GREENE COUNTY BANCORP INC

Previous wording

Management’s Discussion and Analysis of Financial Condition and Results of Operation

Current wording

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operation

Previous wording

Total assets of the Company were $2.97 billion at December 31, 2024 and $2.83 billion at June 30, 2024, an increase of $140.0 million, or 5.0%. Securities available-for-sale and held-to-maturity increased $105.0 million, or 10.1%, to $1.1 billion at December 31, 2024 as compared to $1.0 billion at June 30, 2024. Net loans receivable increased $51.0 million, or 3.4%, to $1.53 billion at December 31, 2024 as compared to $1.48 billion at June 30, 2024.

Current wording

Total assets of the Company were $3.0 billion at March 31, 2025 and $2.8 billion at June 30, 2024, an increase of $182.2 million, or 6.5%. Securities available-for-sale and held-to-maturity increased $96.4 million, or 9.3%, to $1.1 billion at March 31, 2025 as compared to $1.0 billion at June 30, 2024. Net loans receivable increased $118.0 million, or 8.0%, to $1.6 billion at March 31, 2025 as compared to $1.5 billion at June 30, 2024.

Previous wording

Total cash and cash equivalents for the Company were $166.4 million at December 31, 2024 and $190.4 million at June 30, 2024, a decrease of $24.0 million, or 12.6%. The level of cash and cash equivalents is a function of the daily account clearing needs and deposit levels as well as activities associated with securities transactions and loan funding. All of these items can cause cash levels to fluctuate significantly on a daily basis. The Company held excess cash balances for both quarter ends in response to the recent industry turmoil and has continued to maintain strong capital and liquidity positions as of December 31, 2024.

Current wording

Total cash and cash equivalents for the Company were $155.5 million at March 31, 2025 and $190.4 million at June 30, 2024, a decrease of $34.9 million, or 18.3%. The level of cash and cash equivalents is a function of the daily account clearing needs and deposit levels as well as activities associated with securities transactions and loan funding. All of these items can cause cash levels to fluctuate significantly on a daily basis. The Company has continued to maintain strong capital and liquidity positions as of March 31, 2025 and June 30, 2024.

Previous wording

Securities available-for-sale and held-to-maturity increased $105.0 million, or 10.1%, to $1.1 billion at December 31, 2024 as compared to $1.0 billion at June 30, 2024. Securities purchases totaled $274.2 million during the six months ended December 31, 2024, and consisted primarily of $167.9 million of state and political subdivision securities, $72.4 million of mortgage-backed securities, $24.7 million of U.S. Treasury securities, and $9.2 million of collateralized mortgage obligations. Principal pay-downs and maturities during the six months ended December 31, 2024 amounted to $172.0 million, primarily consisting of $107.8 million of state and political subdivision securities, $50.0 million of U.S. Treasury securities, $12.6 million of mortgage-backed securities, $1.4 million of collateralized mortgage obligations and $250,000 of corporate debt securities. At December 31, 2024, 59.4% of our securities portfolio consisted of state and political subdivision securities to take advantage of tax savings and to promote the Company’s participation in the communities in which it operates. Mortgage-backed securities, which represent 32.2% of our securities portfolio at December 31, 2024, do not contain sub-prime loans and are not exposed to the credit risk associated with such lending.

Current wording

Securities available-for-sale and held-to-maturity increased $96.4 million, or 9.3%, to $1.1 billion at March 31, 2025 as compared to $1.0 billion at June 30, 2024. Securities purchases totaled $330.9 million during the nine months ended March 31, 2025, consisting primarily of $207.7 million of state and political subdivision securities, $86.4 million of mortgage-backed securities, $24.7 million of U.S. Treasury securities, and $11.4 million of collateralized mortgage obligations. Principal pay-downs and maturities during the nine months ended March 31, 2025 amounted to $234.3 million, consisting primarily of $160.5 million of state and political subdivision securities, $53.0 million of U.S. Treasury securities, $17.5 million of mortgage-backed securities, $2.0 million of collateralized mortgage obligations and $1.3 million of corporate debt securities. At March 31, 2025, 58.8% of our securities portfolio consisted of state and political subdivision securities to take advantage of tax savings and to promote the Company’s participation in the communities in which it operates. Mortgage-backed securities, which represent 33.6% of our securities portfolio at March 31, 2025, do not contain sub-prime loans and are not exposed to the credit risk associated with such lending.

Previous wording

Securities held-to-maturity are evaluated for credit losses on a quarterly basis under the CECL methodology. At December 31, 2024, the ACL on securities held-to-maturity was $439,000 as compared to $483,000 at June 30, 2024.

Current wording

Securities held-to-maturity are evaluated for credit losses on a quarterly basis under the CECL methodology. At March 31, 2025, the ACL on securities held-to-maturity was $422,000 as compared to $483,000 at June 30, 2024.

