v3.26.1
Employee Benefit Plans
 12 Months Ended
Jun. 30, 2026
Employee Benefit Plans [Abstract]  
Employee Benefit Plans
Note 9. Employee Benefit Plans
 
Defined Benefit Plan
 
The Bank maintained a single-employer defined benefit pension plan (the “Pension Plan”). Effective January 1, 2006, the Board of Directors of the Bank resolved to exclude from membership in the Pension Plan employees hired on or after January 1, 2006, and elected to cease additional benefit accruals to existing Pension Plan participants effective July 1, 2006. Substantially all Bank employees who were hired before January 1, 2006 and attained the age of 21 were covered by the Pension Plan. Under the Pension Plan, retirement benefits are primarily a function of both years of service and level of compensation at July 1, 2006. This defined benefit pension plan is accounted for in accordance with FASB ASC Topic 715 guidance on “Compensation – Retirement Benefits, Defined Benefit Plans – Pension”, which requires the Company to recognize in its consolidated financial statements an asset for a plan’s overfunded status or a liability for a plan’s underfunded status. Changes in the funded status of the single-employer defined benefit pension plan were reported as a component of other comprehensive income, net of applicable taxes, in the year in which changes occur.
 
On September 16, 2025, the Board of Directors approved the termination of the Pension Plan effective as of September 30, 2025. The Pension Plan assets were sufficient to cover the estimated Pension Plan obligations.
During the quarter ended December 31, 2025, the Company initiated the Pension Plan termination process and partially settled benefit obligations, recognizing a settlement charge of $199,000, included in other expenses in the accompanying consolidated statements of income.
 
During the quarter ended March 31, 2026, the Company settled the remaining Pension Plan obligations with the purchase of annuities from a third-party insurer for approximately $3.5 million. As a result of the final settlement, the Company recognized an additional settlement charge of approximately $706,000, included in other expenses on the consolidated statements of income.
 
Information regarding the Pension Plan at June 30, 2026 and 2025 is as follows:
 
         
(In thousands)
            
Change in projected benefit obligation:

 2026 

 2025 
Benefit obligation at beginning of period
  $ 4,075   $ 4,119 
Interest cost
    115     213 
Actuarial loss
    250     (1) 
Benefits paid
    (4,440)     (256) 
Benefit obligation at June 30
       -      4,075 
             
Change in fair value of plan assets:
            
Fair value of plan assets at beginning of period
    4,746     4,654 
Actual return on plan assets
    28     348 
Employer contributions
       -         -  
Benefits paid
    (4,440)     (256) 
Assets transferred to a qualified replacement plan
    (334)       -  
Fair value of plan assets at June 30
       -      4,746 
Over funded status at June 30 included in other liabilities
  $  -    $ (671) 
 
The components of net periodic pension costs related to the Pension Plan for the years ended June 30, 2026 and 2025 were as follows:
 
             
(In thousands)
 2026 
 2025 
Interest cost  $
115
   $
213
 
Expected return on plan assets   
(126
)    
(228
) 
Amortization of net loss   
13
    
30
 
Effect of settlement   
905
    
  -
 
Net periodic pension expense  $ 907   $ 15 
 
The accumulated benefit obligation for the pension plan was zero and $4.1 million at June 30, 2026 and 2025, respectively.
 
Changes in plan assets and benefit obligations recognized in other comprehensive income during the years ended June 30, 2026 and 2025 consisted of the following:
 
             
(In thousands)

 2026 
 2025 
Actuarial loss on plan assets and benefit obligations
 $ 569   $ 152 
Deferred tax expense
   152     41 
Net change in plan assets and benefit obligations recognized in other comprehensive income
 $ 417   $ 111 
Amounts recognized in our consolidated statements of financial condition related to the Pension Plan for the year ended presented as follows:
 
       
(In thousands)
 
Other liabilities:
 June 30, 2025  
Projected benefit obligation in surplus of fair value of pension plan
 $ (671) 
Accumulated other comprehensive loss, net of taxes:
     
Net losses and past service liability
 $ (417) 
 
As of June 30, 2026, there was zero remaining in plan assets and zero remaining benefit obligation after the final termination.
 
