Winchester Bancorp, Inc./MD/
For the period ended Jun 30, 2026. Filed Sep 16, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2026 · Filed Sep 16, 2026
WSBK$13.61-0.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2025-06-30; filed 2025-09-17.
0001193125-25-206332
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2026-06-30; filed 2026-09-16.
0001193125-26-392194
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 86 previous paragraphs and 92 current paragraphs.
47 unchanged; 28 reworded; 17 added; 11 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 9 previous and 12 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (17)
Current report
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 Report 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 report
changes in the Company’s loan policies, procedures and strategies;
Current report
changes in international, national, regional, and local economic and business conditions;
Current report
changes in the nature and volume of the portfolio and terms of loans;
Current report
changes in experience, depth, and ability of lending management;
Current report
changes in the volume, trend, and severity of past due financial assets;
Current report
changes in the quality of the organization’s loan review system;
Current report
changes in the value of underlying collateral for collateral-dependent loans;
Current report
the existence and effect of any concentrations of credit, and changes in the level of such concentration; and
Current report
the effect of competition and legal/regulatory requirements on the portfolio.
Current report
The following table sets forth activity in our allowance for credit losses for the periods indicated.
Current report
The decrease in charge-offs for the year ended June 30, 2026 was primarily due to lower commercial loan charge-offs, partially offset by an increase in charge-offs within the construction portfolio.
Current report
The following table sets forth additional information with respect to charge-offs by category for the years indicated.
Current report
Allocation of Allowance for Credit Losses. The following table sets forth the allowance for credit losses allocated by loan category and the percent of the allowance in each category to the total allocated allowance at the dates indicated. The allowance for credit losses allocated to each category is not necessarily indicative of future losses in any particular category and does not restrict the use of the allowance to absorb losses in other categories.
Current report
Deposits. Deposits increased $130.1 million, or 19.1%, to $809.2 million at June 30, 2026 from $679.2 million at June 30, 2025. The increase was due primarily to an increase in money market accounts, which rose $140.0 million, or 116.1%, to $260.6 million at June 30, 2026 from $120.6 million at June 30, 2025, largely due to the strong performance of our newly established municipal deposit channel. Partially offsetting this growth were decreases of $10.3 million, or 6.4% in savings accounts and $1.6 million or 0.6% in certificates of deposit. Within certificates of deposit, balances greater than $250,000 increased $32.1 million, or 32.5%, while balances less than $250,000 decreased $33.7 million, or 18.3%. All of our deposits are fully insured under the DIF.
Current report
The increase in miscellaneous income represents higher construction release fees recorded in the current period compared to the prior period.
Current report
The increase in salaries and employee benefits was driven by the addition of key staff in commercial lending and accounting, as well as the implementation of a new bonus plan. Data processing expense increased due to implementation of new software across several areas, including cash management, allowance for credit loss, and commercial credit. Other expenses decreased as a result of a one-time contribution of $2.3 million to the Winchester Savings Bank Charitable Foundation that was recorded in the prior year.
Removed paragraphs (11)
Previous report
Allowance for Credit Losses on Loans. The allowance for credit losses on loans is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Such allowance is based on losses expected to arise over the life of the asset (contractual term). The allowance for credit losses on loans is established through a provision for credit losses charged to earnings. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance.
Previous report
We measure the allowance for credit losses on loans using the SCALE method, which is a simple, spreadsheet-based method developed by the Federal Reserve Board to assist community banks in calculating a CECL compliant allowance for credit losses using proxy expected lifetime loss rates. The SCALE tool is a template designed for smaller community banks with total assets of less than $1 billion. It uses publicly available data to derive the initial proxy lifetime loss rates. Management uses judgment to further adjust the proxy expected lifetime loss rates with qualitative factors to reflect the facts and circumstances of our internal loss history and credit risk factors for each loan segment. The allowance for credit losses on loans is measured on a collective (pool) basis when similar characteristics exist. We segment our loan portfolio to correspond to call report classification to make peer data more useful.
