by the cash

surrender value of life insurance. The CRE Owner Occupied segment uses the same model as the C&I portfolio because

repayment is reliant upon cash flow from associated businesses operating at these properties. The C&I loss rate model

considers loan age, credit spread at origination, loan size at origination, regulatory risk rating, loan type, industry sector and

macroeconomic factors to determine loan level lifetime expected loss rates.

***Qualitative Factors***

Estimating the timing and amounts of future losses is subject to significant management judgment as these loss cash flows

rely upon estimates such as default rates, loss severities, collateral valuations, the amounts and timing of principal

payments (including any expected prepayments) or other factors that are reflective of current or future expected conditions.

These estimates, in turn, depend on the duration of current overall economic conditions, industry, borrower, or portfolio

specific conditions, the expected outcome of bankruptcy or insolvency proceedings, as well as, in certain circumstances,

other economic factors, including the level of current and future real estate prices. All of these estimates and assumptions

require significant management judgment and certain assumptions that are highly subjective. Model imprecision also exists

in the allowance for credit losses estimation process due to the inherent time lag of available industry information and

differences between expected and actual outcomes.

Management considers adjustments for these conditions in its allowance for credit loss estimates qualitatively where they

may not be measured directly in its individual or collective assessments, including but not limited to: Control Environment,

Economy, Loan Growth, Management & Staffing, Loan Review, Concentrations, Competition, Legal, Regulatory Changes

and Other.

***Individually Evaluated Loans***

When a loan is assigned a substandard non-accrual or worse risk rating grade, the loan subsequently is evaluated on an

individual basis and no longer evaluated on a collective basis. The net realizable value of the loan is compared to the

appropriate loan basis to determine any allowance for credit losses. The Company generally considers non-accrual loans to

be collateral-dependent. The practical expedient to measure credit losses using the fair value of the collateral has been

exercised.

For collateral-dependent commercial real estate loans, the fair value of collateral is generally based on current appraisals

less selling costs.

For single-family residential loans that are graded substandard non-accrual, an assessment of value is made using the most

recent appraisal or market sales information less selling costs.

Consumer loans are charged off when they reach 120 days delinquency as a general rule. There are limited cases where the

loan is not charged off due to special circumstances and is subject to the collateral review process.

***Off-Balance Sheet Credit Exposures, Including Unfunded Loan Commitments***

Beyond an ACL to cover estimated expected credit losses in all outstanding loans and leases, the Company provides for

any binding commitments to cover estimated credit losses over the contractual period, including other off-balance sheet

obligations such as letters of credit (standby), and unused commitments on lines of credits and loans. In order to calculate

the allowance for credit losses on unfunded lending commitments for the collectively evaluated segments, usage rates are

supported for the unfunded commitments and then multiplied against the qualitative factor adjusted expected credit loss

rate of each pool.

**<u>Purchased Credit Deteriorated (PCD) Loans:</u>**For purchased loans, the Bank will consider internal loan grades,

delinquency status, collateral value (if secured), vintage, financial asset type, effective interest rate, geographical location

and other relevant factors in assessing whether purchased loans are PCD. Loans can be evaluated for PCD at either the

individual asset level or collectively based on similar risk characteristics. Purchased loans that have experienced more than

insignificant credit deterioration since origination are considered PCD loans.

PCD loans are recorded at the amount paid. An allowance for credit losses is determined using the same methodology as

other loans held for investment. The initial allowance for credit losses determined on a collective basis is allocated to

individual loans. The sum of the loan's purchase price and allowance for credit losses becomes its initial amortized cost

basis. The difference between the initial amortized cost basis and the par value of the loan is a noncredit discount or

premium, which is amortized into interest income over the life of the loan. Subsequent changes to the allowance for credit

losses are recorded through credit loss expense.

**<u>Mortgage Servicing Rights:</u>**MSRs are recognized as separate assets on our consolidated balance sheets when we retain

the right to service loans that we have sold or purchase rights to service. We initially record all MSRs at fair value. For

subsequent measurements, single family MSRs are accounted for at fair value, with changes in fair value recorded through

current period earnings, while multifamily and SBA MSRs are accounted for at the lower of amortized cost or fair value.

Subsequent fair value measurements of MSRs are determined by considering the present value of estimated future net

servicing cash flows. Changes in the fair value of MSRs result from changes in (1) model inputs and assumptions and (2)

modeled amortization, representing the collection and realization of expected cash flows and curtailments over time. The

significant model inputs used to measure the fair value of MSRs include assumptions regarding market interest rates,

projected prepayment speeds, discount rates, estimated costs of servicing and other income and additional expenses

associated with the collection of delinquent loans.

Multifamily and SBA MSRs are evaluated periodically for impairment based upon the fair value of the MSRs as compared

to amortized cost. Impairment is determined by comparing the fair value of the portfolio based on predominant risk

characteristic loan type, to amortized cost. Impairment is recognized to the extent that fair value is less than the capitalized

amount of the portfolio.

For single family MSRs, loan servicing income includes fees earned for servicing the loans and the changes in fair value

over the reporting period of both our MSRs and the derivatives used to economically hedge our MSRs. For other MSRs,

loan servicing income includes fees earned for servicing the loans less the amortization of the related MSRs and any

impairment adjustments.

**<u>Goodwill and Other Intangible Assets:</u>** Goodwill arises from business combinations and is determined as the excess of

the fair value of the consideration transferred, plus the fair value of any noncontrolling interests in the acquiree, over the

fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill and intangible assets

acquired in a business combination and determined to have an indefinite useful life are not amortized, but tested for

impairment at least annually or more frequently if events and circumstances exist that indicate that an impairment test

should be performed. The Company has selected November 30, as the date to perform the annual impairment test.

Intangible assets with finite useful lives are amortized over their estimated useful lives to their estimated residual values.

Amortized intangibles must be reviewed for impairment whenever events or changes in circumstances indicate that the

carrying amount of the long-lived asset might not be recoverable. An impairment loss related to intangible assets with finite

useful lives is recognized if the carrying amount of the intangible asset is not recoverable and its carrying amount exceeds

its fair value. After the impairment loss is recognized, the adjusted carrying amount of the intangible asset shall be its new

accounting basis.

Other intangible assets primarily consist of core deposit intangible assets, trade name intangibles and a DUS license

intangible arising from whole bank and branch acquisitions. The core deposit intangibles are amortized on an accelerated

method over their estimated useful lives, which range from 6 to 10 years and the trade name intangibles and DUS license

intangible are not amortized as they have indefinite lives.

**<u>Stock-Based Compensation:</u>**Stock-based compensation expense for all share-based awards granted is based on the grant

date fair value estimated in accordance with the provisions of ASC 718 - Stock Compensation. The Company recognizes

these compensation costs for only those awards expected to vest over the service period of the award.

The Mechanics Bancorp 2025 Equity Incentive Plan (the 2025 Equity Plan), adopted by shareholders in August 2025,

provides for the issuance of incentive stock options, nonqualified stock options, stock appreciation rights, restricted shares

(RSU shares), Performance Awards, dividend equivalent awards and other awards. All share-based awards that are granted

after the Merger date will be issued under the 2025 Equity Plan. As of September 30, 2025, only RSUs have been granted

under the 2025 Equity Plan. Total shares issuable under the 2025 Equity Plan are 7,750,000, excluding shares that may be

delivered pursuant to outstanding awards under prior plans.

Any share-based awards outstanding as of the Merger date are considered outstanding under prior plans of legacy

HomeStreet, Inc. and legacy Mechanics Bank, as appliable. No additional awards may be made under the prior plans, but

prior plans remain in effect as to outstanding awards. Outstanding awards under the prior plans continue to be subject to the

terms and conditions of their respective plan.

In connection with Mechanics Bank becoming a wholly-owned subsidiary of the Company, which is publicly traded, and

the stock of Mechanics Bank being exchanged for shares of Class A common stock of the Company as a result of the

Merger, the Company has elected to settle share-based compensation awards in Class A common stock of the Company

that were outstanding following the Merger that historically were settled in cash by Mechanics Bank. Accordingly, during

the quarter ended September 30, 2025, the Company modified the classification of these outstanding awards from liability

to equity. These outstanding awards also were remeasured at the modification date fair value, and the previously

recognized liability was reclassified to common stock within the consolidated balance sheet. Compensation cost for these

remeasured awards will be recognized over the remaining applicable award vesting period.

**<u>Earnings per Share:</u>** The Company computes net income per share of Class A and Class B common stock using the two-

class method. Basic earnings per share excludes potential dilution from common equivalent shares, such as those associated

with stock-based compensation awards, and is computed by dividing net income allocated to common stockholders by the

weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential

dilution that could occur if securities or other contracts to issue common stock, such as common equivalent shares

associated with stock-based compensation awards, were exercised or converted into common stock that would then share in

the net earnings of the Company. Potential dilution from common equivalent shares is determined using the treasury stock

method, reflecting the potential settlement of stock-based compensation awards resulting in the issuance of additional

shares of the Company's common stock. Stock-based compensation awards that would have an anti-dilutive effect have

been excluded from the determination of diluted earnings per share.

**<u>Loss Contingencies:</u>** Loss contingencies, including claims and legal actions arising in the ordinary course of business, are

recorded as liabilities when the likelihood of a loss is probable and an amount or range of loss can be reasonably estimated.

The Company is occasionally named as a defendant in or threatened with claims and legal actions arising in the ordinary

course of business. The outcomes of claims and legal actions brought against the Company are subject to many

uncertainties. For claims and legal actions where it is not reasonably possible that a loss may be incurred, or where the

Company is not currently able to estimate the reasonably possible loss or range of loss, the Company does not establish an

accrual. Any potential recoveries from insurance are not considered when determining an accrual.As of September 30,

2025 and December 31, 2024, the Company recorded an accrued contingent liability of $4.2 million and $3.1 million,

respectively.

**<u>Recent Accounting Developments</u>**

In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax

Disclosures," which expands disclosures in an entity's income tax rate reconciliation table and taxes paid both in the U.S.

and foreign jurisdictions. The update will be effective for annual periods beginning after December 15, 2024. The adoption

of ASU 2023-09 will not have an impact on the Company's financial position or results of operation as it impacts

disclosures only. We are assessing the impact on our disclosures.

In November 2024, the FASB issued ASU 2024-03, "Income Statement—Reporting Comprehensive Income—Expense

Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses." ASU 2024-03 requires

public companies to disclose, in the notes to the financial statements, specific information about certain costs and expenses

at each interim and annual reporting period. This includes disclosing amounts related to employee compensation,

depreciation, and intangible asset amortization. In addition, public companies will need to provide qualitative description of

the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively. ASU 2024-03 is

effective for public business entities for annual reporting periods beginning after December 15, 2026, and interim reporting

periods beginning after December 15, 2027. Implementation of ASU 2024-03 may be applied prospectively or

retrospectively. The adoption of ASU 2024-03 will not have an impact on the Company's financial position or results of

operation as it impacts disclosures only. We are assessing the impact on our disclosures.

In November 2025, the FASB issued ASU 2025-08, "Financial instruments – Credit Losses (Topic 326): Purchased

Loans," which amends the guidance in ASC 326 on the accounting for certain purchased loans. Under the ASU, entities

must account for acquired loans (excluding credit cards) that meet certain criteria at acquisition (purchased seasoned loans)

by recognizing them at their purchase price plus an allowance for expected credit losses (gross-up approach). Purchased

seasoned loans are defined as either: (1) non-PCD loans that are obtained in a business combination, or (2) non-PCD loans

that (a) are obtained in an asset acquisition or upon consolidation of a variable interest entity that is not a business and (b)

are acquired more than 90 days after their origination date by a transferee that was not involved in their origination. ASU

2025-08 also introduces an accounting policy election related to the subsequent measurement of expected credit losses for

entities that use a method other than a discounted cash flow analysis to estimate credit losses on purchased seasoned loans.

If this accounting policy is elected, entities can use the amortized cost basis of the asset to subsequently measure their

credit loss allowance. ASU 2025-08 is effective for interim and annual reporting periods beginning after December 15,

2026. Early adoption is permitted in an interim or annual reporting period in which financial statements have not yet been

issued or made available for issuance. We are currently assessing the impact of ASU 2025-08 on our consolidated financial

statements.

**NOTE 2-BUSINESS COMBINATION**

As discussed in Note 1, "Summary of Significant Accounting Policies," on September 2, 2025, the Merger by and among

Mechanics Bancorp (formerly known as HomeStreet, Inc.), HomeStreet Bank and Mechanics Bank was consummated. In

connection with the Merger, HomeStreet Bank merged with and into Mechanics Bank, with Mechanics Bank surviving the

Merger and becoming a wholly-owned subsidiary of Mechanics Bancorp. The Merger is considered a reverse acquisition in

which Mechanics Bank is the accounting acquirer (legal acquiree), HomeStreet Bank is the accounting acquiree and

Mechanics Bancorp is the legal acquirer. 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.

In connection with the Merger, each share of common stock, par value $50 per share, of Mechanics Bank voting common

stock issued and outstanding was converted into 3,301.0920 shares of the Company's Class A common stock, no par value,

and existing shares of the Company common stock held by legacy Company shareholders were redesignated as the

Company's Class A common stock. In addition, each share of common stock, par value $50 per share, of Mechanics Bank

non-voting common stock was converted into 330.1092 shares of the Company's Class B common stock, no par value.

Class A common stock, which was previously known as Company common stock and was previously listed on Nasdaq and

traded under the symbol "HMST" through the close of business on August 29, 2025, commenced trading on Nasdaq under

the ticker symbol "MCHB" on September 2, 2025.

Immediately following the Merger, (1) legacy Mechanics Bank shareholders owned approximately 91.7% of the Company

on an economic basis and 91.3% of the voting power of the Company and (2) legacy Company shareholders owned

approximately 8.3% of the Company on an economic basis and 8.7% of the voting power of the Company.

The Merger was accounted for as a reverse acquisition, the purchase price was determined based on the number of equity

interests the legal acquiree would have had to issue to give the owners of the legal acquirer the same percentage equity

interest in the combined entity that results from the reverse acquisition. Therefore, the first step in calculating the purchase

price is to determine the ownership of the combined company following the Merger. The table below shows the calculation

to determine the ownership of the Company following the Merger using shares of Company common stock and Mechanics

Bank common stock outstanding as of September 2, 2025 and the fixed exchange ratio of 3,301.0920 applied to shares of

outstanding Mechanics Bank voting common stock and 330.1092 to shares of outstanding Mechanics Bank non-voting

common stock.

---

| | | |
|:---|:---|:---|
|  | **Company** | **Mechanics** <br>**Bank**<br>|
| Shares of voting common stock outstanding and converted to shares as of September 2, 2025 | 18920808 | 60859 |
| Shares of PSUs outstanding that vested and converted to shares as of September 2, 2025 | 243096 |  |
| Shares of voting common stock outstanding and converted to shares as of September 2, 2025, after <br>PSU vesting<br>| 19163904 | 60859 |
| Fixed exchange ratio |  | 3301.0920 |
| Shares of non-voting common stock outstanding as of September 2, 2025 |  | 3376 |
| Fixed exchange ratio |  | 330.1092 |
| Company shares issued to Mechanics Bank shareholders |  | 202015832 |
| **<u>Company Ownership as of September 2, 2025</u>** | **Number of** <br>**Shares**<br>| **Percentage** <br>**Ownership**<br>|
| Mechanics Bank shareholders | 202015832 | 91.34% |
| Company shareholders | 19163904 | 8.66% |
|  | 221179736 | 100% |
| Ratio of Company to Mechanics Bank |  | 9% |
| **<u>Reverse Acquisition Purchase Price Determination</u>** |  |  |
| Number of Mechanics Bank shares issued to Company shareholders |  | 19163904 |
| Company price per share as of August 29, 2025 |  | $13.87 |
| Purchase price for accounting purposes |  | $265803348 |

---

The following table provides the preliminary purchase price allocation and the assets acquired and liabilities assumed at

their estimated fair values as of the Merger date, resulting in a preliminary bargain purchase gain of $90.4 million.The

preliminary bargain purchase gain resulted from a combination of factors. First, HomeStreet was a company in financial

distress, losing $27.5 million after-tax in 2023, $144.3 million after-tax in 2024 and $8.9 million across the first two

quarters of 2025. As such, public market investors priced its shares at a significant discount to HomeStreet's reported

tangible book value. Second, HomeStreet was subject to a failed merger attempt with FirstSun Capital Bancorp in 2024.

This failed merger occurred due to an inability to obtain regulatory approval, which may have contributed to the sense of

financial distress around the company. Any failed merger causes difficulty retaining key employees, which may have

contributed to HomeStreet's desire to find a new merger partner quickly. Third, HomeStreet recorded a valuation

allowance in 2024 against its deferred tax asset due to uncertainty surrounding its prospects of achieving future

profitability. However, Mechanics Bancorp is a profitable company and expects to be able to utilize the deferred tax assets

acquired from HomeStreet over time. $81.4 million of the net assets acquired from HomeStreet came from deferred tax

assets, which significantly contributed to the $90.4 million preliminary bargain purchase gain.

The estimates of fair value were recorded based on initial valuations at the Merger date and these estimates, including

initial accounting for deferred taxes, are considered preliminary as of September 30, 2025 and subject to adjustment for up

to one year after the Merger date. In many cases, the determination of fair value required management to make estimates

about discount rates, expected future cash flows, market conditions and other future events that are highly subjective in

nature and subject to change. Additional information may be obtained during the measurement period that could result in

changes to the estimated fair value amounts, and that could result in adjustments to the valuation amounts presented herein.

These estimates are considered preliminary as of September 30, 2025, are subject to change for up to one year after the

Merger date, and any changes could be material. The measurement period ends on the earlier of one year after the Merger

date or the date the Company concludes that all necessary information about the facts and circumstances that existed as of

the Merger date have been obtained.

---

| | | |
|:---|:---|:---|
| **(in thousands)** | **September 2, 2025** | **September 2, 2025** |
| Net assets identified |  |  |
| Purchase price consideration |  | $265803 |
| Fair value of assets acquired: |  |  |
| Cash and cash equivalents | $156890 |  |
| Total investment securities | 1028627 |  |
| Loans held for sale | 39489 |  |
| Loans held for investment | 5625463 |  |
| Allowance for credit losses | (63494) |  |
| Mortgage servicing rights | 89704 |  |
| Premises and equipment, net | 31979 |  |
| Other intangible assets, net | 114207 |  |
| Deferred tax assets  | 81420 |  |
| Other assets | 283208 |  |
| Total assets acquired | $7387493 |  |
| Fair value of liabilities assumed: |  |  |
| Deposits | $5743725 |  |
| FHLB advances | 1005370 |  |
| Long-term debt | 193466 |  |
| Accrued interest payable and other liabilities | 88766 |  |
| Total liabilities assumed | $7031327 |  |
| Net assets acquired |  | 356166 |
| Bargain purchase gain |  | $90363 |

---

The following is a description of the methods used to determine the fair values of significant assets and liabilities presented

above.

***Cash and cash equivalents***: The carrying amount of these assets is a reasonable estimate of fair value based on the short-

term nature of these assets.

***Investment securities:*** Fair values for investment securities are based on quoted market prices, where available. If quoted

market prices are not available, fair value estimates are based on observable inputs including quoted market prices for

similar instruments, quoted market prices that are not in an active market or other inputs that are observable in the market.

In the absence of observable inputs, fair value is estimated based on pricing models and/or discounted cash flow

methodologies.

***Loans held for sale***: The loans held for sale portfolio was recorded at fair value based on quotes or bids from third party

investors and/or recent sale prices.

Loans held for investment: A valuation of the loans held for investment portfolio was performed by a third party as of the

Merger date to assess the fair value. The loans held for investment portfolio were segmented into three groups, including

performing PCD loans, non-performing PCD loans and non-PCD loans. Non-performing PCD loans were evaluated based

on individual risk characteristics such as nonaccrual status. A subset of the performing PCD loans that did not meet specific

credit quality indicators were collectively assessed for PCD designation based on their vintage and financial asset type.

Certain commercial real estate loans with an unpaid principal balance of$2.4 billion, which were originated during the

COVID pandemic period between March 2020 and May 2023, have experienced more than insignificant credit

deterioration since origination as a collective. This population of loans is characterized by a historically low-interest rate

environment at origination and rates have since risen significantly as of the acquisition date, which has impacted this loan

population's creditworthiness as a result of declining collateral values and debt-service coverage ratios. The ACL related to

these COVID pandemic period loans at the Merger date was $29.5 million.

The loans were further pooled based on loan type and risk rating bands. Most of the loans were valued at the loan level

using a discounted cash flow methodology. The methodology included projecting cash flows based on the contractual

terms of the loans and the cash flows were adjusted to reflect credit loss expectations along with prepayments. Discount

rates were developed based on the relative risk of the cash flows, taking into consideration the loan type, market rates as of

the valuation date, recent originations in the portfolio, credit loss expectations, and liquidity expectations. Lastly, cash

flows adjusted for credit loss expectations were discounted to present value and summed to arrive at the fair value of the

loans. Other loans were valued based on recent quotes, bids or recent sale prices of similar loans and for one loan portfolio

it was concluded the fair value equaled the portfolio's par value due to the short-term nature of the loan product, combined

with the low expected credit losses and the variable interest rates being at market.

Of theloans held for investment acquired, $3.0 billionwere identified as PCD loans on the Merger date. The following

table provides a summary of these PCD loans at acquisition:

---

| | |
|:---|:---|
| **(in thousands)** | **September 2, 2025** |
| Principal of PCD loans acquired | $2956577 |
| PCD ACL at acquisition | (63494) |
| Non-credit discount on PCD loans | (108617) |
| Fair value of PCD loans | $2784466 |

---

***Mortgage servicing rights***: The fair values of single family mortgage and SBA servicing rights are based on a market

approach, developed by a third party. The fair values of non-DUS multifamily and DUS servicing rights are based on a

market approach, developed by internal models.

***Premises and equipment***: The fair values of premises are based on a market approach, by obtaining third-party appraisals

and broker opinions of value for land, office and branch space.

***Other intangible assets:***Core deposit intangibles assets of $90.8 million were recognized as a result of the Merger. Core

deposit intangible assets values were determined by an analysis of the cost differential between the core deposits inclusive

of estimated servicing costs and alternative funding sources for core deposits acquired through business combinations. The

core deposit intangible assets recorded are amortized on an accelerated basis over a period of 8 years. No impairment losses

separate from the scheduled amortization have been recognized in the periods presented.

Other intangibles acquired of $23.5 million related to a DUS license was recognized related to the Merger. The value of the

DUS licenses was determined by the average value implied under the Base and Growth scenarios using market data

available from comparable public companies.

***Current and deferred tax assets, net***: The acquired net tax assets represent the estimated amount of tax benefits to be

recognized on tax returns.

***Deposits***: The fair values used for the demand and savings deposits equal the amount payable on demand at the Merger

date. The fair values for time deposits are estimated using a discounted cash flow calculation that applies interest rates

currently being offered to the contractual interest rates on such time deposits.

***Borrowings:*** The fair values of FHLB advances and long-term debt instruments are estimated based on quoted market

prices for the instrument if available, or for similar instruments if not available, or by using discounted cash flow analyses,

based on current incremental borrowing rates for similar types of instruments.

The Company's operating results for quarter and nine months ended September 30, 2025 include the operating results of

the acquired assets and assumed liabilities of historical HomeStreet, Inc. subsequent to the Merger date.

The following table shows the amount of the expenses related to the Merger for the quarter and nine months ended

September 30, 2025:

---

| | | |
|:---|:---|:---|
| **(in thousands)** | **Quarter Ended September 30, 2025** | **Nine Months Ended September 30, 2025** |
| Severance and employee related | $27795 | $27795 |
| Legal and professional | 11947 | 17683 |
| System conversion, integration and other | 24127 | 24380 |
|  | $63869 | $69858 |

---

From the Merger date through September 30, 2025, HomeStreet contributed approximately$20 million of revenue

(consisting of net interest income and noninterest income) to the Company's consolidated results.

**Pro-forma Financial Information**

The following unaudited pro forma consolidated financial information reflects the results of operations of the Company for

the three and nine months ended September 30, 2025 and 2024, respectively, as if the Merger had been completed on

January 1, 2024, after giving effect to certain purchase accounting adjustments, primarily related to the preliminary bargain

purchase gain, amortization of intangible assets and non-recurring transaction costs. These pro forma results have been

prepared for comparative purposes only and are based on estimates and assumptions that have been made solely for

purposes of developing such pro forma information and are not necessarily indicative of what the Company's operating

results would have been, had the acquisitions actually taken place at the beginning of the previous annual period.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Quarter Ended September 30,** | **Quarter Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
| **(in thousands)** | **2025** | **2024** | **2025** | **2024** |
| Net interest income | $171854 | $290698 | $502713 | $878684 |
| Noninterest income (loss) | 117263 | 26994 | 178812 | (37220) |
| Net income before income taxes <sup>(1)</sup> | 38205 | 170919 | 144157 | 337865 |

---

(1) The pro forma net income before income taxes includes $69.9 million of acquisition and integration costs from the Merger for the nine months ended

September 30, 2024.

**NOTE 3–DEBT SECURITIES**

The following table presents the amortized cost and fair value of the debt securities portfolio as of the dates indicated:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** |
| **(in thousands)** | **Amortized Cost** | **Gross Unrealized** <br>**Gains**<br>| **Gross Unrealized** <br>**Losses**<br>| **Fair Value** |
| Securities available-for-sale |  |  |  |  |
| Obligations of states and political subdivisions | $459834 | $8954 | $(918) | $467870 |
| Mortgage-backed securities - residential | 2373146 | 28273 | (27264) | 2374155 |
| Mortgage-backed securities - commercial | 389469 | 1402 | (12693) | 378178 |
| Collateralized loan obligations | 188500 | 189 |  | 188689 |
| Corporate bonds | 56558 | 417 | (3491) | 53484 |
| U.S. Treasury securities | 20597 |  | (18) | 20579 |
| Agency debentures | 7545 | 1 | (23) | 7523 |
| Total securities available-for-sale | $3495649 | $39236 | $(44407) | $3490478 |
| Securities held-to-maturity |  |  |  |  |
| Obligations of states and political subdivisions | $15082 | $503 | $(9) | $15576 |
| Mortgage-backed securities - residential | 1037566 |  | (144497) | 893069 |
| Mortgage-backed securities - commercial | 310988 |  | (33373) | 277615 |
| Total securities held-to-maturity | $1363636 | $503 | $(177879) | $1186260 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
| **(in thousands)** | **Amortized Cost** | **Gross Unrealized** <br>**Gains**<br>| **Gross Unrealized** <br>**Losses**<br>| **Fair Value** |
| Securities available-for-sale |  |  |  |  |
| Obligations of states and political subdivisions | $91799 | $699 | $(1199) | $91299 |
| Mortgage-backed securities - residential | 2694745 | 2107 | (53164) | 2643688 |
| Mortgage-backed securities - commercial | 259793 | 22 | (18953) | 240862 |
| Collateralized loan obligations | 50000 |  |  | 50000 |
| Corporate bonds | 43968 |  | (4566) | 39402 |
| Total securities available-for-sale | $3140305 | $2828 | $(77882) | $3065251 |
| Securities held-to-maturity |  |  |  |  |
| Obligations of states and political subdivisions | $14193 | $509 | $(30) | $14672 |
| Mortgage-backed securities - residential | 1115389 |  | (196949) | 918440 |
| Mortgage-backed securities - commercial | 310912 |  | (48024) | 262888 |
| Total securities held-to-maturity | $1440494 | $509 | $(245003) | $1196000 |

---

In addition to the reported fair values of the debt securities reflected above, the Company is entitled to receive accrued

interest and dividends from its securities. Included in interest receivable and other assets on the consolidated balance sheets

as of September 30, 2025 and December 31, 2024 was $19.6 million and $15.9 million, respectively, of interest and

dividends receivable from the Company's debt securities. Accrued interest receivable from securities available-for-sale

totaled $17.4 million and $13.6 million at September 30, 2025 and December 31, 2024, respectively. Accrued interest

receivable from securities held-to-maturity totaled $2.2 million and $2.4 million at September 30, 2025 and December 31,

2024, respectively.

Substantially all the mortgage-backed securities represent securities issued or guaranteed by government sponsored

enterprises and government entities. Municipal bonds are comprised of general obligation bonds (i.e., backed by the

general credit of the issuer) and revenue bonds (i.e., backed by either collateral or revenues from the specific project being

financed) issued by various municipal and corporate entities. As of September 30, 2025 and December 31, 2024,

substantially all securities held, including municipal bonds, corporate debt securities, and collateralized loan obligations

were rated investment grade based upon nationally recognized statistical rating organizations where available.

At September 30, 2025, the Company held $50.4 million of trading securities, consisting of U.S. Treasury notes used as

economic hedges of our single family mortgage servicing rights, which are carried at fair value and reported as trading

securities on the consolidated balance sheet. For both the quarter and nine months ended September 30, 2025, the Company

had net gains of $98 thousand on trading securities, which were recorded in loan servicing income. At December 31, 2024,

there were no trading securities, and there were no net gains or losses on trading securities for the quarter and nine months

ended September 30, 2024.

In accordance with accounting standards, only the realized gains and losses from securities transactions are included in the

consolidated income statement as net gain (loss) on sale of investment securities. In 2025, investment securities were sold

primarily to generate liquidity for the Merger. During the first quarter of 2024, the Company executed an investment

portfolio restructuring of its AFS investment securities portfolio. The Company sold $1.8 billion of lower yielding AFS

securities and realized a loss of $207.2 million. The proceeds from the sale were used to purchase $1.6 billion of higher

yielding investments. No gross gains were realized on the sales.

