Company: MCHB
Filing Date: 2025-07-03
Form Type: S-4
Source: 0001140361-25-024872
Chunk: 95

Company: Mechanics Bancorp
Filing Date: 2025-07-03
Form: S-4
Chunk 95
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 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 to develop, implement and maintain an effective system of internal control over financial reporting, then the accuracy and timing of Mechanics’ financial reporting in future periods may be adversely affected.**

Effective internal controls are necessary for Mechanics to provide timely and reliable financial reports and effectively prevent fraud. If Mechanics fails to maintain adequate internal controls, then Mechanics’ financial statements may not accurately reflect Mechanics’ financial condition. Any material misstatements could require a restatement of Mechanics’ consolidated financial statements or cause investors to lose confidence in Mechanics’ reported financial information.

**Mechanics may identify material weaknesses in its internal control over financial reporting in the future or fail to maintain an effective system of internal control over financial reporting, which may result in material misstatements of its financial statements.**

Mechanics has not identified any material weaknesses in its internal control over financial reporting as of December 31, 2024. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements would not be prevented or detected on a timely basis.

Such material weaknesses could result in the misstatement of a substantial part or substantially all of Mechanics’ accounts or disclosures, which