Mechanics BancorpMCHB
Mechanics Bancorp New Standards Disclosure
Recent Adopted Accounting Guidance
In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax
Disclosures,” which expands disclosures in an entity’s income tax rate reconciliation table and taxes paid both in the U.S.
and foreign jurisdictions. The update will be effective for annual periods beginning after December 15, 2024. For the year
ended December 31, 2025, the Company retrospectively adopted the annual disclosure requirements of ASU 2023-09,
except for the expanded disclosure requirements, the adoption of this guidance had no impact on the Company's
consolidated financial statements. See Note 17, “Income Taxes” for applicable income tax-related disclosures required by
this guidance.
In November 2025, the FASB issued ASU 2025-08, “Financial Instruments – Credit Losses (Topic 326): Purchased
Loans,” which amends the guidance in ASC 326 on the accounting for certain purchased loans. ASU 2025-08 is effective
for interim and annual reporting periods beginning after December 15, 2026. Early adoption is permitted in an interim or
annual reporting period in which financial statements have not yet been issued or made available for issuance. In the fourth
quarter of 2025, the Company early adopted ASU 2025-08 which amends the guidance in ASC 326 on the accounting for
certain purchased loans. Under the ASU, entities must account for acquired loans (excluding credit cards) that meet certain
criteria at acquisition (purchased seasoned loans) by recognizing them at their purchase price plus an allowance for
expected credit losses (gross-up approach). Purchased seasoned loans are defined as either: (1) non-PCD loans that are
obtained in a business combination, or (2) non-PCD loans that (a) are obtained in an asset acquisition or upon consolidation
of a variable interest entity that is not a business and (b) are acquired more than 90 days after their origination date by a
transferee that was not involved in their origination. The Company applied the guidance effective as of January 1, 2025. As
a result, for purchased seasoned loans acquired in the HomeStreet merger, the Company established an allowance for credit
losses of $20.3 million at the date of acquisition for these loans and reversed the provision for credit losses recorded in the
third quarter of 2025, and recorded it as part of the acquired loans initial amortized cost basis. The impact of the
adjustments from the adoption of this ASU as of September 30, 2025, and for the three and nine months ended September
30, 2025 is presented in Note 26, “Quarterly Financial Data.”
Recent Accounting Developments
In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense
Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” ASU 2024-03 requires
public companies to disclose, in the notes to the financial statements, specific information about certain costs and expenses
at each interim and annual reporting period. This includes disclosing amounts related to employee compensation,
depreciation, and intangible asset amortization. In addition, public companies will need to provide qualitative description of
the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively. ASU 2024-03 is
effective for public business entities for annual reporting periods beginning after December 15, 2026, and interim reporting
periods beginning after December 15, 2027. Implementation of ASU 2024-03 may be applied prospectively or
retrospectively. In January 2025, the FASB also issued ASU 2025-01, “Income Statement-Reporting Comprehensive
Income-Expense Disaggregation Disclosures-Clarifying the Effective Date,” which amends the effective date of ASU
2024-03 to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning
after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. The
enhanced income statement expense disclosure requirements apply on a prospective basis. However, retrospective
application in all prior periods presented is permitted. The Company is currently evaluating the impact of this update on its
consolidated financial statements and related disclosures. The adoption of ASU 2024-03 and ASU 2025-01 will not have
an impact on the Company’s financial position or results of operation as it impacts disclosures only. We are assessing the
impact on our disclosures.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 17, 2026 | Showing above |
| 2024 | Mar 7, 2025 | |
| 2023 | Mar 6, 2024 | |
| 2022 | Mar 6, 2023 | |
| 2021 | Mar 4, 2022 | |
| 2020 | Mar 12, 2021 | |
| 2019 | Mar 6, 2020 | |
| 2018 | Mar 6, 2019 | |
| 2017 | Mar 6, 2018 | |
| 2016 | Mar 9, 2017 | |
| 2015 | Mar 11, 2016 | |
About New Standards Disclosures
New accounting standards disclosures describe recently adopted pronouncements and those not yet effective, along with management's assessment of their expected impact. This section provides an early warning system for upcoming changes to how a company reports its financial results, often years before the new rules take effect.
Key signals: when management describes a not-yet-adopted standard's impact as "material" or "still being evaluated," it signals potential significant changes to reported metrics upon adoption. Watch for standards that affect a company's core operations — for example, revenue recognition changes for software companies or lease accounting changes for retailers with large store footprints. The transition method chosen (full retrospective versus modified retrospective) affects comparability with prior periods. Companies that delay adoption to the latest permitted date may be struggling with implementation complexity. Compare the disclosed impact assessments against peers in the same industry to gauge whether management's expectations are reasonable.