Note 3 – Investment Securities

Debt Securities

All of the Company's collateralized mortgage obligations are backed by one- to four-family residential mortgages.

At December 31, 2025 and December 31, 2024, sixteen municipal bonds with an amortized cost of $4.7 million and fair value of $3.6 million and eighteen municipal bonds with an amortized cost of $6.2 million and fair value of $4.6 million, respectively, were pledged as collateral for customer deposits in excess of the Federal Deposit Insurance Corporation ("FDIC") insurance limits. At December 31, 2025 and 2024, no securities were pledged as collateral to the Federal Reserve Bank ("FRB"), to the Federal Home Loan Bank of New York ("FHLBNY"), or for any other purposes.

As of December 31, 2025, the Company’s investment portfolio included no debt securities in the “unrealized losses less than twelve months” category and 164 debt securities in the “unrealized losses twelve months or more” category. As of December 31, 2024, the Company's investment portfolio included seven debt securities in the “unrealized losses less than twelve months” category and 169 debt securities in the “unrealized losses twelve months or more” category.

As of December 31, 2025, the Company had 164 debt securities with a fair value of $55.0 million in an unrealized loss position. As of December 31, 2024, the Company had 176 debt securities with a fair value of $56.4 million in an unrealized loss position. The Company reviews securities in an unrealized loss position to evaluate credit risk. The Company considers payment history, risk ratings from external parties, financial statements for municipal and corporate securities, public statements from issuers, and other available credible published sources in evaluating credit risk. In this review, the Company did not identify any credit risk and, therefore, no allowance for credit losses on securities available for sale was recorded as of December 31, 2025 or December 31, 2024. The unrealized losses are attributed to noncredit-related factors including changes in interest rates and other market conditions. The Company does not have the intent to sell any of these securities and believes that it is more likely than not that the Company will not have to sell any such securities before a recovery of cost. The contractual terms of the investments do not permit the issuers to settle the securities at a price less than the cost basis of the investments. The fair value is expected to recover as the securities approach their maturity date or repricing date or if market yields for such investments decline.

Accrued interest of $248,000 as of December 31, 2025 and $254,000 as of December 31, 2024 on available-for-sale debt securities is included in accrued interest receivable on the consolidated statements of financial condition and is excluded from the estimate of credit losses.

During the year ended December 31, 2025, the Company sold two asset-backed securities which had previously been written-off, resulting in gross realized gains of $10,000. During the year ended December 31, 2024, the Company did not sell any debt securities.

The Company's mortgage-backed securities and asset-backed securities have stated maturities that may differ from actual maturities due to the borrowers' ability to prepay obligations. Cash flows from such investments are dependent upon the performance of the underlying assets and are generally influenced by interest rates. In the table above, mortgage-backed securities and asset-backed securities are shown in the aggregate.

Equity Securities

At December 31, 2024, the Company held 22,368 shares of Federal Home Loan Mortgage Corporation (“FHLMC”) common stock, included within securities, at fair value, on the consolidated statement of financial condition. During the year ended December 31, 2025, the Company sold these shares for proceeds of $223,000. Accordingly, the Company did not hold any equity securities at December 31, 2025. During the years ended December 31, 2025 and 2024, the Company recognized gains of $150,000 and $54,000, respectively, on the equity securities, which was recorded within gains on equity securities in non-interest income in the consolidated statements of income. There were no purchases or sales of equity securities during the year ended December 31, 2024.