Securities

12 Months Ended

Jun. 30, 2025

Note 3. Securities

The Company’s current policies generally limit securities investments to U.S. government and securities of government sponsored enterprises, federal funds sold, municipal bonds, corporate debt obligations, subordinated debt of banks and certain mutual funds. In addition, the Company’s policies permit investments in mortgage-backed securities, including securities issued and guaranteed by Fannie Mae, Freddie Mac, and GNMA, and collateralized mortgage obligations issued by these entities. As of June 30, 2025, all mortgage-backed securities including collateralized mortgage obligations were securities of government sponsored enterprises, no private-label mortgage-backed securities or collateralized mortgage obligations were held in the securities portfolio. The Company’s investments in state and political subdivisions securities generally are municipal obligations that are general obligations supported by the general taxing authority of the issuer, and in some cases are insured. The obligations issued by school districts are supported by state aid. Primarily, these investments are issued by municipalities within New York State.

The Company’s current securities investment strategy utilizes a risk management approach of diversified investing among three categories: short-, intermediate- and long-term. The emphasis of this approach is to increase overall investment securities yields while managing interest rate risk. The Company will only invest in high quality securities as determined by management’s analysis at the time of purchase. The Company generally does not engage in any derivative or hedging transactions, such as balance sheet interest rate swaps or caps.

The following tables summarize the amortized cost and fair value of securities available-for-sale by major type:


	At June 30, 2025
(In thousands)		Amortized cost⁽¹⁾		Unrealized gains		Unrealized losses		Fair value
U.S. Treasury securities	$	10,815	$	-	$	362	$	10,453
U.S. government sponsored enterprises		13,029		-		1,385		11,644
State and political subdivisions		208,450		1,394		-		209,844
Mortgage-backed securities-residential		34,382		212		3,007		31,587
Mortgage-backed securities-multi-family		88,874		-		14,277		74,597
Corporate debt securities		18,416		81		560		17,937
Total securities available-for-sale	$	373,966	$	1,687	$	19,591	$	356,062


	At June 30, 2024
(In thousands)		Amortized cost⁽¹⁾		Unrealized gains		Unrealized losses		Fair value
U.S. Treasury securities	$	43,024	$	-	$	1,829	$	41,195
U.S. government sponsored enterprises		13,042		-		2,068		10,974
State and political subdivisions		169,842		828		1		170,669
Mortgage-backed securities-residential		40,402		67		3,894		36,575
Mortgage-backed securities-multi-family		90,261		-		17,961		72,300
Corporate debt securities		19,608		15		1,335		18,288
Total securities available-for-sale	$	376,179	$	910	$	27,088	$	350,001

⁽¹⁾

Amortized cost excludes accrued interest receivable of $4.5 million and $4.0 million at June 30, 2025 and June 30, 2024, respectively, which is included in accrued interest receivable in the consolidated statements of financial condition.

There was no allowance for credit losses on securities available-for-sale for the years ended June 30, 2025 and 2024, respectively.

The following tables summarize the amortized cost, fair value, and the allowance for credit losses on securities held-to-maturity by major type:


	At June 30, 2025
(In thousands)		Amortized cost⁽¹⁾		Unrealized gains		Unrealized losses		Fair value		Allowance		Net carrying value
Securities held-to-maturity:
U.S. Treasury securities	$	15,850	$	-	$	868	$	14,982	$	-	$	15,850
State and political subdivisions		460,959		8,938		32,028		437,869		40		460,919
Mortgage-backed securities-residential		138,468		1,388		2,327		137,529		-		138,468
Mortgage-backed securities-multi-family		130,119		-		11,963		118,156		-		130,119
Corporate debt securities		31,270		55		1,756		29,569		507		30,763
Other securities		29		-		-		29		1		28
Total securities held-to-maturity	$	776,695	$	10,381	$	48,942	$	738,134	$	548	$	776,147


