Kenneth D. Russell

About Kenneth D. Russell

Kenneth D. Russell is a long-tenured bank executive and board member who has served on Mechanics Bank’s board since 2015 and was appointed to the Mechanics Bancorp (formerly HomeStreet, Inc.) board at the merger closing on September 2, 2025. He was interim President & CEO of Mechanics Bank from June 2015 to October 2016 and currently chairs the Board’s Risk Management Committee; the Board has determined he is not independent under SEC/Nasdaq rules .

Past Roles

External Roles

Board Governance

• Independence: Not independent; Board explicitly identified Ken Russell (and Carl B. Webb) as non-independent, with all other newly appointed directors deemed independent under SEC/Nasdaq rules .
• Committee assignments: Chair, Risk Management Committee; members: Ken Russell (Chair), E. Michael Downer, Adrienne Crowe . Not listed on Audit, Compensation, or Nominating & Governance committees .
• Controlled company status: Mechanics Bancorp elected “controlled company” status under Nasdaq rules, allowing exemptions from majority-independent board and fully independent nominating/compensation committees .
• Ownership concentration: Immediately post-merger, legacy Mechanics Bank shareholders owned ~91.7% economic and 91.3% voting power; Ford-affiliated entities owned ~77.7% voting power and 74.4% economic power .

Fixed Compensation

• Russell (and Executive Chairman Carl B. Webb) will not receive separate Board fees; they are compensated through the Bank Services Agreement (as amended) between Mechanics Bank and GJF Financial Management II, LLC, and are reimbursed for expenses to attend Board meetings .
• The company expects to maintain a non-employee director compensation program for other directors (cash and equity), but Russell is outside that program due to the service agreement .

RED FLAG: Compensation via a Bank Services Agreement to a third-party (GJF Financial Management II, LLC) rather than standard Board retainer creates potential related-party or structural conflict risk and reduces compensation transparency for shareholders .

Performance Compensation

• No performance-based director compensation for Russell is disclosed; his compensation flows through the Bank Services Agreement rather than equity-linked director grants .

Other Directorships & Interlocks

Expertise & Qualifications

• Banking and financial services operating leadership; interim CEO experience at Mechanics Bank (2015–2016) .
• Public company governance experience as director (Hilltop Holdings; First Acceptance Corporation) and current CEO of First Acceptance .
• Risk oversight: Chairs the Risk Management Committee at Mechanics Bancorp .

Equity Ownership

• No specific beneficial ownership by Kenneth D. Russell in Mechanics Bancorp is disclosed in available filings; post-merger ownership is dominated by Ford-affiliated entities and legacy Mechanics Bank shareholders .

Governance Assessment

• Committee leadership: A non-independent director chairs the Risk Management Committee, a critical oversight body for credit, liquidity, and cybersecurity risks. This weakens independence in risk oversight, particularly under a controlled company framework .
• Compensation structure: Russell’s compensation through a Bank Services Agreement (GJF Financial Management II, LLC) outside the standard director fee/equity program is a governance red flag due to opacity and potential related-party exposure .
• Controlled company profile: Extensive shareholder control by Ford affiliates (77.7% voting power) with exemptions from independence requirements can reduce minority shareholder protections. Executive Chairman Carl B. Webb is tied to controlling funds, amplifying control influence over board processes .
• Shareholder signals:
  • 2025 Annual Meeting (May 29, 2025): Directors and advisory votes (say-on-pay and auditor ratification) approved, indicating broad shareholder support under the pre-merger structure .
  • 2025 Special Meeting (Aug 21, 2025): Articles amendment, share issuance for merger, new 2025 Equity Incentive Plan, and merger-related compensation all approved by large margins—entrenching controlled governance post-merger .

RED FLAGS

• Non-independent director (Russell) chairs Risk Management Committee under controlled company exemptions .
• Compensation routed via Bank Services Agreement (GJF Financial Management II, LLC), not standard board retainer/equity—potential related-party exposure and reduced transparency .
• Highly concentrated voting control by Ford affiliates; Executive Chair’s managerial link to fund GP heightens influence risks .

Appendix: Key Votes (Context)

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