Company: MCHB
Filing Date: 2025-03-07
Form Type: 10-K
Source: 0001518715-25-000026
Chunk: 50

Company: Mechanics Bancorp
Filing Date: 2025-03-07
Form: 10-K
Item: Item 7
Chunk 50
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 demand deposits, was 2.71% and 2.02% for 2024 and 2023, respectively.

23

Rate and Volume Analysis

The following table presents the extent to which changes in interest rates and changes in the volume of our interest-earning assets and interest-bearing liabilities have affected our interest income and interest expense, excluding interest income from nonaccrual loans. Information is provided in each category with respect to: (1) changes attributable to changes in volume, (2) changes attributable to changes in rate and (3) the net change. 

 2024 vs. 2023 Increase (Decrease) Due toTotal Change(in thousands)RateVolumeAssets:Interest-earning assetsLoans$8,032 $(2,817)$5,215 Investment securities(1,983)(8,182)(10,165)FHLB stock, Fed Funds and other975 6,458 7,433 Total interest-earning assets7,024 (4,541)2,483 Liabilities:DepositsDemand deposits110 (173)(63)Money market and savings5,731 (7,405)(1,674)Certificates of deposit25,556 12,513 38,069 Total interest-bearing deposits31,397 4,935 36,332 Borrowings:Borrowings1,702 11,320 13,022 Long-term debt120 22 142 Total interest-bearing liabilities33,219 16,277 49,496 Total changes in net interest income (loss)$(26,195)$(20,818)$(47,013)

Net interest income in 2024 decreased $46.7 million as compared to 2023 due primarily to a decrease in our net interest margin. Our net interest margin decreased from 1.88% in 2023 to 1.38% in 2024 due to a 67 basis point increase in the rates paid on interest-bearing liabilities which was partially offset by a 10 basis point increase in the yield on interest earning assets. Yields on interest-earning assets increased as yields on adjustable-rate loans increased due to increases in the indexes on which their pricing is based. The increase in the rates paid on our interest-bearing liabilities was due to an increase in the proportion of higher cost borrowings and a decrease in the proportion of noninterest-bearing deposits to the total balance of interest-bearing liabilities and higher deposit