Previous wording

Net loans receivable increased $51.0 million, or 3.4%, to $1.53 billion at December 31, 2024 as compared to $1.48 billion at June 30, 2024. Loan growth experienced during the six months ended December 31, 2024 consisted primarily of $46.4 million in commercial real estate loans, $2.6 million in home equity loans, $1.6 million in commercial loans, and $1.4 million in residential real estate loans. The Company continues to experience loan growth as a result of the continued growth in its customer base and its relationships with other financial institutions in originating loan participations. The Company continues to use a conservative underwriting policy in regards to all loan originations, and does not engage in sub-prime lending or other exotic loan products. Updated appraisals are obtained on loans when there is a reason to believe that there has been a change in the borrower’s ability to repay the loan principal and interest, generally, when a loan is in a delinquent status. Additionally, if an existing loan is to be modified or refinanced, generally, an appraisal is ordered to ensure continued collateral adequacy.

Current wording

Net loans receivable increased $118.0 million, or 8.0%, to $1.6 billion at March 31, 2025 as compared to $1.5 billion at June 30, 2024. Loan growth experienced during the nine months ended March 31, 2025 consisted primarily of $111.9 million in commercial real estate loans, $3.2 million in home equity loans, $3.0 million in commercial loans, and $2.0 million in residential real estate loans. The Company continues to experience loan growth as a result of the continued growth in its customer base and its relationships with other financial institutions in originating loan participations. The Company continues to use a conservative underwriting policy for loan originations, and does not engage in sub-prime lending or other exotic loan products. Updated appraisals are obtained on loans when there is a reason to believe that there has been a change in the borrower’s ability to repay the loan principal and interest, generally, when a loan is in a delinquent status. Additionally, if an existing loan is to be modified or refinanced, generally, an appraisal is ordered to ensure continued collateral adequacy.

Previous wording

Loan balances include net deferred fees/cost of ($188,000) and ($42,000) at December 31, 2024 and at June 30, 2024, respectively.

Current wording

(1) Loan balances include net deferred fees/cost of ($217,000) and ($42,000) at March 31, 2025 and at June 30, 2024, respectively.

Previous wording

Loan balances exclude accrued interest receivable of $6.9 million and $6.2 million at December 31, 2024 and at June 30, 2024, respectively, which is included in accrued interest receivable in the consolidated statement of financial condition.

Current wording

(2) Loan balances exclude accrued interest receivable of $7.2 million and $6.2 million at March 31, 2025 and at June 30, 2024, respectively, which is included in accrued interest receivable in the consolidated statement of financial condition.

Previous wording

Commercial real estate loans are the largest segment of the Company’s loan portfolio and are comprised of 82.9% in non-owner occupied loans and 17.1% in owner occupied loans. These loans are generally secured by commercial, residential investment or industrial property types. The Company’s commercial real estate loan portfolio generally consists of standalone loans supported by both sufficient cash flows and collateral. On a portfolio basis, the Company’s non-owner occupied commercial real estate loans have a weighted average LTV of approximately 49.8%, and the Company’s owner occupied commercial real estate loans have a weighted average LTV of approximately 39.2%, as of December 31, 2024. The Company’s commercial real estate loans are primarily made within our market area in Greene, Columbia, Albany, Ulster and Rensselaer Counties of New York State. The Company actively monitors the economic and credit trends for borrower industries and manages our commercial real estate portfolio concentrations to mitigate its credit risk exposure.

Current wording

Commercial real estate loans are the largest segment of the Company’s loan portfolio and are comprised of 84.5% in non-owner occupied loans and 15.5% in owner occupied loans. These loans are generally secured by commercial, residential investment or industrial property types. The Company’s commercial real estate loan portfolio generally consists of standalone loans supported by both sufficient cash flows and collateral. On a portfolio basis, the Company’s non-owner occupied commercial real estate loans have a weighted average LTV of approximately 41.6%, and the Company’s owner occupied commercial real estate loans have a weighted average LTV of approximately 38.0%, as of March 31, 2025. The Company’s commercial real estate loans are primarily made within our market area in Greene, Columbia, Albany, Ulster and Rensselaer Counties of New York State. The Company actively monitors the economic and credit trends for borrower industries and manages our commercial real estate portfolio concentrations to mitigate its credit risk exposure.

Previous wording

As of December 31, 2024, the Company’s largest commercial real estate concentration was non-owner occupied multi-family loans at $261.9 million, or 26.6% of total commercial real estate loans. Non-owner occupied multi-family loans provide much needed housing for the residents located in our market area and have historically performed well with strong credit metrics. As of December 31, 2024, the weighted average LTV was approximately 49.5% for the non-owner occupied multi-family loan segment.

