Mechanics Bancorp 10-Q

ITEM 1. FINANCIAL STATEMENTS MECHANICS BANCORP AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) (dollars in thousands) June 30, 2026 December 31, 2025 ASSETS Cash and cash equivalents $ 553,915 $ 1,029,983 Trading securities 46,595 49,518 Securities available-for-sale, at fair value 4,119,215 3,993,385 Securities held-to-maturity, at amortized cost (fair value of $ 1,120,088 and $ 1,170,818 at June 30, 2026 and December 31, 2025, respectively) 1,286,813 1,336,632 Loans held for sale (includes $ 5,345 and $ 5,967 carried at fair value at June 30, 2026 and December 31, 2025, respectively) 5,345 5,967 Loan receivables 13,576,196 14,176,936 Allowance for credit losses on loans ( 152,601 ) ( 153,319 ) Net loan receivables 13,423,595 14,023,617 Mortgage servicing rights (includes $ 58,836 and $ 58,095 carried at fair value at June 30, 2026 and December 31, 2025, respectively) 59,142 85,832 Other real estate owned 4,262 4,990 Federal Home Loan Bank stock, at cost 17,287 17,292 Premises and equipment, net 141,615 143,895 Bank owned life insurance 172,980 170,339 Goodwill 843,305 843,305 Other intangible assets, net 97,906 212,491 Right-of-use asset 74,623 82,076 Interest receivable and other assets 384,241 352,153 TOTAL ASSETS $ 21,230,839 $ 22,351,475 LIABILITIES AND SHAREHOLDERS’ EQUITY LIABILITIES Noninterest-bearing demand deposits $ 6,420,746 $ 6,744,082 Interest-bearing transaction accounts 8,394,708 8,128,832 Savings and time deposits 3,273,983 4,152,083 Total deposits 18,089,437 19,024,997 Borrowings 80,000 — Long-term debt 130,420 192,014 Operating lease liability 78,174 86,794 Interest payable and other liabilities 162,877 185,295 TOTAL LIABILITIES 18,540,908 19,489,100 SHAREHOLDERS’ EQUITY Common stock, Class A, no par value, Authorized — 1,897,500,000 shares, Issued and outstanding, 220,311,021 shares and 220,190,561 shares at June 30, 2026 and December 31, 2025, respectively; Class B, no par value, Authorized — 2,500,000 shares, Issued and outstanding, 1,114,448 shares at June 30, 2026 and December 31, 2025 2,404,941 2,402,193 Retained earnings 303,046 456,695 Accumulated other comprehensive income (loss), net of tax ( 18,056 ) 3,487 TOTAL SHAREHOLDERS’ EQUITY 2,689,931 2,862,375 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 21,230,839 $ 22,351,475 See accompanying notes to consolidated financial statements 5 MECHANICS BANCORP AND SUBSIDIARIES CONSOLIDATED INCOME STATEMENTS (Unaudited) Quarter Ended June 30, Six Months Ended June 30, (dollars in thousands, except per share amounts) 2026 2025 2026 2025 INTEREST INCOME Loans interest and fees $ 178,170 $ 120,116 $ 359,360 $ 237,908 Investment securities 53,062 42,013 106,136 89,598 Interest-bearing cash and other 6,710 16,024 14,382 24,232 Total interest income 237,942 178,153 479,878 351,738 INTEREST EXPENSE Deposits 56,544 48,024 114,867 93,155 Borrowed funds 1,055 — 1,283 — Long-term debt 3,171 — 7,511 — Total interest expense 60,770 48,024 123,661 93,155 Net interest income 177,172 130,129 356,217 258,583 Provision (reversal of provision) for credit losses on loans ( 904 ) 357 6,689 ( 3,395 ) Provision (reversal of provision) for credit losses on unfunded lending commitments ( 1,863 ) ( 725 ) ( 1,689 ) ( 631 ) Net interest income after provision for credit losses 179,939 130,497 351,217 262,609 NONINTEREST INCOME Service charges on deposit accounts 6,027 5,492 12,070 10,986 Trust fees and commissions 3,476 3,216 6,546 6,335 ATM network fee income 4,109 3,040 8,013 5,928 Loan servicing income 1,582 168 3,509 345 Net gain on sales and calls of investment securities 31 4,137 83 4,137 Income from bank owned life insurance 1,327 502 2,492 1,029 Other 7,244 3,070 12,103 5,846 Total noninterest income 23,796 19,625 44,816 34,606 NONINTEREST EXPENSE Salaries and employee benefits 63,090 47,734 131,640 96,585 Occupancy 11,851 8,337 24,280 16,309 Equipment 8,724 6,288 18,339 12,157 Professional services 7,435 5,907 13,506 10,823 FDIC assessments and regulatory fees 2,990 2,213 5,980 4,426 Amortization of intangible assets 7,207 2,666 14,429 5,404 Data processing 2,468 2,200 6,341 3,550 Loan related 3,616 3,220 7,122 4,797 Marketing and advertising 696 744 1,603 1,328 Other real estate owned related 47 104 431 2,788 Acquisition and integration costs 5,923 5,639 10,717 5,989 Other 10,426 6,028 20,512 12,562 Total noninterest expense 124,473 91,080 254,900 176,718 Income before income tax expense 79,262 59,042 141,133 120,497 INCOME TAX EXPENSE 21,561 16,557 39,342 34,221 NET INCOME $ 57,701 $ 42,485 $ 101,791 $ 86,276 Basic earnings per share Class A common stock $ 0.25 $ 0.20 $ 0.44 $ 0.41 Class B common stock $ 2.51 $ 2.00 $ 4.42 $ 4.07 Diluted earnings per share Class A common stock $ 0.25 $ 0.20 $ 0.44 $ 0.41 Class B common stock $ 2.51 $ 2.00 $ 4.42 $ 4.07 Basic weighted-average shares outstanding Class A common stock 221,148,246 200,893,223 221,098,302 200,889,074 Class B common stock 1,114,448 1,114,448 1,114,448 1,114,448 Diluted weighted-average shares outstanding Class A common stock 221,338,344 200,952,643 221,271,096 200,948,494 Class B common stock 1,114,448 1,114,448 1,114,448 1,114,448 See accompanying notes to consolidated financial statements 6 MECHANICS BANCORP AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) Quarter Ended June 30, Six Months Ended June 30, (in thousands) 2026 2025 2026 2025 NET INCOME $ 57,701 $ 42,485 $ 101,791 $ 86,276 Other comprehensive income (loss) Net change in unrealized gain (loss) on investment securities available-for-sale 1,437 3,259 ( 30,794 ) 42,502 Reclassification adjustment for accretion of unrealized holding loss from the transfer of securities from available-for-sale to held-to-maturity debt securities 593 625 1,198 1,252 Reclassification adjustment for net realized (gain) loss on securities available-for-sale included in net income ( 31 ) ( 4,137 ) ( 83 ) ( 4,137 ) Change in defined benefit pension liability obligations ( 38 ) 72 ( 75 ) 144 Other comprehensive income (loss) before tax 1,961 ( 181 ) ( 29,754 ) 39,761 Less: income tax impact of: Net change in unrealized gain (loss) on investment securities available-for-sale 392 1,036 ( 8,493 ) 12,346 Reclassification adjustment for accretion of unrealized holding loss from the transfer of securities from available-for-sale to held-to-maturity debt securities 161 179 326 360 Reclassification adjustment for net realized (gain) loss on securities available-for-sale included in net income ( 9 ) ( 1,202 ) ( 23 ) ( 1,202 ) Change in defined benefit pension liability obligations ( 11 ) 21 ( 21 ) 41 Total 533 34 ( 8,211 ) 11,545 Other comprehensive income (loss) 1,428 ( 215 ) ( 21,543 ) 28,216 Total comprehensive income $ 59,129 $ 42,270 $ 80,248 $ 114,492 See accompanying notes to consolidated financial statements 7 MECHANICS BANCORP AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited) Class A and Class B Common Stock Accumulated Other Comprehensive Income (Loss), Net (dollars in thousands, except per share amounts) Shares Amount Retained Earnings Securities Defined Benefit Obligations Total Shareholders’ Equity Quarter Ended June 30, 2025 Balance, March 31, 2025 201,999,328 $ 2,122,117 $ 283,308 $ ( 35,679 ) $ 4,344 $ 2,374,090 Net income — — 42,485 — — 42,485 Other comprehensive income (loss), net of tax — — — ( 266 ) 51 ( 215 ) Common stock issued from stock awards, net 16,504 257 — — — 257 Balance, June 30, 2025 202,015,832 $ 2,122,374 $ 325,793 $ ( 35,945 ) $ 4,395 $ 2,416,617 Six Months Ended June 30, 2025 Balance, December 31, 2024 201,999,328 $ 2,122,117 $ 239,517 ( 64,058 ) 4,292 $ 2,301,868 Net income — — 86,276 — — 86,276 Other comprehensive income, net of tax — — — 28,113 103 28,216 Common stock issued from stock awards, net 16,504 257 — — — 257 Balance, June 30, 2025 202,015,832 $ 2,122,374 $ 325,793 $ ( 35,945 ) $ 4,395 $ 2,416,617 Quarter Ended June 30, 2026 Balance, March 31, 2026 221,400,590 $ 2,402,968 $ 407,908 $ ( 22,566 ) $ 3,082 $ 2,791,392 Net income — — 57,701 — — 57,701 Other comprehensive income (loss), net of tax — — — 1,455 ( 27 ) 1,428 Share-based compensation expense — 1,481 — — — 1,481 Common stock issued from stock awards, net 24,879 ( 65 ) — — — ( 65 ) Reinvested dividends on vested stock awards — 557 ( 557 ) — — — Cash dividends declared - Class A common stock ($ 0.70 per share) — — ( 154,205 ) — — ( 154,205 ) Cash dividends declared - Class B common stock ($ 7.00 per share) — — ( 7,801 ) — — ( 7,801 ) Balance, June 30, 2026 221,425,469 $ 2,404,941 $ 303,046 $ ( 21,111 ) $ 3,055 $ 2,689,931 Six Months Ended June 30, 2026 Balance, December 31, 2025 221,305,009 $ 2,402,193 $ 456,695 $ 378 $ 3,109 $ 2,862,375 Net income — — 101,791 — — 101,791 Other comprehensive loss, net of tax — — — ( 21,489 ) ( 54 ) ( 21,543 ) Share-based compensation expense — 2,819 — — 2,819 Common stock issued from stock awards, net 120,460 ( 937 ) — — — ( 937 ) Reinvested dividends on vested stock awards — 866 ( 866 ) — — — Cash dividends declared - Class A common stock ($ 1.10 per share) — — ( 242,315 ) — — ( 242,315 ) Cash dividends declared - Class B common stock ($ 11.00 per share) — — ( 12,259 ) — — ( 12,259 ) Balance, June 30, 2026 221,425,469 $ 2,404,941 $ 303,046 $ ( 21,111 ) $ 3,055 $ 2,689,931 See accompanying notes to consolidated financial statements 8 MECHANICS BANCORP AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Six Months Ended June 30, (in thousands) 2026 2025 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 101,791 $ 86,276 Adjustments to reconcile net income to net cash provided by operating activities: Provision (reversal of provision) for credit losses on loans 6,689 ( 3,395 ) Originations of loans held for sale and principal collections, net ( 84,737 ) ( 3,181 ) Proceeds from sales of loans held for sale 89,042 3,309 Net fair value adjustment and gain on sale of loans held for sale ( 3,620 ) — Provision (reversal of provision) for credit losses on unfunded lending commitments ( 1,689 ) ( 631 ) Amortization (accretion) of premiums and discounts on investment securities ( 4,025 ) 1,457 Depreciation of premises and equipment 6,745 4,563 Amortization of intangible assets 14,429 5,404 Amortization of premiums and discounts on debt and deposits 3,150 — Share-based compensation expense 2,819 3,732 Increase in cash surrender value of bank-owned life insurance ( 2,641 ) ( 1,045 ) Net gain on sales and calls of investment securities ( 83 ) ( 4,137 ) Net loss on sale, disposal and write-down of other real estate owned 336 2,297 Net loss on sale and disposal of premises and equipment 587 42 Deferred income tax expense (benefit) ( 21,567 ) 8,712 Amortization of deferred loan fees and costs 4,002 6,972 Amortization (accretion) of premiums and discounts on purchased loans ( 25,770 ) ( 4,140 ) Gain on sale of DUS business line ( 911 ) — Origination, amortization and change in fair value of MSRs, net 1,398 — Net decrease in trading securities 3,434 — Changes in: Interest receivable and other assets 1,260 5,254 Interest payable and other liabilities ( 26,448 ) ( 47,787 ) Net cash provided by operating activities 64,191 63,702 CASH FLOWS FROM INVESTING ACTIVITIES: Securities available-for-sale: Purchases ( 491,782 ) ( 561,139 ) Sales — 929,969 Maturities, calls and paydowns 341,188 175,956 Securities held-to-maturity: Maturities, calls and