Winchester Bancorp (WSBK) risk factors, FY2025 10-K

Risks Related to our Lending Activities

1. 01Our portfolios of commercial real estate and multi-family real estate loans have increased in recent periods, and we intend to continue originating these types of loans. These loans involve credit risks that could adversely affect our financial condition and results of operations
2. 02Our construction loans involve credit risks that could adversely affect our financial condition and results of operations
3. 03Our emphasis on real estate loans exposes us to lending risks
4. 04The geographic concentration of our loan portfolio and lending activities makes us vulnerable to a downturn in our local market area
5. 05the net worth and liquidity of loan guarantors may decrease, thereby impairing their ability to honor commitments made to us
6. 06If our allowance for credit losses is not sufficient to cover actual loan losses, our earnings could decrease
7. 07Uncertainties associated with increased originations of commercial real estate, construction and multi-family loans may result in errors in judging collectability, which may lead to additional provisions for credit losses or charge-offs, which would negatively affect our operations
8. 08The level of our commercial real estate and multi-family real estate loan portfolio may subject us to additional regulatory scrutiny
9. 09The foreclosure process may adversely impact our recoveries on non-performing loans
10. 10We are subject to environmental liability risk associated with lending activities or properties we own

Risks Related to Market Interest Rates

1. 11Future changes in interest rates could negatively affect our operating results and asset values
2. 12the interest expense we pay on interest-bearing liabilities, such as deposits and borrowings
3. 13Furthermore, increases in interest rates may adversely affect our ability to originate loans
4. 14Any substantial, unexpected, prolonged change in market interest rates could have a material adverse effect on our financial condition, liquidity and results of operations. Changes in the level of interest rates also may negatively affect the value of our assets and ultimately affect our earnings

Risks Related to our Business Strategy

1. 15Our business strategy includes loan growth, and our financial condition and results of operations could be negatively affected if we fail to grow or fail to manage our growth effectively. Growing our operations could also cause our expenses to increase faster than our revenues
2. 16Our continued pace of growth may require us to raise additional capital in the future, but that capital may not be available when it is needed
3. 17We depend on our management team and other key personnel to implement our business strategy and execute successful operations and we could be harmed by the loss of their services or the inability to hire additional personnel

Risks Related to Competitive Matters

1. 18Strong competition within our market areas may limit our growth and profitability
2. 19Our smaller size may make it more difficult for us to compete

Risks Related to Laws and Regulations

1. 20Changes in laws and regulations and the cost of regulatory compliance with new laws and regulations may adversely affect our operations and/or increase our costs of operations
2. 21Non-compliance with the USA PATRIOT Act, Bank Secrecy Act, or other laws and regulations could result in fines or sanctions
3. 22We are subject to stringent capital requirements, which may adversely impact our return on equity, require us to raise additional capital, or limit our ability to pay dividends or repurchase shares
4. 23The Federal Reserve Board may require us to commit capital resources to support Winchester Savings Bank, and we may not have sufficient access to such capital resources
5. 24We are an emerging growth company, and our decision to comply only with certain reduced reporting and disclosure requirements applicable to emerging growth companies could make our common stock less attractive to investors
6. 25We qualify as a smaller reporting company, and our decision to comply only with certain reduced reporting and disclosure requirements applicable to smaller reporting companies could make our common stock less attractive to investors

Risks Related to Economic Conditions

1. 26Inflation can have an adverse impact on our business and on our customers
2. 27Changes to trade policies and tariffs can have an adverse impact on our business and our customers

Risks Related to Operational Matters

1. 28Our funding sources may prove insufficient to replace deposits at maturity and support our growth. A lack of liquidity could adversely affect our financial condition and results of operations and result in regulatory limits being placed on us
2. 29We hold a relatively large level of certificates of deposit, which has and may continue to significantly increase our cost of funds
3. 30The development of new products and services may impose additional costs on us and may expose us to increased operational risk
4. 31We face significant operational risks because of our reliance on technology. Our information technology systems may be subject to failure, interruption or security breaches
5. 32Our board of directors relies to a large degree on management and outside consultants in overseeing cybersecurity risk management
6. 33We rely on third-party vendors, which could expose us to additional cybersecurity risks
7. 34We may be subject to risks and losses resulting from fraudulent activities that could adversely impact our financial performance and results of operations

Risks Related to Accounting Matters

1. 35Changes in accounting standards could affect reported earnings
2. 36Changes in management’s estimates and assumptions may have a material impact on our consolidated financial statements and our financial condition or operating results
3. 37Legal and regulatory proceedings and related matters could adversely affect us
4. 38Societal responses to climate change could adversely affect our business and performance, including indirectly through impacts on our customers
5. 39We are a community bank and our ability to maintain our reputation is critical to the success of our business, and the failure to do so may materially adversely affect our performance
6. 40Severe weather, natural disasters and other external events could significantly affect our operations and results
7. 41If our deposits grow too large, we may lose the benefits of excess deposit insurance provided by the Depositors Insurance Fund
8. 42Various factors may make takeover attempts more difficult to achieve

Risks Related to Our Organizational Structure

1. 43Our stockholders own a minority of Winchester Bancorp, Inc.’s common stock and will not be able to exercise voting control over most matters put to a vote of stockholders
2. 44If we declare dividends on our common stock, Winchester Bancorp, MHC will be prohibited from waiving the receipt of dividends