Current wording

As of March 31, 2025, the Company’s largest commercial real estate concentration was non-owner occupied multi-family loans at $288.5 million, or 27.5% of total commercial real estate loans. Non-owner occupied multi-family loans provide much needed housing for the residents located in our market area and have historically performed well with strong credit metrics. As of March 31, 2025, the weighted average LTV was approximately 42.6% for the non-owner occupied multi-family loan segment.

Previous wording

As of December 31, 2024, non-owner occupied construction loans were $73.3 million, or 7.5% of total commercial real estate loans. Construction loans are typically 12 to 24 months in duration with active monitoring, which may include pre-engineering review and third party site inspections for more complex projects. High volatility commercial real estate loan exposure totaled $381,000 of the Company’s construction exposure. Construction loans are primarily comprised of approximately 31.2% mixed use real estate, 13.4% multi-family buildings, 13.2% pre-construction and land loans, and 13.1% retail plaza.

Current wording

As of March 31, 2025, non-owner occupied construction loans were $70.5 million, or 6.7% of total commercial real estate loans. Construction loans are typically 12 to 24 months in duration with active monitoring, which may include pre-engineering review and third party site inspections for more complex projects. High volatility commercial real estate loan exposure totaled $4.8 million of the Company’s construction exposure. Construction loans are primarily comprised of approximately 28.9% mixed use real estate, 25.9% multi-family buildings, and 14.3% pre-construction and land loans.

Previous wording

The Company’s outstanding balance of non-owner occupied commercial real estate office loans were $67.9 million, or 6.9% of total commercial real estate loans as of December 31, 2024. The office loans are primarily low-rise, non-metropolitan buildings, located within our geographic footprint. As of December 31, 2024, the weighted average LTV was approximately 53.3% for the non-owner occupied office loan segment.

Current wording

The Company’s outstanding balance of non-owner occupied commercial real estate office loans were $64.0 million, or 6.1% of total commercial real estate loans as of March 31, 2025. The office loans are primarily low-rise, non-metropolitan buildings, located within our geographic footprint. As of March 31, 2025, the weighted average LTV was approximately 56.8% for the non-owner occupied office loan segment.

Previous wording

The ACL totaled $20.2 million at December 31, 2024, compared to $19.2 million at June 30, 2024. The ACL to total loans receivable was 1.30% at December 31, 2024 compared to 1.28% at June 30, 2024. The increase in the ACL from December 31, 2024 to June 30, 2024 was primarily attributable to unfavorable changes in the economic forecasts used in the Company’s CECL modeling.

Current wording

The ACL totaled $21.2 million at March 31, 2025, compared to $19.2 million at June 30, 2024. The ACL to total loans receivable was 1.31% at March 31, 2025 compared to 1.28% at June 30, 2024. The increase in the ACL from March 31, 2025 to June 30, 2024 was primarily attributable to growth in gross loans and a modest deterioration in the economic forecasts used in the CECL model.

Previous wording

The allowance for credit losses on unfunded commitments as of December 31, 2024 was $1.7 million as compared to $1.3 million at June 30, 2024, an increase of $425,000. The increase in the reserve was primarily due to an increase in the contractual obligations to extend credit.

Current wording

The allowance for credit losses on unfunded commitments as of March 31, 2025 was $1.8 million as compared to $1.3 million at June 30, 2024, an increase of $502,000. The increase in the reserve was primarily due to an increase in the contractual obligations to extend credit.

Previous wording

Generally, management places loans on non-accrual status once the loans have become 90 days or more delinquent. A non-accrual loan is defined as a loan in which collectability is questionable and therefore interest on the loan will no longer be recognized on an accrual basis. A loan is not placed back on accrual status until the borrower has demonstrated the ability and willingness to make timely payments on the loan. A loan does not have to be 90 days delinquent in order to be classified as non-performing and may be placed on non-accrual when circumstances indicate that the borrower may be unable to meet the contractual principal or interest payments. The threshold for evaluating classified and non-performing loans specifically evaluated for individual credit loss is $250,000. Foreclosed real estate represents property acquired through foreclosure and is valued at the lower of the carrying amount or fair value, less any estimated disposal costs. The Company monitors loan modifications made to borrowers experiencing financial difficulty. As of December 31, 2024, there were four loans being monitored in the prior twelve months, under ASU-2022-02 with a total amortized basis of $6.7 million. As of December 31, 2023 there were no loans being monitored in the prior twelve months, under ASU-2022-02.