The following table presents proceeds, gross realized gains and gross realized losses from sales and calls of available-for-

sale investments:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Quarter Ended September 30,** | **Quarter Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
| **(in thousands)** | **2025** | **2024** | **2025** | **2024** |
| Proceeds | $1801 | $— | $931770 | $1629114 |
| Gross gains | 155 |  | 5215 |  |
| Gross losses |  |  | 923 | 207203 |

---

Tax-exempt interest income on investment securities was $1.9 million and $776 thousandfor the quarter ended September

30, 2025 and 2024, and $3.4 million and $2.4 million for the nine months ended September 30, 2025 and 2024,

respectively.

The Company reassessed classification of certain investments and effective January 1, 2022, transferred $1.7 billion in

residential and commercial mortgage-backed securities from available-for-sale to held-to-maturity securities. The transfer

occurred at fair value. The related net unrealized loss of $23.5 million, or $16.7 million net of deferred taxes, included in

other comprehensive income remained in other comprehensive income. For the three and nine months ended September 30,

2025 and 2024,$627 thousand, $648 thousand,$1.9 million and $1.9 million, respectively, of the unrealized loss was

accreted to interest income as a yield adjustment through earnings and will be accreted over the remaining term of the

securities. No gain or loss was recorded at the time of transfer.

The following table summarizes available-for-sale securities with unrealized and unrecognized losses at September 30,

2025 and December 31, 2024 aggregated by major security type and length of time in a continuous unrealized and

unrecognized loss position:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** |
|  | **Less than 12 months** | **Less than 12 months** | **12 months or more** | **12 months or more** | **Total** | **Total** |
| **(dollars in thousands)** | **Fair Value** | **Gross** <br>**Unrealized** <br>**Losses**<br>| **Fair Value** | **Gross**<br>**Unrealized**<br>**Losses**<br>| **Fair Value** | **Gross**<br>**Unrealized**<br>**Losses**<br>|
| Obligations of states and political subdivisions | $60303 | $222 | $31326 | $696 | $91629 | $918 |
| Mortgage-backed securities - residential | 196863 | 517 | 438518 | 26747 | 635381 | 27264 |
| Mortgage-backed securities - commercial | 46281 | 69 | 158651 | 12624 | 204932 | 12693 |
| Corporate bonds | 3387 | 121 | 26629 | 3370 | 30016 | 3491 |
| U.S. Treasury securities | 20579 | 18 |  |  | 20579 | 18 |
| Agency debentures | 6511 | 23 |  |  | 6511 | 23 |
| Total | $333924 | $970 | $655124 | $43437 | $989048 | $44407 |
| Number of securities with unrealized losses |  | 142 |  | 252 |  | 394 |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Less than 12 months** | **Less than 12 months** | **12 months or more** | **12 months or more** | **Total** | **Total** |
| **(dollars in thousands)** | **Fair Value** | **Gross**<br>**Unrealized**<br>**Losses**<br>| **Fair Value** | **Gross**<br>**Unrealized**<br>**Losses**<br>| **Fair Value** | **Gross**<br>**Unrealized**<br>**Losses**<br>|
| Obligations of states and political subdivisions | $19273 | $162 | $28394 | $1037 | $47667 | $1199 |
| Mortgage-backed securities - residential | 1381125 | 15337 | 311751 | 37827 | 1692876 | 53164 |
| Mortgage-backed securities - commercial | 98071 | 422 | 107118 | 18531 | 205189 | 18953 |
| Corporate bonds |  |  | 39402 | 4566 | 39402 | 4566 |
| Total | $1498469 | $15921 | $486665 | $61961 | $1985134 | $77882 |
| Number of securities with unrealized losses |  | 60 |  | 280 |  | 340 |

---

The Company did not record an ACL on the debt securities portfolio at September 30, 2025 or December 31, 2024. As of

both dates, the Company considers any unrealized loss across the classes of major security-type to be related to fluctuations

in market conditions, primarily interest rates, and not reflective of a deterioration in credit quality. The Company maintains

that it has intent and ability to hold these securities until the amortized cost basis of each security is recovered and likewise

concluded as of September 30, 2025 that it was not more likely than not that any of the securities in an unrealized loss

position would be required to be sold. The following factors were considered in determining that an ACL was not required

at September 30, 2025 or December 31, 2024.

**<u>Obligations of States and Political Subdivisions:</u>**The unrealized losses on the Company's investments in obligations of

states and political subdivisions are primarily due to changes in interest rates and not due to credit losses. Management

monitors these securities on an ongoing basis and performs an internal analysis which takes into account the impact from

market rates movements, severity and duration of the unrealized loss position, viability of the issuer, recent downgrades in

ratings, and external credit rating assessments. As a result, management expects to recover the entire amortized cost basis

of these securities.

**<u>Mortgage-Backed Securities - Residential and Commercial:</u>** The unrealized losses on the Company's investments in

residential and commercial MBS are primarily due to changes in interest rates. These securities are either implicitly or

explicitly guaranteed by the U.S. government, as such management expects to recover the entire amortized cost basis of

these securities.

**<u>Collateralized Loan Obligations:</u>** There were no unrealized losses on the Company's collateralized loan obligations.

**<u>Corporate Bonds:</u>** The unrealized losses on the Company's investments in corporate bonds are due to slight discount

margin variances related to changes in market rates and not due to credit losses. Management monitors these securities on

an ongoing basis and performs an internal analysis which includes a review of credit quality, changes in ratings, assessment

of regulatory and financial ratios, and general standing versus peer group. Management expects to recover the entire

amortized cost basis of these securities.

**<u>U.S. Treasury Securities:</u>** The unrealized losses on the Company's investments in U.S. Treasury securities are primarily

due to changes in interest rates. These securities are backed by the full faith and credit of the U.S. government, as such

management expects to recover the entire amortized cost basis of these securities.

**<u>Agency Debentures:</u>** The unrealized losses on the Company's investments in agency debentures are primarily due to

changes in interest rates. These securities are either implicitly or explicitly guaranteed by the U.S. government, as such

management expects to recover the entire amortized cost basis of these securities.

At September 30, 2025, investment securities with a carrying value of $3.0 billion were pledged to secure borrowings from

the Federal Reserve, and investment securities with a carrying value of $1.5 billion were pledged to secure the Company's

obligations for securities sold under agreements to repurchase and to collateralize certain public, trust and bankruptcy

deposits as required by law.

As of September 30, 2025, there were no past due or nonaccrual available-for-sale or held-to-maturity securities.

The fair value of available-for-sale securities and the amortized cost and fair value of held-to-maturity debt securities are

shown by contractual maturity in the following tables. Expected maturities may differ from contractual maturities if

borrowers have the right to call or prepay obligations with or without call or prepayment penalties.Contractual maturities

of securities as of September 30, 2025 were as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** |
| **(in thousands)** | **Within One** <br>**Year**<br>| **After One** <br>**Through Five** <br>**Years**<br>| **After Five** <br>**Through Ten** <br>**Years**<br>| **After Ten Years** | **Total** |
| Securities available-for-sale |  |  |  |  |  |
| Obligations of states and political subdivisions | $345 | $45276 | $90330 | $331919 | $467870 |
| Mortgage-backed securities - residential | 446 | 16887 | 26601 | 2330221 | 2374155 |
| Mortgage-backed securities - commercial | 2460 | 190384 | 158333 | 27001 | 378178 |
| Collateralized loan obligations |  |  |  | 188689 | 188689 |
| Corporate bonds |  | 3388 | 50096 |  | 53484 |
| U.S. Treasury securities |  | 20579 |  |  | 20579 |
| Agency debentures |  | 1384 | 3942 | 2197 | 7523 |
| Total  | $3251 | $277898 | $329302 | $2880027 | $3490478 |

---

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** |
| **(in thousands)** | **Within One Year** | **Within One Year** | **After One Through** <br>**Five Years** | **After One Through** <br>**Five Years** | **After Five Through** <br>**Ten Years** | **After Five Through** <br>**Ten Years** | **After Ten Years** | **After Ten Years** | **Total** | **Total** |
| Securities held-to-<br>maturity<br>| **Amortized** <br>**Cost**<br>| **Fair** <br>**Value**<br>| **Amortized** <br>**Cost**<br>| **Fair** <br>**Value**<br>| **Amortized** <br>**Cost**<br>| **Fair** <br>**Value**<br>| **Amortized** <br>**Cost**<br>| **Fair** <br>**Value**<br>| **Amortized** <br>**Cost**<br>| **Fair Value** |
| Obligations of states <br>and political <br>subdivisions<br>| $5244 | $5243 | $3592 | $3635 | $4621 | $4966 | $1625 | $1732 | $15082 | $15576 |
| Mortgage-backed <br>securities - <br>residential<br>|  |  | 58 | 57 |  |  | 1037508 | 893012 | 1037566 | 893069 |
| Mortgage-backed <br>securities - <br>commercial<br>|  |  | 139756 | 126430 | 171232 | 151185 |  |  | 310988 | 277615 |
| Total | $5244 | $5243 | $143406 | $130122 | $175853 | $156151 | $1039133 | $894744 | $1363636 | $1186260 |

---

**NOTE 4-LOANS AND CREDIT QUALITY**

The loan and lease receivable portfolio consisted of the following as of the dates indicated:

---

| | | |
|:---|:---|:---|
| **(in thousands)** | **September 30, 2025** | **December 31, 2024** |
| Commercial and industrial | $547311 | $410040 |
| Commercial real estate |  |  |
| Multifamily | 5448374 | 2794581 |
| Non-owner occupied | 1864040 | 1657597 |
| Owner occupied | 709239 | 360100 |
| Construction and land development | 535776 | 104430 |
| Residential real estate | 3907101 | 2280963 |
| Auto | 954615 | 1596935 |
| Other consumer | 602339 | 438851 |
| Total loan and lease receivables before allowance for credit losses | 14568795 | 9643497 |
| Allowance for credit losses on loans and leases | (168959) | (88558) |
| Net loan and lease receivables | $14399836 | $9554939 |

---

At September 30, 2025, $6.6 billion of loans were pledged to secure borrowings from the FHLB, and $1.4 billion of loans

were pledged to secure borrowings from the Federal Reserve.

**Credit Risk Concentrations**

The Company's portfolio of non-owner occupied and owner occupied commercial real estate, multifamily and residential

real estate loans are primarily to borrowers in California, or are secured by real estate collateral located in California. Such

loans represented 76% of total loans in these segments as of September 30, 2025. In addition, substantial portions of the

Company's loans are multifamily and residential real estate. At September 30, 2025, multifamily loans represented 37% of

the loan portfolio and residential real estate loans represented 27% of the loan portfolio.

**Allowance for Credit Losses**

The following tables present the activity in the allowance for credit losses on loans and leases by portfolio segment for the

quarter and nine months ended September 30, 2025 and 2024:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **(in thousands)** | **Commercial** <br>**and** <br>**Industrial**<br>| **Commercial** <br>**Real Estate**<br>| **Residential** <br>**Real Estate**<br>| **Auto** | **Other** <br>**Consumer**<br>| **Total** |
| **Quarter Ended September 30, 2025** |  |  |  |  |  |  |
| Allowance for credit losses on loans and leases |  |  |  |  |  |  |
| Beginning balance | $3456 | $33599 | $4977 | $23867 | $2435 | $68334 |
| Initial allowance on acquired PCD loans <sup>(1)</sup> | 15923 | 42934 | 4612 | 1 | 24 | 63494 |
| Provision for credit losses | 4311 | 24780 | 12613 | 3553 | 801 | 46058 |
| Loans charged off | (484) | (250) | (9) | (11365) | (695) | (12803) |
| Recoveries | 38 |  |  | 3677 | 161 | 3876 |
| Ending balance | $23244 | $101063 | $22193 | $19733 | $2726 | $168959 |

---

(1)ACL on loans identified as PCD on the Merger date. For additional discussion on PCD loans, refer to Note 1, "Summary of Significant

Accounting Policies," and Note 2, "Business Combination."

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **(in thousands)** | **Commercial** <br>**and** <br>**Industrial**<br>| **Commercial** <br>**Real Estate**<br>| **Residential** <br>**Real Estate**<br>| **Auto** | **Other** <br>**Consumer**<br>| **Total** |
| **Quarter Ended September 30, 2024** |  |  |  |  |  |  |
| Allowance for credit losses on loans and leases |  |  |  |  |  |  |
| Beginning balance | $5409 | $34092 | $6741 | $58698 | $3081 | $108021 |
| Provision for credit losses | (103) | 590 | 58 | 5730 | 455 | 6730 |
| Loans charged off | (313) |  |  | (13318) | (941) | (14572) |
| Recoveries | 12 |  |  | 3025 | 265 | 3302 |
| Ending balance | $5005 | $34682 | $6799 | $54135 | $2860 | $103481 |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **(in thousands)** | **Commercial** <br>**and** <br>**Industrial**<br>| **Commercial** <br>**Real Estate**<br>| **Residential** <br>**Real Estate**<br>| **Auto** | **Other** <br>**Consumer**<br>| **Total** |
| **Nine Months Ended September 30, 2025** |  |  |  |  |  |  |
| Allowance for credit losses on loans and leases |  |  |  |  |  |  |
| Beginning balance | $4869 | $35097 | $4656 | $41282 | $2654 | $88558 |
| Initial allowance on acquired PCD loans <sup>(1)</sup> | 15923 | 42934 | 4612 | 1 | 24 | 63494 |
| Provision for credit losses | 2864 | 23282 | 12934 | 2144 | 1439 | 42663 |
| Loans charged off | (705) | (250) | (9) | (32125) | (1880) | (34969) |
| Recoveries | 293 |  |  | 8431 | 489 | 9213 |
| Ending balance | $23244 | $101063 | $22193 | $19733 | $2726 | $168959 |

---

(1)ACL on loans identified as PCD on the Merger date. For additional discussion on PCD loans, refer to Note 1, "Summary of Significant

Accounting Policies," and Note 2, "Business Combination."

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **(in thousands)** | **Commercial** <br>**and** <br>**Industrial**<br>| **Commercial** <br>**Real Estate**<br>| **Residential** <br>**Real Estate**<br>| **Auto** | **Other** <br>**Consumer**<br>| **Total** |
| **Nine Months Ended September 30, 2024** |  |  |  |  |  |  |
| Allowance for credit losses on loans and leases |  |  |  |  |  |  |
| Beginning balance | $5805 | $31486 | $6745 | $87053 | $2689 | $133778 |
| Provision (reversal of provision) for credit losses | (1219) | 3196 | 64 | (1567) | 2210 | 2684 |
| Loans charged off | (525) |  | (10) | (42850) | (2649) | (46034) |
| Recoveries | 944 |  |  | 11499 | 610 | 13053 |
| Ending balance | $5005 | $34682 | $6799 | $54135 | $2860 | $103481 |

---

In addition to the ACL for LHFI, the Company maintains a separate allowance for unfunded loan commitments, which is

included in interest payable and other liabilities on the consolidated balance sheets. The following table presents changes in

the allowance for credit losses on unfunded lending commitments for the quarter and nine months ended September 30,

2025 and 2024:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Quarter Ended September 30,** | **Quarter Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
| **(in thousands)** | **2025** | **2024** | **2025** | **2024** |
| Allowance for credit losses on unfunded lending <br>commitments <br>|  |  |  |  |
| Beginning balance | $3735 | $4818 | $4366 | $4314 |
| Initial allowance on acquired loans | 3736 |  | 3736 |  |
| Provision for credit losses | 960 | 13 | 329 | 517 |
| Ending balance | $8431 | $4831 | $8431 | $4831 |

---

Management considers the level of ACL to be appropriate to cover credit losses expected over the life of the loans for the

LHFI portfolio. The cumulative loss rate used as the basis for the estimate of credit losses is comprised of the Company's

historical loss experience and qualitative factors for current and forecasted periods.

As of September 30, 2025, the historical expected loss rates decreased when compared to December 31, 2024 due to

product mix, composition changes and lower modeled losses. During the quarter and nine months ended September 30,

2025, the qualitative factors increased due to increased maturity, repricing, collateral, concentration and other model risk.

There were no material changes to the methodologies for estimating credit losses for the periods presented.

Disclosures related to the amortized cost in loans excludes accrued interest receivable. The Company has elected to exclude

accrued interest receivable from the evaluation of the allowance for credit losses. Accrued interest receivable on loans held

for investment was $54.9 million and $33.6 million at September 30, 2025 and December 31, 2024, respectively, and is

included in interest receivable and other assets on the consolidated balance sheets.

**Credit Quality**

Nonaccrual loans include both smaller balance homogeneous loans that are collectively evaluated for impairment and

individually classified impaired loans. Loans whose repayments are insured by the Federal Housing Administration (FHA),

guaranteed by the Department of Veterans' Affairs (VA) or Ginnie Mae (GNMA) are maintained on accrual status even if

90 days or more past due.

The following table presents the amortized cost in nonaccrual loans and loans past due 90 days or more and still accruing

by class of loans as of September 30, 2025 and December 31, 2024:

---

| | | | |
|:---|:---|:---|:---|
|  | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** |
| **(in thousands)** | **Nonaccrual With** <br>**No Allowance for** <br>**Credit Loss**<br>| **Total Nonaccrual** | **Loans Past Due** <br>**90 Days or More** <br>**Still Accruing**<br>|
| Commercial and industrial | $1303 | $23707 | $— |
| Commercial real estate |  |  |  |
| Multifamily | 1816 | 3430 |  |
| Non-owner occupied | 3371 | 15018 |  |
| Owner occupied | 1177 | 2854 |  |
| Construction and land development | 140 | 2987 |  |
| Residential real estate | 1302 | 7596 | 2653 |
| Auto | 1 | 4986 |  |
| Other consumer | 8 | 8 |  |
| Total  | $9118 | $60586 | $2653 |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
| **(in thousands)** | **Nonaccrual With** <br>**No Allowance for** <br>**Credit Loss**<br>| **Total Nonaccrual** | **Loans Past Due** <br>**90 Days or More** <br>**Still Accruing**<br>|
| Commercial and industrial | $1145 | $1145 | $211 |
| Commercial real estate |  |  |  |
| Multifamily |  |  |  |
| Non-owner occupied |  |  |  |
| Owner occupied |  |  |  |
| Construction and land development | 441 | 441 |  |
| Residential real estate | 2854 | 2854 |  |
| Auto | 564 | 6252 |  |
| Other consumer | 1 | 1 |  |
| Total  | $5005 | $10693 | $211 |

---

The following table presents the amortized cost of collateral-dependent loans by class and collateral type as of

September 30, 2025 and December 31, 2024:

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** |
| **(in thousands)** | **Auto** | **Equipment** | **Farmland** | **Multifamily** | **Retail** <br>**Building**<br>| **Single** <br>**Family** <br>**Residential**<br>| **Other non-**<br>**real estate**<br>| **Total Loans** |
| Commercial and <br>industrial<br>| $— | $293 | $3848 | $— | $1015 | $2808 | $12858 | $20822 |
| Commercial real estate |  |  |  |  |  |  |  |  |
| Multifamily |  |  |  | 17892 |  |  |  | 17892 |
| Non-owner occupied |  |  |  |  | 15018 |  |  | 15018 |
| Owner occupied |  |  |  |  | 2090 |  |  | 2090 |
| Construction and land <br>development<br>|  |  | 2987 |  |  |  |  | 2987 |
| Residential real estate |  |  |  | 165 |  | 1892 |  | 2057 |
| Total  | $— | $293 | $6835 | $18057 | $18123 | $4700 | $12858 | $60866 |

---

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
| **(in thousands)** | **Auto** | **Equipment** | **Farmland** | **Multifamily** | **Retail** <br>**Building**<br>| **Single** <br>**Family** <br>**Residential**<br>| **Other non-**<br>**real estate**<br>| **Total Loans** |
| Commercial and <br>industrial<br>| $5 | $10 | $— | $— | $1064 | $— | $— | $1079 |
| Commercial real estate |  |  |  |  |  |  |  |  |
| Construction and land <br>development<br>|  |  | 441 |  |  |  |  | 441 |
| Residential real estate |  |  |  |  |  | 2853 |  | 2853 |
| Total  | $5 | $10 | $441 | $— | $1064 | $2853 | $— | $4373 |

---

The following tables present the aging of the amortized cost in past due loans as of September 30, 2025 and December 31,

2024 by class of loans:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** |
| **(in thousands)** | **30-59 Days** <br>**Past Due**<br>| **60-89 Days** <br>**Past Due**<br>| **Greater than** <br>**89 Days Past** <br>**Due**<br>| **Total Past** <br>**Due**<br>| **Loans Not** <br>**Past Due**<br>| **Total**<br>**Loans**<br>|
| Commercial and industrial | $1876 | $436 | $9178 | $11490 | $535821 | $547311 |
| Commercial real estate |  |  |  |  |  |  |
| Multifamily | 2095 |  | 1614 | 3709 | 5444665 | 5448374 |
| Non-owner occupied | 1000 |  | 14018 | 15018 | 1849022 | 1864040 |
| Owner occupied |  |  | 1177 | 1177 | 708062 | 709239 |
| Construction and land development | 1204 |  | 2987 | 4191 | 531585 | 535776 |
| Residential real estate | 12756 | 3033 | 6422 | 22211 | 3884890 | 3907101 |
| Auto | 24693 | 7615 | 2915 | 35223 | 919392 | 954615 |
| Other consumer | 1054 | 121 | 5 | 1180 | 601159 | 602339 |
| Total | $44678 | $11205 | $38316 | $94199 | $14474596 | $14568795 |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
| **(in thousands)** | **30-59 Days** <br>**Past Due**<br>| **60-89 Days** <br>**Past Due**<br>| **Greater than** <br>**89 Days Past** <br>**Due**<br>| **Total Past** <br>**Due**<br>| **Loans Not** <br>**Past Due**<br>| **Total**<br>**Loans**<br>|
| Commercial and industrial | $1920 | $82 | $278 | $2280 | $407760 | $410040 |
| Commercial and industrial |  |  |  |  |  |  |
| Multifamily | 1940 |  |  | 1940 | 2792641 | 2794581 |
| Non-owner occupied | 513 |  |  | 513 | 1657084 | 1657597 |
| Owner occupied | 1005 |  |  | 1005 | 359095 | 360100 |
| Construction and land development | 5400 |  | 140 | 5540 | 98890 | 104430 |
| Residential real estate | 13662 | 406 | 502 | 14570 | 2266393 | 2280963 |
| Auto | 53197 | 12637 | 5161 | 70995 | 1525940 | 1596935 |
| Other consumer | 361 | 214 | 1 | 576 | 438275 | 438851 |
| Total | $77998 | $13339 | $6082 | $97419 | $9546078 | $9643497 |

---

The following tables present the amortized cost of loans at September 30, 2025 and 2024 that were both experiencing

financial difficulty and modified during the quarters and nine months ended September 30, 2025 and 2024, by class and by

type of modification. The percentage of the amortized cost of loans that were modified to borrowers in financial distress as

compared to the amortized cost of each class of financing receivable is also presented below.

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Quarter Ended September 30, 2025** | **Quarter Ended September 30, 2025** | **Quarter Ended September 30, 2025** | **Quarter Ended September 30, 2025** | **Quarter Ended September 30, 2025** | **Quarter Ended September 30, 2025** | **Quarter Ended September 30, 2025** | **Quarter Ended September 30, 2025** |
| **(in thousands)** | **Principal** <br>**Forgiveness**<br>| **Payment** <br>**Delay**<br>| **Term** <br>**Extension**<br>| **Interest** <br>**Rate** <br>**Reduction**<br>| **Combined** <br>**Term** <br>**Extension** <br>**and** <br>**Principal** <br>**Forgiveness**<br>| **Combined** <br>**Term** <br>**Extension** <br>**and Interest** <br>**Rate** <br>**Reduction**<br>| **Combined** <br>**Payment** <br>**Delay and** <br>**Term** <br>**Extension**<br>| **Total Class** <br>**of Financing** <br>**Receivable**<br>|
| Commercial and industrial | $— | $11760 | $68 | $— | $— | $— | $4158 | 2.92% |
| Commercial real estate |  |  |  |  |  |  |  |  |
| Construction and land <br>development<br>|  |  |  |  |  |  | 2847 | 0.53% |
| Residential real estate |  | 206 |  |  |  |  | 1344 | 0.04% |
| Total | $— | $11966 | $68 | $— | $— | $— | $8349 | 0.14% |
|  | **Quarter Ended September 30, 2024** | **Quarter Ended September 30, 2024** | **Quarter Ended September 30, 2024** | **Quarter Ended September 30, 2024** | **Quarter Ended September 30, 2024** | **Quarter Ended September 30, 2024** | **Quarter Ended September 30, 2024** | **Quarter Ended September 30, 2024** |
| **(in thousands)** | **Principal** <br>**Forgiveness**<br>| **Payment** <br>**Delay**<br>| **Term** <br>**Extension**<br>| **Interest** <br>**Rate** <br>**Reduction**<br>| **Combined** <br>**Term** <br>**Extension** <br>**and** <br>**Principal** <br>**Forgiveness**<br>| **Combined** <br>**Term** <br>**Extension** <br>**and Interest** <br>**Rate** <br>**Reduction**<br>| **Combined** <br>**Payment** <br>**Delay and** <br>**Term** <br>**Extension**<br>| **Total Class** <br>**of Financing** <br>**Receivable**<br>|
| Commercial and industrial | $— | $— | $788 | $— | $— | $— | $— | 0.19% |
| Residential real estate |  |  | 204 |  |  |  |  | 0.01% |
| Total | $— | $— | $992 | $— | $— | $— | $— | 0.01% |
|  | **Nine Months Ended September 30, 2025** | **Nine Months Ended September 30, 2025** | **Nine Months Ended September 30, 2025** | **Nine Months Ended September 30, 2025** | **Nine Months Ended September 30, 2025** | **Nine Months Ended September 30, 2025** | **Nine Months Ended September 30, 2025** | **Nine Months Ended September 30, 2025** |
| **(in thousands)** | **Principal** <br>**Forgiveness**<br>| **Payment** <br>**Delay**<br>| **Term** <br>**Extension**<br>| **Interest** <br>**Rate** <br>**Reduction**<br>| **Combined** <br>**Term** <br>**Extension** <br>**and** <br>**Principal** <br>**Forgiveness**<br>| **Combined** <br>**Term** <br>**Extension** <br>**and Interest** <br>**Rate** <br>**Reduction**<br>| **Combined** <br>**Payment** <br>**Delay and** <br>**Term** <br>**Extension**<br>| **Total Class** <br>**of Financing** <br>**Receivable**<br>|
| Commercial and industrial | $— | $11760 | $176 | $— | $— | $— | $5813 | 3.24% |
| Commercial real estate |  |  |  |  |  |  |  |  |
| Multifamily |  | 1614 |  |  |  |  |  | 0.03% |
| Construction and land <br>development<br>|  |  |  |  |  |  | 2847 | 0.53% |
| Residential real estate |  | 206 |  |  |  |  | 1861 | 0.05% |
| Total | $— | $13580 | $176 | $— | $— | $— | $10521 | 0.17% |
|  | **Nine Months Ended September 30, 2024** | **Nine Months Ended September 30, 2024** | **Nine Months Ended September 30, 2024** | **Nine Months Ended September 30, 2024** | **Nine Months Ended September 30, 2024** | **Nine Months Ended September 30, 2024** | **Nine Months Ended September 30, 2024** | **Nine Months Ended September 30, 2024** |
| **(in thousands)** | **Principal** <br>**Forgiveness**<br>| **Payment** <br>**Delay**<br>| **Term** <br>**Extension**<br>| **Interest** <br>**Rate** <br>**Reduction**<br>| **Combined** <br>**Term** <br>**Extension** <br>**and** <br>**Principal** <br>**Forgiveness**<br>| **Combined** <br>**Term** <br>**Extension** <br>**and Interest** <br>**Rate** <br>**Reduction**<br>| **Combined** <br>**Payment** <br>**Delay and** <br>**Term** <br>**Extension**<br>| **Total Class** <br>**of Financing** <br>**Receivable**<br>|
| Commercial and industrial | $— | $— | $1003 | $— | $— | $— | $— | 0.24% |
| Commercial real estate |  |  |  |  |  |  |  |  |
| Non-owner occupied |  |  | 15978 |  |  |  |  | 0.93% |
| Residential real estate |  |  | 204 |  |  |  |  | 0.01% |
| Total | $— | $— | $17185 | $— | $— | $— | $— | 0.17% |

---

The Company has committed to lend no additional amounts to the borrowers included in the previous tables.

