Greene County Bancorp (NASDAQ: GCBC) lifts earnings on loan and securities growth
Filing Impact
Filing Sentiment
Form Type
10-Q
Rhea-AI Filing Summary
Greene County Bancorp, Inc. reported stronger results for the three and six months ended December 31, 2025. For the quarter, net interest income rose to $19.1 million, and net income increased to $10.3 million, or $0.60 per share, compared with $7.5 million, or $0.44 per share, a year earlier.
Total assets reached $3.15 billion, up from $3.04 billion at June 30, 2025, driven mainly by growth in loans and securities. Deposits were steady at about $2.64 billion, while short-term borrowings increased. Credit quality remained solid, with non-accrual loans of $3.3 million and an allowance for credit losses on loans of $21.3 million.
The company continued its $0.10 per share quarterly dividend. It also moved to terminate its frozen defined benefit pension plan, recording a $199,000 settlement charge, while pension assets remained sufficient to cover obligations.
Positive
- Profitability improved: Quarterly net income increased to $10.3 million, or $0.60 per share, compared with $7.5 million, or $0.44 per share, in the prior-year quarter.
- Balance sheet growth with stable credit: Assets rose to $3.15 billion while non-accrual loans remained low at $3.3 million and the allowance for credit losses on loans increased to $21.3 million.
Negative
- None.
Insights
Earnings improved on wider net interest margins and loan growth, with stable credit quality.
Greene County Bancorp showed meaningful profit expansion. Quarterly net interest income rose to
Asset quality metrics stayed conservative. Non-accrual loans were
Strategically, management repaid
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2025
OR
Commission File Number: 0-25165
(Exact Name of Registrant as Specified in its Charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
| | | |
| (Address of principal executive office) | (Zip code) |
Registrant's telephone number, including area code: (518 ) 943-2600
Securities registered pursuant to Section 12(b) of the Act:
| Title of class | Trading symbol | Name of exchange on which registered |
| | | The |
Securities Registered Pursuant to Section 12(g) of the Act:
None
(Title of Class)
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. ☒
NO ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ☒
NO ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | | Emerging Growth Company | |
| Non-accelerated filer ☐ | Smaller reporting company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).YES ☐ NO ☒
As of February 5, 2026, the registrant had 17,026,828 shares of common stock outstanding at $0.10 par value per share.
Index
GREENE COUNTY BANCORP, INC.
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INDEX
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PART I.
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FINANCIAL INFORMATION
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Page
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Item 1.
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Financial Statements (unaudited)
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* Consolidated Statements of Financial Condition
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3
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* Consolidated Statements of Income
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4
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* Consolidated Statements of Comprehensive Income
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5
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* Consolidated Statements of Changes in Shareholders’ Equity
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6
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* Consolidated Statements of Cash Flows
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7
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* Notes to Consolidated Financial Statements
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8-31
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Item 2.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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32-49
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Item 3.
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Quantitative and Qualitative Disclosures About Market Risk
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49
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Item 4.
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Controls and Procedures
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49
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PART II.
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OTHER INFORMATION
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Item 1.
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Legal Proceedings
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50
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Item 1A.
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Risk Factors
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50
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Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds
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50
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Item 3.
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Defaults Upon Senior Securities
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50
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Item 4.
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Mine Safety Disclosures
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50
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Item 5.
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Other Information
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50
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Item 6.
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Exhibits
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50
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Signatures
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51
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2
Index
Greene County Bancorp, Inc.
Consolidated Statements of Financial Condition
At December 31, 2025 and June 30, 2025
(Unaudited)
(In thousands, except share and per share amounts)
| ASSETS | December 31, 2025 | June 30, 2025 | ||||||
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Cash and due from banks
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$ | $ | ||||||
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Interest-bearing deposits
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Total cash and cash equivalents
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Long-term certificates of deposit
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Securities available-for-sale, at fair value
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| Securities held-to-maturity, at amortized cost, net of allowance for credit losses of $ |
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Equity securities, at fair value
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Federal Home Loan Bank stock, at cost
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Loans receivable
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Allowance for credit losses on loans
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( | ) | ( | ) | ||||
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Net loans receivable
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Premises and equipment, net
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Bank-owned life insurance
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Accrued interest receivable
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Prepaid expenses and other assets
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Total assets
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$ | $ | ||||||
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LIABILITIES AND SHAREHOLDERS’ EQUITY
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||||||||
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Noninterest-bearing deposits
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$ | $ | ||||||
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Interest-bearing deposits
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Total deposits
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Borrowings, short-term
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Borrowings, long-term
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Subordinated notes payable, net
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Accrued expenses and other liabilities
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Total liabilities
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SHAREHOLDERS' EQUITY
|
||||||||
| Preferred stock, Authorized - |
||||||||
| Common stock, par value $ |
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Additional paid-in capital
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Retained earnings
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Accumulated other comprehensive loss
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( | ) | ( | ) | ||||
| Treasury stock, at cost |
( | ) | ( | ) | ||||
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Total shareholders’ equity
|
||||||||
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Total liabilities and shareholders’ equity
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$ | $ |
See notes to consolidated financial statements
3
Index
Greene County Bancorp, Inc.
Consolidated Statements of Income
For the Three and Six Months Ended December 31, 2025 and 2024
(Unaudited)
(In thousands, except share and per share amounts)
| For the three months ended December 31, | For the six months ended December 31, | |||||||||||||||
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2025
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2024
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2025
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2024
| |||||||||||||
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Interest income:
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||||||||||||||||
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Loans
|
$ | $ | $ | $ | ||||||||||||
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Investment securities - tax exempt
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||||||||||||||||
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Investment securities - taxable
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||||||||||||||||
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Interest-bearing deposits and federal funds sold
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Total interest income
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||||||||||||||||
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Interest expense:
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Interest on deposits
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||||||||||||||||
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Interest on borrowings
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Total interest expense
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Net interest income
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Provision for credit losses
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Net interest income after provision for credit losses
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Noninterest income:
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||||||||||||||||
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Service charges on deposit accounts
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||||||||||||||||
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Debit card fees
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Investment services
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E-commerce fees
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||||||||||||||||
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Bank-owned life insurance
|
||||||||||||||||
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Net loss on sale of securities available-for-sale
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( | ) | ( | ) | ||||||||||||
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Other operating income
|
||||||||||||||||
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Total noninterest income
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Noninterest expense:
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Salaries and employee benefits
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Occupancy expense
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Equipment and furniture expense
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Service and data processing fees
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Computer software, supplies and support
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Advertising and promotion
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FDIC insurance premiums
|
||||||||||||||||
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Legal and professional fees
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Other
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Total noninterest expense
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||||||||||||||||
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Income before provision for income taxes
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||||||||||||||||
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Provision for income taxes
|
||||||||||||||||
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Net income
|
$ | $ | $ | $ | ||||||||||||
|
Basic and diluted earnings per share
|
$ | $ | $ | $ | ||||||||||||
|
Basic and diluted average shares outstanding
|
||||||||||||||||
See notes to consolidated financial statements
4
Index
Greene County Bancorp, Inc.
Consolidated Statements of Comprehensive Income
For the Three and Six Months Ended December 31, 2025 and 2024
(Unaudited)
(In thousands)
| For the three months ended December 31, |
December 31, |
|||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
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Net income
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$ | $ | $ | $ | ||||||||||||
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Other comprehensive income (loss):
|
||||||||||||||||
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Unrealized holding gains (losses) on securities available-for-sale, gross
|
( | ) | ||||||||||||||
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Tax effect
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( | ) | ||||||||||||||
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Unrealized holding gains (losses) on securities available-for-sale, net
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( | ) | ||||||||||||||
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Reclassification adjustment for loss on sale of securities available-for-sale realized in net income, gross
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||||||||||||||||
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Tax effect
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||||||||||||||||
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Reclassification adjustment for loss on sale of securities available-for-sale realized in net income, net
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Pension actuarial loss, gross
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( | ) | ( | ) | ||||||||||||
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Tax effect
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( | ) | ( | ) | ||||||||||||
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Pension actuarial loss, net
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( | ) | ( | ) | ||||||||||||
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Amortization of pension actuarial losses recognized in other expense, gross
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Tax effect
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Amortization of pension actuarial losses recognized in other expense, net
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Total other comprehensive income (loss), net of taxes
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( | ) | ||||||||||||||
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Comprehensive income
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$ | $ | $ | $ | ||||||||||||
See notes to consolidated financial statements
5
Index
Greene County Bancorp, Inc.
Consolidated Statements of Changes in Shareholders’ Equity
For the Three Months Ended December 31, 2025 and 2024
(Unaudited)
(In thousands)
| Common stock |
Additional
paid-in capital | Retained earnings | Accumulated other comprehensive loss | Treasury stock | Total shareholders' equity | |||||||||||||||||||
|
Balance at September 30, 2025
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$ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||
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Dividends declared
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( | ) | ( | ) | ||||||||||||||||||||
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Net income
|
||||||||||||||||||||||||
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Other comprehensive income, net of taxes
|
||||||||||||||||||||||||
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Balance at December 31, 2025
|
$ | $ | $ | $ | ( | ) | $ | ( | ) | $ |
|
Common
stock
|
Additional
paid-in
capital
|
Retained
earnings
|
Accumulated
other
comprehensive
loss
|
Treasury
stock
|
Total
shareholders'
equity
| |||||||||||||||||||
|
Balance at September 30, 2024
|
$ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||
|
Dividends declared
|
( | ) | ( | ) | ||||||||||||||||||||
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Net income
|
||||||||||||||||||||||||
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Other comprehensive loss, net of taxes
|
( | ) | ( | ) | ||||||||||||||||||||
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Balance at December 31, 2024
|
$ | $ | $ | $ | ( | ) | $ | ( | ) | $ |
Greene County Bancorp, Inc.
Consolidated Statements of Changes in Shareholders’ Equity
For the Six Months Ended December 31, 2025 and 2024
(Unaudited)
(In thousands)
| Common stock |
Additional
paid-in capital | Retained earnings | Accumulated other comprehensive loss | Treasury stock | Total shareholders' equity | |||||||||||||||||||
|
Balance at June 30, 2025
|
$ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||
|
Dividends declared
|
( | ) | ( | ) | ||||||||||||||||||||
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Net income
|
||||||||||||||||||||||||
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Other comprehensive income, net of taxes
|
||||||||||||||||||||||||
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Balance at December 31, 2025
|
$ | $ | $ | $ | ( | ) | $ | ( | ) | $ |
| Common stock |
Additional
paid-in capital | Retained earnings | Accumulated other comprehensive loss | Treasury stock | Total shareholders' equity | |||||||||||||||||||
|
Balance at June 30, 2024
|
$ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||
|
Dividends declared
|
( | ) | ( | ) | ||||||||||||||||||||
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Net income
|
||||||||||||||||||||||||
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Other comprehensive income, net of taxes
|
||||||||||||||||||||||||
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Balance at December 31, 2024
|
$ | $ | $ | $ | ( | ) | $ | ( | ) | $ |
See notes to consolidated financial statements
6
Index
Greene County Bancorp, Inc.