Current wording

Generally, management places loans on non-accrual status once the loans have become 90 days or more delinquent. A non-accrual loan is defined as a loan in which collectability is questionable and therefore interest on the loan will no longer be recognized on an accrual basis. A loan is not placed back on accrual status until the borrower has demonstrated the ability and willingness to make timely payments on the loan. A loan does not have to be 90 days delinquent in order to be classified as non-performing and may be placed on non-accrual when circumstances indicate that the borrower may be unable to meet the contractual principal or interest payments. The threshold for evaluating classified and non-performing loans specifically evaluated for individual credit loss is $250,000. Foreclosed real estate represents property acquired through foreclosure and is valued at the lower of the carrying amount or fair value, less any estimated disposal costs. The Company monitors loan modifications made to borrowers experiencing financial difficulty. As of March 31, 2025, there were five loans being monitored in the prior twelve months, under ASU-2022-02 with a total amortized basis of $6.9 million. As of March 31, 2024, there were two commercial real estate loans being monitored in the prior nine months, under ASU-2022-02 with a total amortized basis of $4.1 million.

Previous wording

Non-performing assets amounted to $4.1 million and $3.7 million at December 31, 2024 and June 30, 2024, respectively. Loans on non-accrual status totaled $4.1 million at December 31, 2024, of which there were three residential real estate loans totaling $478,000 and three commercial real estate loans totaling $1.1 million that were in process of foreclosure. Included in non-accrual loans were $1.3 million of loans which were less than 90 days past due at December 31, 2024, but have a recent history of delinquency greater than 90 days past due. These loans will be returned to accrual status once they have demonstrated a history of timely payments. Loans on non-accrual status totaled $3.7 million at June 30, 2024, of which there were four residential real estate loans totaling $686,000 and three commercial real estate loans totaling $1.6 million in the process of foreclosure. Included in non-accrual loans were $1.5 million of loans which were less than 90 days past due at June 30, 2024, but have a recent history of delinquency greater than 90 days past due.

Current wording

Non-performing assets amounted to $2.9 million and $3.7 million at March 31, 2025 and June 30, 2024, respectively. Loans on non-accrual status totaled $2.9 million at March 31, 2025, of which there were two residential real estate loans totaling $297,000 and three commercial real estate loans totaling $1.1 million that were in process of foreclosure. Included in non-accrual loans were $1.4 million of loans which were less than 90 days past due at March 31, 2025, but have a recent history of delinquency greater than 90 days past due. These loans will be returned to accrual status once they have demonstrated a history of timely payments. Loans on non-accrual status totaled $3.7 million at June 30, 2024, of which there were four residential real estate loans totaling $686,000 and three commercial real estate loans totaling $1.6 million in the process of foreclosure. Included in non-accrual loans were $1.5 million of loans which were less than 90 days past due at June 30, 2024, but have a recent history of delinquency greater than 90 days past due.

Previous wording

Deposits totaled $2.5 billion at December 31, 2024 and $2.4 billion at June 30, 2024, an increase of $78.0 million, or 3.3%. The Company had zero brokered deposits at December 31, 2024 and June 30, 2024, respectively. NOW deposits increased $75.7 million, or 4.3%, and certificates of deposits increased $38.3 million, or 27.7%, when comparing December 31, 2024 and June 30, 2024. Money market deposits decreased $18.8 million, or 16.6%, noninterest bearing deposits decreased $13.0 million, or 10.3%, and savings deposits decreased $4.2 million, or 1.7%, when comparing December 31, 2024 and June 30, 2024.

Current wording

Deposits totaled $2.7 billion at March 31, 2025 and $2.4 billion at June 30, 2024, an increase of $265.5 million, or 11.1%. The Company had $11.6 million and zero brokered deposits at March 31, 2025 and June 30, 2024, respectively. NOW deposits increased $232.6 million, or 13.2%, and certificates of deposits increased $53.6 million, or 38.7%, when comparing March 31, 2025 and June 30, 2024. Noninterest bearing deposits decreased $9.2 million, or 7.4%, savings deposits decreased $7.8 million, or 3.1%, and money market deposits decreased $3.7 million, or 3.3%, when comparing March 31, 2025 and June 30, 2024.

Previous wording

Reflects $166.4 million of cash and cash equivalents, and $143.5 million and $19.4 million of remaining borrowing capacity from the Federal Home Loan Bank and the Federal Reserve Bank, as of December 31, 2024.

Current wording

(1) Reflects $155.5 million of cash and cash equivalents, and $131.0 million and $18.1 million of remaining borrowing capacity from the Federal Home Loan Bank and the Federal Reserve Bank, as of March 31, 2025.

Previous wording

Uninsured deposits after exclusions, represents 12.2% of total deposits as of December 31, 2024. The Company believes that this presentation provides a more accurate view of deposits at risk, given that affiliate deposits are not customer facing and therefore are eliminated upon consolidation, and collateralized deposits are fully secured by investments and municipal letters of credit. The Company continually monitors the level and composition of uninsured deposits.

Current wording

Uninsured deposits after exclusions represent 11.9% of total deposits as of March 31, 2025. The Company believes that this presentation provides a more accurate view of deposits at risk, given that affiliate deposits are not customer facing and therefore are eliminated upon consolidation, and collateralized deposits are fully secured by investments and municipal letters of credit. The Company continually monitors the level and composition of uninsured deposits.

