GREENE COUNTY BANCORP INC

Previous wording

The allowance for credit losses consists of the allowance for credit losses for loans and unfunded commitments. The measurement of Current Expensed Credit Losses (“CECL”) on financial instruments requires an estimate of the credit losses expected over the life of an exposure (or pool of exposures). The estimate of expected credit losses under the CECL approach is based on relevant information about past events, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amounts. Historical loss experience is generally the starting point for estimating expected credit losses. The Company then considers whether the historical loss experience should be adjusted for asset-specific risk characteristics or current conditions at the reporting date that did not exist over the period from which historical experience was used. Finally, the Company considers forecasts about future economic conditions that are reasonable and supportable. The allowance for credit losses for loans, as reported in our consolidated statements of financial condition, are adjusted by a provision (expense) for credit losses, which is recognized in earnings, and reduced by the charge-off of loans, net of recoveries. The allowance for credit losses on unfunded commitments represents the expected credit losses on off-balance sheet commitments such as unfunded commitments to extend credit and standby letters of credit. However, a liability is not recognized for commitments unconditionally cancellable by the Company. The allowance for credit losses on unfunded commitments is determined by estimating future draws and applying the expected loss rates on those draws, and is included in accrued expenses and other liabilities on the Company’s consolidated statements of financial condition.

Current wording

The allowance for credit losses consists of the allowance for credit losses for loans and unfunded commitments. The measurement of Current Expected Credit Losses (“CECL”) on financial instruments requires an estimate of the credit losses expected over the life of an exposure (or pool of exposures). The estimate of expected credit losses under the CECL approach is based on relevant information about past events, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amounts. Historical loss experience is generally the starting point for estimating expected credit losses. The Company then considers whether the historical loss experience should be adjusted for asset-specific risk characteristics or current conditions at the reporting date that did not exist over the period from which historical experience was used. Finally, the Company considers forecasts about future economic conditions that are reasonable and supportable. The allowance for credit losses for loans, as reported in our consolidated statements of financial condition, is adjusted by a provision (expense) for credit losses, which is recognized in earnings, and reduced by the charge-off of loans, net of recoveries. The allowance for credit losses on unfunded commitments represents the expected credit losses on off-balance sheet commitments such as unfunded commitments to extend credit and standby letters of credit. However, a liability is not recognized for commitments unconditionally cancellable by the Company. The allowance for credit losses on unfunded commitments is determined by estimating future draws and applying the expected loss rates on those draws and is included in accrued expenses and other liabilities on the Company’s consolidated statements of financial condition.

Previous wording

Net income for the year ended June 30, 2024 amounted to $24.8 million, or $1.45 per basic and diluted share, as compared to $30.8 million, or $1.81 per basic and diluted share, for the year ended June 30, 2023, a decrease of $6.0 million, or 19.5%. The decrease in net income was due to an increase of $29.3 million in interest expense partially offset by an increase of $19.0 million in interest income. The provision for credit losses amounted to a charge of $766,000 for the year ended June 30, 2024 and a benefit of $1.1 million for the year ended June 30, 2023. Net interest income decreased $10.2 million when comparing the years ended June 30, 2024 and 2023. The decrease in net interest income resulted from an increase in interest rates paid on interest-bearing liabilities outpacing the interest rates earned on interest-earning assets, offset by interest-earnings assets growing faster than interest-bearing liabilities when comparing the years ended June 30, 2024 and 2023. Growth in interest-earning assets was due to interest bearing bank balances and loans. Growth in loans was primarily in residential and commercial real estate.

Current wording

Net income for the year ended June 30, 2025 amounted to $31.1 million, or $1.83 per basic and diluted share, as compared to $24.8 million, or $1.45 per basic and diluted share, for the year ended June 30, 2024, an increase of $6.3 million, or 25.7%. The increase in net income was primarily due to an increase of $14.0 million in interest income partially offset by an increase of $4.9 million in interest expense. The provision for credit losses amounted to a charge of $1.3 million and $766,000 for the years ended June 30, 2025 and 2024, respectively. Net interest income increased $9.1 million when comparing the years ended June 30, 2025 and 2024. The increase in net interest income resulted from an increase in interest rates earned on interest-earnings assets outpacing the increase in interest rates paid on interest-bearing liabilities, and by interest-earnings assets growing faster than interest-bearing liabilities when comparing the years ended June 30, 2025 and 2024. Growth in interest-earning assets was due to loans and securities. Growth in loans was primarily in commercial real estate.

