Gouverneur Bancorp, Inc./MD/

Previous wording

The Company cautions readers of this report that a number of important factors could cause the Company’s actual results to differ materially from those expressed in forward-looking statements. Factors that could cause actual results to differ from those predicted and could affect the future prospects of the Company include, but are not limited to: (i)general economic conditions, either nationally or in our market areas, that are worse than expected including as a result of employment levels and labor shortages, and the effects of inflation, a potential recession or slowed economic growth caused by supply chain disruptions or otherwise; (ii) changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for loan losses; (iii) our ability to access cost-effective funding; (iv) fluctuations in real estate values and both residential and commercial real estate market conditions; (v) demand for loans and deposits in our market area; (vi) deposit outflows and our ability to successfully manage liquidity; (vii) our ability to implement and change our business strategies; (viii) competition among depository and other financial institutions; (ix) inflation and changes in the interest rate environment that reduce our margins and yields, the fair value of financial instruments or our level of loan originations or prepayments on loans we have made and make; (x) adverse changes in the securities or secondary mortgage markets; (xi) changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements and insurance premiums; (xii) changes in the quality or composition of our loan or investment portfolios; (xiii) technological changes that may be more difficult or expensive than expected; (xiv) the inability of third-party providers to perform as expected; (xv) our ability to manage market risk, credit risk and operational risk in the current economic environment; (xvi) our ability to enter new markets successfully and to capitalize on growth opportunities; (xvii) our ability to successfully integrate into our operations any assets, liabilities, customers, systems and management personnel we may acquire, including those recently acquired from Citizens Bank of Cape Vincent, and our ability to realize related revenue synergies and cost savings within expected time frames and any goodwill charges related thereto; (xviii) our ability to receive all required regulatory approvals necessary for the Bank to convert from a New York chartered stock savings and loan association to a national banking association, and for the currently contemplated subsequent merger of GS&L Municipal Bank with and into the Bank; (xix) changes in consumer spending, borrowing and savings habits; (xx) changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the Securiti…

Excerpt shortened here; the source contains the full paragraph.

Current wording

The Company cautions readers of this report that a number of important factors could cause the Company’s actual results to differ materially from those expressed in forward-looking statements. Factors that could cause actual results to differ from those predicted and could affect the future prospects of the Company include, but are not limited to: (i)general economic conditions, either nationally or in our market areas, that are worse than expected including as a result of employment levels and labor shortages, and the effects of inflation, a potential recession or slowed economic growth caused by supply chain disruptions or otherwise; (ii) changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for credit losses; (iii) our ability to access cost-effective funding; (iv) fluctuations in real estate values and both residential and commercial real estate market conditions; (v) demand for loans and deposits in our market area; (vi) deposit outflows and our ability to successfully manage liquidity; (vii) our ability to implement and change our business strategies, including our branching strategy; (viii) competition among depository and other financial institutions; (ix) inflation and changes in the interest rate environment that reduce our margins and yields, the fair value of financial instruments or our level of loan originations or prepayments on loans we have made and make; (x) adverse changes in the securities or secondary mortgage markets; (xi) changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements and insurance premiums; (xii) changes in the quality or composition of our loan or investment portfolios; (xiii) technological changes that may be more difficult or expensive than expected; (xiv) the inability of third-party providers to perform as expected; (xv) our ability to manage market risk, credit risk and operational risk in the current economic environment; (xvi) our ability to enter new markets successfully and to capitalize on growth opportunities; (xvii) our ability to successfully integrate into our operations any assets, liabilities, customers, systems and management personnel we may acquire, and our ability to realize related revenue synergies and cost savings within expected time frames and any goodwill charges related thereto; (xvii) changes in consumer spending, borrowing and savings habits; (xix) changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission or the Public Company Accounting Oversight Board; (xx) our ability to attract and retain key employees; and (xxi) changes in financial condition, results of operations or future prospects of issuers of securities that we own.

