Company: MCHB
Filing Date: 2025-07-15
Form Type: S-4/A
Source: 0001140361-25-025920
Chunk: 372

Company: Mechanics Bancorp
Filing Date: 2025-07-15
Form: S-4/A
Chunk 372
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561 |

The Bank also sponsors a profit sharing plan covering substantially all of its employees (Profit Sharing Plan). The Profit Sharing Plan is a qualified defined contribution plan that contains a cash or deferred arrangement (CODA) authorized under section 401(k) of the Internal Revenue Code. The Bank may make profit sharing contributions to this plan at the discretion of the Board of Directors of the Bank. The Board may terminate the plan at any time. The employee participants also have the option of contributing directly to their individual participant accounts a percentage of their pre-tax wage compensation through salary deductions. In addition to its profit sharing contributions (if any), the Bank also provides a company match of individual employee contributions. For both 2024 and 2023, the company match was up to 3.5% of individual employee participant pay. Expense related to the 401(k) employer matching contribution was $3.9 million and $4.5 million for the years ended December 31, 2024 and 2023, respectively. NOTE 12 – DERIVATIVE INSTRUMENTS The Bank enters into interest rate swaps with loan customers. The specific terms of the interest rate swap agreements are tied to the terms of the underlying loan agreements. To avoid increasing internal interest rate risk as a result of these business activities, the Bank enters into offsetting swap agreements with Rabo’s parent and a subsidiary of Rabo’s parent, which also provided various interest rate swap services to the Bank. The notional amount of interest rate swaps with loan customers and offsetting swap agreements as of December 31, 2024 and 2023 were $759.4 million and $863.5 million, respectively. The net income on customer swaps for the years ended December 31, 2024, 2023 and 2022 were $70, $48 and $58 thousand, respectively, which are reported in Noninterest Income on the Consolidated Income Statements. The Bank’s customer related interest rate swaps provide an economic hedge but do not qualify for hedge accounting treatment. Fair value of interest rate swap contracts is reported within Interest Receivable and Other Assets and Interest Payable and Other Liabilities on the balance sheet. As of December 31, 2024 and 2023, the fair value of interest rate swap contracts within Interest Receivable and Other Assets were $12.8 million and $18.1 million and Interest Payable and Other Liabilities were $11.1 million and $15.2 million, respectively. The applicable Rabo counterparties