paydowns 49,009 48,355 Loan originations and principal collections, net 605,964 421,282 Purchases of loans ( 6,617 ) ( 42,617 ) Recoveries of loans charged-off 6,106 5,337 Proceeds from sales of loans 7,537 — Proceeds from sales of other real estate owned 2,442 13,303 Proceeds from sales of premises and equipment 730 — Purchases of premises and equipment ( 5,783 ) ( 1,958 ) Proceeds from sale of DUS business line 125,820 — Redemptions of Federal Home Loan Bank stock 5 — Net cash provided by investing activities 634,619 988,488 9 Six Months Ended June 30, (in thousands) 2026 2025 CASH FLOWS FROM FINANCING ACTIVITIES: Net increase (decrease) in deposits ( 935,304 ) 27,059 Repayment of Senior Notes ( 65,000 ) — Net change in short-term borrowings 80,000 — Cash dividends paid ( 254,574 ) — Net cash provided by (used in) financing activities ( 1,174,878 ) 27,059 Net increase (decrease) in cash and cash equivalents ( 476,068 ) 1,079,249 Cash and cash equivalents at beginning of period 1,029,983 999,711 Cash and cash equivalents at end of period $ 553,915 $ 2,078,960 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the period for: Interest paid $ 121,891 $ 93,815 Income taxes paid, net 29,075 21,777 Non-cash activities: Transfer from loans to other real estate owned 2,050 — ROU assets obtained in exchange for operating lease obligations 3,883 14,415 See accompanying notes to consolidated financial statements 10 Mechanics Bancorp and Subsidiaries Notes to Consolidated Financial Statements NOTE 1– SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations : Mechanics Bancorp, a Washington corporation (the “Company”), is a financial holding company and primarily operates through 121-year-old Mechanics Bank, its wholly-owned subsidiary. Mechanics Bank is a full-service community bank with 166 branches throughout California, Washington, Oregon and Hawaii. Following the strategic Merger of HomeStreet Bank with and into Mechanics Bank on September 2, 2025, 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 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. Prior to merging with and into Mechanics Bank on September 2, 2025, HomeStreet 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 and ATMs, and through 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, 16389 Redmond Way LLC and Mechanics Bank Trust Company of Delaware. Ceasing the origination of auto loans in February 2023, Mechanics Bank continued to service its existing auto loan portfolio until May 1, 2025, when it 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. Basis of Presentation : 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 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, formerly HomeStreet, Inc., 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 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 beginning September 2, 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 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 11 with the Company’s audited Consolidated Financial Statements and Notes to Consolidated Financial Statements for the years ended December 31, 2025 and 2024 included in our 2025 Annual Report on Form 10-K. Use of Estimates : 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. Business Combinations : 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 is greater than the consideration paid and it is recognized in earnings on the acquisition date. Merger with HomeStreet : On September 2, 2025, Mechanics Bancorp (formerly known as “HomeStreet, Inc.”), consummated the Merger 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. See Note 16, “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 June 30, 2026, are subject to change for up to one year after the Merger date, and any changes could be material. Asset Sale : On May 1, 2026, Mechanics Bank completed the previously announced sale of its Fannie Mae Multifamily Delegated Underwriting and Servicing (“DUS®”) business line to Fifth Third for aggregate cash consideration of $ 125.8 million. Under the terms of the completed transaction, Fifth Third acquired Mechanics Bank’s $ 1.7 billion in total unpaid principal balance of multifamily loans serviced for Fannie Mae, including DUS multifamily mortgage servicing rights of $ 25.3 million, associated escrow amounts, and hired Mechanics Bank employees who operate the DUS business line. The sale resulted in a $ 911 thousand net gain, which is included in other noninterest income for the quarter and six months ended June 30, 2026. In addition, the DUS license and business line intangible of $ 100.2 million, which was included in other intangible assets on the balance sheet, was derecognized in connection with the sale. Adoption of Purchased Seasoned Loans Accounting Standard : The Company early adopted Accounting Standards Update (“ASU”) 2025-08, “Financial Instruments–Credit Losses (Topic 326): Purchased Loans,” during the fourth quarter of 2025. This new standard, which the Company elected to early adopt as of January 1, 2025, requires acquired loans that meet certain criteria at acquisition (purchased seasoned loans) to be recognized at their purchase price plus the amount of the allowance for expected credit losses (gross-up approach). As a result, for purchased seasoned loans acquired in the Merger, the Company established an allowance for credit losses of $ 20.3 million at the date of acquisition for these loans and reversed the provision for credit losses recorded in the third quarter of 2025, and recorded it as part of the acquired loans initial amortized cost basis. Required disclosures regarding the impact of the adoption were presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. In addition, third quarter 2025 results will be retrospectively adjusted when the Company files its Quarterly Report on Form 10-Q for the quarter ended September 30, 2026. 12 Recent Accounting Developments 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. In January 2025, the FASB also issued ASU 2025-01, “Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures-Clarifying the Effective Date,” which amends the effective date of ASU 2024-03 to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. The enhanced income statement expense disclosure requirements apply on a prospective basis. However, retrospective application in all prior periods presented is permitted. The Company is currently evaluating the impact of this update on its consolidated financial statements and related disclosures. The adoption of ASU 2024-03 and ASU 2025-01 will not have an impact on the Company’s financial position or results of operations as it impacts disclosures only. We are assessing the impact on our disclosures. 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. 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, with the purchase price 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. 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 $ 145.5 million. The estimates of fair value were recorded based on initial valuations at the Merger date and these estimates are considered preliminary as of June 30, 2026, and are subject to adjustment for up to one year after the Merger date, and any changes could be material. 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. The Company’s taxes are provisional along with the review of certain contracts assumed in the Merger. 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. 13 (in thousands) September 2, 2025 Net assets identified Purchase price consideration $ 265,803 Fair value of assets acquired: Cash and cash equivalents $ 156,890 Total investment securities 1,028,627 Loans held for sale 39,489 Loans held for investment (1) 5,645,715 Allowance for credit losses ( 83,746 ) Mortgage servicing rights 89,533 Premises and equipment 31,979 Other intangible assets (2) 190,913 Deferred tax assets 59,960 Other assets (1) 283,526 Total assets acquired (1) $ 7,442,886 Fair value of liabilities assumed: Deposits $ 5,743,725 FHLB advances 1,005,370 Long-term debt 193,466 Accrued interest payable and other liabilities 89,062 Total liabilities assumed $ 7,031,623 Net assets acquired 411,263 Bargain purchase gain $ 145,460 (1) Reflects the adoption of ASU 2025-08. See Note 1, “Summary of Significant Accounting Policies—Adoption of Purchased Seasoned Loans Accounting Standard” for discussion of the adoption of this guidance. (2) Consists of $ 100.2 million of a DUS license and business line intangible and $ 90.8 million of core deposit intangible assets. The following table shows the amount of the expenses related to the Merger for the periods indicated: Quarter Ended June 30, Six Months Ended June 30, (in thousands) 2026 2025 2026 2025 Severance and employee related $ 3,922 $ — $ 5,550 $ — Legal and professional 1,150 5,386 4,015 5,736 System conversion, integration and other 851 253 1,152 253 Total $ 5,923 $ 5,639 $ 10,717 $ 5,989 Pro-Forma Financial Information The following unaudited pro forma consolidated financial information reflects the results of operations of the Company for the quarter and six months ended June 30, 2025 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 acquisition actually taken place at the beginning of the annual period prior to the Merger. Quarter Ended June 30, Six Months Ended June 30, (in thousands) 2025 2025 Net interest income $ 176,294 $ 350,693 Noninterest income 34,342 61,126 Net income before income taxes 67,469 131,352 14 NOTE 3– DEBT SECURITIES The following table presents the amortized cost and fair value of the debt securities portfolio as of the dates indicated: June 30, 2026 (in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Securities available-for-sale Obligations of states and political subdivisions $ 453,017 $ 11,503 $ ( 1,800 ) $ 462,720 Mortgage-backed securities - residential 3,016,269 19,221 ( 34,295 ) 3,001,195 Mortgage-backed securities - commercial 364,721 776 ( 12,893 ) 352,604 Collateralized loan obligations 230,500 104 ( 22 ) 230,582 Corporate bonds 45,243 1,522 ( 1,382 ) 45,383 U.S. Treasury securities 20,674 — ( 250 ) 20,424 Agency debentures 6,433 — ( 126 ) 6,307 Total securities available-for-sale $ 4,136,857 $ 33,126 $ ( 50,768 ) $ 4,119,215 (in thousands) Amortized Cost Gross Unrecognized Gains Gross Unrecognized Losses Fair Value Securities held-to-maturity Obligations of states and political subdivisions $ 13,030 $ 506 $ ( 12 ) $ 13,524 Mortgage-backed securities - residential 962,717 — ( 134,393 ) 828,324 Mortgage-backed securities - commercial 311,066 — ( 32,826 ) 278,240 Total securities held-to-maturity $ 1,286,813 $ 506 $ ( 167,231 ) $ 1,120,088 December 31, 2025 (in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Securities available-for-sale Obligations of states and political subdivisions $ 458,290 $ 13,518 $ ( 649 ) $ 471,159 Mortgage-backed securities - residential 2,871,733 36,881 ( 24,325 ) 2,884,289 Mortgage-backed securities - commercial 381,934 1,622 ( 11,750 ) 371,806 Collateralized loan obligations 188,500 1 ( 185 ) 188,316 Corporate bonds 51,828 527 ( 2,440 ) 49,915 U.S. Treasury securities 20,623 46 — 20,669 Agency debentures 7,243 9 ( 21 ) 7,231 Total securities available-for-sale $ 3,980,151 $ 52,604 $ ( 39,370 ) $ 3,993,385 (in thousands) Amortized Cost Gross Unrecognized Gains Gross Unrecognized Losses Fair Value