Mechanics Bancorp Q2 profit rises on HomeStreet merger
MCHB•Outlook
The company said merger-related cost savings are expected to continue affecting results.
Mechanics Bancorp expects to return to "business as usual" following merger integration.
Result drivers
- NONINTEREST INCOME - Higher noninterest income was driven by a gain on sale of the Fannie Mae DUS business line and a mortgage servicing rights valuation adjustment.
- CREDIT LOSS PROVISION - The provision for credit losses was reversed due to changes in modeled loss rates, elimination of certain economic adjustments, and reduced unfunded commitments.
- EXPENSE REDUCTION - Lower noninterest expense reflected decreased salaries and benefits from merger-related headcount reductions.
Key details and analyst coverage
| Metric | Actual |
|---|---|
| Q2 EPS | $0.25 |
| Q2 Net Income | $57.70 mln |
| Q2 Net Interest Income | $177.17 mln |
The current average analyst rating on the shares is "buy," with 2 "strong buy" or "buy" ratings, 1 "hold" rating and no "sell" or "strong sell" ratings.
The average consensus recommendation for the banks peer group is "buy."
Wall Street's median 12-month price target for Mechanics Bancorp is $17.00, about 7.3% above its July 28 closing price of $15.84.