Previous wording

We consider the allowance for credit losses to be a critical accounting policy. Note 2 to the Company’s Consolidated Financial Statements for the three and nine months ended June 30, 2024 discusses significant accounting policies, including the allowance for credit losses and the adoption of ASC 326, which changes the methodology under which management calculates its reserve for loans and investment securities, now referred to as the allowance for credit losses. Please refer to Note 2 to the Company’s Consolidated Financial Statements for detail regarding the Company’s adoption of ASU 206-13:Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and the allowance for credit losses. Although we believe that we use the best information available to establish the allowance for credit losses, future adjustments to the allowance may be necessary if economic conditions differ substantially from the assumptions used in making the evaluation.

Current wording

We consider the allowance for credit losses to be a critical accounting policy. Note 2 to the Company’s Consolidated Financial Statements for the three months ended December 31, 2024 discusses significant accounting policies, including the allowance for credit losses and the adoption of ASC 326, which changes the methodology under which management calculates its reserve for loans and investment securities, now referred to as the allowance for credit losses. Please refer to Note 2 to the Company’s Consolidated Financial Statements for detail regarding the Company’s adoption of ASU 206-13:Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and the allowance for credit losses. Although we believe that we use the best information available to establish the allowance for credit losses, future adjustments to the allowance may be necessary if economic conditions differ substantially from the assumptions used in making the evaluation.

Previous wording

Our financial results are affected by the changes in and the level of the allowance for credit losses. This process involves our analysis of complex internal and external variables, and it requires that we exercise judgement to estimate an appropriate allowance for credit losses. As a result of the uncertainty associated with this subjectivity, we cannot assure the precision of the amount reserved, should we experience sizeable loan losses in any particular period. For example, changes in the financial condition of individual borrowers, economic conditions, or the condition of various markets in which collateral may be sold could require us to significantly decrease or increase the level of the allowance for credit losses. Such an adjustment could materially affect net income as a result of the change in provision for credit losses. We also have approximately $529,000 as of June 30, 2024 in non-performing assets consisting of non-performing loans. We continue to assess the collectability of these loans and update our appraisals on these loans as appropriate.

Current wording

Our financial results are affected by the changes in and the level of the allowance for credit losses. This process involves our analysis of complex internal and external variables, and it requires that we exercise judgement to estimate an appropriate allowance for credit losses. As a result of the uncertainty associated with this subjectivity, we cannot assure the precision of the amount reserved, should we experience sizeable loan losses in any particular period. For example, changes in the financial condition of individual borrowers, economic conditions, or the condition of various markets in which collateral may be sold could require us to significantly decrease or increase the level of the allowance for credit losses. Such an adjustment could materially affect net income as a result of the change in provision for credit losses. We also have approximately $691,000 as of December 31, 2024 in non-performing assets consisting of non-performing loans. We continue to assess the collectability of these loans and update our appraisals on these loans as appropriate.

Previous wording

To determine the total allowance for credit losses, management estimates the reserves needed for each segment of the portfolio, including loans analyzed individually and loans analyzed on a pooled basis. The allowance for loan losses consists of amounts applicable to: (1) the commercial portfolio; (2) the real estate portfolio; and (3) the consumer portfolio.

Current wording

To determine the total allowance for credit losses, management estimates the reserves needed for each segment of the portfolio, including loans analyzed individually and loans analyzed on a pooled basis. The allowance for credit losses consists of amounts applicable to: (1) the commercial portfolio; (2) the real estate portfolio; and (3) the consumer portfolio.

Previous wording

Management monitors differences between estimated and actual credit losses. This monitoring process includes periodic assessments by senior management of loan portfolios and the models used to estimate the expected credit losses in those portfolios. Additions to the allowance for credit losses are made by changes to the provision for loan losses. Credit exposures deemed to be uncollectible are charged against the allowance for loan losses. Recoveries of previously charged off amounts are credited to the allowance for credit losses.

