NEW YORK, December 29, 2025, 05:02 ET — Premarket
- Mechanics Bancorp shares last closed at $14.67, up 3.5% in the previous session. [1]
- Investors are watching Federal Reserve minutes due Tuesday for clues on 2026 rate cuts. [2]
- The company is still working toward a first-quarter 2026 close for its planned sale of a Fannie Mae DUS business line to Fifth Third, it said. [3]
Mechanics Bancorp shares ended the last session up 3.5% at $14.67, heading into the final trading week of 2025 with the lender’s rate-sensitive setup back in focus. [4]
The timing matters now because thin year-end trading can amplify moves, and banks tend to react sharply when the market reprices the path of interest rates. Reuters said year-end portfolio adjustments can add volatility when liquidity is light. [5]
Minutes from the Federal Reserve’s Dec. 9-10 meeting are due Tuesday, and investors will parse the notes for how officials weighed further rate cuts after the central bank lowered rates three times late in 2025, Reuters reported. [6]
“Handicapping how many rate cuts we’re going to get next year is a big thing markets are focused on right now,” said Michael Reynolds, vice president of investment strategy at Glenmede. [7]
Treasury yields — a benchmark for borrowing costs that also influences what banks earn on loans and securities — were steady early Monday. The 10-year yield eased to 4.12%, TradingEconomics data showed. [8]
Global equities started the week firmer as investors leaned into bets that the Fed will keep cutting rates in 2026, a backdrop that has kept risk assets supported into year-end, Reuters reported. [9]
In the United States, the S&P 500 posted a record close before the Christmas break and was about 1% shy of the 7,000 mark, Reuters reported, with investors also rotating into non-tech sectors such as financials. [10]
For Mechanics, the most recent major company catalyst remains its Dec. 9 announcement that its subsidiary Mechanics Bank agreed to sell its Fannie Mae Delegated Underwriting and Servicing, or DUS, business line to Fifth Third Bancorp in an all-cash deal. [11]
DUS refers to a Fannie Mae program that lets approved lenders underwrite, close and service multifamily mortgages on the agency’s behalf — a niche business tied to apartment lending. [12]
Mechanics said Fifth Third will acquire about a $1.8 billion DUS servicing portfolio and hire the employees operating the business. Mechanics expects the transaction to close in the first quarter of 2026, subject to customary conditions and Fannie Mae approval of Fifth Third as an authorized DUS lender, the company said. [13]
The lender is also still digesting a September merger that combined Mechanics Bank and HomeStreet Bank, which the company said created a West Coast franchise with 166 branches across California, Washington, Oregon and Hawaii and over $22 billion in assets. [14]
In its last quarterly update on Oct. 30, Mechanics reported $55.2 million in net income and a 13.42% common equity Tier 1 ratio — a key measure of how much loss-absorbing capital a bank holds relative to risk-weighted assets. [15]
The stock traded between $14.02 and $14.69 on Friday, with about 658,519 shares changing hands, according to StockAnalysis data. Traders will watch Tuesday’s Fed minutes for a shift in rate expectations and look for any update on the DUS-sale timetable as 2026 approaches. [16]
References
1. stockanalysis.com, 2. www.reuters.com, 3. ir.mechanicsbank.com, 4. stockanalysis.com, 5. www.reuters.com, 6. www.reuters.com, 7. www.reuters.com, 8. tradingeconomics.com, 9. www.reuters.com, 10. www.reuters.com, 11. ir.mechanicsbank.com, 12. ir.mechanicsbank.com, 13. ir.mechanicsbank.com, 14. ir.mechanicsbank.com, 15. ir.mechanicsbank.com, 16. stockanalysis.com
