Company: MCHB
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001518715-25-000083
Chunk: 110

Company: Mechanics Bancorp
Filing Date: 2025-05-08
Form: 10-Q
Item: Item 2
Chunk 110
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Income Taxes: Due to our cumulative losses over the last three year period ended December 31, 2024, accounting rules required us to provide a valuation allowance for the balance of our deferred tax assets in the fourth quarter of 2024. As a result, we do not expect to recognize income tax expense until the deferred tax assets valuation allowance no longer exists. The $0.3 million income tax benefit recognized in the first quarter of 2025 primarily relates to the reversal of the disparate tax effects on our accumulated other comprehensive income ("AOCI") resulting from the recording in the fourth quarter of 2024, of a deferred tax valuation allowance for the deferred tax assets related to the AOCI. In the fourth quarter of 2024, we recorded a $53 million deferred tax allowance which was recorded as income tax expense. Excluding this allowance, the income tax benefit would have been $22.4 million and would have resulted in an effective tax rate of 24.3% for the fourth quarter of 2024. 

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Net Interest Income: The following tables set forth, for the periods indicated, information regarding (i) the total dollar amount of interest income from interest-earning assets and the resultant average yields on those assets; (ii) the total dollar amount of interest expense and the average rate of interest on our interest-bearing liabilities; (iii) net interest income; (iv) net interest rate spread; and (v) net interest margin:

Quarter Ended  March 31, 2025December 31, 2024(dollars in thousands)AverageBalanceInterestAverageYield/CostAverageBalanceInterestAverageYield/CostAssets:Interest-earning assets:Loans (1)$6,198,659 $73,587 4.76 %$7,334,221 $86,119 4.62 %Investment securities (1)1,055,336 9,509 3.60 %1,096,695 9,953 3.63 %FHLB Stock, Fed Funds and other242,687 3,691 6.20 %290,506 4,052 5.52 %Total interest-earning assets7,496,682 86,787 4.65 %8,721,422 100,124 4.53 %Noninterest-earning assets 374,252 405,681 Total assets$7,870,934