Current wording

Management monitors differences between estimated and actual credit losses. This monitoring process includes periodic assessments by senior management of loan portfolios and the models used to estimate the expected credit losses in those portfolios. Additions to the allowance for credit losses are made by changes to the provision for credit losses. Credit exposures deemed to be uncollectible are charged against the allowance for credit losses. Recoveries of previously charged off amounts are credited to the allowance for credit losses.

Previous wording

Total assets decreased by $10.8 million, or 5.26%, to $195.1 million at June 30, 2024 from $205.9 million at September 30, 2023. The decrease in assets was primarily due to decreases in acquired loans of $3.4 million and cash and due from banks of $5.2 million, partially offset by an increase in originated loans of $1.4 million and an increase in interest bearing deposits with banks of $1.1 million.

Current wording

Total assets decreased by $0.5 million, or 0.25%, to $196.8 million at December 31, 2024 from $197.3 million at September 30, 2024. The decrease in assets was primarily due to decreases in securities available for sale of $1.8 million resulting from fluctuations in market rates, partially offset by an increase in loans receivable of $0.7 million and an increase in cash and cash equivalents of $0.6 million.

Previous wording

Loans receivable, net of the allowance for credit losses, decreased by $2.3 million, or 1.84%, to $123.1 million at June 30, 2024 from $125.4 million at September 30, 2023. The decrease in loans receivable, net of the allowance for credit losses, was primarily due to a decrease in net loans acquired from Citizens Bank of Cape Vincent of $3.4 million and the transition

Current wording

Loans receivable, net of the allowance for credit losses, increased by $0.7 million, or 0.54%, to $124.9 million at December 31, 2024 from $124.2 million at September 30, 2024. The increase in loans receivable, net of the allowance for credit losses, was primarily due to a increase in originated loans by $1.3 million, partially offset by a decrease in net loans acquired from Citizens Bank of Cape Vincent of $0.7 million.

Previous wording

Securities available for sale decreased by $2.9 million, or 6.18%, to $43.7 million at June 30, 2024 from $46.6 million at September 30, 2023. The decrease was primarily due to principal paydowns and maturities, partially offset by an increase in the market value on the portfolio.

Current wording

Securities available for sale decreased by $1.8 million, or 4.00%, to $43.5 million at December 31, 2024 from $45.3 million at September 30, 2024. The decrease was primarily due to principal paydowns and maturities along with a decrease in the market value on the portfolio, partially offset by reinvested principal proceeds.

Previous wording

The Bank held no foreclosed real estate at June 30, 2024, down from $101,000 at September 30, 2023 due to the write-down and sale of two foreclosed properties.

Current wording

The Bank held no foreclosed real estate at December 31, 2024 or September 30, 2024.

Previous wording

Total deposits decreased by $5.4 million, or 3.36%, to $153.4 million at June 30, 2024 from $158.8 million at September 30, 2023. The decrease in deposits can primarily be attributed to a $13.9 million decrease in non-maturing deposits, due to seasonal fluctuations with municipal deposits, partially offset by an $8.5 million increase in time deposits. The increase in time deposits can primarily be attributed to an increase in offering rates as market and competitor rates have increased. Uninsured deposits, which are the portion of deposit accounts that exceed the FDIC insurance limit, currently set at $250,000 per insured account, were approximately $32.5 million at June 30, 2024 and $42.3 million at September 30, 2023. Municipal deposits held at GS&L Municipal Bank accounted for approximately $15.2 million and $17.5 million of the uninsured deposits at June 30, 2024 and September 30, 2023, respectively. At June 30, 2024, we had $56.7 million in available liquidity with the Federal Home Loan Bank of New York and $6.3 million in cash and cash equivalents, which was sufficient to cover 100% of our uninsured and uncollateralized deposits. Municipal deposits held by GS&L Municipal Bank are fully collateralized by available for sale government and collateralized mortgage obligation securities.