Previous wording

Net interest rate spread and margin both decreased when comparing the years ended June 30, 2024 and 2023. Net interest rate spread decreased 58 basis points to 1.75% for the year ended June 30, 2024, compared to 2.33% for the year ended June 30, 2023. Net interest margin decreased 47 basis points to 1.98% for the year ended June 30, 2024, compared to 2.45% for the year ended June 30, 2023. The decrease during the year ended June 30, 2024 was due to the higher interest rate environment, which caused competitive pressure to increase rates paid on deposits, resulting in higher interest expense. This was partially offset by increases in interest income on securities and loans, as they repriced at higher yields and interest rates earned on new balances were higher than the low levels from the prior periods.

Current wording

Net interest rate spread and margin both increased when comparing the years ended June 30, 2025 and 2024. Net interest rate spread increased 22 basis points to 1.97% for the year ended June 30, 2025, compared to 1.75% for the year ended June 30, 2024. Net interest margin increased 21 basis points to 2.19% for the year ended June 30, 2025, compared to 1.98% for the year ended June 30, 2024. The increase during the year ended June 30, 2025 was due to increases in interest income on loans and securities, as they continue to reprice at higher yields and the interest rates earned on new balances were higher than the historic low levels from the prior periods.

Previous wording

Total assets grew $127.5 million, or 4.7%, to $2.8 billion at June 30, 2024 as compared to $2.7 billion at June 30, 2023. Net loans increased $92.6 million, or 6.7%, to $1.5 billion at June 30, 2024 as compared to $1.4 billion at June 30, 2023. Securities classified as available-for-sale and held-to-maturity remained unchanged at $1.0 billion at June 30, 2024 and June 30, 2023. Deposits decreased $47.9 million, or 2.0%, to $2.39 billion at June 30, 2024 as compared to $2.44 billion at June 30, 2023. Total shareholders’ equity increased to $206.0 million at June 30, 2024 from $183.3 million at June 30, 2023, resulting primarily from net income of $24.8 million and a decrease in accumulated other comprehensive loss of $1.7 million, partially offset by dividends declared and paid of $3.2 million and the day-one CECL adoption impact of $510,000.

Current wording

Total assets grew $214.8 million, or 7.6%, to $3.0 billion at June 30, 2025 as compared to $2.8 billion at June 30, 2024. Net loans increased $127.0 million, or 8.6%, to $1.6 billion at June 30, 2025 as compared to $1.5 billion at June 30, 2024. Securities classified as available-for-sale and held-to-maturity increased $91.9 million, or 8.8%, to $1.1 billion at June 30, 2025 as compared to $1.0 billion at June 30, 2024. Deposits increased $250.6 million, or 10.5%, to $2.6 billion at June 30, 2025 as compared to $2.4 billion at June 30, 2024. Total shareholders’ equity increased to $238.8 million at June 30, 2025 from $206.0 million at June 30, 2024, resulting primarily from net income of $31.1 million and a decrease in accumulated other comprehensive loss of $6.2 million, partially offset by dividends declared and paid of $4.5 million.

Previous wording

Total cash and cash equivalents decreased $6.0 million to $190.4 million at June 30, 2024 from $196.4 million at June 30, 2023. 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. As of June 30, 2024, the Company believes it has maintained a strong liquidity position.

Current wording

Total cash and cash equivalents decreased $7.3 million to $183.1 million at June 30, 2025 from $190.4 million at June 30, 2024. 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. As of June 30, 2025, the Company believes it has maintained a strong liquidity position.

Previous wording

Securities available-for-sale and held-to-maturity for the Company remained unchanged at $1.0 billion at June 30, 2024 and June 30, 2023. Securities purchases totaled $329.6 million during the year ended June 30, 2024 and consisted primarily of $245.1 million of state and political subdivision securities, $51.1 million of U.S. Treasury securities, $29.8 million of mortgage-backed securities and $3.6 million of corporate debt securities. Principal pay-downs and maturities during the year ended June 30, 2024 amounted to $297.8 million, primarily consisting of $240.4 million of state and political subdivision securities, $37.0 million of U.S. Treasury securities, $17.4 million of mortgage-backed securities, and $2.7 million of collateralized mortgage obligations.

Current wording

Securities available-for-sale and held-to-maturity increased $91.9 million, or 8.8%, to $1.1 billion at June 30, 2025 as compared to $1.0 billion at June 30, 2024. Securities purchases totaled $444.2 million during the year ended June 30, 2025, primarily consisting of $308.5 million of state and political subdivision securities, $88.4 million of mortgage-backed securities, $24.7 million of U.S. Treasury securities, $16.7 million of collateralized mortgage obligations, and $5.9 million of corporate debt securities. Principal pay-downs and maturities during the year ended June 30, 2025 amounted to $353.5 million, primarily consisting of $258.7 million of state and political subdivision securities, $58.0 million of U.S. Treasury securities, $32.7 million of mortgage-backed securities, $2.8 million of collateralized mortgage obligations and $1.3 million of corporate debt securities. Sales during the year ended June 30, 2025 amounted to $6.7 million of U.S. Treasury securities.

