Company: MCHB
Filing Date: 2025-07-15
Form Type: S-4/A
Source: 0001140361-25-025920
Chunk: 89

Company: Mechanics Bancorp
Filing Date: 2025-07-15
Form: S-4/A
Chunk 89
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 initiatives. These may include significant time delays, cost overruns, loss of key personnel, technological problems, processing failures, distraction of management and other adverse developments. Further, Mechanics’ ability to maintain an adequate control environment may be impacted.

The ultimate effect of any adverse development could damage Mechanics’ reputation, result in a loss of customer business, subject Mechanics to additional regulatory scrutiny, or expose Mechanics to civil litigation and possible financial liability, any of which could materially affect Mechanics, including its control environment, operating efficiency, and results of operations.

**Mechanics’ geographic concentration may magnify the adverse effects and consequences of any regional or local economic downturn.**

Mechanics primarily serves businesses, organizations and individuals located in California. As a result, Mechanics is exposed to risks associated with lack of geographic diversification. An economic downturn or decrease in property values in California, adverse changes in laws or regulations in California could impact the credit quality of Mechanics’ assets, the businesses of Mechanics’ customers, the ability to expand Mechanics’ business, the ability of the Mechanics’ customers to repay loans, the value of the collateral securing loans, Mechanics’ ability to sell the collateral upon any foreclosure and the stability of Mechanics’ deposit funding sources. Mechanics’ success significantly depends upon the growth in population, income levels, commerce, deposits and housing in Mechanics’ market area. If the communities in which Mechanics operates do not grow or if prevailing economic conditions locally or nationally are unfavorable, then Mechanics’ business may be negatively affected.

Any regional or local economic downturn that affects California, whether caused by recession, inflation, unemployment, natural disasters, supply chain disruptions or other factors, may affect Mechanics’ profitability more significantly and more adversely than Mechanics’ competitors that are less geographically concentrated and could have a material adverse effect on Mechanics’ results of operations and financial condition.

The trade policies and potential tariff initiatives being pursued by the U.S. government may present risks to Mechanics’ borrowers and the markets within which Mechanics operates, particularly with respect to the threatened imposition of additional tariffs on certain products imported from countries such as Mexico, Canada and China, which are significant international trading partners for the California economy. The imposition of tariffs on imports, the potential for retaliatory tariffs by foreign governments, or other similar restrictions on international trade could increase costs for manufacturers and resellers, reduce demand for U.S. exports and disrupt supply chains. Prolonged trade tensions or the implementation of tariffs could negatively impact the broader economic environment, potentially leading to reduced consumer spending, lower economic growth, and decreased demand for other banking