Current wording

Total deposits decreased by $0.2 million, or 0.14%, to $159.7 million at December 31, 2024 from $159.9 million at September 30, 2024. The decrease in deposits can primarily be attributed to a $1.9 million decrease in non-maturing deposits, due to seasonal fluctuations, partially offset by an $1.7 million increase in time deposits. The increase in time deposits can primarily be attributed to offering rates remaining higher as market and competitor rates have increased throughout the past year. Uninsured deposits, which are the portion of deposit accounts that exceed the FDIC insurance limit, currently set at $250,000 per insured account, were approximately $36.9 million at December 31, 2024 and $37.2 million at September 30, 2024. Municipal deposits held at GS&L Municipal Bank accounted for approximately $19.2 million and $19.3 million of the uninsured deposits at December 31, 2024 and September 30, 2024, respectively. At December 31, 2024, we had $58.9 million in available liquidity with the Federal Home Loan Bank of New York and $7.0 million in cash and cash equivalents, which was sufficient to cover 100% of our uninsured and uncollateralized deposits. Municipal deposits held by GS&L Municipal Bank are fully collateralized by available for sale government and collateralized mortgage obligation securities.

Previous wording

Shareholders’ equity increased by $6.6 million, or 26.27%, to $31.7 million at June 30, 2024 from $25.1 million at September 30, 2023. The increase in shareholders’ equity was primarily a result of the completion of the second-step conversion on October 31, 2023, at which time the Company sold, for gross proceeds of $7.2 million, a total of 723,068 shares of common stock at $10.00 per share, including 57,845 shares sold to the Bank’s employee stock ownership plan. There was also a $1.5 million increase to the market value adjustment on the securities portfolio included in the accumulated other comprehensive income component.

Current wording

Shareholders’ equity decreased by $1.0 million, or 3.12%, to $31.7 million at December 31, 2024 from $32.8 million at September 30, 2024. The decrease in shareholders’ equity was primarily a result of a $1.1 million decrease to the market value adjustment on the securities portfolio included in the accumulated other comprehensive income component. The Company also declared dividends of $0.08 per share totaling $89,000 during the three months ended December 31, 2024.

Previous wording

Net income for the three months ended June 30, 2024 was $183,000 compared to $232,000 for the three months ended June 30, 2023. Net income for the three months ended June 30, 2024 was lower than the three months ended June 30, 2023 primarily due to an increase in total interest expense and a $67,000 decrease in the unrealized loss on interest rate swap agreements as of June 30, 2024. The Company also recognized $13,000 in realized gains on sales of securities for the three months ended June 30, 2024. Interest expense for the three months ended June 30, 2024 was $387,000 compared to $187,000 for the three months ended June 30, 2023, primarily due to a $183,000 increase in interest expense on deposits.

Current wording

Net income for the three months ended December 31, 2024 was $160,000 compared to $118,000 for the three months ended December 31, 2023. Net income for the three months ended December 31, 2024 was higher than the three months ended December 31, 2023 primarily due to a $134,000 decrease in the unrealized loss on interest rate swap agreements as of December 31, 2024. The Company also made a $15,000 provision for credit losses for the three months ended December 31, 2024 compared to a $70,000 provision for credit losses for the three months ended December 31, 2023. Interest expense for the three months ended December 31, 2024 was $401,000 compared to $324,000 for the three months ended December 31, 2023, primarily due to a $158,000 increase in interest expense on deposits, partially offset by a $131,000 decrease in interest expense on Federal Home Loan Bank advances.

Previous wording

Net interest income totaled $1.8 million for the three months ended June 30, 2024 and also for the three months ended June 30, 2023. Net interest income for the three months ended June 30, 2024 decreased by $89,000, or 4.81%, primarily due to an increase in deposit interest expense of $183,000 and a decrease in interest income on the swap agreements hedged against borrowings of $44,000, partially offset by an increase in interest income on loans of $131,000 and a decrease in borrowing interest expense of $27,000.

