Company: MCHB
Filing Date: 2025-07-15
Form Type: S-4/A
Source: 0001140361-25-025920
Chunk: 92

Company: Mechanics Bancorp
Filing Date: 2025-07-15
Form: S-4/A
Chunk 92
---
 use, derivative financial instruments, such as interest rate swaps, to limit its exposure to interest rate risk. No hedging strategy can completely protect Mechanics, and the derivative financial instruments Mechanics elects may not have the effect of reducing Mechanics’ interest rate risk. Poorly designed strategies, improperly executed and documented transactions, inaccurate assumptions or the failure of a counterparty to fulfill its obligations could actually increase Mechanics’ risks and losses. In addition, hedging strategies involve transaction and other costs. Mechanics’ hedging strategies and the derivatives that Mechanics uses may not adequately offset the risks of interest rate volatility and could result in or magnify losses, which could have an adverse effect on Mechanics’ financial condition and results of operations.

<div align='center'>46</div>

#### TABLE OF CONTENTS
**Mechanics depends on its computer and communications systems and an interruption in service would negatively affect its business.**

Mechanics’ businesses rely on electronic data processing and communications systems. The effective use of technology allows Mechanics to better serve customers and clients, increases efficiency and reduces costs. The continued success of Mechanics will depend, in part, upon its ability to successfully maintain, secure and upgrade the capability of its systems, its ability to address the needs of its clients by using technology to provide products and services that satisfy their demands and its ability to retain skilled information technology employees. Significant malfunctions or failures of Mechanics’ computer systems, computer security, software or any other systems (e.g., record retention and data processing functions performed by third parties, and third-party software, such as Internet browsers), could cause delays in customer activity. Such delays could cause substantial losses for customers and could subject Mechanics to claims from customers for losses, including litigation claiming fraud or negligence. In addition, if Mechanics’ computer and communications systems fail to operate properly, regulations would restrict Mechanics’ ability to conduct business. Any such failure could prevent Mechanics from collecting funds relating to customer and client transactions, which would materially impact Mechanics’ cash flows. Any computer or communications system failure or decrease in computer system performance that causes interruptions in Mechanics’ operations could have a material adverse effect on Mechanics’ business, financial condition, results of operations or cash flows.

**Climate change could adversely affect Mechanics’ business and performance, including indirectly through impacts on Mechanics’ customers.**

Concerns over the long-term impacts of climate change have led, and may continue to lead, to governmental efforts in the United States to mitigate those impacts. Consumers and businesses also may change their behavior as a result of these concerns. Mechanics’ customers will need