The following tables present the financial effect of the loan modifications presented above to borrowers experiencing

financial difficulty for the quarters and nine months ended September 30, 2025 and 2024:

---

| | | | |
|:---|:---|:---|:---|
|  | **Quarter Ended September 30, 2025** | **Quarter Ended September 30, 2025** | **Quarter Ended September 30, 2025** |
| **(dollars in thousands)** | **Principal** <br>**Forgiveness**<br>| **Weighted-**<br>**Average Interest** <br>**Rate Reduction**<br>| **Weighted-**<br>**Average Term** <br>**Extension** <br>|
| Commercial and industrial | $— | —% | 18 |
| Commercial real estate |  |  |  |
| Construction and land development |  | —% | 18 |
| Residential real estate |  | —% | 67 |
| Total | $— | —% | 26 |
|  | **Quarter Ended September 30, 2024** | **Quarter Ended September 30, 2024** | **Quarter Ended September 30, 2024** |
| **(dollars in thousands)** | **Principal** <br>**Forgiveness**<br>| **Weighted-**<br>**Average Interest** <br>**Rate Reduction**<br>| **Weighted-**<br>**Average Term** <br>**Extension** <br>|
| Commercial and industrial | $— | —% | 20 |
| Residential real estate |  | —% | 12 |
| Total | $— | —% | 18 |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **Nine Months Ended September 30, 2025** | **Nine Months Ended September 30, 2025** | **Nine Months Ended September 30, 2025** |
| **(dollars in thousands)** | **Principal** <br>**Forgiveness**<br>| **Weighted-**<br>**Average Interest** <br>**Rate Reduction**<br>| **Weighted-**<br>**Average Term** <br>**Extension** <br>|
| Commercial and industrial | $— | —% | 25 |
| Commercial real estate |  |  |  |
| Construction and land development |  | —% | 18 |
| Residential real estate |  | —% | 70 |
| Total | $— | —% | 31 |
|  | **Nine Months Ended September 30, 2024** | **Nine Months Ended September 30, 2024** | **Nine Months Ended September 30, 2024** |
| **(dollars in thousands)** | **Principal** <br>**Forgiveness**<br>| **Weighted-**<br>**Average Interest** <br>**Rate Reduction**<br>| **Weighted-**<br>**Average Term** <br>**Extension** <br>|
| Commercial and industrial | $— | —% | 28 |
| Commercial real estate |  |  |  |
| Non-owner occupied |  | —% | 9 |
| Residential real estate |  | —% | 12 |
| Total | $— | —% | 10 |

---

The Company closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty to

understand the effectiveness of its modification efforts.

The following table presents the amortized cost of loans that had a payment default (i.e. borrower missed a regularly

scheduled payment) and were past due for the quarter ended September 30, 2025 and that were modified in the last 12

months.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** |
| **(in thousands)** | **30-59 Days Past** <br>**Due**<br>| **60-89 Days Past** <br>**Due**<br>| **Greater than 89** <br>**Days Past Due**<br>| **Total Past Due** |
| Commercial and industrial | $— | $— | $4158 | $4158 |
| Commercial real estate |  |  |  |  |
| Construction and land development |  |  | 2847 | 2847 |
| Residential real estate | 408 |  |  | 408 |
| Total | $408 | $— | $7005 | $7413 |

---

The following table presents the amortized cost of loans that had a payment default and were past due for the quarter ended

September 30, 2024 and that were modified in the last 12 months.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **September 30, 2024** | **September 30, 2024** | **September 30, 2024** | **September 30, 2024** |
| **(in thousands)** | **30-59 Days Past** <br>**Due**<br>| **60-89 Days Past** <br>**Due**<br>| **Greater than 89** <br>**Days Past Due**<br>| **Total Past Due** |
| Commercial and industrial | $447 | $— | $— | $447 |
| Total | $447 | $— | $— | $447 |

---

The following table presents the amortized cost of loans that had a payment default and were past due for the nine months

ended September 30, 2025 that were modified in the last 12 months.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** |
| **(in thousands)** | **30-59 Days Past** <br>**Due**<br>| **60-89 Days Past** <br>**Due**<br>| **Greater than 89** <br>**Days Past Due**<br>| **Total Past Due** |
| Commercial and industrial | $— | $— | $4158 | $4158 |
| Commercial real estate |  |  |  |  |
| Multifamily |  |  | 1614 | 1614 |
| Construction and land development |  |  | 2847 | 2847 |
| Residential real estate | 408 |  |  | 408 |
| Total | $408 | $— | $8619 | $9027 |

---

The following table presents the amortized cost of loans that had a payment default and were past due for the nine months

ended September 30, 2024 that were modified in the last 12 months.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **September 30, 2024** | **September 30, 2024** | **September 30, 2024** | **September 30, 2024** |
| **(in thousands)** | **30-59 Days Past** <br>**Due**<br>| **60-89 Days Past** <br>**Due**<br>| **Greater than 89** <br>**Days Past Due**<br>| **Total Past Due** |
| Commercial and industrial | $447 | $— | $— | $447 |
| Total | $447 | $— | $— | $447 |

---

Upon the Company's determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible,

the loan (or a portion of the loan) is written off. Therefore, the amortized cost of the loan is reduced by the uncollectible

amount and the allowance for credit losses is adjusted by the same amount.

**Credit Quality Indicators:**

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service

their debt such as: current financial information, historical payment experience, credit documentation, public information,

current economic trends and other factors. The Company analyzes loans individually by classifying the loans as to credit

risk. This analysis includes all loans regardless of balances. This analysis is performed on a quarterly basis.

The Company uses the following definitions for risk ratings:

**Special Mention.** Loans classified as special mention have a potential weakness that deserves management's

close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment

prospects for the loan or of the institution's credit position at some future date.

**Substandard.** Loans classified as substandard are inadequately protected by the current net worth and paying

capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or

weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the

institution will sustain some loss if the deficiencies are not corrected.

**Doubtful.** Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with

the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently

existing facts, conditions, and values, highly questionable and improbable.

Loans not meeting the criteria above are considered to be pass rated loans.

Based on the most recent analysis performed, the following table presents the amortized cost, by risk category of loans and

origination year, for commercial and industrial and commercial real estate loan classes at September 30, 2025 and

December 31, 2024. In addition, year-to-date charge-offs for the nine months ended September 30, 2025 and the twelve

months ended December 31, 2024 are presented by origination year.

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **(in thousands)** | **2025** | **2024** | **2023** | **2022** | **2021** | **Prior**  | **Revolving** <br>**Loans** <br>**Amortized** <br>**Cost Basis** | **Revolving** <br>**Loans** <br>**Converted** <br>**to Term** | **Total** |
| **September 30, 2025** | **2025** | **2024** | **2023** | **2022** | **2021** | **Prior**  | **Revolving** <br>**Loans** <br>**Amortized** <br>**Cost Basis** | **Revolving** <br>**Loans** <br>**Converted** <br>**to Term** | **Total** |
| Commercial and <br>industrial<br>|  |  |  |  |  |  |  |  |  |
| Risk rating |  |  |  |  |  |  |  |  |  |
| Pass | $18360 | $44507 | $55030 | $32011 | $27792 | $83171 | $226292 | $885 | $488048 |
| Special mention |  | 114 |  | 493 | 1078 | 2932 | 479 |  | 5096 |
| Substandard | 68 | 634 | 382 | 33126 | 600 | 15952 | 3405 |  | 54167 |
| Doubtful |  |  |  |  |  |  |  |  |  |
| Total | $18428 | $45255 | $55412 | $65630 | $29470 | $102055 | $230176 | $885 | $547311 |
| Year-to-date gross <br>charge-offs<br>| $— | $383 | $100 | $— | $16 | $— | $206 | $— | $705 |
| Multifamily |  |  |  |  |  |  |  |  |  |
| Risk rating |  |  |  |  |  |  |  |  |  |
| Pass | $52711 | $180574 | $459247 | $2212986 | $1183086 | $1094711 | $38131 | $— | $5221446 |
| Special mention |  |  |  | 49972 | 24099 | 43439 |  |  | 117510 |
| Substandard |  |  | 6553 | 63028 | 24356 | 15481 |  |  | 109418 |
| Doubtful |  |  |  |  |  |  |  |  |  |
| Total | $52711 | $180574 | $465800 | $2325986 | $1231541 | $1153631 | $38131 | $— | $5448374 |
| Year-to-date gross <br>charge-offs<br>| $— | $— | $— | $— | $— | $— | $— | $— | $— |
| Non-owner occupied |  |  |  |  |  |  |  |  |  |
| Risk rating |  |  |  |  |  |  |  |  |  |
| Pass | $3057 | $13810 | $36000 | $385373 | $138952 | $1124892 | $41734 | $— | $1743818 |
| Special mention |  |  |  |  |  | 58762 |  |  | 58762 |
| Substandard |  |  |  |  |  | 61460 |  |  | 61460 |
| Doubtful |  |  |  |  |  |  |  |  |  |
| Total | $3057 | $13810 | $36000 | $385373 | $138952 | $1245114 | $41734 | $— | $1864040 |
| Year-to-date gross <br>charge-offs<br>| $— | $— | $— | $— | $— | $250 | $— | $— | $250 |
| Owner occupied |  |  |  |  |  |  |  |  |  |
| Risk rating |  |  |  |  |  |  |  |  |  |
| Pass | $19286 | $11012 | $27972 | $112543 | $76237 | $386615 | $6248 | $— | 639913 |
| Special mention |  |  |  | 10282 | 7017 | 39718 |  |  | 57017 |
| Substandard |  |  |  | 274 | 5211 | 6824 |  |  | 12309 |
| Doubtful |  |  |  |  |  |  |  |  |  |
| Total | $19286 | $11012 | $27972 | $123099 | $88465 | $433157 | $6248 | $— | $709239 |
| Year-to-date gross <br>charge-offs<br>| $— | $— | $— | $— | $— | $— | $— | $— | $— |
| Construction and land development | Construction and land development | Construction and land development | Construction and land development | Construction and land development | Construction and land development | Construction and land development | Construction and land development | Construction and land development | Construction and land development |
| Risk rating |  |  |  |  |  |  |  |  |  |
| Pass | $236608 | $179266 | $73857 | $13823 | $5049 | $13586 | $600 | $— | $522789 |
| Special mention |  |  |  | 10000 |  |  |  |  | 10000 |
| Substandard |  |  |  |  |  | 2987 |  |  | 2987 |
| Doubtful |  |  |  |  |  |  |  |  |  |
| Total | $236608 | $179266 | $73857 | $23823 | $5049 | $16573 | $600 | $— | $535776 |
| Year-to-date gross <br>charge-offs<br>| $— | $— | $— | $— | $— | $— | $— | $— | $— |

---

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **(in thousands)** | **2024** | **2023** | **2022** | **2021** | **Prior**  | **Revolving** <br>**Loans** <br>**Amortized** <br>**Cost Basis** | **Revolving** <br>**Loans** <br>**Converted** <br>**to Term** | **Total** |
| **December 31, 2024** | **2024** | **2023** | **2022** | **2021** | **Prior**  | **Revolving** <br>**Loans** <br>**Amortized** <br>**Cost Basis** | **Revolving** <br>**Loans** <br>**Converted** <br>**to Term** | **Total** |
| Commercial and industrial |  |  |  |  |  |  |  |  |
| Risk rating |  |  |  |  |  |  |  |  |
| Pass | $28334 | $113024 | $41271 | $23098 | $55675 | $140905 | $— | $402307 |
| Special mention |  |  |  | 107 | 789 |  |  | 896 |
| Substandard |  |  | 5 | 166 | 6665 | 1 |  | 6837 |
| Doubtful |  |  |  |  |  |  |  |  |
| Total | $28334 | $113024 | $41276 | $23371 | $63129 | $140906 | $— | $410040 |
| Year-to-date gross charge-offs | $— | $191 | $95 | $2 | $127 | $806 | $— | $1221 |
| Multifamily |  |  |  |  |  |  |  |  |
| Risk rating |  |  |  |  |  |  |  |  |
| Pass | $183739 | $383108 | $777706 | $690644 | $736585 | $21469 | $— | $2793251 |
| Special mention |  |  |  |  |  |  |  |  |
| Substandard |  |  |  |  | 1330 |  |  | 1330 |
| Doubtful |  |  |  |  |  |  |  |  |
| Total | $183739 | $383108 | $777706 | $690644 | $737915 | $21469 | $— | $2794581 |
| Year-to-date gross charge-offs | $— | $— | $— | $— | $— | $— | $— | $— |
| Non-owner occupied |  |  |  |  |  |  |  |  |
| Risk rating |  |  |  |  |  |  |  |  |
| Pass | $15127 | $37938 | $347939 | $95368 | $1082553 | $42257 | $— | $1621182 |
| Special mention |  |  |  |  | 9026 |  |  | 9026 |
| Substandard |  |  |  |  | 27389 |  |  | 27389 |
| Doubtful |  |  |  |  |  |  |  |  |
| Total | $15127 | $37938 | $347939 | $95368 | $1118968 | $42257 | $— | $1657597 |
| Year-to-date gross charge-offs | $— | $— | $— | $— | $— | $— | $— | $— |
| Owner-occupied |  |  |  |  |  |  |  |  |
| Risk rating |  |  |  |  |  |  |  |  |
| Pass | $10840 | $23340 | $62849 | $47056 | $189436 | $3357 | $— | $336878 |
| Special mention |  |  |  |  | 13111 |  |  | 13111 |
| Substandard |  |  |  |  | 10111 |  |  | 10111 |
| Doubtful |  |  |  |  |  |  |  |  |
| Total | $10840 | $23340 | $62849 | $47056 | $212658 | $3357 | $— | $360100 |
| Year-to-date gross charge-offs | $— | $— | $— | $— | $— | $— | $— | $— |
| Construction and land <br>development<br>|  |  |  |  |  |  |  |  |
| Risk rating |  |  |  |  |  |  |  |  |
| Pass | $34891 | $13515 | $34985 | $141 | $20355 | $102 | $— | $103989 |
| Special mention |  |  |  |  |  |  |  |  |
| Substandard |  |  |  |  | 441 |  |  | 441 |
| Doubtful |  |  |  |  |  |  |  |  |
| Total | $34891 | $13515 | $34985 | $141 | $20796 | $102 | $— | $104430 |
| Year-to-date gross charge-offs | $— | $— | $— | $— | $— | $— | $— | $— |

---

The Company considers the performance of the loan portfolio and its impact on the allowance for credit losses. For

residential and consumer loan classes, the Company also evaluates credit quality based on the aging status of the loan,

which was previously presented, and by payment activity. The following table presents the amortized cost in residential

and consumer loans based upon year of origination at September 30, 2025 and December 31, 2024. In addition, year-to-

date charge-offs for the nine months ended September 30, 2025 and the twelve months ended December 31, 2024 are

presented by origination year.

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **(in thousands)** | **2025** | **2024** | **2023** | **2022** | **2021** | **Prior** | **Revolving** <br>**Loans** <br>**Amortized** <br>**Cost Basis** | **Revolving** <br>**Loans** <br>**Converted** <br>**to Term** | **Total** |
| **September 30, 2025** | **2025** | **2024** | **2023** | **2022** | **2021** | **Prior** | **Revolving** <br>**Loans** <br>**Amortized** <br>**Cost Basis** | **Revolving** <br>**Loans** <br>**Converted** <br>**to Term** | **Total** |
| Residential real estate | Residential real estate | Residential real estate | Residential real estate | Residential real estate | Residential real estate | Residential real estate | Residential real estate | Residential real estate | Residential real estate |
| Payment <br>performance<br>|  |  |  |  |  |  |  |  |  |
| Performing | $412755 | $176598 | $116483 | $782678 | $835953 | $1077996 | $491871 | $5171 | $3899505 |
| Nonperforming |  |  |  | 405 |  | 4152 | 2898 | 141 | 7596 |
| Total  | $412755 | $176598 | $116483 | $783083 | $835953 | $1082148 | $494769 | $5312 | $3907101 |
| Year-to-date gross <br>charge-offs<br>| $— | $— | $— | $— | $— | $9 | $— | $— | $9 |
| Auto |  |  |  |  |  |  |  |  |  |
| Payment <br>performance<br>|  |  |  |  |  |  |  |  |  |
| Performing | $165 | $260 | $56105 | $544758 | $283351 | $64989 | $— | $— | $949628 |
| Nonperforming |  |  | 253 | 3051 | 1304 | 379 |  |  | $4987 |
| Total | $165 | $260 | $56358 | $547809 | $284655 | $65368 | $— | $— | $954615 |
| Year-to-date gross <br>charge-offs<br>| $— | $— | $1325 | $18657 | $9744 | $2399 | $— | $— | $32125 |
| Other consumer |  |  |  |  |  |  |  |  |  |
| Payment <br>performance<br>|  |  |  |  |  |  |  |  |  |
| Performing | $160340 | $172039 | $145144 | $72037 | $16992 | $29841 | $5938 | $— | $602331 |
| Nonperforming |  | 1 |  |  |  |  | 7 |  | 8 |
| Total | $160340 | $172040 | $145144 | $72037 | $16992 | $29841 | $5945 | $— | $602339 |
| Year-to-date gross <br>charge-offs<br>| $450 | $1 | $— | $— | 511 | $868 | $50 | $— | $1880 |

---

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **(in thousands)** | **2024** | **2023** | **2022** | **2021** | **Prior** | **Revolving** <br>**Loans** <br>**Amortized** <br>**Cost Basis** | **Revolving** <br>**Loans** <br>**Converted to** <br>**Term** | **Total** |
| **December 31, 2024** | **2024** | **2023** | **2022** | **2021** | **Prior** | **Revolving** <br>**Loans** <br>**Amortized** <br>**Cost Basis** | **Revolving** <br>**Loans** <br>**Converted to** <br>**Term** | **Total** |
| Residential real estate |  |  |  |  |  |  |  |  |
| Payment performance |  |  |  |  |  |  |  |  |
| Performing | $235132 | $97522 | $456174 | $608721 | $810899 | $69661 | $— | $2278109 |
| Nonperforming |  |  |  |  | 2037 | 817 |  | 2854 |
| Total | $235132 | $97522 | $456174 | $608721 | $812936 | $70478 | $— | $2280963 |
| Year-to-date gross <br>charge-offs<br>| $— | $— | $— | $— | $10 | $— | $— | $10 |
| Auto |  |  |  |  |  |  |  |  |
| Payment performance |  |  |  |  |  |  |  |  |
| Performing | $— | $81178 | $831402 | $497176 | $180927 | $— | $— | $1590683 |
| Nonperforming |  | 316 | 3355 | 1900 | 681 |  |  | 6252 |
| Total | $— | $81494 | $834757 | $499076 | $181608 | $— | $— | $1596935 |
| Year-to-date gross <br>charge-offs<br>| $— | $2223 | $29978 | $16780 | $6116 | $— | $— | $55097 |
| Other consumer |  |  |  |  |  |  |  |  |
| Payment performance |  |  |  |  |  |  |  |  |
| Performing | $167162 | $136903 | $71023 | $22414 | $38429 | $2919 | $— | $438850 |
| Nonperforming |  |  |  |  |  | 1 |  | $1 |
| Total | $167162 | $136903 | $71023 | $22414 | $38429 | $2920 | $— | $438851 |
| Year-to-date gross <br>charge-offs<br>| $700 | $— | $— | $950 | $1521 | $47 | $— | $3218 |

---

**Loan Purchases**

The following table presents loan and lease receivables purchased by portfolio segment, excluding loans acquired in

business combinations and PCDloans and leases for the periods indicated:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Quarter Ended September 30,** | **Quarter Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| **(in thousands)** |  |  |  |  |
| Residential real estate | $3547 | $36240 | $46163 | $91367 |
| Auto |  |  |  | 5407 |
| Other consumer | 41718 | 16519 | 126133 | 127126 |
| Total | $45265 | $52759 | $172296 | $223900 |

---

The Company purchased the above loan and lease receivables at a premium of $140 thousand, $657 thousand, $767

thousand and $1.6 million for the quarters and nine months ended September 30, 2025 and 2024, respectively. For the

purchased loan and lease receivables disclosed above, the Company did not incur any specific allowances for credit losses

during the periods indicated.

**NOTE 5–GOODWILL AND OTHER INTANGIBLES**

At September 30, 2025 and December 31, 2024, the Company had goodwill of $843.3 million, from prior acquisitions.

Goodwill represents the excess of the total acquisition price paid over the fair value of the assets acquired, net of fair value

of liabilities assumed. As discussed in Note 2, "Business Combination," a bargain purchase gain was recorded as a result of

the Merger, therefore, no goodwill was recognized.

Core deposit intangibles assets of $90.8 million were recognized as a result of the Merger. Core deposit intangible assets

values were determined by an analysis of the cost differential between the core deposits inclusive of estimated servicing

costs and alternative funding sources for core deposits acquired through business combinations. The core deposit intangible

assets recorded are amortized on an accelerated basis over a period of 8 years. No impairment losses separate from the

scheduled amortization have been recognized in the periods presented. Other intangibles acquired of $23.5 million related

to a DUS license was recognized related to the Merger. The value of the DUS licenses was determined by the average

value implied under the Base and Growth scenarios using market data available from comparable public companies.

The Company's core deposit intangibles are amortized over their useful lives ranging from6to 10 years using the sum of

years digits. The weighted average remaining amortization period for core deposit intangibles was approximately 8 years as

of September 30, 2025. Trade name intangibles and DUS license intangibles have an indefinite life and are not amortized.

The following table summarizes other intangible assets:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Other Intangible Assets** | **Other Intangible Assets** | **Other Intangible Assets** | **Other Intangible Assets** |
| **(in thousands)** | **Gross Carrying** <br>**Value**<br>| **Accumulated** <br>**Amortization**<br>| **Accumulated** <br>**Impairment**<br>| **Net Carrying** <br>**Value**<br>|
| Balance, June 30, 2025 | $183403 | $147774 | $2321 | $33308 |
| Additions from the Merger | 114207 |  |  | 114207 |
| Amortization |  | 4251 |  | 4251 |
| Balance, September 30, 2025 | $297610 | $152025 | $2321 | $143264 |

---

Aggregate amortization of intangible assets was $4.3 million, $3.3 million, $9.7 million and $10.7 million for the quarters

and nine months ended September 30, 2025 and 2024, respectively. The following table presents estimated future

amortization expense as of September 30, 2025:

---

| | |
|:---|:---|
| **(in thousands)** | **September 30, 2025** |
| **Period ending December 31,** |  |
| 2025 | $7480 |
| 2026 | 27950 |
| 2027 | 22173 |
| 2028 | 16397 |
| 2029 | 11558 |
| Thereafter | 18657 |
| Total future amortization expense | $104215 |

---

**NOTE 6–LOW INCOME HOUSING TAX CREDIT AND COMMUNITY REINVESTMENT ACT** 

**INVESTMENTS**

The Company has LIHTC investments that are designed to promote qualified affordable housing programs and generate a

return primarily through the realization of federal tax credits. The Company accounts for these investments by amortizing

the cost of tax credit investments over the life of the investment using the proportional amortization method. At

September 30, 2025 and December 31, 2024, the balance of LIHTC investments, which is included in interest receivable

and other assets on the consolidated balance sheets, was $45.4 million and $14.6 million, respectively. Remaining

unfunded commitments related to the investments in qualified affordable housing projects totaled $1.1 million as of both

September 30, 2025 and December 31, 2024. The Company expects to fulfill these commitments through 2032.

The following table presents other information related to the Company's LIHTC investments for the periods indicated:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Quarter Ended September 30,** | **Quarter Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
| **(in thousands)** | **2025** | **2024** | **2025** | **2024** |
| Tax credits and other tax benefits recognized | $1012 | $869 | $2669 | $2608 |
| LIHTC amortization expense | 1294 | 858 | 2945 | 2554 |

---

The Company also has a portfolio of CRA Investments. The majority of the CRA investments represent investments in

small to mid-sized businesses throughout California. At September 30, 2025 and December 31, 2024, the balance of CRA

investments, which is included in interest receivable and other assets on the consolidated balance sheets, was $77.9 million

and $55.9 million, respectively. The Company recognized dividend income on CRA investments of $2.3 million, $1.6

million, $3.3 million and $2.4 million for the quarter and nine months ended September 30, 2025 and 2024, respectively,

which are included within other interest income in the consolidated income statements.

**NOTE 7–DEPOSITS**

The aggregate amount of time certificates of deposits that meet or exceed the FDIC insurance limit of $250 thousand at

September 30, 2025 and December 31, 2024 was $648.1 million and $407.7 million, respectively. At September 30, 2025,

certificates of deposit outstanding mature as follows:

---

| | |
|:---|:---|
| **(in thousands)** | **September 30, 2025** |
| Within one year | $3329099 |
| One to two years | 38727 |
| Two to three years | 8384 |
| Three to four years | 5355 |
| Four to five years | 4176 |
| Thereafter | 1499 |
| Total | $3387240 |

---

The Company accepts public deposits from various state, city and municipal agencies. Public deposits totaling $1.3 billion

and $1.2 billion are included in demand deposits, interest bearing transaction accounts, savings accounts and time

certificates of deposit as presented in the consolidated balance sheets at September 30, 2025 and December 31, 2024,

respectively. As required by law, the Company pledges marketable securities as collateral for its public deposits in

quantities of not less than 110% of the Company's deposit obligations for these public funds. The Company had investment

securities with a carrying value of $1.5 billion pledged as collateral as of September 30, 2025.

The Company accepts deposits from its Investment Management and Trust Department for the benefit of certain trust

customers. In accordance with state trust regulations, the Company is required to secure any trust deposits that are in excess

of the $250 thousand FDIC insurance limits by pledging marketable securities equal to those excess deposit balances. As of

September 30, 2025 and December 31, 2024, the Company held trust deposits of$901 thousand and $884 thousand,

respectively, that were in excess of $250 thousand and which required securities collateralization.

**NOTE 8–BORROWINGS AND LONG-TERM DEBT**

*Federal Home Loan Bank (FHLB) Advances*

The Company did not have any outstanding FHLB Advances as of September 30, 2025 and December 31, 2024.

As of September 30, 2025 and December 31, 2024, the Company's investment in capital stock of the FHLB of San

Francisco totaled $17.3 million. The Company had $6.6 billion of loans pledged to the FHLB, which permits up to $3.8

billion of additional borrowing capacity as of September 30, 2025.

*Federal Reserve Bank Discount Window*

The Company had no outstanding Discount Window borrowings as of September 30, 2025 and December 31, 2024.

The Company had pledged $1.4 billion of consumer loans through the Borrower-In-Custody Program and investment

securities with a carrying value of $3.0 billion to the Federal Reserve Bank Discount Window, which permits $4.0 billion

of additional borrowing capacity as of September 30, 2025.

*Brokered and Other Wholesale Funding*

The Company had no brokered or other wholesale funding outstanding as of September 30, 2025 and December 31, 2024.

The Company had $5.3 billion of available borrowing capacity under borrowing lines established with other financial

institutions as of September 30, 2025.

*Long-Term Debt*

As a result of the Merger, the Company assumed Subordinated Notes, Senior Notes and TRUPS debt. These balances are

reported beginning on the Merger date of September 2, 2025, therefore there are no balances or activity for the quarters and

nine months ended September 30, 2024 and as of December 31, 2024.

The trust preferred securities were issued by legacy HomeStreet, Inc. during the period from 2005 through 2007. In

connection with the issuance of trust preferred securities, legacy HomeStreet, Inc. issued to HomeStreet Statutory Trust,

Junior Subordinated Deferrable Interest Debentures. The sole assets of the HomeStreet Statutory Trust are the Subordinated

Debt Securities I, II, III, and IV.

The Company's outstanding long-term debt as of September 30, 2025 are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **September 30, 2025** | **September 30, 2025** | | |
| **(in thousands)** | **Par Value** | **Carrying Value** <sup>(1)</sup> | <br>**Rate** | <br>**Maturity Date** |
| Senior Notes | $65000 | $64608 | 6.5% per annum | June 1, 2026 |
| Subordinated Notes | 96000 | 78449 | 3.5% per annum <sup>(2)</sup> | January 30, 2032 |
| TRUPs: |  |  |  |  |
| HomeStreet Statutory Trust I <sup>(4)</sup> | 5155 | 4048 | 3 MO SOFR + 1.96%<sup>(3)</sup> | June 15, 2035 |
| HomeStreet Statutory Trust II <sup>(4)</sup> | 20619 | 15773 | 3 MO SOFR + 1.76%<sup>(3)</sup> | December 15, 2035 |
| HomeStreet Statutory Trust III <sup>(4)</sup> | 20619 | 15516 | 3 MO SOFR + 1.63%<sup>(3)</sup> | March 15, 2036 |
| HomeStreet Statutory Trust IV <sup>(4)</sup> | 15464 | 11729 | 3 MO SOFR + 1.94%<sup>(3)</sup> | June 15, 2037 |
|  | $222857 | $190123 |  |  |

---

(1) Includes discounts from purchase accounting adjustments as a result of the Merger on September 2, 2025.

(2) The Subordinated Notes bear interest at a rate of 3.5% per annum until January 30, 2027. From January 30, 2027, until the maturity date or the date of

earlier redemption, the notes will bear interest equal to the three-month term SOFR plus 215 basis points.

(3) These rates reflect the floating rates as of September 30, 2025.

(4) Call options are exercisable at par and are callable, without penalty, on a quarterly basis.

**NOTE 9 - SHAREHOLDERS' EQUITY AND DIVIDEND LIMITATIONS**

On September 2, 2025, HomeStreet Bank merged with and into Mechanics Bank, and Mechanics Bank became a wholly-

owned subsidiary of Mechanics Bancorp (formerly known as HomeStreet, Inc.).

In connection with the Merger, the Company amended its articles of incorporation to increase the number of authorized

shares of Company common stock from 160,000,000 to 1,900,000,000 and Company preferred stock from 100,000 to

120,000 and authorize the issuance of two (2) classes of Company common stock, 1,897,500,000 shares of which are

designated Class A common stock and 2,500,000 shares of which are designated Class B common stock.

Legacy Mechanics Bank's number of shares issued and outstanding have been retrospectively restated for periods prior to

the Merger to reflect the equivalent number of shares issued in the Merger since the Merger was accounted for as a reverse

acquisition. In all prior periods, the fixed exchange ratio of 3,301.0920 was applied to shares of outstanding Mechanics

Bank voting common stock, which were converted to Class A common stock, and the fixed exchange ratio of 330.1092

was applied to shares of outstanding Mechanics Bank non-voting common stock, which were converted to Class B

common stock.

