Winchester Bancorp, Inc./MD/

Previous wording

Management’s discussion and analysis of financial condition and results of operations at December 31, 2025 and June 30, 2025 and for the three months and six months ended December 31, 2025 and 2024 is intended to assist in understanding the financial condition and results of operations of the Company. The information contained in this section should be read in conjunction with the unaudited financial statements and the notes thereto appearing in Part I, Item 1, of this Quarterly Report on Form 10-Q.

Current wording

Management’s discussion and analysis of financial condition and results of operations at March 31, 2026 and June 30, 2025 and for the three months and nine months ended March 31, 2026 and 2025 is intended to assist in understanding the financial condition and results of operations of the Company. The information contained in this section should be read in conjunction with the unaudited financial statements and the notes thereto appearing in Part I, Item 1, of this Quarterly Report on Form 10-Q.

Previous wording

Allowance for Credit Losses on Loans. The allowance for credit losses is established based upon the Company's current estimate of expected lifetime credit losses on loans measured at amortized cost. Credit losses are charged against the allowance when management's assessments confirm that the Company will not collect the full amortized cost basis of a loan. Subsequent recoveries, if any, are credited to the allowance. The Company estimates credit losses for financial assets on a collective basis for loans sharing similar risk characteristics. The Company segments financial assets with similar risk characteristics and has elected to segment its loans based on Federal Call codes used for reporting loans to the Federal Deposit Insurance Corporation as part of the Call Report process. These segments are collectively evaluated for expected credit losses using a quantitative Discounted Cash Flow ("DCF") model combined with an assessment of certain qualitative factors designed to address forecast risk and model risk inherent in the quantitative model output. The Company has elected to use this approach because DCF models allow for effective incorporation of a reasonable and supportable forecast in a directionally consistent and objective manner and peer data is available for certain inputs such as the probability of default and the loss given default. The quantitative model utilizes a loss factor based approach to estimate expected credit losses, which are derived from industry peer loss experience. The model estimates expected credit losses using loan level data over the estimated life of the exposure, considering the effect of prepayments. Economic forecasts are incorporated into the estimate over a reasonable and supportable forecast period, beyond which is a reversion to the historical long-run average using the straight-line reversion method. Management periodically evaluates a reasonable and supportable forecast period and a reversion period to be appropriate for purposes of estimating expected credit losses. The qualitative risk factors impacting the expected risk of loss within the portfolio include the following:

Current wording

Allowance for Credit Losses on Loans. The allowance for credit losses is established based upon the Company's current estimate of expected lifetime credit losses on loans measured at amortized cost. Credit losses are charged against the allowance when management's assessments confirm that the Company will not collect the full amortized cost basis of a loan. Subsequent recoveries, if any, are credited to the allowance. The Company estimates credit losses for financial assets on a collective basis for loans sharing similar risk characteristics. The Company segments financial assets with similar risk characteristics and has elected to segment its loans based on Federal Call codes used for reporting loans to the Federal Deposit Insurance Corporation as part of the Call Report process. These segments are collectively evaluated for expected credit losses using a quantitative DCF model combined with an assessment of certain qualitative factors designed to address forecast risk and model risk inherent in the quantitative model output. The Company has elected to use this approach because DCF models allow for effective incorporation of a reasonable and supportable forecast in a directionally consistent and objective manner and peer data is available for certain inputs such as the probability of default and the loss given default. The quantitative model utilizes a loss factor based approach to estimate expected credit losses, which are derived from industry peer loss experience. The model estimates expected credit losses using loan level data over the estimated life of the exposure, considering the effect of prepayments. Economic forecasts are incorporated into the estimate over a reasonable and supportable forecast period, beyond which is a reversion to the historical long-run average using the straight-line reversion method. Management periodically evaluates a reasonable and supportable forecast period and a reversion period to be appropriate for purposes of estimating expected credit losses. The qualitative risk factors impacting the expected risk of loss within the portfolio include the following:

Previous wording

The allowance for credit losses on loans is evaluated on a regular basis by management. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. For example, an increase of 25 basis points as to our lifetime loss rate for qualitative factors for all loan categories at December 31, 2025 would have increased our allowance for credit losses on loans at that date to $6.3 million from $4.4 million.

Current wording

The allowance for credit losses on loans is evaluated on a regular basis by management. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. For example, an increase of 25 basis points as to our lifetime loss rate for qualitative factors for all loan categories at March 31, 2026 would have increased our allowance for credit losses on loans at that date to $6.6 million from $4.5 million.