Previous wording

There was no ACL recorded on available-for-sale securities as of either period presented as each of 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.

Current wording

There was no allowance for credit losses recorded on available-for-sale securities as of either period presented as each of 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.

Previous wording

Securities held-to-maturity are evaluated for credit losses on a quarterly basis under the CECL methodology. At June 30, 2024, the ACL on securities held-to-maturitywas $483,000.

Current wording

Securities held-to-maturity are evaluated for credit losses on a quarterly basis under the CECL methodology. The Allowance for Credit Losses on securities held-to-maturitywas $548,000 and $483,000 at June 30, 2025 and 2024, respectively.

Previous wording

The Company holds 59.7% of its securities portfolio at June 30, 2024 in 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 and asset-backed securities held within the portfolio do not contain sub-prime loans and are not exposed to the credit risk associated with such lending.

Current wording

The Company holds 59.2% of its securities portfolio at June 30, 2025 in 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 and asset-backed securities held within the portfolio do not contain sub-prime loans and are not exposed to the credit risk associated with such lending.

Previous wording

The following table set forth information with regard to contractual maturities of debt securities shown in amortized cost ($) and weighted average yield (%) at June 30, 2024. Weighted-average yields are an arithmetic computation of income not fully tax equivalent (“FTE”) adjusted divided by amortized cost. Mortgage-backed securities balances are presented based on final maturity date and do not reflect the expected cash flows from monthly principal repayments. 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. No tax-equivalent adjustments were made in calculating the weighted average yield.

Current wording

The following table sets forth information with regard to contractual maturities of debt securities shown in amortized cost ($) and weighted average yield (%) at June 30, 2025. Weighted-average yields are an arithmetic computation of income not fully tax equivalent (“FTE”) adjusted divided by amortized cost. Mortgage-backed securities balances are presented based on final maturity date and do not reflect the expected cash flows from monthly principal repayments. 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. No tax-equivalent adjustments were made in calculating the weighted average yield.

Previous wording

Net loans receivable increased $92.6 million, or 6.7%, to $1.5 billion at June 30, 2024 from $1.4 billion at June 30, 2023. The loan growth experienced during the year ended consisted primarily of $54.3 million in commercial real estate loans, $26.7 million in residential real estate loans, $6.3 million in home equity loans, $3.3 million in commercial loans, and a $2.0 million decrease in the allowance for credit losses on loans. The Company continues to experience loan growth as a result of 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 regard 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 $127.0 million, or 8.6%, to $1.6 billion at June 30, 2025 from $1.5 billion at June 30, 2024. The loan growth experienced during the year ended June 30, 2025 consisted primarily of $117.9 million in commercial real estate loans, $5.5 million in commercial loans, and $4.9 million in home equity loans. The Company continues to experience loan growth as a result of 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 regard 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.

Previous wording

The following tables present the composition of the Company’s loan portfolio in dollar amounts and percentages as of the dates indicated. The Company adopted ASU 2016-13 (CECL) effective July 1, 2023. Our loan segmentation has been redefined under CECL. Prior year loan tables are presented separately and loan segments presented may not align with how the Company assessed credit risk in the estimate for credit losses under CECL.

Current wording

The following table presents the composition of the Company’s loan portfolio at amortized cost in dollar amounts and percentages as of the dates indicated.

Previous wording

Commercial real estate loans are the largest segment of the Company’s loan portfolio and are comprised of 82.3% in non-owner occupied loans and 17.7% 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 55.4%, and the Company’s owner occupied commercial real estate loans have a weighted average LTV of approximately 50.5%, as of June 30, 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 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 84.4% in non-owner occupied loans and 15.6% 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 57.2%, and the Company’s owner occupied commercial real estate loans have a weighted average LTV of approximately 49.4%, as of June 30, 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 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 June 30, 2024, the Company’s largest commercial real estate concentration was non-owner occupied multi-family loans, at $233.3 million or 24.9% 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 June 30, 2024, the weighted average LTV was approximately 55.8% for the non-owner occupied multi-family loan segment.

Current wording

As of June 30, 2025, the Company’s largest commercial real estate concentration was non-owner occupied multi-family loans, at $282.3 million or 26.8% 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 June 30, 2025, the weighted average LTV was approximately 58.8% for the non-owner occupied multi-family loan segment.

Previous wording

As of June 30, 2024, non-owner occupied construction loans were $108.3 million or 11.6% 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 $1.1 million or 1.0% of the Company’s construction exposure. Construction loans are primarily comprised of approximately 35.5% mixed use real estate, 32.6% multi-family buildings and 13.1% pre-construction and land loans.