Securities held-to-maturity Obligations of states and political subdivisions $ 12,902 $ 545 $ ( 6 ) $ 13,441 Mortgage-backed securities - residential 1,012,716 — ( 134,994 ) 877,722 Mortgage-backed securities - commercial 311,014 — ( 31,359 ) 279,655 Total securities held-to-maturity $ 1,336,632 $ 545 $ ( 166,359 ) $ 1,170,818 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 June 30, 2026 and December 31, 2025 was $ 21.4 million and $ 20.2 million, respectively, of interest and dividends receivable from the Company’s debt securities. Accrued interest receivable from securities available-for-sale totaled $ 19.1 15 million and $ 17.8 million at June 30, 2026 and December 31, 2025, respectively. Accrued interest receivable from securities held-to-maturity totaled $ 2.1 million and $ 2.2 million at June 30, 2026 and December 31, 2025, 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 June 30, 2026 and December 31, 2025, 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 June 30, 2026 and December 31, 2025, the Company held $ 46.6 million and $ 49.5 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 sheets. For the quarter and six months ended June 30, 2026, net losses of $ 431 thousand and $ 964 thousand on trading securities were recorded in loan servicing income. There were no net gains or losses on trading securities for the quarter and six months ended June 30, 2025. The following table presents proceeds, gross realized gains and gross realized losses from sales and calls of available-for-sale investments: Quarter Ended June 30, Six Months Ended June 30, (in thousands) 2026 2025 2026 2025 Proceeds $ 456 $ 929,969 $ 1,828 $ 929,969 Gross gains 31 5,060 83 5,060 Gross losses — 923 — 923 Tax-exempt interest income on investment securities was $ 4.2 million and $ 773 thousand for the quarter ended June 30, 2026 and 2025, and $ 8.5 million and $ 1.5 million for the six months ended June 30, 2026 and 2025, 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 accumulated other comprehensive income remained in accumulated other comprehensive income. The unrealized loss is accreted to interest income as a yield adjustment through earnings over the remaining term of the securities. For the quarter ended June 30, 2026 and 2025, $ 593 thousand and $ 625 thousand, respectively, of the unrealized loss was accreted to interest income, and $ 1.2 million and $ 1.3 million, respectively, was accreted to interest income for the six months ended June 30, 2026 and 2025. No gain or loss was recorded at the time of transfer. The following table summarizes available-for-sale securities with unrealized losses at June 30, 2026 and December 31, 2025 aggregated by major security type and length of time in a continuous unrealized loss position: June 30, 2026 Less than 12 months 12 months or more Total (dollars in thousands) Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Obligations of states and political subdivisions $ 112,534 $ 1,419 $ 22,601 $ 381 $ 135,135 $ 1,800 Mortgage-backed securities - residential 890,067 8,263 358,301 26,032 1,248,368 34,295 Mortgage-backed securities - commercial 116,897 1,162 151,305 11,731 268,202 12,893 Collateralized loan obligations 53,478 22 — — 53,478 22 Corporate bonds 1,060 18 21,636 1,364 22,696 1,382 U.S. Treasury securities 20,424 250 — — 20,424 250 Agency debentures 6,307 126 — — 6,307 126 Total $ 1,200,767 $ 11,260 $ 553,843 $ 39,508 $ 1,754,610 $ 50,768 Number of securities with unrealized losses 288 219 507 16 December 31, 2025 Less than 12 months 12 months or more Total (dollars in thousands) Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Obligations of states and political subdivisions $ 27,015 $ 151 $ 30,244 $ 498 $ 57,259 $ 649 Mortgage-backed securities - residential 72,234 384 393,915 23,941 466,149 24,325 Mortgage-backed securities - commercial 106,225 405 156,600 11,345 262,825 11,750 Collateralized loan obligations 138,315 185 — — 138,315 185 Corporate bonds 3,543 101 27,661 2,339 31,204 2,440 Agency debentures 4,877 21 — — 4,877 21 Total $ 352,209 $ 1,247 $ 608,420 $ 38,123 $ 960,629 $ 39,370 Number of securities with unrealized losses 83 240 323 The Company did not record an ACL on the debt securities portfolio at June 30, 2026 and December 31, 2025. As of both dates, the Company considers any unrealized or unrecognized 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 the intent and ability to hold these securities until the amortized cost basis of each security is recovered, which may be at maturity, and likewise concluded as of June 30, 2026, 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 factors that were considered in determining that an ACL was not required at June 30, 2026 and December 31, 2025 are discussed below. As discussed in Note 17, “Subsequent Events,” in July 2026, the Company completed a balance sheet restructuring by selling its remaining low-yielding AFS securities and reinvesting in MBS at current market rates. Management expects that the restructuring will improve the Company’s near-term net interest margin. The restructuring was not the result of a deterioration in credit quality of the portfolio. Obligations of States and Political Subdivisions : 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. Mortgage-Backed Securities - Residential and Commercial : 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 a result, management expects to recover the entire amortized cost basis of these securities. Collateralized Loan Obligations : The unrealized losses on the Company’s collateralized loan obligations are primarily due to slightly wider spreads. Management conducts ongoing monitoring of these securities including analysis of credit enhancement and performance of the underlying collateral. Management expects to recover the entire amortized cost basis of these securities. Corporate Bonds : 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, and an assessment of regulatory and financial ratios. Management expects to recover the entire amortized cost basis of these securities. U.S. Treasury Securities : 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 a result, management expects to recover the entire amortized cost basis of these securities. 17 Agency Debentures : 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 a result, management expects to recover the entire amortized cost basis of these securities. At June 30, 2026, investment securities with a carrying value of $ 3.5 billion were pledged to secure available borrowing capacity from the Federal Reserve’s Discount Window, and investment securities with a carrying value of $ 1.7 billion were pledged to secure the Company’s obligations to collateralize certain public, trust and bankruptcy deposits as required by law. As of June 30, 2026, 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 June 30, 2026, were as follows: June 30, 2026 (in thousands) Within One Year After One Through Five Years After Five Through Ten Years After Ten Years Total Securities available-for-sale Obligations of states and political subdivisions $ 3,386 $ 44,415 $ 131,205 $ 283,714 $ 462,720 Mortgage-backed securities - residential 242 10,371 21,687 2,968,895 3,001,195 Mortgage-backed securities - commercial 5,247 199,870 133,373 14,114 352,604 Collateralized loan obligations — — — 230,582 230,582 Corporate bonds — 12,490 32,893 — 45,383 U.S. Treasury securities — 20,424 — — 20,424 Agency debentures — 1,105 3,092 2,110 6,307 Total $ 8,875 $ 288,675 $ 322,250 $ 3,499,415 $ 4,119,215 June 30, 2026 Within One Year After One Through Five Years After Five Through Ten Years After Ten Years Total (in thousands) Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost Fair Value Securities held-to-maturity Obligations of states and political subdivisions $ 3,500 $ 3,500 $ 3,113 $ 3,135 $ 4,751 $ 5,053 $ 1,666 $ 1,836 $ 13,030 $ 13,524 Mortgage-backed securities - residential — — 50 49 — — 962,667 828,275 962,717 828,324 Mortgage-backed securities - commercial — — 189,144 170,753 121,922 107,487 — — 311,066 278,240 Total $ 3,500 $ 3,500 $ 192,307 $ 173,937 $ 126,673 $ 112,540 $ 964,333 $ 830,111 $ 1,286,813 $ 1,120,088 18 NOTE 4- LOANS AND CREDIT QUALITY The loan receivables portfolio consisted of the following as of the dates indicated: (in thousands) June 30, 2026 December 31, 2025 Commercial and industrial $ 439,814 $ 482,170 Commercial real estate Multifamily 5,223,356 5,355,252 Non-owner occupied 1,614,883 1,740,277 Owner occupied 512,474 689,079 Construction and land development 360,668 493,992 Residential real estate 4,107,867 3,970,803 Auto 510,232 791,012 Other consumer 806,902 654,351 Total loan receivables before allowance for credit losses 13,576,196 14,176,936 Allowance for credit losses on loans ( 152,601 ) ( 153,319 ) Net loan receivables $ 13,423,595 $ 14,023,617 At June 30, 2026, $ 10.2 billion of loans were pledged to secure borrowings from the FHLB, and $ 1.2 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 77 % of total loans in these segments as of June 30, 2026 and 76 % as of December 31, 2025. In addition, substantial portions of the Company’s loans are multifamily and residential real estate. At June 30, 2026, multifamily loans represented 38 % of the loan portfolio and residential real estate loans represented 30 % of the loan portfolio. At December 31, 2025, multifamily loans represented 38 % of the loan portfolio and residential real estate loans represented 28 % of the loan portfolio. 19 Allowance for Credit Losses The following tables present the activity in the allowance for credit losses on loans by portfolio segment: (in thousands) Commercial and Industrial Commercial Real Estate Residential Real Estate Auto Other Consumer Total Quarter Ended June 30, 2026 Allowance for credit losses on loans Beginning balance $ 8,860 $ 120,758 $ 13,621 $ 11,446 $ 2,111 $ 156,796 Provision (reversal of provision) for credit losses 1,160 3,502 ( 5,868 ) 45 257 ( 904 ) Loans charged off ( 105 ) ( 68 ) — ( 5,573 ) ( 562 ) ( 6,308 ) Recoveries 235 85 6 2,502 189 3,017 Ending balance $ 10,150 $ 124,277 $ 7,759 $ 8,420 $ 1,995 $ 152,601 (in thousands) Commercial and Industrial Commercial Real Estate Residential Real Estate Auto Other Consumer Total Quarter Ended June 30, 2025 Allowance for credit losses on loans Beginning balance $ 4,297 $ 34,995 $ 4,763 $ 28,935 $ 2,525 $ 75,515 Provision (reversal of provision) for credit losses ( 989 ) ( 1,396 ) 214 2,219 309 357 Loans charged off ( 105 ) — — ( 9,253 ) ( 591 ) ( 9,949 ) Recoveries 253 — — 1,966 192 2,411 Ending balance $ 3,456 $ 33,599 $ 4,977 $ 23,867 $ 2,435 $ 68,334 (in thousands) Commercial and Industrial Commercial Real Estate Residential Real Estate Auto Other Consumer Total Six Months Ended June 30, 2026 Allowance for credit losses on loans Beginning balance $ 8,417 $ 114,326 $ 13,294 $ 15,003 $ 2,279 $ 153,319 Provision (reversal of provision) for credit losses 1,568 9,823 ( 5,894 ) 610 582 6,689 Loans charged off ( 236 ) ( 68 ) ( 1 ) ( 11,993 ) ( 1,215 ) ( 13,513 ) Recoveries 401 196 360 4,800 349 6,106 Ending balance $ 10,150 $ 124,277 $ 7,759 $ 8,420 $ 1,995 $ 152,601 (in thousands) Commercial and Industrial Commercial Real Estate Residential Real Estate Auto Other Consumer Total Six Months Ended June 30, 2025 Allowance for credit losses on loans Beginning balance $ 4,869 $ 35,097 $ 4,656 $ 41,282 $ 2,654 $ 88,558 Provision (reversal of provision) for credit losses ( 1,447 ) ( 1,498 ) 321 ( 1,410 ) 639 ( 3,395 ) Loans charged off ( 222 ) — — ( 20,759 ) ( 1,185 ) ( 22,166 ) Recoveries 256 — — 4,754 327 5,337 Ending balance $ 3,456 $ 33,599 $ 4,977 $ 23,867 $ 2,435 $ 68,334 20 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: Quarter Ended June 30, Six Months Ended June 30, (in thousands) 2026 2025 2026 2025 Allowance for credit losses on unfunded lending commitments Beginning balance $ 7,289 $ 4,460 $ 7,115 $ 4,366 Provision (reversal of provision) for credit losses ( 1,863 ) ( 725 ) ( 1,689 ) ( 631 ) Ending balance $ 5,426 $ 3,735 $ 5,426 $ 3,735 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 quantitative and qualitative expected losses for current and forecasted periods. As of June 30, 2026, the quantitative rates increased when compared to December 31, 2025 due to higher forecasted product risk metrics in certain geographically concentrated areas, partially offset by runoff of the auto, non-owner occupied commercial real estate, and construction and land development portfolios. There were no material changes to the methodologies for estimating credit losses for the periods presented. Disclosures related to the amortized cost of 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 $ 51.5 million and $ 53.1 million at June 30, 2026 and December 31, 2025, respectively, and is included in interest receivable and other assets on the consolidated balance sheets. Credit Quality Nonaccrual loans include both individually evaluated loans and smaller balance homogeneous loans that are collectively evaluated. Loans whose repayments are insured by the Federal Housing Administration, or guaranteed by the Department of Veterans’ Affairs or Ginnie Mae, are maintained on accrual status even if 90 days or more past due. The following table presents the amortized cost of nonaccrual loans and loans past due 90 days or more and still accruing by class of loans as of June 30, 2026 and December 31, 2025: June 30, 2026 (in thousands) Nonaccrual With No Allowance for Credit Loss Total Nonaccrual Loans Past Due 90 Days or More Still Accruing Commercial and industrial $ 3,541 $ 10,758 $ — Commercial real estate Multifamily 1,725 1,725 — Non-owner occupied 4,425 4,425 — Owner occupied 694 694 — Construction and land development 392 15,564 — Residential real estate 5,002 12,161 6,543 Auto — 3,212 — Other consumer — 18 — Total $ 15,779 $ 48,557 $ 6,543 21 December 31, 2025 (in thousands) Nonaccrual With No Allowance for Credit Loss Total Nonaccrual Loans Past Due 90 Days or More Still Accruing Commercial and industrial $ 5,310 $ 11,196 $ — Commercial real estate Multifamily 3,387 3,387 — Non-owner occupied 953 12,539 — Owner occupied 1,644 1,870 — Construction and land development 140 2,962 — Residential real estate 3,766 6,765 3,943 Auto — 4,143 — Other consumer — 1 — Total $ 15,200 $ 42,863 $ 3,943 The following tables present the amortized cost of collateral-dependent loans by class and collateral type as of June 30, 2026 and December 31, 2025: June 30, 2026 (in thousands) Auto Equipment Land Multifamily Retail Building Single Family Residential Other non-real estate Total Loans Commercial and industrial $ — $ — $ 4,153 $ — $ 3,259 $ 998 $ 758 $ 9,168 Commercial real estate Multifamily — — — 16,229 — — — 16,229 Non-owner occupied — — — — 4,425 — — 4,425 Owner occupied — — — — 694 — — 694 Construction and land development — — 15,564 — — — — 15,564 Residential real estate — — — — — 5,002 — 5,002 Total $ — $ — $ 19,717 $ 16,229 $ 8,378 $ 6,000 $ 758 $ 51,082 December 31, 2025 (in thousands) Auto Equipment Land Multifamily Retail Building Single Family Residential Other non-real estate Total Loans Commercial and industrial $ — $ — $ — $ — $ 3,819 $ — $ 4,674 $ 8,493 Commercial real estate Multifamily — — — 17,869 — — — 17,869 Non-owner occupied — — — — 12,539 — — 12,539 Owner occupied — — — — 742 — 1,128 1,870 Construction and land development — — 2,962 — — — — 2,962 Residential real estate — — — 157 — 4,121 — 4,278 Total $ — $ — $ 2,962 $ 18,026 $ 17,100 $ 4,121 $ 5,802 $ 48,011 22 The following tables present the aging of the amortized cost in past due loans as of June 30, 2026 and December 31, 2025 by class of loans: June 30, 2026 (in thousands) 30-59 Days Past Due 60-89 Days Past Due Greater than 89 Days Past Due Total Past Due Loans Not Past Due Total Loans Commercial and industrial $ 997 $ 89 $ 9,344 $ 10,430 $ 429,384 $ 439,814 Commercial real estate Multifamily — 3,685 1,724 5,409 5,217,947 5,223,356 Non-owner occupied 7,666 12,759 — 20,425 1,594,458 1,614,883 Owner occupied 448 — 264 712 511,762 512,474 Construction and land development 389 — 15,312 15,701 344,967 360,668 Residential real estate 1,161 7,359 12,368 20,888 4,086,979 4,107,867 Auto 15,078 4,499 1,860 21,437 488,795 510,232 Other consumer 234 165 16 415 806,487 806,902 Total $ 25,973 $ 28,556 $ 40,888 $ 95,417 $ 13,480,779 $ 13,576,196 December 31, 2025 (in thousands) 30-59 Days Past Due 60-89 Days Past Due Greater than 89 Days Past Due Total Past Due Loans Not Past Due Total Loans Commercial and industrial $ 3,277 $ 1,066 $ 8,024 $ 12,367 $ 469,803 $ 482,170 Commercial real estate Multifamily — — 1,614 1,614 5,353,638 5,355,252 Non-owner occupied 50 — 11,586 11,636 1,728,641 1,740,277 Owner occupied — 1,349 226 1,575 687,504 689,079 Construction and land development — — 2,962 2,962 491,030 493,992 Residential real estate 14,274 4,944 7,187 26,405 3,944,398 3,970,803 Auto 25,984 7,078 3,086 36,148 754,864 791,012 Other consumer 288 149 1 438 653,913 654,351 Total $ 43,873 $ 14,586 $ 34,686 $ 93,145 $ 14,083,791 $ 14,176,936 23 The following tables present the amortized cost of loans at June 30, 2026 and 2025 that were both experiencing financial difficulty and modified during the quarters and six months ended June 30, 2026 and 2025, 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. There were no loans that were both experiencing financial difficulty and modified during the quarter ended June 30, 2025. Quarter Ended June 30, 2026 (in thousands) Principal Forgiveness Payment Delay Term Extension Interest Rate Reduction Combined Term Extension and Principal Forgiveness Combined Term Extension and Interest Rate Reduction Combined Payment Delay and Term Extension Total Class of Financing Receivable Residential real estate $ — $ — $ — $ — $ — $ — $ 767 0.02 % Total $ — $ — $ — $ — $ — $ — $ 767 0.01 % Six Months Ended June 30, 2026 (in thousands) Principal Forgiveness Payment Delay Term Extension Interest Rate Reduction Combined Term Extension and Principal Forgiveness Combined Term Extension and Interest Rate Reduction Combined Payment Delay and Term Extension Total Class of Financing Receivable Commercial and industrial $ — $ — $ 12 $ — $ — $ — $ — 0.00 % Residential real estate — — — — — — 1,305 0.03 % Total $ — $ — $ 12 $ — $ — $ — $ 1,305 0.01 % Six Months Ended June 30, 2025 (in thousands) Principal Forgiveness Payment Delay Term Extension Interest Rate Reduction Combined Term Extension and Principal Forgiveness Combined Term Extension and Interest Rate Reduction Combined Payment Delay and Term Extension Total Class of Financing Receivable Commercial and industrial $ — $ — $ 113 $ — $ — $ — $ — 0.04 % Total $ — $ — $ 113 $ — $ — $ — $ — 0.00 % The Company has committed to lend no additional amounts to the borrowers included in the previous tables. 24 The following tables present the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty for the quarter ended June 30, 2026. There were no loans that were both experiencing financial difficulty and modified during the quarter ended June 30, 2025. Quarter Ended June 30, 2026 (dollars in thousands) Principal Forgiveness Weighted-Average Payment Delay <months> Weighted-Average Interest Rate Reduction Weighted-Average Term Extension <months> Residential real estate $ — 125 — % 125 The following tables present the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty for the six months ended June 30, 2026 and 2025: Six Months Ended June 30, 2026 (dollars in thousands) Principal Forgiveness Weighted-Average Payment Delay <months> Weighted-Average Interest Rate Reduction Weighted-Average Term Extension <months> Commercial and industrial $ — — — % 24 Residential real estate — 81 — % 81 Six Months Ended June 30, 2025 (dollars in thousands) Principal Forgiveness Weighted-Average Payment Delay <months> Weighted-Average Interest Rate Reduction Weighted-Average Term Extension <months> Commercial and industrial $ — — — % 60 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 tables present the payment status of loans that were modified in the last 12 months, with related amortized cost balances, as of the dates indicated: Payment Status (Amortized Cost) At June 30, 2026 (in thousands) Current 30-59 Days Past Due 60-89 Days Past Due Greater than 89 Days Past Due Total Commercial and industrial $ 787 $ — $ — $ 4,153 $ 4,940 Commercial real estate Non-owner occupied 17,176 — — — 17,176 Construction and land development — — — 2,772 2,772 Residential real estate 1,910 — — 1,155 3,065 Total $ 19,873 $ — $ — $ 8,080 $ 27,953 Payment Status (Amortized Cost) At June 30, 2025 (in thousands) Current 30-59 Days Past Due 60-89 Days Past Due Greater than 89 Days Past Due Total Commercial and industrial $ 592 $ — $ — $ — $ 592 Total $ 592 $ — $ — $ — $ 592 There were no loans that had a payment default (e.g., borrower missed a regularly scheduled payment) and were past due for the quarter and six months ended June 30, 2026 and 2025 and that were modified in the last 12 months. 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. 25 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. 