Previous wording

Total Assets. Total assets increased $66.6 million, or 7.0%, to $1.0 billion at December 31, 2025, from $949.4 million at June 30, 2025. The increase was primarily due to increases in loans and investment securities.

Current wording

Total Assets. Total assets increased $107.7 million, or 11.3%, to $1.06 billion at March 31, 2026, from $949.4 million at June 30, 2025. The increase was primarily due to increases in loans and investment securities.

Previous wording

Cash and Cash Equivalents. Cash and cash equivalents decreased $459,000, or 0.8%, to $54.8 million at December 31, 2025 from $55.2 million at June 30, 2025.

Current wording

Cash and Cash Equivalents. Cash and cash equivalents decreased $1.3 million, or 2.3%, to $54.0 million at March 31, 2026 from $55.2 million at June 30, 2025.

Previous wording

Investment Securities. Investment securities, comprised of both available for sale and held to maturity securities, aggregated $122.7 million at December 31, 2025 compared to $104.5 million at June 30, 2025, as we continued to invest stock offering proceeds into government agency and mortgage backed securities.

Current wording

Investment Securities. Investment securities, comprised of both available for sale and held to maturity securities, aggregated $124.0 million at March 31, 2026 compared to $104.5 million at June 30, 2025, as we continued to invest stock offering proceeds into government agency and mortgage backed securities.

Previous wording

Gross Loans. Loans increased $49.0 million, or 6.5%, to $803.1 million at December 31, 2025 compared to $754.1 million at June 30, 2025. The main driver of the new growth was in multi-family and residential real estate loans, which increased $24.4 million and $10.8 million, respectively. The construction and commercial real estate portfolios also increased $8.9 million and $3.4 million, respectively. We remained focused on originating construction, commercial and residential real estate, and multi-family real estate loans as the primary drivers of loan portfolio growth.

Current wording

Gross Loans. Loans increased $89.4 million, or 11.9%, to $843.5 million at March 31, 2026 compared to $754.1 million at June 30, 2025. The main driver of the new growth was in multi-family and residential real estate loans, which increased $49.6 million and $31.7 million, respectively. The commercial real estate and home equity portfolios also increased $6.2 million and $2.2 million, respectively. We remained focused on originating multi-family, commercial and residential real estate loans as the primary drivers of loan portfolio growth.

Previous wording

Deposits. Deposits increased $67.1 million, or 9.9%, to $746.3 million at December 31, 2025 from $679.2 million at June 30, 2025. The increase was due primarily to an increase in money market accounts, which increased $77.0 million, or 63.5%, to $197.1 million at December 31, 2025 from $120.1 million at June 30, 2025; this was due to the growth in our municipal customer deposits. The offset was in certificates of deposit, which decreased $9.9 million, or 3.5%, to $273.3 million at December 31, 2025 from $283.2 million at June 30, 2025. All of our deposits are fully insured by the FDIC or the Massachusetts Depositors Insurance Fund.

Current wording

Deposits. Deposits increased $104.5 million, or 15.4%, to $783.7 million at March 31, 2026 from $679.2 million at June 30, 2025. Money market accounts drove the increase, rising $108.7 million, or 90.1%, to $229.3 million at March 31, 2026 from $120.6 million at June 30, 2025, primarily due to growth in municipal customer deposits. Offsetting the increase in money market accounts was a decrease of $4.2 million, or 1.5%, in certificates of deposit to $278.9 million at March 31, 2026 from $283.2 million at June 30, 2025. All of our deposits are fully insured by the FDIC or the Depositors Insurance Fund.

Previous wording

Borrowings. Borrowings, which consisted solely of Federal Home Loan Bank of Boston advances, decreased $3.4 million, or 2.3%, to $143.6 million at December 31, 2025, compared to $147.0 million at June 30, 2025, as the inflows from the increase in deposits were used to pay off some borrowings.

Current wording

Borrowings. Borrowings, which consisted solely of Federal Home Loan Bank of Boston advances, decreased $117,000, or 0.1%, to $146.9 million at March 31, 2026, compared to $147.0 million at June 30, 2025, as the inflows from the increase in deposits were used to restructure wholesale funding.

