Company: MCHB
Filing Date: 2025-07-03
Form Type: S-4
Source: 0001140361-25-024872
Chunk: 359

Company: Mechanics Bancorp
Filing Date: 2025-07-03
Form: S-4
Chunk 359
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 at December 31, 2024 or December 31, 2023. As of both dates, the Bank considers any unrealized loss across the classes of major security-type to be related to fluctuations in market conditions, primarily interest rates, and not reflective of a deterioration in credit quality. The Bank maintains that it has intent and ability to hold these securities until the amortized cost basis of each security is recovered and likewise concluded as of December 31, 2024 that it was not more likely than not that any of the securities in an unrealized loss position would be required to be sold.

F-21

TABLE OF CONTENTS

U.S. Treasuries and US Government-Sponsored Agency Securities - For the years presented, the unrealized losses on the Bank’s investments in U.S. treasuries and government-sponsored agency securities are primarily due to changes in interest rates. These securities have explicit or implicit guarantees from the U.S. government, thus posing no credit losses. Management expects to recover the entire amortized cost basis of these securities. Obligations of States and Political Subdivisions - For the years presented, the unrealized losses on the Bank’s investments in obligations of states and political subdivisions are primarily due to changes in interest rate and not due to credit losses. Management monitors these securities on an ongoing basis and performs an internal analysis which takes into account the impact from market rates movements, severity and duration of the unrealized loss position, viability of the issuer, recent downgrades in ratings, and external credit rating assessments. As a result, management expects to recover the entire amortized cost basis of these securities. Mortgage-Backed Securities -Residential and Commercial (MBS) - For the years presented, the unrealized losses on the Bank’s investments in residential and commercial MBS are primarily due to changes in interest rates. These securities are either implicitly or explicitly guaranteed by the U.S. government, as such management expects to recover the entire amortized cost basis of these securities. Collateralized Loan Obligations - For the years presented, there were no unrealized losses on the Bank’s collateralized loan obligations primarily due to timing of the purchases. These securities are presented at par value. Corporate Bonds - For the years presented, the unrealized losses on the Bank’s investments in corporate bonds are due to slight discount margin variances related to changes in market rates and not due to credit losses. Management monitors these securities on an ongoing basis and performs an internal analysis which includes a review of credit quality, changes in ratings