Mechanics Bank Stock

Mechanics Bank offers a variety of financial services to meet the banking and financial needs of the communities it serves.

The company’s deposit customers are consisted of hundreds of thousands of individuals, families, small businesses, municipalities and non-profits in communities across the state of California.

The company conducts its operations through banking branches, including locations in Greater San Francisco, Sacramento, Los Angeles and San Diego areas and throughout the Central Valley in California. MacDonald Auxiliary Corporation, Mechanics Real Estate Holdings Inc. and SVB Resolution Holdings, Limited Liability Company are wholly-owned subsidiary corporations whose business purposes are lending, holding deeds of trust securing loans made by the bank and its subsidiaries and holding real estate and other assets acquired through foreclosure proceedings that are pending sale or liquidation.

The bank has operated CRB Auto, which is a relationship based, indirect auto lender, as a division of the bank since 2016. In January 2021, CRB Auto was renamed Mechanics Bank Auto Finance.

The bank also engages in indirect automobile lending activities, including origination, securitization and servicing of new and pre-owned retail automobile sales contracts from both franchised and independent automobile dealerships throughout various states: Arizona, California, Colorado, Connecticut, Florida, Georgia, Hawaii, Iowa, Idaho, Illinois, Indiana, Kansas, Kentucky, Michigan, Minnesota, Missouri, Montana, North Carolina, North Dakota, Nebraska, Nevada, Ohio, Oklahoma, Oregon, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Washington, Wisconsin, and Wyoming. The bank has a subsidiary limited liability company (LLC), California Republic Funding, LLC, for the special purpose of managing the securitizations.

The company operates under a California state banking charter issued by the California Department of Financial Protection and Innovation, its primary state regulator. The bank is a member of the Federal Home Loan Bank (FHLB) system, and maintains insurance on deposit accounts with the Federal Deposit Insurance Corporation (FDIC), which is also the bank’s primary federal regulator.

Loans

The bank grants commercial & industrial, commercial real estate, residential real estate and consumer loans to customers principally in the state of California. Substantial portions of the bank’s loans are real estate and automobile related. The Bank's automobile customers are spread throughout the United States.

The following portfolio segments have been identified: commercial and industrial, commercial real estate, residential real estate, auto, installment and lease financing.

Commercial & Industrial (C&I) - C&I loans are dependent on the performance of a business enterprise, which can range from a small, sole proprietor operation to large multinational corporations.

Commercial Real Estate (CRE) - The primary source of repayment for CRE loans is net operating income (NOI) from the property or properties that secure the loan. CRE loans are inherently somewhat riskier than loans secured by owner-occupied residential real estate in part because the pool of potential buyers for the collateral securing these loans is smaller than buyer pools for single-family homes.

Residential real estate - The degree of risk for single family (i.e., 1-4 unit residential) real estate loans is primarily dependent on the loan-to-value ratio and the borrower’s debt-to-income ratio.

Auto - The bank identifies internal and external risk factors for auto loans.

Installment and Lease Financing - The bank primarily identifies internal risk factors for installment loans and finance leases. In addition, for loans that are secured by real collateral, information specific to the underlying collateral is evaluated.

Derivative Instruments and Hedging Activities: The bank purchases indirect automobile loans for sale, which are fixed-rate.

Loan Servicing: The bank retains servicing for the automobile loans sold through securitizations and flow loan sale agreements throughout various states: Arizona, California, Colorado, Connecticut, Florida, Georgia, Hawaii, Iowa, Idaho, Illinois, Indiana, Kansas, Kentucky, Michigan, Minnesota, Missouri, Montana, North Carolina, North Dakota, Nebraska, Nevada, Ohio, Oklahoma, Oregon, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Washington, Wisconsin, and Wyoming.

The bank originates loans secured by first or second trust deeds on individual residential properties. Some of the residential mortgage loans are sold, with servicing retained, in the secondary market. The bank also services participation loans sold to other institutions.

Securities Portfolio

The company’s securities portfolio are the U.S. government agency securities, obligations of states and political subdivisions, mortgage-backed securities – residential, mortgage-backed securities – commercial, and corporate bonds.

SBA Paycheck Protection Program (PPP)

The bank participated in the SBA Paycheck Protection Program (PPP), which consisted of federally guaranteed loans intended to provide liquidity to small businesses to pay employees, rent, mortgage interest, and utilities.

Deposits

The bank accepts public deposits from various state, city and municipal agencies. Public deposits are demand deposits, interest bearing transaction accounts, savings accounts and time certificates of deposit. The bank accepts deposits from its Investment Management and Trust Department for the benefit of certain trust customers.

Regulatory Matters

The Federal Deposit Insurance Corporation and the State of California Department of Financial Protection and Innovation regulate the bank.

History

Mechanics Bank was founded in 1905. The company was incorporated in 1907.