Company: MCHB
Filing Date: 2025-04-15
Form Type: ARS
Source: 0001518715-25-000069
Chunk: 22

Company: Mechanics Bancorp
Filing Date: 2025-04-15
Form: ARS
Chunk 22
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 where a fair value option election was made at the time of origination and, therefore, are carried at fair value with changes recognized in our consolidated income statements. Management considers the current level of the ACL to be appropriate to cover estimated lifetime losses within our LHFI portfolio. The following table presents the ACL by product type: December 31, 2024 December 31, 2023 (in thousands) Balance Rate (1) Balance Rate (1) CRE Non-owner occupied CRE $ 1,739 0.30 % $ 2,610 0.41 % Multifamily 14,909 0.50 % 13,093 0.33 % Construction/land development Multifamily construction 849 0.86 % 3,983 2.37 % CRE construction 66 0.60 % 189 1.02 % Single family construction 6,737 2.10 % 7,365 2.69 % Single family construction to permanent 184 0.44 % 672 0.64 % Total 24,484 0.61 % 27,912 0.54 % Commercial and industrial loans Owner occupied CRE 576 0.16 % 899 0.23 % Commercial business 6,886 2.23 % 2,950 0.83 % Total 7,462 1.12 % 3,849 0.52 % Consumer loans Single family 3,610 0.35 % 5,287 0.51 % Home equity and other 3,187 0.77 % 3,452 0.90 % Total 6,797 0.47 % 8,739 0.61 % Total ACL $ 38,743 0.63 % $ 40,500 0.55 % (1) The ACL rate is calculated excluding balances related to loans that are insured by the FHA or guaranteed by the VA or SBA. 20

Liquidity and Sources of Funds Liquidity risk management is primarily intended to ensure we are able to maintain sources of cash to adequately fund operations and meet our obligations, including demands from depositors, draws on lines of credit and paying any creditors, on a timely and cost-effective basis, in various market conditions. Our liquidity profile is influenced by changes in market conditions, the composition of the balance sheet and risk tolerance levels. The Company has established liquidity guidelines and operating plans that detail the sources and uses