Previous report
Although we believe that we use the best information available to establish the allowance for credit losses on loans, future adjustments to the allowance may be necessary if economic conditions differ substantially from the assumptions used in making the evaluation. In addition, the Massachusetts Commissioner of Banks and the FDIC, as an integral part of their examination process, periodically review our allowance for credit losses on loans, and as a result of such reviews, we may have to adjust our allowance for credit losses on loans. A large loss could deplete the allowance and require increased provisions to replenish the allowance, which would adversely affect earnings.
Previous report
Effective on July 1, 2025, the Company has changed the methodology to calculate the allowance for credit losses on loans and off-balance sheet credit exposures to a discounted cash flow method from the SCALE method as the SCALE method is not applicable for institutions with assets greater than $1 billion. The Company does not expect the resulting methodology change to have a significant impact on the total allowance for credit losses as a result of this methodology change.
Previous report
Deposits. Deposits increased $43.8 million, or 6.9%, to $679.2 million at June 30, 2025 from $635.4 million at June 30, 2024. The increase was due primarily to an increase in money market accounts, which increased $34.0 million, or 39.3%, to $120.6 million at June 30, 2025 from $86.6 million at June 30, 2024, as customers continued to hold deposit products with higher interest rates. The increase in deposits was also due to a $21.0 million or 8.0% increase in certificates of deposits to $283.2 million at June 30, 2025 from $262.2 million at June 30, 2024, which was primarily due to a $13.1 million increase in brokered deposits. This increase consisted of an increase of $23.7 million, or 14.7%, in certificates of deposit in amounts of less than $250,000, and a decrease of $2.7 million, or 2.7%, in certificates of deposit in amounts of $250,000 or greater (the limit for federal deposit insurance). Offsetting the increases is an $7.1 million or 4.2% decrease in savings accounts. All of our deposits are fully insured under the DIF.
Previous report
The increase in income on bank owned life insurance was due to the purchase of $4.0 million of additional policies during the 2024 fiscal year. Gain on sale of fixed assets during the 2024 period was related to the sale of a bank branch.
Previous report
The increase in other expense was due to a one-time contribution of $2.3 million to the Winchester Savings Bank Charitable Foundation. Additional increases include higher deposit insurance expense which was due to an increase in FDIC insurance rates and our higher deposit levels. 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.
Previous report
We do not engage in hedging activities, such as engaging in futures, options or interest rate swap transactions, nor invest in high-risk mortgage derivatives, such as collateralized mortgage obligation residual interests, real estate mortgage investment conduit residual interests or stripped mortgage-backed securities.
Previous report
Assumes an instantaneous uniform change in interest rates at all maturities.
Previous report
Assumes an instantaneous uniform change in interest rates at all maturities.
Previous report
The net proceeds from the offering significantly increased our liquidity and capital resources. Over time, the initial level of liquidity will be reduced as net offering proceeds are used for general corporate purposes, including funding loans. Our financial condition and results of operations will be enhanced by the net proceeds from the offering, which will increase our net interest-earning assets and net interest income. However, due to the increase in equity resulting from the net proceeds, as well as other factors associated with the offering, our return on equity will be lowered immediately following the offering.
Reworded paragraphs (28)
Previous wording
Total assets increased $96.4 million, or 11.3%, to $949.4 million at June 30, 2025, from $853.0 million at June 30, 2024. The increase was primarily due to increases in loans, investments and cash and cash equivalents. Net loss for the year ended June 30, 2025 was $874,000, a decrease of $1.7 million, compared to net income of $786,000 for the year ended June 30, 2024. The decrease was due to a one-time donation of $400,000 in cash and 185,907 shares of common stock to the Winchester Savings Bank Charitable Foundation at a total market value of $2.3 million, resulting in an after-tax charge of $1.6 million in connection with the reorganization and stock offering.
Current wording
Total assets increased $146.6 million, or 15.4%, to $1.1 billion at June 30, 2026, from $949.4 million at June 30, 2025. The growth was primarily driven by increases in loans, deposits, investments, and cash and cash equivalents. Net income for the year ended June 30, 2026 was $4.4 million, an increase of $5.3 million, compared to net loss of $874,000 for the year ended June 30, 2025. The prior year loss was due in part to a one-time donation of $400,000 in cash and 185,907 shares of common stock to the Winchester Savings Bank Charitable Foundation at a total market value of $2.3 million, resulting in an after-tax charge of $1.6 million in connection with the reorganization and stock offering.
