Company: MCHB
Filing Date: 2025-07-03
Form Type: S-4
Source: 0001140361-25-024872
Chunk: 393

Company: Mechanics Bancorp
Filing Date: 2025-07-03
Form: S-4
Chunk 393
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. The Bank maintains that it has intent and ability to hold these securities until the amortized cost basis of each security is recovered and likewise concluded as of March 31, 2025 that it was not more likely than not that any of the securities in an unrealized loss position would be required to be sold.

F-58

TABLE OF CONTENTS

U.S. Treasuries and US Government-Sponsored Agency Securities - For the quarters presented, the unrealized losses on the Bank’s investments in U.S. treasuries and government-sponsored agency securities are primarily due to changes in interest rates. These securities have explicit or implicit guarantees from the U.S. government, thus posing no credit losses. Management expects to recover the entire amortized cost basis of these securities. Obligations of States and Political Subdivisions - For the quarters presented, the unrealized losses on the Bank’s investments in obligations of states and political subdivisions are primarily due to changes in interest rates and not due to credit losses. Management monitors these securities on an ongoing basis and performs an internal analysis which takes into account the impact from market rates movements, severity and duration of the unrealized loss position, viability of the issuer, recent downgrades in ratings, and external credit rating assessments. As a result, management expects to recover the entire amortized cost basis of these securities. Mortgage-Backed Securities -Residential and Commercial (MBS) - For the quarters presented, the unrealized losses on the Bank’s investments in residential and commercial MBS are primarily due to changes in interest rates. These securities are either implicitly or explicitly guaranteed by the U.S. government, as such management expects to recover the entire amortized cost basis of these securities. Collateralized Loan Obligations - For the quarters presented, there were no unrealized losses on the Bank’s collateralized loan obligations are primarily due to timing of the purchases. These securities are presented at par value. Corporate Bonds - For the quarters presented, the unrealized losses on the Bank’s investments in corporate bonds are due to slight discount margin variances related to changes in market rates and not due to credit losses. Management monitors these securities on an ongoing basis and performs an internal analysis which includes a review of credit quality, changes in ratings, assessment of regulatory and financial ratios, and general standing versus peer group. Management expects to recover the entire amortized cost basis of these securities. Securities with a gross carrying value of $1.46 billion at March 31, 2025 and $1.38 billion at December