Current wording

As of June 30, 2025, non-owner occupied construction loans were $72.0 million or 6.8% 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 $5.5 million or 1.0% of the Company’s construction exposure. Construction loans are primarily comprised of approximately 33.5% mixed use real estate, 27.3% multi-family buildings, 18.1% pre-construction and land loans, and 12.1% residential real estate.

Previous wording

The Company’s outstanding balance of non-owner occupied commercial real estate office loans were $55.6 million or 5.9% of total commercial real estate loans as of June 30, 2024. The office loans are primarily low-rise, non-metropolitan buildings, located within our geographic footprint. As of June 30, 2024, the weighted average LTV was approximately 64.8% 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 $67.9 million or 6.4% of total commercial real estate loans as of June 30, 2025. The office loans are primarily low-rise, non-metropolitan buildings, located within our geographic footprint. As of June 30, 2025, the weighted average LTV was approximately 59.3% for the non-owner occupied office loan segment.

Previous wording

Non-performing assets consist of non-accrual loans, loans over 90 days past due and still accruing, other real estate owned that has been acquired in partial or full satisfaction of the loan obligation or upon foreclosure, and nonperforming securities. Effective July 1, 2023, the Company concurrently adopted ASU 2016-13 and ASU 2022-02, which eliminated the troubled debt restructuring accounting guidance while providing for additional disclosures for loan modifications.

Current wording

Non-performing assets consist of non-accrual loans, loans over 90 days past due and still accruing, other real estate owned that has been acquired in partial or full satisfaction of the loan obligation or upon foreclosure, and non-performing securities.

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 nonaccrual when circumstances indicate that the borrower may be unable to meet the contractual principal or interest payments. The threshold for evaluating classified and nonperforming loans specifically evaluated for individual credit loss is $250,000. Foreclosed real estate represents property acquired through foreclosure and is vale 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 June 30, 2024 there were three loans being monitored under ASU 2022-02 with a total amortized basis of $4.1 million.

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 proceedings 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 June 30, 2025, two loans have been modified in the last 12 months with a total amortized basis of $2.8 million. As of June 30, 2024, there were three loans modified with a total amortized basis of $4.1 million.

Previous wording

The table below details additional information related to non-accrual loans at the date indicated:

Current wording

The table below details additional information related to non-accrual loans at the dates indicated:

Previous wording

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. These loans will be returned to accrual status once they have demonstrated a history of timely payments. Loans on non-accrual status totaled $5.5 million at June 30, 2023 of which $2.0 million were in the process of foreclosure at that date. At June 30, 2023, there were three residential real estate loans totaling $625,000 and two commercial real estate loan totaling $1.4 million in the process of foreclosure. Included in non-accrual loans were $3.1 million of loans which were less than 90 days past due at June 30, 2023, 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.

Current wording

Non-performing assets amounted to $3.1 million and $3.7 million at June 30, 2025 and 2024, respectively. Loans on non-accrual status totaled $3.1 million at June 30, 2025, of which there were one commercial real estate loan totaling $142,000, and three residential real estate loans totaling $841,000 in the process of foreclosure. Included in non-accrual loans were $1.2 million of loans which were less than 90 days past due at June 30, 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 loan 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. These loans will be returned to accrual status once they have demonstrated a history of timely payments.

Previous wording

In addition to non-performing assets discussed above, the Company has identified potential problem loans classified as substandard or special mention, totaling $48.6 million at June 30, 2024 compared to $41.9 million at June 30, 2023, an increase of $6.7 million. During the year ended June 30, 2024, the Company downgraded 12 commercial and commercial real estate relationships from special mention to substandard, and downgraded 14 commercial and commercial real estate relationships from pass to special mention, due to the deterioration in the borrower cash flows and financial performance. This was offset by 14 commercial and commercial real estate relationships that were either upgraded, paid-off, or charged-off during the year ended June 30, 2024. Management continues to monitor classified loan relationships closely. No loans were classified as doubtful or loss at June 30, 2024 or 2023.

Current wording

In addition to non-performing assets discussed above, the Company has identified potential problem loans classified as substandard or special mention, totaling $45.4 million at June 30, 2025 compared to $48.6 million at June 30, 2024, a decrease of $3.2 million. During the year ended June 30, 2025, the Company upgraded 10 commercial real estate relationships and 15 commercial relationships to pass, and 10 commercial real estate relationships and 5 commercial relationships were paid-off. This was offset by 14 commercial real estate relationships and 11 commercial relationships that were downgraded to classified from pass, due to the deterioration in the borrower cash flows and financial performance during the year end June 30, 2025. During the year ended June 30, 2024, the Company downgraded to classified from pass 17 commercial real estate relationships and 9 commercial loan relationships, due to the deterioration in the borrower cash flows and financial performance. This was offset by 4 commercial real estate relationships and 1 commercial relationship that were upgraded to pass, and 7 commercial real estate relationships and 2 commercial relationships that were paid-off during the year ended June 30, 2024. Management continues to monitor classified loan relationships closely. The Company had no loans classified doubtful or loss at June 30, 2025 or June 30, 2024.