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 June 30, 2025 would have increased our allowance for credit losses on collectively evaluated loans at that date to $5.4 million from $3.9 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 June 30, 2026, would have increased our allowance for credit losses on loans at that date to $6.9 million from $4.8 million.
Previous wording
Loans that do not share risk characteristics are evaluated on an individual loan basis. Loans evaluated individually are not also included in the collective evaluation. For loans that are collateral dependent, that is, when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral, expected credit losses are based on fair value of the collateral at the reporting date, adjusted for selling costs as appropriate.
Current wording
Loans that do not share similar risk characteristics with any pools of assets are subject to individual evaluation and are removed from the collectively assessed pools to avoid double counting. This includes loans on non-accrual and loans that are 90 days or greater past due. For the loans that will be individually evaluated, the Company will use either a DCF approach or a fair value of collateral approach. The latter approach will be used for loans that are collateral dependent, that is, when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral, expected credit losses are based on fair value of the collateral at the reporting date, adjusted for selling costs as appropriate.
Previous wording
Total Assets. Total assets increased $96.4 million, or 11.3%, to $949.4 million at June 30, 2025, from $853.0 million at June 30, 2024. The increase was primarily due to increases in loans, securities and cash and cash equivalents.
Current wording
Total Assets. Total assets increased $146.6 million, or 15.4%, to $1.1 billion at June 30, 2026, from $949.4 million at June 30, 2025. The increase was primarily due to increases in loans, securities and cash and cash equivalents.
Previous wording
Cash and Cash Equivalents. Cash and cash equivalents increased $11.1 million, or 25.2%, to $55.2 million at June 30, 2025 from $44.1 million at June 30, 2024. The increase represents cash proceeds from our initial public offering.
Current wording
Cash and Cash Equivalents. Cash and cash equivalents increased $4.8 million, or 8.7%, to $60.0 million at June 30, 2026 from $55.2 million at June 30, 2025 as a result of current year cash flows.
Previous wording
Investment Securities. Investment securities, comprised of both available for sale and held to maturity securities, aggregated $104.5 million at June 30, 2025 compared to $86.6 million at June 30, 2024, as excess cash from the stock offering was invested in securities.
Current wording
Investment Securities. Investment securities, comprised of both available for sale and held to maturity securities, aggregated $125.0 million at June 30, 2026 compared to $104.5 million at June 30, 2025, as excess cash from the stock offering was invested in securities.
Previous wording
Gross Loans. Loans increased $69.7 million, or 10.2%, to $754.1 million at June 30, 2025 compared to $684.4 million at June 30, 2024. The primary increases were in multi-family real estate loans, which increased by $41.8 million, or 33.5%, one- to four-family residential real estate loans which increased by $18.8 million, or 5.6% and commercial real estate loans which increased by $16.9 million, or 19.8%. Partially offsetting those increases was a decrease of $5.5 million or 5.4% in the construction loan portfolio. The aforementioned increase in the loan portfolios reflects our strategy to continue to diversify into higher yielding multi-family and commercial real estate loans to improve portfolio yields and manage interest rate risk. In addition, we will continue to originate single-family residential real estate loans to support local homebuyers. The recent increase in one- to four-family residential real estate loans was mostly due to our establishing new broker relationships. The allowance for credit losses on loans was $4.2 million at June 30, 2025 and $3.5 million at June 30, 2024, which represented 0.55% and 0.50% of total loans at June 30, 2025 and June 30, 2024, respectively. The allowance for credit losses for off balance sheet commitments was $1.2 million at June 30, 2025 and June 30, 2024.
Current wording
Gross Loans. Loans increased $119.7 million, or 15.9%, to $873.8 million at June 30, 2026 compared to $754.1 million at June 30, 2025. The growth was primary driven by increases in one- to four-family residential real estate loans, of $47.6 million, or 13.3%, multi-family real estate loans of $45.9 million, or 27.6%, and construction real estate loans of $20.4 million, or 21.3%. The increase in the loan portfolios reflects our strategy of maintaining a well balanced mix of residential and commercial real estate loans. The recent increase in one- to four-family residential real estate loans was largely attributable to the expansion of our broker channel. The allowance for credit losses on loans was $4.8 million at June 30, 2026 and $4.2 million at June 30, 2025, which represented 0.55% of total loans at both June 30, 2026 and June 30, 2025. The allowance for credit losses for off balance sheet commitments at June 30, 2026 and June 30, 2025, was $746,000 and $1.2 million, respectively.