Previous wording

Total Stockholders’ Equity. Total stockholders’ equity increased $2.9 million, and was $118.2 million at December 31, 2025 and $115.4 million at June 30, 2025. Total stockholders’ equity increased due to a $758,000 decrease in accumulated other comprehensive loss to $928,000 at December 31, 2025, and by net income of $2.0 million for the six months ended December 31, 2025.

Current wording

Total Stockholders’ Equity. Total stockholders’ equity increased $3.8 million, and was $119.1 million at March 31, 2026 and $115.4 million at June 30, 2025. Total stockholders’ equity increased due to a $457,000 decrease in accumulated other comprehensive loss to $1.2 million at March 31, 2026, and the net income increase of $3.2 million for the nine months ended March 31, 2026.

Previous wording

General. We recorded net income of $1.1 million and $373,000 for the three months ended December 31, 2025 and 2024, respectively. The increase in net income was due to an increase in interest and dividend income and a decrease in the cost of deposits, partially offset by an increase in operating expense.

Current wording

General. We recorded net income of $1.1 million and $305,000 for the three months ended March 31, 2026 and 2025, respectively. The increase in net income was due to an increase in interest and dividend income and a decrease in the cost of funds, partially offset by an increase in operating expense.

Previous wording

Interest and Dividend Income. Interest and dividend income increased $1.9 million, or 18.2%, to $12.4 million for the three months ended December 31, 2025, from $10.5 million for the three months ended December 31, 2024. Interest and fees on loans, which is our primary source of interest income, increased $1.5 million, or 15.8%, to $10.7 million for the three months ended December 31, 2025.

Current wording

Interest and Dividend Income. Interest and dividend income increased $1.9 million, or 17.9%, to $12.5 million for the three months ended March 31, 2026, from $10.6 million for the three months ended March 31, 2025. Interest and fees on loans, which is our primary source of interest income, increased $1.4 million, or 14.6%, to $10.9 million for the three months ended March 31, 2026.

Previous wording

The average balance of loans increased by $81.1 million, or 11.3%, to $797.4 million for the three months ended December 31, 2025, over the average balance for the three months ended December 31, 2024, while the average yield on loans increased by 21 basis points to 5.37% for the three months ended December 31, 2025, from 5.16% for the three months ended December 31, 2024. The increase in the average yield was due to a change in the composition of our loan portfolio to include a higher percentage of higher yielding construction and commercial real estate loans, as well as multi-family residential real estate loans. The increase in average balance was due to our continuing to pursue new commercial relationships.

Current wording

The average balance of loans increased by $82.1 million, or 11.2%, to $817.3 million for the three months ended March 31, 2026, over the average balance for the three months ended March 31, 2025, while the average yield on loans increased by 16 basis points to 5.32% for the three months ended March 31, 2026, from 5.16% for the three months ended March 31, 2025. The increase in the average yield was due to a change in the composition of our loan portfolio to include a higher percentage of higher yielding construction and commercial real estate loans, as well as multi-family residential real estate loans. The increase in average balance was due to our continuing to pursue new commercial relationships.

Previous wording

Interest Expense. Total interest expense decreased $125,000, or 1.9%, to $6.4 million for the three months ended December 31, 2025, compared to $6.5 million for the three months ended December 31, 2024. Interest expense on deposits decreased $66,000, or 1.3%, to $4.9 million for the three months ended December 31, 2025. Our average balance of interest-bearing deposits increased $66.7 million, or 11.1%, to $667.9 million, while our average cost of deposits decreased 37 basis points to 2.92% for the three months ended December 31, 2025, from 3.29% for the three months ended December 31, 2024.

Current wording

Interest Expense. Total interest expense totaled $6.2 million for the three months ended March 31, 2026 which represents a decrease of $21,000, or 0.3%, compared to the same period in 2025. Interest expense on deposits increased $222,000, or 4.7%, to $4.9 million for the three months ended March 31, 2026. Our average balance of interest-bearing deposits increased $87.0 million, or 14.2%, to $699.6 million, while our average cost of deposits decreased 26 basis points to 2.80% for the three months ended March 31, 2026, from 3.06% for the three months ended March 31, 2025.

Previous wording

Interest expense on Federal Home Loan Bank advances decreased $59,000, or 3.9%, to $1.5 million for the three months ended December 31, 2025. Our average balance of Federal Home Loan Bank advances increased $2.9 million, while our average cost of borrowings decreased 26 basis points to 4.21% for the three months ended December 31, 2025, from 4.47% for the three months ended December 31, 2024. The decrease in the Federal Home Loan Bank cost of funds is due to the decrease in advance rates.