***Class A common stock:*** Our voting common stock is listed on Nasdaq under the symbol "MCHB" and there were

220,088,687 shares outstanding at September 30, 2025 and 200,884,880 shares outstanding at December 31, 2024.

***Class B common stock:*** Our Class B common stock is not listed or traded on any national securities exchange or

automated quotation system, and there currently is no established trading market for such stock. There were 1,114,448

shares outstanding at September 30, 2025 and December 31, 2024.

Each holder of Class A common stock and Class B common stock is entitled to one (1) vote per share of combined

company common stock on matters submitted to the vote of holders of combined company common stock. The Class A

common stock and Class B common stock vote together as a single class on all matters submitted to a vote of combined

company shareholders, except as may otherwise be required by law or certain adverse amendments to the rights of Class B

common stock. The Company's common shareholders are entitled to equally share in all dividends and distributions based

on such shareholders' pro rata ownership interest in the Company, except that each share of Class B common stock is

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.

Mechanics is a separate legal entity from Mechanics Bank, which is the primary source of funds available to Mechanics to

service its debt, fund its operations, pay dividends to shareholders, repurchase shares and otherwise satisfy its obligations.

The availability of dividends from Mechanics Bank is limited by various statutes and regulations, capital rules regarding

requirements to maintain a "well capitalized" position at Mechanics Bank, as well as by our policy of retaining a significant

portion of our earnings to support Mechanics Bank's operations. Under California law, Mechanics Bank, or any majority

owned subsidiary of Mechanics Bank, generally may not declare a cash dividend on its capital stock in an amount that

exceeds the lesser of the retained earnings of Mechanics Bank or the net income of Mechanics Bank in the last three fiscal

years, less the amount of any distributions made by Mechanics Bank or any majority owned subsidiary of Mechanics Bank

to shareholders of Mechanics Bank, unless approved by the California Department of Financial Protection and Innovation.

**NOTE 10–DERIVATIVES AND HEDGING ACTIVITIES**

To reduce the risk of significant interest rate fluctuations on the value of certain assets and liabilities, such as single family

mortgage LHFS and MSRs, the Company utilizes derivatives as economic hedges.

As a part of its mortgage origination process, the Company enters into contracts that qualify as derivatives, including

forward sale commitments and interest rate lock commitments. It is the Company's practice to enter into forward

commitments for the future delivery of residential mortgage loans when interest rate lock commitments are entered into to

economically hedge the effect of changes in the interest rates resulting from its commitments to fund the loans. These

mortgage banking derivatives are not designated in hedge relationships.

The Company enters into interest rate swaps with loan customers. The specific terms of the interest rate swap agreements

are tied to the terms of the underlying loan agreements. To avoid increasing internal interest rate risk as a result of these

business activities, the Company enters into offsetting swap agreements. The Company enters into interest rate swaps

executed with commercial banking customers and broker dealer counterparties. The Company's customer related interest

rate swaps provide an economic hedge but do not qualify for hedge accounting treatment.

Cooperative Rabobank, U.A. (CRUA) and a subsidiary of Rabo's parent also provided various interest rate swap services

to the Company. The applicable Rabo counterparties deposited $5.5 million in cash collateral with the Company to secure

underlying derivative contracts as of September 30, 2025. B&F Capital Markets, LLC (a Stifel Company) has provided the

interest rate swap services to the Company since 2023.

The notional amounts and fair values for derivatives, all of which are economic hedges, are included in interest receivable

and other assets or interest payable and other liabilities on the consolidated balance sheet, consist of the following:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **September 30, 2025** | **September 30, 2025** | **December 31, 2024** | **December 31, 2024** |
| **(in thousands)** | **Notional amount** | **Fair Value** | **Notional amount** | **Fair Value** |
| Included in interest receivable and other assets: |  |  |  |  |
| Interest rate lock commitments | $14385 | $277 | $— | $— |
| Forward sale commitments | 34230 | 131 |  |  |
| Interest rate swaps | 430236 | 11347 | 379696 | 12835 |
| Total derivatives before netting | $478851 | $11755 | $379696 | $12835 |
| Netting adjustment/cash collateral <sup>(1)</sup> |  | (5741) |  |  |
| Carrying value on consolidated balance sheet |  | $6014 |  | $12835 |
| Included in interest payable and other liabilities: |  |  |  |  |
| Interest rate lock commitments | $— | $— | $430 | $7 |
| Forward sale commitments | 30862 | 112 | 430 |  |
| Interest rate swaps | 430236 | 10259 | 379696 | 11056 |
| Futures | 1800 | 1 |  |  |
| Total derivatives before netting | $462898 | $10372 | $380556 | $11063 |
| Netting adjustment/cash collateral <sup>(1)</sup> |  | 147 |  |  |
| Carrying value on consolidated balance sheet |  | $10519 |  | $11063 |

---

(1)Includes net cash collateral received of $5.9 million and zero at September 30, 2025 and December 31, 2024, respectively.

The collateral used under the Company's master netting agreements is typically cash, but securities may be used under

agreements with certain counterparties. Receivables related to cash collateral that has been paid to counterparties are

included in interest receivable and other assets. Payables related to cash collateral that has been received from

counterparties are included in interest payable and other liabilities. Interest is owed on amounts received from

counterparties and we earn interest on cash paid to counterparties. Any securities pledged to counterparties as collateral

remain on the consolidated balance sheets. At September 30, 2025 and December 31, 2024, the Company had liabilities of

$6.1 million and zero, respectively, in cash collateral received from counterparties and receivables of $193 thousand and

zero, respectively, in cash collateral paid to counterparties.

The following table presents the net gain (loss) recognized on economic hedge derivatives, within the respective line items

in the consolidated income statements for the periods indicated:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Quarter Ended September 30,** | **Quarter Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
| **(in thousands)** | **2025** | **2024** | **2025** | **2024** |
| Recognized in noninterest income: |  |  |  |  |
| Net loss on loan origination and sale activities <sup>(1)</sup> | $(146) | $— | $(146) | $— |
| Loan servicing income <sup>(2)</sup> | 78 |  | 78 |  |
| Other <sup>(3)</sup> | 21 | 53 | 96 | 93 |

---

(1)Comprised of forward contracts used as an economic hedge of loans held for sale and IRLCs to customers. Included in other noninterest income in

the consolidated income statements.

(2)Comprised of futures, U.S. Treasury options and forward contracts used as economic hedges of single family MSRs.

(3)Impact of interest rate swap agreements executed with commercial banking customers and broker dealer counterparties.

The interest income from U.S. Treasury notes trading securities used for hedging purposes, which is included in interest

income on the consolidated income statements, was$160 thousand for both the quarter and nine months ended

September 30, 2025, and was zero for the quarter and nine months endedSeptember 30, 2024, respectively.

**NOTE 11–MORTGAGE BANKING OPERATIONS**

LHFS consisted of the following:

---

| | | |
|:---|:---|:---|
| **(in thousands)** | **September 30, 2025** | **December 31, 2024** |
| Single family | $21397 | $543 |
| CRE, multifamily and SBA | 33588 |  |
| Total | $54985 | $543 |

---

Loans sold consisted of the following for the periods indicated:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Quarter Ended September 30,** | **Quarter Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
| **(in thousands)** | **2025** | **2024** | **2025** | **2024** |
| Single family | $35925 | $342 | $39234 | $4029 |
| CRE, multifamily and SBA | 7100 |  | 7100 |  |
| Total | $43025 | $342 | $46334 | $4029 |

---

For loan and lease receivables sold for the quarters and nine months ended September 30, 2025 and 2024, there were no

loans sold as part of securitizations.

Gain on loan origination and sale activities, including the effects of derivative risk management instruments, consisted of

the following:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Quarter Ended September 30,** | **Quarter Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
| **(in thousands)** | **2025** | **2024** | **2025** | **2024** |
| Single family <sup>(1)</sup> | $213 | $— | $213 | $42 |
| CRE, multifamily and SBA <sup>(1)</sup> | 446 |  | 446 |  |
| Total | $659 | $— | $659 | $42 |

---

(1)Gain on loan origination and sale activities is included in other noninterest income in the consolidated income statements.

The Company's portfolio of loans serviced for others is primarily comprised of loans held in U.S. government and agency

MBS issued by Fannie Mae and Freddie Mac. The unpaid principal balance of loans serviced for others is as follows:

---

| | | |
|:---|:---|:---|
| **(in thousands)** | **September 30, 2025** | **December 31, 2024** |
| Single family | $4453004 | $196895 |
| CRE, multifamily and SBA | 1886746 | 11092 |
| Total | $6339750 | $207987 |

---

The following is a summary of changes in the Company's liability for estimated single-family mortgage repurchase losses:

---

| | | |
|:---|:---|:---|
|  | **Quarter Ended September 30,** | **Nine Months Ended September 30,** |
| **(in thousands)** | **2025** | **2025** |
| Balance, beginning of period | $— | $— |
| Reserve liability acquired <sup>(1)</sup> | 734 | 734 |
| Additions, net of adjustments <sup>(2)</sup> | 4 | 4 |
| Balance, end of period | $738 | $738 |

---

(1)Represents the reserve liability acquired from the Merger on September 2, 2025.

(2)Includes additions for new loan sales and changes in estimated probable future repurchase losses on previously sold loans.

The Company has agreements with certain investors to advance scheduled principal and interest amounts on delinquent

loans. Advances are also made to fund the foreclosure and collection costs of delinquent loans prior to the recovery of

reimbursable amounts from investors or borrowers. Advances of $1.1 million were recorded in interest receivable and other

assets as of September 30, 2025. There were no advances as of December 31, 2024.

When the Company has the unilateral right to repurchase Ginnie Mae pool loans it has previously sold (generally loans that

are more than 90 days past due), the Company records the balance of the loans within assets as interest receivable and other

assets and within liabilities as interest payable and other liabilities. At September 30, 2025, there were no delinquent or

defaulted mortgage loans currently in Ginnie Mae pools that the Company has recognized on its consolidated balance

sheets and there were no such delinquent or defaulted mortgage loans as of December 31, 2024.

Revenue from mortgage servicing, including the effects of derivative risk management instruments, consisted of the

following:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Quarter Ended September 30,** | **Quarter Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
| **(in thousands)** | **2025** | **2024** | **2025** | **2024** |
| Servicing income, net: |  |  |  |  |
| Servicing fees and other | $1873 | $202 | $2218 | $786 |
| Changes in fair value of single family MSRs - other <sup>(1)</sup> | (618) |  | (618) |  |
| Amortization of multifamily and SBA MSRs | (585) |  | (585) |  |
| Total | 670 | 202 | 1015 | 786 |
| Risk management, single family MSRs: |  |  |  |  |
| Changes in fair value of MSRs due to assumptions <sup>(2)</sup> | (167) |  | (167) |  |
| Net gain from economic hedging <sup>(3)</sup> | 177 |  | 177 |  |
| Total | 10 |  | 10 |  |
| Loan servicing income | $680 | $202 | $1025 | $786 |

---

(1)Represents changes due to collection/realization of expected cash flows and curtailments.

(2)Principally reflects changes in model assumptions, including prepayment speed assumptions, which are primarily affected by changes in mortgage

interest rates.

(3)Comprised of net gains on derivatives used as economic hedges of single family MSRs, and net gains on U.S. Treasury notes trading securities used

for hedging purposes.

*Single Family MSRs*

Balances and activity for single family MSRs are reported beginning on the Merger date of September 2, 2025, therefore

there were no balances or activity for the quarters and nine months ended September 30, 2024 and as of December 31,

2024. The changes in single family MSRs measured at fair value are as follows:

---

| | | |
|:---|:---|:---|
|  | **Quarter Ended September 30,** | **Nine Months Ended September 30,** |
| **(in thousands)** | **2025** | **2025** |
| Beginning balance | $— | $— |
| Additions: |  |  |
| MSRs acquired <sup>(1)</sup> | 60166 | 60166 |
| Originations | 155 | 155 |
| Net additions | 60321 | 60321 |
| Changes in fair value: |  |  |
| Changes in fair value assumptions <sup>(2)</sup> | (167) | (167) |
| Other<sup>(3)</sup> | (618) | (618) |
| Ending balance | $59536 | $59536 |

---

(1)Represents MSRs acquired from the Merger on September 2, 2025.

(2)Principally reflects changes in model assumptions, including prepayment speed assumptions, which are primarily affected by changes in mortgage

interest rates

(3)Represents changes due to collection/realization of expected cash flows and curtailments.

Key economic assumptions used in measuring the initial fair value of capitalized single family MSRs were as follows:

---

| | | |
|:---|:---|:---|
|  | **Quarter Ended September 30,** | **Nine Months Ended September 30,** |
| **(rates per annum)** <sup>(1)</sup> | **2025** | **2025** |
| Constant prepayment rate (CPR) <sup>(2)</sup> | 16.47% | 16.47% |
| Discount rate | 8.73% | 8.73% |

---

(1)Based on a weighted average.

(2)Represents an expected lifetime average CPR used in the model.

For single family MSRs, we use a discounted cash flow valuation technique which utilizes CPRs and discount rates as

significant unobservable inputs as noted in the table below:

---

| | | |
|:---|:---|:---|
|  | **September 30, 2025** | **September 30, 2025** |
| **(rates per annum)** | **Range of Inputs** | **Average** <sup>(1)</sup> |
| CPRs <sup>(2)</sup> | 5.05% - 11.95% | 6.89% |
| Discount Rates | 8.66% - 16.23% | 8.99% |

---

(1) Weighted averages of all the inputs within the range.

(2) Represents the expected lifetime average CPR used in the model.

To compute hypothetical sensitivities of the value of our single family MSRs to immediate adverse changes in key

assumptions, we computed the impact of changes to CPRs and in discount rates as outlined below:

---

| | |
|:---|:---|
| **(dollars in thousands)** | **September 30, 2025** |
| Fair value of single family MSRs | $59536 |
| Expected weighted-average life (in years) | 8.19 |
| CPR |  |
| Impact on fair value of 25 basis points adverse change in interest rates | $(980) |
| Impact on fair value of 50 basis points adverse change in interest rates | $(1989) |
| Discount rate |  |
| Impact on fair value of 100 basis points increase | $(2585) |
| Impact on fair value of 200 basis points increase | $(5050) |

---

*Multifamily and SBA MSRs*

Balances and activity for multifamily and SBA MSRs are reported beginning on the Merger date of September 2, 2025,

therefore there were no balances or activity for the quarters and nine months ended September 30, 2024 and as of

December 31, 2024.

The changes in multifamily and SBA MSRs measured at the lower of amortized cost or fair value were as follows:

---

| | | |
|:---|:---|:---|
|  | **Quarter Ended September 30,** | **Nine Months Ended September 30,** |
| **(in thousands)** | **2025** | **2025** |
| Beginning balance | $— | $— |
| MSRs acquired <sup>(1)</sup> | 29538 | 29538 |
| Originations | 106 | 106 |
| Amortization | (585) | (585) |
| Ending balance | $29059 | $29059 |

---

(1)Represents MSRs acquired from the Merger on September 2, 2025.

The fair value of multifamily and SBA MSRs was $29.2 million at September 30, 2025.

Key economic assumptions used in measuring the initial fair value of capitalized multifamily MSRs were as follows:

---

| | | |
|:---|:---|:---|
|  | **Quarter Ended September 30,** | **Nine Months Ended September 30,** |
| **(rates per annum)** <sup>(1)</sup> | **2025** | **2025** |
| Discount rate | 13.00% | 13.00% |

---

(1)Based on a weighted average.

For multifamily MSRs, we use a discounted cash flow valuation technique which utilizes CPRs and discount rates as

significant unobservable inputs as noted in the table below. Multifamily DUS loans typically contain yield maintenance

features that significantly reduce loan prepayments, resulting in a CPR of zero for valuation purposes.

---

| | | |
|:---|:---|:---|
|  | **September 30, 2025** | **September 30, 2025** |
|  | **Range of Inputs** | **Average** <sup>(1)</sup> |
| Discount Rates | 13.00% - 15.00% | 13.00% |

---

(1) Weighted averages of all the inputs within the range.

**NOTE 12–GUARANTEES AND MORTGAGE REPURCHASE LIABILITY**

In the ordinary course of business, the Company sells loans through the Fannie Mae Multifamily Delegated Underwriting

and Servicing Program (DUS®) that are subject to a credit loss sharing arrangement. The Company services the loans for

Fannie Mae and shares in the risk of loss with Fannie Mae under the terms of the DUS contracts. Under the DUS program,

the Company and Fannie Mae share losses on a pro rata basis, where the Company is responsible for losses incurred up to

one-third of the principal balance on each loan with two-thirds of the loss covered by Fannie Mae. For loans that have been

sold through this program, a liability is recorded for this loss sharing arrangement under the accounting guidance for

guarantees. At September 30, 2025, the total unpaid principal balance of loans sold under this program was $1.8 billion and

the Company's reserve liability related to this arrangement totaled $554 thousand. There was a reversal of provision of

$340 thousand and no actual losses were incurred for the quarter and nine months ended September 30, 2025. Balances and

activity from the DUS Program are reported beginning on the Merger date of September 2, 2025, therefore there were no

balances or activity for the quarters and nine months ended September 30, 2024 and as of December 31, 2024.

In the ordinary course of business, the Company sells residential mortgage loans to government sponsored enterprises and

other entities. Under the terms of these sales agreements, the Company has made representations and warranties that the

loans sold meet certain requirements. The Company may be required to repurchase mortgage loans or indemnify loan

purchasers due to defects in the origination process of the loan, such as documentation errors, underwriting errors and

judgments, early payment defaults and fraud. The total unpaid principal balance of loans sold on a servicing-retained basis

that were subject to the terms and conditions of these representations and warranties totaled $4.5 billion as of

September 30, 2025.

At September 30, 2025, the Company had recorded a mortgage repurchase liability for loans sold on a servicing-retained

and servicing-released basis, included in accounts payable and other liabilities on the consolidated balance sheets of $738

thousand. There was a provision of $4 thousand and no actual losses were incurred for the quarter and nine months ended

September 30, 2025. Balances from loans sold on a servicing retained basis and the mortgage repurchase liability are

reported beginning on the Merger date of September 2, 2025, therefore there were no balances as of December 31, 2024.

**NOTE 13–FAIR VALUE** 

The term "fair value" is defined as the price that would be received to sell an asset or paid to transfer a liability in an

orderly transaction between market participants at the measurement date. A fair value measurement assumes that the

transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence

of a principal market, the most advantageous market for the asset or liability. The Company's approach is to maximize the

use of observable inputs and minimize the use of unobservable inputs when developing fair value measurements.

<u>Fair Value Hierarchy</u>

A three-level valuation hierarchy has been established under ASC 820 for disclosure of fair value measurements. The

valuation hierarchy is based on the observability of inputs to the valuation of an asset or liability as of the measurement

date. A financial instrument's categorization within the valuation hierarchy is based on the lowest level of input that is

significant to the fair value measurement. The levels are defined as follows:

• Level 1 **–** Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity

can access at the measurement date. An active market for the asset or liability is a market in which transactions for

the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing

basis.

• Level 2 **–** Inputs other than quoted prices included within Level 1 that are observable for the asset or liability,

either directly or indirectly. This includes quoted prices for similar assets and liabilities in active markets and

inputs that are observable for the asset or liability for substantially the full term of the financial instrument.

• Level 3 **–** Unobservable inputs for the asset or liability. These inputs reflect the Company's assumptions of what

market participants would use in pricing the asset or liability.

The Company's policy regarding transfers between levels of the fair value hierarchy is that all transfers are assumed to

occur at the end of the reporting period.

<u>Estimation of Fair Value</u>

Fair value is based on quoted market prices, when available. In cases where a quoted price for an asset or liability is not

available, the Company uses valuation models to estimate fair value. These models incorporate inputs such as forward

yield curves, loan prepayment assumptions, expected loss assumptions, market volatilities and pricing spreads utilizing

market-based inputs where readily available. The Company believes its valuation methods are appropriate and consistent

with those that would be used by other market participants. However, imprecision in estimating unobservable inputs and

other factors may result in these fair value measurements not reflecting the amount realized in an actual sale or transfer of

the asset or liability in a current market exchange.

The following table summarizes the fair value measurement methodologies, including significant inputs and assumptions

and classification of the Company's assets and liabilities valued at fair value on a recurring basis.

---

| | | |
|:---|:---|:---|
| **Asset/Liability class** | **Valuation methodology, inputs and assumptions** | **Classification** |
| Investment securities |  |  |
| U.S Treasury securities <br>(Trading securities and <br>Investment securities <br>AFS)<br>| Fair Value is based on quoted prices in an active market. | Level 1 recurring fair value <br>measurement.<br>|
| Investment securities <br>AFS<br>| Observable market prices of identical or similar securities <br>are used where available.<br>| Level 2 recurring fair value <br>measurement.<br>|
|  | If market prices are not readily available, value is based on <br>discounted cash flows using the following significant inputs:<br>•Expected prepayment speeds <br>•Estimated credit losses <br>•Market liquidity adjustments<br>| Level 3 recurring fair value <br>measurement.<br>|
| LHFS |  |  |
| Single family loans | Fair value is based on observable market data, including:<br>•Quoted market prices, where available <br>•Dealer quotes for similar loans <br>•Forward sale commitments<br>| Level 2 recurring fair value <br>measurement.<br>|
| Equity securities | Observable market prices of identical or similar securities <br>are used where available.<br>| Level 2 recurring fair value <br>measurement.<br>|
| Mortgage servicing rights |  |  |
| Single family MSRs | For information on how the Company measures the fair <br>value of its single family MSRs, including key economic <br>assumptions and the sensitivity of fair value to changes in <br>those assumptions, see Note 11, "Mortgage Banking <br>Operations."<br>| Level 3 recurring fair value <br>measurement.<br>|
| Derivatives |  |  |
| Futures and Options | Fair value is based on closing exchange prices. | Level 1 recurring fair value <br>measurement.<br>|
| Forward sale <br>commitments and <br>interest rate swaps<br>| Fair value is based on quoted prices for identical or similar <br>instruments, when available. When quoted prices are not <br>available, fair value is based on internally developed <br>modeling techniques, which require the use of multiple <br>observable market inputs including:<br>•Forward interest rates <br>•Interest rate volatilities<br>| Level 2 recurring fair value <br>measurement.<br>|
| IRLC | The fair value considers several factors including:<br>•Fair value of the underlying loan based on <br>quoted prices in the secondary market, when <br>available. <br>•Value of servicing<br>•Fall-out factor<br>| Level 3 recurring fair value <br>measurement.<br>|

---

The following tables present the levels of the fair value hierarchy for the Company's assets and liabilities measured at fair

value on a recurring basis:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** |
| **(in thousands)** | **Fair Value** | **Level 1** | **Level 2** | **Level 3** |
| Assets: |  |  |  |  |
| Trading securities - U.S. Treasury securities | $50357 | $50357 | $— | $— |
| Securities available-for-sale: |  |  |  |  |
| Obligations of states and political subdivisions | 467870 |  | 467870 |  |
| Mortgage backed securities - residential | 2374155 |  | 2372543 | 1612 |
| Mortgage backed securities - commercial | 378178 |  | 378178 |  |
| Collateralized loan obligations | 188689 |  | 188689 |  |
| Corporate bonds | 53484 |  | 53437 | 47 |
| U.S. Treasury securities | 20579 | 20579 |  |  |
| Agency debentures | 7523 |  | 7523 |  |
| Total securities available-for-sale | 3490478 | 20579 | 3468240 | 1659 |
| Single family LHFS | 21397 |  | 21397 |  |
| Single family mortgage servicing rights | 59536 |  |  | 59536 |
| Equity securities | 16018 |  | 16018 |  |
| Derivatives: |  |  |  |  |
| Forward loan sale commitments | 131 |  | 131 |  |
| Interest rate lock commitments | 277 |  |  | 277 |
| Interest rate swaps | 11347 |  | 11347 |  |
| Total assets | $3649541 | $70936 | $3517133 | $61472 |
| Liabilities: |  |  |  |  |
| Derivatives: |  |  |  |  |
| Forward loan sale commitments | $112 | $— | $112 | $— |
| Interest rate swaps | 10259 |  | 10259 |  |
| Futures | 1 | 1 |  |  |
| Total liabilities | $10372 | $1 | $10371 | $— |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
| **(in thousands)** | **Fair Value** | **Level 1** | **Level 2** | **Level 3** |
| Assets: |  |  |  |  |
| Securities available-for-sale: |  |  |  |  |
| Obligations of states and political subdivisions | $91299 | $— | $91299 | $— |
| Mortgage backed securities - residential | 2643688 |  | 2643688 |  |
| Mortgage backed securities - commercial | 240862 |  | 240862 |  |
| Collateralized loan obligations | 50000 |  | 50000 |  |
| Corporate bonds | 39402 |  | 39402 |  |
| Total securities available-for-sale | 3065251 |  | 3065251 |  |
| Equity securities | 15355 |  | 15355 |  |
| Derivatives: |  |  |  |  |
| Interest rate swaps | 12835 |  | 12835 |  |
| Total assets | $3093441 | $— | $3093441 | $— |
| Liabilities: |  |  |  |  |
| Derivatives: |  |  |  |  |
| Interest rate swaps | $11056 | $— | $11056 | $— |
| Interest rate lock commitments | 7 |  |  | 7 |
| Total liabilities  | $11063 | $— | $11056 | $7 |

---

There were no transfers between levels of the fair value hierarchy during the quarters and nine months ended September

30, 2025 and 2024.

<u>Level 3 Recurring Fair Value Measurements</u>

The Company's Level 3 recurring fair value measurements consist of investment securities AFS, single family MSRs, and

interest rate lock commitments, which are accounted for as derivatives. For information regarding fair value changes and

activity for single family MSRs during the quarter and nine months ended September 30, 2025, see Note 11, "Mortgage

Banking Operations."

The fair value of IRLCs considers several factors, including the fair value in the secondary market of the underlying loan

resulting from the exercise of the commitment, the expected net future cash flows related to the associated servicing of the

loan (referred to as the value of servicing) and the probability that the commitment will not be converted into a funded loan

(referred to as a fall-out factor). The fair value of IRLCs on LHFS, while based on interest rates observable in the market,

is highly dependent on the ultimate closing of the loans. The significance of the fall-out factor to the fair value

measurement of an individual IRLC is generally highest at the time that the rate lock is initiated and declines as closing

procedures are performed and the underlying loan gets closer to funding. The fall-out factor applied is based on historical

experience. The value of servicing is impacted by a variety of factors, including prepayment assumptions, discount rates,

delinquency rates, contractually specified servicing fees, servicing costs and underlying portfolio characteristics. Because

these inputs are not observable in market trades, the fall-out factor and value of servicing are considered to be Level 3

inputs. The fair value of IRLCs decreases in value upon an increase in the fall-out factor and increases in value upon an

increase in the value of servicing. Changes in the fall-out factor and value of servicing do not increase or decrease based on

movements in other significant unobservable inputs.

The Company recognizes unrealized gains and losses from the time that an IRLC is initiated until the gain or loss is

realized at the time the loan closes, which generally occurs within 30-90 days. For IRLCs that fall out, any unrealized gain

or loss is reversed, which generally occurs at the end of the commitment period. The gains and losses recognized on IRLC

derivatives generally correlates to volume of single family interest rate lock commitments made during the reporting period

(after adjusting for estimated fallout) while the amount of unrealized gains and losses realized at settlement generally

correlates to the volume of single family closed loans during the reporting period.

The following information presents significant Level 3 unobservable inputs used to measure fair value of certain assets as

of September 30, 2025. As of December 31, 2024, there were no assets measured at fair value using Level 3 unobservable

inputs.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **(dollars in thousands)** | **Fair** <br>**Value**<br>| **Valuation**<br>**Technique**<br>| **Significant Unobservable**<br>**Inputs**<br>| **Low** | **High** | **Weighted** <br>**Average**<br>|
| **September 30, 2025** |  |  |  |  |  |  |
| Investment securities AFS | $1659 | Income approach | Implied spread to benchmark <br>interest rate curve<br>| 2.25% | 2.25% | 2.25% |
| Interest rate lock commitments, <br>net<br>| 277 | Income approach | Fall-out factor | 1.10% | 24.54% | 15.04% |
|  |  |  | Value of servicing | 0.64% | 1.49% | 1.18% |

---

The following table presents fair value changes and activity for certain Level 3 assets for the periods indicated:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **(in thousands)** | **Beginning** <br>**balance**<br>| **Additions**<sup>(1)</sup> | **Transfers** | **Payoffs/Sales** | **Change in mark** <br>**to market**<br>| **Ending** <br>**balance**<br>|
| **Quarter Ended September 30, 2025** |  |  |  |  |  |  |
| Investment securities AFS | $— | $1649 | $— | $— | $10 | $1659 |
| **Nine Months Ended September 30, 2025** |  |  |  |  |  |  |
| Investment securities AFS | $— | $1649 | $— | $— | $10 | $1659 |

---

(1)Includes the assets acquired from the Merger on September 2, 2025

The following table presents fair value changes and activity for Level 3 interest rate lock commitments:

---

| | | |
|:---|:---|:---|
|  | **Quarter Ended September 30,** | **Nine Months Ended September 30,** |
| **(in thousands)** | **2025** | **2025** |
| Beginning balance, net | $— | $— |
| IRLC acquired <sup>(1)</sup> | 514 | 514 |
| Total realized/unrealized gains | (97) | (97) |
| Settlements | (140) | (140) |
| Ending balance, net | $277 | $277 |

---

(1)Represents the interest rate lock commitments acquired from the Merger on September 2, 2025.

