Gouverneur Bancorp, Inc./MD/

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 six months ended March 31, 2025 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 and nine months ended June 30, 2025 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 $1.1 million as of March 31, 2025 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 $0.7 million as of June 30, 2025 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

Total assets increased by $0.1 million, or 0.06%, to $197.4 million at March 31, 2025 from $197.3 million at September 30, 2024. The increase in assets was primarily due to increases in loans receivable of $1.1 million and cash and cash equivalents of $1.5 million, partially offset by a decrease in securities available for sale of $2.5 million resulting from principal paydowns and maturities along with a decrease in the market value from fluctuations in market rates.

Current wording

Total assets decreased by $0.6 million, or 0.27%, to $196.7 million at June 30, 2025 from $197.3 million at September 30, 2024. The decrease in assets was primarily due to a decrease in securities available for sale of $3.6 million resulting from principal paydowns and maturities along with a decrease in market value from fluctuations in market rates, partially offset by an increase in loans receivable, net of $1.7 million and cash and cash equivalents of $0.8 million.

Previous wording

Cash and cash equivalents increased by $1.5 million, or 23.59%, to $7.9 million at March 31, 2025 from $6.4 million at September 30, 2024. The increase in cash and cash equivalents can be primarily attributed to an increase in deposits of $1.9 million and principal maturities from securities available for sale of $2.3 million, partially offset by an increase in loans receivable of $1.1 million and purchases of securities available for sale of $0.8 million.

Current wording

Cash and cash equivalents increased by $0.8 million, or 13.11%, to $7.2 million at June 30, 2025 from $6.4 million at September 30, 2024. The increase in cash and cash equivalents can be primarily attributed to an increase in principal maturities from securities available for sale of $3.9 million and an increase in escrow deposits of $0.8 million, partially offset by an increase in loans receivable, net of $1.7 million and purchases of securities available for sale of $1.2 million.

Previous wording

Loans receivable, net of the allowance for credit losses, increased by $1.1 million, or 0.91%, to $125.4 million at March 31, 2025 from $124.3 million at September 30, 2024. The increase in loans receivable, net of the allowance for credit losses, was primarily due to an increase in originated loans by $2.2 million, partially offset by a decrease in total acquired loans of $1.1 million.

Current wording

Loans receivable, net of the allowance for credit losses, increased by $1.6 million, or 1.35%, to $125.9 million at June 30, 2025 from $124.3 million at September 30, 2024. The increase in loans receivable, net of the allowance for credit losses, was primarily due to an increase in originated loans by $3.4 million, partially offset by a decrease in total acquired loans of $1.7 million due to loan repayments.

Previous wording

Securities available for sale decreased by $2.5 million, or 5.59%, to $42.8 million at March 31, 2025 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. The unrealized loss on securities available for sale included in other comprehensive loss was $2.4 million at March 31, 2025, compared to $1.4 million at September 30, 2024, primarily due to fluctuations in market rates impacting the fair value of the investment portfolio.

Current wording

Securities available for sale decreased by $3.6 million, or 8.05%, to $41.7 million at June 30, 2025 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. The unrealized loss on securities available for sale included in other comprehensive loss was $2.5 million at June 30, 2025, compared to $1.4 million at September 30, 2024, primarily due to fluctuations in market rates impacting the fair value of the investment portfolio.

