Mechanics Bancorp Class A (MCHB)
NASDAQ:MCHB
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Mechanics Bancorp Class A
(NASDAQ:MCHB)
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Rating:68Neutral
Price Target:
$16.50
▲(6.38% Upside)
Action:ReiteratedDate:04/30/26
The score is driven primarily by improved profitability and a materially strengthened balance sheet, offset by weak/volatile cash flow quality. Valuation is supportive (low P/E and solid yield), while technicals show a generally positive but not strong momentum backdrop. The latest earnings call adds confidence via clear multi-year targets and capital strength, tempered by near-term funding runoff, provisioning, and concentration risks.
Positive Factors
Strengthened balance sheet
Mechanics materially cut leverage and expanded equity in 2025, producing a meaningful capital cushion and positive ROE. Lower leverage improves resilience to credit stress, raises loss-absorbing capacity, and supports sustained lending, dividends and strategic flexibility over the medium term.
Negative Factors
Inconsistent cash flow quality
Sharp year-over-year FCF decline and historically volatile cash generation weaken the bank's ability to reliably fund dividends, buybacks or loan growth from internal cash. Persistent variability increases reliance on deposits or capital markets and raises execution risk for multi-year targets.
Read all positive and negative factors
Positive Factors
Negative Factors
Strengthened balance sheet
Mechanics materially cut leverage and expanded equity in 2025, producing a meaningful capital cushion and positive ROE. Lower leverage improves resilience to credit stress, raises loss-absorbing capacity, and supports sustained lending, dividends and strategic flexibility over the medium term.
Read all positive factors
Mechanics Bancorp Class A (MCHB) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.45B
Dividend Yield1.49%
Average Volume (3M)398.65K
Price to Earnings (P/E)18.3
Beta (1Y)0.44
Revenue Growth149.22%
EPS GrowthN/A
CountryUS
Employees1,800
SectorFinancial
Sector Strength70
IndustryBanks - Regional
Share Statistics
EPS (TTM)0.98
Shares Outstanding220,274,080
10 Day Avg. Volume400,965
30 Day Avg. Volume398,651
Financial Highlights & Ratios
PEG Ratio0.01
Price to Book (P/B)1.12
Price to Sales (P/S)3.10
P/FCF Ratio17.10
Enterprise Value/Market Cap0.84
Enterprise Value/Revenue3.24
Enterprise Value/Gross Profit4.73
Enterprise Value/Ebitda10.87
Forecast
1Y Price Target
$16.25Price Target Upside4.77% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)1.18
Revenue Forecast (FY)$902.99M
Mechanics Bancorp Class A Business Overview & Revenue Model
Company Description
Mechanics Bank provides various financial services for individual clients, and small and middle-market businesses. The company offers checking and savings accounts. It also provides home and auto loans; term loans and lines of credit, multi-family...
How the Company Makes Money
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Mechanics Bancorp Class A Earnings Call Summary
Earnings Call Date:Apr 30, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 03, 2026
Earnings Call Sentiment Positive
Overall the call conveyed constructive progress on integration, capital strength, improved funding costs, and a clear multi-year earnings thesis (2027 ROTCE/ROAA targets and dividend policy), while acknowledging near-term headwinds including geopolitical provisioning, higher-than-expected CD runoff, auto loan runoff drag, and a temporarily weaker fee base. Management emphasized conservative risk management, completed core conversion, expected cost synergies and shareholder returns, and predicted NIM expansion starting in early 2027.Positive Updates
Reported Profitability and Core Earnings
Net income of $44.1 million in Q1 2026; diluted EPS $0.19. Adjusting for non-core items, core net income was $53.8 million, producing a core ROAA of 1.0% and a core ROTCE of 13% for the quarter.
Negative Updates
Geopolitical Provisioning
Recorded a $6.35 million pre-tax qualitative CECL provision related to geopolitical uncertainty stemming from the Iran war; management stated this was not driven by specific credit deterioration but increased ACL by 5 bps to 1.13%.
Read all updates
Q1-2026 Updates
Positive
Negative
Reported Profitability and Core Earnings
Net income of $44.1 million in Q1 2026; diluted EPS $0.19. Adjusting for non-core items, core net income was $53.8 million, producing a core ROAA of 1.0% and a core ROTCE of 13% for the quarter.