Previous wording

At December 31, 2024, the Bank had pledged approximately $616.6 million of its residential and commercial mortgage portfolio as collateral for borrowing and irrevocable municipal letters of credit at the Federal Home Loan Bank of New York (“FHLB”). The maximum amount of funding available from the FHLB was $374.6 million at December 31, 2024, of which there were $7.0 million term fixed rate borrowings, $30.0 million irrevocable municipal letters of credit and $194.1 million of overnight borrowings outstanding at December 31, 2024. At June 30, 2024, the Bank had $115.3 million in overnight borrowings, and $9.2 million of long-term borrowings with the FHLB. Interest rates on overnight borrowings are determined at the time of borrowing. The irrevocable municipal letters of credit with the FHLB have been issued to secure municipal transactional deposit accounts, on behalf of Greene County Commercial Bank.

Current wording

At March 31, 2025, the Bank had pledged approximately $639.2 million of its residential and commercial mortgage portfolio as collateral for borrowing and irrevocable municipal letters of credit at the Federal Home Loan Bank of New York (“FHLB”). The maximum amount of funding available from the FHLB was $385.2 million at March 31, 2025, of which there were $2.2 million term fixed rate borrowings, $210.0 million irrevocable municipal letters of credit and $42.0 million of overnight borrowings outstanding at March 31, 2025. At June 30, 2024, the Bank had $115.3 million in overnight borrowings, and $9.2 million of long-term borrowings with the FHLB. Interest rates on overnight borrowings are determined at the time of borrowing. The irrevocable municipal letters of credit with the FHLB have been issued to secure municipal transactional deposit accounts, on behalf of Greene County Commercial Bank.

Previous wording

The FHLB term borrowings include long-term fixed rate borrowings from the “FHLB 0% Development Advance (ZDA) Program.” The Company receives a corresponding credit related to the FHLB term fixed rate borrowings, which effectively reduces the interest rate paid to zero percent. At December 31, 2024, the Bank had a FHLB long-term fixed rate borrowing of $4.8 million at a stated rate of 5.2%, maturing March 2025 and $2.2 million at a stated rate of 3.8%, maturing October 2027.

Current wording

The FHLB term borrowings include long-term fixed rate borrowings from the “FHLB 0% Development Advance (ZDA) Program.” The Company receives a corresponding credit related to the FHLB term fixed rate borrowings, which effectively reduces the interest rate paid to zero percent. At March 31, 2025, the Bank had a FHLB long-term fixed rate borrowing of $2.2 million at a stated rate of 3.8%, maturing October 2027.

Previous wording

The Bank pledges securities and certificates of deposit as collateral at the Federal Reserve Bank discount window for overnight borrowings. At December 31, 2024, approximately $19.4 million of collateral was available to be pledged against potential borrowings at the Federal Reserve Bank discount window of which there were zero overnight borrowings outstanding. The Bank participated in the “Bank Term Funding Program” (“BTFP”) that was established by the Federal Reserve Bank to provide additional funding to eligible depository institutions to meet the needs of their depositors. The BTFP ended new borrowings on March 11, 2024 and during the quarter ended December 31, 2024, the Bank paid off $25.0 million of long-term borrowings with the BTFP. At December 31, 2024, there were zero borrowings with the BTFP.

Current wording

The Bank pledges securities and certificates of deposit as collateral at the Federal Reserve Bank discount window for overnight borrowings. At March 31, 2025, approximately $18.1 million collateral was available to be pledged against potential borrowings at the Federal Reserve Bank discount window of which there were zero overnight borrowings outstanding. The Bank participated in the “Bank Term Funding Program” (“BTFP”) that was established by the Federal Reserve Bank to provide additional funding to eligible depository institutions to meet the needs of their depositors. The BTFP ended new borrowings on March 11, 2024. At March 31, 2025, there were zero borrowings with the BTFP.

Previous wording

On September 17, 2020, the Company entered into Subordinated Note Purchase Agreements (“SNPA”) with 14 qualified institutional investors, issued at 4.75% Fixed-to-Floating Rate due September 17, 2030, in the aggregate principal amount of $20.0 million, carried net of issuance costs of $424,000 amortized over a period of 60 months. These notes are callable on September 15, 2025. At December 31, 2024, there were $19.9 million of these Subordinated Note Purchases Agreements outstanding, net of issuance costs.

Current wording

On September 17, 2020, the Company entered into Subordinated Note Purchase Agreements (“SNPAs”) with 14 qualified institutional investors, issued at 4.75% Fixed-to-Floating Rate due September 17, 2030, in the aggregate principal amount of $20.0 million, carried net of issuance costs of $424,000 amortized over a period of 60 months. These notes are callable on September 15, 2025. At March 31, 2025, there were $20.0 million of these SNPAs outstanding, net of issuance costs.

