v3.26.1
Income Taxes
 12 Months Ended
Jun. 30, 2026
Income Taxes [Abstract]  
Income Taxes
Note 12. Income Taxes
 
The provision for income taxes consists of the following for the years ended June 30, 2026 and 2025:
 
(In thousands)
   2026      2025  
Current:
           
Federal
 $ 5,923   $ 3,238 
State
   1,534     996 
Total current
   7,457     4,234 
Deferred:
           
Federal
   (1,464)     (659) 
State
   (183)     (47) 
Total deferred
   (1,647)     (706) 
Total provision for income taxes:
           
Federal
   4,459     2,579 
State
   1,351     949 
Total provision for income taxes
 $ 5,810   $ 3,528 
The following table reconciles the statutory federal income tax rate to the effective income tax rate for the year ended June 30, 2026, presenting both dollar amounts and percentages in accordance with ASC 740-10-50-12A.
 
              
(In thousands, except percentages)
   For the year ended June 30, 2026  
     Amount      Percentage  
Federal income tax at the statutory rate
 $ 9,835     21.00 %
State income taxes, net of federal effect (1)    1,028     2.20  
Tax credits, net of amortization
   (40 )    (0.08 ) 
Nontaxable or nondeductible items:
            
Tax-exempt income
   (4,730 )    (10.10 ) 
Increase in cash surrender value of bank-owned life insurance
   (579 )    (1.24 ) 
Other
   296     0.63  
Total provision for income taxes
 $ 5,810     12.41 %
 
(1)
State taxes in New York contribute to the majority (greater than 50%) of the tax effect in this category.
 
The Company had no income taxes in foreign jurisdictions for the years ended June 30, 2026.
 
The following table presents income taxes paid, net of refunds received, disaggregated by federal, state, and by individual jurisdictions that meet the 5% disclosure threshold under ASU 2023-09, for the year ended June 30, 2026.
 
(In thousands)
   2026  
U.S. Federal
 $ 1,486 
New York State
   717 
Other States
   65 
Total income taxes paid
 $ 2,268 
 
The effective tax rate differs from the federal statutory rate as follows for the years ended June 30, 2025, in accordance with the guidance prior to the adoption of ASU 2023-09:
 
     2025  
Tax based on federal statutory rate
  21.00 %
State income taxes, net of federal benefit
  2.14  
Tax-exempt income
  (11.71 ) 
Other, net
  (1.25 ) 
Total income tax expense
  10.18 %
The components of the deferred tax assets and liabilities at June 30, 2026 and 2025 were as follows:
 
(In thousands)
   2026      2025  
Deferred tax assets:
           
Allowance for credit losses
$ 5,984  $ 5,531 
Allowance for credit losses on unfunded commitments
  382    474 
Unrealized losses on securities
  4,101    4,694 
Other benefit plans
  5,314    5,108 
Solar tax credit investments
  1,077    253 
Lease liability
  611    632 
Other
  73    129 
Total deferred tax assets
  17,542    16,821 
             
Deferred tax liabilities:
           
Depreciation
  1,198    1,204 
Net loan costs
  1,275    1,296 
Real estate investment trust income
  2,955    2,990 
Lease right of use asset
  587    610 
Pension benefits
  88    179 
Total deferred tax liabilities
  6,103    6,279 
Net deferred tax asset included in prepaid expenses and other assets
$ 11,439  $ 10,542 
 
Income tax accounting guidance results in two components of income tax expense: current and deferred. Current income tax expense reflects taxes to be paid or refunded for the current period by applying the provisions of the enacted tax law to the taxable income or excess of deductions over revenues. The Company determines deferred income taxes using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax bases at currently enacted income tax rates applicable to the period in which the deferred tax assets and liabilities are expected to be realized or settled.
 
Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are reduced by a valuation allowance if, based on the weight of the evidence available, it is more likely than not that some portion or all of a deferred tax asset will not be realized. Realization of deferred tax assets is dependent upon the generation of future taxable income. A valuation allowance is recorded when it is more likely than not that some portion of the deferred tax asset will not be realized. Based on available evidence, gross deferred tax assets will ultimately be realized and a valuation allowance was not deemed necessary at June 30, 2026 and 2025.
 
The Company accounts for uncertain tax positions if it is more likely than not, based on technical merits, that the tax position will be realized or sustained upon examination. The term more likely than not means a likelihood of more than 50 percent; the terms examined and upon examination also include resolution of the related appeals or litigation processes, if any. A tax position that meets the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50 percent likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether or not a tax position has met the more-likely-than-not recognition threshold considers the facts, circumstances, and information available at the reporting date and is subject to management’s judgments.
 
As of June 30, 2026 and 2025, the Company did not have any uncertain tax positions. The Company does not expect to have any changes in unrecognized tax benefits as a result of settlements with taxing authorities during the next twelve months. At June 30, 2026 and 2025, the Bank of Greene County had an unrecaptured pre-1988 Federal bad debt reserve of approximately $1.8 million for which no Federal income tax provision has been made. A deferred tax liability has not been provided on this amount as management does not intend to redeem stock, make distributions or take other actions that would result in recapture of the reserve. As of June 30, 2026, tax years ended June 30, 2023 through June 30, 2026, remain open and are subject to Federal, New York and Massachusetts State taxing authority examinations.
 
The Company recognizes interest and penalties on income taxes, if any, as a component of the provision for income taxes.