Company: MCHB
Filing Date: 2025-07-03
Form Type: S-4
Source: 0001140361-25-024872
Chunk: 90

Company: Mechanics Bancorp
Filing Date: 2025-07-03
Form: S-4
Chunk 90
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 TABLE OF CONTENTS
**Mechanics is heavily reliant on technology, and a failure to effectively implement new technological solutions or enhancements to existing systems or platforms could adversely affect Mechanics’ business operations and the financial results of Mechanics’ operations.**

Mechanics significantly depends on technology to deliver its products and services and to otherwise conduct business. To remain technologically competitive and operationally efficient, Mechanics has either begun the significant investment in or has plans to invest in new technological solutions, substantial core system upgrades and other technology enhancements. Many of these solutions and enhancements have a significant duration, include phased implementation schedules, are tied to critical systems, and require substantial internal and external resources for design and implementation. Such external resources may be relied upon to provide expertise and support to help implement, maintain and/or service certain of Mechanics’ core technology solutions.

Although Mechanics takes steps to mitigate the risks and uncertainties associated with these solutions and initiatives, it may encounter significant adverse developments in the completion and implementation of these initiatives. These may include significant time delays, cost overruns, loss of key personnel, technological problems, processing failures, distraction of management and other adverse developments. Further, Mechanics’ ability to maintain an adequate control environment may be impacted.

The ultimate effect of any adverse development could damage Mechanics’ reputation, result in a loss of customer business, subject Mechanics to additional regulatory scrutiny, or expose Mechanics to civil litigation and possible financial liability, any of which could materially affect Mechanics, including its control environment, operating efficiency, and results of operations.

**Mechanics’ geographic concentration may magnify the adverse effects and consequences of any regional or local economic downturn.**

Mechanics primarily serves businesses, organizations and individuals located in California. As a result, Mechanics is exposed to risks associated with lack of geographic diversification. An economic downturn or decrease in property values in California, adverse changes in laws or regulations in California could impact the credit quality of Mechanics’ assets, the businesses of Mechanics’ customers, the ability to expand Mechanics’ business, the ability of the Mechanics’ customers to repay loans, the value of the collateral securing loans, Mechanics’ ability to sell the collateral upon any foreclosure and the stability of Mechanics’ deposit funding sources. Mechanics’ success significantly depends upon the growth in population, income levels, commerce, deposits and housing in Mechanics’ market area. If the communities in which Mechanics operates do not grow or if prevailing economic conditions locally or nationally are unfavorable, then Mechanics’ business may be negatively affected.

Any regional or local economic downturn that affects California, whether caused by recession, inflation