Mechanics Bank completes sale of substantial majority of runoff auto loan Portfolio to Bank of America. Business Wire 16-Sep-2026 6:18 PM Mechanics Bancorp ("Mechanics") (NASDAQ:MCHB) announced today that its wholly owned subsidiary, Mechanics Bank, completed the sale to Bank of America's trading desk of approximately $417 million of its remaining performing indirect auto loans at a price near book value, with a cutoff date of August 31, 2026. Mechanics Bank will retain approximately $13 million of runoff auto loans. Westlake Portfolio Management will continue to service the auto loans for both Bank of America and Mechanics Bank. C.J. Johnson, President and CEO of Mechanics, said: "This transaction represents another important step in our ongoing efforts to optimize our balance sheet and allocate capital to its highest and best use. The sale of the substantial majority of our runoff auto loans will reduce risk, improve liquidity and enhance the future profitability of our company." About Mechanics Bancorp Mechanics Bancorp is headquartered in Walnut Creek, Calif., and is the financial holding company of Mechanics Bank, a full-service, FDIC-insured bank with $21.2 billion in assets as of June 30, 2026, and 166 branches across California, Oregon, Washington and Hawaii. Founded in 1905 to help families, businesses and communities prosper, Mechanics Bank offers a wide range of products and services in consumer and business banking, commercial lending, cash management services, private banking, and comprehensive wealth management and trust services. Cautionary Note Regarding Forward Looking Statements This communication contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Reform Act"). All statements other than statements of historical facts included herein may be forward-looking statements. Generally, forward-looking statements include the words "anticipate," "believe," "estimate," "expect," "intend," "may," "will," "plan," "potential," "predict," "goal," "upcoming," "outlook," "guidance" or "project" or the negative of those terms, or similar expressions. Market Chameleon do not assume any obligation or undertake to update any forward-looking statements after the date of this release as a result of new information, future events or developments, except as required by federal securities or other applicable laws, although Market Chameleon may do so from time to time. For all forward-looking statements, Market Chameleon claim the protection of the safe harbor for forward-looking statements contained in the Reform Act.

Mechanics Bank completed its HomeStreet integration in Q2 2026 and sold its DUS business line to Fifth Third, generating substantial excess capital and reducing intangibles. The bank is allowing high-cost certificates of deposit to run off whilst focusing on core deposit growth and capital efficiency. Headcount fell from 1,890 to 1,756 full-time equivalents quarter-over-quarter. Management expects annual noninterest expenses to reach approximately $430 million by Q4 2026 as merger synergies fully realise. The bank plans to restructure $310 million in low-yielding available-for-sale securities into current market-rate mortgage-backed securities in Q3, anticipating a $25 million after-tax loss with a four to five-year earn-back period. Management targets 17% to 18% return on average tangible common equity and 1.3% to 1.4% return on average assets for 2027 and beyond, projecting a $250 million total dividend payout next year. The bank's credit portfolio comprises 71% low-risk multifamily lending.

Mechanics Bancorp reported second quarter 2026 net income of $57.7 million, or $0.25 per diluted share, up from $44.1 million, or $0.19 per diluted share, in the first quarter. The Walnut Creek, California-based financial holding company had total assets of $21.2 billion at quarter-end. The company substantially completed its merger with HomeStreet during the quarter and sold its Fannie Mae DUS business line. Mechanics paid $162 million in cash dividends. Non-recurring acquisition and integration costs totalled $5.9 million. Total deposits stood at $18.1 billion, with a loans-to-deposits ratio of 75%. The company maintained strong capital ratios, including an estimated 16.70% total risk-based capital ratio and 14.39% CET1 capital ratio.