Company: MCHB
Filing Date: 2025-03-07
Form Type: 10-K
Source: 0001518715-25-000026
Chunk: 109

Company: Mechanics Bancorp
Filing Date: 2025-03-07
Form: 10-K
Item: Item 8
Chunk 109
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 deterioration in commercial collateral values offset by improvement in commercial and single family collateral values in later periods of the two-year forecast period in the markets in which it operates. Additionally, over the near term and two-year forecast period in the markets in which it operates, the Bank expects neutral economic conditions.The Company maintains a separate allowance for unfunded loan commitments which is included in accounts payable and other liabilities on our consolidated balance sheets. The allowance for unfunded commitments was $1.1 million and $1.8 million at December 31, 2024 and 2023, respectively.The Bank has elected to exclude accrued interest receivable from the evaluation of the ACL. Accrued interest on LHFI was $25.1 million and $28.9 million at December 31, 2024 and 2023, respectively, and was reported in other assets on the consolidated balance sheets.

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Activity in the ACL for LHFI and the allowance for unfunded commitments was as follows: Years Ended December 31,(in thousands)20242023Beginning balance$40,500 $41,500 Provision for credit losses677 (67)Net (charge-offs) recoveries(2,434)(933)Ending balance$38,743 $40,500 Allowance for unfunded commitmentsBeginning balance$1,823 $2,197 Provision for credit losses(677)(374)Ending balance$1,146 $1,823 Provision for credit losses:Allowance for credit losses-loans$677 $(67)Allowance for unfunded commitments(677)(374)Total$— $(441)Activity in the ACL by loan portfolio and loan sub-class was as follows:Year Ended December 31, 2024(in thousands)BeginningbalanceCharge-offsRecoveriesProvisionEndingbalanceCRENon-owner occupied CRE$2,610 $— $— $(871)$1,739 Multifamily13,093 — — 1,816 14,909 Construction/land developmentMultifamily construction3,983 — — (3,134)849 CRE construction189 — — (123)66 Single family construction7,365 — — (628)6,737 Single family construction to permanent672 — — (488)184 Total27,912 — — (3,428)24,484 Commercial and industrial loansOwner occupied CRE899