Company: MCHB
Filing Date: 2025-04-15
Form Type: ARS
Source: 0001518715-25-000069
Chunk: 104

Company: Mechanics Bancorp
Filing Date: 2025-04-15
Form: ARS
Chunk 104
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 approach Implied spread to benchmark interest rate curve 2.25% 2.25% 2.25% Single family LHFI 1,280 Income approach Implied spread to benchmark interest rate curve 3.30% 5.04% 3.94% Interest rate lock commitments, net 411 Income approach Fall-out factor 0.81% 41.64% 10.54% Value of servicing 0.32% 0.80% 0.57% We had no LHFS where the fair value was not derived with significant observable inputs at December 31, 2024 or 2023. The following table presents fair value changes and activity for certain Level 3 assets: (in thousands) Beginning balance Additions Transfers Payoffs/Sales Change in mark to market (1) Ending balance Year Ended December 31, 2024 Investment securities AFS $ 1,860 $ — $ — $ (200) $ 38 $ 1,698 Single family LHFI 1,280 — — — 7 1,287 Year Ended December 31, 2023 Investment securities AFS $ 2,009 $ — $ — $ (192) $ 43 $ 1,860 Single family LHFI 5,868 — — (4,607) 19 1,280 (1) Changes in fair value for singe family LHFI are recorded in other noninterest income on the consolidated income statements. 83

The following table presents fair value changes and activity for Level 3 interest rate lock commitments: Years Ended December 31, (in thousands) 2024 2023 Beginning balance, net $ 411 $ 105 Total realized/unrealized gains 3,770 2,334 Settlements (4,055) (2,028) Ending balance, net $ 126 $ 411 Nonrecurring Fair Value Measurements Certain assets held by the Company are not included in the tables above but are measured at fair value on a periodic basis. These assets include certain LHFI and OREO that are carried at the lower of cost or fair value of the underlying collateral, less the estimated cost to sell. The estimated fair values of real estate collateral are generally based on internal evaluations and appraisals of such collateral, which use the market approach and income approach methodologies. We have omitted disclosure related to quantitative inputs given the insignificance of assets measured on a nonrecurring basis. The fair value of commercial properties are generally