Company: MCHB
Filing Date: 2025-07-03
Form Type: S-4
Source: 0001140361-25-024872
Chunk: 98

Company: Mechanics Bancorp
Filing Date: 2025-07-03
Form: S-4
Chunk 98
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 misrepresentation. Mechanics has experienced losses resulting from fraud in the past, including loan, wire transfer, document and check fraud, and identity theft. Mechanics maintains fraud insurance, but this insurance may not be sufficient to cover all of Mechanics’ losses from any fraudulent acts.

**Negative publicity regarding Mechanics, or financial institutions in general, could damage Mechanics’ reputation and adversely impact its business and results of operations.**

Mechanics’ ability to attract and retain customers and conduct its business could be adversely affected to the extent Mechanics’ reputation is damaged. Reputational risk, or the risk to Mechanics’ business, earnings and capital from negative public opinion regarding its company, or financial institutions in general (such as the bank failures in the first half of 2023), is inherent in Mechanics’ business. Adverse perceptions concerning Mechanics’ reputation or financial institutions in general could lead to difficulties in generating and maintaining accounts as well as in financing them. In particular, such negative perceptions could lead to decreases in the level of deposits that consumer and commercial customers and potential customers choose to maintain with Mechanics. Negative public opinion could result from actual or alleged conduct in any number of activities or circumstances, including: lending or foreclosure practices; sales practices; corporate governance and potential conflicts of interest; ethical failures or fraud, including alleged deceptive or unfair lending or pricing practices; regulatory compliance; protection of customer information; cyberattacks, whether actual, threatened, or perceived; negative news about Mechanics or the financial institutions industry generally; general company performance; or actions taken by government regulators and community organizations in response to such activities or circumstances. Furthermore, Mechanics’ failure to address, or the perception that Mechanics has failed to address, these issues appropriately could impact Mechanics’ ability to keep and attract customers and/or employees and could expose Mechanics to litigation and/or regulatory action, which could have an adverse effect on Mechanics’ business and results of operations. If Mechanics, or its relationships with certain customers, vendors or suppliers, became the subject of negative publicity, then Mechanics’ ability to attract and retain customers and employees, and Mechanics’ financial condition and results of operations, could be adversely impacted.

**Mechanics is subject to legal claims and litigation, including potential securities law liabilities, any of which could have a material adverse effect on its business.**

Mechanics faces legal risks in each aspect of its business, and the volume of legal claims and amount of damages and penalties claimed in litigation and regulatory proceedings against financial service companies remains high. These risks often are difficult to assess or quantify, and their existence and magnitude often