Company: MCHB
Filing Date: 2025-07-16
Form Type: 424B3
Source: 0001140361-25-026051
Chunk: 96

Company: Mechanics Bancorp
Filing Date: 2025-07-16
Form: 424B3
Chunk 96
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 needs it, then it may have to curtail its growth or certain operations until market conditions become more favorable. Any diminished ability to raise additional capital, if needed, could restrict Mechanics’ ability to grow, require Mechanics to take actions that would affect its earnings negatively or otherwise affect its business and its ability to implement its business plan, capital plan and strategic goals adversely. Such events could have a material adverse effect on Mechanics’ business, consolidated financial condition and consolidated results of operations.

**The soundness of other financial institutions could adversely affect Mechanics’ business.**

Mechanics’ ability to engage in routine funding transactions could be adversely affected by the actions and commercial soundness of other financial institutions. Financial services institutions are interrelated as a result of trading, clearing, counterparty and other relationships. Mechanics has exposure to many different counterparties and Mechanics routinely executes transactions with counterparties in the financial services industry, including brokers and dealers, commercial banks, credit unions, investment banks, mutual and hedge funds and other institutional clients. As a result, defaults by, or even negative speculation about, one or more financial services institutions, or the financial services industry in general, have led to market-wide liquidity problems in the past and could lead to losses or defaults by 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