GREENE COUNTY BANCORP INC

Previous wording

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

Current wording

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

Previous wording

Market risk is the risk of loss from adverse changes in market prices and/or interest rates. Since net interest income (the difference between interest earned on loans and investments and interest paid on deposits and borrowings) is the Company’s primary source of revenue. Net interest income is affected by changes in interest rates as well as fluctuations in the level and duration of the Company’s assets and liabilities.

Current wording

Market risk is the risk of loss from adverse changes in market prices and/or interest rates. Net interest income (the difference between interest earned on loans and investments and interest paid on deposits and borrowings) is the Company’s primary source of revenue, and is affected by changes in interest rates as well as fluctuations in the level and duration of the Company’s assets and liabilities.

Previous wording

Operational risk is the risk to current or anticipated earnings or capital arising from inadequate or failed internal processes or systems, the misconduct or errors of people, and adverse external events. Operational losses result from internal fraud; external fraud; employment practices and workplace safety, clients, products, and business practices; damage to physical assets; business disruption and system failures; and execution, delivery, and process management.

Current wording

Operational risk is the risk to current or anticipated earnings or capital arising from inadequate or failed internal processes or systems, the misconduct or errors of people, and adverse external events. Operational losses result from internal fraud; external fraud including cybersecurity risks; employment practices and workplace safety, clients, products, and business practices; damage to physical assets; business disruption and system failures; and execution, delivery, and process management.

Previous wording

Tax-Equivalent Net Interest Income and Net Interest Margin: Net interest income, as a component of the tabular presentation by financial institutions of Selected Financial Information regarding their recently completed operations, as well as disclosures based on that tabular presentation, is commonly presented on a tax-equivalent basis. That is, to the extent that some component of the institution's net interest income, which is presented on a before-tax basis, is exempt from taxation (e.g., is received by the institution as a result of its holdings of state or municipal obligations), an amount equal to the tax benefit derived from that component is added to the actual before-tax net interest income total. This adjustment is considered helpful in comparing one financial institution's net interest income to that of another institution or in analyzing any institution’s net interest income trend line over time, to correct any analytical distortion that might otherwise arise from the fact that financial institutions vary widely in the proportions of their portfolios that are invested in tax-exempt securities, and that even a single institution may significantly alter over time the proportion of its own portfolio that is invested in tax-exempt obligations. Moreover, net interest income is itself a component of a second financial measure commonly used by financial institutions, net interest margin, which is the ratio of net interest income to average interest-earning assets. For purposes of this measure as well, tax-equivalent net interest income is generally used by financial institutions, again to provide a better basis of comparison from institution to institution and to better demonstrate a single institution’s performance over time. While we present net interest income and net interest margin utilizing GAAP measures (no tax-equivalent adjustments) as a component of the tabular presentation within our disclosures, we do provide as supplemental information net interest income and net interest margin on a tax-equivalent basis.

Current wording

Fully Tax-Equivalent Net Interest Income and Net Interest Margin: Net interest income, as a component of the tabular presentation by financial institutions of Selected Financial Information regarding their recently completed operations, as well as disclosures based on that tabular presentation, is commonly presented on a tax-equivalent basis. That is, to the extent that some component of the institution's net interest income, which is presented on a before-tax basis, is exempt from taxation (e.g., is received by the institution as a result of its holdings of state or municipal obligations), an amount equal to the tax benefit derived from that component is added to the actual before-tax net interest income total. This adjustment is considered helpful in comparing one financial institution's net interest income to that of another institution or in analyzing any institution’s net interest income trend line over time, to correct any analytical distortion that might otherwise arise from the fact that financial institutions vary widely in the proportions of their portfolios that are invested in tax-exempt securities, and that even a single institution may significantly alter over time the proportion of its own portfolio that is invested in tax-exempt obligations. Moreover, net interest income is itself a component of a second financial measure commonly used by financial institutions, net interest margin, which is the ratio of net interest income to average interest-earning assets. For purposes of this measure as well, tax-equivalent net interest income is generally used by financial institutions, again to provide a better basis of comparison from institution to institution and to better demonstrate a single institution’s performance over time. While we present net interest income and net interest margin utilizing GAAP measures (no tax-equivalent adjustments) as a component of the tabular presentation within our disclosures, we do provide as supplemental information net interest income and net interest margin on a tax-equivalent basis.