Previous wording

Total deposits increased by $1.9 million, or 1.20%, to $161.8 million at March 31, 2025 from $159.9 million at September 30, 2024. The increase in deposits can primarily be attributed to a $2.3 million increase in time deposits, reflecting consumer preference in the current interest rate environment, partially offset by a $0.4 million decrease in non-maturing deposits. The overall increase in deposits can be attributed to a $2.8 million increase in municipal deposits due to seasonal fluctuations. 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 $38.4 million at March 31, 2025 and $37.2 million at September 30, 2024. Municipal deposits held at GS&L Municipal Bank accounted for approximately $19.2 million and $22.2 million of the uninsured deposits at March 31, 2025 and September 30, 2024, respectively. At March 31, 2025, we had $58.8 million in available liquidity with the Federal Home Loan Bank of New York and $7.9 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 $0.5 million, or 0.31%, to $159.4 million at June 30, 2025 from $159.9 million at September 30, 2024. The decrease in deposits can primarily be attributed to a $2.0 million decrease in non-maturing deposits, partially offset by a $1.5 million increase in time deposits, reflecting consumer preference in the current interest rate environment. The overall decrease in deposits can be attributed to seasonal fluctuations with commercial deposits decreasing by $0.6 million during the period. 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 $35.3 million at June 30, 2025 and $37.2 million at September 30, 2024. Municipal deposits held at GS&L Municipal Bank accounted for approximately $20.9 million and $19.3 million of the uninsured deposits at June 30, 2025 and September 30, 2024, respectively. At June 30, 2025, we had $60.9 million in available liquidity with the Federal Home Loan Bank of New York and $7.2 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 decreased by $1.4 million, or 4.30%, to $31.4 million at March 31, 2025 from $32.8 million at September 30, 2024. The decrease in shareholders’ equity was primarily a result of a $1.0 million decrease to the market value adjustment on the securities portfolio included in the accumulated other comprehensive income component, and the repurchase of common stock of $0.6 million which was returned to authorized but unissued stock. The Company also declared dividends of $0.08 per share totaling $89,000 during the six months ended March 31, 2025.

Current wording

Shareholders’ equity decreased by $1.4 million, or 4.18%, to $31.4 million at June 30, 2025 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, and the repurchase of common stock of $0.6 million which was returned to authorized but unissued stock. The Company also declared dividends of $0.16 per share totaling $173,000 during the nine months ended June 30, 2025.

Previous wording

Net income for the three months ended March 31, 2025 was $118,000 compared to $102,000 for the three months ended March 31, 2024. Net income for the three months ended March 31, 2025 was higher than the three months ended March 31, 2024 primarily due to a $66,000 decrease in total non-interest expenses and a $38,000 decrease in the unrealized loss on interest rate swap agreements as of March 31, 2025. The Company made no provision for credit losses for the three months ended March 31, 2025 and 2024. Interest expense for the three months ended March 31, 2025 was $390,000 compared to $337,000 for the three months ended March 31, 2024, primarily due to a $98,000 increase in interest expense on deposits, partially offset by a $75,000 decrease in interest expense on Federal Home Loan Bank advances.

Current wording

Net income for the three months ended June 30, 2025 was $217,000, compared to $183,000 for the three months ended June 30, 2024. Net income for the three months ended June 30, 2025 was higher than the three months ended June 30, 2024 primarily due to a $65,000 increase in total non-interest income and a $53,000 increase in net interest income. The Company also recorded a $12,000 provision for credit losses for the three months ended June 30, 2025 compared to no provision for credit losses for the three months ended June 30, 2024. Interest expense for the three months ended June 30, 2025 was $360,000 compared to $387,000 for the three months ended June 30, 2024, primarily due to a $98,000 decrease in interest expense in Federal Home Loan Bank advances, partially offset by a $39,000 increase in interest expense on deposits.

Previous wording

Net interest income totaled $1.7 million for the three months ended March 31, 2025, as compared to $1.8 million for the three months ended March 31, 2024. Net interest income for the three months ended March 31, 2025 decreased by $61,000, or 3.37%, primarily due to an increase in deposit interest expense of $98,000 and a decrease in interest income on the swap agreements hedged against borrowings and deposits of $30,000, partially offset by a decrease in borrowing interest expense of $75,000.

Current wording

Net interest income totaled $1.8 million for the three months ended June 30, 2025 and also for the three months ended June 30, 2024. Net interest income for the three months ended June 30, 2025 increased by $53,000, or 3.02%, primarily due to an increase in interest income on loans of $60,000 and a decrease in borrowing interest expense of $98,000, partially offset by an increase in deposit interest expense of $39,000 and a decrease in interest income on the swap agreements hedged against borrowings of $32,000.