Consolidated Statements of Cash Flows
For the Six Months Ended December 31, 2025 and 2024
(Unaudited)
(In thousands)
| 2025 | 2024 | |||||||
|
Cash flows from operating activities:
|
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Net income
|
$ | $ | ||||||
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
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Depreciation
|
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Deferred income tax benefit
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( | ) | ( | ) | ||||
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Net accretion of investment premiums and discounts
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( | ) | ( | ) | ||||
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Net amortization of deferred loan costs and fees
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Amortization of subordinated debt issuance costs
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Provision for credit losses
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Bank-owned life insurance income
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( | ) | ( | ) | ||||
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Net loss on sale of securities available-for-sale
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||||||||
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Net loss (gain) on equity securities
|
( | ) | ||||||
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Net decrease in accrued income taxes
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( | ) | ( | ) | ||||
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Net increase in accrued interest receivable
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( | ) | ( | ) | ||||
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Net (increase) decrease in prepaid expenses and other assets
|
( | ) | ||||||
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Net decrease in accrued expenses and other liabilities
|
( | ) | ( | ) | ||||
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Net cash provided by operating activities
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Cash flows from investing activities:
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Securities available-for-sale:
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Proceeds from maturities
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Proceeds from sale of securities
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Purchases of securities
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( | ) | ( | ) | ||||
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Proceeds from principal payments on securities
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Securities held-to-maturity:
|
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Proceeds from maturities
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Purchases of securities
|
( | ) | ( | ) | ||||
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Proceeds from principal payments on securities
|
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Net purchase of Federal Home Loan Bank Stock
|
( | ) | ( | ) | ||||
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Maturity of long-term certificates of deposit
|
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Purchase of bank owned life insurance
|
( | ) | ||||||
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Net increase in loans receivable
|
( | ) | ( | ) | ||||
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Purchases of premises and equipment
|
( | ) | ( | ) | ||||
|
Net cash used in investing activities
|
( | ) | ( | ) | ||||
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Cash flows from financing activities:
|
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Net increase in short-term borrowings
|
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Repayment of long-term borrowings
|
( | ) | ||||||
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Repayment of subordinated notes payable
|
( | ) | ||||||
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Payment of cash dividends
|
( | ) | ( | ) | ||||
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Net increase in deposits
|
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Net cash provided by financing activities
|
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Net decrease in cash and cash equivalents
|
( | ) | ( | ) | ||||
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Cash and cash equivalents at beginning of period
|
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Cash and cash equivalents at end of period
|
$ | $ | ||||||
|
Cash paid during period for:
|
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|
Interest
|
$ | $ | ||||||
|
Income taxes
|
$ | $ |
See notes to consolidated financial statements
7
Index
Greene County Bancorp, Inc.
Notes to Unaudited Consolidated Financial Statements
At and for the Three and Six Months Ended December 31, 2025 and 2024
(1)
Summary of Significant Accounting Policies
Principles of Consolidation and Basis of Presentation
Within the accompanying unaudited interim consolidated financial statements and related notes to the consolidated financial statements, the June 30, 2025 data was derived from the audited consolidated financial statements and notes of Greene County Bancorp, Inc. (the “Company”) and its wholly owned subsidiaries, the Bank of Greene County (the “Bank”) and the Bank’s wholly owned subsidiaries, Greene County Commercial Bank (the “Commercial Bank”) and Greene Property Holdings, Ltd.
The interim consolidated financial statements at and for the three and six months ended December 31, 2025 and 2024 are unaudited.
The unaudited interim consolidated financial statements include the accounts of certain Variable Interest Entities (“VIE(s)”). In accordance with the applicable accounting guidance for consolidations, the Company consolidates a VIE if it has (i) a variable interest in the entity; (ii) the power to direct activities of the VIE that most significantly affect the entity’s economic performance; and (iii) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE (i.e., we are considered to be the primary beneficiary).
The Company uses the equity method to account for unconsolidated investments in VIEs if it has significant influence over the entity’s operating and financing decision. Unconsolidated investments in VIEs in which the Company does not have significant influence, are carried at a cost measurement alternative. See Note 14, Variable Interest Entities for information on our involvement with VIEs.
The
financial statements have been prepared in accordance with accounting
principles generally accepted in the United States of America (“GAAP”) for
interim financial information and with the instructions to Form 10-Q and
Article 8 of Regulation S-X.
Accordingly, they do not include all the information and notes required
by GAAP for complete financial statements. To the extent that information and
notes required by GAAP, for complete financial statements, are contained in or
are consistent with the audited financial statements incorporated by reference
to Greene County Bancorp, Inc.’s Annual Report on Form 10-K for the year ended
June 30, 2025, such information and notes have not been duplicated herein. In
the opinion of management, all adjustments (consisting of only normal recurring
items) necessary for a fair presentation of the financial position and results
of operations and cash flows at and for the periods presented have been
included. Certain previous years’ amounts in the unaudited consolidated financial
statements and notes thereto, have been reclassified to conform to the current
year’s presentation. All material inter-company accounts and transactions have
been eliminated in the consolidation. The results of operations and other data
for the three and six months ended December 31, 2025, are not necessarily
indicative of results that may be expected for the entire fiscal year ending
June 30, 2026. These consolidated financial statements consider events that
occurred through the date the consolidated financial statements were issued and
should be read in conjunction with the audited consolidated financial
statements and notes included in the Company’s Annual Report on Form 10-K.
Nature of Operations
The Company’s primary business is the ownership and operation of its subsidiaries. At December 31, 2025, the Company operated 19 full-service banking offices, lending centers, an operations center, customer call center, administration center, and wealth management center, located in its market area consisting of the Hudson Valley and Capital District Regions of New York State. The Bank is primarily engaged in the business of attracting deposits from the general public in the Bank’s market area, and investing such deposits, together with other sources of funds, in loans and investment securities. The Commercial Bank’s primary business is to attract deposits from and provide banking services to local municipalities. Greene Property Holdings, Ltd. was formed as a New York corporation that has elected under the Internal Revenue Code to be a real estate investment trust. Currently, certain mortgages and loan notes held by the Bank are transferred and beneficially owned by Greene Property Holdings, Ltd. The Bank continues to service these loans.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for credit losses (“ACL”) on loans and on unfunded commitments.
8
Index
(2)
Recent Accounting Pronouncements
Accounting Standards Issued Not Yet Adopted
In December 2023, the Financial Accounting Standards
Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income
Taxes (Topic 740), Improvements to
Income Tax Disclosures, which will require public entities to disclose
annually a tabular rate reconciliation, including specific items such as state
and local income tax, tax credits, nontaxable or nondeductible items, among
others, and a separate disclosure requiring disaggregation of reconciling items
as described above which equal or exceed 5% of the product of multiplying
income from continuing operations by the applicable statutory income tax rate.
The ASU is effective for annual periods beginning after December 15, 2024. The
Company’s adoption of this standard is not expected to have a material impact
on the consolidated financial statements.
In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosure (Subtopic 220-40), which will require enhanced disaggregation of certain expense categories in the notes to the financial statements. The disclosure will require disaggregation of certain income statement expenses including employee compensation, depreciation and intangible asset amortization. The ASU is effective for annual reporting periods beginning after December 15, 2026, and early adoption is permitted. The Company’s adoption of this standard is not expected to have a material impact on the consolidated financial statements.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270), Narrow-Scope Improvements, which clarifies the interim reporting requirements by improving navigability and more clearly specifying what disclosures are required in an interim reporting period applicable to Topic 270. The ASU is effective for annual reporting periods beginning after December 15, 2027, and early adoption is permitted. The Company’s adoption of this standard is not expected to have a material impact on the consolidated financial statements.
(3)
Securities
The following tables summarize the amortized cost and fair value of securities available-for-sale by major type:
| At December 31, 2025 | ||||||||||||||||
|
(In thousands)
|
Amortized cost (1) | Unrealized gains | Unrealized losses | Fair value | ||||||||||||
|
U.S. Treasury securities
|
$ | $ | $ | $ | ||||||||||||
|
U.S. government sponsored enterprises
|
||||||||||||||||
|
State and political subdivisions
|
||||||||||||||||
|
Mortgage-backed securities-residential
|
||||||||||||||||
|
Mortgage-backed securities-multi-family
|
||||||||||||||||
|
Corporate debt securities
|
||||||||||||||||
|
Total securities available-for-sale
|
$ | $ | $ | $ | ||||||||||||
| At June 30, 2025 | ||||||||||||||||
|
(In thousands)
|
Amortized cost (1) |
Unrealized gains |
Unrealized losses | Fair value | ||||||||||||
|
U.S. Treasury securities
|
$ | $ | $ | $ | ||||||||||||
|
U.S. government sponsored enterprises
|
||||||||||||||||
|
State and political subdivisions
|
||||||||||||||||
|
Mortgage-backed securities-residential
|
||||||||||||||||
|
Mortgage-backed securities-multi-family
|
||||||||||||||||
|
Corporate debt securities
|
||||||||||||||||
|
Total securities available-for-sale
|
$ | $ | $ | $ | ||||||||||||
(1)
There was no
9
Index
The following tables summarize the amortized cost, fair value, and allowance for credit loss on securities held-to-maturity by major type:
| At December 31, 2025 | ||||||||||||||||||||||||
|
(In thousands)
|
Amortized cost (1) | Unrealized gains | Unrealized losses | Fair value | Allowance | Net carrying value | ||||||||||||||||||
|
U.S. Treasury securities
|
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
|
State and political subdivisions
|
||||||||||||||||||||||||
|
Mortgage-backed securities-residential
|
||||||||||||||||||||||||
|
Mortgage-backed securities-multi-family
|
||||||||||||||||||||||||
|
Corporate debt securities
|
||||||||||||||||||||||||
|
Other securities
|
||||||||||||||||||||||||
|
Total securities held-to-maturity
|
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
| At June 30, 2025 | ||||||||||||||||||||||||
|
(In thousands)
|
Amortized cost (1) | Unrealized gains | Unrealized losses | Fair value | Allowance | Net carrying value | ||||||||||||||||||
|
U.S. Treasury securities
|
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
|
State and political subdivisions
|
||||||||||||||||||||||||
|
Mortgage-backed securities-residential
|
||||||||||||||||||||||||
|
Mortgage-backed securities-multi-family
|
||||||||||||||||||||||||
|
Corporate debt securities
|
||||||||||||||||||||||||
|
Other securities
|
||||||||||||||||||||||||
|
Total securities held-to-maturity
|
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
(1)
U.S. Treasury and mortgage-backed securities are issued by U.S. government entities and agencies. These securities are either explicitly and/or implicitly guaranteed by the U.S. government as to timely repayment of principal and interest, are highly rated by major rating agencies, and have a long history of zero credit losses. Therefore, the Company determined a zero credit loss assumption and did not calculate or record an allowance for credit loss for these securities. An allowance for credit losses on investment securities held-to-maturity has been recorded for certain municipal securities issued by state and political subdivisions and corporate debt securities, to account for expected lifetime credit loss using the Current Expected Credited Losses (“CECL”) methodology.
