Mechanics Bancorp (MCHB) stock analysis

P/E below its 5-year median

Mechanics Bancorp's P/E of 12.4 is below its own 5-year median of 66.3.

P/E above the industry

Mechanics Bancorp's P/E of 12.4 is above the Commercial Banks median of 12.1.

P/S above the industry

Mechanics Bancorp's price-to-sales of 64.08 is above the Commercial Banks median of 3.60.

P/B below the industry

Mechanics Bancorp's price-to-book of 1.26 is below the Commercial Banks median of 1.29.

Trading below fair value

The share price of $14.56 is below our fair value estimate of $31.35.

Margin of safety over 20%

The price is 53.6% below fair value, more than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew -44.1% a year over the last three fiscal years, short of the 10% we look for.

EPS growing 10%+ a year

Diluted EPS grew 57.2% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew 25.6% over the last twelve months, against a 5-year average of 27.1% a year.

Growing slower than the industry

Revenue grew -0.7% over the last twelve months; the Commercial Banks median is 11.3%.

Company guidance

No outlook found in earnings releases from the last twelve months.

Gross margin trend

Banks and insurers do not report gross profit.

Return on equity under 15%

Return on equity was 9.7% over the last twelve months and averaged 7.2% over five years; we look for 15% on both.

Return on assets over 1%

Return on assets was 1.2%; for a bank or insurer, 1% or more is considered good.

Return on equity below the industry

Mechanics Bancorp's return on equity of 9.7% is below the Commercial Banks median of 11.5%.

Earnings grew over 5 years

Net income grew 27.1% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 515% over the last twelve months, against a 5-year average of 128%.

Net margin above the industry

Mechanics Bancorp's net margin of 515% is above the Commercial Banks median of 30.3%.

Well capitalized

Equity is 12.3% of total assets; 8% or more is a comfortable cushion.

Loans funded by deposits

Loans equal 71.5% of deposits, so lending is funded by customer deposits.

Adequate loan-loss reserve

The allowance for credit losses is 1.0% of loans; we look for at least 1%.

High cost base

Non-interest expense takes 60.5% of revenue; under 60% is efficient for a bank.

Deposits shrinking

Deposits fell 7.4% over the past year.

Borrowings

Needs debt and equity figures.

Pays a dividend

Mechanics Bancorp paid dividends worth 10.7% of the share price over the last twelve months.

Yield above Treasuries

The 10.7% yield is above the 4.4% on a 1-year Treasury.

Yield in the top quarter

The top quarter of US dividend payers yield 3.8% or more; Mechanics Bancorp yields 10.7%.

Dividend was cut

The dividend per share fell by more than 10% at least once in the last 5 fiscal years.

Not covered by earnings

Dividends take 139% of net income, leaving little room.

Not covered by free cash flow

Dividends take 185% of free cash flow.