Previous wording
Total nonaccrual loans were $2.2 million at June 30, 2025, compared to $1.4 million at June 30, 2024. The increase was primarily due to a $622,000 increase in residential real estate loans and a $270,000 increase in commercial loans. Total loans past due 30 days or greater were $1.8 million at June 30, 2025 compared to $1.3 million at June 30, 2024. The increase was primarily due to a $340,00 increase in residential real estate loans and a $270,000 increase in commercial loans. The allowance for credit losses on loans to nonaccrual loans was 187.6% at June 30, 2025 compared to 245.5% at June 30, 2024.
Current wording
Total nonaccrual loans declined to $1.6 million at June 30, 2026, from $2.2 million at June 30, 2025. The decrease was primarily due to a decrease in non-accrual residential real estate and commercial loans. Total loans past due 30 days or greater were $1.5 million at June 30, 2026 compared to $1.8 million at June 30, 2025. As a result, the ratio of allowance for credit losses on loans to nonaccrual loans increased to 300.8% at June 30, 2026 from 187.6% at June 30, 2025.
Previous wording
Borrowings. Borrowings, which consisted solely of Federal Home Loan Bank of Boston advances, increased $17.5 million, or 13.5%, to $147.0 million at June 30, 2025, compared to $129.5 million from June 30, 2024, as funds were used to supplement loan growth.
Current wording
Borrowings. Borrowings, which consisted solely of FHLBB advances, increased $11.2 million, or 7.6%, to $158.2 million at June 30, 2026, compared to $147.0 million from June 30, 2025, as funds were used to support loan growth.
Previous wording
Total stockholders' equity. Total stockholders' equity increased $35.1 million, and was $115.4 million at June 30, 2025 and $80.3 million at June 30, 2024. The increase in total stockholders' equity was mostly due to the stock offering proceeds of $37.8 million, partially offset by a decreased of $1.4 million in retained earnings for the year ended June 30, 2025.
Current wording
Total stockholders' equity. Total stockholders' equity increased $5.2 million, to $120.5 million at June 30, 2026 from $115.4 million at June 30, 2025. The increase in total stockholders' equity was primarily driven by a $4.4 million increase in retained earnings and a lower accumulated other comprehensive loss at June 30, 2026 compared to the prior year end.
Previous wording
General. We recorded net loss of $874,000 and net income of $786,000 for the years ended June 30, 2025 and 2024. The decrease in net income was due primarily to increases in non-interest expense due to a one-time contribution of $2.3 million to the Winchester Savings Bank Charitable foundation and an increase of $1.6 million in the provision for credit losses, partially offset by a $3.1 million increase in net interest income and an increase in the income tax benefit.
Current wording
General. We recorded net income of $4.4 million and net loss of $874,000, for the years ended June 30, 2026 and 2025, respectively. The increase in net income was due primarily to margin improvements and lower provision for credit losses. The prior year loss was partially attributable to a one-time donation of $400,000 in cash and 185,907 shares of common stock to the Winchester Savings Bank Charitable Foundation at a total market value of $2.3 million, resulting in an after-tax charge of $1.6 million in connection with the reorganization and stock offering.
Previous wording
Interest and Dividend Income. Interest and dividend income increased $7.9 million, or 22.5%, to $42.7 million for the year ended June 30, 2025, from $34.9 million for the year ended June 30, 2024. Interest and fees on loans, which is our primary source of interest income, increased $6.9 million, or 22.5%, to $37.5 million for the year ended June 30, 2025, from $30.6 million for the year ended June 30, 2024.
Current wording
Interest and Dividend Income. Interest and dividend income increased $7.7 million, or 18.0%, to $50.4 million for the year ended June 30, 2026, from $42.7 million for the year ended June 30, 2025. Interest and fees on loans, which is our primary source of interest income, increased $6.3 million, or 16.7%, to $43.8 million for the year ended June 30, 2026, from $37.5 million for the year ended June 30, 2025.
