Company: MCHB
Filing Date: 2025-07-03
Form Type: S-4
Source: 0001140361-25-024872
Chunk: 364

Company: Mechanics Bancorp
Filing Date: 2025-07-03
Form: S-4
Chunk 364
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 Lease expense for operating leases and short term leases is recognized over a straight line basis over the lease term. Right-of-use assets represent the right to use the underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Right of use assets and lease obligations are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term.

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TABLE OF CONTENTS

The Bank uses its incremental borrowing rate at lease commencement to calculate the present value of lease payments when the rate implicit in the lease is not known. The Bank’s incremental borrowing rate is based on the FHLB advance rate, adjusted for the lease term and other factors. The Bank’s leases are all operating leases and are reported separately as Right-of-use asset and Operating lease liabilities, reported on the Consolidated Balance Sheets. The total annual base rental expense included in Occupancy Expense in the Consolidated Income Statements was $15.0 million, $16.8 million, and $16.9 million for the years ended December 31, 2024, 2023 and 2022, respectively. Operating lease expense was deemed the only material component of lease costs for the years ended December 31, 2024, 2023 and 2022. Total cash payments related to operating leases were $15.0 million, $16.8 million and $16.9 million for the years ended December 31, 2024, 2023 and 2022, respectively. The weighted-average lease term in years at December 31, 2024 and 2023 was 5.3 and 5.6, respectively. The weighted-average discount rate for lease liabilities at December 31, 2024 and 2023 was 3.9% and 3.3%, respectively. At December 31, 2024, the approximate minimum future lease payments under noncancellable operating lease agreements were:

| (in thousands)                               |     |         |
| 2025                                         |     | $13,829 |
| 2026                                         |     |  11,330 |
| 2027                                         |     |  10,451 |
| 2028                                         |     |   8,610 |
| 2029                                         |     |   4,487 |
| Thereafter                                   |     |   8,448 |
| Total undiscounted operating lease liability |     |  57,155 |
| Im