Company: MCHB
Filing Date: 2025-07-15
Form Type: S-4/A
Source: 0001140361-25-025920
Chunk: 357

Company: Mechanics Bancorp
Filing Date: 2025-07-15
Form: S-4/A
Chunk 357
---
 that market participants would use in pricing the asset or the liability, including assumptions about the risk inherent in a particular valuation technique, the effect of a restriction on the sale or use of an asset, and the risk of nonperformance. Depending on the nature of the asset or liability, the Bank uses various valuation techniques and assumptions when estimating the instrument’s fair value. Considerable judgment may be involved in determining the amount that is most representative of fair value.

To increase consistency and comparability of fair value measures, ASC 820 established a three-level hierarchy to prioritize the inputs used in valuation techniques between observable inputs among (i) observable inputs that reflect quoted prices in active markets; (ii) inputs other than quoted prices with observable market data; and (iii) unobservable data, such as the Bank’s own data or single dealer non-binding pricing quotes. The Bank assesses the valuation hierarchy for each asset or liability measured at the end of each quarter, and, as a result, assets or liabilities may be transferred within hierarchy levels due to changes in availability of observable market inputs to measure fair value at the measurement date. Further information regarding the Bank’s policies and methodology used to measure fair value is presented in Note 21, “Fair Value.”

Comprehensive Income: Comprehensive income consists of net income and other comprehensive income. Other comprehensive income includes unrealized gains and losses on securities available for sale and the equity component of the AFS to HTM debt security transfer discussed in Note 2, “Debt Securities”. In addition, changes in the funded status of the pension plan and supplemental retirement plans are also recognized as separate components of equity.

Segments: The Bank has one reportable segment: community banking. The segment primarily encompasses the commercial loan and deposit activities of the Bank as well as retail lending and deposit activities in areas surrounding the branches. Our chief operating decision maker (CODM), the Chief Executive Officer, manages the Bank’s business activities as one single operating and reportable segment at the consolidated level. Accordingly, our CODM

<div align='center'>F-18</div>

#### TABLE OF CONTENTS
uses consolidated net income to measure segment profit or loss, allocate resources and assess performance. Further, the CODM reviews and utilizes net interest income, noninterest income and noninterest expenses (salary and employee benefits, occupancy, equipment and general, administrative and other) at the consolidated level to manage the Bank’s operations.

Earnings per Share: Earnings per share of common stock is calculated on both a basic and diluted basis, based on the weighted