Current wording

Interest expense on Federal Home Loan Bank advances decreased $243,000, or 15.6%, to $1.3 million for the three months ended March 31, 2026. Our average balance of Federal Home Loan Bank advances decreased $12.3 million, and our average cost of borrowings decreased 34 basis points to 3.98% for the three months ended March 31, 2026, from 4.32% for the three months ended March 31, 2025. The decrease in the Federal Home Loan Bank cost of funds is due to the decrease in average borrowing balances and lower advance rates.

Previous wording

Net Interest Income. Net interest income was $6.1 million for the three months ended December 31, 2025, compared to $4.0 million for the three months ended December 31, 2024, as our interest income increased faster than our interest expense. Our interest rate spread increased to 2.01% for the three months ended December 31, 2025 from 1.48% for the three months ended December 31, 2024. Our net interest margin increased to 2.51% for the three months ended December 31, 2025 from 1.92% for the three months ended December 31, 2024

Current wording

Net Interest Income. Net interest income was $6.3 million for the three months ended March 31, 2026, compared to $4.4 million for the three months ended March 31, 2025, as our interest income increased faster than our interest expense. Our interest rate spread increased to 2.06% for the three months ended March 31, 2026 from 1.61% for the three months ended March 31, 2025. Our net interest margin increased to 2.54% for the three months ended March 31, 2026 from 2.02% for the three months ended March 31, 2025

Previous wording

Provision for Credit Losses. Based on an analysis of the factors described in “Critical Accounting Policies—Allowance for Credit Losses,” we recorded a provision for credit losses of $388,000 for the three months ended December 31, 2025, compared to a provision of $238,000 for the three months ended December 31, 2024. The provision for credit losses on loans for the three months ended December 31, 2025 was due to an increase in loan balances and a partial charge-off.

Current wording

Provision for Credit Losses. Based on an analysis of the factors described in “Critical Accounting Policies—Allowance for Credit Losses,” we recorded a provision for credit losses of $325,000 for the three months ended March 31, 2026, compared to a benefit of $21,000 for the three months ended March 31, 2025. The increase in provision for credit losses on loans for the three months ended March 31, 2026 was primarily due to loan portfolio growth.

Previous wording

The allowance for credit losses on loans was $4.4 million at December 31, 2025 and $4.2 million at June 30, 2025, and represented 0.55% of total loans at both December 31, 2025 and June 30, 2025 . The allowance for credit losses for off balance sheet commitments was $428,000 at December 31, 2025 and $1.1 million at June 30, 2025. The benefit for off balance sheet commitments related to the change in ACL methodology and lower balances of loan commitments as the commitments were converted to loans.

Current wording

The allowance for credit losses on loans was $4.5 million at March 31, 2026 and $4.2 million at June 30, 2025, and represented 0.54% of total loans at March 31, 2026 and 0.55% at June 30, 2025 . The allowance for credit losses for off balance sheet commitments was $601,000 at March 31, 2026 and $1.1 million at June 30, 2025. The benefit for off balance sheet commitments is related to the change in ACL methodology and lower balances of loan commitments as the commitments were converted to loans.

Previous wording

Total nonaccrual loans were $3.6 million at December 31, 2025, compared to $2.2 million at June 30, 2025. Total loans past due 30 days or greater were $4.2 million at December 31, 2025 and $1.8 million June 30, 2025. As a percentage of nonperforming loans, the allowance for credit losses on loans was 121.31% at December 31, 2025 compared to 187.57% at June 30, 2025. The increase in past due and non-accrual balances is primarily due to one construction loan that was placed on non-accrual during the quarter.

Current wording

Total nonaccrual loans were $1.7 million at March 31, 2026, compared to $2.2 million at June 30, 2025. Total loans past due 30 days or greater were $1.8 million at March 31, 2026, unchanged from June 30, 2025. As a percentage of nonperforming loans, the allowance for credit losses on loans was 272.17% at March 31, 2026 compared to 187.57% at June 30, 2025. The decrease in past due and non-accrual balances is primarily due to a loan payoff during the quarter.

Previous wording

The decrease in gain on marketable equity securities, net, was due to the liquidation of the equities portfolio in June 2025.