Previous wording

Critical accounting estimates as those estimates made in accordance with GAAP that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on the financial condition or results of operations. The more significant of these policies are summarized in Note 1,Summary of significant accounting policies to the consolidated financial statements presented in our Annual Report on Form 10-K for the fiscal year ended June 30, 2024. Refer to Note 2,Recent Accounting Pronouncements in this Quarterly Report on Form 10-Q for recently adopted accounting standards. Not all significant accounting policies require management to make difficult, subjective or complex judgments. The allowance for credit losses on loans and unfunded commitments policies noted below are deemed the Company’s critical accounting estimate.

Current wording

Critical accounting estimates as those estimates made in accordance with GAAP that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on the financial condition or results of operations. The more significant of these policies are summarized in Note 1, Summary of significant accounting policies to the consolidated financial statements presented in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025. Not all significant accounting policies require management to make difficult, subjective or complex judgments. The allowance for credit losses on loans and unfunded commitments policies noted below are deemed the Company’s critical accounting estimate.

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

Management of the Company considers the accounting policy relating to the allowance for credit losses to be a critical accounting estimate given the uncertainty in evaluating the level of the allowance required to cover management’s estimate of all expected credit losses over the expected contractual life of our loan portfolios. Determining the appropriateness of the allowance is complex and requires judgment by management about the effect of matters that are inherently uncertain. Subsequent evaluations of the then-existing loan portfolios, in light of the factors then prevailing, may result in significant changes in the allowance for credit losses in those future periods. While management’s current evaluation of the allowance for credit losses indicates that the allowance is appropriate, the allowance may need to be increased under adversely different conditions or assumptions. The allowance for credit losses is significantly influenced by the composition, characteristics and quality of our loan portfolios, as well as the prevailing economic conditions and forecasts utilized. Material changes to these and other relevant factors may result in volatility to the allowance for credit losses, and therefore, volatility to our reported earnings. This critical accounting policy and its application are periodically reviewed with the Audit Committee and the Board of Directors.

Current wording

Management of the Company considers the accounting policy relating to the allowance for credit losses on loans to be a critical accounting estimate given the uncertainty in evaluating the level of the allowance required to cover management’s estimate of all expected credit losses over the expected contractual life of our loan portfolios. Determining the appropriateness of the allowance is complex and requires judgment by management about the effect of matters that are inherently uncertain. Subsequent evaluations of the then-existing loan portfolios, in light of the factors then prevailing, may result in significant changes in the allowance for credit losses in those future periods. While management’s current evaluation of the allowance for credit losses on loans indicates that the allowance is appropriate, the allowance may need to be increased under adversely different conditions or assumptions. The impact of utilizing the CECL models to calculate the allowance for credit losses are significantly influenced by the composition, characteristics and quality of our loan portfolios, as well as the prevailing economic conditions and forecasts utilized. Changes in the national unemployment rate and national GDP could have a material impact on the model’s estimation of the allowance. Material changes to these and other relevant factors may result in greater volatility to the allowance for credit losses, and therefore, greater volatility to our reported earnings. This critical accounting policy and its application are periodically reviewed with the Audit Committee and the Board of Directors.

Previous 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.

Current wording

Total assets of the Company were $3.1 billion at September 30, 2025 and $3.0 billion at June 30, 2025, an increase of $17.9 million, or 0.6%. Securities available-for-sale and held-to-maturity increased $5.0 million, or 0.4%, to $1.137 billion at September 30, 2025 as compared to $1.132 billion at June 30, 2025. Net loans receivable increased $42.3 million, or 2.6%, to $1.65 billion at September 30, 2025 as compared to $1.61 billion at June 30, 2025.

Previous 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.

