Company: MCHB
Filing Date: 2025-04-15
Form Type: ARS
Source: 0001518715-25-000069
Chunk: 38

Company: Mechanics Bancorp
Filing Date: 2025-04-15
Form: ARS
Chunk 38
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 valuation as a critical audit matter because of the significant judgment applied by management in evaluating these assumptions. In addition, auditing the Company’s single family MSRs valuation required a high degree of auditor judgment and an increased 31

extent of effort, including the need to involve third party fair value specialists to evaluate the reasonableness of management’s assumptions related to the selection of projected prepayment speeds and discount rates used in the valuation of the single family MSRs. The primary audit procedures we performed to address this critical audit matter included the following: • Tested the design and operating effectiveness of controls related to the appropriateness of the fair value of single family MSRs, including management’s review of the projected prepayment speeds and discount rates. • Compared management’s estimate of fair value of single family MSRs to a fair value estimate independently determined by a third party fair value specialist using projected prepayment speeds and discount rates obtained from market survey data. By: /s/ Crowe LLP We have served as the Company's auditor since 2023. Los Angeles, California March 7, 2025 32

HOMESTREET, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS At December 31, (in thousands, except share data) 2024 2023 ASSETS Cash and cash equivalents $ 406,600 $ 215,664 Investment securities 1,057,006 1,278,268 Loans held for sale ("LHFS") 20,312 19,637 Loans held for investment ("LHFI") (net of allowance for credit losses of $38,743 and $40,500) 6,193,053 7,382,404 Mortgage servicing rights ("MSRs") 99,466 104,236 Premises and equipment, net 47,201 53,582 Other real estate owned ("OREO") 2,820 3,667 Intangible assets 7,141 9,641 Other assets 290,099 325,351 Total assets $ 8,123,698 $ 9,392,450 LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Deposits $ 6,413,021 $ 6,763,378 Borrowings 1,000,000 1,745,000 Long-term debt 225,131 224,766 Accounts payable and other liabilities 88,549 120,919 Total liabilities 7,726,701 8,854,063