Mechanics Bancorp (NASDAQ:MCHB) Sets New 12-Month High on Earnings Beat

Key Points

• Mechanics Bancorp beat quarterly expectations, reporting earnings of $0.27 per share versus the $0.25 consensus and revenue of $200.97 million versus $198.30 million expected. Shares reached a new 52-week high of $16.86.
• The company increased its quarterly dividend to $0.70 from $0.40, implying an annualized payout of $2.80 and a 16.6% yield. However, its dividend payout ratio is elevated at 373.33%.
• Analyst sentiment remains positive, with a consensus “Moderate Buy” rating and a $16.62 price target; institutional investors and hedge funds own approximately 74.71% of the stock.

Mechanics Bancorp (NASDAQ:MCHB - Get Free Report)'s share price reached a new 52-week high during trading on Thursday following a better than expected earnings announcement. The stock traded as high as $16.86 and last traded at $16.8290, with a volume of 87984 shares changing hands. The stock had previously closed at $16.49.

The company reported $0.27 earnings per share for the quarter, beating the consensus estimate of $0.25 by $0.02. The firm had revenue of $200.97 million during the quarter, compared to the consensus estimate of $198.30 million. Mechanics Bancorp had a net margin of 21.71% and a return on equity of 10.61%.

Mechanics Bancorp Increases Dividend

The company also recently disclosed a quarterly dividend, which was paid on Thursday, May 28th. Investors of record on Saturday, May 23rd were issued a $0.70 dividend. The ex-dividend date was Friday, May 22nd. This represents a $2.80 annualized dividend and a dividend yield of 16.6%. This is a boost from Mechanics Bancorp's previous quarterly dividend of $0.40. Mechanics Bancorp's dividend payout ratio (DPR) is presently 373.33%.

Wall Street Analysts Forecast Growth

A number of equities analysts recently commented on the company. Zacks Research upgraded Mechanics Bancorp to a "hold" rating in a report on Monday, June 1st. Keefe, Bruyette & Woods cut their price target on shares of Mechanics Bancorp from $16.00 to $15.50 and set a "market perform" rating on the stock in a research note on Monday, May 4th. Raymond James Financial assumed coverage on shares of Mechanics Bancorp in a research report on Thursday, May 28th. They set an "outperform" rating and a $17.00 price target on the stock. Stifel Nicolaus set a $17.00 price objective on shares of Mechanics Bancorp in a research note on Thursday, May 28th. Finally, Cantor Fitzgerald started coverage on shares of Mechanics Bancorp in a report on Friday, April 10th. They issued an "overweight" rating and a $17.00 price objective for the company. Three investment analysts have rated the stock with a Buy rating and two have assigned a Hold rating to the company's stock. According to data from MarketBeat.com, the stock presently has a consensus rating of "Moderate Buy" and a consensus price target of $16.62.

Institutional Inflows and Outflows

Several institutional investors and hedge funds have recently bought and sold shares of the stock. Bank of America Corp DE purchased a new stake in Mechanics Bancorp during the 1st quarter worth about $1,662,000. California State Teachers Retirement System purchased a new stake in shares of Mechanics Bancorp during the first quarter worth approximately $39,000. Royal Bank of Canada purchased a new stake in shares of Mechanics Bancorp during the first quarter worth approximately $76,000. The Manufacturers Life Insurance Company raised its holdings in Mechanics Bancorp by 48.3% in the first quarter. The Manufacturers Life Insurance Company now owns 26,088 shares of the company's stock valued at $385,000 after acquiring an additional 8,494 shares in the last quarter. Finally, Quantinno Capital Management LP purchased a new position in Mechanics Bancorp in the first quarter worth approximately $813,000. 74.71% of the stock is owned by institutional investors and hedge funds.

Mechanics Bancorp Stock Up 2.1%

The company has a debt-to-equity ratio of 0.05, a current ratio of 0.80 and a quick ratio of 0.80. The company has a market cap of $3.73 billion, a PE ratio of 22.45 and a beta of 1.41. The business's 50 day moving average is $15.43 and its 200-day moving average is $15.07.

Mechanics Bancorp Company Profile

HomeStreet, Inc operates as the bank holding company for HomeStreet Bank that provides commercial, mortgage, and consumer/retail banking services primarily in the Western United States. The company offers personal and business checking, savings accounts, interest-bearing negotiable order of withdrawal accounts, money market accounts, and time certificates of deposit; credit cards; insurance; and treasury management products and services. Its loan products include commercial business and agriculture loans, single family residential mortgages, consumer loans, commercial loans secured by residential and commercial real estate, and construction loans for residential and commercial real estate development, as well as consumer installment loans and permanent loans on commercial real estate and single-family residences.

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