Previous wording

The allowance for credit losses on loans (the “ACL”) is established through a provision made periodically by charges or benefits to the provision for credit losses. This is necessary to maintain the ACL at a level which management believes is reasonably reflective of the overall loss expected over the contractual life of the loan portfolio. Management has an established ACL policy to govern the use of judgments exercised in evaluating the ACL required to estimate the expected credit losses over the expected contractual life of the loan portfolios and the material effect that such judgments can have on the consolidated financial statements. While management uses available information to recognize losses on loans, additions or reductions to the allowance may fluctuate from one reporting period to another. These fluctuations are reflective of changes in the reasonable and supportable forecast, analysis of loans evaluated individually, and/or changes in management’s assessment of factors.

Current wording

The allowance for credit losses (the “ACL”) on loans is established through a provision made periodically by charges or benefits to the provision for credit losses. This is necessary to maintain the ACL at a level which management believes is reasonably reflective of the overall loss expected over the contractual life of the loan portfolio. Management has an established ACL policy to govern the use of judgments exercised in evaluating the ACL required to estimate the expected credit losses over the expected contractual life of the loan portfolios and the material effect that such judgments can have on the consolidated financial statements. While management uses available information to recognize losses on loans, additions or reductions to the allowance may fluctuate from one reporting period to another. These fluctuations are reflective of changes in the reasonable and supportable forecast, analysis of loans individually evaluated, and/or changes in management’s assessment of factors.

Previous wording

The ACL is based on the results of life of loan quantitative models, reserves associated with collateral-dependent loans evaluated individually and adjustments for the impact of current economic conditions not accounted for in the quantitative models. The discounted cash flow methodology is used to calculate the CECL reserve for the residential real estate, commercial real estate, home equity and commercial loan segments. The remaining life method is utilized to determine the CECL reserve for the consumer loan segment. The Company elected to use the practical expedient to evaluate loans individually, if they are collateral dependent loans that are on nonaccrual status with a balance of $250,000 or greater, which is consistent with regulatory requirements. The fair value of collateral for collateral dependent loans less selling expenses will be compared to the loan balance to determine if a CECL reserve is required. A qualitative factor framework has been developed to adjust the quantitative loss rates for asset-specific risk characteristics or current conditions at the reporting date.

Current wording

The ACL on loans is based on the results of life of loan quantitative models, reserves associated with collateral-dependent loans individually evaluated and adjustments for the impact of current economic conditions not accounted for in the quantitative models. The discounted cash flow methodology is used to calculate the ACL on loans for the residential real estate, commercial real estate, home equity and commercial loan segments. The remaining life method is utilized to determine the ACL on loans for the consumer loan segment. The Company elected to use the practical expedient to evaluate loans individually, if they are collateral dependent loans that are on non-accrual status with a balance of $250,000 or greater, which is consistent with regulatory requirements. The fair value of collateral for collateral dependent loans less selling expenses will be compared to the loan balance to determine if an ACL on loans is required. A qualitative factor framework has been developed to adjust the quantitative loss rates for asset-specific risk characteristics or current conditions at the reporting date.

Previous wording

The Company charges loans off against the ACL when it becomes evident that a loan cannot be collected within a reasonable amount of time or that it will cost the Company more than it will receive, and all possible avenues of repayment have been analyzed, including the potential of future cash flow, the value of the underlying collateral, and strength of any guarantors or co-borrowers. Generally, consumer loans and smaller business loans (not secured by real estate) in excess of 90 days are charged-off against the ACL, unless equitable arrangements are made. Included within consumer installment loan charge-offs and recoveries are deposit accounts that have been overdrawn in excess of 60 days. For loans secured by real estate, a charge-off is recorded when it is determined that the collection of all or a portion of a loan may not be collected and the amount of that loss can be reasonably estimated. The ACL is increased by a provision for credit losses (which results in a charge to expense) and recoveries of loans previously charged off, and is reduced by charge-offs.