Previous wording
The average balance of loans increased by $80.9 million, or 12.6%, to $725.6 million for the year ended June 30, 2025, over the average balance for the year ended June 30, 2024, while the average yield on loans increased by 42 basis points to 5.17% for the year ended June 30, 2025, from 4.75% for the year ended June 30, 2024. The increase in the average yield was due to increases in market interest rates as well as changes in the composition of our loan portfolio to include a higher percentage of higher-yielding construction and commercial real estate loans, and 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 $88.5 million, or 12.2%, to $814.2 million for the year ended June 30, 2026, over the average balance for the year ended June 30, 2025, while the average yield on loans increased by 19 basis points to 5.38% for the year ended June 30, 2026, from 5.17% for the year ended June 30, 2025. The increase in the average yield was due to increases in market interest rates as well as changes in the composition of our loan portfolio to include a higher percentage of higher-yielding multi-family residential real estate loans. The increase in average balance was due to our continuing to pursue new commercial and residential broker relationships.
Previous wording
Interest Expense. Total interest expense increased $4.7 million, or 23.0%, to $25.2 million for the year ended June 30, 2025, compared to $20.5 million for the year ended June 30, 2024. Interest expense on deposits increased $3.2 million, or 19.9%, to $19.1 million for the year ended June 30, 2025, from $15.9 million for the year ended June 30, 2024. Our average balance of interest-bearing deposits increased $58.1 million, or 10.7%, to $603.4 million, while our average cost of deposits increased 25 basis points to 3.17% for the year ended June 30, 2025, from 2.92% for the year ended June 30, 2024. The increase in the average cost of deposits was due to increases in market interest rates as well as a higher percentage of our deposits consisting of certificates of deposit, and money market accounts, which bear higher rates than other deposit categories.
Current wording
Interest Expense. Total interest expense increased $0.2 million, or 0.8%, to $25.4 million for the year ended June 30, 2026, compared to $25.2 million for the year ended June 30, 2025. Interest expense on deposits increased $0.6 million, or 3.4%, to $19.8 million for the year ended June 30, 2026, from $19.1 million for the year ended June 30, 2025. Our average balance of interest-bearing deposits increased $83.2 million, or 13.8%, to $686.6 million, while our average cost of deposits decreased 29 basis points to 2.88% for the year ended June 30, 2026, from 3.17% for the year ended June 30, 2025. The decrease in the average cost of deposits was due to lower market interest rates.
Previous wording
Interest expense on Federal Home Loan Bank advances increased $1.5 million, or 33.7%, to $6.1 million for the year ended June 30, 2025, from $4.5 million for the year ended June 30, 2024. The increase was due to increases in our average balance of Federal Home Loan Bank advances ($35.9 million, or 34.8%), offset by a decrease in the average cost of borrowings (four basis points to 4.36% for the year ended June 30, 2025, from 4.40% for the year ended June 30, 2024). We increased Federal Home Loan Bank borrowings in recent periods primarily to fund loan growth.
Current wording
Interest expense on Federal Home Loan Bank advances decreased $0.5 million, or 7.5%, to $5.6 million for the year ended June 30, 2026, from $6.1 million for the year ended June 30, 2025. The decrease was due lower average balance of Federal Home Loan Bank advances and a decrease in the average cost of borrowings (23 basis points to 4.13% for the year ended June 30, 2026, from 4.36% for the year ended June 30, 2025).
Previous wording
Net Interest Income. Net interest income was $17.5 million for the year ended June 30, 2025, compared to $14.4 million for the year ended June 30, 2024, as our interest income increased faster than our interest expense. Our interest rate spread increased to 1.60% for the year ended June 30, 2025 from 1.45% for the year ended June 30, 2024, as well as our net interest margin to 2.05% for the year ended June 30, 2025 from 1.90% for the year ended June 30, 2024. The interest rate spread and net interest margin were both positively impacted by the addition of new higher yielding loans and investments.