Previous wording

Interest income decreased by $8,000, or 0.37%, for the three months ended March 31, 2025 due to a decrease in interest on taxable and non-taxable securities, partially offset by an increase in loan income due to an increase in market rates resulting in higher interest rates on loan originations and loan repricing.

Current wording

Interest income increased by $26,000, or 1.21%, for the three months ended June 30, 2025 due to an increase in loan income from an increase in market rates resulting in higher interest rates on loan originations and loan repricing, partially offset by a decrease in interest on taxable and non-taxable securities.

Previous wording

Interest expense increased by $53,000, or 15.73%, 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 decreased by $27,000, or 6.98%, due to the decrease in Federal Home Loan Bank borrowing interest expense, partially offset by an increase in interest expense on deposits and decrease in income earned on swap agreements hedged against certain borrowings.

Previous wording

Net interest margin decreased by 1 basis point, to 4.02% compared to 4.03% for the six months ended March 31, 2025 driven primarily by a decrease in net interest income and a slight decrease in interest earning assets.

Current wording

Net interest margin increased by 12 basis points, to 4.15% compared to 4.03% for the three months ended June 30, 2025 driven primarily by an increase in net interest income and a slight decrease in interest earning assets.

Previous wording

Management recorded a $5,000 provision for credit loss on loans and a $5,000 benefit from the provision for unfunded commitments for the three months ended March 31, 2025, compared to no provision for credit loss recorded during the same period in the prior year. Based on a review of the loans that were in the loan portfolio at March 31, 2025, 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 a $9,000 provision for credit loss on loans and a $3,000 provision for credit loss on unfunded commitments for the three months ended June 30, 2025, compared to no provision for credit loss recorded during the same period in the prior year. Based on a review of the loans that were in the loan portfolio at June 30, 2025, 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

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. There was no unrealized loss on swap agreements at March 31, 2025 compared to an unrealized loss of $38,000 at March 31, 2024. On November 4, 2024, the Company’s last remaining off-balance sheet swap, $3.0 million in notional value, matured. Earnings on deferred fees plan decreased $25,000 for the three months ended March 31, 2025 compared to the same period last year, primarily due to fluctuations with market rates.

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. There was no unrealized loss on swap agreements at June 30, 2025 compared to an unrealized loss of $27,000 at June 30, 2024. On November 4, 2024, the Company’s last remaining off-balance sheet swap, $3.0 million in notional value, matured. Earnings on deferred fees plan increased $25,000 for the three months ended June 30, 2025 compared to the same period last year, primarily due to fluctuations with market rates.

Previous wording

The decrease in total non-interest expense included a $31,000 decrease in salaries and employee benefits for the six months ended March 31, 2025 compared to the six months ended March 31, 2024. This was primarily due to staff retirements over the prior year. Other non-interest expense increased $156,000 for the six months ended March 31, 2025, primarily due to operational expenses related to the Company’s operations as a public company.

Current wording

The increase in total non-interest expense included a $39,000 increase in foreclosed asset expenses primarily due to legal fees incurred on foreclosures this fiscal year, as compared to a gain on the sale of a foreclosed property during the prior period. Other non-interest expense increased $26,000 for the three months ended June 30, 2025, primarily due to operational expenses related to the Company’s operations as a public company. Total non-interest expense included a $34,000 decrease in salaries and employee benefits for the three months ended June 30, 2025 compared to the three months ended June 30, 2024, primarily due to staff retirements over the prior year.

Previous wording

The Company recorded an income tax benefit of $16,000 and $17,000 for the three months ended March 31, 2025 and 2024, 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 (15.69)% and (20.00)% for the three months ended March 31, 2025 and 2024, 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.

Current wording

The Company recorded an income tax expense of $51,000 for the three months ended June 30, 2025 and an income tax benefit of $5,000 for the three months ended June 30, 2024. The increase in income taxes resulted from an increase in pre-tax book income and a change in tax-exempt income. The Company’s effective income tax rates were 19.03% and (2.81)% for the three months ended June 30, 2025 and 2024, respectively. The increase in the effective income tax rate for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024, was primarily related to the increase in pre-tax book income and fluctuations in permanent tax differences.

