Securities

12 Months Ended

Jun. 30, 2026

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, 2026 and 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 subdivision securities, generally are municipal obligations that are general obligations supported by the 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 securities investment yield 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 balance sheet 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, 2026
(In thousands)		Amortized cost(1)		Unrealized gains		Unrealized losses		Fair value
U.S. Treasury securities	$	3,826	$	-	$	15	$	3,811
U.S. government sponsored enterprises		7,087		-		746		6,341
State and political subdivisions		216,477		1,163		-		217,640
Mortgage-backed securities-residential		59,969		180		3,145		57,004
Mortgage-backed securities-multi-family		86,161		-		12,796		73,365
Corporate debt securities		15,961		43		355		15,649
Total securities available-for-sale	$	389,481	$	1,386	$	17,057	$	373,810


	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

(1)

Amortized cost excludes accrued interest receivable of $4.1 million and $4.5 million at June 30, 2026 and 2025, 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, 2026 and 2025, 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, 2026
(In thousands)		Amortized cost(1)		Unrealized gains		Unrealized losses		Fair value		Allowance		Net carrying value
Securities held-to-maturity:
U.S. Treasury securities	$	13,903	$	-	$	639	$	13,264	$	-	$	13,903
State and political subdivisions		473,174		11,474		24,700		459,948		52		473,122
Mortgage-backed securities-residential		170,248		752		3,263		167,737		-		170,248
Mortgage-backed securities-multi-family		119,232		-		9,840		109,392		-		119,232
Corporate debt securities		27,500		168		873		26,795		477		27,023
Other securities		26		-		-		26		1		25
Total securities held-to-maturity	$	804,083	$	12,394	$	39,315	$	777,162	$	530	$	803,553





	At June 30, 2025
(In thousands)		Amortized cost(1)		Unrealized gains		Unrealized losses		Fair value		Allowance		Net carrying value
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

⁽¹⁾

Amortized cost excludes accrued interest receivable of $5.4 million and $4.9 million at June 30, 2026 and 2025, 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, 2026 and 2025, 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, 2026			June 30, 2025
Balance at beginning of year	$	548		$	483
Provision (benefit) for credit losses		(18	)		65
Balance at end of year	$	530		$	548

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, 2026.



	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	$	2,996	$	6	1	$	815	$	9	2	$	3,811	$	15	3
U.S. government sponsored enterprises		-		-	-		6,341		746	2		6,341		746	2
State and political subdivisions		22		-	1		-		-	-		22		-	1
Mortgage-backed securities-residential		20,168		538	10		29,045		2,607	19		49,213		3,145	29
Mortgage-backed securities-multi-family		8,300		1,842	4		65,065		10,954	25		73,365		12,796	29
Corporate debt securities		2,854		144	2		10,790		211	7		13,644		355	9
Total securities available-for-sale		34,340		2,530	18		112,056		14,527	55		146,396		17,057	73
Securities held-to-maturity:
U.S. Treasury securities		11,313		596	3		1,951		43	1		13,264		639	4
State and political subdivisions		34,212		3,732	249		200,240		20,968	1,238		234,452		24,700	1,487
Mortgage-backed securities-residential		12,807		262	11		75,637		3,001	34		88,444		3,263	45
Mortgage-backed securities-multi-family		27,690		2,276	9		81,702		7,564	32		109,392		9,840	41
Corporate debt securities		2,457		43	3		14,419		830	9		16,876		873	12
Total securities held-to-maturity		88,479		6,909	275		373,949		32,406	1,314		462,428		39,315	1,589
Total securities	$	122,819	$	9,439	293	$	486,005	$	46,933	1,369	$	608,824	$	56,372	1,662



	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

There were no transfers of securities available-for-sale to held-to-maturity during the year ended June 30, 2026 or 2025.

During the year ended June 30, 2026, a loss of $576,000 was recognized from a sale of four securities available-for-sale with a total par value of $8.3 million. During the year ended June 30, 2025, a loss of $665,000 was recognized from a sale of two securities available-for-sale with a total par value of $6.7 million. The proceeds were used to fund higher yielding investments.

The estimated fair values of debt securities at June 30, 2026, 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	$	225,843	$	226,875
After one year through five years		16,008		15,242
After five years through ten years		1,500		1,324
After ten years		-		-
Total securities available-for-sale		243,351		243,441
Mortgage-backed and asset-backed securities		146,130		130,369
Total securities available-for-sale		389,481		373,810

Securities held-to-maturity
Within one year		54,756		54,929
After one year through five years		164,013		164,756
After five years through ten years		222,205		207,522
After ten years		73,629		72,826
Total securities held-to-maturity		514,603		500,033
Mortgage-backed securities		289,480		277,129
Total securities held-to-maturity		804,083		777,162
Total securities	$	1,193,564	$	1,150,972

As of June 30, 2026 and 2025, securities with an aggregate fair value of $1.1 billion and $1.0 billion, 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, 2026 and 2025, securities with an aggregate fair value of $15.9 million and $18.2 million, respectively, were pledged as collateral for potential borrowings at the Federal Reserve Bank discount window. The Company did not participate in any securities lending programs during the years ended June 30, 2026 or 2025.