Company: MCHB
Filing Date: 2025-08-06
Form Type: 10-Q
Source: 0001518715-25-000110
Chunk: 45

Company: Mechanics Bancorp
Filing Date: 2025-08-06
Form: 10-Q
Item: Item 8
Chunk 45
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, including prepayment speed assumptions, which are primarily affected by changes in mortgage interest rates.(3)    The interest income from US Treasury notes securities used for hedging purposes, which is included in interest income on the consolidated income statements, was $0.5 million and $0.3 million for quarters ended June 30, 2025 and 2024, respectively, and $0.9 million and $0.6 million for the six months ended June 30, 2025 and 2024, respectively. The changes in single family MSRs measured at fair value are as follows:Quarter Ended June 30,Six Months Ended June 30,(in thousands)2025202420252024Beginning balance$72,285 $74,056 $72,901 $74,249 Additions and amortization:Originations931 853 1,626 1,470 Amortization (1)(1,598)(1,713)(3,180)(3,141)Net additions and amortization(667)(860)(1,554)(1,671)Changes in fair value assumptions (2)4,373 529 4,644 1,147 Ending balance$75,991 $73,725 $75,991 $73,725 (1)  Represents changes due to collection/realization of expected cash flows and curtailments.(2)  Principally reflects changes in model assumptions, including prepayment speed assumptions, which are primarily affected by changes in mortgage interest rates.Key economic assumptions used in measuring the initial fair value of capitalized single family MSRs were as follows: Quarter Ended June 30,Six Months Ended June 30,(rates per annum) (1)2025202420252024Constant prepayment rate ("CPR") (2)19.24 %17.46 %18.67 %18.28 %Discount rate 11.28 %10.45 %10.77 %10.33 %(1)  Based on a weighted average.(2)  Represents an expected lifetime average CPR used in the model.

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For single family MSRs, we use a discounted cash flow valuation technique which utilizes CPRs and discount rates as significant unobservable inputs as noted in the table below:At June 30, 2025At December 31, 2024Range of InputsAverage (1)Range of InputsAverage (1)CPRs (