Company: MCHB
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001518715-25-000083
Chunk: 49

Company: Mechanics Bancorp
Filing Date: 2025-05-08
Form: 10-Q
Item: Item 8
Chunk 49
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 instruments:(in thousands)Gross fair valueNetting adjustments/ Cash collateral (1)Carrying valueAt March 31, 2025Derivative assets$8,918 $(8,186)$732 Derivative liabilities(8,486)(91)(8,577)At December 31, 2024Derivative assets$10,666 $(10,388)$278 Derivative liabilities(10,701)219 (10,482)(1)    Includes net cash collateral received of $8.3 million and $10.2 million at March 31, 2025 and December 31, 2024, respectively. 

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The collateral used under the Company's master netting agreements is typically cash, but securities may be used under agreements with certain counterparties. Receivables related to cash collateral that has been paid to counterparties are included in other assets. Payables related to cash collateral that has been received from counterparties are included in accounts payable and other liabilities. Interest is owed on amounts received from counterparties and we earn interest on cash paid to counterparties. Any securities pledged to counterparties as collateral remain on the consolidated balance sheets. At March 31, 2025 and December 31, 2024, the Company had liabilities of $8.5 million and $10.4 million, respectively, in cash collateral received from counterparties and receivables of $0.2 million and $0.2 million, respectively, in cash collateral paid to counterparties. The following table presents the net gain (loss) recognized on economic hedge derivatives, within the respective line items in the consolidated income statements for the periods indicated: Quarter Ended March 31,(in thousands)20252024Recognized in noninterest income: Net gain (loss) on loan origination and sale activities (1)$61 $86 Loan servicing income (loss) (2)191 (500)Other (3)— 3 (1)Comprised of forward contracts used as an economic hedge of loans held for sale and interest rate lock commitments ("IRLCs") to customers.(2)Comprised of futures, US Treasury options and forward contracts used as economic hedges of single family MSRs.(3)Impact of interest rate swap agreements executed with commercial banking customers and broker dealer counterparties.The interest income from US Treasury notes securities used for hedging purposes, which is included in interest income on the consolidated income statements, were $0.4