Company: MCHB
Filing Date: 2025-08-06
Form Type: 10-Q
Source: 0001518715-25-000110
Chunk: 87

Company: Mechanics Bancorp
Filing Date: 2025-08-06
Form: 10-Q
Item: Item 8
Chunk 87
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 portfolio value as of June 30, 2025 and December 31, 2024 are provided in the table below. For the scenarios shown, the interest rate simulation assumes an instantaneous and parallel shift in market interest rates and no change in the composition or size of the balance sheet.

 At June 30, 2025At December 31, 2024Change in Interest Rates(basis points) (1)Percentage ChangeNet Interest Income (2)Net Portfolio Value (3)Net Interest Income (2)Net Portfolio Value (3)+300(10.6)%(16.1)%(4.0)%(14.5)%+200(6.6)%(8.5)%(1.5)%(6.6)%+100(3.1)%(4.5)%(0.5)%(2.6)%-1002.6 %(1.5)%0.3 %(0.2)%-2005.4 %(4.2)%0.1 %(3.8)%-30011.4 %(8.5)%— %(12.3)%

(1)For purposes of our model, we assume interest rates will not go below zero. This "floor" limits the effect of a potential negative interest rate shock in a low rate environment.

(2)This percentage change represents the impact to net interest income for a one-year period, assuming there is no change in the structure of the balance sheet.

(3)This percentage change represents the impact to the net present value of equity, assuming there is no change in the structure of the balance sheet.

The changes in interest rate sensitivity between December 31, 2024 and June 30, 2025 reflected the impact of lower market interest rates, a steepened yield curve and changes to overall balance sheet composition. Some of the assumptions made in the simulation model may not materialize and unanticipated events and circumstances will occur. In addition, the simulation model does not take into account any future actions that we could undertake to mitigate an adverse impact due to changes in interest rates from those expected, in the actual level of market interest rates or competitive influences on our deposits.

Current Banking Environment

Market conditions and external factors may unpredictably impact the competitive landscape for deposits in the banking industry. Additionally, the higher interest rate environment has increased competition for liquidity and the premium at which liquidity is available to meet funding needs. Rel