Company: MCHB
Filing Date: 2025-07-03
Form Type: S-4
Source: 0001140361-25-024872
Chunk: 93

Company: Mechanics Bancorp
Filing Date: 2025-07-03
Form: S-4
Chunk 93
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 of risk. For example, Mechanics might fail to identify or anticipate particular risks, or the systems that Mechanics use, and may not be capable of identifying certain risks. Certain of Mechanics’ strategies for managing risk are based upon observed historical market behavior. Mechanics applies statistical and other tools to these observations to quantify its risk exposure. Any failures in Mechanics’ risk management techniques and strategies to accurately identify and quantify its risk exposure could limit its ability to manage risks. In addition, any risk management failures could cause Mechanics’ losses to be significantly greater than the historical measures indicate. Further, Mechanics’ quantified modeling does not take all risks into account. As a result, Mechanics also takes a qualitative approach in reducing its risk, although Mechanics’ qualitative approach to managing those risks could also prove insufficient, exposing it to material unanticipated losses.

**Mechanics’ hedging strategies may not be successful in mitigating Mechanics’ exposure to interest rate risk.**

Mechanics has used, and may 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.

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**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),