Current wording

Total cash and cash equivalents for the Company were $154.6 million at September 30, 2025 and $183.1 million at June 30, 2025, a decrease of $28.5 million, or 15.6%. 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 has continued to maintain strong capital and liquidity positions as of September 30, 2025 and June 30, 2025.

Previous 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.

Current wording

Securities available-for-sale and held-to-maturity increased $5.0 million, or 0.4%, to $1.1 billion at September 30, 2025 as compared to $1.1 billion at June 30, 2025. Securities purchases totaled $93.3 million during the three months ended September 30, 2025, consisting primarily of $82.2 million of state and political subdivision securities, $5.7 million of mortgage-backed securities, $3.5 million of corporate debt securities, and $1.9 million of collateralized mortgage obligations. Principal pay-downs and maturities during the three months ended September 30, 2025, amounted to $90.1 million, primarily consisting of $78.6 million of state and political subdivision securities, $8.9 million of mortgage-backed securities, $1.6 million of corporate debt securities, and $1.0 million of collateralized mortgage obligations. At September 30, 2025, 59.3% 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 32.8% of our securities portfolio at September 30, 2025, do not contain sub-prime loans and are not exposed to the credit risk associated with such lending.

Previous wording

The following table summarizes the securities portfolio by classification as a percentage of the portfolio. The values are reported at the balance sheet carrying value, as of March 31, 2025 and June 30, 2024. Refer to financial statements Note 3,Securitiesfor the complete fair value of securities.

Current wording

The following table summarizes the securities portfolio by classification as a percentage of the portfolio. The values are reported at the balance sheet carrying value, as of September 30, 2025 and June 30, 2025. Refer to the financial statements Note 3, Securitiesfor the complete fair value of securities.

Previous wording

There was no ACL recorded on securities available-for-sale 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 on securities available-for-sale as of either period presented as the securities in the portfolio are investment grade, current as to principal and interest and their price changes are consistent with interest and credit spreads when adjusting for convexity, rating, and industry differences.

Previous 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.

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-maturity was $599,000 and $548,000 at September 30, 2025 and June 30, 2025, respectively.

Previous 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.

Current wording

Net loans receivable increased $42.3 million, or 2.6%, to $1.65 billion at September 30, 2025 as compared to $1.61 billion at June 30, 2025. Loan growth experienced during the three months ended September 30, 2025, consisted primarily of $32.3 million in commercial real estate loans, $9.2 million in commercial loans, and $3.1 million in home equity loans. The allowance for credit losses on loans increased $1.1 million, or 5.7%, to $21.3 million at September 30, 2025 as compared to $20.1 million at June 30, 2025. The increase in the allowance for credit losses was primarily attributable to an increase in loan volume and an increase in the quantitative modeling reserve for the commercial real estate segment due to the conversion of construction loans to permanent financing. 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.

Previous wording

The following tables present the composition of the Company’s loan portfolio in dollar amounts and percentages as of the dates indicated.

Current wording

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

Previous 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.

Current wording

Loan balances include net deferred fees/(costs) of ($583,000) and ($567,000) at September 30, 2025 and at June 30, 2025, respectively.

Previous 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.

Current wording

Loan balances exclude accrued interest receivable of $7.2 million and $7.0 million at September 30, 2025 and at June 30, 2025, 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 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.

Current wording

Commercial real estate loans are the largest segment of the Company’s loan portfolio and are comprised of 84.7% in non-owner occupied loans and 15.3% 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 57.0%, and the Company’s owner occupied commercial real estate loans have a weighted average LTV of approximately 49.4%, as of September 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 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 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.

Current wording

As of September 30, 2025, the Company’s largest commercial real estate concentration was non-owner occupied multi-family loans at $282.3 million, or 26.0% 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 September 30, 2025, the weighted average LTV was approximately 58.6% for the non-owner occupied multi-family loan segment.

Previous 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.

Current wording

As of September 30, 2025, non-owner occupied construction loans were $68.6 million, or 6.3% 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 $6.5 million of the Company’s construction exposure. Construction loans are primarily comprised of approximately 35.6% mixed use real estate, 35.3% multi-family buildings, and 14.2% self-storage.

Previous 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.