Current wording

The decrease in loss on marketable equity securities, net, was due to the liquidation of the equities portfolio in June 2025.

Previous wording

The increase in salaries and employee benefits was due to the addition of key finance staff, and higher expenses related to our health plan, while the decrease in deposit insurance expense was due to a decrease in FDIC insurance rates. Increases in marketing expense were due to the launch of a new website as well as a new investor relations site while increases in other expense were primarily due to higher cost for professional services related to our operation as a public reporting entity.

Current wording

The increase in salaries and employee benefits was due to the addition of key finance and commercial lending staff, and higher expenses related to our health plan, while the decrease in deposit insurance expense was due to a decrease in FDIC insurance rates. The increase in data processing cost is due to investments in new technologies that will improve customer experience and efficiencies. Increases in marketing expense were due to the launch of a new website as well as a new investor relations site while increases in other expense were primarily due to higher reserves for off balance sheet commitments.

Previous wording

Income Taxes. Income tax expense increased to $276,000 for the three months ended December 31, 2025, compared to $41,000 for the three months ended December 31, 2024. The effective tax rates were 20.5% and 9.9% for the three months ended December 31, 2025 and 2024, respectively, as we had lower levels of taxable income during the 2024 period.

Current wording

Income Taxes. Income tax expense increased to $349,000 for the three months ended March 31, 2026, compared to $67,000 for the three months ended March 31, 2025. The effective tax rates were 23.4% and 18.0% for the three months ended March 31, 2026 and 2025, respectively, as we had lower levels of taxable income during the 2025 period.

Previous wording

Comparison of Operating Results for the Six Months ended December 31, 2025 and 2024

Current wording

Comparison of Operating Results for the Nine Months ended March 31, 2026 and 2025

Previous wording

General. We recorded net income of $2.0 million and net loss of $259,000 for the six months ended December 31, 2025 and 2024. The increase in net income was due primarily to increases in net interest income and lower provision for credit losses, partially offset by an increase in non-interest expense and income tax expense.

Current wording

General. We recorded net income of $3.2 million and net income of $46,000 for the nine months ended March 31, 2026 and 2025, respectively. The increase in net income was due primarily to increases in net interest income and lower provision for credit losses, partially offset by an increase in non-interest expense and income tax expense.

Previous wording

Interest and Dividend Income. Interest and dividend income increased $3.6 million, or 17.4%, to $24.4 million for the six months ended December 31, 2025, from $20.7 million for the six months ended December 31, 2024. Interest and fees on loans, which is our primary source of interest income, increased $2.8 million, or 15.6%, to $21.1 million for the six months ended December 31, 2025, from $18.3 million for the six months ended December 31, 2024.

Current wording

Interest and Dividend Income. Interest and dividend income increased $5.5 million, or 17.6%, to $36.9 million for the nine months ended March 31, 2026, from $31.4 million for the nine months ended March 31, 2025. Interest and fees on loans, which is our primary source of interest income, increased $4.2 million, or 15.2%, to $32.0 million for the nine months ended March 31, 2026, from $27.7 million for the nine months ended March 31, 2025.

Previous wording

The average balance of loans increased by $77.7 million, or 11.0%, to $786.2 million for the six months ended December 31, 2025, over the average balance for the six months ended December 31, 2024, while the average yield on loans increased by 22 basis points to 5.37% for the six months ended December 31, 2025, from 5.15% for the six months ended December 31, 2024. The increase in the average yield was primarily due to increases in higher yielding construction, commercial real estate, and multi-family loan balances. The increase in average balance was due to our continuing to pursue new commercial relationships.

Current wording

The average balance of loans increased by $79.1 million, or 11.0%, to $796.6 million for the nine months ended March 31, 2026, over the average balance for the nine months ended March 31, 2025, while the average yield on loans increased by 19 basis points to 5.35% for the nine months ended March 31, 2026, from 5.16% for the nine months ended March 31, 2025. The increase in the average yield was primarily due to increases in higher yielding construction, commercial and residential real estate, and multi-family loan balances. The increase in average balance was due to our continuing to pursue new commercial relationships.