The Company’s current policies generally limit securities investments to U.S. government and securities of government sponsored enterprises, federal funds sold, municipal bonds, corporate debt obligations, subordinated debt of banks and certain mutual funds. In addition, the Company’s policies permit investments in mortgage-backed securities, including securities issued and guaranteed by Fannie Mae, Freddie Mac, and GNMA, and collateralized mortgage obligations issued by these entities. As of December 31, 2025, all mortgage-backed securities including collateralized mortgage obligations were securities of government sponsored enterprises, no private-label mortgage-backed securities or collateralized mortgage obligations were held in the securities portfolio. The Company’s investments in state and political subdivisions securities generally are municipal obligations that are general obligations supported by the general taxing authority of the issuer, and in some cases are insured. The obligations issued by school districts are supported by state aid. Primarily, these investments are issued by municipalities within New York State.
The Company’s current securities investment strategy utilizes a risk management approach of diversified investing among three categories: short-, intermediate- and long-term. The emphasis of this approach is to increase overall investment securities yields while managing interest rate risk. The Company will only invest in high quality securities, as determined by management’s analysis at the time of purchase. The Company generally does not engage in any balance sheet derivative or hedging investment transactions, such as balance sheet interest rate swaps or caps.
10
Index
The following table summarizes the activity in the allowance for credit losses on securities held-to-maturity:
| For the three months ended December 31, | ||||||||
|
(In thousands)
|
2025 | 2024 | ||||||
|
Balance at beginning of period
|
$ | $ | ||||||
|
Provision (benefit) for credit losses
|
( | ) | ||||||
|
Balance at end of period
|
$ | $ | ||||||
| For the six months ended December 31, | ||||||||
|
(In thousands)
|
2025 | 2024 | ||||||
|
Balance at beginning of period
|
$ | $ | ||||||
|
Provision (benefit) for credit losses
|
( | ) | ||||||
|
Balance at end of period
|
$ | $ | ||||||
The following table shows fair value and gross unrealized losses, aggregated by security category and length of time that individual securities have been in a continuous unrealized loss position, at December 31, 2025.
| Less than 12 Months | More than 12 Months | Total | ||||||||||||||||||||||||||||||||||
|
(In thousands, except number of securities)
|
Fair value | Unrealized losses | Number of securities | Fair value | Unrealized losses | Number of securities | Fair value | Unrealized losses | Number of securities | |||||||||||||||||||||||||||
|
Securities available-for-sale:
|
||||||||||||||||||||||||||||||||||||
|
U.S. Treasury securities
|
$ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
|
U.S. government sponsored enterprises
|
||||||||||||||||||||||||||||||||||||
|
State and political subdivisions
|
||||||||||||||||||||||||||||||||||||
|
Mortgage-backed securities-residential
|
||||||||||||||||||||||||||||||||||||
|
Mortgage-backed securities-multi-family
|
||||||||||||||||||||||||||||||||||||
|
Corporate debt securities
|
||||||||||||||||||||||||||||||||||||
|
Total securities available-for-sale
|
||||||||||||||||||||||||||||||||||||
|
Securities held-to-maturity:
|
||||||||||||||||||||||||||||||||||||
|
U.S. Treasury securities
|
||||||||||||||||||||||||||||||||||||
|
State and political subdivisions
|
||||||||||||||||||||||||||||||||||||
|
Mortgage-backed securities-residential
|
||||||||||||||||||||||||||||||||||||
|
Mortgage-backed securities-multi-family
|
||||||||||||||||||||||||||||||||||||
|
Corporate debt securities
|
||||||||||||||||||||||||||||||||||||
|
Total securities held-to-maturity
|
||||||||||||||||||||||||||||||||||||
|
Total securities
|
$ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
11
Index
The following table shows fair value and gross unrealized losses, aggregated by security category and length of time that individual securities have been in a continuous unrealized loss position, at June 30, 2025.
|
Less than 12 months
|
More than 12 months | Total | ||||||||||||||||||||||||||||||||||
|
(In thousands, except number of securities)
|
Fair value | Unrealized losses |
Number of securities | Fair value | Unrealized losses |
Number of securities | Fair value | Unrealized losses |
Number
of securities | |||||||||||||||||||||||||||
|
Securities available-for-sale:
|
||||||||||||||||||||||||||||||||||||
|
U.S. Treasury securities
|
$ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
|
U.S. government sponsored enterprises
|
||||||||||||||||||||||||||||||||||||
|
State and political subdivisions
|
||||||||||||||||||||||||||||||||||||
|
Mortgage-backed securities-residential
|
||||||||||||||||||||||||||||||||||||
|
Mortgage-backed securities-multi-family
|
||||||||||||||||||||||||||||||||||||
|
Corporate debt securities
|
||||||||||||||||||||||||||||||||||||
|
Total securities available-for-sale
|
||||||||||||||||||||||||||||||||||||
|
Securities held-to-maturity:
|
||||||||||||||||||||||||||||||||||||
|
U.S. Treasury securities
|
||||||||||||||||||||||||||||||||||||
|
State and political subdivisions
|
||||||||||||||||||||||||||||||||||||
|
Mortgage-backed securities-residential
|
||||||||||||||||||||||||||||||||||||
|
Mortgage-backed securities-multi-family
|
||||||||||||||||||||||||||||||||||||
|
Corporate debt securities
|
||||||||||||||||||||||||||||||||||||
|
Total securities held-to-maturity
|
||||||||||||||||||||||||||||||||||||
|
Total securities
|
$ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
There were no 576 four 8.3 no
The estimated fair values of debt securities at December 31, 2025, by contractual maturity are shown below. Expected maturities may differ from contractual maturities, because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.
(In thousands)
|
Securities available-for-sale
|
Amortized cost | Fair value | ||||||
|
Within one year
|
$ | $ | ||||||
|
After one year through five years
|
||||||||
|
After five years through ten years
|
||||||||
|
After ten years
|
||||||||
|
Total securities available-for-sale
|
||||||||
|
Mortgage-backed securities
|
||||||||
|
Total securities available-for-sale
|
||||||||
|
Securities held-to-maturity
|
||||||||
|
Within one year
|
||||||||
|
After one year through five years
|
||||||||
|
After five years through ten years
|
||||||||
|
After ten years
|
||||||||
|
Total securities held-to-maturity
|
||||||||
|
Mortgage-backed securities
|
||||||||
|
Total securities held-to-maturity
|
||||||||
|
Total securities
|
$ | $ | ||||||
At December 31, 2025 and June 30, 2025, securities with an aggregate fair value of $1.1 billion and $1.0 billion, respectively, were pledged as collateral for deposits in excess of FDIC insurance limits for various municipalities placing deposits with the Commercial Bank. At December 31, 2025 and June 30, 2025, securities with an aggregate fair value of $18.4 million and $18.2 million, respectively, were pledged as collateral for potential borrowings at the Federal Reserve Bank discount window. The Company did not participate in any securities lending programs during the three and six months ended December 31, 2025 or 2024.
12
Index
Federal Home Loan Bank Stock
Federal law requires a member institution of the Federal Home Loan Bank (“FHLB”) system to hold stock of its district FHLB according to a predetermined formula. This stock is restricted in that it can only be sold to the FHLB or to another member institution, and all sales of FHLB stock must be at par. As a result of these restrictions, FHLB stock is carried at cost. FHLB stock is held as a long-term investment and its value is determined based on the ultimate recoverability of the par value. Estimated credit loss of this investment is evaluated quarterly and is a matter of judgment that reflects management’s view of the FHLB’s long-term performance, which includes factors such as the following: its operating performance; the severity and duration of declines in the fair value of its net assets related to its capital stock amount; its commitment to make payments required by law or regulation and the level of such payments in relation to its operating performance; the impact of legislative and regulatory changes on the FHLB, and accordingly, on the members of the FHLB; and its liquidity and funding position. After evaluating these considerations, the Company concluded that the par value of its investment in FHLB stock will be recovered and, therefore, no
(4)
Loans and Allowance for Credit Losses on Loans
Loan segments are summarized below as of the dates indicated:
|
(In thousands)
|
December 31, 2025 | June 30, 2025 | ||||||
|
Residential real estate
|
$ | $ | ||||||
|
Commercial real estate
|
||||||||
|
Home equity
|
||||||||
|
Consumer
|
||||||||
|
Commercial
|
||||||||
|
Total gross loans
(1)(2)
|
||||||||
|
Allowance for credit losses on loans
|
( | ) | ( | ) | ||||
|
Loans receivable, net
|
$ | $ | ||||||
| (1) | |
| (2) |
Non-accrual Loans
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-accrual. Loans on non-accrual status totaled $3.3 million at December 31, 2025, of which there were four residential real estate loans totaling $668,000 and one commercial real estate loan totaling $142,000 in the process of foreclosure. Included in non-accrual loans were $2.0 million of loans which were less than 90 days past due at December 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 $3.1 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. The activity in non-performing loans during the six months ended December 31, 2025, included $586,000 in loan repayments, $73,000 in charge-offs or transfers to foreclosure, and $860,000 of loans placed into nonperforming status.
