Christa Steele, President and CEO of Mechanics Bank (MCHB), Interviews with The Wall Street Transcript

Wall Street Transcript

67 WALL STREET, New York - March 4, 2014 - The Wall Street Transcript has just published its Pacific and Southwest Banks Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs and Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Interest Rates and Loan-Growth Strategies - Regulatory Outlook Gains Clarity - Heightened M&A Activity - Consolidation in Regional Banking - Prolonged Interest Rate Environment Challenges - Investing in Regional Banks - Pockets of Growth in Western Banking - Recovery in the Pacific Northwest

Companies include: Mechanics Bank (MCHB) and many more.

In the following excerpt from the Pacific and Southwest Banks Report, the President and CEO of Mechanics Bank (MCHB) discusses company strategy and the outlook for this vital sector:

TWST: Has the bank changed the mix of what generates income over the last few years?

Ms. Steele: Yes. We have seen fee income generation greatly reduced in some key categories, primarily due to increased regulatory scrutiny and economic conditions. I'll name a couple. One is reduction in overdraft-fee income due to Dodd-Frank and the Consumer Financial Protection Bureau. Another is a reduction in loan-fee income due to decreased demand and poor reinvestment alternatives available in our securities portfolio. Fortunately, we maintain a decent stream of fee income in our wealth management division - though margin pressures remain a concern - through interest income. The name of the game is to reinvent ourselves in how we offer products to our clientele. These are the core sources of revenue, and it's a tough balancing act.

TWST: What does the loan portfolio look like? And what about nonperforming assets?

Ms. Steele: If you look at our loan mix, we are really a commercial bank. If you look at our deposit portfolio, you'd say we're a strong consumer bank, because where we really thrive is in that category. People trust us enough to place their money here. Our loan portfolio is just over $1.6 billion and consists primarily of commercial-related credits with the exception of approximately $200 million that is consumer. The lion's share of the portfolio is commercial real estate. We will work on better balancing of the portfolio in the coming years.

TWST: Deposits is a very strong category for you. What is happening with that category? Is it growing, or is it fairly steady?

Ms. Steele: Our deposits have increased significantly. In my opinion, that says a lot about the bank and how we are viewed by the consumer as being a very stable financial institution that people trust. Clients will place their money and deposit accounts here...

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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