Company: MCHB
Filing Date: 2025-08-06
Form Type: 10-Q
Source: 0001518715-25-000110
Chunk: 50

Company: Mechanics Bancorp
Filing Date: 2025-08-06
Form: 10-Q
Item: Item 8
Chunk 50
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 speeds •      Estimated credit losses •      Market liquidity adjustmentsLevel 3 recurring fair value measurement.LHFSSingle family loans, excluding loans transferred from held for investmentFair value is based on observable market data, including: •       Quoted market prices, where available •       Dealer quotes for similar loans •       Forward sale commitmentsLevel 2 recurring fair value measurement.When not derived from observable market inputs, fair value is based on discounted cash flows, which considers the following inputs:•       Benchmark yield curve  •       Estimated discount spread to the benchmark yield curve •       Expected prepayment speedsEstimated fair value classified as Level 3.Mortgage servicing rightsSingle family MSRsFor information on how the Company measures the fair value of its single family MSRs, including key economic assumptions and the sensitivity of fair value to changes in those assumptions, see Note 6, Mortgage Banking Operations.Level 3 recurring fair value measurement.DerivativesFutures and OptionsFair value is based on closing exchange prices.Level 1 recurring fair value measurement.Forward sale commitments   Interest rate swapsFair value is based on quoted prices for identical or similar instruments, when available. When quoted prices are not available, fair value is based on internally developed modeling techniques, which require the use of multiple observable market inputs including:             •       Forward interest rates             •       Interest rate volatilitiesLevel 2 recurring fair value measurement.IRLCThe fair value considers several factors including:•       Fair value of the underlying loan based on quoted prices in the secondary market, when available. •       Value of servicing•       Fall-out factorLevel 3 recurring fair value measurement.

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The following tables presents the levels of the fair value hierarchy for the Company's assets and liabilities measured at fair value on a recurring basis: At June 30, 2025(in thousands)Fair ValueLevel 1Level 2Level 3Assets:Trading securities - U.S. Treasury securities$40,615 $40,615 $— $— Investment securities AFSMortgage backed securities:Residential159,960 — 158,293 1,667 Commercial48,843 — 48,843 — Collateralized mortgage obligations:Residential300,714 — 300,714 — Commercial52,245 — 52,245 — Municipal bonds371,582