26 The following table presents the amortized cost by loan risk category and origination year for commercial and industrial and commercial real estate loan classes at June 30, 2026 and December 31, 2025. In addition, year-to-date charge-offs for 2026 and 2025 are presented by origination year. (in thousands) 2026 2025 2024 2023 2022 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total June 30, 2026 Commercial and industrial Risk rating Pass $ 8,393 $ 17,948 $ 54,660 $ 48,490 $ 19,799 $ 101,640 $ 144,296 $ — $ 395,226 Special mention — — 83 — 428 918 6,510 — 7,939 Substandard — 147 627 118 22,221 9,317 4,219 — 36,649 Doubtful — — — — — — — — — Total $ 8,393 $ 18,095 $ 55,370 $ 48,608 $ 42,448 $ 111,875 $ 155,025 $ — $ 439,814 Year-to-date gross charge-offs $ — $ 105 $ — $ — $ — $ 6 $ 125 $ — $ 236 Commercial real estate - multifamily Risk rating Pass $ 83,189 $ 59,021 $ 169,005 $ 404,100 $ 2,181,122 $ 2,055,845 $ 20,297 $ — $ 4,972,579 Special mention — — — 20,550 22,951 86,769 — — 130,270 Substandard — — — 6,565 70,275 43,667 — — 120,507 Doubtful — — — — — — — — — Total $ 83,189 $ 59,021 $ 169,005 $ 431,215 $ 2,274,348 $ 2,186,281 $ 20,297 $ — $ 5,223,356 Year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Commercial real estate - non-owner occupied Risk rating Pass $ 5,161 $ 10,987 $ 13,635 $ 34,741 $ 367,768 $ 1,082,950 $ 8,650 $ — $ 1,523,892 Special mention — — — — — 22,410 — — 22,410 Substandard — — — — — 68,581 — — 68,581 Doubtful — — — — — — — — — Total $ 5,161 $ 10,987 $ 13,635 $ 34,741 $ 367,768 $ 1,173,941 $ 8,650 $ — $ 1,614,883 Year-to-date gross charge-offs $ — $ — $ — $ — $ — $ 68 $ — $ — $ 68 Commercial real estate - owner occupied Risk rating Pass $ 906 $ 26,029 $ 12,243 $ 19,213 $ 81,334 $ 298,828 $ 11,189 $ — $ 449,742 Special mention — — — 1,623 8,315 37,400 — — 47,338 Substandard — — — — 8,754 6,640 — — 15,394 Doubtful — — — — — — — — — Total $ 906 $ 26,029 $ 12,243 $ 20,836 $ 98,403 $ 342,868 $ 11,189 $ — $ 512,474 Year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Commercial real estate - construction and land development Risk rating Pass $ 84,362 $ 180,867 $ 41,274 $ 19,324 $ 8,883 $ 9,854 $ 540 $ — $ 345,104 Special mention — — — — — — — — — Substandard — — — — — 15,564 — — 15,564 Doubtful — — — — — — — — — Total $ 84,362 $ 180,867 $ 41,274 $ 19,324 $ 8,883 $ 25,418 $ 540 $ — $ 360,668 Year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — 27 (in thousands) 2025 2024 2023 2022 2021 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total December 31, 2025 Commercial and industrial Risk rating Pass $ 22,961 $ 40,427 $ 52,574 $ 24,657 $ 19,914 $ 78,344 $ 200,344 $ 225 $ 439,446 Special mention — 104 — 472 162 2,828 — — 3,566 Substandard 64 634 65 23,257 400 14,487 251 — 39,158 Doubtful — — — — — — — — — Total $ 23,025 $ 41,165 $ 52,639 $ 48,386 $ 20,476 $ 95,659 $ 200,595 $ 225 $ 482,170 Year-to-date gross charge-offs $ 40 $ 75 $ 47 $ 6,772 $ 230 $ 19 $ 1,215 $ — $ 8,398 Commercial real estate - multifamily Risk rating Pass $ 59,536 $ 177,297 $ 458,411 $ 2,224,002 $ 1,177,242 $ 1,031,448 $ 18,160 $ 211 $ 5,146,307 Special mention — — — 32,156 22,062 35,772 — — 89,990 Substandard — — 6,558 68,486 24,403 19,508 — — 118,955 Doubtful — — — — — — — — — Total $ 59,536 $ 177,297 $ 464,969 $ 2,324,644 $ 1,223,707 $ 1,086,728 $ 18,160 $ 211 $ 5,355,252 Year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Commercial real estate -non-owner occupied Risk rating Pass $ 7,032 $ 13,753 $ 31,688 $ 371,096 $ 138,150 $ 1,057,437 $ 6,659 $ 257 $ 1,626,072 Special mention — — — — — 32,308 — — 32,308 Substandard — — — — — 81,897 — — 81,897 Doubtful — — — — — — — — — Total $ 7,032 $ 13,753 $ 31,688 $ 371,096 $ 138,150 $ 1,171,642 $ 6,659 $ 257 $ 1,740,277 Year-to-date gross charge-offs $ — $ — $ — $ — $ — $ 428 $ — $ — $ 428 Commercial real estate - owner-occupied Risk rating Pass $ 30,541 $ 12,420 $ 27,707 $ 108,047 $ 73,141 $ 371,660 $ 9,045 $ 243 $ 632,804 Special mention — — — 1,660 6,954 28,003 — — 36,617 Substandard — — — 8,836 3,752 7,070 — — 19,658 Doubtful — — — — — — — — — Total $ 30,541 $ 12,420 $ 27,707 $ 118,543 $ 83,847 $ 406,733 $ 9,045 $ 243 $ 689,079 Year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Commercial real estate - construction and land development Risk rating Pass $ 272,783 $ 128,650 $ 59,371 $ 13,377 $ 3,112 $ 12,937 $ 200 $ 600 $ 491,030 Special mention — — — — — — — — — Substandard — — — — — 2,962 — — 2,962 Doubtful — — — — — — — — — Total $ 272,783 $ 128,650 $ 59,371 $ 13,377 $ 3,112 $ 15,899 $ 200 $ 600 $ 493,992 Year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — 28 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 June 30, 2026 and December 31, 2025. In addition, year-to-date charge-offs for 2026 and 2025 are presented by origination year. (in thousands) 2026 2025 2024 2023 2022 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total June 30, 2026 Residential real estate Payment performance Performing $ 311,543 $ 457,561 $ 172,152 $ 86,707 $ 594,309 $ 1,892,339 $ 542,296 $ 32,256 $ 4,089,163 Nonperforming — — — 417 740 11,268 5,182 1,097 18,704 Total $ 311,543 $ 457,561 $ 172,152 $ 87,124 $ 595,049 $ 1,903,607 $ 547,478 $ 33,353 $ 4,107,867 Year-to-date gross charge-offs $ — $ — $ — $ — $ — $ 1 $ — $ — $ 1 Auto Payment performance Performing $ — $ 128 $ 169 $ 35,879 $ 325,127 $ 145,717 $ — $ — $ 507,020 Nonperforming — — — 251 2,036 925 — — 3,212 Total $ — $ 128 $ 169 $ 36,130 $ 327,163 $ 146,642 $ — $ — $ 510,232 Year-to-date gross charge-offs $ — $ — $ — $ 609 $ 7,579 $ 3,805 $ — $ — $ 11,993 Other consumer Payment performance Performing $ 199,909 $ 211,779 $ 152,868 $ 140,522 $ 62,114 $ 35,828 $ 3,864 $ — $ 806,884 Nonperforming — 3 — — — — 15 — 18 Total $ 199,909 $ 211,782 $ 152,868 $ 140,522 $ 62,114 $ 35,828 $ 3,879 $ — $ 806,902 Year-to-date gross charge-offs $ 385 $ 28 $ 6 $ 150 $ — $ 635 $ — $ 11 $ 1,215 (in thousands) 2025 2024 2023 2022 2021 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total December 31, 2025 Residential real estate Payment performance Performing $ 552,620 $ 155,815 $ 110,989 $ 767,915 $ 828,395 $ 1,041,378 $ 499,312 $ 3,671 $ 3,960,095 Nonperforming — — — — — 7,651 3,057 — 10,708 Total $ 552,620 $ 155,815 $ 110,989 $ 767,915 $ 828,395 $ 1,049,029 $ 502,369 $ 3,671 $ 3,970,803 Year-to-date gross charge-offs $ — $ — $ — $ — $ — $ 9 $ 96 $ — $ 105 Auto Payment performance Performing $ 157 $ 218 $ 49,109 $ 467,560 $ 227,342 $ 41,638 $ — $ 845 $ 786,869 Nonperforming — — 311 2,451 1,107 274 — — 4,143 Total $ 157 $ 218 $ 49,420 $ 470,011 $ 228,449 $ 41,912 $ — $ 845 $ 791,012 Year-to-date gross charge-offs $ — $ — $ 1,690 $ 23,927 $ 12,077 $ 2,985 $ — $ — $ 40,679 Other consumer Payment performance Performing $ 216,135 $ 171,060 $ 145,091 $ 73,178 $ 15,624 $ 27,294 $ 5,825 $ 143 $ 654,350 Nonperforming — 1 — — — — — — 1 Total $ 216,135 $ 171,061 $ 145,091 $ 73,178 $ 15,624 $ 27,294 $ 5,825 $ 143 $ 654,351 Year-to-date gross charge-offs $ 619 $ 1 $ — $ — $ 607 $ 1,106 $ 78 $ — $ 2,411 29 Loan Purchases The following table presents loan receivables purchased by portfolio segment, excluding loans acquired in business combinations: Quarter Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (in thousands) Residential real estate $ 3,139 $ 13,387 $ 6,617 $ 42,617 The Company purchased the above loan receivables at a premium of $ 15 thousand and $ 159 thousand for the quarters ended June 30, 2026 and 2025, respectively, and $ 35 thousand and $ 201 thousand for the six months ended June 30, 2026 and 2025, respectively. For the purchased loan receivables disclosed above, the Company did not incur any specific allowances for credit losses during the periods indicated. NOTE 5– 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. Under the proportional amortization method, the amortization is recorded as a component of income tax expense. At June 30, 2026 and December 31, 2025, the balance of LIHTC investments, which is included in interest receivable and other assets on the consolidated balance sheets, was $ 39.1 million and $ 43.3 million, respectively. Remaining unfunded commitments related to the investments in qualified affordable housing projects totaled $ 5.7 million and $ 7.9 million as of June 30, 2026 and December 31, 2025. The Company expects to fulfill these commitments through 2039. The following table presents other information related to the Company’s LIHTC investments for the periods indicated: Quarter Ended June 30, Six Months Ended June 30, (in thousands) 2026 2025 2026 2025 Tax credits and other tax benefits recognized $ 2,047 $ 829 $ 4,093 $ 1,657 LIHTC amortization expense 2,146 826 4,292 1,651 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 June 30, 2026 and December 31, 2025 , the balance of CRA investments, which is included in interest receivable and other assets on the consolidated balance sheets, was $ 83.2 million and $ 79.1 million , respectively. The Company recognized dividend income on CRA investments of $ 2.6 million and $ 670 thousand for the quarters ended June 30, 2026 and 2025, respectively, and $ 4.9 million and $ 1.0 million for the six months ended June 30, 2026 and 2025, respectively, which is included within other interest income in the consolidated income statements. 30 NOTE 6– DEPOSITS The aggregate amount of time certificates of deposits that meet or exceed the FDIC insurance limit of $250 thousand at June 30, 2026 and December 31, 2025 was $ 476.9 million and $ 565.6 million, respectively. At June 30, 2026, certificates of deposit outstanding mature as follows: (in thousands) June 30, 2026 Within one year $ 1,898,801 One to two years 30,339 Two to three years 8,196 Three to four years 4,124 Four to five years 3,034 Thereafter 986 Total $ 1,945,480 The Company accepts public deposits from various state, city and municipal agencies. Public deposits totaling $ 1.4 billion and $ 1.3 billion are included in demand deposits, interest bearing transaction accounts, savings accounts and time certificates of deposit at June 30, 2026 and December 31, 2025, respectively. As of June 30, 2026, the Company had investment securities with a carrying value of $ 1.6 billion pledged as collateral for public deposits. 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 June 30, 2026 and December 31, 2025, the Company held trust deposits of $ 801 thousand and $ 683 thousand, respectively, that were in excess of $250 thousand and which required securities collateralization. NOTE 7– BORROWINGS AND LONG-TERM DEBT Borrowings The following table presents the Company’s borrowings as of the dates indicated: June 30, 2026 December 31, 2025 (dollars in thousands) Balance Weighted Average Rate Balance Weighted Average Rate Short-term borrowings: (1) Federal Reserve Bank Discount Window $ 80,000 3.75 % $ — — % Total $ 80,000 3.75 % $ — — % (1) Short-term borrowings have an original maturity of one year or less. Federal Home Loan Bank (FHLB) Advances The Company did not have any outstanding FHLB advances as of June 30, 2026 and December 31, 2025. As of June 30, 2026 and December 31, 2025, the Company’s investment in capital stock of the FHLB totaled $ 17.3 million. The Company had $ 10.2 billion of loans pledged to the FHLB, which permits up to $ 5.9 billion of available borrowing capacity as of June 30, 2026. Federal Reserve Bank Discount Window The Company had pledged $ 1.2 billion of consumer loans through the Borrower-In-Custody Program and investment securities with a carrying value of $ 3.5 billion to the Federal Reserve Bank Discount Window, which permits $ 4.4 billion of additional borrowing capacity as of June 30, 2026. 31 Brokered and Other Wholesale Funding The Company had no brokered or other wholesale funding outstanding as of June 30, 2026 and December 31, 2025. The Company had $ 5.0 billion of available borrowing capacity under borrowing lines established with other financial institutions as of June 30, 2026. 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. 