Current wording

The Company charges loans off against the ACL on loans when it becomes evident that a loan cannot be collected within a reasonable amount of time or that it will cost the Company more than it will receive, and all possible avenues of repayment have been analyzed, including the potential of future cash flow, the value of the underlying collateral, and strength of any guarantors or co-borrowers. Generally, consumer loans and smaller business loans (not secured by real estate) in excess of 90 days are charged-off against the ACL on loans, unless equitable arrangements are made. Included within consumer installment loan charge-offs and recoveries are deposit accounts that have been overdrawn in excess of 60 days. For loans secured by real estate, a charge-off is recorded when it is determined that the collection of all or a portion of a loan may not be collected and the amount of that loss can be reasonably estimated. The ACL on loans is increased by a provision for credit losses (which results in a charge to expense) and recoveries of loans previously charged off and is reduced by charge-offs.

Previous wording

The ACL totaled $19.2 million at June 30, 2024, compared to $21.2 million at June 30, 2023 and $19.9 million at July 1, 2023. The ACL to total loans receivable was 1.28% at June 30, 2024 compared to 1.51% at June 30, 2023 and 1.42% at day-one CECL adoption (July 1, 2023). The ACL as of June 30, 2024 decreased as compared to the July 1, 2023 day-one ACL, primarily attributable to a decrease in the reserve for individually evaluated loans due to improved credit risk, and a decrease in the modeled pooled reserve due to favorable economic forecasts as of June 30, 2024. This was partially offset by an increase in the ACL due to growth in gross loans as of June 30, 2024.

Current wording

The ACL on loans totaled $20.1 million at June 30, 2025, compared to $19.2 million at June 30, 2024. The ACL on loans to total loans receivable was 1.24% at June 30, 2025, compared to 1.28% at June 30, 2024. The ACL on loans as of June 30, 2025 increased as compared to June 30, 2024, primarily attributable to growth in gross loans, an increase in the reserve for individually evaluated loans, and a modest deterioration in the economic forecasts used in the CECL models on loans as of June 30, 2025. This was partially offset by an improvement in the qualitative factor assessments on loans as of June 30, 2025.

Previous wording

Net charge-offs on loans totaled $1.4 million and $478,000 for the years ended June 30, 2024 and 2023, respectively. The increase in net charge-offs for the year ended June 30, 2024, was due to one commercial loan being charged-off, which was fully reserved for as an individually evaluated loan through the allowance for credit losses.

Current wording

Net charge-offs totaled $349,000 and $1.4 million for years ended June 30, 2025 and 2024, respectively. There were no material charge-offs in any loan segment during the year ended June 30, 2025 and one commercial loan charged-off for the year ended June 30, 2024, which was fully reserved for as an individually evaluated loan through the allowance for credit losses.

Previous wording

The following table set forth the activity and allocation of the allowance for loan losses by loan category in prior periods at the dates indicated under the incurred methodology.

Current wording

The following table sets forth the activity and allocation of the allowance for credit losses on loans at the dates indicated.

Previous wording

The following table sets forth the allocation of the allowance for loan losses by loan category in prior periods at the dates indicated under the incurred methodology.

Current wording

The following table sets forth the allocation of the allowance for credit losses by loan segment at the dates indicated.

Previous wording

The allowance for credit losses on unfunded commitments represents the amount held against credit exposures that are not represented on the consolidate balance sheets. The allowance is recognized as a liability, a component of other liabilities, with adjustments as an expense in other noninterest expense. The Company estimates expected credit losses over the contractual period in which the Company has exposure to a contractual obligation to extend credit, unless that obligation in unconditionally cancellable by the Company. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over the estimated contractual life. The Company considers the following segments of unfunded commitments exposure; home equity line of credits, commercial line of credits, consumer loans, the residential and commercial real estate loans committed but not closed and the unfunded portion of the construction loans. The probable funding amount by segment is multiplied by the respective reserve percentage calculated in the allowance for credit losses on loans to calculate a reserve on unfunded commitments.

Current wording

The allowance for credit losses on unfunded commitments represents the amount held against credit exposures that are not represented on the consolidate balance sheets. The allowance is recognized as a liability, a component of other liabilities, with adjustments as an expense in other noninterest expense. The Company estimates expected credit losses over the contractual period in which the Company has exposure to a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over the estimated contractual life. The Company considers the following segments of unfunded commitments exposure; home equity line of credits, commercial line of credits, consumer loans, the residential and commercial real estate loans committed but not closed and the unfunded portion of the construction loans. The probable funding amount by segment is multiplied by the respective reserve percentage calculated in the allowance for credit losses on loans to calculate a reserve on unfunded commitments.

Previous wording

The Company enters into interest rate swap agreements with its commercial customers to provide them with a long-term fixed rate, while simultaneously entering into offsetting interest rate swap agreements with a counterparty to swap the fixed rate to a variable rate to manage interest rate exposure. These interest rate swap agreements are not designated as hedges for accounting purposes. As the interest rate swap agreements have substantially equivalent and offsetting terms, they do not present any material exposure to the Company’s consolidated statements of income. The Company records its interest rate swap agreements at fair value and is presented on a gross basis within other assets and other liabilities on the consolidated statements of financial condition. Changes in the fair value of assets and liabilities arising from these derivatives are included, net, in other operating income in the consolidated statement of income.

