Company: MCHB
Filing Date: 2025-08-06
Form Type: 10-Q
Source: 0001518715-25-000110
Chunk: 57

Company: Mechanics Bancorp
Filing Date: 2025-08-06
Form: 10-Q
Item: Item 8
Chunk 57
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 — 2,273 — LHFI6,191,766 5,864,426 — — 5,864,426 Mortgage servicing rights – multifamily and SBA26,565 32,361 — — 32,361 Federal Home Loan Bank stock50,676 50,676 — 50,676 — Other assets-GNMA EBO loans5,111 5,111 — — 5,111 Liabilities:Certificates of deposit$3,267,772 $3,262,350 $— $3,262,350 $— Borrowings1,000,000 1,001,873 — 1,001,873 — Long-term debt225,131 184,124 — 184,124 — 

42

Fair Value OptionSingle family loans held for sale accounted under the fair value option are measured initially at fair value with subsequent changes in fair value recognized in earnings. Gains and losses from such changes in fair value are recognized in net gain on mortgage loan origination and sale activities within noninterest income. The change in fair value of loans held for sale is primarily driven by changes in interest rates subsequent to loan funding and changes in fair value of the related servicing asset, resulting in revaluation adjustments to the recorded fair value. The use of the fair value option allows the change in the fair value of loans to more effectively offset the change in fair value of derivative instruments that are used as economic hedges of loans held for sale.The following table presents the difference between the aggregate fair value and the aggregate unpaid principal balance of loans held for sale accounted for under the fair value option:At June 30, 2025At December 31, 2024(in thousands)Fair ValueAggregate Unpaid Principal BalanceFair Value Less Aggregated Unpaid Principal BalanceFair ValueAggregate Unpaid Principal BalanceFair Value Less Aggregated Unpaid Principal BalanceSingle family LHFS$29,999 $29,256 $743 $20,312 $20,137 $175 

NOTE 10–LOW INCOME HOUSING TAX CREDIT ("LIHTC") INVESTMENTS:

The Company has LIHTC investments that are designed to promote qualified affordable housing programs and generate a return primarily through the realization of federal tax credits. The Company accounts for these investments by amortizing the cost of tax credit investments over the life of the