Company: MCHB
Filing Date: 2025-07-03
Form Type: S-4
Source: 0001140361-25-024872
Chunk: 380

Company: Mechanics Bancorp
Filing Date: 2025-07-03
Form: S-4
Chunk 380
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 is a lack of transparency

F-45

TABLE OF CONTENTS

around the inputs to valuation, the securities are classified as Level 3 and reliance is placed upon internally developed models, and management judgment and evaluation for valuation. The Bank had no securities available-for-sale classified as Level 3 at December 31, 2024 and 2023. Derivative Instruments: Derivatives instruments include interest rate swaps and forward loan sales. Valuation for the swaps is calculated using key valuation inputs, including the SOFR swap curve, volatility curve, reset rates and updates to swap notional amounts. These instruments are classified as Level 2 in the fair value hierarchy. Valuation for the forward loan sales is the difference between the market value at the end of the month and the contract price. The fair value is based on the market value as indicated by Fannie Mae (the Bank’s purchaser) as of month end resulting in a Level 2 recurring basis classification. The following table presents the Bank’s Financial Assets and Liabilities measured at fair value on a recurring basis as of the dates indicated:

| (in thousands)                                   |     | December 31, 2024 |     | Fair Value Measurements Using 
 Quoted Prices in              
 Active Markets for            
 Identical Assets              
 (Level 1)                     |     | Significant Other 
 Observable Inputs 
         (Level 2) |     | Significant      
 Unobservable     
 Inputs (Level 3) |
|:-------------------------------------------------|:----|------------------:|:----|:------------------------------|:----|------------------:|:----|:-----------------|
| Debt securities available-for-sale:              |     |                   |     |                               |     |                   |     |                  |
| Obligations of states and political subdivisions |     |           $91,299 |     | $—                            |     |           $91,299 |     | $—               |
| Mortgage backed securities - residential         |     |         2,643,688 |     | —                             |     |         2,643,688 |     | —                |
| Mortgage backed securities - commercial          |     |           240,863 |     | —                             |     |           240,863 |     | —                |
| Collateralized loan obligations                  |     |            50,000 |     | —                             |     |            50,000 |     | —                |
| Corporate bonds                                  |     |            39,401 |     | —