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. Long-term debt has an original maturity in excess of one year. The following table presents the Company’s long-term debt as of the dates indicated: June 30, 2026 December 31, 2025 (dollars in thousands) Par Value Carrying Value (1) Par Value Carrying Value (1) Rate Maturity Date Senior Notes (2) $ — $ — $ 65,000 $ 64,835 6.5 % per annum June 1, 2026 Subordinated Notes 96,000 81,892 96,000 79,626 3.5 % per annum (3) January 30, 2032 TRUPs: HomeStreet Statutory Trust I (5) 5,155 4,173 5,155 4,090 3-month Term SOFR + 1.96 % (4) June 15, 2035 HomeStreet Statutory Trust II (5) 20,619 16,283 20,619 15,943 3-month Term SOFR + 1.76 % (4) December 15, 2035 HomeStreet Statutory Trust III (5) 20,619 16,024 20,619 15,686 3-month Term SOFR + 1.63 % (4) March 15, 2036 HomeStreet Statutory Trust IV (5) 15,464 12,048 15,464 11,834 3-month Term SOFR + 1.94 % (4) June 15, 2037 Total $ 157,857 $ 130,420 $ 222,857 $ 192,014 (1) Includes discounts from purchase accounting adjustments as a result of the Merger on September 2, 2025. (2) On March 1, 2026, the Company redeemed at par, its $ 65 million of Senior Notes. (3) 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. (4) These rates reflect the floating rates as of June 30, 2026. (5) Call options are exercisable at par and are callable, without penalty, on a quarterly basis. NOTE 8– 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. The notional amount of the 32 interest rate swaps does not represent amounts exchanged by the parties. The amount exchanged is determined by reference to the notional amount and the other terms of the individual interest rate swap agreements. Cooperative Rabobank, U.A. and a subsidiary of Rabobank International Holding B.V.’s parent also provided various interest rate swap services to the Company. The applicable Rabobank International Holding B.V. counterparties deposited $ 2.8 million and $ 3.7 million in cash collateral with the Company to secure underlying derivative contracts as of June 30, 2026 and December 31, 2025, respectively. B&F Capital Markets, LLC (a Stifel Company) has provided interest rate swap services to the Company since 2023. The following table presents the notional amounts and fair values for derivatives which are economic hedges. The fair values for derivatives are included in interest receivable and other assets or interest payable and other liabilities on the consolidated balance sheets. June 30, 2026 December 31, 2025 (in thousands) Notional amount Fair Value Notional amount Fair Value Included in interest receivable and other assets: Interest rate lock commitments $ 4,892 $ 68 $ 4,929 $ 75 Forward sale commitments 37,999 105 32,217 148 Interest rate swaps 308,565 8,829 398,536 9,406 Total derivatives before netting $ 351,456 $ 9,002 $ 435,682 $ 9,629 Netting adjustment/cash collateral (1) ( 5,807 ) ( 5,438 ) Carrying value on consolidated balance sheets $ 3,195 $ 4,191 Included in interest payable and other liabilities: Forward sale commitments $ 23,797 $ 90 $ 10,363 $ 28 Interest rate swaps 308,565 8,354 398,536 8,543 Futures 4,600 1 2,200 2 Total derivatives before netting $ 336,962 $ 8,445 $ 411,099 $ 8,573 Netting adjustment/cash collateral (1) ( 29 ) 38 Carrying value on consolidated balance sheets $ 8,416 $ 8,611 (1) Includes net cash collateral received of $ 5.8 million and $ 5.5 million at June 30, 2026 and December 31, 2025, 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 June 30, 2026 and December 31, 2025, the Company had liabilities of $ 6.0 million and $ 5.6 million, respectively, in cash collateral received from counterparties and receivables of $ 221 thousand and $ 122 thousand, 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 June 30, Six Months Ended June 30, (in thousands) 2026 2025 2026 2025 Recognized in noninterest income: Net gain (loss) on loan origination and sale activities (1) $ ( 101 ) $ — $ 77 $ — Loan servicing income (loss) (2) ( 52 ) — ( 406 ) — Other (3) ( 12 ) 21 ( 15 ) 75 (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. 33 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 $ 486 thousand and $ 959 thousand for the quarter and six months ended June 30, 2026 and was zero for the quarter and six months ended June 30, 2025, respectively. NOTE 9– MORTGAGE BANKING OPERATIONS LHFS consisted of the following: (in thousands) June 30, 2026 December 31, 2025 Single family $ 5,345 $ 5,967 Total $ 5,345 $ 5,967 Loans sold consisted of the following for the periods indicated: Quarter Ended June 30, Six Months Ended June 30, (in thousands) 2026 2025 2026 2025 Single family $ 23,728 $ 1,672 $ 55,958 $ 3,309 Multifamily and other 7,773 — 37,001 — Total $ 31,501 $ 1,672 $ 92,959 $ 3,309 For the quarters and six months ended June 30, 2026 and 2025, there were no loans sold as part of securitizations. Gain (loss) on loan origination and sale activities, including the effects of derivative risk management instruments, consisted of the following: Quarter Ended June 30, Six Months Ended June 30, (in thousands) 2026 2025 2026 2025 Single family (1) $ 2,432 $ ( 7 ) $ 3,259 $ — Multifamily and other (1) 45 — 361 — Total $ 2,477 $ ( 7 ) $ 3,620 $ — (1) Gain (loss) 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) June 30, 2026 December 31, 2025 Single family $ 4,192,680 $ 4,370,577 CRE, multifamily and SBA (1) 87,438 1,866,799 Total $ 4,280,118 $ 6,237,376 (1) On May 1, 2026, Mechanics Bank completed the previously announced sale of its Fannie Mae DUS business line to Fifth Third. Fifth Third acquired Mechanics Bank’s $ 1.7 billion in unpaid principal balance of multifamily loans serviced for Fannie Mae. As part of the transition in servicing to Fifth Third, Mechanics Bank is the sub-servicer of the DUS loans on an interim basis following the sale. 34 The following is a summary of changes in the Company’s liability for estimated single-family mortgage repurchase losses: Quarter Ended June 30, Six Months Ended June 30, (in thousands) 2026 2025 2026 2025 Balance, beginning of period $ 674 $ — $ 708 $ — Additions, net of adjustments (1) — — ( 32 ) — Realized (losses) recoveries, net (2) — — ( 2 ) — Balance, end of period $ 674 $ — $ 674 $ — (1) Includes additions for new loan sales and changes in estimated probable future repurchase losses on previously sold loans. (2) Includes principal losses and accrued interest on repurchased loans, “make-whole” settlements, settlements with claimants and certain related expenses. 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 $ 871 thousand and $ 1.2 million were recorded in interest receivable and other assets as of June 30, 2026 and December 31, 2025, respectively. 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 June 30, 2026 and December 31, 2025, there were no delinquent or defaulted mortgage loans currently in Ginnie Mae pools that the Company has recognized on its consolidated balance sheets. Revenue from mortgage servicing, including the effects of derivative risk management instruments, consisted of the following: Quarter Ended June 30, Six Months Ended June 30, (in thousands) 2026 2025 2026 2025 Servicing income, net: Servicing fees and other $ 3,673 $ 168 $ 8,864 $ 345 Changes in fair value of single family MSRs - other (1) ( 1,482 ) — ( 2,924 ) — Amortization of multifamily and SBA MSRs ( 771 ) — ( 2,409 ) — Total 1,420 168 3,531 345 Risk management, single family MSRs: Changes in fair value of MSRs due to assumptions (2) 646 — 1,348 — Net gain from economic hedging (3) ( 484 ) — ( 1,370 ) — Total 162 — ( 22 ) — Loan servicing income $ 1,582 $ 168 $ 3,509 $ 345 (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 quarter and six months ended June 30, 2025. 35 The changes in single family MSRs measured at fair value are as follows: Quarter Ended June 30, Six Months Ended June 30, (in thousands) 2026 2025 2026 2025 Beginning balance $ 57,630 $ — $ 58,095 $ — Additions: Originations 205 — 480 — Changes in fair value: Changes in fair value assumptions (1) 646 — 1,348 — Other (2) 355 — ( 1,087 ) — Ending balance $ 58,836 $ — $ 58,836 $ — (1) Principally reflects changes in model assumptions, including prepayment speed assumptions, which are primarily affected by changes in mortgage interest rates. (2) Represents changes due to collection/realization of expected cash flows and curtailments. In addition, includes a mortgage servicing rights valuation adjustment of $ 1.8 million for the quarter and six months ended June 30, 2026. Key economic assumptions used in measuring the initial fair value of capitalized single family MSRs were as follows: Quarter Ended June 30, Six Months Ended June 30, (rates per annum) (1) 2026 2025 2026 2025 Constant prepayment rate (CPR) (2) 12.30 % n/a 12.20 % n/a Discount rate (3) 8.90 % n/a 8.85 % n/a (1) Based on a weighted average. (2) Represents an expected lifetime average CPR used in the model. (3) Based on market observations. For the fair value of single family MSRs as of June 30, 2026 and December 31, 2025, we use a discounted cash flow valuation technique which utilizes CPRs and discount rates as significant unobservable inputs as noted in the table below: June 30, 2026 December 31, 2025 (rates per annum) Range of Inputs Average (1) Range of Inputs Average (1) CPRs (2) 5.03 % - 12.83 % 6.42 % 5.07 % - 12.14 % 6.96 % Discount Rates (3) 8.89 % - 17.33 % 9.27 % 8.65 % - 16.05 % 8.97 % (1) Weighted average rates for sales during the period for sales of loans with similar characteristics. (2) Represents the expected lifetime average CPR used in the model. (3) Based on market observations. To compute hypothetical sensitivities of the fair 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) June 30, 2026 Fair value of single family MSRs $ 58,836 Expected weighted-average life (in years) 8.13 CPR shock Impact on fair value of 10% increase in CPR $ ( 1,085 ) Impact on fair value of 20% increase in CPR $ ( 2,218 ) Discount rate shock Impact on fair value of 100 basis points increase $ ( 2,463 ) Impact on fair value of 200 basis points increase $ ( 4,846 ) 36 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 quarter and six months ended June 30, 2025. The changes in multifamily and SBA MSRs measured at the lower of amortized cost or fair value were as follows: Quarter Ended June 30, Six Months Ended June 30, (in thousands) 2026 2025 2026 2025 Beginning balance $ 26,370 $ — $ 27,737 $ — Originations — — 271 — Sale of MSRs - DUS business line (1) ( 25,293 ) — ( 25,293 ) — Amortization ( 771 ) — ( 2,409 ) — Ending balance $ 306 $ — $ 306 $ — (1) On May 1, 2026, Mechanics Bank completed the previously announced sale of its Fannie Mae DUS business line to Fifth Third, which included DUS multifamily mortgage servicing rights of $ 25.3 million. The fair value of multifamily and SBA MSRs was $ 412 thousand and $ 28.3 million at June 30, 2026 and December 31, 2025, respectively. Key economic assumptions used in measuring the initial fair value of capitalized multifamily MSRs were as follows: Quarter Ended June 30, Six Months Ended June 30, (rates per annum) (1) 2026 2025 2026 2025 Discount rate — % n/a 13.00 % n/a (1) Weighted averages of all the inputs within the range. 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. June 30, 2026 December 31, 2025 Range of Inputs Average (1) Range of Inputs Average (1) Discount rates 15.00 % 15.00 % 13.00 % - 15.00 % 13.07 % (1) Weighted averages of all the inputs within the range. 37 NOTE 10– GUARANTEES AND MORTGAGE REPURCHASE LIABILITY In the ordinary course of business, the Company has sold loans through the DUS program that are subject to a credit loss sharing arrangement. The Company has serviced the loans for Fannie Mae and shared in the risk of loss with Fannie Mae under the terms of the DUS contracts. Under the DUS program, the Company and Fannie Mae shared losses on a pro rata basis, where the Company was 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. On May 1, 2026, Mechanics Bank completed the previously announced sale of its DUS business line. As part of the completed sale, the repurchase liability associated with the prior sales transferred to the buyer. See Note 1, “Summary of Significant Accounting Policies—Asset Sale” for further details. At June 30, 2026 and December 31, 2025, the total unpaid principal balance of loans sold under this program was zero and $ 1.8 billion, respectively. The Company’s reserve liability related to this arrangement totaled zero and $ 554 thousand at June 30, 2026 and December 31, 2025, respectively. No actual losses were incurred for the quarter and six months ended June 30, 2026. 