Company: MCHB
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001518715-25-000083
Chunk: 73

Company: Mechanics Bancorp
Filing Date: 2025-05-08
Form: 10-Q
Item: Item 8
Chunk 73
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 2025 and December 31, 2024. The estimated federal statutory tax rate was 21% for the periods presented.

(2)    Cost of all deposits, including noninterest-bearing demand deposits was 2.52% and 2.74% for the quarters ended March 31, 2025 and December 31, 2024, respectively.

Our net interest income in the first quarter of 2025 was $3.6 million higher than the fourth quarter of 2024 due to an increase in our net interest margin from 1.38% to 1.82%. The increase in the net interest margin was due primarily to a 32 basis point decrease in the rates paid on interest-bearing liabilities and a 12 basis point increase in the yield on interest earning assets. The increase in yield on interest earning assets was primarily due to the sale of $990 million of lower yielding multifamily loans at the end of the fourth quarter of 2024. The decrease in rates on interest bearing liabilities are primarily due to our paydown at the end of 2024 and beginning of 2025 of higher cost borrowings and brokered certificates of deposit using the proceeds from the sale of multifamily loans. 

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Provision for Credit Losses: The $1.0 million provision for credit losses recognized during the first quarter of 2025 was due to a $3.3 million increase in specific reserves which was partially offset by lower general reserves resulting in part from lower loan balances. There was no provision for credit losses in the fourth quarter of 2024 as the benefits of the reduction in loan balances resulting from the loan sale were offset by specific reserves on commercial loans. 

Noninterest income (loss) consisted of the following: 

 Quarter Ended (in thousands)March 31, 2025December 31, 2024Noninterest income (loss)Gain (loss) on loan origination and sale activities (1)Single family$2,283 $2,090 CRE, multifamily and SBA (2)933 (87,082)Loan servicing income4,858 2,997 Deposit fees2,071 2,166 Other1,991 1,705 Total noninterest income (loss)$12,136 $(78,124)

(1)   May include loans originated as held for investment. 

(2)   December 31, 2024 amount includes loss of $88.8 million