Company: MCHB
Filing Date: 2025-07-03
Form Type: S-4
Source: 0001140361-25-024872
Chunk: 100

Company: Mechanics Bancorp
Filing Date: 2025-07-03
Form: S-4
Chunk 100
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 Mechanics or by other institutions. For example, bank failures during the first half of 2023 put additional financial pressure and uncertainty on other financial institutions and led to increased regulatory scrutiny in the industry. Similar bank failures, or the perception thereof, could adversely affect Mechanics’ operations. Many of these transactions expose Mechanics to credit risk in the event of default of its counterparty or client. In addition, Mechanics’ credit risk may be exacerbated when Mechanics holds collateral that cannot be realized or is liquidated at prices not sufficient to recover the full amount of the receivable due to Mechanics. Any such losses could be material and could materially and adversely affect Mechanics’ business, financial condition, results of operations or cash flows.

**Mechanics faces strong competition from other financial institutions and financial service companies, which may adversely affect its operations and financial condition.**

Mechanics competes with national, regional and community banks within the various markets where the Bank operates. Mechanics also faces competition from many other types of financial institutions, including savings and loan associations, savings banks, finance companies and credit unions. A number of these banks and other financial institutions have substantially greater resources and lending limits, larger branch systems and a wider array of banking services than Mechanics does. Mechanics also competes with other providers of financial services, such as money market mutual funds, brokerage and investment banking firms, consumer finance companies, pension trusts, governmental organizations and increasingly fintech companies, each of which may offer more favorable financing than Mechanics is able to provide. In addition, some of Mechanics’ non-bank competitors are not subject to the same extensive regulations that govern Mechanics. The banking business in California has remained competitive over the past several years, and Mechanics expects the level of competition it faces to further increase. Competition for deposits and in providing lending products and services to consumers and businesses in Mechanics’ market area continues to be competitive and pricing is important.

Other factors encountered in competing for savings deposits are convenient office locations, interest rates and fee structures of products offered. Direct competition for savings deposits also comes from other commercial bank and thrift institutions, money market mutual funds and corporate and government securities that may offer more attractive

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rates than insured depository institutions are willing to pay. Competition for loans is based on factors such as interest rates, loan origination fees and the range of services offered by the provider. Mechanics’ profitability depends on Mechanics’ ability to compete effectively in these markets. This competition may reduce or limit Mechanics’ margins on banking services, reduce