Current wording

The Company’s outstanding balance of non-owner occupied commercial real estate office loans were $87.3 million, or 8.0% of total commercial real estate loans as of September 30, 2025. The office loans are primarily low-rise, non-metropolitan buildings, located within our geographic footprint. As of September 30, 2025, the weighted average LTV was approximately 59.4% for the non-owner occupied office loan segment.

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 qualitative 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 current 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 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 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 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

Additional information about the ACL is included in Note 4,Loans and Allowance for Credit Losses on Loans, of the Company’s 2024 Annual Report on Form 10-K for the fiscal year ended June 30, 2024. Management considers the ACL to be appropriate based on evaluation and analysis of the loan portfolio.

Current wording

Additional information about the ACL on loans is included in Note 4, Loans and Allowance for Credit Losses on Loans, of the Company’s 2025 Annual Report on Form 10-K for the fiscal year ended June 30, 2025. Management considers the ACL to be appropriate based on evaluation and analysis of the loan portfolio.

Previous 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.

Current wording

The ACL on loans totaled $21.3 million at September 30, 2025, compared to $20.1 million at June 30, 2025. The ACL on loans to total loans receivable was 1.27% at September 30, 2025 compared to 1.24% at June 30, 2025. The increase in the ACL on loans from September 30, 2025 to June 30, 2025 was primarily attributable to an increase in loan volume, an increase in the quantitative modeling reserve for the commercial real estate segment due to the conversion of construction loans to permanent financing.

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 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.

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 September 30, 2025, three loans have been modified in the last 12 months with a total amortized basis of $2.9 million. As of September 30, 2024, there were three loans modified with a total amortized basis of $4.1 million.

Previous 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.

Current wording

Non-performing assets amounted to $3.6 million and $3.1 million at September 30, 2025 and June 30, 2025, respectively. Loans on non-accrual status totaled $3.6 million at September 30, 2025, of which there were six residential real estate loans totaling $1.1 million and one commercial real estate loans totaling $142,000 in the process of foreclosure. Included in non-accrual loans were $1.8 million of loans which were less than 90 days past due at September 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 $3.1 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.

Previous wording

Deposit flow is influenced by general economic conditions, changes in prevailing interest rates and competition. The diversity of deposit accounts offered allows the Company to be competitive in obtaining funds and responding to changes in consumer demand. The Company’s emphasis is placed on acquiring locally, stable, low-cost deposits to fund high-quality loans without taking on unnecessary interest rate risk. The ability to attract and maintain deposits and the rates paid on these deposits are and will continue to be affected by market conditions.

Current wording

Deposit flows are influenced significantly by general economic conditions, changes in prevailing interest rates and competition. The diversity of deposit accounts offered allows the Company to be competitive in obtaining funds and responding to changes in consumer demand. Deposits are obtained predominantly from the areas in which the Company’s branch offices are located. The Company relies primarily on competitive pricing of its deposit products, customer service, and long-standing relationships with customers to attract and retain these deposits. However, market interest rates and rates offered by competing financial institutions significantly affect the Company’s ability to attract and retain deposits. The Company uses traditional means of advertising its deposit products, including radio, television, print and social media. While the Company accepts certificates of deposits in excess of $250,000, they are not subject to preferential rates. The Company does not actively solicit such deposits, as they are more difficult to retain than core deposits. The Company’s emphasis is placed on acquiring locally, stable, low-cost deposits to fund high-quality loans without taking on unnecessary interest rate risk. The ability to attract and maintain deposits and the rates paid on these deposits are and will continue to be affected by market conditions.

Previous 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.

Current wording

Deposits totaled $2.7 billion at September 30, 2025 and $2.6 billion at June 30, 2025, an increase of $83.4 million, or 3.2%. The Company had $31.6 million and $51.6 million of brokered deposits at September 30, 2025 and June 30, 2025, respectively. NOW deposits increased $96.1 million, or 4.9%, and noninterest bearing deposits increased $12.7 million, or 11.5%, when comparing September 30, 2025 and June 30, 2025. Savings deposits decreased $11.3 million, or 4.6%, money market deposits decreased $10.2 million, or 10.0%, and certificates of deposits decreased $3.9 million, or 1.7%, when comparing September 30, 2025 and June 30, 2025.