13
Index
The following table sets forth information regarding delinquent and/or non-accrual loans as of December 31, 2025:
|
(In thousands)
|
30-59
days past due |
60-89
days past due |
90 days
or more past due |
Total
past due | Current | Total loans |
Loans on non- accrual | |||||||||||||||||||||
|
Residential real estate
|
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
|
Commercial real estate
|
||||||||||||||||||||||||||||
|
Home equity
|
||||||||||||||||||||||||||||
|
Consumer
|
||||||||||||||||||||||||||||
|
Commercial
|
- | |||||||||||||||||||||||||||
|
Total gross loans
|
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
The following table sets forth information regarding delinquent and/or non-accrual loans as of June 30, 2025:
|
(In
thousands)
|
30-59
days
past due
|
60-89
days
past due
|
90 days
or more
past due
|
Total
past due
|
Current
|
Total loans
|
Loans
on non-
accrual
| |||||||||||||||||||||
|
Residential real estate
|
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
|
Commercial real estate
|
||||||||||||||||||||||||||||
|
Home equity
|
||||||||||||||||||||||||||||
|
Consumer
|
||||||||||||||||||||||||||||
|
Commercial
|
||||||||||||||||||||||||||||
|
Total gross loans
|
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
The Company had no
Allowance for Credit Losses on Loans
The allowance for credit losses (“ACL”) for the loan portfolio is established through a provision for credit losses based on the results of life of loan quantitative models, reserves associated with collateral-dependent loans individually evaluated and adjustments for the impact of current economic conditions not accounted for in the quantitative models. The discounted cash flow methodology is used to calculate the ACL on loans for the residential real estate, commercial real estate, home equity and commercial loan segments. The Company uses a four-quarter reasonable and supportable forecast period based on the one-year percent change in national GDP and the national unemployment rate, as economic variables. The forecast will revert to long-term economic conditions over a four-quarter reversion period on a straight-line basis. The remaining life method will be utilized to determine the ACL for the consumer loan segment. 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. 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 the collateral dependent loan less selling expenses will be compared to the loan balance to determine if an ACL on loans is required. 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 the qualitative factors.
In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for credit losses. Such agencies may require the Company to recognize additions to the allowance based on their judgment about information available to them at the time of their examination. The Company charges loans off against the allowance for credit losses 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 allowance for credit losses, unless equitable arrangements are made. Included within consumer 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 allowance for credit losses 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.
14
Index
The following tables set forth the activity and allocation of the allowance for credit losses on loans by segment:
| Activity for the three months ended December 31, 2025 | ||||||||||||||||||||||||
|
(In thousands)
|
Residential real estate | Commercial real estate | Home equity | Consumer | Commercial | Total | ||||||||||||||||||
|
Balance at September 30, 2025
|
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
|
Charge-offs
|
( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
|
Recoveries
|
||||||||||||||||||||||||
|
Provision (benefit)
|
( | ) | ( | ) | ||||||||||||||||||||
|
Balance at December 31, 2025
|
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Activity for the three months ended December 31, 2024 | ||||||||||||||||||||||||
|
(In thousands)
|
Residential real estate | Commercial real estate | Home equity | Consumer | Commercial | Total | ||||||||||||||||||
|
Balance at September 30, 2024
|
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
|
Charge-offs
|
( | ) | ( | ) | ( | ) | ||||||||||||||||||
|
Recoveries
|
||||||||||||||||||||||||
|
Provision
|
||||||||||||||||||||||||
|
Balance at December 31, 2024
|
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Activity for the six months ended December 31, 2025 | ||||||||||||||||||||||||
|
(In thousands)
|
Residential real estate | Commercial real estate | Home equity | Consumer | Commercial | Total | ||||||||||||||||||
|
Balance at June 30, 2025
|
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
|
Charge-offs
|
( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
|
Recoveries
|
||||||||||||||||||||||||
|
Provision
|
||||||||||||||||||||||||
|
Balance at December 31, 2025
|
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Activity for the six months ended December 31, 2024 | ||||||||||||||||||||||||
|
(In thousands)
|
Residential real estate | Commercial real estate | Home equity | Consumer | Commercial | Total | ||||||||||||||||||
|
Balance at June 30, 2024
|
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
|
Charge-offs
|
( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
|
Recoveries
|
||||||||||||||||||||||||
|
Provision (benefit)
|
( | ) | ||||||||||||||||||||||
|
Balance at December 31, 2024
|
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
Credit monitoring process
Management closely monitors the quality of the loan portfolio and has established a loan review process designed to help monitor any change in borrower risk during the life cycle of their loan. The Company utilizes a credit quality grading system that is used at loan inception and updated as appropriate based on an annual review process. The credit quality grade helps management make a consistent assessment of each loan relationship’s credit risk and identify any portfolio trends that could impact profitability. Consistent with regulatory guidelines, the Company provides for the classification of loans, such as “Pass,” “Special Mention,” “Substandard,” “Doubtful” and “Loss” classifications.
Commercial grading system
Loss
Loss ratings are loans that are considered uncollectible and of such little value that their continuance as active assets of the Company is not warranted. Loss rating does not necessarily mean that the loan has no recovery or salvage value, however, it is not practical or desirable to defer charging off the loan.
15
Index
Doubtful
Doubtful ratings are loans that have all the weakness inherent in loans classified as substandard with the added characteristic that the weaknesses present make collection or liquidation in full, on the basis of currently existing facts, highly questionable and improbable. Doubtful ratings generally are non-performing and considered to have a high risk of default.
Substandard
Substandard ratings are loans that possess well-defined weaknesses that jeopardize the orderly liquidation of debt and are characterized by the distinct possibility that the Company will sustain some loss, if the deficiencies are not corrected. Substandard ratings are inadequately protected by the current sound worth and paying capacity of the borrower or the collateral pledged, if any.
Special mention
Special mention ratings are loans that have potential weaknesses or emerging problems, which require close attention. These weaknesses, if left uncorrected, could lead to deterioration in the repayment prospects for the loan or the Company’s collateral position in the future. Special mention loans are less risky than substandard assets as no loss of principal or interest is anticipated unless, the potential problems continue for a prolonged basis.
Pass
Pass ratings are loans that do not encompass loans graded as Loss, Doubtful, Substandard, or Special mention. Pass loans range from Pass/Watch, Acceptable, Average, Satisfactory, Good and Excellent. Pass loans demonstrate sufficient cash flow to ensure full repayment of the loan with Pass ratings being determined by the quality of the collateral and equity position, stability of operations or management, and the guarantors.
Residential and consumer grading system
Residential real estate, home equity and consumer loans are graded as either non-performing or performing.
Non-performing
Non-performing loans are loans in which the borrower has not made the scheduled payments of principal or interest and are generally loans over 90 days past due, and loans on non-accrual status.
Performing
Performing loans are those loans in which the borrower is making timely payments of both principal and interest as upon the agreed loan terms.
16
Index
The following tables present the amortized cost basis of the Company’s loans by class and vintage and includes gross charge-offs by loan class and vintage as of the three and six months ended December 31, 2025:
| At December 31, 2025 | ||||||||||||||||||||||||||||||||||||
| Term loans amortized cost basis by origination year |
Revolving loans amortized cost basis |
Revolving loans converted to term | Total | |||||||||||||||||||||||||||||||||
|
(In thousands)
|
2026 | 2025 | 2024 | 2023 | 2022 | Prior | ||||||||||||||||||||||||||||||
|
Residential real estate
|
||||||||||||||||||||||||||||||||||||
|
By payment activity status:
|
||||||||||||||||||||||||||||||||||||
|
Performing
|
$ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
|
Non-performing
|
||||||||||||||||||||||||||||||||||||
|
Total residential real estate
|
||||||||||||||||||||||||||||||||||||
|
Current period gross charge-offs
|
||||||||||||||||||||||||||||||||||||
|
Commercial real estate
|
||||||||||||||||||||||||||||||||||||
|
By internally assigned grade:
|
||||||||||||||||||||||||||||||||||||
|
Pass
|
||||||||||||||||||||||||||||||||||||
|
Special mention
|
||||||||||||||||||||||||||||||||||||
|
Substandard
|
||||||||||||||||||||||||||||||||||||
|
Total commercial real estate
|
||||||||||||||||||||||||||||||||||||
|
Current period gross charge-offs
|
||||||||||||||||||||||||||||||||||||
|
Home equity
|
||||||||||||||||||||||||||||||||||||
|
By payment activity status:
|
||||||||||||||||||||||||||||||||||||
|
Performing
|
||||||||||||||||||||||||||||||||||||
|
Non-performing
|
||||||||||||||||||||||||||||||||||||
|
Total home equity
|
||||||||||||||||||||||||||||||||||||
|
Current period gross charge-offs
|
||||||||||||||||||||||||||||||||||||
|
Consumer
|
||||||||||||||||||||||||||||||||||||
|
By payment activity status:
|
||||||||||||||||||||||||||||||||||||
|
Performing
|
||||||||||||||||||||||||||||||||||||
|
Non-performing
|
||||||||||||||||||||||||||||||||||||
|
Total Consumer
|
||||||||||||||||||||||||||||||||||||
|
Current period gross charge-offs
|
||||||||||||||||||||||||||||||||||||
|
Commercial
|
||||||||||||||||||||||||||||||||||||
|
By internally assigned grade:
|
||||||||||||||||||||||||||||||||||||
|
Pass
|
||||||||||||||||||||||||||||||||||||
|
Special mention
|
||||||||||||||||||||||||||||||||||||
|
Substandard
|
||||||||||||||||||||||||||||||||||||
|
Total Commercial
|
$ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
|
Current period gross charge-offs
|
$ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
17
Index
The following tables present the amortized cost basis of the Company’s loans by class and vintage and includes gross charge-offs by loan class and vintage as of the twelve months ended June 30, 2025:
| At June 30, 2025 | ||||||||||||||||||||||||||||||||||||
| Term loans amortized cost basis by origination year | Revolving loans amortized cost basis | Revolving loans converted to term | Total | |||||||||||||||||||||||||||||||||
|
(In thousands)
|
2025 | 2024 | 2023 | 2022 | 2021 | Prior | ||||||||||||||||||||||||||||||
|
Residential real estate
|
||||||||||||||||||||||||||||||||||||
|
By payment activity status:
|
||||||||||||||||||||||||||||||||||||
|
Performing
|
$ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
|
Non-performing
|
||||||||||||||||||||||||||||||||||||
|
Total residential real estate
|
||||||||||||||||||||||||||||||||||||
|
Current period gross charge-offs
|
||||||||||||||||||||||||||||||||||||
|
Commercial real estate
|
||||||||||||||||||||||||||||||||||||
|
By internally assigned grade:
|
||||||||||||||||||||||||||||||||||||
|
Pass
|
||||||||||||||||||||||||||||||||||||
|
Special mention
|
||||||||||||||||||||||||||||||||||||
|
Substandard
|
||||||||||||||||||||||||||||||||||||
|
Total commercial real estate
|
||||||||||||||||||||||||||||||||||||
|
Current period gross charge-offs
|
||||||||||||||||||||||||||||||||||||
|
Home equity
|
||||||||||||||||||||||||||||||||||||
|
By payment activity status:
|
||||||||||||||||||||||||||||||||||||
|
Performing
|
||||||||||||||||||||||||||||||||||||
|
Non-performing
|
||||||||||||||||||||||||||||||||||||
|
Total home equity
|
||||||||||||||||||||||||||||||||||||
|
Current period gross charge-offs
|
||||||||||||||||||||||||||||||||||||
|
Consumer
|
||||||||||||||||||||||||||||||||||||
|
By payment activity status:
|
||||||||||||||||||||||||||||||||||||
|
Performing
|
||||||||||||||||||||||||||||||||||||
|
Non-performing
|
||||||||||||||||||||||||||||||||||||
|
Total Consumer
|
||||||||||||||||||||||||||||||||||||
|
Current period gross charge-offs
|
||||||||||||||||||||||||||||||||||||
|
Commercial
|
||||||||||||||||||||||||||||||||||||
|
By internally assigned grade:
|
||||||||||||||||||||||||||||||||||||
|
Pass
|
||||||||||||||||||||||||||||||||||||
|
Special mention
|
||||||||||||||||||||||||||||||||||||
|
Substandard
|
||||||||||||||||||||||||||||||||||||
|
Total Commercial
|
$ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
|
Current period gross charge-offs
|
$ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
The Company had no
Allowance for Credit Losses on Unfunded Commitments
The Company estimates expected credit losses over the contractual period in which the Company has exposure to a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. The allowance for credit losses on unfunded commitments exposure is recognized in other liabilities and is adjusted through a provision expense in other noninterest expense. At December 31, 2025, the allowance for credit losses on unfunded commitments totaled $1.5 million as compared to $1.8 million at June 30, 2025.
