| INVESTMENT SECURITIES |
4.INVESTMENT SECURITIES The amortized cost and estimated fair value of securities available for sale are as follows (dollars in thousands): | | | | | | | | | | | | | | | | | | Gross | | Gross | | | | | | Amortized | | Unrealized | | Unrealized | | Estimated | | | Cost | | Gains | | Losses | | Fair Value | June 30, 2026 | | | | | | | | | | | | | U.S. Treasury | | $ | 49,548 | | $ | 51 | | $ | (34) | | $ | 49,565 | Mortgage-backed securities: | | | | | | | | | | | | | U.S. Government agency securities | | | 45,144 | | | 220 | | | (588) | | | 44,776 | Government-sponsored enterprises | | | 36,975 | | | 304 | | | (123) | | | 37,156 | Collateralized mortgage obligations: | | | | | | | | | | | | | U.S. Government agency securities | | | 20,064 | | | 55 | | | (171) | | | 19,948 | Government-sponsored enterprises | | | 43,782 | | | 230 | | | (57) | | | 43,955 | Municipal obligations | | | 5,500 | | | — | | | (4) | | | 5,496 | Total available for sale securities | | $ | 201,013 | | $ | 860 | | $ | (977) | | $ | 200,896 | | | | | | | | | | | | | | December 31, 2025 | | | | | | | | | | | | | U.S. Treasury | | $ | 54,483 | | $ | 275 | | $ | (6) | | $ | 54,752 | Mortgage-backed securities: | | | | | | | | | | | | | U.S. Government agency securities | | | 36,743 | | | 384 | | | (423) | | | 36,704 | Government-sponsored enterprises | | | 38,955 | | | 828 | | | — | | | 39,783 | Collateralized mortgage obligations: | | | | | | | | | | | | | U.S. Government agency securities | | | 21,009 | | | 374 | | | — | | | 21,383 | Government-sponsored enterprises | | | 47,929 | | | 465 | | | (104) | | | 48,290 | Municipal obligations | | | 19,477 | | | 42 | | | — | | | 19,519 | Total available for sale securities | | $ | 218,596 | | $ | 2,368 | | $ | (533) | | $ | 220,431 |
The Company elected to exclude accrued interest receivable from the amortized cost basis of debt securities. Accrued interest receivable on available for sale debt securities totaled $857,000 at June 30, 2026 and $1.2 million at December 31, 2025, respectively, and is excluded from the estimate of credit losses and reported in accrued interest receivable in the consolidated statements of condition. There was no allowance for credit losses for securities available for sale as of June 30, 2026 and December 31, 2025. The amortized cost and estimated fair value of securities held to maturity are as follows (dollars in thousands): | | | | | | | | | | | | | | | | | | | | | | | | Gross | | Gross | | | | | | | | | | | | Amortized | | Unrealized | | Unrealized | | Estimated | | Allowance for | | Net Carrying | | | Cost | | Gains | | Losses | | Fair Value | | Credit Losses | | Value | June 30, 2026 | | | | | | | | | | | | | | | | | | | Corporate debt securities | | $ | 42,631 | | | 455 | | | (1,872) | | $ | 41,214 | | $ | 486 | | $ | 42,145 | Municipal obligations | | | 2,621 | | | — | | | (9) | | | 2,612 | | | — | | | 2,621 | Total held to maturity securities | | $ | 45,252 | | $ | 455 | | $ | (1,881) | | $ | 43,826 | | $ | 486 | | $ | 44,766 | | | | | | | | | | | | | | | | | | | | December 31, 2025 | | | | | | | | | | | | | | | | | | | Corporate debt securities | | $ | 39,637 | | | 648 | | | (2,441) | | $ | 37,844 | | $ | 452 | | $ | 39,185 | Municipal obligations | | | 2,336 | | | — | | | (5) | | | 2,331 | | | — | | | 2,336 | Total held to maturity securities | | $ | 41,973 | | $ | 648 | | $ | (2,446) | | $ | 40,175 | | $ | 452 | | $ | 41,521 |
Accrued interest receivable on held to maturity debt securities totaled $502,000 and $382,000 at June 30, 2026 and December 31, 2025, respectively, and is excluded from the estimate of credit losses and is reported in accrued interest receivable in the consolidated statements of condition. There were no held to maturity securities that were 30 days or more past due or classified as non-accrual as of June 30, 2026 and December 31, 2025. The following tables present the activity in the allowance for credit losses on securities held to maturity (dollars in thousands): | | | | | | | | | | | | | | | | | | For the Three Months Ended June 30, 2026 | | | Beginning | | | | | | | | Ending | | | Balance | | Provisions | | Charge-offs | | Recoveries | | Balance | Corporate debt securities | | $ | 486 | | $ | — | | $ | — | | $ | — | | $ | 486 | Municipal obligations | | | — | | | — | | | — | | | — | | | — | Total | | $ | 486 | | $ | — | | $ | — | | $ | — | | $ | 486 |