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 quarter and six months ended June 30, 2025. 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 $ 4.2 billion and $ 4.4 billion as of June 30, 2026 and December 31, 2025, respectively. At June 30, 2026 and December 31, 2025, the Company had recorded a mortgage repurchase liability for loans sold on a servicing-retained and servicing-released basis, which is included in accounts payable and other liabilities on the consolidated balance sheets of $ 674 thousand and $ 708 thousand, respectively. There was a net reversal of provision of zero and $ 32 thousand for the quarter and six months ended June 30, 2026, respectively, and zero and $ 2 thousand actual losses were incurred for the quarter and six months ended June 30, 2026, respectively. 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 or activity for the quarter and six months ended June 30, 2025. NOTE 11– CONTINGENCIES Legal Contingencies In the normal course of business, the Company may have various legal claims and other similar contingent matters outstanding for which a loss may be realized. For these claims, the Company establishes a liability for contingent losses when it is probable that a loss has been incurred and the amount of loss can be reasonably estimated. For claims determined to be reasonably possible but not probable of resulting in a loss, there may be a range of possible losses in excess of the established liability. As of June 30, 2026 and December 31, 2025, the Company recorded an accrued contingent liability of $ 5.5 million and $ 4.2 million, respectively. McClain Feed Yard Litigation. Mechanics Bank is currently a defendant in (i) actions filed in the U.S. Bankruptcy Court for the Northern District of Texas, captioned AgTexas Farm Credit Services, et al. v. Rabo AgriFinance, LLC, et al. and 2B Farms, et al. v. Rabo AgriFinance, LLC, et al. , which were consolidated in the bankruptcy case captioned In re McClain Feed Yard, Inc., et al. (jointly administered with In re 2B Farms), (ii) a related adversary proceeding filed by a court-appointed Chapter 7 Trustee captioned Kent Ries, et al. v. Community Financial Services Bank et al. (In re McClain Feed Yard, Inc.) , and (iii) a Kentucky putative class action captioned Tindal and Rogers v. Community Financial Services Bank, et al. , brought on behalf of investors in that state. These cases allege that the defendants knowingly or negligently aided and abetted a Ponzi scheme orchestrated by Kentucky farmer Brian McClain, who was accused of defrauding investors of millions of dollars through a fictitious “ghost” cattle scheme. On March 27, 2026, the bankruptcy court granted Mechanics Bank’s motion to dismiss all of the Trustee’s common-law claims. On April 10, 2026, the court granted Mechanics Bank’s motion to dismiss the Trustee’s constructive fraudulent transfer claims with prejudice, as well as the Trustee’s preferential transfer and actual fraudulent transfer claims without prejudice and with leave to replead. (By this order, the court dismissed all of the Trustee’s claims against Mechanics Bank, four with prejudice and two without prejudice.) On April 13, 2026, the Trustee filed a motion to reconsider, which Mechanics Bank opposed on May 1, 2026. The court directed the 38 Trustee to wait until the court rules on other pending motions to dismiss filed by co-defendants before filing a third amended complaint. NOTE 12– FAIR VALUE MEASUREMENTS 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. Fair Value Hierarchy 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. Estimation of Fair Value 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. 39 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 (Trading securities and Investment securities AFS) Fair Value is based on quoted prices in an active market. Level 1 recurring fair value measurement. Investment securities AFS (level 2) Observable market prices of identical or similar securities are used where available. Level 2 recurring fair value measurement. Investment securities AFS (level 3) If market prices are not readily available, value is based on discounted cash flows using the following significant inputs: • Expected prepayment speeds • Estimated credit losses • Market liquidity adjustments Level 3 recurring fair value measurement. LHFS Single family loans Fair value is based on observable market data, including: • Quoted market prices, where available • Dealer quotes for similar loans • Forward sale commitments Level 2 recurring fair value measurement. Equity securities Observable market prices of identical or similar securities are used where available. Level 2 recurring fair value measurement. Mortgage servicing rights Single family MSRs For information on how the Company measures the fair value of its single family MSRs, including key economic assumptions and the sensitivity of fair value to changes in those assumptions, see Note 9, “Mortgage Banking Operations.” Level 3 recurring fair value measurement. Derivatives Futures and Options Fair value is based on closing exchange prices. Level 1 recurring fair value measurement. Forward sale commitments and interest rate swaps Fair value is based on quoted prices for identical or similar instruments, when available. When quoted prices are not available, fair value is based on internally developed modeling techniques, which require the use of multiple observable market inputs including: • Forward interest rates • Interest rate volatilities Level 2 recurring fair value measurement. IRLC The fair value considers several factors including: • Fair value of the underlying loan based on quoted prices in the secondary market, when available • Value of servicing • Fall-out factor Level 3 recurring fair value measurement. 40 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: June 30, 2026 (in thousands) Fair Value Level 1 Level 2 Level 3 Assets: Trading securities - U.S. Treasury securities $ 46,595 $ 46,595 $ — $ — Securities available-for-sale: Obligations of states and political subdivisions 462,720 — 462,720 — Mortgage backed securities - residential 3,001,195 — 2,999,681 1,514 Mortgage backed securities - commercial 352,604 — 352,604 — Collateralized loan obligations 230,582 — 230,582 — Corporate bonds 45,383 — 45,342 41 U.S. Treasury securities 20,424 20,424 — — Agency debentures 6,307 — 6,307 — Total securities available-for-sale 4,119,215 20,424 4,097,236 1,555 Single family LHFS 5,345 — 5,345 — Single family mortgage servicing rights 58,836 — — 58,836 Equity securities 15,858 — 15,858 — Derivatives: Forward loan sale commitments 105 — 105 — Interest rate lock commitments 68 — — 68 Interest rate swaps 8,829 — 8,829 — Total assets $ 4,254,851 $ 67,019 $ 4,127,373 $ 60,459 Liabilities: Derivatives: Forward loan sale commitments $ 90 $ — $ 90 $ — Interest rate swaps 8,354 — 8,354 — Futures 1 1 — — Total liabilities $ 8,445 $ 1 $ 8,444 $ — 41 December 31, 2025 (in thousands) Fair Value Level 1 Level 2 Level 3 Assets: Trading securities - U.S. Treasury securities $ 49,518 $ 49,518 $ — $ — Securities available-for-sale: Obligations of states and political subdivisions 471,159 — 471,159 — Mortgage backed securities - residential 2,884,289 — 2,882,704 1,585 Mortgage backed securities - commercial 371,806 — 371,806 — Collateralized loan obligations 188,316 — 188,316 — Corporate bonds 49,915 — 49,870 45 U.S. Treasury securities 20,669 20,669 — — Agency debentures 7,231 — 7,231 — Total securities available-for-sale 3,993,385 20,669 3,971,086 1,630 Single family LHFS 5,967 — 5,967 — Single family mortgage servicing rights 58,095 — — 58,095 Equity securities 15,567 — 15,567 — Derivatives: Forward loan sale commitments 148 — 148 — Interest rate lock commitments 75 — — 75 Interest rate swaps 9,406 — 9,406 — Total assets $ 4,132,161 $ 70,187 $ 4,002,174 $ 59,800 Liabilities: Derivatives: Forward loan sale commitments $ 28 $ — $ 28 $ — Interest rate swaps 8,543 — 8,543 — Futures 2 2 — — Total liabilities $ 8,573 $ 2 $ 8,571 $ — There were no transfers between levels of the fair value hierarchy for the quarter and six months ended June 30, 2026 and 2025. Level 3 Recurring Fair Value Measurements 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 for the quarter and six months ended June 30, 2026, see Note 9, “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. 42 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 June 30, 2026 and December 31, 2025. Balances and activity from these Level 3 assets are reported beginning on the Merger date of September 2, 2025. Therefore, there were no balances or activity for the quarter and six months ended June 30, 2025. (dollars in thousands) Fair Value Valuation Technique Significant Unobservable Inputs Low High Weighted Average June 30, 2026 Investment securities AFS $ 1,555 Income approach Implied spread to benchmark interest rate curve 2.25 % 2.25 % 2.25 % Interest rate lock commitments, net 68 Income approach Fall-out factor 1.10 % 37.43 % 15.89 % Value of servicing 0.66 % 2.46 % 1.52 % December 31, 2025 Investment securities AFS $ 1,630 Income approach Implied spread to benchmark interest rate curve 2.25 % 2.25 % 2.25 % Interest rate lock commitments, net 75 Income approach Fall-out factor 0.60 % 20.65 % 10.11 % Value of servicing 1.04 % 1.43 % 1.15 % The following table presents fair value changes and activity for Level 3 investment securities AFS: Quarter Ended June 30, Six Months Ended June 30, (in thousands) 2026 2025 2026 2025 Beginning balance $ 1,594 $ — $ 1,630 $ — Payoffs/sales ( 12 ) — ( 18 ) — Change in mark to market ( 27 ) — ( 57 ) — Ending balance $ 1,555 $ — $ 1,555 $ — The following table presents fair value changes and activity for Level 3 interest rate lock commitments: Quarter Ended June 30, Six Months Ended June 30, (in thousands) 2026 2025 2026 2025 Beginning balance, net $ 120 $ — $ 75 $ — Total realized/unrealized gains 252 — 685 — Settlements ( 304 ) — ( 692 ) — Ending balance, net $ 68 $ — $ 68 $ — 43 Assets and Liabilities Measured on a Nonrecurring Basis Collateral Dependent Loan Receivables: The fair value of collateral dependent loan receivables with specific allocations of the allowance for credit losses based on collateral values is generally based on recent appraisals or evaluations. 