Company: MCHB
Filing Date: 2025-07-16
Form Type: 424B3
Source: 0001140361-25-026051
Chunk: 91

Company: Mechanics Bancorp
Filing Date: 2025-07-16
Form: 424B3
Chunk 91
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 these risks into account in making lending and other decisions may not be effective in protecting it from the negative impact of new laws and regulations or changes in consumer or business behavior.

**Mechanics is subject to environmental liability risk associated with lending activities.**

A significant portion of Mechanics’ loan portfolio is secured by real property. In the ordinary course of business, Mechanics may foreclose on and take title to properties securing certain loans. In doing so, there is a risk that hazardous or toxic substances could be found on these properties. If hazardous or toxic substances are found, Mechanics may be liable for remediation costs, as well as for personal injury and property damage. Environmental laws may require Mechanics to incur substantial expenses and may materially reduce the affected property’s value or limit Mechanics’ ability to use or sell the affected property. In addition, future laws or more stringent interpretations or enforcement policies with respect to existing laws may increase Mechanics’ exposure to environmental liability. The remediation costs and any other financial liabilities associated with an environmental hazard could have a material and adverse effect on Mechanics’ business, financial condition and results of operations.

**Mechanics may fail to adapt our services to changes in the marketplace related to mortgage servicing or origination, technology or in changing requirements of governmental authorities and customers.**

Mechanics both sells and holds for investment residential mortgage loans that it originates. The markets for Mechanics’ mortgage origination and servicing business are subject to frequent introduction of new services by competitors, evolving industry standards and government regulations. Mechanics’ future success will depend on enhancing its services and technologies, and developing new services that address changes in technology, competing services, applicable marketplaces, or customer needs. In addition, the demand for mortgage servicing can be impacted by various factors, including national and regional economic trends, such as recessions or stagnating real estate markets, as well as the difference between interest rates on existing mortgage loans relative to prevailing mortgage rates. Mechanics may not be able to maintain or grow the size of its servicing portfolio if mortgage loans serviced by Mechanics are repaid at maturity, prepaid prior to maturity, refinanced with a mortgage not serviced by Mechanics, liquidated through foreclosure, deed-in-lieu of foreclosure, other liquidation process, or other events. The failure of mortgage loans that Mechanics holds on its books to perform adequately, or a decline in Mechanics’ mortgage servicing business, could have a material adverse effect on Mechanics’ financial condition, liquidity and results of operations.

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**If Mechanics fails