Company: MCHB
Filing Date: 2025-07-03
Form Type: S-4
Source: 0001140361-25-024872
Chunk: 104

Company: Mechanics Bancorp
Filing Date: 2025-07-03
Form: S-4
Chunk 104
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, to fine or remove officers and directors and, if it is concluded that such conditions cannot be corrected or there is an imminent risk of loss to depositors, to terminate Mechanics’ deposit insurance and place Mechanics into receivership or conservatorship. Any regulatory action against Mechanics could have a material adverse effect on Mechanics’ business, financial condition and results of operations.

**Mechanics faces a risk of noncompliance and enforcement action with the Bank Secrecy Act and other anti-money laundering statutes and regulations.**

The Bank Secrecy Act, the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, and other laws and regulations require financial institutions to institute and maintain an effective anti-money laundering program and file suspicious activity and currency transaction reports. There is also increased scrutiny of compliance with the sanctions programs and rules administered and enforced by the Treasury Department’s Office of Foreign Assets Control.

To comply with laws and guidelines in this area, Mechanics has dedicated significant resources to its anti-money laundering program. If Mechanics’ policies, procedures and systems are deemed deficient, Mechanics could be

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required to dedicate additional resources to its anti-money laundering program and could be subject to liabilities, including fines, and regulatory enforcement actions restricting Mechanics’ growth and restrictions on future acquisitions and de novo branching.

**Mechanics relies on certain entities affiliated with the Ford Entities for services, and certain of Mechanics directors and officers are employed by entities affiliated with the Ford Entities.**

Mechanics is a party to a Bank Services Agreement (the “Mechanics Bank Services Agreement”) with GJF Financial Management II, LLC (“GJF Management”), an affiliate of Gerald J. Ford, a former director and now director emeritus of Mechanics. GJF Management serves as the management company to Ford Financial Fund II, L.P. and Ford Financial Fund III, L.P., which collectively beneficially own, directly or indirectly, approximately 85% of Mechanics voting common stock as of July 1, 2025. Pursuant to the Mechanics Bank Services Agreement, GJF Management and individuals from GJF Management provide certain services to Mechanics, including, among others, accounting, tax, investment management, legal, regulatory, strategic planning, capital management, budgeting and other oversight. The services and value of services, inclusive of administrative costs, are evaluated annually to ensure compliance with applicable regulations. These services are provided to Mechanics at a