Previous wording

Results of Operations for the Six Months Ended March 31, 2025 and 2024

Current wording

Results of Operations for the Nine Months Ended June 30, 2025 and 2024

Previous wording

Net income for the six months ended March 31, 2025 was $278,000 compared to $220,000 for the six months ended March 31, 2024. Net income for the six months ended March 31, 2025 was higher than the six months ended March 31, 2024 primarily due to a $172,000 decrease in the unrealized loss on interest rate swap agreements as of March 31, 2025. The Company also had a $15,000 provision for credit losses for the six months ended March 31, 2025 compared to a $70,000 provision for credit losses for the six months ended March 31, 2024. Interest expense for the six months ended March 31, 2025 was $791,000 compared to $661,000 for the six months ended March 31, 2024, primarily due to a $266,000 increase in interest expense on deposits, partially offset by a $206,000 decrease in interest expense on Federal Home Loan Bank advances.

Current wording

Net income for the nine months ended June 30, 2025 was $495,000 compared to $403,000 for the nine months ended June 30, 2024. Net income for the nine months ended June 30, 2025 was higher than the nine months ended June 30, 2024 primarily due to a $199,000 decrease in the unrealized loss on interest rate swap agreements as of June 30, 2025. The Company also recorded a $27,000 provision for credit losses for the nine months ended June 30, 2025 compared to a $70,000 provision for credit losses for the nine months ended June 30, 2024. Interest expense for the nine months ended June 30, 2025 was $1.2 million compared to $1.0 million for the nine months ended June 30, 2024, primarily due to a $295,000 increase in interest expense on deposits and $102,000 decrease in interest income on the swap agreements hedged against borrowings and deposits, partially offset by a $304,000 decrease in interest expense on Federal Home Loan Bank advances.

Previous wording

Net interest income totaled $3.5 million for the six months ended March 31, 2025, as compared to $3.6 million for the six months ended March 31, 2024. Net interest income for the six months ended March 31, 2025 decreased by $100,000, or 2.77%, primarily due to an increase in deposit interest expense of $266,000 and a decrease in interest income on the swap agreements hedged against borrowings and deposits of $80,000, partially offset by an increase in interest income of $30,000 and a decrease in borrowing interest expense of $206,000.

Current wording

0.88%, primarily due to an increase in deposit interest expense of $295,000 and a decrease in interest income on the swap agreements hedged against borrowings and deposits of $102,000, partially offset by an increase in interest income of $56,000 and a decrease in borrowing interest expense of $304,000.

Previous wording

Interest income increased by $30,000, or 0.70%, for the six months ended March 31, 2025 due to an increase in market rates resulting in higher interest rates on loan originations and loan repricing.

Current wording

Interest income increased by $56,000, or 0.87%, for the nine months ended June 30, 2025 due to an increase in market rates resulting in higher interest rates on loan originations and loan repricing.

Previous wording

Interest expense increased by $130,000, or 19.67%, for the six months ended March 31, 2025 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 $103,000, or 9.83%, for the nine months ended June 30, 2025 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

Management recorded credit loss provisions of $15,000 and $70,000 for the six months ended March 31, 2025 and 2024, respectively. Based on a review of the loans that were in the loan portfolio at March 31, 2025, 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 $27,000 and $70,000 for the nine months ended June 30, 2025 and 2024, respectively. Based on a review of the loans that were in the loan portfolio at June 30, 2025, 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

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 March 31, 2025 compared to an unrealized loss of $181,000 at March 31, 2024. On December 29, 2023, the Company unwound two off-balance sheet swaps, with $2.5 million in notional value, for a realized gain of approximately $75,000. On November 4, 2024, the Company’s last remaining off-balance sheet swap, $3.0 million in notional value, matured. Earnings on deferred fees plan decreased $43,000 compared to the same period last year, primarily due to fluctuations with market rates. Other non-interest income increased $42,000 for the six months ended March 31, 2025 compared to the same period last year, primarily due to the recognition of additional income from a tax-related refund.