Current wording

The Company enters into interest rate swap agreements with its commercial customers to provide them with a long-term fixed rate, while simultaneously entering into offsetting interest rate swap agreements with a counterparty to swap the fixed rate to a variable rate to manage interest rate exposure. These interest rate swap agreements are not designated as hedges for accounting purposes. As the interest rate swap agreements have substantially equivalent and offsetting terms, they do not present any material exposure to the Company’s consolidated statements of income. The Company records its interest rate swap agreements at fair value and are presented within other assets and other liabilities on the consolidated statements of financial condition. Changes in the fair value of assets and liabilities arising from these derivatives are included, net, in other operating income in the consolidated statement of income.

Previous wording

RPAs in which the Company acts as the lead bank are referred to as “participations-out,” in reference to the credit risk associated with the customer derivatives being transferred out of the Company. Participations-out generally occur concurrently with the sale of new customer derivatives. At June 30, 2024, the Company’s exposure was reduced due to participations-outs in the amount of $105,000, with a notional amount of $8.0 million. There were no participations-out at June 30, 2023.

Current wording

RPAs in which the Company acts as the lead bank are referred to as “participations-out,” in reference to the credit risk associated with the customer derivatives being transferred out of the Company. Participations-out generally occur concurrently with the sale of new customer derivatives. The RPAs participations-out are spread out over three financial institution counterparties and terms range between three to ten years. The Company’s credit exposure transferred out was $506,000 and $105,000 as of June 30, 2025 and 2024, respectively. The Company transferred out RPAs with a notional amount of $18.9 million and $8.0 million as of June 30, 2025 and 2024, respectively.

Previous wording

RPAs in which the Company acts as the participating bank are referred to as “participations-in,” in reference to the credit risk associated with the counterparty’s derivatives being assumed by the Company. The Company’s maximum credit exposure is based on its proportionate share of the settlement amount of the referenced interest rate swap. Settlement amounts are generally calculated based on the fair value of the swap plus outstanding accrued interest receivables from the customer. The credit exposure associated with risk participations-ins was $276,000 and zero as of June 30, 2024 and June 30, 2023, respectively. The RPAs participations-ins are spread out over four financial institution counterparties and terms range between 4 to 13 years. At June 30, 2024 and June 30, 2023, the Company held RPAs with a notional amount of $112.3 million and $82.0 million, respectively.

Current wording

RPAs in which the Company acts as the participating bank are referred to as “participations-in,” in reference to the credit risk associated with the counterparty’s derivatives being assumed by the Company. The Company’s maximum credit exposure is based on its proportionate share of the settlement amount of the referenced interest rate swap. Settlement amounts are generally calculated based on the fair value of the swap plus outstanding accrued interest receivables from the customer. The RPAs participations-ins are spread out over five financial institution counterparties and terms range between two to twelve years. The credit exposure associated with risk participations-ins was $1.0 million and $276,000 as of June 30, 2025 and 2024, respectively. The Company held RPAs with a notional amount of $130.9 million and $112.3 million as of June 30, 2025 and 2024, respectively.

Previous wording

Premises and equipment amounted to $15.6 million and $15.0 million at June 30, 2024 and 2023, respectively. Purchases totaled $1.5 million during the year ended June 30, 2024, consisting primarily of building improvements and equipment for a new lending center located in Albany, New York and a new office building located in Catskill, New York, and IT equipment. Purchases totaled $1.5 million during the year ended June 30, 2023, consisting primarily of building improvements and equipment for a new branch located in East Greenbush, New York and a new office building located in Catskill, New York, and IT equipment. Depreciation for the year ended June 30, 2024 totaled $928,000, compared to $871,000 for the year ended June 30, 2023. There were no disposals of premises and equipment during the fiscal years ended June 30, 2024 and 2023.

Current wording

Premises and equipment amounted to $15.2 million and $15.6 million at June 30, 2025 and 2024, respectively. Purchases totaled $691,000 during the year ended June 30, 2025, consisting primarily of data equipment for a new disaster recovery and new surveillance systems for the Company’s branch network. Purchases totaled $1.5 million during the year ended June 30, 2024, consisting primarily of building improvements and equipment for a new lending center located in Albany, New York and a new office building located in Catskill, New York, and IT equipment. Depreciation for the year ended June 30, 2025 totaled $1.1 million, compared to $928,000 for the year ended June 30, 2024. There were no disposals of premises and equipment during the fiscal years ended June 30, 2025 and 2024.