The principal actuarial assumptions used at June 30, 2025:
 
       
Projected benefit obligation:
   June 30, 2025 
Discount rate
  5.37 %
Net periodic pension expense:
     
Amortization period, in years
  11  
Discount rate
  5.30 %
Expected long-term rate of return on plan assets
  5.00 %
 
The discount rate used in the measurement of the Bank’s pension obligation was based on the FTSE Pension Discount Curve and Liability index based on expected benefit payments of the Pension Plan. The discount rates were evaluated at each measurement date to give effect to changes in the general interest rates. The expected long-term rate of return on plan assets reflects the average rate of earnings expected on the funds invested or to be invested to provide for the benefits included in the projected benefit obligation. The selected rate considers the historical and expected future investment trends of the present and expected assets in the plan. Since this is a frozen plan, the compensation rate was zero percent.
 
The weighted average asset allocation and fair value of our Pension Plan assets at June 30, 2025 was as follows:
 
         
             
(Dollars in thousands)
   Fair Value
 
Money market
 $ 1,382    29.1 %
Mutual funds – fixed income
   3,364    70.9  
Total plan assets
 $ 4,746    100.0 %
 
The fair value of assets within the Pension Plan was determined utilizing quoted prices in active markets at the measurement date. As such, these assets are classified as Level 1 within the “Fair Value Measurement” hierarchy.
 
As of June 30, 2026, there was zero remaining in the plan assets.
 
Defined Contribution Plan
 
The Bank of Greene County also participates in a defined contribution plan (the “Contribution Plan”) covering substantially all employees who have completed three months of service and perform a minimum of 250 hours of service. The plan includes Section 401(k) and thrift provisions as defined under the Internal Revenue Code (“IRC”). The provisions permit employees to contribute up to 50% of pre-tax and post-tax annual compensation, as defined in the Contribution Plan, up to the maximum allowable under the IRC. The Bank of Greene County matches employee contributions 100% of each participant’s contributions up to 3% of compensation plus 50% of the next 3% of compensation for a total matching contribution of up to 4.5% of compensation as defined by the Contribution Plan. Contributions are subject to certain limitations. The Company contributions associated with the Contribution Plan amounted to $581,000 and $530,000 in the years ended June 30, 2026 and 2025, respectively.
 
Employee Stock Ownership Plan (“ESOP”)
 
All Bank employees meeting certain age and service requirements are eligible to participate in the ESOP. Participants’ benefits become fully vested after three years of service. During the years ended June 30, 2026 and 2025, the Board of Directors authorized the payment of $200,000 and $190,000, respectively, to the ESOP trustee for the purposes of purchasing additional shares of stock to be allocated to employees as of December 2026 and 2025, respectively. ESOP expense was $195,000 and $194,000 for the years ended June 30, 2026 and 2025, respectively. There were no unearned shares at June 30, 2026 or 2025.
Supplemental Executive Retirement Plan
 
On June 21, 2010, the Board of Directors of the Bank of Greene County adopted The Bank of Greene County Supplemental Executive Retirement Plan (the “SERP Plan”), effective as of July 1, 2010. The SERP Plan provides a benefit from the Bank upon retirement, death, disability or voluntary or involuntary termination of service (other than “for cause”) to certain key senior executives of the Bank who are selected by the Board to participate. Accordingly, the SERP Plan obligates the Bank to make an allocation to each executive’s account on the first business day of each July and permits each executive to defer up to 50% of their base salary and 100% of their annual bonus to the SERP Plan, subject to the requirements of Section 409A of the Internal Revenue Code (“Code”). In addition, the Bank may but is not required to, make additional discretionary contributions to the executives’ accounts from time to time. An executive becomes vested in the Bank’s contributions based on the terms of their SERP Plan agreement, ranging from 10 to 20 years of service as defined in the SERP Plan, and is fully vested immediately for all deferral of salary and bonus. However, the executive will vest in the present value of their account in the event of death, disability or a change in control of the Bank or the Company. In the event the executive is terminated involuntarily or resigns for good reason following a change in control, the present value of all remaining Bank contributions is accelerated and paid to the executive’s account, subject to potential reduction to avoid an excess parachute payment under Code Section 280G. In the event of the executive’s death, disability or termination within two years after a change in control, executive’s account will be paid in a lump sum to the executive or his beneficiary, as applicable. In the event the executive is entitled to a benefit from the SERP Plan due to retirement or other termination of employment, the benefit will be paid in 10 annual installments.
 
The net periodic pension costs related to the SERP Plan for the years ended June 30, 2026 and 2025 were $2.6 million and $2.4 million, respectively, consisting primarily of service and interest costs, included within compensation expense on the consolidated statements of income. The total liability for the SERP Plan was $20.3 million and $17.6 million as of June 30, 2026 and 2025, respectively, and is included in accrued expenses and other liabilities on the consolidated statements of financial condition. The total liability for the SERP Plan includes both accumulated net periodic pension costs and participant contributions.