| | | | | | | | | | | | | | | | | | For the Three Months Ended June 30, 2025 | | | Beginning | | | | | | | | | | Ending | | | Balance | | Provisions | | Charge-offs | | Recoveries | | Balance | Corporate debt securities | | $ | 275 | | $ | 106 | | $ | — | | $ | — | | $ | 381 | Municipal obligations | | | — | | | — | | | — | | | — | | | — | Total | | $ | 275 | | $ | 106 | | $ | — | | $ | — | | $ | 381 |
| | | | | | | | | | | | | | | | | | For the Six Months Ended June 30, 2026 | | | Beginning | | | | | | | | Ending | | | Balance | | Provisions | | Charge-offs | | Recoveries | | Balance | Corporate debt securities | | $ | 452 | | $ | 34 | | $ | — | | $ | — | | $ | 486 | Municipal obligations | | | — | | | — | | | — | | | — | | | — | Total | | $ | 452 | | $ | 34 | | $ | — | | $ | — | | $ | 486 |
| | | | | | | | | | | | | | | | | | For the Six Months Ended June 30, 2025 | | | Beginning | | | | | | | | Ending | | | Balance | | Provisions | | Charge-offs | | Recoveries | | Balance | Corporate debt securities | | $ | 216 | | $ | 165 | | $ | — | | $ | — | | $ | 381 | Municipal obligations | | | — | | | — | | | — | | | — | | | — | Total | | $ | 216 | | $ | 165 | | $ | — | | $ | — | | $ | 381 |
The estimated fair value and gross unrealized losses aggregated by security category and length of time such securities have been in a continuous unrealized loss position, is summarized as follows (dollars in thousands): | | | | | | | | | | | | | | | | | | | | | June 30, 2026 | | | Less than 12 Months | | 12 Months or Longer | | Total | | | Estimated | | Unrealized | | Estimated | | Unrealized | | Estimated | | Unrealized | | | Fair Value | | Losses | | Fair Value | | Losses | | Fair Value | | Losses | Securities available for sale: | | | | | | | | | | | | | | | | | | | U.S. Treasury | | $ | 14,695 | | $ | (34) | | $ | — | | $ | — | | $ | 14,695 | | $ | (34) | Mortgage-backed securities: | | | | | | | | | | | | | | | | | | | U.S. Government agency securities | | | — | | | — | | | 17,177 | | | (588) | | | 17,177 | | | (588) | Government-sponsored enterprises | | | 4,750 | | | (22) | | | 9,738 | | | (101) | | | 14,488 | | | (123) | Collateralized mortgage obligations: | | | | | | | | | | | | | | | | | | | U.S. Government agency securities | | | 3,998 | | | (26) | | | 9,334 | | | (145) | | | 13,332 | | | (171) | Government-sponsored enterprises | | | — | | | — | | | 27,082 | | | (57) | | | 27,082 | | | (57) | Municipal obligations | | | 1,995 | | | (4) | | | — | | | — | | | 1,995 | | | (4) | | | $ | 25,438 | | $ | (86) | | $ | 63,331 | | $ | (891) | | $ | 88,769 | | $ | (977) | | | | | | | | | | | | | | | | | | | | Securities held to maturity: | | | | | | | | | | | | | | | | | | | Corporate debt securities | | $ | 12,438 | | $ | 562 | | $ | 17,380 | | $ | 1,310 | | $ | 29,818 | | $ | 1,872 | Municipal obligations | | | 2,612 | | | 9 | | | — | | | — | | | 2,612 | | | 9 | | | $ | 15,050 | | $ | 571 | | $ | 17,380 | | $ | 1,310 | | $ | 32,430 | | $ | 1,881 |
| | | | | | | | | | | | | | | | | | | | | December 31, 2025 | | | Less than 12 Months | | 12 Months or Longer | | Total | | | Estimated | | Unrealized | | Estimated | | Unrealized | | Estimated | | Unrealized | | | Fair Value | | Losses | | Fair Value | | Losses | | Fair Value | | Losses | Securities available for sale: | | | | | | | | | | | | | | | | | | | U.S. Treasury | | $ | — | | $ | — | | $ | 4,994 | | $ | (6) | | $ | 4,994 | | $ | (6) | Mortgage-backed securities: | | | | | | | | | | | | | | | | | | | U.S. Government agency securities | | | — | | | — | | | 18,183 | | | (423) | | | 18,183 | | | (423) | Government-sponsored enterprises | | | — | | | — | | | — | | | — | | | — | | | — | Collateralized mortgage obligations: | | | | | | | | | | | | | | | | | | | U.S. Government agency securities | | | — | | | — | | | — | | | — | | | — | | | — | Government-sponsored enterprises | | | 6,661 | | | (11) | | | 27,763 | | | (93) | | | 34,424 | | | (104) | Municipal obligations | | | — | | | — | | | — | | | — | | | — | | | — | | | $ | 6,661 | | $ | (11) | | $ | 50,940 | | $ | (522) | | $ | 57,601 | | $ | (533) | | | | | | | | | | | | | | | | | | | | Securities held to maturity: | | | | | | | | | | | | | | | | | | | Corporate debt securities | | $ | 2,483 | | $ | (17) | | $ | 10,326 | | $ | (2,424) | | $ | 12,809 | | $ | (2,441) | Municipal obligations | | | 2,331 | | | (5) | | | — | | | — | | | 2,331 | | | (5) | | | $ | 4,814 | | $ | (22) | | $ | 10,326 | | $ | (2,424) | | $ | 15,140 | | $ | (2,446) |