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 following tables present collateral dependent loans that were measured at fair value on a nonrecurring basis, and still held on the consolidated balance sheets, as well as the valuation methodology and unobservable inputs, and the net gains or losses resulting from those fair value adjustments for the periods indicated. June 30, 2026 (in thousands) Fair Value Valuation Technique Unobservable Input Input or Range Weighted Average Commercial and industrial loans $ 3,277 Third party appraisal Discount for market conditions 10 % - 36 % 15 % Estimated selling costs 7 % - 10 % 7 % Internal evaluation Estimated selling costs 7 % - 10 % 9 % Commercial real estate loans $ 23,773 Third party appraisal Discount for market conditions 10 % - 36 % 15 % Estimated selling costs 7 % - 10 % 7 % Internal evaluation Vacancy, collection loss, concessions adjustment 15 % 15 % Capitalization rate 7 % 7 % December 31, 2025 (in thousands) Fair Value Valuation Technique Unobservable Input Input or Range Weighted Average Commercial and industrial loans $ 2,955 Third party appraisal Discount for market conditions 10 % - 20 % 18 % Estimated selling costs 10 % 10 % Third party evaluation Estimated selling costs 7 % 7 % Commercial real estate loans $ 23,006 Third party appraisal Discount for market conditions 6 % - 36 % 24 % Estimated selling costs 8 % - 10 % 10 % Income approach Vacancy, collection loss, concessions 15 % 15 % Capitalization rate 6 % 6 % Quarter Ended June 30, Six Months Ended June 30, (in thousands) 2026 2025 2026 2025 Net (gain) loss: (1) Commercial and industrial loans $ ( 86 ) $ — $ ( 165 ) $ — Commercial real estate loans 23 — ( 54 ) — Total $ ( 63 ) $ — $ ( 219 ) $ — (1) The net (gain) loss represents re-measurements of collateral-dependent impaired loans with specific allowance for credit loss allocations. 44 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 tables present other real estate owned that were measured at fair value on a nonrecurring basis and still held on the consolidated balance sheets, as well as the valuation methodology, unobservable inputs and losses resulting from those fair value adjustments for the periods indicated. June 30, 2026 (in thousands) Fair Value Valuation Technique Unobservable Inputs Input or Range Weighted Average Other real estate owned-commercial real estate $ 1,512 Third party appraisal Estimated selling costs 6 % 6 % December 31, 2025 (in thousands) Fair Value Valuation Technique Unobservable Inputs Input or Range Weighted Average Other real estate owned-commercial real estate $ 1,675 Income approach Estimated selling costs 10 % 10 % Quarter Ended June 30, Six Months Ended June 30, (in thousands) 2026 2025 2026 2025 Losses due to write downs: Other real estate owned-commercial real estate (1) $ — $ — $ 163 $ — (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 June 30, 2026 and December 31, 2025: June 30, 2026 Fair Value (in thousands) Carrying Value Total Level 1 Level 2 Level 3 Assets: Cash and cash equivalents $ 553,915 $ 553,915 $ 553,915 $ — $ — Securities held-to-maturity 1,286,813 1,120,088 — 1,117,088 3,000 Loan receivables, net 13,423,595 12,911,454 — — 12,911,454 Mortgage servicing rights – multifamily and SBA 306 412 — — 412 Liabilities: Time deposits $ 1,945,480 $ 1,933,009 $ — $ 1,933,009 $ — Borrowings 80,000 80,000 80,000 — — Long-term debt 130,420 141,114 — 86,399 54,715 45 December 31, 2025 Fair Value (in thousands) Carrying Value Total Level 1 Level 2 Level 3 Assets: Cash and cash equivalents $ 1,029,983 $ 1,029,983 $ 1,029,983 $ — $ — Securities held-to-maturity 1,336,632 1,170,818 — 1,167,818 3,000 Loan receivables, net 14,023,617 13,665,520 — — 13,665,520 Mortgage servicing rights – multifamily and SBA 27,737 28,276 — — 28,276 Liabilities: Time deposits $ 2,784,608 $ 2,768,873 $ — $ 2,768,873 $ — Long-term debt 192,014 203,272 — 148,925 54,347 Fair Value Option 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 June 30, 2026 and December 31, 2025: June 30, 2026 December 31, 2025 (in thousands) Fair Value Aggregate Unpaid Principal Balance Fair Value Less Aggregated Unpaid Principal Balance Fair Value Aggregate Unpaid Principal Balance Fair Value Less Aggregated Unpaid Principal Balance Single family LHFS $ 5,345 $ 5,217 $ 128 $ 5,967 $ 5,883 $ 84 46 NOTE 13 – 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 income statements. 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 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: Quarter Ended June 30, Six Months Ended June 30, (in thousands) 2026 2025 2026 2025 Noninterest income in scope of ASC 606: Service charges on deposit accounts $ 6,027 $ 5,492 $ 12,070 $ 10,986 Trust fees and commissions 3,476 3,216 6,546 6,335 ATM network fee income 4,109 3,040 8,013 5,928 Noninterest income subject to ASC 606 13,612 11,748 26,629 23,249 Noninterest income not subject to ASC 606 10,184 7,877 18,187 11,357 Total noninterest income $ 23,796 $ 19,625 $ 44,816 $ 34,606 47 NOTE 14– 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 June 30, 2026 2025 (dollars in thousands, except per share amounts) Class A common stock Class B common stock Consolidated Class A common stock Class B common stock Consolidated Net income $ 57,701 $ 42,485 Basic: Numerator Allocation of distributed earnings (cash dividends declared) $ 154,205 $ 7,801 $ 162,006 $ — $ — $ — Allocation of undistributed earnings (losses) ( 99,301 ) ( 5,004 ) ( 104,305 ) 40,252 2,233 42,485 Allocation of distributed and undistributed earnings $ 54,904 $ 2,797 $ 57,701 $ 40,252 $ 2,233 $ 42,485 Denominator Basic weighted average common shares outstanding 221,148,246 1,114,448 222,262,694 200,893,223 1,114,448 202,007,671 Basic earnings per share (1) $ 0.25 $ 2.51 $ 0.26 $ 0.20 $ 2.00 $ 0.21 Diluted: Numerator Allocation of distributed and undistributed earnings $ 54,904 $ 2,797 $ 57,701 $ 40,252 $ 2,233 $ 42,485 Denominator Basic weighted average common shares outstanding 221,148,246 1,114,448 222,262,694 200,893,223 1,114,448 202,007,671 Dilutive effect of unvested RSUs or PSUs (2) 190,098 — 190,098 59,420 — 59,420 Diluted weighted average common shares outstanding 221,338,344 1,114,448 222,452,792 200,952,643 1,114,448 202,067,091 Diluted earnings per share (1) $ 0.25 $ 2.51 $ 0.26 $ 0.20 $ 2.00 $ 0.21 (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) No RSUs or PSUs were antidilutive for the quarters ended June 30, 2026 and 2025. 48 Six Months Ended June 30, 2026 2025 (dollars in thousands, except per share amounts) Class A common stock Class B common stock Consolidated Class A common stock Class B common stock Consolidated Net income $ 101,791 $ 86,276 Basic: Numerator Allocation of distributed earnings (cash dividends declared) $ 242,315 $ 12,259 $ 254,574 $ — $ — $ — Allocation of undistributed earnings (losses) ( 145,452 ) ( 7,331 ) ( 152,783 ) 81,741 4,535 86,276 Allocation of distributed and undistributed earnings $ 96,863 $ 4,928 $ 101,791 $ 81,741 $ 4,535 $ 86,276 Denominator Basic weighted average common shares outstanding 221,098,302 1,114,448 222,212,750 200,889,074 1,114,448 202,003,522 Basic earnings per share (1) $ 0.44 $ 4.42 $ 0.46 $ 0.41 $ 4.07 $ 0.43 Diluted: Numerator Allocation of distributed and undistributed earnings $ 96,863 $ 4,928 $ 101,791 $ 81,741 $ 4,535 $ 86,276 Denominator Basic weighted average common shares outstanding 221,098,302 1,114,448 222,212,750 200,889,074 1,114,448 202,003,522 Dilutive effect of unvested RSUs or PSUs (2) 172,794 — 172,794 59,420 — 59,420 Diluted weighted average common shares outstanding 221,271,096 1,114,448 222,385,544 200,948,494 1,114,448 202,062,942 Diluted earnings per share (1) $ 0.44 $ 4.42 $ 0.46 $ 0.41 $ 4.07 $ 0.43 (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) No RSUs or PSUs were antidilutive for the six months ended June 30, 2026 and 2025. NOTE 15– SHARE-BASED COMPENSATION PLANS The 2025 Equity Plan, adopted by shareholders in August 2025, provides for the issuance of incentive stock options, nonqualified stock options, stock appreciation rights, RSUs, PSUs, dividend equivalent awards and other awards. All share-based awards granted after the Merger date were issued under the 2025 Equity Plan. As of June 30, 2026, only RSUs and PSUs have been granted under the 2025 Equity Plan. Shares available for grant under the 2025 Equity Plan were 6,792,823 shares as of June 30, 2026. 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 2025, the Company modified the classification of these outstanding awards from liability to equity (RSU awards). These outstanding awards also were remeasured at the modification date fair value of the Company’s stock, and the previously recognized liability was reclassified to common stock within the consolidated balance sheets. Upon modification, $ 13.6 million of previously recognized liability-classified awards was reclassified to additional paid-in capital. Compensation expense on the accompanying consolidated income statements was $ 1.5 million and $ 1.2 million for the quarter ended June 30, 2026 and 2025 and $ 2.8 million and $ 3.7 million for the six months ended June 30, 2026 and 2025, respectively. The income tax benefit recognized in the consolidated income statements related to this expense was $ 393 thousand and $ 331 thousand for the quarter ended June 30, 2026 and 2025, and $ 654 thousand and $ 1.1 million for the six months ended June 30, 2026 and 2025, respectively. The amount of unrecognized compensation expense related to all 49 RSUs and PSUs as of June 30, 2026 totaled $ 12.7 million. Such expense is expected to be recognized over a weighted average period of 2.33 years. RSUs generally vest over a period of three to four years and PSUs vest over a period of three years with the fair market value of the awards determined at the grant date based on the Company’s stock price. The vesting date fair value of RSUs that vested was $ 2.7 million for the six months ended June 30, 2026. The table below summarizes activity related to the Company’s outstanding RSUs and PSUs for the six months ended June 30, 2026. Number Weighted Average Grant Date Fair Value Outstanding at December 31, 2025 1,553,634 $ 13.02 Granted 566,718 14.28 Dividends reinvested into shares 66,760 13.87 Cancelled or forfeited ( 62,344 ) 14.00 Vested ( 182,776 ) 13.71 Outstanding at June 30, 2026 1,941,992 $ 13.97 NOTE 16- SHAREHOLDERS’ EQUITY AND DIVIDENDS Common Stock 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 Class A common stock is listed on Nasdaq under the symbol “MCHB” and there were 220,311,021 shares outstanding at June 30, 2026, and 220,190,561 shares outstanding at December 31, 2025. 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 June 30, 2026 and December 31, 2025. Each holder of Class A common stock and Class B common stock is entitled to one 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. Dividends 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. 50 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. The following table presents a summary of dividends declared on common stock: Quarter Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (in thousands, except per share amounts) Per Share Total Per Share Total Per Share Total Per Share Total Class A common stock $ 0.70 $ 154,205 $ — $ — $ 1.10 $ 242,315 $ — $ — Class B common stock $ 7.00 7,801 $ — — $ 11.00 12,259 $ — — Total $ 162,006 $ — $ 254,574 $ — NOTE 17– SUBSEQUENT EVENTS In late July 2026, the Company completed a balance sheet restructuring by selling its remaining low-yielding AFS securities and reinvesting in MBS at current market rates. The Company sold AFS securities of $ 308.2 million, which resulted in approximately $ 24 million of after-tax losses in the third quarter. Management expects that the restructuring will improve the Company’s near-term net interest margin as the reinvestment yields are significantly higher than the yields on the securities that were sold. 51