Current wording

Net interest income totaled $1.8 million for the three months ended December 31, 2024 and also for the three months ended December 31, 2023. Net interest income for the three months ended December 31, 2024 decreased by $39,000, or 2.16%, primarily due to an increase in deposit interest expense of $158,000 and a decrease in interest income on the swap agreements hedged against borrowings and deposits of $40,000, partially offset by an increase in interest income of $38,000 and a decrease in borrowing interest expense of $131,000.

Previous wording

Interest income increased by $111,000, or 5.49%, for the three months ended June 30, 2024 due to an increase in market rates resulting in higher interest rates on loan originations and loan repricing.

Current wording

Interest income increased by $38,000, or 1.79%, for the three months ended December 31, 2024 due to an increase in market rates resulting in higher interest rates on loan originations and loan repricing.

Previous wording

Interest expense increased by $200,000, or 107.19%, due to the increase in interest expense on deposits and decrease in income earned on swap agreements hedged against certain borrowings offset by a decrease in Federal Home Loan Bank borrowing interest expense.

Current wording

Interest expense increased by $77,000, or 23.77%, due to the increase in interest expense on deposits and decrease in income earned on swap agreements hedged against certain borrowings offset by a decrease in Federal Home Loan Bank borrowing interest expense.

Previous wording

Net interest margin decreased by 10 basis points, to 4.03% compared to 4.13% for the three months ended June 30, 2024 driven primarily by an increase in interest bearing liability costs resulting from the increase in market rates over the prior year.

Current wording

Net interest margin increased by 1 basis point, to 3.99% compared to 3.98% for the three months ended December 31, 2024 driven primarily by an increase in average yield on interest earning assets resulting from the increase in market rates over the prior year and a slight decrease in interest earning assets.

Previous wording

Management recorded no credit loss provisions for the three months ended June 30, 2024 and loan loss provisions of $30,000 on loans for the three months ended June 30, 2023. Based on a review of the loans that were in the loan portfolio at June 30, 2024, management believes that the allowance is maintained at a level that represents its best estimate of inherent credit losses in the loan portfolio that were both probable and reasonably estimable.

Current wording

Management recorded credit loss provisions of $15,000 and $70,000 for the three months ended December 31, 2024 and 2023, respectively. Based on a review of the loans that were in the loan portfolio at December 31, 2024, management believes that the allowance is maintained at a level that represents its best estimate of inherent credit losses in the loan portfolio that were both probable and reasonably estimable.

Previous wording

Non-performing loans were $529,000 and $700,000 at June 30, 2024 and September 30, 2023, respectively. At June 30, 2024, non-performing loans consisted primarily of residential mortgage loans. Non-performing loans included troubled debt restructurings of $435,000 at September 30, 2023.

Current wording

Non-performing loans were $691,000 and $874,000 at December 31, 2024 and September 30, 2024, respectively. At December 31, 2024 and September 30, 2024, non-performing loans consisted primarily of residential mortgage loans.

Previous wording

The increase in total non-interest income (loss) was primarily due to the reduction in the unrealized loss on swap agreements resulting from fluctuations with long-term bond rates and projected short-term rates. The unrealized loss on swap agreements was $208,000 at June 30, 2024 compared to an unrealized loss of $783,000 at June 30, 2023. For the nine months ended June 30, 2023, the Company unwound four off-balance sheet swaps for a realized gain of $661,000 and sold fourteen investments for a loss of $654,000.

Current wording

The increase in total non-interest income was primarily due to the decrease in the unrealized loss on swap agreements resulting from fluctuations with long-term bond rates and projected short-term rates. The unrealized loss on swap agreements was $9,000 at December 31, 2024 compared to an unrealized loss of $143,000 at December 31, 2023. Other non-interest income increased $50,000 compared to the same period last year, primarily due to the recognition of additional income from a tax-related refund. For the three months ended December 31, 2023, the Company unwound two off-balance sheet swaps for a realized gain of $75,000.