Previous wording

Interest Expense. Total interest expense decreased $393,000, or 3.0%, to $12.5 million for the six months ended December 31, 2025, compared to $12.9 million for the six months ended December 31, 2024. Interest expense on deposits decreased $405,000, or 4.1%, to $9.5 million for the six months ended December 31, 2025, from $10.0 million for the six months ended December 31, 2024. Our average balance of interest-bearing deposits increased $54.0 million, or 9.1%, to $648.7 million, while our average cost of deposits decreased 41 basis points to 2.94% for the six months ended December 31, 2025, from 3.35% for the six months ended December 31, 2024. The decrease in the average cost of deposits was due to decreases in market interest rates as well as an increase in money market accounts, which typically bear lower rates than certificates of deposits.

Current wording

Interest Expense. Total interest expense decreased $415,000, or 2.2%, to $18.8 million for the nine months ended March 31, 2026, compared to $19.2 million for the nine months ended March 31, 2025. Interest expense on deposits decreased $184,000, or 1.3%, to $14.4 million for the nine months ended March 31, 2026, from $14.6 million for the nine months ended March 31, 2025. Our average balance of interest-bearing deposits increased $65.1 million, or 10.8%, to $665.8 million, while our average cost of deposits decreased 36 basis points to 2.89% for the nine months ended March 31, 2026, from 3.25% for the nine months ended March 31, 2025. The decrease in the average cost of deposits was due to decreases in market interest rates as well as an increase in money market accounts, which typically bear lower rates than certificates of deposits.

Previous wording

Interest expense on Federal Home Loan Bank advances was $3.0 million for the six months ended December 31, 2025, as well as for the six months ended December 31, 2024. We decreased Federal Home Loan Bank borrowings in recent periods due to increases in the money market accounts. The decrease in the average cost of borrowings was due to decreases in market interest rates between the periods.

Current wording

Interest expense on Federal Home Loan Bank advances was $4.3 million for the nine months ended March 31, 2026, compared to $4.5 million for the nine months ended March 31, 2025. We decreased Federal Home Loan Bank borrowings in recent periods due to increases in money market accounts. The decrease in the average cost of borrowings was due to decreases in market interest rates between the periods.

Previous wording

Net Interest Income. Net interest income was $11.8 million for the six months ended December 31, 2025, compared to $7.8 million for the six months ended December 31, 2024, as our interest income increased faster than our interest expense. Our interest rate spread increased to 1.98% for the six months ended December 31, 2025 from 1.43% for the six months ended December 31, 2024, while our net interest margin increased to 2.50% for the six months ended December 31, 2025 from 1.88% for the six months ended December 31, 2024. The interest rate spread and net interest margin were both positively impacted by the lower market interest rates.

Current wording

Net Interest Income. Net interest income was $18.1 million for the nine months ended March 31, 2026, compared to $12.2 million for the nine months ended March 31, 2025, as our interest income increased faster than our interest expense. Our interest rate spread increased to 2.01% for the nine months ended March 31, 2026 from 1.50% for the nine months ended March 31, 2025, while our net interest margin increased to 2.52% for the nine months ended March 31, 2026 from 1.93% for the nine months ended March 31, 2025. The interest rate spread and net interest margin were both positively impacted by the lower market interest rates.

Previous wording

Provision for Credit Losses. Based on an analysis of the factors described in “Critical Accounting Policies—Allowance for Credit Losses,” we recorded a provision for credit losses of $68,000 for the six months ended December 31, 2025, compared to a provision of $1.4 million for the six months ended December 31, 2024. The decrease in the provision for credit losses on loans for the six months ended December 31, 2025 was primarily due to lower charge offs of $580,000 compared to our charge offs of $1.4 million for the six months ended December 31, 2024. Additionally, there was a net credit of $158,000 recorded for the six months ended December 31, 2025 due to the change in the credit loss methodology from the Federal Reserve Scaled CECL Allowance for Credit Loss Estimated (SCALE) method to the Discounted Cash Flow (DCF) model which was completed in the first quarter of 2026.

Current wording

Provision for Credit Losses. Based on an analysis of the factors described in “Critical Accounting Policies—Allowance for Credit Losses,” we recorded a provision for credit losses of $393,000 for the nine months ended March 31, 2026, compared to a provision of $1.4 million for the nine months ended March 31, 2025. The decrease in the provision for credit losses on loans for the nine months ended March 31, 2026 was primarily due to lower charge offs of $592,000 compared to our charge offs of $1.4 million for the nine months ended March 31, 2025. Additionally, there was a net credit of $158,000 recorded for the nine months ended March 31, 2026 due to the change in the credit loss methodology from the Federal Reserve Scaled CECL Allowance for Credit Loss Estimated (SCALE) method to the DCF model which was completed in the first quarter of 2026.