18
Index
Individually Evaluated Loans
Loans individually evaluated had an amortized cost basis of $947,000 and $751,000 , with an allowance for credit losses on loans of $495,000 and $549,000 at December 31, 2025 and June 30, 2025, respectively. At December 31, 2025, the amortized cost basis of collateral dependent loans was $947,000 for residential real estate loans. At June 30, 2025, the amortized cost basis of collateral dependent loans was $751,000 for residential real estate loans. The allowance for credit loss for collateral dependent loans is individually assessed based on the fair value of the collateral less costs to sell at the reporting date.
Loan Modifications to Borrowers Experiencing Financial Difficulties
When the Company modifies a loan for borrowers experiencing financial difficulty, such modifications generally include one or a combination of the following: an extension of the maturity date; a stated rate of interest not at the market rate for new debt with similar risk; a change in the scheduled payment amount; or principal forgiveness. The Company works with loan customers experiencing financial difficulty and may enter into loan modifications to achieve the best mutual outcome given the financial circumstances of the borrower.
The following tables present the amortized cost basis of the loans modified to borrowers experiencing financial difficulty by type of concession granted:
| For the three months ended December 31, 2025 | ||||||||
| Interest rate reduction | ||||||||
|
(Dollars in thousands)
|
Amortized cost |
Percentage of
total class | ||||||
|
Commercial real estate
|
$ | % | ||||||
|
Total
|
$ | |||||||
| For the three months ended December 31, 2024 | ||||||||
| Interest rate reduction | ||||||||
|
(Dollars in thousands)
|
Amortized cost |
Percentage of
total class | ||||||
|
Commercial real estate
|
$ | % | ||||||
|
Total
|
$ | |||||||
| For the six months ended December 31, 2025 | ||||||||||||||||
| Term extension | Interest rate reduction | |||||||||||||||
|
(Dollars in thousands)
|
Amortized cost | Percentage of total class | Amortized cost |
Percentage of
total class | ||||||||||||
|
Commercial real estate
|
$ | % | $ | % | ||||||||||||
|
Total
|
$ | $ | ||||||||||||||
| For the six months ended December 31, 2024 | ||||||||
| Interest rate reduction | ||||||||
|
(Dollars in thousands)
|
Amortized cost |
Percentage of
total class | ||||||
|
Commercial real estate
|
$ | % | ||||||
|
Total
|
$ | |||||||
19
Index
The following tables presents the financial effect of the modifications made to borrowers experiencing financial difficulty:
| For the three months ended December 31, 2025 | ||
| Loan type | Interest rate reduction | |
| Commercial real estate | Interest rates were reduced by an average of |
| For the three months ended December 31, 2024 | ||
| Loan type | Interest rate reduction | |
| Commercial real estate | Interest rates were reduced by an average of |
| For the six months ended December 31, 2025 | ||||
| Loan type | Term extension | Interest rate reduction | ||
| Commercial real estate | | Interest rates were reduced by an average of | ||
| For the six months ended
December 31, 2024 | ||
| Loan type | Interest rate reduction | |
| Commercial real estate | Interest rates were reduced by an average of |
There were no
There was one
The Company closely monitors the performance of loans that have
been modified. The following table depicts the performance of loans that have
been modified to borrowers experiencing financial difficulty that were modified
in the prior twelve months at amortized cost basis:
| At December 31, 2025 | ||||||||||||||||||||
|
(In thousands)
|
Current |
30-59 days past due |
60-89 days past due |
90 days or more past due | Total | |||||||||||||||
|
Commercial real estate
|
$ | $ | $ | $ | $ | |||||||||||||||
|
Total
|
$ | $ | $ | $ | $ | |||||||||||||||
| At December 31, 2024 | ||||||||||||||||||||
|
(In thousands)
|
Current |
30-59 days past due |
60-89 days past due |
90 days or more past due | Total | |||||||||||||||
|
Commercial real estate
|
$ | $ | $ | $ | $ | |||||||||||||||
|
Consumer
|
||||||||||||||||||||
|
Total
|
$ | $ | $ | $ | $ | |||||||||||||||
Foreclosed real estate
Foreclosed real estate (“FRE”) consists of properties acquired through mortgage loan foreclosure proceedings, deed in lieu of foreclosure or in full or partial satisfaction of loans. At December 31, 2025 and June 30, 2025, the Company had no
(5)
Fair Value Measurements and Fair Value of Financial Instruments
Management uses its best judgment in estimating the fair value of the Company’s financial instruments; however, there are inherent weaknesses in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates herein are not necessarily indicative of the amounts the Company could have realized in a sale transaction on the dates indicated. The estimated fair value amounts have been measured as of December 31, 2025 and June 30, 2025, and have not been re-evaluated or updated for purposes of these consolidated financial statements subsequent to those respective dates. As such, the estimated fair values of these financial instruments subsequent to the respective reporting dates may be different from the amounts reported at each period-end.
20
Index
The following information should not be interpreted as an estimate of the fair value of the entire Company since a fair value calculation is only provided for a limited portion of the Company’s assets and liabilities. Due to a wide range of valuation techniques and the degree of subjectivity used in making the estimates, comparisons between the Company’s disclosures and those of other companies may not be meaningful.
The FASB ASC Topic 820 on “Fair Value Measurement” established a fair value hierarchy that prioritized the inputs to valuation techniques used to measure fair value. The fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Fair value measurements are not adjusted for transaction costs. A fair value hierarchy exists within GAAP that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:
Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
Level 2: Quoted prices for similar assets or liabilities in active markets, quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability.
Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported with little or no market activity).
An asset’s or liability’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.
For assets measured at fair value on a recurring basis, the fair value measurements by level within the fair value hierarchy used are as follows:
| Fair Value Measurements Using | ||||||||||||||||
|
Quoted prices in active markets for identical assets |
Significant other observable inputs |
Significant unobservable inputs | ||||||||||||||
|
(In thousands)
|
December 31, 2025 | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
|
Assets:
|
||||||||||||||||
|
U.S. Treasury securities
|
$ | $ | $ | $ | ||||||||||||
|
U.S. government sponsored enterprises
|
||||||||||||||||
|
State and political subdivisions
|
||||||||||||||||
|
Mortgage-backed securities-residential
|
||||||||||||||||
|
Mortgage-backed securities-multi-family
|
||||||||||||||||
|
Corporate debt securities
|
||||||||||||||||
|
Securities available-for-sale
|
||||||||||||||||
|
Equity securities
|
||||||||||||||||
|
Interest rate swaps
|
||||||||||||||||
|
Total
|
$ | $ | $ | $ | ||||||||||||
|
Liabilities:
|
||||||||||||||||
|
Interest rate swaps
|
$ | $ | $ | $ | ||||||||||||
|
Total
|
$ | $ | $ | $ | ||||||||||||
21
Index
| Fair Value Measurements Using | ||||||||||||||||
|
Quoted prices in active markets for identical assets |
Significant other observable inputs |
Significant unobservable inputs | ||||||||||||||
|
(In thousands)
|
June 30, 2025 | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
|
Assets:
|
||||||||||||||||
|
U.S. Treasury securities
|
$ | $ | $ | $ | ||||||||||||
|
U.S. government sponsored enterprises
|
||||||||||||||||
|
State and political subdivisions
|
||||||||||||||||
|
Mortgage-backed securities-residential
|
||||||||||||||||
| Mortgage-backed securities-multi-family | ||||||||||||||||
|
Corporate debt securities
|
||||||||||||||||
|
Securities available-for-sale
|
||||||||||||||||
|
Equity securities
|
||||||||||||||||
|
Interest rate swaps
|
||||||||||||||||
|
Total
|
$ | $ | $ | $ | ||||||||||||
|
Liabilities:
|
||||||||||||||||
|
Interest rate swaps
|
$ | $ | $ | $ | ||||||||||||
|
Total
|
$ | $ | $ | $ | ||||||||||||
Certain investments that are actively traded and have quoted market prices have been classified as Level 1 valuations. Other investment securities available-for-sale have been valued by reference to prices for similar securities or through model-based techniques in which all significant inputs are observable and, therefore, such valuations have been classified as Level 2.
