Company: MCHB
Filing Date: 2025-03-07
Form Type: 10-K
Source: 0001518715-25-000026
Chunk: 45

Company: Mechanics Bancorp
Filing Date: 2025-03-07
Form: 10-K
Item: Item 7
Chunk 45
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 downgraded one grade for all periods, the amount of the ACL at December 31, 2024 would increase by approximately $7 million. This sensitivity analysis is hypothetical and has been provided only to indicate the potential impact that changes in assumptions may have on the ACL estimate. 

MSRs are recognized as separate assets when servicing rights are acquired through the sale of loans or through purchases of MSRs. For sales of mortgage loans, the fair value of the MSR is estimated and capitalized. Purchased MSRs are capitalized at the cost to acquire. Initial and subsequent fair value measurements are determined using a discounted cash flow model that is owned and operated by a third party valuation firm. To determine the fair value of the MSR, the present value of expected net future cash flows is estimated. Assumptions used include market discount rates, anticipated prepayment speeds, delinquency and foreclosure rates, and ancillary fee income net of servicing costs. The model assumptions and the MSR fair value estimates are also compared to observable trades of similar portfolios as well as to MSR broker valuations and industry surveys, as available. We also utilize a separate third-party valuation firm to value our MSRs on a periodic basis, the results of which we use to evaluate the reasonableness of the modeled values. Actual market conditions could vary significantly from current conditions which could result in the estimated life of the underlying loans being different which would change the fair value of the MSR. We carry our single family residential MSRs at fair value and report changes in fair value through earnings. MSRs for loans other than single family loans are adjusted to fair value if the carrying value is higher than fair value and are amortized into noninterest income in proportion to, and over the period of, the estimated future net servicing income of the underlying financial assets.

Summary Financial Data 

 For the Years Ended December 31,(dollars in thousands, except per share data and FTE data)20242023Select Income Statement data: Net interest income$120,087 $166,753 Provision for credit losses— (441)Noninterest income (loss)(44,385)41,921 Noninterest expense196,214 241,872 Net income (loss):Before income tax (benefit) expense(120,512)(32,757)Total(144,344)(27,508)Net income (loss) per fully diluted share$(7.65)$(1.46)Core net income (loss): (1)Total(20,949)8,