Previous wording

The decrease in gain on marketable equity securities, net, was due to the liquidation of the portfolio in June 2025. The loss on sale of securities for the six months ended December 31, 2025 was due to the sale of securities available for sale, which were replaced with higher yielding investment securities as part of the Company’s investment portfolio restructuring. The increase in miscellaneous other income for the six months ended December 31, 2025 is primarily due to higher release fees on construction loans.

Current wording

The decrease in gain on marketable equity securities, net, was due to the liquidation of the portfolio in June 2025. The loss on sale of securities for the nine months ended March 31, 2026 was due to the sale of securities available for sale, which were replaced with higher yielding investment securities as part of the Company’s investment portfolio restructuring. The increase in miscellaneous other income for the nine months ended March 31, 2026 is primarily due to higher release fees on construction loans.

Previous wording

The increase in salaries and employee benefits was due to the addition of key staff in finance and other areas, while the increase in data processing expense was due to our implementing a new program for electronic communications and online account opening. The decrease in deposit insurance expense was due to a decrease in FDIC insurance rates. The lower credit in net periodic pension and post-retirement cost is due to the freezing of the pension plan, while the increase in marketing and advertising is due to the launch of a new website as well as a new investor relations site. The increase in other expense were primarily due to higher cost for professional services related to our operation as a public reporting entity

Current wording

The increase in salaries and employee benefits was due to the addition of key staff in finance and commercial real estate, while the increase in data processing expense was due to our implementing a new program for electronic communications and online account opening. The decrease in deposit insurance expense was due to a decrease in FDIC insurance rates. The lower credit in net periodic pension and post-retirement cost is due to the freezing of the pension plan, while the increase in marketing and advertising is due to the launch of a new website as well as a new investor relations site. The increase in other expense were primarily due to higher cost for professional services related to our operation as a public reporting entity.

Previous wording

Income Taxes. Income taxes increased by $789,000 to a provision of $632,000 for the six months ended December 31, 2025, compared to a benefit of $157,000 for the six months ended December 31, 2024. The increase in the income tax provision was due primarily to higher income for the six months ended December 31, 2025.

Current wording

Income Taxes. Income taxes increased by $1.1 million to a provision of $981,000 for the nine months ended March 31, 2026, compared to a benefit of $90,000 for the nine months ended March 31, 2025. The increase in the income tax provision was due primarily to higher income for the nine months ended March 31, 2026.

Previous wording

include the effect of deferred fees/costs, discounts, and premiums that are amortized or accreted to interest income. Deferred loan fees for the six months ended December 31, 2025 and 2024 were not material.

Current wording

include the effect of deferred fees/costs, discounts, and premiums that are amortized or accreted to interest income. Deferred loan fees for the nine months ended March 31, 2026 and 2025 were not material.

Previous wording

The tables above indicate that at December 31, 2025, in the event of an instantaneous parallel 200 basis point increase in interest rates, we would have experienced a 16.8% decrease in net interest income, and in the event of an instantaneous parallel 200 basis point decrease in interest rates, we would have experienced a 5.2% increase in net interest income and at June 30, 2025, in the event of an instantaneous parallel 200 basis point increase in interest rates, we would have experienced a 14.3% decrease in net interest income, and in the event of an instantaneous parallel 200 basis point decrease in interest rates, we would have experienced a 1.7% increase in net interest income.

Current wording

The tables above indicate that at March 31, 2026, in the event of an instantaneous parallel 200 basis point increase in interest rates, we would have experienced a 15.7% decrease in net interest income, and in the event of an instantaneous parallel 200 basis point decrease in interest rates, we would have experienced a 5.7% increase in net interest income and at June 30, 2025, in the event of an instantaneous parallel 200 basis point increase in interest rates, we would have experienced a 14.3% decrease in net interest income, and in the event of an instantaneous parallel 200 basis point decrease in interest rates, we would have experienced a 1.7% increase in net interest income.

Previous wording

The tables above indicate that at December 31, 2025, in the event of an instantaneous parallel 200 basis point increase in interest rates, we would have experienced a 22.4% decrease in EVE, and in the event of an instantaneous parallel 200 basis point decrease in interest rates, we would have experienced a 6.9% increase in EVE, and at June 30, 2025, in the event of an instantaneous parallel 200 basis point increase in interest rates, we would have experienced a 22.0% decrease in EVE, and in the event of an instantaneous parallel 200 basis point decrease in interest rates, we would have experienced a 7.1% increase in EVE.