**Assets and Liabilities Measured on a Nonrecurring Basis**

**Collateral Dependent Loan and Lease Receivables:** The fair value of collateral dependent loan and lease receivables

with specific allocations of the allowance for credit losses based on collateral values is generally based on recent real estate

appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable

sales and the income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for

differences between the comparable sales and income data available. Such adjustments are typically significant and result

in a Level 3 classification of the inputs for determining fair value. Loss exposure for collateral dependent loans is typically

determined by the "practical expedient" which allows these loans to be assessed using the fair value of collateral method,

which compares the net realizable value of the collateral (fair value less costs of sale) to the amortized cost basis of the loan

(carrying value). The fair value of real estate collateral is based on appraisals, evaluations or internal values.

As of September 30, 2025 and December 31, 2024 there were no collateral dependent loans with specific allowance

allocations of the allowance for credit losses, which are measured for impairment using the fair value of the collateral.

**Other real estate owned:** Nonrecurring adjustments to certain commercial and residential real estate properties classified

as other real estate owned are measured at the lower of the carrying amount or fair value, less costs to sell. Fair values are

generally based on third party appraisals of the property or internal evaluations based on comparable sales, resulting in a

Level 3 classification. Appraisals for both collateral-dependent impaired loans and real estate owned are performed by

certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose

qualifications and licenses have been reviewed and verified by the Company. Once received, a member of the Appraisal

Department reviews the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in

comparison with independent data sources such as recent market data or industry-wide statistics. These appraisals may

utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. In

cases where the carrying amount exceeds the fair value, less cost to sell, an impairment loss is recognized. Management

also considers inputs regarding market trends or other relevant factors and selling and commission costs.

Other real estate owned assets fall under a Level 3 fair value measurement methodology. The following table presents other

real estate owned recorded at fair value on a nonrecurring basis and still held on the consolidated balance sheet for the

periods indicated. Other real estate owned of $1.7 million as of September 30, 2025 was acquired in the Merger and

recorded at fair value as of the Merger date.

---

| | | |
|:---|:---|:---|
| **(in thousands)** | **September 30, 2025** | **December 31, 2024** |
| Fair value: |  |  |
| Other real estate owned | $1675 | $15600 |

---

The following table presents losses due to write-downs of other real estate owned for the periods indicated and that were

still held at the end of each respective reporting period.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Quarter Ended September 30,** | **Quarter Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
| **(in thousands)** | **2025** | **2024** | **2025** | **2024** |
| Losses due to write downs: |  |  |  |  |
| Other real estate owned <sup>(1)</sup> | $— | $— | $— | $1200 |

---

(1)Losses are included in other real estate owned related expense within noninterest expense on the consolidated income statements.

The following is a summary of the estimated fair value and carrying value of the Company's financial instruments not

recorded at fair value in the consolidated financial statements as of September 30, 2025 and December 31, 2024:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** |
|  | | **Fair Value** | **Fair Value** | **Fair Value** | **Fair Value** |
| **(in thousands)** | <br>**Carrying**<br>**Value**<br>| **Total** | **Level 1** | **Level 2** | **Level 3** |
| Assets: |  |  |  |  |  |
| Cash and cash equivalents | $1442647 | $1442647 | $1442647 | $— | $— |
| Securities held-to-maturity | 1363636 | 1186260 |  | 1183260 | 3000 |
| Loans held for sale - multifamily and <br>other<br>| 33588 | 33655 |  | 33655 |  |
| Loan and lease receivables, net | 14399836 | 13948529 |  |  | 13948529 |
| Mortgage servicing rights – <br>multifamily and SBA<br>| 29059 | 29213 |  |  | 29213 |
| Liabilities: |  |  |  |  |  |
| Time deposits | $3387240 | $3378332 | $— | $3378332 | $— |
| Long-term debt | 190123 | 198516 |  | 198516 |  |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Carrying**<br>**Value** | **Fair Value** | **Fair Value** | **Fair Value** | **Fair Value** |
| **(in thousands)** | **Carrying**<br>**Value** | **Total** | **Level 1** | **Level 2** | **Level 3** |
| Assets: |  |  |  |  |  |
| Cash and cash equivalents | $999711 | $999711 | $999711 | $— | $— |
| Securities held-to-maturity | 1440494 | 1196000 |  | 1193000 | 3000 |
| Loans held for sale - single family | 543 | 543 |  |  | 543 |
| Loan and lease receivables, net | 9554939 | 8817007 |  |  | 8817007 |
| Liabilities: |  |  |  |  |  |
| Time deposits | $970053 | $960276 | $— | $960276 | $— |

---

<u>Fair Value Option</u>

Single family loans held for sale accounted under the fair value option are measured initially at fair value with subsequent

changes in fair value recognized in earnings. Gains and losses from such changes in fair value are recognized in net gain on

mortgage loan origination and sale activities within other noninterest income. The change in fair value of loans held for

sale is primarily driven by changes in interest rates subsequent to loan funding and changes in fair value of the related

servicing asset, resulting in revaluation adjustments to the recorded fair value. The use of the fair value option allows the

change in the fair value of loans to more effectively offset the change in fair value of derivative instruments that are used as

economic hedges of loans held for sale.

The following table presents the difference between the aggregate fair value and the aggregate unpaid principal balance of

loans held for sale accounted for under the fair value option as of September 30, 2025. As of December 31, 2024, there

were no single family loans held for sale accounted for under the fair value option, since this election was made following

the Merger.

---

| | | | |
|:---|:---|:---|:---|
|  | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** |
| **(in thousands)** | **Fair Value** | **Aggregate** <br>**Unpaid Principal** <br>**Balance**<br>| **Fair Value Less** <br>**Aggregated** <br>**Unpaid Principal** <br>**Balance**<br>|
| Single family LHFS | $21397 | $20932 | $465 |

---

**NOTE 14 – REVENUE FROM CONTRACTS WITH CUSTOMERS**

All of the Company's revenue from contracts with customers in the scope of ASC 606 is recognized within noninterest

income in the consolidated statements of income. A description of the Company's revenue streams accounted for under

ASC 606 are as follows:

**Service Charges on Deposit Accounts and Other Deposit Service Fees:** The Company earns fees from its deposit

customers for transaction-based, account maintenance, and overdraft services. Transaction-based fees are recognized at the

time the transaction is executed as that is the point in time the Company fulfills the customer's request. Account

maintenance fees, which relate primarily to monthly maintenance, are earned over the course of a month, representing the

period over which the Company satisfies the performance obligation. Overdraft fees are recognized at the point in time that

the overdraft occurs. Service charges on deposits are withdrawn from the customer's account balance. Other deposit service

fees are recognized at the point in time that the transaction occurs or the services provided.

**Trust Fees:** The Company earns trust fees from its contracts with trust customers to manage assets for investment services.

These fees are primarily earned over time as the Company provides the contracted monthly services and are generally

assessed based on a tiered scale of the market value of assets under management (AUM) at month-end. Other related

services provided, which are based on a fixed fee schedule, are recognized when the services are rendered.

**Merchant Processing Services, ATM processing and Debit Card Fees:** ATM processing fees are recognized at the point

in time that the transaction occurs or the services provided. The Company earns interchange fees from cardholder

transactions conducted through the payment networks. Interchange fees from cardholder transactions represent a

percentage of the underlying transaction value and are recognized daily, concurrently with the transaction processing

services provided to the cardholder.

The following is a summary of the revenue from contracts with customers in the scope of ASC 606 that is recognized

within noninterest income (loss):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Quarter Ended September 30,** | **Quarter Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
| **(in thousands)** | **2025** | **2024** | **2025** | **2024** |
| **Noninterest income in scope of ASC 606:** |  |  |  |  |
| Service charges on deposit accounts | $5875 | $6007 | $16861 | $17854 |
| Trust fees and commissions | 3117 | 3176 | 9452 | 8841 |
| ATM network fee income | 3425 | 3109 | 9353 | 9084 |
| Noninterest income subject to ASC 606 | 12417 | 12292 | 35666 | 35779 |
| Noninterest income (loss) not subject to ASC 606 | 97361 | 4612 | 108718 | (193434) |
| Total noninterest income (loss) | $109778 | $16904 | $144384 | $(157655) |

---

**NOTE 15–EARNINGS PER SHARE**

The Company has two classes of common stock and, as such applies the "two-class method" of computing earnings per

share in accordance with ASC 260, "Earnings Per Share." Earnings are allocated in the same manner as dividends would be

distributed. The Company's common shareholders are entitled to equally share in all dividends and distributions based on

such shareholders' pro rata ownership interest in the Company, except that each share of Class B common stock is 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.

The following tables summarize the calculation of earnings per share under the two-class method:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Quarter Ended September 30,** | **Quarter Ended September 30,** | **Quarter Ended September 30,** | **Quarter Ended September 30,** | **Quarter Ended September 30,** | **Quarter Ended September 30,** |
|  | **2025** | **2025** | **2025** | | **2024** | |
| **(in thousands, except share and per share data)** | Class A <br>common <br>stock<br>| Class B <br>common <br>stock<br>| Consolidated | Class A <br>common <br>stock<br>| Class B <br>common <br>stock<br>| Consolidated |
| Net income |  |  | $55161 |  |  | $39944 |
| Basic: |  |  |  |  |  |  |
| Numerator |  |  |  |  |  |  |
| Allocation of distributed earnings (cash <br>dividends declared)<br>| $— | $— | $— | $28419 | $1577 | $29996 |
| Allocation of undistributed earnings  | 52345 | 2816 | 55161 | 9425 | 523 | 9948 |
| Allocation of distributed and undistributed <br>earnings<br>| $52345 | $2816 | $55161 | $37844 | $2100 | $39944 |
| Denominator |  |  |  |  |  |  |
| Basic weighted average common shares <br>outstanding<br>| 207189764 | 1114448 | 208304212 | 200884880 | 1114448 | 201999328 |
| Basic earnings per share <sup>(1)</sup> | $0.25 | $2.53 | $0.26 | $0.19 | $1.88 | $0.20 |
| Diluted: |  |  |  |  |  |  |
| Numerator |  |  |  |  |  |  |
| Allocation of distributed and undistributed <br>earnings<br>| $52345 | $2816 | $55161 | $37844 | $2100 | $39944 |
| Denominator |  |  |  |  |  |  |
| Basic weighted average common shares <br>outstanding<br>| 207189764 | 1114448 | 208304212 | 200884880 | 1114448 | 201999328 |
| Dilutive effect of unvested restricted stock <br>units<br>| 68914 |  | 68914 | 92431 |  | 92431 |
| Diluted weighted average common shares <br>outstanding<br>| 207258678 | 1114448 | 208373126 | 200977311 | 1114448 | 202091759 |
| Diluted earnings per share <sup>(1)</sup> | $0.25 | $2.53 | $0.26 | $0.19 | $1.88 | $0.20 |

---

(1) Periods prior to September 2, 2025 have been restated as a result of the adjustment to common shares outstanding based on the exchange ratio from

the Merger of 3,301.0920 for Class A common stock and 330.1092 for Class B common stock.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
|  | **2025** | **2025** | **2025** | **2024** | **2024** | **2024** |
| **(in thousands, except share and per share data)** | Class A <br>common <br>stock<br>| Class B <br>common <br>stock<br>| Consolidated | Class A <br>common <br>stock<br>| Class B <br>common <br>stock<br>| Consolidated |
| Net income (loss) |  |  | $141437 |  |  | $(22664) |
| Basic: |  |  |  |  |  |  |
| Numerator |  |  |  |  |  |  |
| Allocation of distributed earnings (cash <br>dividends declared)<br>| $— | $— | $— | $89999 | $4993 | $94992 |
| Allocation of undistributed earnings (losses) | 134077 | 7360 | 141437 | (111472) | (6184) | (117656) |
| Allocation of distributed and undistributed <br>earnings (losses)<br>| $134077 | $7360 | $141437 | $(21473) | $(1191) | $(22664) |
| Denominator |  |  |  |  |  |  |
| Basic weighted average common shares <br>outstanding<br>| 203012384 | 1114448 | 204126832 | 200876688 | 1114448 | 201991136 |
| Basic earnings (loss) per share <sup>(1)</sup> | $0.66 | $6.60 | $0.69 | $(0.11) | $(1.07) | $(0.11) |
| Diluted: |  |  |  |  |  |  |
| Numerator |  |  |  |  |  |  |
| Allocation of distributed and undistributed <br>earnings (losses)<br>| $134077 | $7360 | $141437 | $(21473) | $(1191) | $(22664) |
| Denominator |  |  |  |  |  |  |
| Basic weighted average common shares <br>outstanding<br>| 203012384 | 1114448 | 204126832 | 200876688 | 1114448 | 201991136 |
| Dilutive effect of unvested restricted stock <br>units <sup>(2)</sup><br>| 62619 |  | 62619 |  |  |  |
| Diluted weighted average common shares <br>outstanding<br>| 203075003 | 1114448 | 204189451 | 200876688 | 1114448 | 201991136 |
| Diluted earnings per share <sup>(1)</sup> | $0.66 | $6.60 | $0.69 | $(0.11) | $(1.07) | $(0.11) |

---

(1) Periods prior to September 2, 2025 have been restated as a result of the adjustment to common shares outstanding based on the exchange ratio from

the Merger of 3,301.0920 for Class A common stock and 330.1092 for Class B common stock.

(2) Excluded from the computation of diluted earnings per share (due to their antidilutive effect) for the nine months ended September 30, 2024 were

certain unvested RSUs. On a weighted average basis, 112,237 unvested RSUs were excluded because their effect would have been anti-dilutive.

**NOTE 16–SUBSEQUENT EVENTS**

The Company has evaluated and concluded that no subsequent events have occurred through the date of issuance of the

financial statements that would require recognition in the consolidated financial statements or disclosure in the notes to the

consolidated financial statements.

**ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF** 

**OPERATIONS**

*You should read the following discussion and analysis of our financial condition and results of operations together with* 

*our unaudited consolidated financial statements and related notes appearing elsewhere in this Quarterly Report. This* 

*Quarterly Report contains forward-looking statements that involve risks and uncertainties, including those described in the* 

*section entitled "Cautionary Note Regarding Forward Looking Statements." There are a number of important risks and* 

*uncertainties that could cause our actual results to differ materially from those discussed in these forward-looking* 

*statements. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements,* 

*and you should not place undue reliance on our forward-looking statements. Actual results or events could differ* 

*materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. Factors that* 

*could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in* 

*the section entitled "Risk Factors" under Part II, Item 1A of this Quarterly Report, and those discussed in our other* 

*disclosures and filings.*

**FORWARD-LOOKING STATEMENTS**

This Quarterly Report on Form 10-Q, 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. All

statements, other than statements of historical fact, contained or incorporated by reference in this Quarterly Report,

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. These statements are subject to known and unknown risks, uncertainties, assumptions, estimates, and

other important factors that change over time, many of which may be beyond our control. Our future performance and

actual results may differ materially from those expressed or implied in such forward-looking statements. Forward-looking

statements should not be relied upon as a prediction of actual results.

We caution readers that actual results may differ materially from those expressed in or implied by the Company's forward-

looking statements. Other important factors could affect the Company's future results from those expressed or implied in

any forward-looking statements include, but are not limited to:

• the ability to achieve expected cost savings, synergies and other financial benefits from the Merger within the

expected time frames and costs or difficulties relating to integration matters being greater than expected;

• the diversion of management time from core banking functions due to integration-related matters;

• changes in the interest rate environment and in expectation of reduction in short-term interest rates;

• changes in the U.S. and global economies, including business disruptions, reductions in employment, inflationary

pressures and an increase in business failures, specifically among our customers, and global trade disputes,

including the imposition of tariffs by the U.S. and countermeasures by foreign governments;

• our ability to control operating costs and expenses;

• our ability to attract and retain key members of our senior management team;

• changes in deposit flows, loan demand or real estate values may adversely affect our business;

• increases in competitive pressure among financial institutions or from non-financial institutions;

• our ability to obtain regulatory approvals or non-objection to take various capital actions, including the payment

of dividends by us or the Bank;

• our credit quality and the effect of credit quality on our credit losses expense and allowance for credit losses and

impact the adequacy of our allowance for credit losses;

• changes in accounting principles, policies or guidelines may cause our financial condition to be perceived or

interpreted differently;

• legislative or regulatory changes that may adversely affect our business or financial condition, including, without

limitation, changes in corporate and/or individual income tax laws and policies, changes in privacy laws, and

changes in regulatory capital or other rules, and the availability of resources to address or respond to such

changes;

• general economic conditions, either nationally or locally in some or all areas in which we conduct business, or

conditions in the securities markets or banking industry;

• technological changes may be more difficult or more expensive than what we anticipate;

• a failure in or breach of our operational or security systems or information technology infrastructure, or those of

our third-party providers and vendors, including due to cyber-attacks;

• success or consummation of new business initiatives may be more difficult or expensive than what we anticipate;

• staffing fluctuations in response to product demand or the implementation of corporate strategies that affect our

work force and potential associated charges; and

• the potential for litigation, investigations or other matters before regulatory agencies.

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 the Risk Factors included on Exhibit 99.2 to the Company's Current Report on

Form 8-K, filed with the SEC on September 2, 2025. We strongly recommend readers review those disclosures in

conjunction with the discussions herein. Because forward-looking statements are inherently subject to risks and

uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as

predictions of future events.

Forward-looking statements in this Quarterly Report are based on management's expectations at the time such statements

are made and speak only as of the date made. The Company does not assume any obligation or undertake to update any

forward-looking statements after the date of this Quarterly Report as a result of new information, future events or

developments, except as required by federal securities or other applicable laws, although the Company may do so from

time to time.

All future written and oral forward-looking statements attributable to the Company or any person acting on its behalf are

expressly qualified in their entirety by the cautionary statements contained or referred to above. New risks and uncertainties

arise from time to time, and factors that the Company currently deems immaterial may become material, and it is

impossible for the Company to predict these events or how they may affect the Company.

**Overview**

Founded in 1921, Mechanics is a financial holding company and primarily operates through Mechanics Bank, a full-service

community bank that was founded in 1905, with locations throughout California, Washington, the Portland, Oregon area

and Hawaii. Following the Merger of HomeStreet Bank with and into Mechanics Bank, with Mechanics Bank surviving the

Merger as a wholly-owned subsidiary of the Company, the assets, liabilities and operations of HomeStreet Bank became

the assets, liabilities and operations of Mechanics Bank. Headquartered in Walnut Creek, California, Mechanics Bank

provides personal banking, business banking, trust and estate, brokerage and wealth management products and services.

Mechanics Bank's retail banking products include a wide range of personal checking, savings and loan products (including

credit card, home equity, home mortgage and secured/unsecured loans), as well as online banking and a variety of wealth

management services (including trust and estate, investment management and financial planning services). Mechanics

Bank's banking products and services for businesses include business checking and savings accounts, business debit cards,

online banking, cash management services, wealth management services, business credit cards, commercial real estate

loans, equipment leasing and loans guaranteed by the SBA.

Legacy HomeStreet Bank, which was merged with and into Mechanics Bank and whose business is now part of the

business of Mechanics Bank, was principally engaged in commercial banking, consumer banking, and real estate lending,

including construction and permanent loans on commercial real estate and single-family residences. It also sold insurance

products for consumer clients. It provided these financial products and services to its customers through bank branches,

loan production offices, ATMs, online, mobile and telephone banking channels.

Our business strategy is to offer a full range of financial products and services to our customer base consistent with a

regional bank's offerings while providing the responsive and personalized service of a community bank. We intend to

maintain our business by:

• marketing our services directly to prospective new customers;

• obtaining new client referrals from existing clients;

• adding experienced relationship managers, branch managers and loan officers who may have established client

relationships that we can serve;

• cross-selling our products and services; and

• making opportunistic acquisitions of complementary businesses and/or establishing de novo offices in select

markets within and outside our existing market areas.

Legacy Mechanics Bank ceased originating auto loans in February 2023, but continued to service the portfolio through

April 30, 2025. Effective May 1, 2025, Mechanics Bank entered into a servicing agreement with a third-party servicer to

oversee and manage Mechanics Bank's active portfolio of auto loans. The portfolio consisted of new and pre-owned retail

automobile sales contracts purchased from both franchised and independent automobile dealerships in the United States.

Our primary sources of liquidity include deposits, loan repayments and investment securities payments, both principal and

interest, borrowings, and proceeds from the sale of loans and investment securities. Borrowings may include advances from

the FHLB, borrowings from the Federal Reserve, federal funds purchased and borrowings from other financial institutions.

**General**

The Company's management's discussion and analysis of results of operations and financial condition (MD&A) is

intended to assist the reader in understanding and assessing significant changes and trends related to the results of

operations and financial condition of the Company. This discussion and analysis should be read in conjunction with the

consolidated financial statements and accompanying footnotes in this Quarterly Report on Form 10-Q.

**Recent Developments**

*<u>HomeStreet Acquisition</u>*

As discussed in Note 1, "Summary of Significant Accounting Policies," on September 2, 2025, the Merger by and among

Mechanics Bancorp (formerly known as HomeStreet, Inc.), HomeStreet Bank and Mechanics Bank was consummated. In

connection with the Merger, HomeStreet Bank merged with and into Mechanics Bank, with Mechanics Bank surviving the

Merger and becoming a wholly-owned subsidiary of Mechanics Bancorp. The Merger is considered a reverse acquisition in

which Mechanics Bank is the accounting acquirer (legal acquiree), HomeStreet Bank is the accounting acquiree and

Mechanics Bancorp is the legal acquirer. 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.

*<u>Economic and Market Conditions</u>*

The current level of interest rates continues to impact our results of operations as our overall relatively low cost of funds

face pressure with higher available market rates. With the decrease in short term interest rates in the latter part of 2024, our

cost of funds have stabilized. Given the scheduled repricing of our loans, the expectation of ongoing reductions in short-

term interest rates by the Federal Reserve and continued effective noninterest expense management, we anticipate modest

growth in earnings in the current rate environment.

**Non-GAAP Financial Measures** 

This document contains non-GAAP financial measures of our financial performance, including return on average tangible

equity, efficiency ratio, 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.

**Critical Accounting Estimates**

The following discussion and analysis of financial condition and results of operations are based upon our consolidated

financial statements and the notes thereto, which have been prepared in accordance with GAAP and accounting practices in

the banking industry. Certain of those accounting policies are considered critical accounting policies because they require

us to make estimates and assumptions regarding circumstances or trends that could materially affect the value of those

assets, such as economic conditions or trends that could impact our ability to fully collect our loans or ultimately realize the

carrying value of certain of our other assets. Those estimates and assumptions are made based on current information

available to us regarding those economic conditions or trends or other circumstances. If changes were to occur in the

events, trends or other circumstances on which our estimates or assumptions were based, these changes could have a

material adverse effect on the carrying value of assets and liabilities and on our results of operations. As a result of the

Merger, the Company updated critical accounting estimates. Management believes the ACL policy and estimate, and the

valuation of single familyMSRs and business combinations and goodwill estimates are important to the portrayal of the

Company's financial condition and results of operations and requires difficult, subjective, or complex judgments and,

therefore, management considers the following to be critical accounting estimates.

<u>ACL</u>

The Company utilizes a blend of economic forecast scenarios from Moody's Analytics, specifically, the baseline, upside

(S1), and downside (S3) scenarios, as key inputs in estimating our ACL. These scenarios are refreshed quarterly and

provide forward-looking assumptions on key macroeconomic indicators such as GDP growth, unemployment rates, and

commercial real estate conditions. Within this framework, our current expected credit loss models generate PD and LGD at

the individual loan or pooled segment level. These components are modeled using borrower characteristics, loan terms, and

scenario-specific economic conditions. The product of PD and LGD results in the expected credit loss for each instrument,

which aggregates into our total ACL. In addition to model-driven outputs, we incorporate qualitative adjustments where

management determines additional reserves may be warranted. These adjustments consider factors not fully captured in the

models and are reassessed regularly to ensure reserves remain appropriate.

The increase in ACL during the reporting period primarily reflects the establishment of reserves on PCD and non-PCD

loans from HomeStreet and reserves related to increased maturity, repricing, collateral, concentration and other model risk.

The Company continuously monitors its ACL methodology to ensure it remains appropriately calibrated to reflect both

modeled outputs and emerging risks.

<u>MSRs</u>

The valuation of MSRs is based on various assumptions which are set forth in Note 11, "Mortgage Banking Operations" in

the financial statements. Note 11 also provides sensitivity analysis based on the assumptions used. The sensitivity analyses

are hypothetical and have been provided to indicate the potential impact that changes in assumptions may have on the

estimate of the fair value of MSRs.

<u>Business Combinations</u>

The Company accounts for business combinations using the acquisition method of accounting. Under this accounting

method, the acquired company's assets and liabilities are recorded at fair value at the date of the acquisition, except as

provided for by the applicable accounting guidance, and the results of operations of the acquired company are combined

with the acquiree's results from the date of the acquisition forward. The difference between the purchase price and the fair

value of the net assets acquired (including identifiable intangible assets) is recorded as goodwill or bargain purchase gain.

Management uses significant estimates and assumptions to value such items, including projected cash flows, repayment

rates, default rates and losses assuming default, discount rates, and realizable collateral values. The allowance for credit

losses for PCD loans is recognized within acquisition accounting. The allowance for credit losses for non-PCD assets is

recognized as provision for credit losses in the same reporting period as the acquisition. Fair value adjustments are

amortized or accreted into the statement of operations over the estimated life of the acquired assets or assumed liabilities.

The purchase date valuations and any subsequent adjustments determine the amount of goodwill or bargain purchase gain

recognized in connection with the acquisition. The use of different assumptions could produce significantly different

valuation results, which could have material positive or negative effects on our results of operations.

The determination of fair values is based on valuations using management's assumptions of future growth rates, future

attrition, discount rates, multiples of earnings or other relevant factors. In addition, the Company engages third-party

specialists to assist in the development of fair values. Preliminary estimates of fair values may be adjusted for a period of

time subsequent to the effective time of the acquisition if new information is obtained about facts and circumstances that

existed as of the effective time of the acquisition that, if known, would have affected the measurement of the amounts

recognized as of that date.

Adjustments recorded during this period are recognized in the current reporting period. Management uses various valuation

methodologies to estimate the fair value of these assets and liabilities and often involves a significant degree of judgment,

particularly when liquid markets do not exist for the particular item being valued. Examples of such items include loans,

deposits, identifiable intangible assets, and certain other assets and liabilities.

Changes in these factors, as well as downturns in economic or business conditions, could have a significant adverse impact

on the carrying value of assets, including goodwill and liabilities, which could result in impairment losses affecting our

financial statements as a whole and our banking subsidiary in which the goodwill is recorded.

<u>Summary Financial Data</u>

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Quarter Ended** | **Quarter Ended** | **Nine Months Ended** | **Nine Months Ended** |
| **(in thousands, except shares, per share and FTE data)** | **September 30**<br>**2025**<br>| **June 30**<br>**2025**<br>| **September 30**<br>**2025**<br>| **September 30**<br>**2024**<br>|
| Select Income Statement data: |  |  |  |  |
| Net interest income | $145670 | $130129 | $404253 | $390769 |
| Provision for credit losses on loans and leases | 46058 | 357 | 42663 | 2684 |
| Provision (reversal of provision) for credit losses on <br>unfunded lending commitments<br>| 960 | (725) | 329 | 517 |
| Noninterest income (loss) | 109778 | 19625 | 144384 | (157655) |
| Noninterest expense | 163329 | 91080 | 340047 | 261410 |
| Net income (loss): |  |  |  |  |
| Before income tax expense | 45101 | 59042 | 165598 | (31497) |
| Total | 55161 | 42485 | 141437 | (22664) |
| Basic earnings per share: |  |  |  |  |
| Class A common stock | $0.25 | $0.20 | $0.66 | $(0.11) |
| Class B common stock | $2.53 | $2.00 | $6.60 | $(1.07) |
| Diluted earnings per share: |  |  |  |  |
| Class A common stock | $0.25 | $0.20 | $0.66 | $(0.11) |
| Class B common stock | $2.53 | $2.00 | $6.60 | $(1.07) |
| Basic weighted-average shares outstanding |  |  |  |  |
| Class A common stock | 207189764 | 200893223 | 203012384 | 200876688 |
| Class B common stock | 1114448 | 1114448 | 1114448 | 1114448 |
| Diluted weighted-average shares outstanding |  |  |  |  |
| Class A common stock | 207258678 | 200952643 | 203075003 | 200876688 |
| Class B common stock | 1114448 | 1114448 | 1114448 | 1114448 |
| Select Performance Ratios: |  |  |  |  |
| Return on average equity <sup>(1)</sup> | 8.61% | 7.15% | 7.81% | (1.35)% |
| Return on average tangible equity <sup>(1),(2)</sup> | 14.17% | 11.82% | 12.96% | (1.48)% |
| Return on average assets <sup>(1)</sup> | 1.18% | 1.03% | 1.10% | (0.18)% |
| Efficiency ratio | 63.9% | 60.8% | 62.0% | 112.1% |
| Efficiency ratio (non-GAAP) <sup>(2)</sup> | 62.3% | 59.0% | 60.2% | 107.6% |
| Net interest margin<sup>(1)</sup> | 3.36% | 3.44% | 3.41% | 3.29% |

---

(1) Ratios are annualized.

(2)Return on average tangible equity, efficiency ratio, 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."

(3)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

legacy Mechanics Bank.

