Company: MCHB
Filing Date: 2025-04-15
Form Type: ARS
Source: 0001518715-25-000069
Chunk: 96

Company: Mechanics Bancorp
Filing Date: 2025-04-15
Form: ARS
Chunk 96
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 balance of loans sold under this program was $1.8 billion. The Company's reserve liability related to this arrangement totaled $0.7 million and $0.5 million at December 31, 2024 and 2023, respectively. There were no actual losses incurred under this arrangement during 2024 and 2023. Contingencies In the normal course of business, the Company may have various legal claims and other similar contingent matters outstanding for which a loss may be realized. For these claims, the Company establishes a liability for contingent losses when it is probable that a loss has been incurred and the amount of loss can be reasonably estimated. For claims determined to be reasonably possible but not probable of resulting in a loss, there may be a range of possible losses in excess of the established liability. The Company did not have any material amounts reserved for legal claims as of December 31, 2024. NOTE 11–INCOME TAXES: Income tax (benefit) expense consisted of the following: Years Ended December 31, (in thousands) 2024 2023 Current expense (benefit) Federal $ 6,731 $ 2,900 State and local (841) 980 Deferred expense (benefit) Federal (30,836) (7,407) State and local (4,532) (1,722) Total (29,478) (5,249) Deferred tax assets valuation allowance 53,310 — Income tax expense (benefit) $ 23,832 $ (5,249) 77

Income tax expense (benefit) differed from amounts computed at the federal income tax statutory rate as follows: Years Ended December 31, 2024 2023 (in thousands, except rate) Rate Amount Rate Amount Income (loss) before income taxes $ (120,512) $ (32,757) Federal tax statutory rate 21.00 % (25,308) 21.00 % (6,879) State tax - net of federal tax benefit 3.63 % (4,380) 4.12 % (1,351) Tax-exempt investments 0.65 % (788) 3.86 % (1,266) Low income housing tax benefits 0.91 % (1,093) 3.20 % (1,047) Stock-based compensation expense (0.55) % 672 (1.28) % 421 Goodwill — % — (14.13) %