Previous 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.

Current wording

Reflects $154.6 million and $183.1 million of cash and cash equivalents, $180.2 million and $221.1 million of remaining borrowing capacity from the Federal Home Loan Bank, and $18.4 million and $18.2 million of remaining borrowing capacity from the Federal Reserve Bank, as of September 30, 2025 and June 30, 2025, respectively.

Previous 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.

Current wording

Uninsured deposits after exclusions represent 11.8% and 12.5% of total deposits as of September 30, 2025 and June 30, 2025, respectively. 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 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.

Current wording

At September 30, 2025, the Bank had pledged approximately $623.1 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 $384.4 million at September 30, 2025, of which there were $4.2 million long-term fixed rate borrowings, $200.0 million irrevocable municipal letters of credit and zero of overnight borrowings outstanding at September 30, 2025. At June 30, 2025, the Bank had $74.0 million in overnight borrowings, $4.2 million of long-term fixed rate borrowings and $90.0 million in irrevocable municipal letters of credit at 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 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.

Current wording

The FHLB term borrowings include long-term fixed rate borrowings from the “FHLB 0.0% 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 September 30, 2025 and June 30, 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, and a FHLB long-term fixed rate borrowing of $2.0 million at a stated rate of 4.2%, maturing June 2028.

Previous 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.

Current wording

The Bank pledges securities and certificates of deposit as collateral at the Federal Reserve Bank discount window for overnight borrowings. At September 30, 2025 and June 30, 2025, approximately $18.4 million and $18.2 million, respectively, of collateral was available to be pledged against potential borrowings at the Federal Reserve Bank discount window. There were zero overnight borrowings outstanding with the Federal Reserve Bank at September 30, 2025 and June 30, 2025.

Previous wording

The Bank has established unsecured lines of credit with Atlantic Community Bankers Bank for $15.0 million and three other financial institutions for $75.0 million. The lines of credit provide for overnight borrowing and the interest rate is determined at the time of the borrowing. There were no borrowings outstanding with these lines of credit for the Bank at March 31, 2025 and June 30, 2024.

Current wording

The Bank has established unsecured lines of credit with Atlantic Community Bankers Bank for $15.0 million and three other financial institutions for $75.0 million. The lines of credit provide for overnight borrowing and the interest rate is determined at the time of the borrowing. There were zero borrowings outstanding with these lines of credit for the Bank at September 30, 2025 and June 30, 2025.

Previous 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.

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 totaled $20.0 million and had a floating interest rate of 8.99% at September 30, 2025. These notes were callable on September 15, 2025. The Company redeemed its 4.75%, Fixed-to-Floating Rate Subordinated Notes due 2030, in full on October 1, 2025.

Previous wording

For regulatory purposes, the Company allocated the SNPAs to The Bank of Greene County to qualify as Tier 1 capital subject to a 25% of capital limitation under risk-based capital guidelines. The portion that exceeds the 25% of capital limitation qualifies as Tier 2 capital.

Current wording

For regulatory purposes, the Company allocated the SNPAs to the Bank of Greene County to qualify as Tier 1 capital subject to a 25.0% of capital limitation under risk-based capital guidelines. The portion that exceeds 25.0% of capital limitation qualifies as Tier 2 capital.

Previous 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.

Current wording

Shareholders’ equity increased to $248.2 million at September 30, 2025 compared to $238.8 million at June 30, 2025, resulting primarily from net income of $8.9 million and a decrease in accumulated other comprehensive loss of $1.3 million, partially offset by dividends declared and paid of $781,000.

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. The Federal Reserve has since reduced interest rates 100 basis points in the third and fourth quarter of 2024.

Current wording

The Federal Reserve raised its target benchmark interest rate in 2022 and 2023, resulting in subsequent prime lending rate increases of 525 basis points and a significant increase in market rates. The Federal Reserve has since reduced interest rates 100 basis points in the third and fourth quarter of 2024 and 25 basis points in September 2025.