Current wording
Net Interest Income. Net interest income was $25.0 million for the year ended June 30, 2026, compared to $17.5 million for the year ended June 30, 2025, as our interest income increased faster than our interest expense. Our interest rate spread increased to 2.05% for the year ended June 30, 2026 from 1.60% for the year ended June 30, 2025, as well as our net interest margin to 2.55% for the year ended June 30, 2026 from 2.05% for the year ended June 30, 2025. The interest rate spread and net interest margin were both positively impacted by the addition of new higher yielding loans and investments.
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 $2.1 million for the year ended June 30, 2025, compared to a provision of $514,000 for the year ended June 30, 2024. The provision for credit losses on loans was $2.1 million while a benefit of $2,000 was recorded for off balance sheet commitments. The increase in the provision for credit losses on loans for the year ended June 30, 2025 was primarily due to our charging off and fully reserving on a $1.6 million commercial loan due to the borrower’s filing for bankruptcy protection and terminating operations of the underlying business.
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 $789,000 for the year ended June 30, 2026, compared to a provision of $2.1 million for the year ended June 30, 2025. The provision for credit losses on loans was $1.2 million while a benefit of $440,000 was recorded for off balance sheet commitments. The decrease in the provision for credit losses on loans for the year ended June 30, 2026 was primarily due to lower charge offs offset by increases in the loan portfolio.
Previous wording
Income Taxes. Income taxes decreased by $624,000 to a benefit of $656,000 for the year ended June 30, 2025, compared to a benefit of $32,000 for the year ended June 30, 2024. The decrease in the income tax provision was due primarily to a net loss for the 2025 period.
Current wording
Income Taxes. Income taxes expense was $1.3 million for the year ended June 30, 2026, compared to a benefit of $656,000 for the year ended June 30, 2025. The increase in income tax provision was due primarily to a $7.3 million year over year increase in pre-tax income.
Previous wording
Net Interest Income. We analyze our sensitivity to changes in interest rates through a net interest income model. Net interest income is the difference between the interest income we earn on our interest-earning assets, such as loans and securities, and the interest we pay on our interest-bearing liabilities, such as deposits and borrowings. We estimate what our net interest income would be for a 12-month period. We then calculate what the net interest income would be for the same period under the assumptions that the United States Treasury yield curve increases or decreases instantaneously by up to 300 basis points, with changes in interest rates representing immediate and permanent, parallel shifts in the yield curve. A basis point equals one-hundredth of one percent, and 100 basis points equals one percent. An increase in interest rates from 2% to 3% would mean, for example, a 100 basis point increase in the “Change in Interest Rates” column below.
Current wording
Net Interest Income. We analyze our sensitivity to changes in interest rates through a net interest income model. Net interest income is the difference between the interest income we earn on our interest-earning assets, such as loans and securities, and the interest we pay on our interest-bearing liabilities, such as deposits and borrowings. We estimate what our net interest income would be for a 12-month period. We then calculate what the net interest income would be for the same period under the assumptions that the U.S. Treasury yield curve increases or decreases instantaneously by up to 300 basis points, with changes in interest rates representing immediate and permanent, parallel shifts in the yield curve.
Previous wording
The tables below sets forth, as of June 30, 2025 and June 30, 2024, the calculation of the estimated changes in our net interest income that would result from the designated instantaneous changes in the United States Treasury yield curve.
Current wording
The tables below sets forth, as of June 30, 2026 and June 30, 2025, the calculation of the estimated changes in our net interest income that would result from the designated instantaneous changes in the U.S. Treasury yield curve.
Previous wording
The tables above indicate that 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 and at June 30, 2024, in the event of an instantaneous parallel 200 basis point increase in interest rates, we would have experienced a 22.8% decrease in net interest income, and in the event of an instantaneous parallel 200 basis point decrease in interest rates, we would have experienced an 8.9% increase in net interest income.
Current wording
The tables above indicate that at June 30, 2026, in the event of an instantaneous parallel 200 basis point increase in interest rates, we would have experienced a 17.9% 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 6.9% 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 an 1.7% increase in net interest income.
