Company: MCHB
Filing Date: 2025-08-06
Form Type: 10-Q
Source: 0001518715-25-000110
Chunk: 105

Company: Mechanics Bancorp
Filing Date: 2025-08-06
Form: 10-Q
Item: Item 2
Chunk 105
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4,704 CRE, multifamily and SBA986 638 Loan servicing income12,408 6,442 Deposit fees4,187 4,450 Other4,190 6,447 Total noninterest income$27,236 $22,681 

(1)   May include loans originated as held for investment. 

Noninterest income in the six months ended June 30, 2025 increased from the six months ended June 30, 2024 primarily due to a $1.1 million increase in gain on loan sales and a $6.0 million increase in loan servicing income, partially offset by a $2.3 million decrease in other noninterest income. The gain on loan sales increased primarily due to an increase in CRE loan sales volume. The increase in loan servicing income is primarily due to a $5.9 million increase in the value of our single family mortgage servicing rights resulting from higher market valuations of these assets. The decrease in other noninterest income is primarily due to higher levels of income realized from our investments in small business investment companies in the first six months of 2024.

Loan servicing income, a component of noninterest income, consisted of the following: 

 Six Months Ended June 30,(in thousands)20252024Single family servicing income, netServicing fees and other$7,409 $7,590 Changes - amortization (1)(3,180)(3,141)Net4,229 4,449 Risk management, single family MSRs:Changes in fair value due to assumptions (2)4,644 1,147 Net gain (loss) from economic hedging (3)898 (1,619)Subtotal5,542 (472)Single Family servicing income 9,771 3,977 Commercial loan servicing income:Servicing fees and other5,446 5,326 Amortization of capitalized MSRs(2,809)(2,861)Total2,637 2,465 Total loan servicing income$12,408 $6,442 

(1)Represents changes due to collection/realization of expected cash flows and curtailments.

(2)Principally reflects changes in model assumptions, including prepayment speed assumptions, which are primarily affected by changes in mortgage interest rates. 

(3)The interest income from US Treasury notes securities used for hedging purposes, which is included in interest income on the consolidated