In addition to disclosures of the fair value of assets on a recurring basis, FASB ASC Topic 820 on “Fair Value Measurement” requires disclosures for assets and liabilities measured at fair value on a nonrecurring basis, such as loans individually evaluated for expected credit losses in the period in which a re-measurement at fair value is performed. The Company uses the fair value of underlying collateral, less costs to sell, to estimate the allowance for credit losses for individually evaluated loans. Management may modify the appraised values, for qualitative factors such as economic conditions and estimated liquidation expenses ranging from 21.3 % to 89.6 %. Such modifications to the appraised values could result in lower valuations of such collateral. Based on the valuation techniques used, the fair value measurements for loans evaluated individually are classified as Level 3.
Fair values for foreclosed real estate are initially recorded at the estimated fair value of the property less estimated costs to dispose at the time of acquisition to establish a new carrying value. Values are derived from appraisals, similar to loans individually evaluated for expected credit loss, of underlying collateral. Any write-downs from the carrying value of the loan to estimated fair value, which are required at the time of foreclosure, are charged to the allowance for credit losses. Subsequent adjustments to the carrying value of such properties resulting from declines in fair value result in the establishment of a valuation allowance and are charged to operations in the period in which the declines occur. In the determination of fair value subsequent to foreclosure, management may modify the appraised values, for qualitative factors such as economic conditions and estimated liquidation expenses. Such modifications to the appraised values could result in lower valuations of such collateral. Based on the valuation techniques used, the fair value measurements for foreclosed real estate are classified as Level 3.
| December 31, 2025 | June 30, 2025 | |||||||||||||||||||
|
(In thousands)
|
Fair value hierarchy |
Carrying amount |
Estimated fair value |
Carrying amount |
Estimated fair value | |||||||||||||||
|
Loans evaluated individually
|
3 | $ | $ | $ | ||||||||||||||||
No other financial assets or liabilities were re-measured during the three and six month period on a nonrecurring basis.
22
Index
The carrying amounts reported in the statements of financial condition for total cash and cash equivalents, long-term certificates of deposit, accrued interest receivable and accrued interest payable approximate their fair values. Fair values of securities are based on quoted market prices (Level 1), where available, or matrix pricing (Level 2), which is a mathematical technique, used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted prices. The carrying amount of Federal Home Loan Bank stock approximates fair value due to its restricted nature. The fair values for loans are measured using the "exit price" notion, which is a reasonable estimate of what another party might pay in an orderly transaction. Fair values for variable rate loans that reprice frequently, with no significant credit risk, are based on carrying value. Fair values for fixed rate loans are estimated using discounted cash flows and interest rates currently being offered for loans with similar terms to borrowers of similar credit quality. Fair values disclosed for demand and savings deposits are equal to carrying amounts at the reporting date. The carrying amounts for variable rate money market deposits approximate fair values at the reporting date. Fair values for long- term certificates of deposit are estimated using discounted cash flows and interest rates currently being offered in the market on similar certificates. Fair value for Federal Home Loan Bank long-term borrowings are estimated using discounted cash flows and interest rates currently being offered on similar borrowings. The carrying value of short-term Federal Home Loan Bank borrowings approximates its fair value. Fair value for subordinated notes payable is estimated based on a discounted cash flow methodology or observations of recent highly-similar transactions. Fair value for interest rate swaps include any accrued interest and are valued using the present value of cash flows discounted using observable forward rate assumptions. The Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy.
The carrying amounts and estimated fair value of financial instruments are as follows:
| December 31, 2025 | Fair value measurements using | |||||||||||||||||||
|
(In thousands)
|
Carrying amount | Fair value | (Level 1) | (Level 2) | (Level 3) | |||||||||||||||
|
Cash and cash equivalents
|
$ | $ | $ | $ | $ | |||||||||||||||
|
Long-term certificate of deposit
|
||||||||||||||||||||
|
Securities available-for-sale
|
||||||||||||||||||||
|
Securities held-to-maturity
|
||||||||||||||||||||
|
Equity securities
|
||||||||||||||||||||
|
Federal Home Loan Bank stock
|
||||||||||||||||||||
|
Net loans receivable
|
||||||||||||||||||||
|
Accrued interest receivable
|
||||||||||||||||||||
|
Interest rate swap asset
|
||||||||||||||||||||
|
Deposits
|
||||||||||||||||||||
|
Borrowings
|
||||||||||||||||||||
|
Subordinated notes payable, net
|
||||||||||||||||||||
|
Accrued interest payable
|
||||||||||||||||||||
|
Interest rate swap liability
|
||||||||||||||||||||
| June 30, 2025 | Fair value measurements using | |||||||||||||||||||
|
(In thousands)
|
Carrying amount | Fair value | (Level 1) | (Level 2) | (Level 3) | |||||||||||||||
|
Cash and cash equivalents
|
$ | $ | $ | $ | $ | |||||||||||||||
|
Long-term certificate of deposit
|
||||||||||||||||||||
|
Securities available-for-sale
|
||||||||||||||||||||
|
Securities held-to-maturity
|
||||||||||||||||||||
|
Equity securities
|
||||||||||||||||||||
| Federal Home Loan Bank stock | ||||||||||||||||||||
|
Net loans receivable
|
||||||||||||||||||||
|
Accrued interest receivable
|
||||||||||||||||||||
|
Interest rate swap asset
|
||||||||||||||||||||
|
Deposits
|
||||||||||||||||||||
|
Borrowings
|
||||||||||||||||||||
|
Subordinated notes payable, net
|
||||||||||||||||||||
|
Accrued interest payable
|
||||||||||||||||||||
|
Interest rate swap liability
|
||||||||||||||||||||
23
Index
(6)
Derivative Instruments
The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, primarily by managing the amount, sources and duration of its assets and liabilities. The Company has interest rate derivatives that result from a service provided to certain qualifying customers and, therefore, are not used to manage interest rate risk in the Company’s assets or liabilities. The Company manages a matched book with respect to its derivative instruments in order to minimize its net risk exposure resulting from such transactions.
Derivatives Not Designated as Hedging Instruments
The Company enters into interest rate swap agreements with its commercial customers to provide them with a long-term fixed rate, while simultaneously entering into offsetting interest rate swap agreements with a counterparty to swap the fixed rate to a variable rate to manage interest rate exposure. These interest rate swap agreements are not designated as hedges for accounting purposes. As the interest rate swap agreements have substantially equivalent and offsetting terms, they do not present any material exposure to the Company’s consolidated statements of income. The Company records its interest rate swap agreements at fair value and are presented within other assets and other liabilities on the consolidated statements of financial condition. Changes in the fair value of assets and liabilities arising from these derivatives are included, net, in other operating income in the consolidated statements of income. Under terms of the agreements with the third-party counterparties, the Company provides cash collateral to the counterparty, when required, for the initial trade. Subsequent to the trade, the margin is exchanged in either direction, based upon the estimated fair value of the underlying contracts. Cash collateral represents the amount that is exchanged under master netting agreements that allows the Company to offset the derivative position with the related collateral. The notional amount of the interest rate swaps does not represent amounts exchanged by the parties. The amount exchanged is determined by reference to the notional amount and the other terms of the individual interest rate swap agreements.
The following tables present the notional amount and fair values of interest rate derivative positions:
| At December 31, 2025 | |||||||||||||||||||||
| Asset derivatives | Liability derivatives | ||||||||||||||||||||
|
(In thousands)
|
Statement of financial condition location |
Notional amount | Fair value |
Statement of financial condition location |
Notional amount | Fair value | |||||||||||||||
|
Interest rate derivatives
|
Other assets | $ | $ | Other liabilities | $ | $ | |||||||||||||||
|
Less cash collateral
|
Other liabilities | ( | ) | ||||||||||||||||||
|
Total after netting
|
$ | $ | |||||||||||||||||||
| At June 30, 2025 | |||||||||||||||||||||
| Asset derivatives | Liability derivatives | ||||||||||||||||||||
|
(In thousands)
|
Statement of
financial condition location |
Notional amount | Fair value |
Statement of financial condition location |
Notional amount | Fair value | |||||||||||||||
|
Interest rate derivatives
|
Other assets
| $ | $ |
Other liabilities
|
$ | $ | |||||||||||||||
|
Less cash collateral
|
Other liabilities
|
( | ) | ||||||||||||||||||
|
Total after netting
|
$ | $ | |||||||||||||||||||
Risk Participation Agreements
Risk participation agreements (“RPAs”) are guarantees issued by the Company to other parties for a fee, whereby the Company agrees to participate in the credit risk of a derivative customer of the other party. Under the terms of these agreements, the “participating bank” receives a fee from the “lead bank” in exchange for the guarantee of reimbursement if the customer defaults on an interest rate swap. The interest rate swap is transacted such that any and all exchanges of interest payments (favorable and unfavorable) are made between the lead bank and the customer. In the event that an early termination of the swap occurs and the customer is unable to make a required close out payment, the participating bank assumes that obligation and is required to make this payment.
24
Index
RPAs in which the Company acts as the lead bank are referred to as “participations-out,” in reference to the credit risk associated with the customer derivatives being transferred out of the Company. Participations-out generally occur concurrently with the sale of new customer derivatives. The RPAs participations-out are spread out over three financial institution counterparties and terms range between three to seven years . The Company’s credit exposure transferred out was $413,000 and $506,000 as of December 31, 2025 and June 30, 2025, respectively. The Company transferred out RPAs with a notional amount of $22.5 million and $18.9 million as of December 31, 2025 and June 30, 2025, respectively.
RPAs where the Company acts as the participating bank are referred to as “participations-in,” in reference to the credit risk associated with the counterparty’s derivatives being assumed by the Company. The Company’s maximum credit exposure is based on its proportionate share of the settlement amount of the referenced interest rate swap. Settlement amounts are generally calculated based on the fair value of the swap plus outstanding accrued interest receivables from the customer. The RPAs participations-ins are spread out over five financial institution counterparties and terms range between one to eleven years . The credit exposure associated with risk participations-ins was $893,000 and $1.0 million as of December 31, 2025 and June 30, 2025, respectively. The Company held RPAs with a notional amount of $143.7 million and $130.9 million as of December 31, 2025 and June 30, 2025, respectively.