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 June 30, 2025 compared to an unrealized loss of $208,000 at June 30, 2024. On December 29, 2023, the Company unwound two off-balance sheet swaps, with $2.5 million in notional value, for a realized gain of approximately $75,000. On November 4, 2024, the Company’s last remaining off-balance sheet swap, $3.0 million in notional value, matured. Earnings on deferred fees plan decreased $18,000 compared to the same period last year, primarily due to fluctuations with market rates. Other non-interest income increased $73,000 for the nine months ended June 30, 2025 compared to the same period last year, primarily due to the recognition of additional income from a tax-related refund.

Previous wording

The decrease in total non-interest expense included a $41,000 decrease in salaries and employee benefits for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. This was primarily due to staff retirements over the prior year. Other non-interest expense increased $80,000 for the three months ended March 31, 2025, primarily due to operational expenses related to the Company’s operations as a public company.

Current wording

The increase in total non-interest expense included a $188,000 increase in other non-interest expense, primarily due to operational expenses related to the Company’s operations as a public company. There was a $66,000 decrease in salaries and employee benefits for the nine months ended June 30, 2025 compared to the nine months ended June 30, 2024, primarily due to staff retirements over the prior year.

Previous wording

The Company recorded an income tax benefit of $17,000 and $34,000 for the six months ended March 31, 2025 and 2024, 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 (6.51)% and (18.28)% for the six months ended March 31, 2025 and 2024, 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.

Current wording

The Company recorded an income tax expense of $34,000 for the nine months ended June 30, 2025 and income tax benefit of $40,000 for the nine months ended June 30, 2024. The increase in income taxes resulted from an increase in pre-tax book income and a change in tax-exempt income. The Company’s effective income tax rates were 6.43% and (11.02)% for the nine months ended June 30, 2025 and 2024, respectively. The effective income tax rates in both periods primarily reflect the Company’s tax-exempt income, including earnings from securities and Bank-Owned Life Insurance (BOLI), which reduce the overall tax liability.

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 $455,000 and $415,000 for the three and six months ended March 31, 2025 and 2024, 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 $456,000 and $428,000 for the three and nine months ended June 30, 2025 and 2024, 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 March 31, 2025, there were no outstanding advances from the Federal Home Loan Bank, and we had the ability to borrow $58.8 million. Additionally, at March 31, 2025, 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 March 31, 2025, 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 June 30, 2025, there were no outstanding advances from the Federal Home Loan Bank, and we had the ability to borrow $60.9 million. Additionally, at June 30, 2025, 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, 2025, 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 operating activities was $0.1 million and $3.6 million for the six months ended March 31, 2025 and 2024, 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 $0.3 million and $3.2 million for the six months ended March 31, 2025 and 2024. Net cash provided by financing activities, consisting primarily of activity in deposit accounts and Federal Home Loan Bank advances, was $1.3 million for the six months ended March 31, 2025 and was $30,000 for the six months ended March 31, 2024.

Current wording

Our cash flows are comprised of three primary classifications: cash flows from operating activities, investing activities and financing activities. Net cash provided by (used in) operating activities was $0.6 million and $(3.3) million for the nine months ended June 30, 2025 and 2024, 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 $0.7 million and $7.8 million for the nine months ended June 30, 2025 and 2024, respectively. Net cash used in financing activities, consisting primarily of activity in deposit accounts and Federal Home Loan Bank advances, was $0.5 million for the nine months ended June 30, 2025 and was $8.7 million for the nine months ended June 30, 2024.

Previous 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 March 31, 2025 and September 30, 2024, Bancorp (on an unconsolidated basis) had liquid assets of $1.6 million and $2.4 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 June 30, 2025 and September 30, 2024, Bancorp (on an unconsolidated basis) had liquid assets of $1.4 million and $2.4 million, respectively.