Company: MCHB
Filing Date: 2025-08-06
Form Type: 10-Q
Source: 0001518715-25-000110
Chunk: 46

Company: Mechanics Bancorp
Filing Date: 2025-08-06
Form: 10-Q
Item: Item 8
Chunk 46
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2)5.05%  - 12.13%6.82 %6.00% - 13.50%6.60 %Discount Rates8.69%  - 15.85%9.13 %10.00% - 17.00%11.00 %(1)  Weighted averages of all the inputs within the range.(2)   Represents the expected lifetime average CPR used in the model.To compute hypothetical sensitivities of the value of our single family MSRs to immediate adverse changes in key assumptions, we computed the impact of changes to CPRs and in discount rates as outlined below:(dollars in thousands)At June 30, 2025Fair value of single family MSR$75,991 Expected weighted-average life (in years)8.24CPRImpact on fair value of 25 basis points adverse change in interest rates$(1,005)Impact on fair value of 50 basis points adverse change in interest rates$(2,092)Discount rateImpact on fair value of 100 basis points increase$(2,838)Impact on fair value of 200 basis points increase$(5,642)The changes in multifamily and SBA MSRs measured at the lower of amortized cost or fair value were as follows: Quarter Ended June 30,Six Months Ended June 30,(in thousands)2025202420252024Beginning balance$25,674 $28,863 $26,565 $29,987 Originations283 179 746 457 Amortization(1,455)(1,459)(2,809)(2,861)Ending balance$24,502 $27,583 $24,502 $27,583 Key economic assumptions used in measuring the initial fair value of capitalized multifamily MSRs were as follows: Quarter Ended June 30,Six Months Ended June 30,(rates per annum) (1)2025202420252024Discount rate13.10 %13.00 %13.10 %13.00 %(1)Based on a weighted average.

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For multifamily 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. Multifamily DUS loans typically contain yield maintenance features that significantly reduce loan prepayments, resulting in a CPR of zero for valuation purposes.At June 30, 2025At December