Previous wording

On September 15, 2021, the Company entered into Subordinated Note Purchase Agreements with 18 qualified institutional investors, issued at 3.00% Fixed-to-Floating Rate due September 15, 2031, in the aggregate principal amount of $30.0 million, carried net of issuance costs of $499,000 amortized over a period of 60 months. These notes are callable on September 15, 2026. At December 31, 2024, there were $29.8 million of these Subordinated Note Purchases Agreements outstanding, net of issuance costs.

Current wording

On September 15, 2021, the Company entered into SNPAs with 18 qualified institutional investors, issued at 3.00% Fixed-to-Floating Rate due September 15, 2031, in the aggregate principal amount of $30.0 million, carried net of issuance costs of $499,000 amortized over a period of 60 months. These notes are callable on September 15, 2026. At March 31, 2025, there were $29.9 million of these SNPAs outstanding, net of issuance costs.

Previous wording

Shareholders’ equity increased to $218.4 million at December 31, 2024 compared to $206.0 million at June 30, 2024, resulting primarily from net income of $13.8 million and a decrease in accumulated other comprehensive loss of $1.8 million, partially offset by dividends declared and paid of $3.1 million.

Current wording

Shareholders’ equity increased to $229.0 million at March 31, 2025 compared to $206.0 million at June 30, 2024, resulting primarily from net income of $21.8 million and a decrease in accumulated other comprehensive loss of $5.0 million, partially offset by dividends declared and paid of $3.8 million.

Previous wording

The Federal Reserve raised its target benchmark interest rate in 2022 and into the third quarter of calendar year 2023, resulting in subsequent prime lending rate increases of 525 basis points and a significant increase in market rates between March 2022 and December 2023. Starting in September 2024 the Federal Reserve started reducing its target benchmark interest rate by 50 basis points, an additional 25 basis points in November 2024 and another 25 basis points in December 2024.

Current wording

The Federal Reserve raised its target benchmark interest rate in 2022 and into the third quarter of calendar year 2023, resulting in subsequent prime lending rate increases of 525 basis points and a significant increase in market rates between March 2022 and December 2023. The Federal Reserve has since reduced interest rates 100 basis points in the third and fourth quarter of 2024.

Previous wording

As of the quarter ended December 31, 2024, market rates increased as compared to June 30, 2024, as long-term Treasury rates increased due to market conditions and investor demand. This resulted in the fair value of the fixed income bond portfolio to decrease. The unrealized loss position as of December 31, 2024 increased as compared to June 30, 2024, as the Company continued to purchase investment securities in the higher interest rate environment.

Current wording

As of the quarter ended March 31, 2025, market rates decreased as compared to December 31, 2024 and was in line with June 30, 2024. Long-term Treasury rates decreased in the current quarter due to market conditions and investor demand. This resulted in the fair value of the fixed income bond portfolio to increase and therefore, decreased the unrealized loss position as of March 31, 2025 as compared to December 31, 2024. Additionally, the Company continued to purchase investment securities in the higher interest rate environment, decreasing the unrealized loss position.

Previous wording

On September 17, 2019, the Board of Directors of the Company adopted a stock repurchase program. Under the repurchase program, the Company may repurchase up to 400,000 shares of its common stock. Repurchases will be made at management’s discretion at prices management considers to be attractive and in the best interests of both the Company and its stockholders, subject to the availability of stock, general market conditions, the trading price of the stock, alternative uses for capital, and the Company’s financial performance. For the three and six months ended December 31, 2024, the Company did not repurchase any shares.

Current wording

On September 17, 2019, the Board of Directors of the Company adopted a stock repurchase program. Under the repurchase program, the Company may repurchase up to 400,000 shares of its common stock. Repurchases will be made at management’s discretion at prices management considers to be attractive and in the best interests of both the Company and its stockholders, subject to the availability of stock, general market conditions, the trading price of the stock, alternative uses for capital, and the Company’s financial performance. For the three and nine months ended March 31, 2025, the Company did not repurchase any shares.

Previous wording

Comparison of Operating Results for the Three and Six Months Ended December 31, 2024 and 2023

Current wording

Comparison of Operating Results for the Three and Nine Months Ended March 31, 2025 and 2024

Previous wording

The following table sets forth certain information relating to the Company for the three and six months ended December 31, 2024 and 2023. For the periods indicated, the total dollar amount of interest income from average interest-earning assets and the resultant yields, as well as the interest expense on average interest-bearing liabilities, are expressed in both dollars and rates. There were no tax equivalent adjustments made. Average balances were based on daily averages. Average loan balances include non-performing loans. The loan yields include net amortization of certain deferred fees and costs that are considered adjustments to yields.