Previous wording

The decrease in total noninterest expense included a $71,000 decrease in other non-interest expenses for the three months ended June 30, 2024 compared to the three months ended June 30, 2024. There was a $43,000 increase in professional fees for the three months ended June 30, 2024, as compared to the three months ended June 30, 2023, due to ongoing professional services resulting from the Bank’s second step conversion, which was completed during the first quarter of fiscal year 2024, and expenses related to the Company’s operations as a public company.

Current wording

The increase in total non-interest expense included a $76,000 increase in other non-interest expenses for the three months ended December 31, 2024 compared to the three months ended December 31, 2023. This was primarily due to operational expenses related to the Company’s operations as a public company.

Previous wording

The Company recorded income tax benefit of $40,000 for the nine months ended June 30, 2024 and income tax benefit of $96,000 for the nine months ended June 30, 2023. The decrease in income tax benefit resulted from an increase in pre-tax book income and a change in interest income in tax exempt securities. The Company’s effective income tax rates were (11.02)% and (70.59)% for the nine months ended June 30, 2024 and 2023, respectively.

Current wording

The Company recorded an income tax benefit of $1,000 and $17,000 for the three months ended December 31, 2024 and 2023, respectively. The decrease in income tax benefit resulted from an increase in pre-tax book income and a change in interest income in tax-exempt securities. The Company’s effective income tax rates were (0.63)% and (16.83)% for the three months ended December 31, 2024 and 2023, respectively. The income tax benefit in both periods primarily reflects the Company’s tax-exempt income, including earnings from securities and Bank-Owned Life Insurance (BOLI), which reduce the overall tax liability.

Previous wording

Non-performing loans were $529,000 and $700,000 at June 30, 2024 and September 30, 2023, respectively. At June 30, 2024, non-performing loans consisted primarily of residential mortgage loans. Non-performing loans included troubled debt restructurings of $435,000 at September 30, 2023.

Current wording

Non-performing loans were $691,000 and $874,000 at December 31, 2024 and September 30, 2024, respectively. At December 31, 2024 and September 30, 2024, non-performing loans consisted primarily of residential mortgage loans.

Previous wording

From time to time, as part of our loss mitigation strategy, we may renegotiate the loan terms based on the economic or legal reasons related to the borrower’s financial difficulties. There were no loans modified to borrowers experiencing financial difficulty during the nine months ended June 30, 2024. Loans modified to borrowers experiencing financial difficulty may be considered to be non-performing and, if so, are placed on non-accrual, except for those that have established a sufficient performance history (generally a minimum of six consecutive months of performance) under the terms of the restructured loan.

Current wording

From time to time, as part of our loss mitigation strategy, we may renegotiate the loan terms based on the economic or legal reasons related to the borrower’s financial difficulties. There were no loans modified to borrowers experiencing financial difficulty during the three months ended December 31, 2024. Loans modified to borrowers experiencing financial difficulty may be considered to be non-performing and, if so, are placed on non-accrual, except for those that have established a sufficient performance history (generally a minimum of six consecutive months of performance) under the terms of the restructured loan.

Previous wording

The following tables set forth average balance sheets, average yields and costs, and certain other information for the periods indicated. No tax-equivalent yield adjustments have been made, as the effects would be immaterial. All average balances are daily average balances. Non-accrual loans were included in the computation of average balances only. The yields set forth below include the effect of deferred fees, discounts, and premiums that are amortized or accreted to interest income or interest expense. Deferred loan fees totaled $428,000 and $523,000 for the three and nine months ended June 30, 2024 and 2023, respectively.

Current wording

The following tables set forth average balance sheets, average yields and costs, and certain other information for the periods indicated. No tax-equivalent yield adjustments have been made, as the effects would be immaterial. All average balances are daily average balances. Non-accrual loans were included in the computation of average balances only. The yields set forth below include the effect of deferred fees, discounts, and premiums that are amortized or accreted to interest income or interest expense. Deferred loan fees totaled $440,000 and $426,000 for the three months ended December 31, 2024 and 2023, respectively.