(7)
Earnings Per Share
Basic earnings per share (“EPS”) is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted EPS is computed in a manner similar to that of basic EPS except that the weighted-average number of common shares outstanding is increased to include the number of incremental common shares that would have been outstanding under the treasury stock method if all potentially dilutive common shares (such as stock options) issued became vested during the period. Unallocated common shares held by the ESOP are not included in the weighted-average number of common shares outstanding for either the basic or diluted EPS calculations. There were no
|
|
For the three months ended December 31,
|
|
For the six months ended December 31,
| |||||||||||||
|
2025
|
2024
|
2025
|
2024
| |||||||||||||
|
Net Income
|
$ | $ | $ | $ | ||||||||||||
|
Weighted average shares - basic
|
||||||||||||||||
|
Weighted average shares - diluted
|
||||||||||||||||
|
Earnings per share - basic
|
$ | $ | $ | $ | ||||||||||||
|
Earnings per share - diluted
|
$ | $ | $ | $ | ||||||||||||
(8)
Dividends
On October 22, 2025 , the Company announced that its Board of Directors has approved a quarterly cash dividend of $0.10 per share on the Company’s common stock. The dividend reflects an annual cash dividend rate of $0.40 per share, which is the same rate as the dividend declared during the previous quarter. The dividend was payable to stockholders of record as of November 14, 2025 , and was paid on November 28, 2025 . Greene County Bancorp, MHC waived its right to receive this dividend.
(9)
Employee Benefit Plans
Defined Benefit Plan
The Bank maintains a single-employer defined benefit pension plan (the “Pension Plan”). Effective January 1, 2006, the Board of Directors of the Bank resolved to exclude from membership in the Pension Plan employees hired on or after January 1, 2006 and elected to cease additional benefit accruals to existing Pension Plan participants effective July 1, 2006. Substantially all Bank employees who were hired before January 1, 2006, and attained the age of 21 are covered by the Pension Plan. Under the Pension Plan, retirement benefits are primarily a function of both years of service and level of compensation, at July 1, 2006. The Pension Plan is frozen.
On September 16, 2025, the Board of Directors approved the termination of the Pension Plan effective as of September 30, 2025. Pension Plan assets are sufficient to cover the estimated Pension Plan obligation as of period end. During the quarter ended December 31, 2025, the Company initiated the Pension Plan termination process and partially settled benefit obligations, recognizing a settlement charge of $199,000 . The charge is included in other expenses in the accompanying consolidated statements of income.
25
Index
Information regarding the Pension Plan at period end are as follows:
| (In thousands) | ||||||||
| Change in projected benefit obligation: | December 31, 2025 | June 30, 2025 | ||||||
| Benefit obligation at beginning of period | $ | $ | ||||||
| Interest cost | ||||||||
| Actuarial loss | ( | ) | ||||||
| Benefits paid | ( | ) | ( | ) | ||||
| Benefit obligation at end of period | ||||||||
| Change in fair value of plan assets: | ||||||||
| Fair value of plan assets at beginning of period | ||||||||
| Actual return on plan assets | ||||||||
| Employer contributions | ||||||||
| Benefits paid | ( | ) | ( | ) | ||||
| Fair value of plan assets at end of period | ||||||||
| Under (Over) funded status at end of period included in other liabilities | $ | $ | ( | ) |
The components of net periodic pension cost related to the Pension Plan during the three and six months ended December 31, 2025 and 2024 were as follows:
| For the three months ended December 31, | ||||||||
| (In thousands) | 2025 | 2024 | ||||||
| Interest cost | $ | $ | ||||||
| Expected return on plan assets | ) | ) | ||||||
| Amortization of net loss | ||||||||
| Effect of settlement | ||||||||
| Net periodic pension expense | $ | $ | ||||||
| For the six months ended December 31, | ||||||||
| (In thousands) | 2025 | 2024 | ||||||
| Interest cost | $ | $ | ||||||
| Expected return on plan assets | ) | ) | ||||||
| Amortization of net loss | ||||||||
| Effect of settlement | ||||||||
| Net periodic pension expense | $ | $ | ||||||
The accumulated benefit obligation for the pension plan was $4.0 million and $4.1 million at December 31, 2025 and June 30, 2025, respectively.
Changes in plan assets and benefit obligations recognized in other comprehensive income during the three and six months ended December 31, 2025 consisted of the following:
| (In thousands) |
Three months ended December 31, 2025 |
Six months ended December 31, 2025 | ||||||
| Actuarial loss on plan assets and benefit obligations | $ | ( | ) | $ | ( | ) | ||
| Deferred tax expense | ||||||||
| Net change in plan assets and benefit obligations recognized in other comprehensive income | $ | ( | ) | $ | ( | ) |
For the three and six months ended December 31, 2024, there were no changes in plan assets and benefit obligations recognized in other comprehensive income.
26
Index
Amounts
recognized in the consolidated statements of financial condition related to our
pension plan for the period ended December 31, 2025 and June 30, 2025 are as
follows:
|
(In thousands)
|
||||||||
|
Other liabilities:
|
December 31, 2025 | June 30, 2025 | ||||||
|
Projected benefit obligation in deficit (surplus) of fair value of pension plan
|
$ | $ | ( | ) | ||||
|
Accumulated other comprehensive loss, net of taxes:
|
||||||||
|
Net losses and past service liability
|
$ | ( | ) | $ | ( | ) | ||
The principal actuarial assumptions used at December 31, 2025 and June 30, 2025 was as follows were as follows:
| Projected benefit obligation: | December 31, 2025 | June 30, 2025 | ||||||
| Discount rate | % | % | ||||||
| Net periodic pension expense: | ||||||||
| Amortization period, in years | ||||||||
| Discount rate | % | % | ||||||
| Expected long-term rate of return on plan assets | % | % |
The discount rate used in the measurement of the Bank’s pension obligation is based on the FTSE Pension Discount Curve and Liability index based on expected benefit payments of the pension plan. The discount rates are evaluated at each measurement date to give effect to changes in the general interest rates. The expected long-term rate of return on plan assets reflects the average rate of earnings expected on the funds invested or to be invested to provide for the benefits included in the projected benefit obligation. The selected rate considers the historical and expected future investment trends of the present and expected assets in the plan. Since this is a frozen plan, the compensation rate is zero percent.
The weighted average asset allocation and fair value of our pension plan assets at December 31, 2025 and June 30, 2025 was as follows:
| December 31, 2025 | June 30, 2025 | |||||||||||||||
|
(Dollars in thousands)
|
Fair Value
|
Fair Value | ||||||||||||||
|
Money market
|
$ | % | $ | % | ||||||||||||
|
Mutual funds – fixed income
|
||||||||||||||||
|
Total plan assets
|
$ | % | $ | % | ||||||||||||
The fair value of assets within the pension plan was determined utilizing a quoted price in active markets at the measurement date. As such, these assets are classified as Level 1 within the “Fair Value Measurement” hierarchy.
The target allocation for investment in mutual funds is 100.0 %, consisting of short-term and intermediate-term fixed income bond funds. This allocation is consistent with the Company’s goal of preserving capital while achieving investment results that will contribute to the proper funding of pension obligations and cash flow requirements.
SERP
The Board of Directors of the Bank of Greene County adopted The Bank of Greene County Supplemental Executive Retirement Plan (the “SERP”), effective as of July 1, 2010. The SERP benefits certain key senior executives of the Bank who have been selected by the Board to participate. The SERP is intended to provide a benefit from the Bank upon vested retirement, death or disability or voluntary or involuntary termination of service (other than “for cause”). The SERP is more fully described in Note 9, Employee Benefits Plans of the consolidated financial statements presented in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025.
The net periodic pension costs related to the SERP for the three and six months ended December 31, 2025 was $571,000 , and $1.1 million, respectively, consisting primarily of service and interest costs, included within salaries and benefits expense on the consolidated statements of income. The total liability for the SERP was $19.1 million at December 31, 2025, and $17.6 million at June 30, 2025, and is included in accrued expenses and other liabilities on the consolidated statements of financial condition. The total liability for the SERP includes both accumulated net periodic pension costs and participant contributions.
27
Index
(10)
Stock-Based Compensation
Phantom Stock Option Plan and Long-term Incentive Plan
The Greene County Bancorp, Inc. 2011 Phantom Stock Option and Long-term Incentive Plan (the “Plan”) was adopted effective July 1, 2011, to promote the long-term financial success of the Company and its subsidiaries by providing a means to attract, retain and reward individuals who contribute to such success and to further align their interests with those of the Company’s shareholders. The Plan is intended to provide benefits to employees and directors of the Company or any subsidiary as designated by the Compensation Committee of the Board of Directors of the Company. A phantom stock option represents the right to receive a cash payment on the date the award vests. The Plan is more fully described in Note 10, Stock-Based Compensation of the consolidated financial statements presented in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025.
A summary of the Company’s phantom stock option activity and related information for the Plan for the three and six months ended December 31, 2025 and 2024 were as follows:
| Three months ended December 31, | Six months ended December 31, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
|
Number of options outstanding, beginning of period
|
||||||||||||||||
|
Options granted
|
||||||||||||||||
|
Options forfeited
|
( | ) | ( | ) | ||||||||||||
|
Options paid in cash upon vesting
|
( | ) | ( | ) | ( | ) | ( | ) | ||||||||
|
Number of options outstanding, end of period
|
||||||||||||||||
|
| Three months ended December 31, |
|
Six months ended December 31,
| |||||||||||||
|
(In thousands)
|
2025
|
2024
|
2025
|
2024
| ||||||||||||
|
Cash paid out on options vested
|
$ | $ | $ | $ | ||||||||||||
|
Compensation expense recognized
|
$ | $ | $ | $ | ||||||||||||
The total liability for the long-term incentive plan was $2.9 million and $4.4 million at December 31, 2025 and June 30, 2025, respectively, and is included in accrued expenses and other liabilities on the consolidated statements of financial condition.
