Company: MCHB
Filing Date: 2025-07-03
Form Type: S-4
Source: 0001140361-25-024872
Chunk: 86

Company: Mechanics Bancorp
Filing Date: 2025-07-03
Form: S-4
Chunk 86
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 Mechanics’ business and results of operations are affected by general economic, market and business conditions. The credit quality of Mechanics’ loan portfolio necessarily reflects, among other things, the general economic conditions in the areas in which Mechanics conducts its business. Mechanics’ continued financial success depends to a degree on factors beyond its control, including:

| • | national and local economic conditions, such as the level and volatility of short-term and long-term interest rates, inflation, home prices, unemployment and under-employment levels, energy prices, bankruptcies, household income and consumer spending; |

| • | the availability and cost of capital and credit; |

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| • | incidence of customer fraud; and |

| • | federal, state and local laws affecting these matters. |

The deterioration of any of these conditions, as Mechanics has experienced with past economic downturns, could adversely affect Mechanics’ consumer and commercial businesses and securities portfolios, Mechanics’ level of loan charge-offs and provision for credit losses, the carrying value of Mechanics’ deferred tax assets, Mechanics’ capital levels and liquidity, and Mechanics’ results of operations. Several factors could pose risks to the financial services industry, including tightening monetary policies by central banks, rising energy prices, trade wars, restrictions and tariffs; slowing growth in emerging economies; geopolitical matters, including international political unrest, disturbances and conflicts; acts of war and terrorism; pandemics; changes in interest rates; regulatory uncertainty; continued infrastructure deterioration; low oil prices; disruptions in global or national supply chains; and natural disasters. Each of these factors may adversely affect Mechanics’ fees and costs. Over the last several years, there have been several instances where there has been uncertainty regarding the ability of Congress and the President collectively to reach agreement on federal budgetary and spending matters. A period of failure to reach agreement on these matters, particularly if accompanied by an actual or threatened government shutdown, may have an adverse impact on the U.S. economy. Additionally, a prolonged government shutdown may inhibit Mechanics’ ability to evaluate borrower creditworthiness and originate and sell certain government-backed loans. Mechanics’ business is subject to interest rate risk, and fluctuations in interest rates may adversely affect Mechanics’ earnings, capital levels and overall results. Mechanics is subject to significant risk from changes in interest rates. Between August 2019 and March 2020, the Federal Open Market Committee of the Federal Reserve Board decreased its target range for the federal funds rate by 200 basis points, while between March 2022 and December 2023, it raised the target range