WALNUT CREEK, Calif.--(BUSINESS WIRE)--Mechanics Bank (“the Bank”) today announced fourth quarter net income of $8.5 million. Full-year 2014 earnings rose to $25.4 million which represents an 18.1% increase over 2013 earnings. This is despite absorbing two significant but strategic non-interest related expenses in the amount of $9.6 million. These one time expenses were associated with several key initiatives employed to improve operating performance and enable future growth.
Total loans grew modestly in 2014 to $1.65 billion. Continued streamlining of the credit process and the addition of experienced lenders broadened the lending platform.
The Bank’s 2014 net interest margin was 3.36%, and included total interest recoveries of $5.8 million creating a one-time improvement to interest income.
Non-accrual loans continued to rapidly decline, dropping to $16.8 million at the end of 2014 from $29.2 million a year ago, a 42.3% improvement. Non-accrual loans as a percentage of total loans declined to 1.02% from 1.78% a year ago. The Bank’s credit culture remains conservative, with an allowance for loan losses of $34.3 million, representing 2.08% of total loans.
Although total deposits remained at $2.93 billion in 2014, core non-interest bearing deposits increased $103 million, or 10.2% over the past year. The Bank’s cost of funds dropped to 0.08% in 2014 from 0.14% in 2013; which reflects the strength of the Mechanics Bank brand and its core funding base.
The Wealth Management Division, which offers investment management and trust, estate and retirement planning services, also shared in significant operating performance improvement and doubled its new business production generating record net profits.
“After a year of change in 2014, Mechanics Bank is well-positioned for the future,” said Christa Steele, President and Chief Executive Officer of Mechanics Bank. “The Bank is far more efficient than it was a year ago, and our executive leadership team has made great strides getting us ready to hit the ground running in 2015.”
About Mechanics Bank
For more than a century, Mechanics Bank has been committed to helping people build prosperous communities and forging lasting relationships through teamwork, respect and integrity. The $3.4 billion in assets independent bank, based in Northern California, offers personal banking, business banking, trust, brokerage and wealth management services. Member FDIC and Equal Housing Lender. For more information, please visit www.mechanicsbank.com, or call 800.797.6324.