Read all positive updates
Company Guidance
The company reiterated multi-year targets and near‑term pacing: for 2027 it now forecasts GAAP net income of $275–$300M, ROTCE of 17%–18%, ROAA of 1.3%–1.4%, a NIM running roughly 3.7%–3.8% (Q1 NIM was 3.61% and management expects a relatively flat NIM the next 2–3 quarters before expansion in early 2027), and an efficiency ratio of ~50%; balance‑sheet and capital guidance included a 70% loan‑to‑deposit ratio target for 2027, CET1 of 13.9% (current), Tier‑1 leverage of 8.7%, allowance to loans of 1.13% (ACL up 5 bps in Q1) and an allowance 2.95x NPAs; near‑term funding and capital actions include a $1.4B cumulative CD runoff (stabilizing at a ~$2B CD run‑rate with ~$150M more CD runoff expected in Q2), spot cost of deposits 1.21% (Q1 cost 1.28%), expected sale of the DUS business (~$130M) and ~ $165M pro‑forma excess capital to be returned via a special dividend of ~ $0.70/share in Q2 (subject to approvals) after a $0.40/share Q1 dividend, guidance to reach ~$430M annualized noninterest expense (ex‑CDI) by Q4 2026 (from ~ $474M run‑rate), an expected 2026 effective tax rate of ~26.5%, and a longer‑term dividend payout target of ~80% of net income; management also noted Q1 core net income of $53.8M (core ROAA 1%, core ROTCE 13%).Mechanics Bancorp Class A Financial Statement Overview
Summary
Income Statement
67
Positive
Balance Sheet
74
Positive
Cash Flow
41
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 896.44M | 1.03B | 589.62M | 779.42M | 703.83M | 364.27M |
| Gross Profit | 614.18M | 785.37M | 374.58M | 622.92M | 657.37M | 362.03M |
| EBITDA | 267.13M | 330.17M | 58.52M | 305.93M | 333.80M | 157.66M |
| Net Income | 219.14M | 265.74M | 29.00M | 201.91M | 216.58M | 115.42M |
Balance Sheet | ||||||
| Total Assets | 21.39B | 22.47B | 16.53B | 9.43B | 9.41B | 7.23B |
| Cash, Cash Equivalents and Short-Term Investments | 4.42B | 1.08B | 999.71M | 240.36M | 91.83M | 65.21M |
| Total Debt | 211.22M | 278.81M | 56.09M | 2.00B | 1.28B | 167.03M |
| Total Liabilities | 18.60B | 19.61B | 14.23B | 8.89B | 8.85B | 6.52B |
| Stockholders Equity | 2.79B | 2.86B | 2.30B | 538.39M | 562.15M | 715.34M |
Cash Flow | ||||||
| Free Cash Flow | 198.17M | 187.08M | 285.89M | 9.91M | 230.53M | 170.09M |
| Operating Cash Flow | 204.63M | 193.59M | 292.26M | 13.72M | 237.32M | 173.03M |
| Investing Cash Flow | 1.37B | 1.55B | 476.21M | 478.35M | -2.67B | -125.64M |
| Financing Cash Flow | -1.39B | -1.71B | -1.23B | -349.24M | 2.44B | -40.23M |
Mechanics Bancorp Class A Technical Analysis
Positive
15.51
Price Trends
14.68
Positive
14.49
Positive
13.64
Positive
Market Momentum
0.19
Negative
62.93
Neutral
53.74
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MCHB, the sentiment is Positive. The current price of 15.51 is above the 20-day moving average (MA) of 14.83, above the 50-day MA of 14.68, and above the 200-day MA of 13.64, indicating a bullish trend. The MACD of 0.19 indicates Negative momentum. The RSI at 62.93 is Neutral, neither overbought nor oversold. The STOCH value of 53.74 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MCHB.
Mechanics Bancorp Class A Risk Analysis
Mechanics Bancorp Class A disclosed 1 risk factors in its most recent earnings report. Mechanics Bancorp Class A reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Mechanics Bancorp Class A Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $3.77B | 10.00 | 11.34% | 1.16% | -2.05% | ― | |
73 Outperform | $3.32B | 9.35 | 8.00% | 4.35% | 49.44% | 102.42% | |
68 Neutral | $3.45B | 18.29 | 10.40% | 1.49% | 149.22% | ― | |
68 Neutral | $3.43B | 13.89 | 9.02% | 2.71% | -5.31% | 11.35% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
64 Neutral | $2.81B | 12.32 | 7.50% | 1.34% | 18.88% | -1.29% | |
63 Neutral | $3.29B | 18.57 | 6.38% | 3.04% | 14.22% | -15.75% |
* Financial Sector Average
MCHB
Mechanics Bancorp Class A
14.42
3.15
28.01%
BKU
BankUnited
46.16
13.52
41.41%
TOWN
TowneBank
35.73
2.93
8.94%
WSBC
WesBanco
33.93
4.92
16.94%
WSFS
Wsfs Financial
71.21
18.79
35.84%
FBK
FB Financial
53.53
9.58
21.79%
Mechanics Bancorp Class A Corporate Events
Business Operations and StrategyFinancial DisclosuresM&A Transactions
Mechanics Bancorp Posts Lower Q1 Earnings Amid Merger Integration
Negative
Apr 30, 2026
Mechanics Bancorp reported first-quarter 2026 net income of $44.1 million, or $0.19 per diluted share, down from $111.2 million, or $0.48 per share, in the fourth quarter of 2025, as results were weighed by higher credit-loss provisions, merger-re...
Business Operations and StrategyDividends
Mechanics Bancorp Declares Cash Dividends, Updates Share Structure
Positive
Feb 27, 2026
On February 25, 2026, Mechanics Bancorp’s board amended the company’s bylaws to clarify that its shares will generally be uncertificated, unless the board decides otherwise, and that such shares will be maintained in book‑entry f...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.