	At June 30, 2024
(In thousands)		Amortized cost⁽¹⁾		Unrealized gains		Unrealized losses		Fair value		Allowance		Net carrying value
U.S. Treasury securities	$	23,785	$	-	$	1,749	$	22,036	$	-	$	23,785
State and political subdivisions		450,343		4,541		40,235		414,649		44		450,299
Mortgage-backed securities-residential		48,033		51		3,314		44,770		-		48,033
Mortgage-backed securities-multi-family		143,363		-		17,397		125,966		-		143,363
Corporate debt securities		25,282		12		2,505		22,789		438		24,844
Other securities		31		-		-		31		1		30
Total securities held-to-maturity	$	690,837	$	4,604	$	65,200	$	630,241	$	483	$	690,354

⁽¹⁾

Amortized cost excludes accrued interest receivable of $4.9 million and $4.1 million at June 30, 2025 and June 30, 2024, respectively, which is included in accrued interest receivable in the consolidated statements of financial condition.

U.S. Treasury and mortgage-backed securities are issued by U.S. government entities and agencies. These securities are either explicitly and/or implicitly guaranteed by the U.S. government as to timely repayment of principal and interest, are highly rated by major rating agencies, and have a long history of zero credit losses. Therefore, the Company determined a zero credit loss assumption, and did not calculate or record an allowance for credit loss for these securities. An allowance for credit losses on investment securities held-to-maturity has been recorded for certain municipal securities issued by state and political subdivisions and corporate debt securities to account for expected lifetime credit loss using the CECL methodology.

Management assesses the change in fair value of investment securities on a regular basis. Unrealized losses may occur from current market conditions, increases in interest rates since the time of purchase and deterioration in credit quality of issuers. Management assesses both qualitative and quantitative factors to determine whether any credit-related allowance is required. There was no allowance for credit losses on securities available-for-sale for the years ended June 30, 2025 and 2024, as the securities in the portfolio are investment grade, current as to principal and interest and their price changes are consistent with interest and credit spreads when adjusting for convexity, rating, and industry differences.

The following table summarizes the activity in the allowance for credit losses on securities held-to-maturity at the year ended:


(In thousands)		June 30, 2025		June 30, 2024
Balance at beginning of year	$	483	$	-
Adoption of ASU 2016-13 (CECL) on July 1, 2023		-		503
Provision (benefit) for credit losses		65		(20	)
Balance at end of year	$	548	$	483

The following table shows fair value and gross unrealized losses, aggregated by security category and length of time that individual securities have been in a continuous unrealized loss position, at June 30, 2025.




	Less than 12 months					More than 12 months					Total
(In thousands, except number of securities)		Fair value		Unrealized losses	Number of securities		Fair value		Unrealized losses	Number of securities		Fair value		Unrealized losses	Number of securities
Securities available-for-sale:
U.S. Treasury securities	$	241	$	1	1	$	10,212	$	361	5	$	10,453	$	362	6
U.S. government sponsored enterprises		-		-	-		11,644		1,385	5		11,644		1,385	5
State and political subdivisions		-		-	-		43		-	1		43		-	1
Mortgage-backed securities-residential		-		-	-		20,872		3,007	21		20,872		3,007	21
Mortgage-backed securities-multi-family		-		-	-		74,597		14,277	30		74,597		14,277	30
Corporate debt securities		-		-	-		15,919		560	11		15,919		560	11
Total securities available-for-sale		241		1	1		133,287		19,590	73		133,528		19,591	74
Securities held-to-maturity:
U.S. Treasury securities		-		-	-		14,982		868	5		14,982		868	5
State and political subdivisions		23,577		339	154		231,645		31,689	1,511		255,222		32,028	1,665
Mortgage-backed securities-residential		9,470		151	4		26,541		2,176	26		36,011		2,327	30
Mortgage-backed securities-multi-family		-		-	-		118,156		11,963	45		118,156		11,963	45
Corporate debt securities		3,705		45	3		22,209		1,711	17		25,914		1,756	20
Total securities held-to-maturity		36,752		535	161		413,533		48,407	1,604		450,285		48,942	1,765
Total securities	$	36,993	$	536	162	$	546,820	$	67,997	1,677	$	583,813	$	68,533	1,839