Previous wording
Economic Value of Equity. We also compute amounts by which the net present value of our assets and liabilities (economic value of equity, or “EVE”) would change in the event of a range of assumed changes in market interest rates. This model uses a discounted cash flow analysis and an option-based pricing approach to measure the interest rate sensitivity of net portfolio value. The model estimates the economic value of each type of asset, liability and off-balance sheet contract under the assumptions that the United States Treasury yield curve increases or decreases instantaneously by up to 300 basis points, with changes in interest rates representing immediate and permanent, parallel shifts in the yield curve.
Current wording
Economic Value of Equity. We also compute amounts by which the net present value of our assets and liabilities (economic value of equity, or “EVE”) would change in the event of a range of assumed changes in market interest rates. This model uses a discounted cash flow analysis and an option-based pricing approach to measure the interest rate sensitivity of net portfolio value. The model estimates the economic value of each type of asset, liability and off-balance sheet contract under the assumptions that the U.S. Treasury yield curve increases or decreases instantaneously by up to 300 basis points, with changes in interest rates representing immediate and permanent, parallel shifts in the yield curve.
Previous wording
The tables below sets forth, as of June 30, 2025 and June 30, 2024, the calculation of the estimated changes in our EVE that would result from the designated immediate changes in the United States Treasury yield curve.
Current wording
The tables below sets forth, as of June 30, 2026 and June 30, 2025, the calculation of the estimated changes in our EVE that would result from the designated immediate changes in the U.S. Treasury yield curve.
Previous wording
The tables above indicate that 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, and at June 30, 2024, in the event of an instantaneous parallel 200 basis point increase in interest rates, we would have experienced a 33.5% decrease in EVE, and in the event of an instantaneous parallel 200 basis point decrease in interest rates, we would have experienced a 9.6% increase in EVE.
Current wording
The tables above indicate that at June 30, 2026, in the event of an instantaneous parallel 200 basis point increase in interest rates, we would have experienced a 20.1% decrease in EVE, and in the event of an instantaneous parallel 200 basis point decrease in interest rates, we would have experienced a 4.8% 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
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 June 30, 2025, we had $147.0 million outstanding in advances from the Federal Home Loan Bank of Boston. At June 30, 2025, we had the ability to borrow $100.2 million in additional Federal Home Loan Bank of Boston advances. At June 30, 2025, we had a $5.3 million line of credit with the Federal Home Loan Bank of Boston, which was not drawn at June 30, 2025. Additionally, at June 30, 2025, we had a $67.0 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 FHLBB. At June 30, 2026, we had $158.2 million outstanding in advances from the FHLBB. At June 30, 2026, we had the ability to borrow $118.8 million in additional FHLBB advances. At June 30, 2026, we had a $5.3 million line of credit with the FHLBB, which was not drawn at June 30, 2026. Additionally, at June 30, 2026, we had a $102.0 million secured line of credit through the BIC 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 $2.5 million and $231,000 for the years ended June 30, 2025 and 2024, respectively. 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 $86.7 million and $105.2 million for the years ended June 30, 2025 and 2024, respectively. Net cash provided by financing activities was $95.4 million and $96.9 million for the years ended June 30, 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 $5.4 million and $2.5 million for the years ended June 30, 2026 and 2025, respectively. 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 $141.9 million and $86.7 million for the years ended June 30, 2026 and 2025, respectively. Net cash provided by financing activities was $141.3 million and $95.4 million for the years ended June 30, 2026 and 2025, respectively.
Previous wording
We are committed to maintaining a strong liquidity position. We consistently monitor our liquidity position. We anticipate that we will have sufficient funds to meet our current funding commitments based on our current strategy to increase loans with an increase in core deposits and the continued use of Federal Home Loan Bank of Boston advances, as needed.
Current wording
We are committed to maintaining a strong liquidity position. We consistently monitor our liquidity position. We anticipate that we will have sufficient funds to meet our current funding commitments based on our current strategy to increase loans with an increase in core deposits and the continued use of FHLBB advances, as needed.
Previous wording
At June 30, 2025, Winchester Savings Bank exceeded its applicable regulatory capital requirement, and was considered “well capitalized” under regulatory guidelines.
Current wording
At June 30, 2026, the Bank exceeded its applicable regulatory capital requirement, and was considered “well capitalized” under regulatory guidelines.