Current wording

The following table sets forth certain information relating to the Company for the three and nine months ended March 31, 2025 and 2024. For the periods indicated, the total dollar amount of interest income from average interest-earning assets and the resultant yields, as well as the interest expense on average interest-bearing liabilities, are expressed in both dollars and rates. There were no tax equivalent adjustments made. Average balances were based on daily averages. Average loan balances include non-performing loans. The loan yields include net amortization of certain deferred fees and costs that are considered adjustments to yields.

Previous wording

(1) Calculated net of deferred loan fees and costs, loan discounts, and loans in process.

Current wording

(1)Calculated net of deferred loan fees and costs, loan discounts, and loans in process.

Previous wording

(1) Interest income calculated on a taxable-equivalent basis (non-GAAP) includes the additional amount of interest income that would have been earned if the Company’s investment in tax-exempt securities and loans had been subject to federal and New York State income taxes yielding the same after-tax income. The rate used for this adjustment was 21% for federal income taxes and 4.44% for New York State income taxes for the periods ended December 31, 2024 and 2023, respectively.

Current wording

(1)Interest income calculated on a taxable-equivalent basis (non-GAAP) includes the additional amount of interest income that would have been earned if the Company’s investment in tax-exempt securities and loans had been subject to federal and New York State income taxes yielding the same after-tax income. The rate used for this adjustment was 21% for federal income taxes and 4.44% for New York State income taxes for the periods ended March 31, 2025 and 2024, respectively.

Previous wording

(1) Calculated net of deferred loan fees and costs, loan discounts, and loans in process.

Current wording

(1)Calculated net of deferred loan fees and costs, loan discounts, and loans in process.

Previous wording

(1) Interest income calculated on a taxable-equivalent basis (non-GAAP) includes the additional amount of interest income that would have been earned if the Company’s investment in tax-exempt securities and loans had been subject to federal and New York State income taxes yielding the same after-tax income. The rate used for this adjustment was 21% for federal income taxes and 4.44% for New York State income taxes for the periods ended December 31, 2024 and 2023, respectively.

Current wording

(1)Interest income calculated on a taxable-equivalent basis (non-GAAP) includes the additional amount of interest income that would have been earned if the Company’s investment in tax-exempt securities and loans had been subject to federal and New York State income taxes yielding the same after-tax income. The rate used for this adjustment was 21% for federal income taxes and 4.44% for New York State income taxes for the periods ended March 31, 2025 and 2024, respectively.

Previous wording

Return on average assets and return on average equity are common methods of measuring operating results. Annualized return on average assets increased to 1.05% for the three months ended December 31, 2024 as compared to 0.86% for the three months ended December 31, 2023. Annualized return on average equity increased to 13.84% for the three months ended December 31, 2024 as compared to 12.12% for the three months ended December 31, 2023. Annualized return on average assets increased to 0.99% for the six months ended December 31, 2024 as compared to 0.92% for the six months ended December 31, 2023. Annualized return on average equity decreased to 12.89% for the six months ended December 31, 2024 as compared to 13.07% for the six months ended December 31, 2023. The increase in return on average assets and average equity for the three months ended December 31, 2024 was primarily the result of net income outpacing growth in the balance sheet.

Current wording

Return on average assets and return on average equity are common methods of measuring operating results. Annualized return on average assets increased to 1.12% for the three months ended March 31, 2025 as compared to 0.88% for the three months ended March 31, 2024. Annualized return on average equity increased to 14.41% for the three months ended March 31, 2025 as compared to 11.92% for the three months ended March 31, 2024. Annualized return on average assets increased to 1.04% for the nine months ended March 31, 2025 as compared to 0.91% for the nine months ended March 31, 2024. Annualized return on average equity increased to 13.40% for the nine months ended March 31, 2025 as compared to 12.69% for the nine months ended March 31, 2024. The increase in return on average assets and average equity for the three and nine months ended March 31, 2025 was primarily the result of net income outpacing growth in the balance sheet.

Previous wording

Net income amounted to $7.5 million for the three months ended December 31, 2024 as compared to $5.7 million for the three months ended December 31, 2023, an increase of $1.8 million. Net income amounted to $13.8 million for the six months ended December 31, 2024 as compared to $12.2 million for the six months ended December 31, 2023, an increase of $1.6 million.

Current wording

Net income amounted to $8.1 million for the three months ended March 31, 2025 as compared to $5.9 million for the three months ended March 31, 2024, an increase of $2.2 million. Net income amounted to $21.8 million for the nine months ended March 31, 2025 as compared to $18.0 million for the nine months ended March 31, 2024, an increase of $3.8 million.

Previous wording

Average assets increased $207.7 million, or 7.9%, to $2.9 billion for the three months ended December 31, 2024 as compared to $2.6 billion for the three months ended December 31, 2023. Average equity increased $28.0 million, or 14.9%, to $216.4 million for the three months ended December 31, 2024 as compared to $188.4 million for the three months ended December 31, 2023. Average assets increased $132.9 million, or 5.0%, to $2.8 billion for the six months ended December 31, 2024 as compared to $2.6 billion for the six months ended December 31, 2023. Average equity increased $27.1 million, or 14.6%, to $213.4 million for the six months ended December 31, 2024 as compared to $186.3 million for the six months ended December 31, 2023.

