Company: MCHB
Filing Date: 2025-04-15
Form Type: ARS
Source: 0001518715-25-000069
Chunk: 68

Company: Mechanics Bancorp
Filing Date: 2025-04-15
Form: ARS
Chunk 68
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 other 412,535 384,301 Total (1) 1,521,630 1,524,580 Total LHFI 6,231,796 7,422,904 ACL (38,743) (40,500) Total LHFI less ACL $ 6,193,053 $ 7,382,404 (1) Includes $1.3 million at December 31, 2024 and 2023, of loans where a fair value option election was made at the time of origination and, therefore, are carried at fair value with changes recognized in the consolidated income statements. Loans totaling $4.0 billion and $5.1 billion at December 31, 2024 and 2023, respectively, were pledged to secure existing or potential borrowings from the FHLB and loans totaling $1.4 billion and $1.2 billion at December 31, 2024 and 2023, respectively, were pledged to secure existing or potential borrowings from the FRBSF. 54

It is the Company's policy to make loans to officers, directors and their associates in the ordinary course of business on substantially the same terms as those prevailing at the time for comparable transactions with other persons. The following is a summary of activity during the years ended December 31, 2024 and 2023 with respect to such aggregate loans to these related parties and their associates: Years Ended December 31, (in thousands) 2024 2023 Beginning balance $ 1,932 $ 1,978 New loans and advances, net of principal repayments (73) (46) Ending balance $ 1,859 $ 1,932 Credit Risk Concentrations Concentrations of credit risk arise when a number of customers are engaged in similar business activities or activities in the same geographic region, or when they have similar economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic conditions. LHFI are primarily secured by real estate located in the Pacific Northwest and California. At December 31, 2024 and 2023, single family loans in the state of Washington represented 13% and 11% of the total LHFI portfolio, respectively. At December 31, 2024 and 2023, multifamily loans in the state of California represented 30% and 36% of the total LHFI portfolio, respectively. Credit Quality Management considers the level of ACL to be appropriate to cover credit losses expected