---

| | | |
|:---|:---|:---|
|  | **As of** | **As of** |
| **(in thousands, except shares, per share and FTE data)** | **September 30,** <br>**2025**<br>| **December 31,** <br>**2024**<br>|
| Selected Balance Sheet Data |  |  |
| Loans held for sale  | $54985 | $543 |
| Loans held for investment  | 14568795 | 9643497 |
| Allowance for credit losses | (168959) | (88558) |
| Investment securities | 4854114 | 4505745 |
| Total assets | 22708820 | 16490112 |
| Total deposits | 19452819 | 13941804 |
| Total long-term debt | 190123 |  |
| Total shareholders' equity | 2774134 | 2301868 |
| Other data: |  |  |
| Book value per share | $12.54 | $11.40 |
| Tangible book value per share<sup>(2)</sup> | $7.73 | $6.70 |
| Common equity ratio | 12.22% | 13.96% |
| Tangible common equity ratio <sup>(2)</sup> | 8.23% | 9.10% |
| Loans to deposits ratio  | 74.89% | 69.17% |
| Full time equivalent employees | 2036 | 1439 |
| Credit Quality: |  |  |
| Nonaccrual loans | $60586 | $10693 |
| Nonperforming assets to total assets | 0.29% | 0.16% |
| ACL to total loans | 1.16% | 0.92% |
| ACL to nonaccrual loans | 278.88% | 828.22% |
| Nonaccrual loans to total loans  | 0.42% | 0.11% |
| Nonperforming assets | $64914 | $26504 |
| Regulatory Capital Ratios:<sup>(3)</sup> |  |  |
| Mechanics Bancorp |  |  |
| Tier 1 leverage capital | 10.34% | n/a |
| Common equity Tier 1 capital | 13.42% | n/a |
| Tier 1 risk-based capital | 13.42% | n/a |
| Total risk based capital | 15.57% | n/a |
| Mechanics Bank |  |  |
| Tier 1 leverage capital | 11.46% | 9.66% |
| Common equity Tier 1 capital | 14.87% | 16.14% |
| Tier 1 risk-based capital | 14.87% | 16.14% |
| Total risk based capital | 16.13% | 17.14% |

---

(1) Ratios are annualized.

(2)Return on average tangible equity, efficiency ratio, 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."

(3)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.

**Management's Overview of the Third Quarter2025 Financial Performance**

*Third Quarter of 2025 Compared to the Second Quarter of 2025*

*General:* Our net income and income before taxes were $55.2 million and $45.1 million, respectively, in the third quarter

of 2025, as compared to $42.5 million and $59.0 million, respectively, in the second quarter of 2025. The $13.9 million

decrease in income before taxes compared to the second quarter of 2025 was primarily due to an increase in noninterest

expense and an increase in provision for credit losses, partially offset by an increase in net interest income and an increase

in noninterest income.

*Income Taxes:*Our effective tax rate during the third quarter of 2025 was (22.3)% as compared to 28.0% in the second

quarter of 2025. The $90.4 million bargain purchase gain from the Merger with HomeStreet was an after-tax item.

Excluding the bargain purchase gain, we would have recorded a pre-tax loss of $45.3 million, which was the primary

reason for the negative effective tax rate.

*Net Interest Income:* The following table sets 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. The average yields and rates are based on annualized interest income or

expense for the periods presented.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Quarter Ended**  | **Quarter Ended**  | **Quarter Ended**  | **Quarter Ended**  | **Quarter Ended**  | **Quarter Ended**  |
|  | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** |
| **(in thousands)** | **Average**<br>**Balance**<br>| **Interest** | **Average**<br>**Yield/Cost**<br>| **Average**<br>**Balance**<br>| **Interest** | **Average**<br>**Yield/Cost**<br>|
| Assets: |  |  |  |  |  |  |
| Interest-earning assets: |  |  |  |  |  |  |
| Cash and cash equivalents | $1851414 | $19858 | 4.26% | $1390355 | $14668 | 4.23% |
| Investment securities | 4248163 | 40266 | 3.76% | 4342666 | 42013 | 3.88% |
| Loans <sup>(1)</sup> | 10959795 | 141773 | 5.13% | 9337910 | 120116 | 5.16% |
| FHLB stock and other investments | 119880 | 2991 | 9.90% | 103468 | 1356 | 5.26% |
| Total interest-earning assets | 17179252 | 204888 | 4.73% | 15174399 | 178153 | 4.71% |
| Noninterest-earning assets  | 1418197 |  |  | 1294772 |  |  |
| Total assets | $18597449 |  |  | $16469171 |  |  |
| Liabilities and shareholders' equity: |  |  |  |  |  |  |
| Interest-bearing liabilities: |  |  |  |  |  |  |
| Interest-bearing deposits:  |  |  |  |  |  |  |
| Demand deposits | $1480835 | $1196 | 0.32% | $1344397 | $1045 | 0.31% |
| Money market and savings  | 6701690 | 42382 | 2.51% | 6231772 | 40956 | 2.64% |
| Certificates of deposit | 1758659 | 13918 | 3.14% | 960431 | 6023 | 2.52% |
| Total  | 9941184 | 57496 | 2.29% | 8536600 | 48024 | 2.26% |
| Borrowings: |  |  |  |  |  |  |
| Borrowings | 10939 | 124 | 4.48% | 13 |  | 4.61% |
| Long-term debt | 63034 | 1598 | 10.06% |  |  | —% |
| Total interest-bearing liabilities | 10015157 | 59218 | 2.35% | 8536613 | 48024 | 2.26% |
| Noninterest-bearing liabilities: |  |  |  |  |  |  |
| Demand deposits <sup>(2)</sup> | 5823539 |  |  | 5355287 |  |  |
| Other liabilities | 216836 |  |  | 193089 |  |  |
| Total liabilities | 16055532 |  |  | 14084989 |  |  |
| Shareholders' equity | 2541917 |  |  | 2384182 |  |  |
| Total liabilities and shareholders' equity | $18597449 |  |  | $16469171 |  |  |
| Net interest income |  | $145670 |  |  | $130129 |  |
| Net interest rate spread |  |  | 2.38% |  |  | 2.45% |
| Net interest margin |  |  | 3.36% |  |  | 3.44% |

---

(1)Includes loans held for sale.

(2)Cost of all deposits, including noninterest-bearing demand deposits was 1.45% and 1.39% for the quarters ended September 30, 2025 and June 30,

2025, respectively.

Net interest income in the third quarter of 2025 was $15.5 million higher than the second quarter of 2025primarily as a

result of the Merger with HomeStreet Bank in September 2025. Mechanics' net interest margin decreased from 3.44% to

3.36%. The decrease in the net interest margin was primarily due to the deposits and long-term debt acquired from

HomeStreet and non-recurring interest recoveries recognized in the second quarter.

*Provision for Credit Losses on Loans and Leases:* The provision for credit losses on loans in the third quarter of 2025 was

$46.1 million, compared to $357 thousand for the second quarter of 2025. The increase in provision for the third quarter of

2025was primarily driven by reserves established on non-PCD acquired loans from HomeStreet and updates to ACL

factors that were driven by a re-evaluation of future economic conditions and interest rate repricing risk.

*Noninterest income* consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **Quarter Ended**  | **Quarter Ended**  |
| **(in thousands)** | **September 30, 2025** | **June 30, 2025** |
| Noninterest income |  |  |
| Service charges on deposit accounts | $5875 | $5492 |
| Trust fees and commissions | 3117 | 3216 |
| ATM network fee income | 3425 | 3040 |
| Loan servicing income | 680 | 168 |
| Net gain (loss) on sales and calls of investment securities | 155 | 4137 |
| Income from bank-owned life insurance | 2120 | 502 |
| Bargain purchase gain | 90363 |  |
| Other | 4043 | 3070 |
| Total noninterest income  | $109778 | $19625 |

---

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

---

| | | |
|:---|:---|:---|
|  | **Quarter Ended** | **Quarter Ended** |
| **(in thousands)** | **September 30, 2025** | **June 30, 2025** |
| Single family servicing income, net |  |  |
| Servicing fees and other | $1059 | $168 |
| Changes in fair value of single family MSRs - other <sup>(1)</sup> | (618) |  |
| Net | 441 | 168 |
| Risk management, single family MSRs: |  |  |
| Changes in fair value due to assumptions <sup>(2)</sup> | (167) |  |
| Net gain from economic hedging <sup>(3)</sup> | 177 |  |
| Subtotal | 10 |  |
| Single family servicing income  | 451 | 168 |
| Commercial loan servicing income: |  |  |
| Servicing fees and other | 814 |  |
| Amortization of capitalized MSRs | (585) |  |
| Subtotal | 229 |  |
| Total loan servicing income  | $680 | $168 |

---

(1)Represents changes due to collection/realization of expected cash flows and curtailments.

(2)Principally reflects changes in model assumptions, including prepayment speed assumptions, which are primarily affected by changes in mortgage

interest rates.

(3)Comprised of net gains on derivatives used as economic hedges of single family MSRs, and net gains on U.S. Treasury notes trading securities used

for hedging purposes.

Noninterest income in the third quarter of 2025 increased from the second quarter of 2025 primarily due to a $90.4 million

bargain purchase gain recognized on the HomeStreet Merger, additional income from one month of revenues from the

Merger, and higher bank-owned life insurance income. These increases were offset by gains recognized on the sale of

investment securities in the second quarter of $4.1 million.

*Noninterest Expense* consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **Quarter Ended** | **Quarter Ended** |
| **(in thousands)** | **September 30, 2025** | **June 30, 2025** |
| Noninterest expense |  |  |
| Salaries and employee benefits | $54168 | $47734 |
| Occupancy | 9566 | 8337 |
| Equipment | 7288 | 6288 |
| Professional services | 5560 | 5907 |
| FDIC assessments and regulatory fees | 2722 | 2213 |
| Amortization of intangible assets | 4251 | 2666 |
| Data processing | 3315 | 2200 |
| Loan related | 4439 | 3220 |
| Marketing and advertising | 680 | 744 |
| Other real estate owned related | (103) | 104 |
| Acquisition and integration costs | 63869 | 5639 |
| Other | 7574 | 6028 |
| Total noninterest expense | $163329 | $91080 |

---

Noninterest expense increased $72.2 million in the third quarter of 2025 compared to the second quarter of 2025, primarily

due to an increase in acquisition and integration related costs of $63.9 million and the additional expenses associated with

one month of HomeStreet's non-interest expenses reflected from the Merger.

*Nine Months Ended of September 30, 2025 Compared to Nine Months Ended of September 30, 2024*

*General*: Our net income and income before taxes were $141.4 million and $165.6 million, respectively, for the nine

months ended September 30, 2025, as compared to a net loss and net loss before taxes of $22.7 million and $31.5 million,

respectively, for the nine months ended September 30, 2024. The $197.1 million increase in income before taxes compared

to the first nine months of 2024 was primarily due to an increase in net interest income and an increase in noninterest

income, partially offset by an increase in provision for credit losses and an increase in noninterest expense.

*IncomeTaxes:* Our effective tax rate for the nine months ended September 30, 2025 was 14.5% as compared to 28.0% for

the nine months ended September 30, 2024 and our federal statutory rate was 21.0%. The $90.4 million bargain purchase

gain from the Merger with HomeStreet was an after-tax item. Excluding the bargain purchase gain, we would have

recorded pre-tax income of $75.2 million, which was the primary reason for the low effective tax rate.

*Net Interest Income:* The following table sets 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. The average yields and rates are based on annualized interest income or

expense for the periods presented.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Nine Months Ended** | **Nine Months Ended** | **Nine Months Ended** | **Nine Months Ended** | **Nine Months Ended** | **Nine Months Ended** |
|  | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2024** | **September 30, 2024** | **September 30, 2024** |
| **(in thousands)** | **Average**<br>**Balance**<br>| **Interest** | **Average**<br>**Yield/Cost**<br>| **Average**<br>**Balance**<br>| **Interest** | **Average**<br>**Yield/Cost**<br>|
| Assets: |  |  |  |  |  |  |
| Interest-earning assets: |  |  |  |  |  |  |
| Cash and cash equivalents | $1329525 | $41713 | 4.19% | $1525600 | $59315 | 5.19% |
| Investment securities | 4455585 | 129864 | 3.90% | 3914358 | 91238 | 3.11% |
| Loans <sup>(1)</sup> | 9935183 | 379681 | 5.11% | 10312101 | 404010 | 5.23% |
| FHLB stock and other investments | 108261 | 5368 | 6.63% | 102545 | 4303 | 5.61% |
| Total interest-earning assets | 15828554 | 556626 | 4.70% | 15854604 | 558866 | 4.71% |
| Noninterest-earning assets | 1338126 |  |  | 1340551 |  |  |
| Total assets | $17166680 |  |  | $17195155 |  |  |
| Liabilities and shareholders' equity: |  |  |  |  |  |  |
| Interest-bearing liabilities: |  |  |  |  |  |  |
| Interest-bearing deposits:  |  |  |  |  |  |  |
| Demand deposits | $1409713 | $3539 | 0.34% | $1503080 | $7602 | 0.68% |
| Money market and savings  | 6330840 | 121478 | 2.57% | 5775423 | 111971 | 2.59% |
| Certificates of deposit | 1222456 | 25634 | 2.80% | 1021633 | 21286 | 2.78% |
| Total  | 8963009 | 150651 | 2.25% | 8300136 | 140859 | 2.27% |
| Borrowings: |  |  |  |  |  |  |
| Borrowings | 3691 | 124 | 4.48% | 739058 | 26428 | 4.78% |
| Long-term debt | 21242 | 1598 | 10.06% | 19927 | 810 | 5.43% |
| Total interest-bearing liabilities | 8987942 | 152373 | 2.27% | 9059121 | 168097 | 2.48% |
| Noninterest-bearing liabilities: |  |  |  |  |  |  |
| Demand deposits<sup>(2)</sup> | 5541719 |  |  | 5687029 |  |  |
| Other liabilities | 215971 |  |  | 207811 |  |  |
| Total liabilities | 14745632 |  |  | 14953961 |  |  |
| Shareholders' equity | 2421048 |  |  | 2241194 |  |  |
| Total liabilities and shareholders' equity | $17166680 |  |  | $17195155 |  |  |
| Net interest income |  | $404253 |  |  | $390769 |  |
| Net interest spread |  |  | 2.43% |  |  | 2.23% |
| Net interest margin |  |  | 3.41% |  |  | 3.29% |

---

(1) Includes loans held for sale.

(2)Cost of deposits including noninterest-bearing deposits, was 1.39% and 1.35% for the nine months ended September 30, 2025 and 2024,

respectively.

Net interest income for the nine months ended September 30, 2025 increased $13.5 million as compared to the nine months

ended September 30, 2024 due primarily to an increase in net interest margin from 3.29% in the nine months ended

September 30, 2024 to 3.41% in the nine months ended September 30, 2025. The increase in net interest margin is due to a

21 basis point decrease in the rates paid on interest-bearing liabilities. The decrease in rates paid on interest-bearing

liabilities was primarily driven by the payoff of the Company's $750 million of Bank Term Funding Program (BTFP)

borrowings in September 2024, partially offset by higher borrowing costs on acquired debt from the Merger.

*Provision for Credit Losses on Loans and Leases:* There was a $42.7 million provision for credit losses on loans in the nine

months ended September 30, 2025, compared to a $2.7 million provision for credit losses in the nine months ended

September 30, 2024. The increase in provision for the nine months ended September 30, 2025was primarily driven by

reserves established on non-PCD acquired loans from HomeStreet and updates to ACL factors that were driven by a re-

evaluation of future economic conditions and interest rate repricing risk.

*Noninterest income (loss)* consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
| **(in thousands)** | **2025** | **2024** |
| Noninterest income (loss) |  |  |
| Service charges on deposit accounts | $16861 | $17854 |
| Trust fees and commissions | 9452 | 8841 |
| ATM network fee income | 9353 | 9084 |
| Loan servicing income | 1025 | 786 |
| Net gain (loss) on sales and calls of investment securities | 4292 | (207203) |
| Income from bank-owned life insurance | 3149 | 2144 |
| Bargain purchase gain | 90363 |  |
| Other | 9889 | 10839 |
| Total noninterest income (loss) | $144384 | $(157655) |

---

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

---

| | | |
|:---|:---|:---|
|  | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
| **(in thousands)** | **2025** | **2024** |
| Single family servicing income, net |  |  |
| Servicing fees and other | $1404 | $786 |
| Changes in fair value of single family MSRs - other<sup>(1)</sup> | (618) |  |
| Net | 786 | 786 |
| Risk management, single family MSRs: |  |  |
| Changes in fair value due to assumptions <sup>(2)</sup> | (167) |  |
| Net gain from economic hedging <sup>(3)</sup> | 177 |  |
| Subtotal | 10 |  |
| Single family servicing income  | 796 | 786 |
| Commercial loan servicing income: |  |  |
| Servicing fees and other | 814 |  |
| Amortization of capitalized MSRs | (585) |  |
| Subtotal | 229 |  |
| Total loan servicing income | $1025 | $786 |

---

(1)Represents changes due to collection/realization of expected cash flows and curtailments.

(2)Principally reflects changes in model assumptions, including prepayment speed assumptions, which are primarily affected by changes in mortgage

interest rates.

(3)Comprised of net gains on derivatives used as economic hedges of single family MSRs, and net gains on U.S. Treasury notes trading securities used

for hedging purposes.

Noninterest income for the nine months ended September 30, 2025 increased from the nine months ended September 30,

2024 primarily due to the bargain purchase gain of $90.4 millionrecognized on the HomeStreet Merger and the $207.2

million loss on the sale of lower yielding AFS investment securities as part of a balance sheet restructure in the nine

months ended September 30, 2024.

*Noninterest Expense* consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
| **(in thousands)** | **2025** | **2024** |
| Noninterest expense |  |  |
| Salaries and employee benefits | $150753 | $147717 |
| Occupancy | 25875 | 24113 |
| Equipment | 19445 | 17643 |
| Professional services  | 16383 | 15398 |
| FDIC assessments and regulatory fees | 7148 | 8679 |
| Amortization of intangible assets | 9655 | 10705 |
| Data processing | 6865 | 6734 |
| Loan related | 9236 | 5416 |
| Marketing and advertising | 2008 | 2603 |
| Other real estate owned related | 2685 | 1888 |
| Acquisition and integration costs | 69858 |  |
| Other | 20136 | 20514 |
| Total noninterest expense | $340047 | $261410 |

---

Noninterest expense increased $78.6 million for the nine months ended September 30, 2025 compared to the nine months

ended September 30, 2024 primarily due to acquisition and integration related costs of $69.9 million, and higher loan

related costs incurred due to the outsourcing of servicing our auto loan portfolio in the second quarter of 2025.

**Financial Condition -September 30, 2025 compared to December 31, 2024**

During the nine months ended September 30, 2025, total assets increased$6.2 billion, total liabilities increased $5.7 billion

and shareholders' equity increased $472.3 million.

***Investment Securities***

Trading securities totaled $50.4 million at September 30, 2025 and were acquired in the HomeStreet Merger. Securities

held-to-maturity decreased by $76.9 million due to maturities and calls during the nine months ended September 30, 2025

and totaled $1.4 billion at September 30, 2025. Securities available-for-sale increased by $425.2 million during the nine

months ended September 30, 2025 to $3.5 billion at September 30, 2025. The net increase in investment securities was

primarily due to the securities acquired in the HomeStreet Merger, offset by the sale of $925.8 million of securities in the

second quarter of 2025 to generate liquidity for the Merger.

***Loans***

Total loans and leases at September 30, 2025 were $14.6 billion, up $4.9 billion from $9.6 billion at December 31, 2024,

due primarily to the addition of $5.6 billion of legacy HomeStreet Bank loans recorded at fair value, offset by run-off in

our auto loan portfolio of $642.3 million.

***Deposits***

Total deposits increased by $5.5 billion during the nine months ended September 30, 2025 to $19.5 billion at

September 30, 2025, due primarily to balances acquired in the Merger.

Noninterest-bearing accounts totaled $6.7 billion and represented 35% of total deposits at September 30, 2025, compared

to $5.6 billion, or 40% of total deposits, at December 31, 2024. Noninterest-bearing deposit balances increased in the nine

months ended September 30, 2025 primarily due to balances acquired in the Merger.

Insured deposits of $12.8 billion represented 66% of total deposits at September 30, 2025, compared to insured deposits of

$7.8 billion, or 56% of total deposits at December 31, 2024.

***Borrowings***

Total borrowings were $190.1 million at September 30, 2025, representing subordinated notes, senior notes and trust

preferred debt acquired in the Merger.

***Equity***

During the nine months ended September 30, 2025, total shareholders' equity increased by $472.3 million to $2.8 billion

and tangible common equity<sup>(1)</sup> increased by $367.7 million to $1.8 billion at September 30, 2025. The increase in total

shareholders' equity for the nine months ended September 30, 2025 resulted from Mechanics Bancorp shares issued as

Merger consideration, net income in 2025 and a decrease in the unrealized losses on our AFS securities portfolio.

At September 30, 2025, book value per common share increased to $12.54, compared to $11.40 at December 31, 2024. The

year-to-date change in book value per share reflects Mechanics Bancorp shares issued as Merger consideration. Tangible

book value per common share<sup>(1)</sup>increased to $7.73, compared to $6.70 at December 31, 2024, mainly as a result of

Mechanics Bancorp shares issued as Merger consideration, offset by the additional $114.2million of intangibles added as

part of the Merger.

(1) Tangible common equity and tangible book value per share are non-GAAP financial measures. For a reconciliation of this measures to the comparable

GAAP financial measure or the computation of the measure, see "Non-GAAP Financial Measures and Reconciliations."

**Debt Securities**

Debt securities available for sale (AFS) and held to maturity (HTM) are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **September 30, 2025** | **September 30, 2025** | **December 31, 2024** | **December 31, 2024** |
| **(in thousands)** | **Amortized Cost** | **Fair Value** | **Amortized Cost** | **Fair Value** |
| **Securities available-for-sale** |  |  |  |  |
| Obligations of states and political subdivisions | $459834 | $467870 | 91799 | 91299 |
| Mortgage-backed securities - residential | 2373146 | 2374155 | 2694745 | 2643688 |
| Mortgage-backed securities - commercial | 389469 | 378178 | 259793 | 240862 |
| Collateralized loan obligations | 188500 | 188689 | 50000 | 50000 |
| Corporate bonds | 56558 | 53484 | 43968 | 39402 |
| U.S. Treasury securities | 20597 | 20579 |  |  |
| Agency debentures | 7545 | 7523 |  |  |
| Total securities available-for-sale | 3495649 | 3490478 | 3140305 | 3065251 |
| **Securities held-to-maturity** |  |  |  |  |
| Obligations of states and political subdivisions | 15082 | 15576 | 14193 | 14672 |
| Mortgage-backed securities - residential | 1037566 | 893069 | 1115389 | 918440 |
| Mortgage-backed securities - commercial | 310988 | 277615 | 310912 | 262888 |
| Total securities held-to-maturity | 1363636 | 1186260 | 1440494 | 1196000 |
| Total AFS and HTM debt securities | $4859285 | $4676738 | $4580799 | $4261251 |

---

The following table shows the contractual maturities and weighted average yields of the available-for-sale and held-to-

maturity securities portfolio:

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** |
|  | **One Year Or Less** | **One Year Or Less** | **More than One to Five** <br>**Years** | **More than One to Five** <br>**Years** | **More than Five Years** <br>**to Ten Years** | **More than Five Years** <br>**to Ten Years** | **More than Ten Years** | **More than Ten Years** | **Total** | **Total** |
| **(in thousands)** | **Amount** | **Weighted** <br>**Average**<br> **Yield** <sup>(1)</sup><br>| **Amount** | **Weighted** <br>**Average**<br> **Yield** <sup>(1)</sup><br>| **Amount** | **Weighted** <br>**Average**<br> **Yield** <sup>(1)</sup><br>| **Amount** | **Weighted** <br>**Average**<br> **Yield** <sup>(1)</sup><br>| **Amount** | **Weighted** <br>**Average**<br> **Yield** <sup>(1)</sup><br>|
| **Securities available-for-sale** |  |  |  |  |  |  |  |  |  |  |
| Obligations of states and <br>political subdivisions<br>| $345 | 2.49% | $45276 | 1.82% | $90330 | 3.65% | $331919 | 4.29% | $467870 | 3.92% |
| Mortgage-backed securities <br>- residential<br>| 446 | 2.02% | 16887 | 2.06% | 26601 | 2.31% | 2330221 | 5.03% | 2374155 | 4.97% |
| Mortgage-backed securities <br>- commercial<br>| 2460 | 6.30% | 190384 | 3.21% | 158333 | 4.58% | 27001 | 3.66% | 378178 | 3.82% |
| Collateralized loan <br>obligations<br>|  | —% |  | —% |  | —% | 188689 | 5.70% | 188689 | 5.70% |
| Corporate bonds |  | —% | 3388 | 24.61% | 50096 | 4.47% |  | —% | 53484 | 5.72% |
| U.S. Treasury securities |  | —% | 20579 | 3.60% |  | —% |  | —% | 20579 | —% |
| Agency debentures |  | —% | 1384 | 3.81% | 3942 | 4.43% | 2197 | 4.82% | 7523 | 4.43% |
| **Total securities** <br>**available-for-sale**<br>| 3251 | 5.31% | 277898 | 3.21% | 329302 | 3.38% | 2880027 | 5.19% | 3490478 | 4.75% |
| **Securities held-to-maturity** |  |  |  |  |  |  |  |  |  |  |
| Obligations of states and <br>political subdivisions<br>| 5244 | 1.10% | 3592 | 4.23% | 4621 | 4.35% | 1625 | 7.44% | 15082 | 3.52% |
| Mortgage-backed securities <br>- residential<br>|  | —% | 58 | 2.46% |  | —% | 1037508 | 1.78% | 1037566 | 1.78% |
| Mortgage-backed securities <br>- commercial<br>|  | —% | 139756 | 1.74% | 171232 | 1.83% |  | —% | 310988 | 1.79% |
| **Total securities held-to-**<br>**maturity**<br>| 5244 | 1.10% | 143406 | 0.92% | 175853 | 2.27% | 1039133 | 1.79% | 1363636 | 1.80% |
| **Total AFS and HTM** <br>**debt securities**<br>| $8495 | 2.71% | $421304 | 2.80% | $505155 | 3.32% | $3919160 | 4.13% | $4854114 | 3.92% |

---

(1)Weighted-average yields are calculated based on the contractual coupon, including amortization of premiums and accretion of discounts, weighted

by amortized cost.

