Company: MCHB
Filing Date: 2025-07-03
Form Type: S-4
Source: 0001140361-25-024872
Chunk: 102

Company: Mechanics Bancorp
Filing Date: 2025-07-03
Form: S-4
Chunk 102
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Banks are highly regulated under federal and state law. As such, Mechanics is subject to extensive regulation, supervision and legal requirements from government agencies such as the Federal Reserve, the FDIC and the CDFPI, which govern almost all aspects of Mechanics’ operations. Compliance with laws and regulations can be difficult and costly, and changes to laws and regulations often impose additional operating costs. Mechanics’ failure to comply with these laws and regulations could subject Mechanics to restrictions on its business activities, enforcement actions and fines and other penalties, any of which could adversely affect Mechanics’ results of operations, regulatory capital levels and the price of its common stock.

Banking regulations are primarily intended to protect depositors’ funds, federal deposit insurance funds and the banking system as a whole, not stockholders or other debt holders. These regulations affect Mechanics’ lending practices, capital structure, capital requirements, investment practices, brokerage and investment advisory activities, dividends and growth, among other things. Failure to comply with laws, regulations or policies could result in enforcement actions, money damages, civil money penalties or reputational damage, as well as sanctions and supervisory actions by regulatory agencies that could subject Mechanics to significant restrictions on or suspensions of Mechanics’ business and Mechanics’ ability to expand through acquisitions or branching. While Mechanics has implemented policies and procedures designed to prevent any such violations of rules and regulations, such violations may occur from time to time, which could have a material adverse effect on Mechanics’ financial condition and results of operations.

Compliance with new laws and regulations has resulted and likely will continue to result in additional costs, which could be significant and may adversely impact Mechanics’ results of operations, financial condition and liquidity. The

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U.S. Congress, state legislatures and federal and state regulatory agencies frequently revise banking and securities laws, regulations and policies.

Mechanics received a “satisfactory” CRA rating in connection with its most recent CRA performance evaluation. A CRA rating of less than “satisfactory” adversely affects a bank’s ability to establish new branches and impairs a bank’s ability to commence new activities that are “financial in nature” or acquire companies engaged in these activities. Other regulatory exam ratings or findings also may adversely impact Mechanics’ ability to branch, commence new activities or make acquisitions.

Mechanics cannot predict whether or in what form any other proposed regulations or statutes will be adopted or the extent to which its business may be affected by any new regulation or statute. These changes become less predictable