Company: MCHB
Filing Date: 2025-07-16
Form Type: 424B3
Source: 0001140361-25-026051
Chunk: 392

Company: Mechanics Bancorp
Filing Date: 2025-07-16
Form: 424B3
Chunk 392
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 Bank invests in qualified affordable housing projects. At March 31,2025 and December 31, 2024, the balance of the investment for qualified affordable housing projects was $13.8 million and $14.6 million, respectively. These balances are reflected in Interest Receivable and Other Assets on the Consolidated Balance Sheets. Remaining unfunded commitments related to the investments in qualified affordable housing projects totaled $1.1 million and $1.1 million as of March 31, 2025 and December 31, 2024, respectively. The Bank expects to fulfill these commitments through 2032. The Bank recognized amortization expense of $0.8 million and $0.8 million during the quarters ended March 31, 2025 and 2024, respectively, which were included within Provision for Income Tax on the Consolidated Income Statements. The Bank’s outstanding portfolio of other Community Reinvestment Act (CRA) Investments as of March 31, 2025 and December 31, 2024 was $62.3 million and $55.9 million, respectively. The majority of these CRA investments represent investments in small to mid-sized businesses throughout California. The Bank accounts for these CRA investments using the proportional amortization method of accounting and are reflected in Interest Receivable and Other Assets on the Consolidated Balance Sheets.

F-69

TABLE OF CONTENTS

The Bank recognized dividend income of $0.36 million and $0.38 million as of March 31,2025 and 2024, respectively, which were included within Other Interest Income in the Consolidated Income Statements. NOTE 5 – DERIVATIVE INSTRUMENTS The Bank enters into interest rate swaps with loan customers. The specific terms of the interest rate swap agreements are tied to the terms of the underlying loan agreements. To avoid increasing internal interest rate risk as a result of these business activities, the Bank enters into offsetting swap agreements with Cooperative Rabobank, U.A. (CRUA) and a subsidiary of Rabo’s parent, which also provided various interest rate swap services to the Bank. The notional amount of interest rate swaps with loan customers and offsetting swap agreements as of March 31,2025 and December 31, 2024 were $716.3 million and $759.4 million, respectively. The net revenue on customer swaps for the quarters ending March 31, 2025 and March 31, 2024 were $54.0 thousand and $6.2 thousand,