Company: MCHB
Filing Date: 2025-04-15
Form Type: ARS
Source: 0001518715-25-000069
Chunk: 93

Company: Mechanics Bancorp
Filing Date: 2025-04-15
Form: ARS
Chunk 93
---
.00% 11.00 % 10.00% -17.00% 10.00 % (1) Weighted averages of all the inputs within the range. To compute hypothetical sensitivities of the value of our single MSRs to immediate adverse changes in key assumptions, we computed the impact of changes in CPRs and in discount rates as outlined below: (dollars in thousands) At December 31, 2024 Fair value of single family MSRs $ 72,901 Expected weighted-average life (in years) 8.37 CPR Impact on fair value of 25 basis points adverse change in interest rates $ (759) Impact on fair value of 50 basis points adverse change in interest rates $ (1,594) Discount rate Impact on fair value of 100 basis points increase $ (2,133) Impact on fair value of 200 basis points increase $ (4,669) Generally, increases in the CPR or the discount rate utilized in the fair value measurements of single family MSRs will result in a decrease in fair value. Conversely, decreases in the CPR or the discount rate will result in an increase in fair value. These sensitivities are hypothetical and subject to key assumptions of the underlying valuation model. As the table above demonstrates, the Company's methodology for estimating the fair value of MSRs is highly sensitive to changes in key assumptions. Changes in fair value resulting from changes in assumptions generally cannot be extrapolated because the relationship of the change in assumption to the change in fair value may not be linear. Also, in this table, the effect of a variation in a particular assumption on the fair value of the MSRs is calculated without changing any other assumption; in reality, changes in one factor may be associated with changes in another, which may magnify or counteract the sensitivities. Thus, any measurement of MSR fair value is limited by the conditions existing and assumptions made as of a particular point in time. Those assumptions may not be appropriate if they are applied to a different point in time. MSRs resulting from the sale of multifamily loans are recorded at fair value and subsequently carried at the lower of amortized cost or fair value. Multifamily MSRs are amortized in proportion to, and over, the estimated period the net servicing income will be collected. The changes in multifamily and SBA MSRs measured at LOCOM or fair value were as follows: Years Ended December 31, (in thousands) 2024 2023 Beginning balance $ 29,987 $ 35