Current wording

The tables above indicate that at March 31, 2026, in the event of an instantaneous parallel 200 basis point increase in interest rates, we would have experienced a 19.6% decrease in EVE, and in the event of an instantaneous parallel 200 basis point decrease in interest rates, we would have experienced a 5.6% increase in EVE, and at June 30, 2025, in the event of an instantaneous parallel 200 basis point increase in interest rates, we would have experienced a 22.0% decrease in EVE, and in the event of an instantaneous parallel 200 basis point decrease in interest rates, we would have experienced a 7.1% increase in EVE.

Previous wording

At December 31, 2025, all estimated changes described above with respect to net interest income and EVE with respect to potential increases in market interest rates were not in compliance with the current policy limits established by the board of trustees. We have determined that selling assets to comply with our internal policies would result in a significant loss that would deplete capital and, as a result, restrict future growth, while providing limited benefit during a period of declining market interest rates, as has begun in the latter half of 2024.

Current wording

At March 31, 2026, all estimated changes described above with respect to net interest income and EVE with respect to potential increases in market interest rates were not in compliance with the current policy limits established by the board of trustees. We have determined that selling assets to comply with our internal policies would result in a significant loss that would deplete capital and, as a result, restrict future growth, while providing limited benefit during a period of declining market interest rates, as began in the latter half of 2024.

Previous wording

Liquidity is our ability to meet current and future financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Our primary sources of funds are deposits, principal and interest payments on loans and securities and proceeds from maturities and calls of securities. We also have the ability to borrow from the Federal Home Loan Bank of Boston. At December 31, 2025, we had $143.6 million outstanding in advances from the Federal Home Loan Bank of Boston. At December 31, 2025, we had the ability to borrow $152.5 million in additional Federal Home Loan Bank of Boston advances. At December 31, 2025, we had a $5.3 million line of credit with the Federal Home Loan Bank of Boston, which was not drawn at December 31, 2025. Additionally, at December 31, 2025, we had a $68.9 million secured line of credit through the Federal Reserve Borrower in Custody program. At that date, there were no amounts outstanding.

Current wording

Liquidity is our ability to meet current and future financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Our primary sources of funds are deposits, principal and interest payments on loans and securities and proceeds from maturities and calls of securities. We also have the ability to borrow from the Federal Home Loan Bank of Boston. At March 31, 2026, we had $146.9 million outstanding in advances from the Federal Home Loan Bank of Boston and a $25 million outstanding letter of credit. At March 31, 2026, we had the ability to borrow $146.1 million in additional Federal Home Loan Bank of Boston advances. At March 31, 2026, we had a $5.3 million line of credit with the Federal Home Loan Bank of Boston, which was not drawn at March 31, 2026. Additionally, at March 31, 2026, we had a $88.2 million secured line of credit through the Federal Reserve Borrower in Custody program. At that date, there were no amounts outstanding.

Previous wording

Our cash flows are comprised of three primary classifications: cash flows from operating activities, investing activities, and financing activities. Net cash provided by operating activities was $2.9 million for the six months ended December 31, 2025 and net cash used by operating activities was $277,000 for the six months ended December 31, 2024. Net cash used by investing activities, which consists primarily of disbursements for loan originations and the purchase of investment securities, offset by principal collections on loans and proceeds from maturing securities and pay downs on securities, was $67.3 million and $44.1 million for the six months ended December 31, 2025 and 2024, respectively. Net cash provided by financing activities was $64.0 million and $41.9 million for the six months ended December 31, 2025 and 2024, respectively.

Current wording

Our cash flows are comprised of three primary classifications: cash flows from operating activities, investing activities, and financing activities. Net cash provided by operating activities was $4.3 million for the nine months ended March 31, 2026 and $571,000 for the nine months ended March 31, 2025. Net cash used by investing activities, which consists primarily of disbursements for loan originations and the purchase of investment securities, offset by principal collections on loans and proceeds from maturing securities and pay downs on securities, was $110.1 million and $47.5 million for the nine months ended March 31, 2026 and 2025, respectively. Net cash provided by financing activities was $104.6 million and $69.4 million for the nine months ended March 31, 2026 and 2025, respectively.