Previous wording

Real estate acquired as a result of foreclosure, or in-substance foreclosure deed in lieu of foreclosure or in full or partial satisfaction of loans, is classified as foreclosed real estate (“FRE”) until such time as it is sold. When real estate is classified as FRE, it is recorded at the estimated fair value of the property less estimated costs to dispose at the time of acquisition to establish a new carrying value. Write downs from the carrying value of the loan to estimated fair value, which are required at the time of foreclosure, are charged to the allowance for credit losses. Subsequent adjustments to the carrying value of such properties resulting from declines in fair value result in the establishment of a valuation allowance and are charged to operations in the period in which the declines occur. There were zero and $302,000 in FRE assets as of June 30, 2024 and 2023, respectively.

Current wording

Real estate acquired as a result of foreclosure, or in-substance foreclosure, deed in lieu of foreclosure or in full or partial satisfaction of loans, is classified as foreclosed real estate (“FRE”) until such time as it is sold. When real estate is classified as FRE, it is recorded at the estimated fair value of the property less estimated costs to dispose at the time of acquisition to establish a new carrying value. Write downs from the carrying value of the loan to estimated fair value, which are required at the time of foreclosure, are charged to the allowance for credit losses. Subsequent adjustments to the carrying value of such properties resulting from declines in fair value result in the establishment of a valuation allowance and are charged to operations in the period in which the declines occur. At June 30, 2025 and 2024, the Company had no foreclosed real estate.

Previous wording

Uninsured deposits represents the portion of deposit accounts that exceed the FDIC insurance limit. The Company calculates its uninsured deposit balances based on the methodologies and assumptions used for regulatory reporting requirements, which includes affiliate deposits and collateralized deposits.

Current wording

Uninsured deposits represent the portion of deposit accounts that exceed the FDIC insurance limit. The Company calculates its uninsured deposit balances based on the methodologies and assumptions used for regulatory reporting requirements, which includes affiliate deposits and collateralized deposits.

Previous wording

Uninsured deposits after exclusions, represents 13.3% of total deposits as of June 30, 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 represents 12.5% of total deposits as of June 30, 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

Borrowings for the Company amounted to $199.1 million at June 30, 2024 compared to $49.5 million at June 30, 2023, an increase of $149.6 million. At June 30, 2024, borrowings included $115.3 million of overnight borrowings with the Federal Home Loan Bank of New York (“FHLB”), $49.7 million of Fixed-to-Floating Rate Subordinated Notes, $25.0 million in the Bank Term Funding Program with the Federal Reserve Bank, and $9.2 million of long-term borrowings with the FHLB.

Current wording

Borrowings for the Company amounted to $128.1 million at June 30, 2025 compared to $199.1 million at June 30, 2024, a decrease of $71.0 million. At June 30, 2025, borrowings included $74.0 million of overnight borrowings with the Federal Home Loan Bank of New York (“FHLB”), $49.9 million of Fixed-to-Floating Rate Subordinated Notes, and $4.2 million of long-term borrowings with the FHLB.

Previous wording

On September 17, 2020, the Company entered into Subordinated Note Purchase Agreements with 14 qualified institutional investors, issued at 4.75% Fixed-to-Floating Rate due September 15, 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 June 30, 2024, there were $19.9 million of Subordinated Note Purchases Agreements outstanding, net of issuance costs.

Current wording

On September 17, 2020, the Company entered into Subordinated Note Purchase Agreements with 14 qualified institutional investors, issued at 4.75% Fixed-to-Floating Rate due September 15, 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 June 30, 2025, there were $20.0 million of Subordinated Note Purchases Agreements 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 June 30, 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 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 June 30, 2025, there were $29.9 million of these Subordinated Note Purchases Agreements outstanding, net of issuance costs.

Previous wording

Other liabilities, consisting primarily of accrued liabilities, totaled $31.4 million at June 30, 2024, compared to $28.3 million at June 30, 2023, an increase of $3.1 million. The change was primarily due to an increase of $1.8 million in employee benefit plans, including short-term incentive plans and supplemental executive retirement plans and an increase of $1.3 million in accrued expenses for reserve liability accounts related to unfunded loan commitments. This was partially offset by a decrease of $136,000 in federal and state taxes payable when comparing the year ended June 30, 2024 to June 30, 2023.

Current wording

Other liabilities, consisting primarily of accrued liabilities, totaled $33.9 million at June 30, 2025, compared to $31.4 million at June 30, 2024, an increase of $2.5 million. The change was primarily due to an increase of $2.4 million in employee benefits, including short-term incentive plans and supplemental executive retirement plans when comparing the years ended June 30, 2025 to June 30,2024.