**Loans**

The following table details the composition of our LHFI portfolio by dollar amount:

---

| | | |
|:---|:---|:---|
| **(in thousands)** | **September 30, 2025** | **December 31, 2024** |
| Commercial and industrial | $547311 | $410040 |
| Commercial real estate |  |  |
| Multifamily | 5448374 | 2794581 |
| Non-owner occupied | 1864040 | 1657597 |
| Owner occupied | 709239 | 360100 |
| Construction and land development | 535776 | 104430 |
| Residential real estate | 3907101 | 2280963 |
| Auto | 954615 | 1596935 |
| Other consumer | 602339 | 438851 |
| Total LHFI | 14568795 | 9643497 |
| ACL | (168959) | (88558) |
| Total LHFI less ACL | $14399836 | $9554939 |

---

The following table shows the contractual maturity of our loan portfolio by loan type:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** |
|  | | | | | | **Loans due after one year**<br>**by rate characteristic** | **Loans due after one year**<br>**by rate characteristic** |
| **(in thousands)** | <br>**Within one** <br>**year**<br>| <br>**Due after** <br>**one year** <br>**through**<br>**five years**<br>| <br>**Due after**<br>**five through** <br>**fifteen**<br>**years**<br>| <br>**Due after** <br>**fifteen**<br>**years**<br>| <br>**Total** | **Fixed-**<br>**rate**<br>| **Adjustable-**<br>**rate**<br>|
| Commercial and industrial | $216236 | $191271 | $129909 | $9895 | $547311 | $171483 | $159592 |
| Commercial real estate |  |  |  |  |  |  |  |
| Multifamily | 86410 | 166334 | 3098088 | 2097542 | 5448374 | 188960 | 5173004 |
| Non-owner occupied | 389322 | 809843 | 661206 | 3669 | 1864040 | 943065 | 531653 |
| Owner occupied | 43452 | 279254 | 312145 | 74388 | 709239 | 354602 | 311185 |
| Construction and land | 359521 | 137679 | 12080 | 26496 | 535776 | 115186 | 61069 |
| Residential real estate | 7977 | 26023 | 195437 | 3677664 | 3907101 | 2084463 | 1814661 |
| Auto | 53410 | 901154 | 51 |  | 954615 | 901205 |  |
| Other consumer | 551100 | 15086 | 22335 | 13818 | 602339 | 48439 | 2800 |
| Total LHFI | $1707428 | $2526644 | $4431251 | $5903472 | $14568795 | $4807403 | $8053964 |

---

The following table shows the activity in loan balances:

---

| | | |
|:---|:---|:---|
|  | **Nine Months Ended** | **Nine Months Ended** |
| **(in thousands)** | **September 30, 2025** | **September 30, 2024** |
| Loans - beginning of period | $9643497 | $10777756 |
| Originations and advances  | 1092988 | 792810 |
| Purchases | 172296 | 223900 |
| Acquired loans | 5625463 |  |
| Payoffs, paydowns and other  | (1930480) | (1821706) |
| Charge-offs | (34969) | (46034) |
| Transfers to other real estate owned |  | (2282) |
| Loans - end of period | $14568795 | $9924444 |

---

The following table shows loan originations and advances:

---

| | | |
|:---|:---|:---|
|  | **Nine Months Ended** | **Nine Months Ended** |
| **(in thousands)** | **September 30, 2025** | **September 30, 2024** |
| Commercial and industrial | $235338 | $297389 |
| Commercial real estate |  |  |
| Multifamily | 86028 | 181903 |
| Non-owner occupied | 8158 | 33980 |
| Owner occupied | 22649 | 20047 |
| Construction and land development | 114369 | 45815 |
| Residential real estate | 437967 | 97071 |
| Other consumer | 188479 | 116605 |
| Total  | $1092988 | $792810 |

---

**Deposits**

Deposit balances and weighted average rates were as follows for the periods indicated:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **September 30, 2025** | **September 30, 2025** | **December 31, 2024** | **December 31, 2024** |
| **(in thousands)** | **Amount** | **Weighted** <br>**Average Rate**<br>| **Amount** | **Weighted** <br>**Average Rate**<br>|
| Deposits by product: |  |  |  |  |
| Noninterest-bearing demand deposits | $6748479 | —% | $5616116 | —% |
| Interest-bearing: |  |  |  |  |
| Interest-bearing demand deposits | 1733215 | 0.37% | 1435266 | 0.43% |
| Savings | 1398430 | 0.03% | 1216900 | 0.02% |
| Money market | 6185455 | 2.76% | 4703643 | 3.15% |
| Certificates of deposit | 3387240 | 3.43% | 969879 | 2.55% |
| Total interest-bearing deposits | 12704340 | 2.31% | 8325688 | 2.15% |
| Total deposits | 19452819 | 1.51% | 13941804 | 1.29% |
| Uninsured deposits | $6630809 |  | $6153395 |  |

---

The following table presents the schedule of maturities of certificates of deposit as of September 30, 2025:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **(in thousands)** | **Three Months or** <br>**Less**<br>| **Over Three** <br>**Months through** <br>**Six Months**<br>| **Over Six Months** <br>**through Twelve** <br>**Months**<br>| **Over Twelve** <br>**Months**<br>| **Total** |
| Time deposits of $250 thousand or less | $1445798 | 1090021 | $154111 | $48833 | $2738763 |
| Time deposits greater than $250 thousand | 337383 | 271012 | 30774 | 9308 | 648477 |
| Total | $1783181 | $1361033 | $184885 | $58141 | $3387240 |

---

***Credit Risk Management: Delinquent Loans, Nonperforming Assets and Provision for Credit Losses***

**Asset Quality Information and Ratios**

---

| | | |
|:---|:---|:---|
| **(dollars in thousands)** | **September 30,** <br>**2025**<br>| **December 31,** <br>**2024**<br>|
| Delinquent loans held for investment: |  |  |
| 30-89 days past due | $55883 | $91337 |
| 90+ days past due | 38316 | 6082 |
| Total delinquent loans  | $94199 | $97419 |
| Total delinquent loans to loans held for investment | 0.65% | 1.01% |
| Nonperforming assets |  |  |
| Nonaccrual loans | $60586 | $10693 |
| 90+ days past due and accruing | 2653 | 211 |
| Total nonperforming loans  | 63239 | 10904 |
| Foreclosed assets | 1675 | 15600 |
| Total nonperforming assets | $64914 | $26504 |
| Allowance for credit losses on loans and leases | $168959 | $88558 |
| Allowance for credit losses on loans and leases to total loans and leases held for investment | 1.16% | 0.92% |
| Allowance for credit losses on loans and leases to nonaccrual loans | 278.88% | 828.22% |
| Nonaccrual loans to total loans and leases held for investment | 0.42% | 0.11% |
| Nonperforming assets to total assets | 0.29% | 0.16% |

---

At September 30, 2025, total delinquent loans and leases were $94.2 million, compared to $97.4 million at December 31,

2024. The decrease was primarily due to decreases in the auto loan portfolio and loans that improved to current status

during the year. Total delinquent loans and leases as a percentage of total loans and leases declined to 0.65% at

September 30, 2025, as compared to 1.01% at December 31, 2024.

At September 30, 2025, nonperforming assets were $64.9 million, compared to $26.5 million at December 31, 2024. The

increase was mostly due to nonperforming loans and leasesacquired from legacy HomeStreet Bank. Nonperforming assets

as a percentage of total assets increased to 0.29% at September 30, 2025 as compared to 0.16% at December 31, 2024.

Delinquent, nonaccrual and current loans by loan type consisted of the following:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** |
|  | **Past Due and Still Accruing** | **Past Due and Still Accruing** | **Past Due and Still Accruing** | | | | |
| **(in thousands)** | **30-59** <br>**days**<br>| **60-89** <br>**days**<br>| **90 days or**<br>**more**<br>| <br>**Nonaccrual** | <br>**Total past**<br>**due and** <br>**nonaccrual**<br>| <br>**Current** | <br>**Total loans** |
| Commercial and industrial | $1082 | $436 | $— | $23707 | $25225 | $522086 | $547311 |
| Commercial real estate |  |  |  |  |  |  |  |
| Multifamily | 2094 |  |  | 3430 | 5524 | 5442850 | 5448374 |
| Non-owner occupied |  |  |  | 15018 | 15018 | 1849022 | 1864040 |
| Owner occupied |  |  |  | 2854 | 2854 | 706385 | 709239 |
| Construction and land <br>development<br>| 1204 |  |  | 2987 | 4191 | 531585 | 535776 |
| Residential real estate | 11842 | 2568 | 2653 | 7596 | 24659 | 3882442 | 3907101 |
| Auto | 24479 | 6392 |  | 4986 | 35857 | 918758 | 954615 |
| Other consumer | 1055 | 121 |  | 8 | 1184 | 601155 | 602339 |
| Total loans | $41756 | $9517 | $2653 | $60586 | $114512 | $14454283 | $14568795 |
| % | 0.29% | 0.07% | 0.02% | 0.42% | 0.79% | 99.21% | 100.00% |

---

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Past Due and Still Accruing** | **Past Due and Still Accruing** | **Past Due and Still Accruing** | | | | |
| **(in thousands)** | **30-59** <br>**days**<br>| **60-89** <br>**days**<br>| **90 days or**<br>**more**<br>| <br>**Nonaccrual** | <br>**Total past**<br>**due and** <br>**nonaccrual**<br>| <br>**Current** | <br>**Total loans** |
| Commercial and industrial | $1920 | $72 | $211 | $1145 | $3348 | $406692 | $410040 |
| Commercial real estate |  |  |  |  |  |  |  |
| Multifamily | 1940 |  |  |  | 1940 | 2792641 | 2794581 |
| Non-owner occupied | 512 |  |  |  | 512 | 1657085 | 1657597 |
| Owner occupied | 1006 |  |  |  | 1006 | 359094 | 360100 |
| Construction and land <br>development<br>| 5400 |  |  | 441 | 5841 | 98589 | 104430 |
| Residential real estate | 13020 | 406 |  | 2854 | 16280 | 2264683 | 2280963 |
| Auto | 53073 | 11781 |  | 6252 | 71106 | 1525829 | 1596935 |
| Other consumer | 361 | 214 |  | 1 | 576 | 438275 | 438851 |
| Total loans | $77232 | $12473 | $211 | $10693 | $100609 | $9542888 | $9643497 |
| % | 0.80% | 0.13% | 0.00% | 0.11% | 1.04% | 98.96% | 100.00% |

---

Management considers the current level of the allowance for credit losses on loans and leases to be appropriate to cover

estimated lifetime losses within our LHFI portfolio. For additional information on the Company's allowance for credit

losses, refer to Note 4, "Loans and Credit Quality."

The following table presents the amount of allowance for credit losses on loans and leases by product type, as well as the

percentage of each respective portfolio's loan balance to total loans:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **September 30, 2025** | **September 30, 2025** | **December 31, 2024** | **December 31, 2024** |
| **(in thousands)** | **Balance** | **Loan balance %** <br>**to total loans**<br>| **Balance** | **Loan balance %** <br>**to total loans**<br>|
| Commercial and industrial | $23244 | 3.8% | $4869 | 4.2% |
| Commercial real estate | 101063 | 58.8% | 35097 | 51.0% |
| Residential real estate | 22193 | 26.8% | 4656 | 23.6% |
| Auto | 19733 | 6.5% | 41282 | 16.6% |
| Other consumer | 2726 | 4.1% | 2654 | 4.6% |
| Total ACL  | $168959 | 100.0% | $88558 | 100.0% |

---

As of September 30, 2025, the historical expected loss rates decreased when compared to December 31, 2024 due to

product mix and composition changes. During the quarter and nine months ended September 30, 2025, the qualitative

factors increased due to concentration risk, future economic conditions and interest rate and maturity repricing risks.

The following table presents net charge-offs for our loan portfolio for the dates indicated:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Quarter Ended September 30,** | **Quarter Ended September 30,** | **Quarter Ended September 30,** | **Quarter Ended September 30,** | **Quarter Ended September 30,** | **Quarter Ended September 30,** |
|  | **2025** | **2025** | **2025** | **2024** | **2024** | **2024** |
| **(in thousands)** | **Net loan** <br>**charge-offs** <br>**(recoveries)**<br>| **Average** <br>**balance**<br>| **%** | **Net loan** <br>**charge-offs** <br>**(recoveries)**<br>| **Average** <br>**balance**<br>| **%** |
| Commercial and industrial | $446 | $369273 | 0.12% | $301 | $443706 | 0.07% |
| Commercial real estate | 250 | 6030429 | 0.00% |  | 4983393 | 0.00% |
| Residential real estate | 9 | 2933403 | 0.00% |  | 2203008 | 0.00% |
| Auto | 7688 | 1046855 | 0.73% | 10293 | 1973816 | 0.52% |
| Other consumer | 534 | 567318 | 0.09% | 676 | 428043 | 0.16% |
| Total | $8927 | $10947278 | 0.08% | $11270 | $10031966 | 0.11% |
|  | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
|  | **2025** | **2025** | **2025** | **2024** | **2024** | **2024** |
| **(in thousands)** | **Net loan** <br>**charge-offs** <br>**(recoveries)**<br>| **Average** <br>**balance**<br>| **%** | **Net loan** <br>**charge-offs** <br>**(recoveries)**<br>| **Average** <br>**balance**<br>| **%** |
| Commercial and industrial | $412 | $359971 | 0.11% | $(419) | $501004 | (0.08)% |
| Commercial real estate | 250 | 5269715 | 0.00% |  | 5000729 | 0.00% |
| Residential real estate | 9 | 2542582 | 0.00% | 10 | 2184115 | 0.00% |
| Auto | 23694 | 1257736 | 1.88% | 31351 | 2259320 | 1.39% |
| Other consumer | 1391 | 500528 | 0.28% | 2039 | 366708 | 0.56% |
| Total | $25756 | $9930532 | 0.26% | $32981 | $10311876 | 0.32% |

---

**Liquidity and Sources of Funds**

Liquidity risk management is primarily intended to ensure we are able to maintain sources of cash to adequately fund

operations and meet our obligations, including demands from depositors, draws on lines of credit and paying any creditors,

on a timely and cost-effective basis, in various market conditions. Our liquidity profile is influenced by changes in market

conditions, the composition of the balance sheet and risk tolerance levels. Mechanics has established liquidity guidelines

and operating plans that detail the sources and uses of cash and liquidity.

Mechanics' primary sources of liquidity include deposits, loan repayments and investment securities payments, both

principal and interest, borrowings, and proceeds from the sale of loans and investment securities. Borrowings may include

advances from the FHLB, borrowings from the Federal Reserve, federal funds purchased and borrowings from other

financial institutions. While scheduled principal repayments on loans and investment securities are a relatively predictable

source of funds, deposit inflows and outflows and prepayments of loans and investment securities are greatly influenced by

interest rates, economic conditions and competition.

Mechanics' contractual cash flow obligations include the maturity of certificates of deposit, short-term and long-term

borrowings, interest on certificates of deposit and borrowings, operating leases and fees for information technology related

services and professional services. Obligations for certificates of deposit are typically satisfied through excess cash reserve

balances, the renewal of these instruments or the generation of new deposits. Interest payments and obligations related to

leases and services are typically met by cash generated from our operations.

At September 30, 2025, Mechanics had available borrowing capacity of $3.8 billion from the FHLB, $4.0 billion from the

FRBSF and $5.3 billion under borrowing lines established with other financial institutions. We believe that our current

unrestricted cash and cash equivalents, cash flows from operations and borrowing capacity will be sufficient to meet our

liquidity needs for at least the next 12 months. We are currently not aware of any other trends or demands, commitments,

events or uncertainties that will result in or that are reasonably likely to result in our liquidity increasing or decreasing in

any material way that will impact our liquidity needs during or beyond the next 12 months.

***Cash Flows***

For the nine months ended September 30, 2025, cash and cash equivalents increased by $442.9 million compared to a

decrease of $279.4 millionduring the nine months ended September 30, 2024. As a banking institution, Mechanics has

extensive access to liquidity. As excess liquidity can reduce Mechanics' earnings and returns, Mechanics manages its cash

positions to minimize the level of excess liquidity and does not attempt to maximize the level of cash and cash equivalents.

The following discussion highlights the major activities and transactions that affected our cash flows during these periods.

*Cash flows from operating activities*

Mechanics' operating assets and liabilities are used to support our lending activities, including the origination and sale of

mortgage loans. For the nine months ended September 30, 2025, net cash of $79.7 million was provided by operating

activities from ongoing bank operations. For the nine months ended September 30, 2024, net cash of $217.4 million was

provided by operating activities primarily due to ongoing bank operations.

*Cash flows from investing activities*

Mechanics' investing activities are primarily related to investment securities and LHFI. For the nine months ended

September 30, 2025, net cash of $1.6 billion was provided by investing activities primarily from AFS investment security

sales, maturities and calls, net loan originations and principal collections, and cash acquired in the Merger, partially offset

by AFS investment security purchases. For the nine months ended September 30, 2024, net cash of $555.6 million was

provided by investing activities primarily from the sale of AFS investment securities and net loan originations and principal

collections, partially offset by AFS investment security purchases.

*Cash flows from financing activities*

Mechanics' financing activities are primarily related to deposits, net proceeds from borrowings and equity transactions. For

the nine months ended September 30, 2025, net cash of $1.2 billion was used by financing activities, due to repayment of

FHLB advances acquired in the Merger and a decrease in deposits. For the nine months ended September 30, 2024, net

cash of $1.1 billion was used in financing activities due to a net decrease in bank term funding, repayment of subordinated

debt, a decrease in deposits and cash dividends paid.

**Off-Balance Sheet Arrangements**

In the normal course of business, we are a party to financial instruments that carry off-balance sheet risk. These financial

instruments (which include commitments to originate loans and commitments to purchase loans) include potential credit

risk in excess of the amount recognized in the accompanying consolidated financial statements. These transactions are

designed to (1) meet the financial needs of our customers, (2) manage our credit, market or liquidity risks, (3) diversify our

funding sources and/or (4) optimize capital.

These commitments include the following:

---

| | | |
|:---|:---|:---|
| **(in thousands)** | **September 30, 2025** | **December 31, 2024** |
| Unused consumer portfolio lines | $844593 | $224812 |
| Commercial portfolio lines <sup>(1)</sup> | 1413844 | 906123 |
| Commitments to fund loans | 34299 | 2765 |
| Total  | $2292736 | $1133700 |
| Standby letters of credit | $26622 | $19227 |

---

(1)Within the commercial portfolio lines, undistributed construction loan proceeds, where the Company has an obligation to advance funds for

construction progress payments were $395.9 million and $129.9 million at September 30, 2025 and December 31, 2024, respectively.

**Capital Resources and Dividend Policy**

The capital rules applicable to United States based bank holding companies and federally insured depository institutions

(Capital Rules) require Mechanics to meet specific capital adequacy requirements that, for the most part, involve

quantitative measures, primarily in terms of the ratios of their capital to their assets, liabilities, and certain off-balance sheet

items, calculated under regulatory accounting practices. In addition, prompt corrective action regulations place a federally

insured depository institution, such as Mechanics, into one of five capital categories on the basis of its capital ratios: (i)

well capitalized; (ii) adequately capitalized; (iii) undercapitalized; (iv) significantly undercapitalized; or (v) critically

undercapitalized. A depository institution's primary federal regulatory agency may determine that, based on certain

qualitative assessments, the depository institution should be assigned to a lower capital category than the one indicated by

its capital ratios. At each successive lower capital category, a depository institution is subject to greater operating

restrictions and increased regulatory supervision by its federal bank regulatory agency.

The following tables present the regulatory capital amounts and ratios (inclusive of capital 2.5% conservation buffer) for

Mechanics Bancorp and Mechanics Bank as of the dates indicated:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **At September 30, 2025** | **At September 30, 2025** | **At September 30, 2025** | **At September 30, 2025** | **At September 30, 2025** | **At September 30, 2025** |
|  | **Actual** | **Actual** | **For Minimum Capital**<br>**Adequacy Purposes** | **For Minimum Capital**<br>**Adequacy Purposes** | **To Be Categorized As**<br>**"Well Capitalized"**  | **To Be Categorized As**<br>**"Well Capitalized"**  |
| **(dollars in thousands)** | **Amount** | **Ratio** | **Amount** | **Ratio** | **Amount** | **Ratio** |
| **Mechanics Bancorp** <sup>(1)</sup> |  |  |  |  |  |  |
| Tier 1 leverage capital (to average assets) | $1828256 | 10.34% | $706978 | 4.0% | $883723 | 5.0% |
| Common equity Tier 1 capital (to risk-<br>weighted assets)<br>| 1828256 | 13.42% | 953979 | 7.0% | 885837 | 6.5% |
| Tier 1 risk-based capital (to risk-weighted <br>assets)<br>| 1828256 | 13.42% | 1158403 | 8.5% | 1090261 | 8.0% |
| Total risk-based capital (to risk-weighted <br>assets)<br>| 2122338 | 15.57% | 1430968 | 10.5% | 1362827 | 10.0% |
| **Mechanics Bank** <sup>(1)</sup> |  |  |  |  |  |  |
| Tier 1 leverage capital (to average assets) | $2027011 | 11.46% | $707398 | 4.0% | $884247 | 5.0% |
| Common equity Tier 1 capital (to risk-<br>weighted assets)<br>| 2027011 | 14.87% | 953893 | 7.0% | 885758 | 6.5% |
| Tier 1 risk-based capital (to risk-weighted <br>assets)<br>| 2027011 | 14.87% | 1158299 | 8.5% | 1090164 | 8.0% |
| Total risk-based capital (to risk-weighted <br>assets)<br>| 2197436 | 16.13% | 1430840 | 10.5% | 1362705 | 10.0% |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **At December 31, 2024** | **At December 31, 2024** | **At December 31, 2024** | **At December 31, 2024** | **At December 31, 2024** | **At December 31, 2024** |
|  | **Actual** | **Actual** | **For Minimum Capital**<br>**Adequacy Purposes** | **For Minimum Capital**<br>**Adequacy Purposes** | **To Be Categorized As**<br>**"Well Capitalized"** | **To Be Categorized As**<br>**"Well Capitalized"** |
| **(dollars in thousands)** | **Amount** | **Ratio** | **Amount** | **Ratio** | **Amount** | **Ratio** |
| **Mechanics Bank** <sup>(1)</sup> |  |  |  |  |  |  |
| Tier 1 leverage capital (to average assets)  | $1509029 | 9.66% | $624943 | 4.0% | $781179 | 5.0% |
| Common equity Tier 1 capital (to risk-<br>weighted assets)<br>| 1509029 | 16.14% | 654297 | 7.0% | 607562 | 6.5% |
| Tier 1 risk-based capital (to risk-weighted <br>assets)<br>| 1509029 | 16.14% | 794504 | 8.5% | 747769 | 8.0% |
| Total risk-based capital (to risk-weighted <br>assets)<br>| 1601953 | 17.14% | 981446 | 10.5% | 934711 | 10.0% |

---

(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.

As of the dates set forth in the above table, Mechanics Bancorp exceeded the minimum required capital ratios applicable to

it and Mechanics Bank's capital ratios exceeded the minimums necessary to qualify as a well-capitalized depository

institution under the prompt corrective action regulations. In addition to the minimum capital ratios, Mechanics Bancorp

and Mechanics Bank are required to maintain a capital conservation buffer consisting of additional Common Equity Tier 1

Capital of more than 2.5% above the required minimum levels in order to avoid limitations on paying dividends, engaging

in share repurchases, and paying discretionary bonuses. Mechanics maintained capital ratios necessary to satisfy the capital

conservation buffer requirements as of the dates indicated. At September 30, 2025, the capital conservation buffer for

Mechanics Bancorp and Mechanics Bank was 7.42% and 8.13%, respectively.

There were no cash dividends in the first nine months of 2025. The amount and declaration of future cash dividends are

subject to approval by our Board of Directors and certain statutory requirements and regulatory restrictions.

We had no material commitments for capital expenditures as of September 30, 2025.

**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, 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 table presents the calculations of our non-GAAP financial measures used in this Form 10-Q.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **(in thousands, except shares and per share data)** |  | **Quarter Ended** | **Quarter Ended** | **Nine Months Ended** | **Nine Months Ended** |
| Return on Average Equity and Return on Average <br>Tangible Equity<br>| Ref. | **September 30,** <br>**2025**<br>| **June 30,**<br>**2025**<br>| **September 30,** <br>**2025**<br>| **September 30,** <br>**2024**<br>|
| Net income (loss) | (a) | $55161 | $42485 | $141437 | $(22664) |
| Add: intangibles amortization, net of tax <sup>(1)</sup> |  | 3040 | 1906 | 6904 | 7654 |
| Net income (loss), excluding the impact of intangible <br>amortization, net of tax<br>| (b) | $58201 | $44391 | $148341 | $(15010) |
| Average shareholders' equity | (c) | $2541917 | $2384182 | $2421048 | $2241194 |
| Less: average goodwill and other intangible assets |  | 912679 | 878190 | 890677 | 890120 |
| Average tangible shareholders' equity | (d) | $1629238 | $1505992 | $1530371 | $1351074 |
| Return on average equity<sup>(2)</sup> | (a) / (c) | 8.61% | 7.15% | 7.81% | (1.35)% |
| Return on average tangible equity (non-GAAP)<sup>(2)</sup> | (b) / (d) | 14.17% | 11.82% | 12.96% | (1.48)% |
| <sup>(1)</sup> Effective tax rate of 28.5% used in computations above. | <sup>(1)</sup> Effective tax rate of 28.5% used in computations above. |  |  |  |  |
| <sup>(2)</sup> Ratios are annualized. |  |  |  |  |  |
|  |  | **Quarter Ended** | **Quarter Ended** | **Nine Months Ended** | **Nine Months Ended** |
| Efficiency Ratio | Ref. | **September 30,** <br>**2025**<br>| **June 30,**<br>**2025**<br>| **September 30,** <br>**2025**<br>| **September 30,** <br>**2024**<br>|
| Noninterest expense | (e) | $163329 | $91080 | $340047 | $261410 |
| Less: intangibles amortization |  | 4251 | 2666 | 9655 | 10705 |
| Noninterest expense, excluding the impact of intangible <br>amortization<br>| (f) | 159078 | 88414 | 330392 | 250705 |
| Net interest income | (g) | 145670 | 130129 | 404253 | 390769 |
| Noninterest income (loss) | (h) | 109778 | 19625 | 144384 | (157655) |
| Efficiency ratio | (e) / (g+h) | 63.9% | 60.8% | 62.0% | 112.1% |
| Efficiency ratio (non-GAAP) | (f) / (g+h) | 62.3% | 59.0% | 60.2% | 107.6% |

---

---

| | | | |
|:---|:---|:---|:---|
|  |  | **As of** | **As of** |
| Book Value per Share and Tangible Book Value per <br>Share<br>| Ref. | **September 30,** <br>**2025**<br>| **December 31,** <br>**2024**<br>|
| Total shareholders' equity | (i) | $2774134 | $2301868 |
| Less: goodwill and other intangible assets |  | 986569 | 882049 |
| Total tangible shareholders' equity | (j) | $1787565 | $1419819 |
| Common shares outstanding - Class A and B | (k) | 221203135 | 201999328 |
| Common shares outstanding - Class A |  | 220088687 | 200884880 |
| Common shares outstanding - Class B adjusted |  | 11144480 | 11144480 |
| Common shares outstanding at period end - adjusted<sup>(3)</sup> | (l) | 231233167 | 212029360 |
| Book value per share | (i) / (k) | $12.54 | $11.40 |
| Tangible book value per share (non-GAAP) | (j) / (l) | $7.73 | $6.70 |
| <sup>(3)</sup> 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 <br>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 <br>the Company or the declaration of dividends or distributions by the Company.  | <sup>(3)</sup> 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 <br>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 <br>the Company or the declaration of dividends or distributions by the Company.  | <sup>(3)</sup> 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 <br>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 <br>the Company or the declaration of dividends or distributions by the Company.  | <sup>(3)</sup> 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 <br>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 <br>the Company or the declaration of dividends or distributions by the Company.  |
|  |  | **As of** | **As of** |
| Common Equity Ratio and Tangible Common Equity <br>Ratio<br>| Ref. | **September 30,** <br>**2025**<br>| **December 31,** <br>**2024**<br>|
| Total shareholders' equity | (m) | $2774134 | $2301868 |
| Less: goodwill and other intangible assets |  | 986569 | 882049 |
| Total tangible shareholders' equity | (n) | $1787565 | $1419819 |
| Total assets | (o) | $22708820 | $16490112 |
| Less: goodwill and other intangible assets |  | 986569 | 882049 |
| Total tangible assets | (p) | $21722251 | $15608063 |
| Common equity ratio | (m) / (o) | 12.22% | 13.96% |
| Tangible common equity ratio (non-GAAP) | (n) / (p) | 8.23% | 9.10% |

---

**ITEM 3QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK** 

**Market Risk Management**

The primary objective of the following information is to provide forward-looking quantitative and qualitative information

about our potential exposure to market risks. Market risk is defined as the sensitivity of income, fair value measurements

and capital to changes in interest rates, foreign currency exchange rates, commodity prices and other relevant market rates

or prices. The primary market risks that we are exposed to are price and interest rate risks. Price risk is defined as the risk

to current or anticipated earnings or capital arising from changes in the value of either assets or liabilities that are entered

into as part of distributing or managing risk. Interest rate risk is defined as risk to current or anticipated earnings or capital

arising from movements in interest rates. This forward-looking information provides an indicator of how we view and

manage our ongoing market risk exposures.

Mechanics is engaged primarily in the business of investing funds obtained from deposits and borrowings in interest

earning loans and investments, and our primary component of market risk is sensitivity to changes in interest rates.

Consequently, our earnings depend to a significant extent on our net interest income, which is the difference between

interest income on loans and investments and our interest expense on deposits and borrowings. To the extent that our

interest-bearing liabilities do not reprice or mature at the same time as our interest-bearing assets, we are subject to interest

rate risk and corresponding fluctuations in net interest income.

For the Company, price and interest rate risks arise from the financial instruments and positions we hold. This includes

loans, MSRs, investment securities, deposits, borrowings, long-term debt and derivative financial instruments. Due to the

nature of our current operations, we are not subject to foreign currency exchange or commodity price risk. Our real estate

loan portfolio is subject to risks associated with the local economies of our various markets, in particular, the regional

economy of the western United States, including Hawaii.

The spread between the yield on interest-earning assets and the cost of interest-bearing liabilities and the relative dollar

amounts of these assets and liabilities are the principal items affecting net interest income. Changes in net interest rates

(interest rate risk) are influenced to a significant degree by the repricing characteristics of assets and liabilities (timing

risk), the relationship between various rates (basis risk), customer options (option risk) and changes in the shape of the

yield curve (time-sensitive risk). We manage the available-for-sale investment securities portfolio while maintaining a

balance between risk and return. The Company's funding strategy is to grow core deposits while we efficiently supplement

using wholesale borrowings.

We estimate the sensitivity of our net interest income to changes in market interest rates using an interest rate simulation

model that includes assumptions related to the level of balance sheet growth, deposit repricing characteristics and the rate

of prepayments for multiple interest rate change scenarios. Interest rate sensitivity depends on certain repricing

characteristics in our interest-earnings assets and interest-bearing liabilities, including the maturity structure of assets and

liabilities and their repricing characteristics during the periods of changes in market interest rates. Effective interest rate

risk management seeks to ensure both assets and liabilities respond to changes in interest rates within an acceptable

timeframe, minimizing the impact of interest rate changes on net interest income and capital. Interest rate sensitivity is

measured as the difference between the volume of assets and liabilities, at a point in time, which are subject to repricing at

various time horizons, known as interest rate sensitivity gaps.