Current wording

Average assets increased $210.6 million, or 7.9%, to $2.9 billion for the three months ended March 31, 2025 as compared to $2.7 billion for the three months ended March 31, 2024. Average equity increased $26.9 million, or 13.7%, to $223.6 million for the three months ended March 31, 2025 as compared to $196.7 million for the three months ended March 31, 2024. Average assets increased $158.3 million, or 6.0%, to $2.8 billion for the nine months ended March 31, 2025 as compared to $2.6 billion for the nine months ended March 31, 2024. Average equity increased $27.4 million, or 14.5%, to $217.0 million for the nine months ended March 31, 2025 as compared to $189.6 million for the nine months ended March 31, 2024.

Previous wording

Interest income amounted to $29.4 million for the three months ended December 31, 2024 as compared to $25.6 million for the three months ended December 31, 2023, an increase of $3.8 million, or 14.9%. Interest income amounted to $57.2 million for the six months ended December 31, 2024 as compared to $50.3 million for the six months ended December 31, 2023, an increase of $6.9 million, or 13.8%. The increase in yields earned on loans and securities had the greatest impact on interest income when comparing the 2024 and 2023 periods. The average balances of loans also increased during the comparative periods contributing to higher interest income.

Current wording

Interest income amounted to $29.8 million for the three months ended March 31, 2025 as compared to $26.1 million for the three months ended March 31, 2024, an increase of $3.7 million, or 14.2%. Interest income amounted to $87.0 million for the nine months ended March 31, 2025 as compared to $76.3 million for the nine months ended March 31, 2024, an increase of $10.7 million, or 13.9%. The increase in yields earned on loans and securities had the greatest impact on interest income when comparing the 2025 and 2024 periods. The average balances of loans also increased during the comparative periods contributing to higher interest income.

Previous wording

Average loan balances increased $68.1 million and $64.3 million and the yield on loans increased 22 basis points and 29 basis points when comparing the three and six months ended December 31, 2024 and 2023, respectively. The average balance of securities increased $111.8 million and $62.7 million and the yield on such securities increased 19 basis points and 42 basis points when comparing the three and six months ended December 31, 2024 and 2023, respectively. Average interest-bearing bank balances and federal funds increased $24.9 million and $2.7 million and the yield on interest-bearing bank balances and federal funds decreased 8 basis points and 2 basis points when comparing the three and six months ended December 31, 2024 and 2023, respectively.

Current wording

Average loan balances increased $113.1 million and $80.3 million and the yield on loans increased 19 basis points and 26 basis points when comparing the three and nine months ended March 31, 2025 and 2024, respectively. The average balance of securities increased $104.5 million and $76.4 million and the yield on such securities increased 11 basis points and 40 basis points when comparing the three and nine months ended March 31, 2025 and 2024, respectively. Average interest-bearing bank balances and federal funds decreased $11.9 million and $2.1 million and the yield on interest-bearing bank balances and federal funds increased 22 basis points and 6 basis points when comparing the three and nine months ended March 31, 2025 and 2024, respectively.

Previous wording

Interest expense amounted to $15.4 million for the three months ended December 31, 2024 as compared to $13.2 million for the three months ended December 31, 2023, an increase of $2.1 million, or 16.2%. Interest expense amounted to $30.0 million for the six months ended December 31, 2024 as compared to $24.4 million for the six months ended December 31, 2023, an increase of $5.5 million, or 22.7%. The increase during the three and six months ended December 31, 2024 was primarily due to the increase of $202.8 million and $133.5 million in the average balances of interest-bearing liabilities and the increase in the average cost of funds. Increase in the cost of NOW deposits, certificates of deposits and insured cash sweep (“ICS”) deposits had the greatest impact on interest expense reflecting higher market interest rates when comparing the three and six months ended December 31, 2024 and 2023.

Current wording

Interest expense amounted to $13.6 million for the three months ended March 31, 2025 as compared to $13.8 million for the three months ended March 31, 2024, an increase of $200,000, or 1.5%. Interest expense amounted to $43.6 million for the nine months ended March 31, 2025 as compared to $38.2 million for the nine months ended March 31, 2024, an increase of $5.4 million, or 14.0%. The increase during the three and nine months ended March 31, 2025 was primarily due to the increase of $204.2 million and $156.6 million in the average balances of interest-bearing liabilities and the increase in the average cost of funds. Increase in the cost of NOW deposits, certificates of deposits and insured cash sweep (“ICS”) deposits had the greatest impact on interest expense reflecting higher market interest rates when comparing the nine months ended March 31, 2025 and 2024.