Previous wording

Liquidity describes our ability to meet the financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Our primary sources of funds are deposits, principal and interest payments on loans and securities, proceeds from the sale of loans and proceeds from sales and maturities of securities. We also rely on borrowings from the Federal Home Loan Bank as supplemental sources of funds. At June 30, 2024, there were $4.9 million in outstanding advances from the Federal Home Loan Bank, and we had the ability to borrow $56.7 million. Additionally, at June 30, 2024, we had a line of credit with the Federal Reserve Discount Window totaling $5.0 million and a second line of credit with Atlantic Community Bankers Bank totaling $4.0 million. At June 30, 2024, there were no outstanding balances under any of these additional credit facilities.

Current wording

Liquidity describes our ability to meet the financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Our primary sources of funds are deposits, principal and interest payments on loans and securities, proceeds from the sale of loans and proceeds from sales and maturities of securities. We also rely on borrowings from the Federal Home Loan Bank as supplemental sources of funds. At December 31, 2024, there were no outstanding advances from the Federal Home Loan Bank, and we had the ability to borrow $58.9 million. Additionally, at December 31, 2024, we had a line of credit with the Federal Reserve Discount Window totaling $5.0 million and a second line of credit with Atlantic Community Bankers Bank totaling $4.0 million. At December 31, 2024, there were no outstanding balances under any of these additional credit facilities.

Previous wording

Our cash flows are comprised of three primary classifications: cash flows from operating activities; investing activities and financing activities. Net cash (used in) provided by operating activities was $(3.3) million and $1.3 million for the nine months ended June 30, 2024 and 2023, respectively. Net cash provided by investing activities, which consists primarily of disbursements for loan originations and purchases and the purchase of securities available-for-sale, offset by principal collections on loans, proceeds from sales, maturities and principal payments received on securities available-for-sale, was $7.8 million and $2.9 million for the nine months ended June 30, 2024 and 2023. Net cash used in financing activities, consisting primarily of activity in deposit accounts and Federal Home Loan Bank advances, was $8.7 million for the nine months ended June 30, 2024 and was $10.9 million for the nine months ended June 30, 2023.

Current wording

Our cash flows are comprised of three primary classifications: cash flows from operating activities; investing activities and financing activities. Net cash (used in) provided by operating activities was $0.3 million and $(3.5) million for the three months ended December 31, 2024 and 2023, respectively. Net cash (used in) provided by investing activities, which consists primarily of disbursements for loan originations and purchases and the purchase of securities available-for-sale, offset by principal collections on loans, proceeds from sales, maturities and principal payments received on securities available-for-sale, was $(0.2) million and $0.8 million for the three months ended December 31, 2024 and 2023. Net cash provided by financing activities, consisting primarily of activity in deposit accounts and Federal Home Loan Bank advances, was $0.5 million for the three months ended December 31, 2024 and was $0.3 million for the three months ended December 31, 2023.

Previous wording

Bancorp is a separate legal entity from the Bank and must provide for its own liquidity to pay its operating expenses and other financial obligations and to fund repurchases of shares of common stock. Bancorp’s primary source of income is dividends received from the Bank. The amount of dividends that the Bank may declare and pay to Bancorp is governed by applicable bank regulations. At June 30, 2024 and September 30, 2023, Bancorp (on an unconsolidated basis) had liquid assets of $2.5 million and $4.6 million, respectively.

Current wording

Gouverneur Bancorp, Inc. is a separate legal entity from the Bank and must provide for its own liquidity to pay its operating expenses and other financial obligations and to fund repurchases of shares of common stock. Bancorp’s primary source of income is dividends received from the Bank. The amount of dividends that the Bank may declare and pay to Bancorp is governed by applicable bank regulations. At December 31, 2024 and September 30, 2024, Bancorp (on an unconsolidated basis) had liquid assets of $2.3 million and $2.4 million, respectively.