The following table presents sensitivity gaps for these different intervals:

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **At September 30, 2025** | **At September 30, 2025** | **At September 30, 2025** | **At September 30, 2025** | **At September 30, 2025** | **At September 30, 2025** | **At September 30, 2025** | **At September 30, 2025** |
| **(in thousands)** | **3 Mos.**<br>**or Less**<br>| **More Than**<br>**3 Mos.**<br>**to 6 Mos.**<br>| **More** <br>**Than**<br>**6 Mos.**<br>**to 12 Mos.**<br>| **More Than**<br>**12 Mos.**<br>**to 3 Yrs.**<br>| **More Than**<br>**3 Yrs.**<br>**to 5 Yrs.**<br>| **More Than**<br>**5 to 15 Yrs.**<br>| **More** <br>**Than**<br>**15 Yrs.**<br>| **Total** |
| Interest-earning assets: |  |  |  |  |  |  |  |  |
| Cash & cash equivalents | $1442647 | $— | $— | $— | $— | $— | $— | $1442647 |
| Investment securities <sup>(1)</sup> | 523244 | 131110 | 262814 | 864931 | 964292 | 1933593 | 224487 | 4904471 |
| Loans HFS | 54985 |  |  |  |  |  |  | 54985 |
| Loans HFI <sup>(1) ,(2)</sup> | 3307238 | 812409 | 1379009 | 4237002 | 2410506 | 2288897 | 133734 | 14568795 |
| FHLB stock and other <br>investments<br>|  |  |  |  |  |  | 148514 | 148514 |
| Total rate sensitive <br>assets<br>| 5328114 | 943519 | 1641823 | 5101933 | 3374798 | 4222490 | 506735 | 21119412 |
| Interest-bearing liabilities: |  |  |  |  |  |  |  |  |
| Demand deposits <sup>(2), (3)</sup> | 389171 |  |  |  |  | 8092523 |  | 8481694 |
| Savings <sup>(2)</sup> | 677343 |  |  |  |  | 721087 |  | 1398430 |
| Money market accounts <sup>(2)</sup> | 4788767 |  |  |  |  | 1396688 |  | 6185455 |
| Certificates of deposit | 1774918 | 1355658 | 198523 | 47111 | 9531 | 1467 | 32 | 3387240 |
| Long-term debt <sup>(4)</sup> | 125515 | 64608 |  |  |  |  |  | 190123 |
| Total rate sensitive <br>liabilities<br>| $7755714 | $1420266 | $198523 | $47111 | $9531 | $10211765 | $32 | $19642942 |
| Interest sensitivity gap | (2427600) | (476747) | 1443300 | 5054822 | 3365267 | (5989275) | 506703 |  |
| Cumulative interest <br>sensitivity gap<br>| $(2427600) | $(2904347) | $(1461047) | $3593775 | $6959042 | $969767 | $1476470 |  |
| Cumulative ratio of interest-<br>earning assets to interest-<br>bearing liabilities<br>| 69% | 68% | 84% | 138% | 174% | 105% | 108% |  |
| Ratio of interest sensitivity <br>gap to total assets<br>| (11)% | (2)% | 6% | 22% | 15% | (26)% | 2% |  |
| Ratio of cumulative gap to <br>total assets<br>| (11)% | (13)% | (6)% | 16% | 31% | 4% | 7% |  |

---

(1)Based on contractual maturities, repricing dates and forecasted principal payments assuming normal amortization and, where applicable,

prepayments.

(2)Interest-bearing deposits with a rate less than 25 basis points are included in the More than 5 to 15 Years category.

(3)Non-interest bearing demand accounts are included in the More than 5 to 15 Years category based on the projected weighted average life of those

deposits.

(4)Based on contractual maturity.

The negative gap in the interest rate analysis indicates that net interest income would decline if rates increase. Because of

the inherent limitations in the interest rate gap analysis, Mechanics uses multiple interest rate risk measurement approaches.

Mechanics runs interest rate simulations to the existing repricing conditions to rising and falling interest rates in increments

and decrements of 100 basis points to determine the effect on net interest income changes for the next twelve months. In

addition, Mechanics also measures the effects that changes in interest rates on the economic value of equity by discounting

future cash flows. We believe that the simulation analysis presents a more accurate picture than the gap analysis. Our

simulation analysis recognizes that deposit products may not react to changes in interest rates as quickly or with the same

magnitude as earning assets contractually tied to a market rate index. The sensitivity to changes in market rates varies

across deposit products.

The estimated impact on our net interest income over a time horizon of one year and the change in net portfolio value as of

September 30, 2025 are provided in the table below. For the scenarios shown, the interest rate simulation assumes an

instantaneous and parallel shift in market interest rates and no change in the composition or size of the balance sheet.

---

| | | |
|:---|:---|:---|
|  | **At September 30, 2025** | **At September 30, 2025** |
| **Change in Interest Rates**<br>**(basis points)** | **Percentage Change** | **Percentage Change** |
| **Change in Interest Rates**<br>**(basis points)** | **Net Interest** <br>**Income** <sup>(1)</sup><br>| **Net Portfolio** <br>**Value** <sup>(2)</sup><br>|
| -300 | (0.7)% | (1.5)% |
| -200 | (0.7)% | 1.4% |
| -100 | (0.2)% | 1.8% |
| +100 | (0.5)% | (4.6)% |
| +200 | (1.4)% | (11.9)% |
| +300 | (2.5)% | (19.8)% |

---

(1)This percentage change represents the impact to net interest income for a one-year period, assuming there is no change in the structure of the balance

sheet.

(2)This percentage change represents the impact to the net present value of equity, assuming there is no change in the structure of the balance sheet.

The projected changes in the table above were in compliance with established internal policy guidelines and are based on

numerous assumptions. The timing and magnitude of future interest rate movements, along with changes to the balance

sheet composition, may impact projected changes in net interest income, but may not necessarily reflect the manner in

which actual cash flows, yields and costs respond to changes in market interest rates. We continue to evaluate the interest

rate risk position and may reposition the banking segment's balance sheet in the future to better align with management's

target rate risk position. The impact of rate movements will change with the shape of the yield curve, including any

changes in steepness or flatness and inversions at any points on the yield curve. Since the assumptions used relative to

changes in interest rates are uncertain, the simulation analysis may not be indicative of actual results, particularly in times

of stress and uncertainty. In addition, this analysis does not consider actions that management might employ in the future in

response to changes in interest rates, as well as changes in earning asset and costing liability balances.

**Current Banking Environment**

Market conditions and external factors may unpredictably impact the competitive landscape for deposits in the banking

industry. Additionally, the higher interest rate environment has increased competition for liquidity and the premium at

which liquidity is available to meet funding needs. Reliance on secondary funding sources could increase the Company's

overall cost of funding and reduce net interest income. As of September 30, 2025, the Company had available liquidity of

$5.3 billion which is equal to 27% of its total deposits and the level of uninsured deposits was 34%of total deposits. The

Company believes it has sufficient liquidity to meet its current needs.

**ITEM 4CONTROLS AND PROCEDURES**

**Evaluation of Disclosure Controls and Procedures**

The Company carried out an evaluation, with the participation of our management and under the supervision of our Chief

Executive Officer and our Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as

defined under Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act) as of the end of the period covered by this

report. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure

controls and procedures were effective as of September 30, 2025.

**Changes in Internal Control over Financial Reporting**

As required by Rule 13a-15(d), our management, including our Chief Executive Officer and Chief Financial Officer, also

conducted an evaluation of our internal control over financial reporting to determine whether any changes occurred during

the quarter ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, our

internal control over financial reporting.

The Merger, which was completed on September 2, 2025, has had a material impact on the financial position, results of

operations, and cash flows of the combined company from the date of acquisition through September 30, 2025. The

business combination also resulted in material changes in the combined company's internal controls over financial

reporting. The Company is in the process of designing and integrating policies, processes, operations, technology, and

other components of internal controls over financial reporting of the combined company. Management will monitor the

implementation of new controls and test the operating effectiveness when instances are available in future periods.

**PART II - OTHER INFORMATION**

**ITEM 1LEGAL PROCEEDINGS**

Because the nature of our business involves the collection of numerous accounts, the validity of liens and compliance with

various state and federal lending laws, we are subject to various legal proceedings in the ordinary course of our business

related to foreclosures, bankruptcies, condemnation and quiet title actions and alleged statutory and regulatory violations.

We are also subject to other legal proceedings in the ordinary course of business. There are currently no matters that, in the

opinion of management, would have a material adverse effect on our consolidated financial position, results of operation or

liquidity, or for which there would be a reasonable possibility of such a loss based on information known at this time.

However, in the event of unexpected future developments, it is reasonably possible that an adverse outcome in any matter

could be material to our business, consolidated financial position, results of operations or cash flows for any particular

reporting period of occurrence.

**ITEM 1ARISK FACTORS**

Refer to Exhibit 99.2 to the Company's Form 8-K filed on September 2, 2025 for a discussion of factors that could

materially and adversely affect our business, financial condition, liquidity, results of operations and capital position. There

have been no material changes in our risk factors from those described in this report.

**ITEM 2UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS**

**Sales of Unregistered Securities**

Furnished in Item 3.02 of the Company's Form 8-K filed on September 2, 2025.

**ITEM 3DEFAULTS UPON SENIOR SECURITIES**

Notapplicable.

**ITEM 4MINE SAFETY DISCLOSURES**

Notapplicable.

**ITEM 5OTHER INFORMATION**

During the quarter ended September 30, 2025, none of our directors or officers informed us of the adoption, modification,

or termination of a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as those terms are

defined in Regulation S-K, Item 408.

**ITEM 6EXHIBITS**

**EXHIBIT INDEX**

---

| | |
|:---|:---|
| Exhibit<br>Number<br>| Description |
| 10.1 \* | <u>[Bank Services Agreement](ex101bankservicesagreement.htm)</u> |
| 10.2 \* | <u>[First Amendment to Bank Services Agreement](ex102bankservicesagreement.htm)</u> |
| 31.1 \* | <u>[Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.](mchb-ex31110qq32025.htm)</u> |
| 31.2 \* | <u>[Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.](mchb-ex31210qq32025.htm)</u> |
| 32.1 <sup>(1) \*</sup> | <u>[Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to](mchb-ex32110qq32025.htm)</u><br><u>[Section 906 of the Sarbanes-Oxley Act of 2002.](mchb-ex32110qq32025.htm)</u><br>|
| 32.2 <sup>(1) \*</sup> | <u>[Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to](mchb-ex32210qq32025.htm)</u><br><u>[Section 906 of the Sarbanes-Oxley Act of 2002.](mchb-ex32210qq32025.htm)</u><br>|
| 101 INS | Inline XBRL Instance Document |
| 101.SCH \* | Inline XBRL Taxonomy Extension Schema Document |
| 101.CAL \* | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF \* | Inline XBRL Taxonomy Extension Label Linkbase Document |
| 101.LAB \* | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| 101.PRE \* | Inline XBRL Taxonomy Extension Definitions Linkbase Document |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |

---

\*Filed herewith.

(1)This exhibit shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, or

otherwise subject to the liability of that Section. Such exhibit shall not be deemed incorporated into any filing under

the Securities Act of 1933 or the Securities Exchange Act of 1934.

(2)The agreements and other documents filed as exhibits to this report are not intended to provide factual information or

other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should

not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or

other documents were made solely within the specific context of the relevant agreement or document and may not

describe the actual state of affairs as of the date they were made or at any other time.

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed

on its behalf by the undersigned, thereunto duly authorized on November 17, 2025.

---

| | |
|:---|:---|
| Mechanics Bancorp | Mechanics Bancorp |
| By: | /s/ C.J. Johnson |
|  | C.J. Johnson |
|  | President and Chief Executive Officer |
|  | (Principal Executive Officer) |

---

---

| | |
|:---|:---|
| Mechanics Bancorp | Mechanics Bancorp |
| By: | /s/ Nathan Duda |
|  | Nathan Duda |
|  | Executive Vice President and Chief Financial Officer |
|  | (Principal Financial Officer) |

---

## Exhibit 10.1

**Schedules Omitted Pursuant to Rule 601(b)(10)(iv)&nbsp;&nbsp;&nbsp;&nbsp;Exhibit 10.1**

**<u>BANK SERVICES AGREEMENT</u>**

<br> THIS BANK SERVICES AGREEMENT (this "<u>Agreement</u>"), effective as of September 1, 2019 (the "<u>Effective Date</u>"), is entered into by and between **GJF Financial Management II, LLC**, a Delaware limited liability company (the "<u>Service Provider</u>"), and **Mechanics Bank**, a California banking corporation (the "<u>Service Recipient</u>").

**WHEREAS**, the Service Provider and Service Recipient are affiliates (as such term is defined in Sections 23A of the Federal Reserve Act) and subject to the applicable affiliate transaction laws, rules and regulations, including Sections 23A and 23B of the Federal Reserve Act;

**WHEREAS**, affiliates of the Service Provider own approximately 80% of the capital stock of Service Recipient;

**WHEREAS**, the parties hereto believe that Service Provider will provide Service Recipient with certain expertise and efficiencies through the services provided by Service Provider to Service Recipient;

**WHEREAS**, the Service Provider desires to provide, from time to time, various services to the Service Recipient, and the Service Recipient desires to purchase such services in compliance with Sections 23A and 23B of the Federal Reserve Act (where applicable) and applicable banking regulations and policies; and

**WHEREAS**, the parties hereto are aware of the current written guidance provided by applicable bank regulatory authorities with respect to the payment of management and related fees among affiliates and the management of third-party risk and intend for this Agreement to comply with such guidance.

&nbsp;&nbsp;&nbsp;&nbsp;**NOW, THEREFORE**, in consideration of the mutual promises, covenants and conditions set forth in this Agreement, the receipt and sufficiency of which are hereby acknowledged, the parties hereto mutually agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.<u>Nature and Scope of Services</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Subject to the terms and conditions of this Agreement, the Service Recipient hereby engages the Service Provider to perform the respective services set forth on <u>Schedule A</u> to this Agreement (the "<u>Services</u>"), and the Service Provider hereby accepts such engagement and agrees to render and perform such Services for the Service Recipient on its behalf. From time to time, the Services to be provided to the Service Recipient may be modified, in accordance with Section 10, to include other services or to eliminate some or all of the Services provided to the Service Recipient, and a corresponding modification to the Service Fee (as defined below) may be made, by the mutual written agreement of the Service Provider and the Service Recipient.

MECHANICS BANK – BANK SERVICES AGREEMENT

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)The Service Provider shall use commercially reasonable efforts to ensure that the Services to be performed by the Service Provider shall be performed by persons of similar position, background and experience as the Service Provider for companies engaged in a business similar to that conducted by the Service Recipient.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)The Service Recipient agrees to use its commercially reasonable efforts to assist the Service Provider in performing the Services under this Agreement. Without limiting the generality of the foregoing, the Service Recipient agrees to provide all information, to execute any certificates, instruments or other documents and to take such other action that is reasonably requested by the Service Provider in connection with the provision of the Services.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.<u>Fees and Expense Reimbursement</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)In consideration for the Service Provider's performance of the Services, the Service Recipient shall pay to the Service Provider an annual fee in the amount set forth on <u>Schedule B</u> (the "<u>Service Fee</u>") for each calendar year during the term of this Agreement, payable in equal quarterly installments as set forth on <u>Schedule B</u> (the "<u>Quarterly Amount</u>") within thirty (30) days following the last day of each calendar quarter during the term of this Agreement; *provided*, *however*, that for the quarter ending September 30, 2019, such Service Fee shall equal the pro rata portion of the Quarterly Amount for any partial calendar quarter. Notwithstanding the foregoing, in the event that this Agreement is terminated for any reason during any calendar year, or all of the Services for the Service Recipient is terminated during any calendar year prior to the termination of this Agreement, then the Service Recipient shall only pay to the Service Provider with respect to such calendar year the pro rata portion of the Service Fee otherwise payable with respect to such calendar year based upon the number of days during such calendar year that elapsed prior to the date of termination of this Agreement or termination of the Services, as the case may be.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)From time to time, upon thirty (30) days' prior written notice, the Service Provider may revise the Service Fee for the Service Recipient based on its historical experience and costs with the Service Recipient, the Service Provider's reasonable estimates of future costs, and any assignment of some or all of the obligations to perform the Services. The Service Provider shall review the Service Fee of the Service Recipient at least annually and may adjust the Service Fee in accordance with this paragraph and in accordance with the methodologies used to calculate such fees. Notwithstanding anything herein to the contrary, in no event shall the Service Fee exceed $10.0 million in any given calendar year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)The parties to this Agreement believe that the fees, terms and conditions of this Agreement are at least as favorable to the Service Provider as those prevailing at this time for comparable services provided by a non-affiliated company. It is the belief of the parties that in the absence of any comparable transactions, the fees, terms and conditions are at least as favorable as those that in good faith would be offered or could be obtained from a non-affiliated company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)The parties to this Agreement further believe that the methodologies used to calculate the fees set forth on <u>Schedule B</u> provide an equitable proration of the administrative

MECHANICS BANK – BANK SERVICES AGREEMENT

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overhead of the Service Provider's overhead cost centers with respect to the Services and reflect that the Service Provider is being compensated for the fair value of the Services provided under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.<u>Compliance with Laws</u>.&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)In connection with the Services provided under this Agreement, each party shall comply with all applicable laws, regulations, and regulatory guidance. The Service Recipient shall reasonably cooperate with the Service Provider to provide reports and, during normal business hours and upon reasonable advance notice, access to books and records as are necessary for the Service Provider to evaluate compliance with applicable laws, regulations, and regulatory guidance. The Service Recipient shall coordinate with the Service Provider to deliver any required consumer, employee and other public disclosures.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Notwithstanding anything to the contrary herein, the Service Provider shall have no obligation to provide Services that would be reasonably likely to result in a violation of Section 23A or Section 23B of the Federal Reserve Act or Regulation W.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)The Service Provider shall conduct or cause to be conducted periodic audits of all Services performed for the purpose of assessing compliance with applicable laws, regulations, and regulatory guidance. Reports of such audits shall be delivered to the Service Recipients upon request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.<u>Confidentiality</u>. Each party hereto shall appropriately secure, maintain and not disclose or cause to be disclosed any confidential, proprietary or nonpublic data or information obtained from any other party hereto pursuant to this Agreement, except as required by law or in accordance with this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.<u>Indemnity</u>. The Service Recipient shall indemnify, save, defend and hold harmless the Service Provider and its directors, officers, employees and agents (collectively, for the purpose of this paragraph, "<u>Insiders</u>"), from and against, and shall reimburse the Service Provider and its Insiders with respect to, any and all damages, liabilities, losses, obligations, actions, suits, disbursements, claims, deficiencies, penalties, interest, expenses, fines, assessments, charges and costs (including, without limitation, reasonable attorneys' and expert witness' fees, costs of investigation and court costs) of every kind (collectively, "<u>Losses</u>") imposed on, incurred by or asserted against the Service Provider or its Insiders (or any of them) in any way relating to or arising from or out of (a) the performance of the Services under this Agreement, other than Losses that directly result from the gross negligence or willful misconduct of the Service Provider, (b) any acts or omissions of the Service Recipient or its Insiders, or (c) any breach of this Agreement by the Service Recipient.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.<u>Warranty</u>. EXCEPT AS EXPRESSLY PROVIDED HEREIN, THE SERVICES TO BE PROVIDED UNDER THIS AGREEMENT ARE FURNISHED "AS IS, WHERE IS," WITH ALL FAULTS AND WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED.

MECHANICS BANK – BANK SERVICES AGREEMENT

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.<u>Limited Liability</u>. NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, IN NO EVENT SHALL ANY PARTY, UNDER ANY CIRCUMSTANCE, HAVE ANY LIABILITY TO ANY OTHER PARTY FOR ANY SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES CLAIMED BY SUCH OTHER PARTY UNDER THE TERMS OF OR DUE TO ANY BREACH OR NON PERFORMANCE OF THIS AGREEMENT.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.<u>Force Majeure</u>. The Service Provider shall not be liable for any failure or delay in the performance of the Services or any of its obligations hereunder, when such failure or delay is caused by or results from any cause whatsoever beyond the reasonable control of the Service Provider, including but not limited to, riot, war or hostilities between any nations, embargoes, government orders or regulations, acts of god, fire, accidents, strikes, differences with workmen, delays of carriers, lack of transportation facilities, inability to obtain materials, or curtailment of or failure in obtaining sufficient power, but the Service Provider shall give the Service Recipient prompt notice of the interruption and the cause thereof and shall use commercially reasonable efforts to resume full performance of its obligations under this Agreement as soon as possible.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.<u>Term</u>. This Agreement shall remain in effect until termination (a) by the mutual written consent of the parties hereto or (b) by the Service Provider, on the one hand, or the Service Recipient, on the other hand, upon giving thirty (30) days' prior written notice to the other.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.<u>Amendment</u>. This Agreement may be amended, or any term waived, discharged or terminated, only by a written instrument signed by the parties hereto; *provided*, *however*, an amendment or modification to the Services provided to the Service Recipient, as set forth on <u>Schedule B</u>, may be made by the mutual written consent of the parties affected thereby without the consent of any other party hereto, which shall not affect any other terms or conditions of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.<u>Notices</u>. Whenever under this Agreement notice is required or permitted, such notice shall be in writing and signed by the party giving such notice, and deemed made, given and received upon the earlier of actual receipt or two (2) days after being mailed by United States registered or certified mail, return receipt requested, postage prepaid.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.<u>Entire Agreement</u>. This Agreement constitutes the entire agreement among the parties with respect to the subject matter hereof, and there are no agreements, understandings, representations or warranties among the parties on the subject matter hereof other than those set forth herein and therein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.<u>Severability</u>. If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws, then (a) this Agreement is to be construed and enforced as if such illegal, invalid or unenforceable provision were not a part hereof, (b) the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by such illegal, invalid or unenforceable provision or by its severance from this Agreement, and (c) there shall be added automatically as a part of this Agreement a provision

MECHANICS BANK – BANK SERVICES AGREEMENT

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mutually agreed to which is similar in terms to such illegal, invalid or unenforceable provision as may be possible and still be legal, valid and enforceable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.<u>Binding Effect; Assignability</u>. All of the terms, covenants, representations, warranties and conditions of this Agreement are binding upon, and inure to the benefit of and are enforceable by, the parties and their respective successors, representatives and permitted assigns. Nothing expressed or referred to herein is intended or is to be construed to give any person other than the parties hereto any legal or equitable right, remedy or claim under or in respect of this Agreement, it being the intent of the parties that this Agreement, and the terms hereof are for the sole benefit of the parties to this Agreement and not for the benefit of any other person. No party to this Agreement shall assign this Agreement, or any right or obligations under this Agreement, by operation of law or otherwise, in whole or in part, without the prior written consent of the other parties hereto, and any assignment made or attempted in violation of this Section is void and of no force or effect; *provided*, *however*, that the Service Provider may assign this Agreement and any of it rights or obligations under this Agreement to an affiliate of the Service Provider without the prior written consent of the Service Recipients.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.<u>Governing Law</u>. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD FOR THE PROVISIONS THEREOF REGARDING CHOICE OF LAW.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.<u>Authority.</u> Each party represents that it has full right, power and authority to enter into and carry out the terms of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.<u>Multiple Counterparts</u>. For the convenience of the parties hereto, this Agreement may be signed in multiple counterparts, each of which shall be deemed an original, and all counterparts hereof so signed by the parties hereto, whether or not such counterpart shall bear the execution of each of the parties hereto, shall be deemed to be, and is to be construed as, one and the same Agreement. A telecopy, facsimile or electronic scan in ".pdf" format of a signed counterpart of this Agreement shall be sufficient to bind the party or parties whose signature(s) appear thereon.

*[Signature Page Follows]*

MECHANICS BANK – BANK SERVICES AGREEMENT

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**Schedules Omitted Pursuant to Rule 601(b)(10)(iv)&nbsp;&nbsp;&nbsp;&nbsp;**

*[Signature Page to Affiliate Services Agreement]*

IN WITNESS WHEREOF, the parties hereto have executed this Agreement by authorized officers thereof to be effective as of the date first above written.

---

| | |
|:---|:---|
| **Mechanics Bank** | **Mechanics Bank** |
| By: | /s/ JOHN DECERO |
|  | John DeCero |
|  | Chief Executive Officer |
| **GJF Financial Management II, LLC** | **GJF Financial Management II, LLC** |
| By: | /s/ GERALD J. FORD |
|  | Gerald J. Ford |
|  | Member |

---

MECHANICS BANK – BANK SERVICES AGREEMENT

## Exhibit 10.2

**Exhibit 10.2**

**FIRST AMENDMENT**

**TO**

**BANK SERVICES AGREEMENT**

&nbsp;&nbsp;&nbsp;&nbsp;THIS FIRST AMENDMENT TO BANK SERVICES AGREEMENT (this "<u>Amendment</u>") is made and entered into as of February 19, 2025 (the "<u>Execution Date</u>"), but effective as of January 1, 2025 (the "<u>Effective Date</u>"), by and between GJF Financial Management II, LLC, a Delaware limited liability company (the "<u>Service Provider</u>"), and Mechanics Bank, a California banking corporation (the "<u>Service Recipient</u>"). Each initially capitalized term used, but not otherwise defined herein, shall have the meanings assigned to it in the Bank Services Agreement (hereinafter defined).

**RECITALS:**

&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, the Service Provider and the Service Recipient are parties to that certain Bank Services Agreement, effective as of September 1, 2019 (the "<u>Bank Services Agreement</u>"); and

&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, the Service Provider and the Service Recipient desire to amend the Bank Services Agreement to the extent provided in this Amendment.

**AGREEMENT:**

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained in this Amendment and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.<u>Amendment to the Bank Services Agreement</u>. Section 2(a) of the Bank Services Agreement is hereby deleted in its entirety and replaced, effective as of the Effective Date, with the following:

"(a)&nbsp;&nbsp;&nbsp;&nbsp;In consideration for the Service Provider's performance of the Services, the Service Recipient shall pay to the Service Provider an annual fee in the amount set forth on <u>Schedule B</u> (the "<u>Service Fee</u>") for each calendar year during the term of this Agreement, payable in equal monthly installments within the first five days of each calendar month. Notwithstanding the foregoing, in the event that this Agreement is terminated for any reason during any calendar year, or all of the Services for the Service Recipient is terminated during any calendar year prior to the termination of this Agreement, then the Service Recipient shall only pay to the Service Provider with respect to such calendar year the pro rata portion of the Service Fee otherwise payable with respect to such calendar year based upon the number of days during such calendar year that elapsed prior to the date of the termination of this Agreement or termination of the Services, as the case may be."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.<u>Miscellaneous</u>.

------

&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;<u>Effect of Amendment</u>. Each of the Service Provider and the Service Recipient hereby agree and acknowledge that, except as expressly provided in this Amendment, the Bank Services Agreement remains in full force and effect and has not been modified or amended in any respect, it being the intention of each of the Service Provider and the Service Recipient that this Amendment and the Bank Services Agreement be read, construed and interpreted as one and the same instrument. To the extent that any conflict exists between this Amendment and the Bank Services Agreement, the terms of this Amendment shall control and govern.

&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;<u>Counterparts</u>. This Amendment may be executed in any number of counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. For purposes of determining whether a party has signed this Amendment or any document contemplated hereby or any amendment or waiver hereof, only a handwritten original signature on a paper document or a facsimile or portable document format (pdf) copy of such a handwritten original signature shall constitute a signature, notwithstanding any law relating to or enabling the creation, execution or delivery of any contract or signature by electronic means.

**SIGNATURE PAGE FOLLOWS**

MECHANICS BANK – FIRST AMENDMENT TO BANK SERVICES AGREEMENT

------

&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, each of the Service Provider and the Service Recipient has executed this Amendment as of the day and year first above written.

**SERVICE PROVIDER:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**&nbsp;&nbsp;&nbsp;&nbsp;**SERVICE RECIPIENT:**

GJF Financial Management II, LLC&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mechanics Bank

By: <u>/s/ Gary Shultz&nbsp;&nbsp;&nbsp;&nbsp;</u>&nbsp;&nbsp;&nbsp;&nbsp;By: <u>&nbsp;&nbsp;&nbsp;&nbsp;/s/ Nathan Duda&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name: Gary Shultz &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name: Nathan Duda

Title:&nbsp;&nbsp;&nbsp;&nbsp;Vice President &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:&nbsp;&nbsp;&nbsp;&nbsp;EVP, CFO&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

MECHANICS BANK – FIRST AMENDMENT TO BANK SERVICES AGREEMENT

## Exhibit 31.1

EXHIBIT 31.1

**CERTIFICATION PURSUANT TO**

**RULE 13a-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED**

I, C.J. Johnson, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended September 30, 2025 of Mechanics Bancorp;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over

financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | | |
|:---|:---|:---|:---|
| Dated: | November 17, 2025 | By: | /s/ C.J. Johnson |
|  |  |  | C.J. Johnson |
|  |  |  | President and Chief Executive Officer |

---

## Exhibit 31.2

EXHIBIT 31.2

**CERTIFICATION PURSUANT TO**

**RULE 13a-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED**

I, Nathan Duda, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended September 30, 2025 of Mechanics Bancorp;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | | |
|:---|:---|:---|:---|
| Dated: | November 17, 2025 | By: | /s/ Nathan Duda |
|  |  |  | Nathan Duda |
|  |  |  | Executive Vice President and Chief Financial Officer |
|  |  |  | Executive Vice President and Chief Financial Officer |
|  |  |  | Executive Vice President and Chief Financial Officer |

---

## Exhibit 32.1

EXHIBIT 32.1

**CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350**

**AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, C.J. Johnson, the Chief Executive Officer of Mechanics Bancorp, (the "**Company**"), hereby certify, that, to my knowledge:

1. The Quarterly Report on Form 10-Q for the quarter ended September 30, 2025 (the "**Report**") of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.&nbsp;&nbsp;&nbsp;&nbsp;The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| | | | |
|:---|:---|:---|:---|
| Dated: | November 17, 2025 | By: | /s/ C.J. Johnson |
|  |  |  | C.J. Johnson |
|  |  |  | President and Chief Executive Officer |

---

## Exhibit 32.2

EXHIBIT 32.2

**CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350**

 **AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Nathan Duda, the Chief Financial Officer of Mechanics Bancorp, (the "**Company**"), hereby certify, that, to my knowledge:

1. The Quarterly Report on Form 10-Q for the quarter ended September 30, 2025 (the "**Report**") of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| | | | |
|:---|:---|:---|:---|
| Dated: | November 17, 2025 | By: | /s/ Nathan Duda |
|  |  |  | Nathan Duda |
|  |  |  | Executive Vice President and Chief Financial Officer |
|  |  |  | Executive Vice President and Chief Financial Officer |
|  |  |  | Executive Vice President and Chief Financial Officer |

---

<br>