	Less than 12 months					More than 12 months					Total
(In thousands, except number of securities)		Fair value		Unrealized losses	Number of securities		Fair value		Unrealized losses	Number of securities		Fair value		Unrealized losses	Number of securities
Securities available-for-sale:
U.S. Treasury securities	$	24,574	$	215	1	$	16,621	$	1,614	8	$	41,195	$	1,829	9
U.S. government sponsored enterprises		-		-	-		10,974		2,068	5		10,974		2,068	5
State and political subdivisions		-		-	-		62		1	1		62		1	1
Mortgage-backed securities-residential		1,913		8	2		22,700		3,886	23		24,613		3,894	25
Mortgage-backed securities-multi-family		-		-	-		72,300		17,961	31		72,300		17,961	31
Corporate debt securities		-		-	-		16,360		1,335	16		16,360		1,335	16
Total securities available-for-sale		26,487		223	3		139,017		26,865	84		165,504		27,088	87
Securities held-to-maturity:
U.S. treasury securities		-		-	-		22,036		1,749	7		22,036		1,749	7
State and political subdivisions		32,215		474	294		278,521		39,761	2,025		310,736		40,235	2,319
Mortgage-backed securities-residential		-		-	-		29,510		3,314	28		29,510		3,314	28
Mortgage-backed securities-multi-family		-		-	-		125,966		17,397	47		125,966		17,397	47
Corporate debt securities		-		-	-		20,276		2,505	41		20,276		2,505	41
Total securities held-to-maturity		32,215		474	294		476,309		64,726	2,148		508,524		65,200	2,442
Total securities	$	58,702	$	697	297	$	615,326	$	91,591	2,232	$	674,028	$	92,288	2,529

There were no transfers of securities available-for-sale to held-to-maturity during the year ended June 30, 2025 or 2024.

During the year ended June 30, 2025, sales amounted to $6.7 million of U.S. Treasury securities available-for-sale, and a loss of $665,000 was recognized from the sale. The proceeds were used to fund higher-yielding loans and securities. During the year ended June 30, 2024, there were no sales of securities, and no gains or losses recognized.

The estimated fair values of debt securities at June 30, 2025, by contractual maturity are shown below. Expected maturities may differ from contractual maturities, because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

(In thousands)


Securities available-for-sale		Amortized cost		Fair value
Within one year	$	212,369	$	213,657
After one year through five years		27,914		27,107
After five years through ten years		10,427		9,114
After ten years		-		-
Total securities available-for-sale		250,710		249,878
Mortgage-backed and asset-backed securities		123,256		106,184
Total securities available-for-sale		373,966		356,062

Securities held-to-maturity
Within one year		55,541		55,544
After one year through five years		163,832		163,486
After five years through ten years		203,326		186,454
After ten years		85,409		76,965
Total securities held-to-maturity		508,108		482,449
Mortgage-backed securities		268,587		255,685
Total securities held-to-maturity		776,695		738,134
Total securities	$	1,150,661	$	1,094,196

As of June 30, 2025 and 2024, securities with an aggregate fair value of $1.0 billion and $894.5 million, respectively, were pledged as collateral for deposits in excess of FDIC insurance limits for various municipalities placing deposits with the Commercial Bank. As of June 30, 2025 and 2024, securities with an aggregate fair value of $18.2 million and $40.0 million, respectively, were pledged as collateral for potential borrowings at the Federal Reserve Bank discount window and the Bank Term Funding Program. The Company did not participate in any securities lending programs during the years ended June 30, 2025 or 2024.