Unrealized losses on securities available for sale have not been recognized into income because the issuers' debt securities are of high credit quality (rated AA or higher), management does not intend to sell, and it is likely that management will not be required to sell the securities prior to their anticipated recovery, and the decline in fair value is largely due to changes in interest rates and other market conditions. The issuers continue to make timely principal and interest payments on the securities. The fair value is expected to recover as the securities approach maturity. The Company does not believe the available for sale securities that were in an unrealized loss position as of June 30, 2026 and December 31, 2025, which consisted of 26 and 16 individual securities, respectively, represented a credit loss impairment. Available for sale debt securities in unrealized loss positions are evaluated for impairment related to credit losses at least quarterly. As of June 30, 2026 and December 31, 2025, the majority of the available for sale securities in an unrealized loss position consisted of debt securities issued by U.S. government agencies or U.S. government-sponsored enterprises that carry the explicit and/or implicit guarantee of the U.S. government, which are widely recognized as “risk-free” and have a long history of zero credit losses. Total gross unrealized losses were primarily attributable to changes in interest rates, relative to when the investment securities were purchased, and not due to the credit quality of the investment securities. The Company does not intend to sell, nor is it more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis, which may be at maturity. None of the Company’s held to maturity debt securities were past due or on nonaccrual status as of June 30, 2026 and December 31, 2025. There was no accrued interest reversed against interest income for the three and six months ended June 30, 2026 and 2025, as all securities remained on accrual status. In addition, there were no collateral dependent held to maturity debt securities as of June 30, 2026 and December 31, 2025. An allowance for credit losses on held to maturity debt securities is recorded to account for expected lifetime credit losses. The following table sets forth information with regard to contractual maturities of debt securities (dollars in thousands). Securities not due at a single maturity date are shown separately. | | | | | | | | | June 30, 2026 | | | Amortized | | Estimated | | | Cost | | Fair Value | Securities available for sale: | | | | | | | Due in one year or less | | $ | 45,344 | | $ | 45,355 | Due after one to five years | | | 21,280 | | | 21,260 | Due after five to ten years | | | 9,155 | | | 9,132 | Due after ten years | | | 125,234 | | | 125,149 | | | $ | 201,013 | | $ | 200,896 | | | | | | | | Securities held to maturity: | | | | | | | Due in one year or less | | $ | 2,433 | | $ | 2,424 | Due after one to five years | | | 5,188 | | | 5,282 | Due after five to ten years | | | 37,631 | | | 36,120 | | | $ | 45,252 | | $ | 43,826 |
Maturities of mortgage-backed securities and collateralized mortgage obligations are included based on their contractual lives. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. There were no sales of securities available for sale for the three and six months ended June 30, 2026 and 2025. There were no sales of securities held to maturity for the three and six months ended June 30, 2026 and 2025. The following table sets forth information with regard to gains on trading securities reported in other noninterest income on the consolidated statements of operations (dollars in thousands): | | | | | | | | | For the | | For the | | | Three Months Ended | | Six Months Ended | | | June 30, | | June 30, | | | 2026 | | 2026 | Net gain recognized during the period on trading securities | | $ | 552 | | $ | 373 | Less: Net gains recognized during the period on trading securities sold during the period | | | 502 | | | 357 | Unrealized net gain recognized during reporting period on trading securities still held at reporting date | | $ | 50 | | $ | 16 |
At June 30, 2026, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of the Company’s equity. As of June 30, 2026 and December 31, 2025, the carrying value of available for sale securities pledged to secure Federal Home Loan Bank of New York (“FHLBNY”) advances and municipal deposits was $195.7 million and $216.4 million, respectively.
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