Company: MCHB
Filing Date: 2025-07-03
Form Type: S-4
Source: 0001140361-25-024872
Chunk: 96

Company: Mechanics Bancorp
Filing Date: 2025-07-03
Form: S-4
Chunk 96
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 would result in a material misstatement of Mechanics’ annual or interim financial statements that would not be prevented or detected.

To prevent such material weaknesses, Mechanics actively recruits accounting personnel with appropriate experience, certification, education and training. Mechanics is in the process of implementing additional measures and risk assessment procedures designed to improve Mechanics’ disclosure controls and procedures and internal control over financial reporting. Mechanics has engaged financial consultants to assist with the implementation of internal controls over financial reporting. To the extent that Mechanics is not able to hire and retain such individuals or is unable to successfully design and implement such controls, material weaknesses may not be prevented, identified or remediated and management may be required to record additional adjustments to its financial statements in the future or otherwise not be able to produce timely or accurate financial statements. Remediation efforts are generally time-consuming and require financial and operational resources. If Mechanics’ management concludes that Mechanics’ internal control over financial reporting is not effective, such a determination could adversely affect investor confidence in Mechanics.

**Mechanics ultimately may write off goodwill and other intangible assets resulting from business combinations.**

Goodwill is initially recorded at fair value and is not amortized but is reviewed at least annually or more frequently if events or changes in circumstances indicate that the carrying value may not be fully recoverable. If Mechanics’ estimates of goodwill fair value change, then Mechanics may determine that impairment charges are necessary. The determination of whether impairment has occurred, takes into consideration a number of factors, including, but not limited to, operating results, business plans, economic projections, anticipated future cash flows and current market data. On an ongoing basis, Mechanics evaluates whether facts and circumstances indicate any impairment of value of intangible assets. As circumstances change, Mechanics may not realize the value of these intangible assets. If Mechanics determines that a material impairment has occurred, then it will be required to write off the impaired portion of intangible assets, which could have a material adverse effect on Mechanics’ results of operations in the period in which the write-off occurs. Mechanics continuously monitors developments regarding future operating performance of Mechanics’ business, overall economic conditions, market capitalization and any other triggering events or circumstances that may indicate an impairment in the future.

No assurance can be given that Mechanics will not record an impairment loss on goodwill in the future and any such impairment loss could have a material adverse effect on its business, consolidated financial condition and Mechanics’ consolidated results of operations. Furthermore, even though goodwill is a noncash item, significant impairment of goodwill could subject Mechanics to regulatory limitations, including the ability to pay dividends