(11)
Accumulated Other Comprehensive Loss
The components of accumulated other comprehensive loss are presented as follows:
Activity for the three months ended December 31, 2025 and 2024
|
(In thousands)
|
Unrealized
losses on securities available-for-sale |
Pension
benefits |
Total
| |||||||||
|
Balance – September 30, 2025
|
$ | ( | ) | $ | ( | ) | $ | ( | ) | |||
|
Other comprehensive income (loss) before reclassification
|
( | ) | ||||||||||
|
Reclassification adjustment for loss on sale of securities available-for-sale realized in net income, net
|
||||||||||||
|
Amortization of pension actuarial losses recognized in other expense, net
|
||||||||||||
|
Other comprehensive income (loss) for the three months ended December 31, 2025
|
( | ) | ||||||||||
|
Balance – December 31, 2025
|
$ | ( | ) | $ | ( | ) | $ | ( | ) | |||
|
Balance – September 30, 2024
|
$ | ( | ) | $ | ( | ) | $ | ( | ) | |||
|
Other comprehensive loss before reclassification
|
( | ) | ( | ) | ||||||||
|
Other comprehensive loss for the three months ended December 31, 2024
|
( | ) | ( | ) | ||||||||
|
Balance – December 31, 2024
|
$ | ( | ) | $ | ( | ) | $ | ( | ) |
28
Index
Activity for the six months ended December 31, 2025 and 2024
|
(In thousands)
|
Unrealized
losses on securities available-for-sale |
Pension
benefits |
Total
| |||||||||
|
Balance – June 30, 2025
|
$ | ( | ) | $ | ( | ) | $ | ( | ) | |||
|
Other comprehensive income (loss) before reclassification
|
( | ) | ||||||||||
|
Reclassification adjustment for loss on sale of securities available-for-sale realized in net income, net
|
||||||||||||
|
Amortization of pension actuarial losses recognized in other expense, net
|
||||||||||||
|
Other comprehensive income (loss) for the six months ended December 31, 2025
|
( | ) | ||||||||||
|
Balance – December 31, 2025
|
$ | ( | ) | $ | ( | ) | $ | ( | ) | |||
|
Balance – June 30, 2024
|
$ | ( | ) | $ | ( | ) | $ | ( | ) | |||
|
Other comprehensive income before reclassification
|
||||||||||||
|
Other comprehensive income for the six months ended December 31, 2024
|
||||||||||||
|
Balance – December 31, 2024
|
$ | ( | ) | $ | ( | ) | $ | ( | ) |
(12)
Operating leases
The Company leases certain branch properties under long-term operating lease agreements. The Company’s operating lease agreements contain non-lease components, which are generally accounted for separately. The Company’s lease agreements do not contain any residual value guarantee.
The following includes quantitative data related to the Company’s operating leases at December 31, 2025 and June 30, 2025, and for the three and six months ended December 31, 2025 and 2024:
|
(In thousands)
|
||||||||
|
Operating lease amounts:
|
December 31, 2025
|
June 30, 2025
| ||||||
|
Right-of-use assets
|
$ | $ | ||||||
|
Lease liabilities
|
$ | $ |
|
For the three months ended
December 31,
|
||||||||
|
(In thousands)
|
2025
|
2024
| ||||||
|
Other information:
|
||||||||
|
Operating outgoing cash flows from operating leases
|
$ | $ | ||||||
|
Lease costs:
|
||||||||
|
Operating lease cost
|
$ | $ | ||||||
|
Variable lease cost
|
$ | $ | ||||||
|
For the six months ended
December 31,
|
||||||||
|
(In thousands)
|
2025
|
2024
| ||||||
|
Other information:
|
||||||||
|
Operating outgoing cash flows from operating leases
|
$ | $ | ||||||
|
Right-of-use assets obtained in exchange for new operating lease liabilities
|
||||||||
|
Lease costs:
|
||||||||
|
Operating lease cost
|
$ | $ | ||||||
|
Variable lease cost
|
$ | $ | ||||||
29
Index
The following is a schedule by year of the undiscounted cash flows of the operating lease liabilities, excluding common area maintenance charges and real estate taxes as of December 31, 2025:
| (In thousands, except weighted-average information) | ||||
| Within the twelve months ended December 31, | ||||
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| Total undiscounted cash flow | ||||
| Less net present value adjustment | ( | ) | ||
| Lease liability | $ | |||
| Weighted-average remaining lease term (years) | ||||
| Weighted-average discount rate | % |
Right-of-use assets are included in , and lease liabilities are included in within the Company’s consolidated statements of financial condition.
(13)
Commitments and Contingent Liabilities
Credit-Related Financial Instruments
In the normal course of business, the Company offers financial instruments with off-balance sheet risk to meet the financing needs of its customers. These transactions include commitments to extend credit, standby letters of credit, and lines of credit, which involve, to varying degrees, elements of credit risk, which are not reflected in the accompanying consolidated financial statements.
The Company’s unfunded loan commitments and unused lines of credit are as follows at December 31, 2025 and June 30, 2025:
|
(In thousands)
|
December 31, 2025 | June 30, 2025 | ||||||
|
Unfunded loan commitments
|
$ | $ | ||||||
|
Unused lines of credit
|
||||||||
|
Standby letters of credit
|
||||||||
|
Total credit-related financial instruments with off-balance sheet risk
|
$ | $ |
The Company enters into contractual commitments to extend credit to its customers in the form of loan commitments and lines of credit, generally with fixed expiration dates and other termination clauses, and may require payment of a fee. Substantially all of the Company's commitments to extend credit are contingent upon its customers maintaining specific credit standards at the time of loan funding and are often secured by real estate collateral. Since the majority of the Company's commitments typically expire without being funded, the total contractual amount does not necessarily represent the Company's future payment requirements.
The Company evaluates each customer’s credit worthiness on a case-by-case basis. The amount of collateral, if any, required upon an extension of credit is based on management’s evaluation of customer credit. Commitments to extend mortgage credit are primarily collateralized by first liens on real estate. Collateral on extensions of commercial lines of credit vary but may include accounts receivable, inventory, property, plant and equipment, and income producing commercial property.
Allowance for Credit Losses on Unfunded Commitments
The Company estimates expected credit losses over the contractual period in which the Company has exposure to a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. The allowance for credit losses on unfunded commitments exposure is recognized in other liabilities and is adjusted through a provision expense in other noninterest expense. At December 31, 2025, the allowance for credit losses on unfunded commitments totaled $1.5 million as compared to $1.8 million at June 30, 2025.
30
Index
(14)
Variable Interest Entities
Solar Tax Credit Investments
The Company makes non-marketable equity investments in entities that sponsor solar development projects that qualify for the Solar Tax Credit Program. The purpose of these investments is to assist the Company in meeting its responsibilities under the Community Reinvestment Act (“CRA”), and to provide a return, primarily through the realization of tax benefits. The Company does not have controlling interest and is not the primary beneficiary for the solar tax credit investments, therefore the entity is not consolidated. The Company has determined that it is not the primary beneficiary due to its inability to direct activities that most significantly impact economic performance. The Company applies the proportional amortization method to subsequently measure its investment in solar tax credit projects.
The following table summarizes the Company’s solar tax credit investments and related unfunded commitments:
|
(In thousands)
|
December 31, 2025
|
June 30, 2025
| ||||||
|
Gross investment in solar tax credit investments
|
$ | $ | ||||||
|
Accumulated amortization
|
( | ) | ( | ) | ||||
|
Net investment in solar tax credit investments
|
$ | $ | ||||||
|
Unfunded commitments for solar tax credit investments
|
$ | $ |
The aggregate carrying value of the Company’s solar tax credit investments is included in accrued interest receivable, and prepaid expenses and other assets within the Company’s consolidated statements of financial condition and represents the Company’s maximum exposure to loss.
(15)
Subsequent events
On January 21, 2026 , the Board of Directors announced a cash dividend for the quarter ended December 31, 2025, of $0.10 per share on the Company’s common stock. The dividend reflects an annual cash dividend rate of $0.40 per share, which was the same rate as the dividend declared during the previous quarter. The dividend will be payable to stockholders of record as of February 13, 2026 , and is expected to be paid on February 27, 2026 . Greene County Bancorp, MHC has historically waived its right to receive dividends from the Company however, for purposes of cash flow, Greene County Bancorp, MHC does not intend to waive its receipt of these dividends to be paid by the Company for the quarter ended December 31, 2025.
Management has reviewed events from the date of the unaudited consolidated financial statements, and accompanying notes thereto, through the date of issuance, and determined that no subsequent events occurred requiring adjustment to or disclosure in these unaudited consolidated financial statements.
31
Index
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operation
Overview of the Company’s Activities and Risks
The Company’s results of operations depend primarily on its net interest income, which is the difference between the income earned on the Company’s loan and securities portfolios and its cost of funds, consisting of the interest paid on deposits and borrowings. Results of operations are also affected by the Company’s provision for credit losses, noninterest income and noninterest expense. Noninterest income consists primarily of fees and service charges. The Company’s noninterest expense consists principally of compensation and employee benefits, occupancy, equipment and data processing, and other operating expenses. Results of operations are also significantly affected by general economic and competitive conditions, changes in interest rates, as well as government policies and actions of regulatory authorities. Additionally, future changes in applicable law, regulations or government policies may materially affect the Company.
To operate successfully, the Company must manage various types of risk, including but not limited to, market or interest rate risk, credit risk, transaction risk, liquidity risk, security risk, strategic risk, reputation risk and compliance risk.
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.
Interest rate risk is the most significant market risk affecting the Company since the majority of the Company’s assets and liabilities are sensitive to changes in interest rates. The Company’s primary sources of funds are deposits and proceeds from principal and interest payments on loans, mortgage-backed securities and debt securities. While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit outflows, mortgage prepayments, and lending activities are greatly influenced by general interest rates, economic conditions and competition.
Credit risk is the risk to the Company’s earnings and shareholders’ equity that results from customers to whom loans have been made and to the issuers of debt securities in which the Company has invested, failing to repay their obligations. The magnitude of risk depends on the capacity and willingness of borrowers and debt issuers to repay and the sufficiency of the value of collateral obtained to secure the loans made or investments purchased.
Liquidity risk is the risk the Company may not be able to satisfy current or future financial commitments or may become unduly reliant on alternate funding sources. The Company’s objective is to fund balance sheet growth while meeting the cash flow requirements of depositors. Management is responsible for liquidity monitoring and has available different sources of liquidity as requirements and demands change. These demands include loan growth and repayments, security purchases and maturities, deposit inflows and outflows, and payments on borrowings. Management continually monitors trends to identify patterns that might improve the predictability and timing of the Company’s liquidity position.
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.
Special Note Regarding Forward-Looking Statements
This quarterly report contains forward-looking statements. Greene County Bancorp, Inc. desires to take advantage of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 and is including this statement for the express purpose of availing itself of the protections of the safe harbor with respect to all such forward-looking statements. These forward-looking statements, which are included in this Management’s Discussion and Analysis and elsewhere in this quarterly report, describe future plans or strategies and include Greene County Bancorp, Inc.’s expectations of future financial results. The words “believe,” “may,” “will,” “intend,” “expect,” “anticipate,” “project,” and similar expressions identify forward-looking statements. Greene County Bancorp, Inc.’s ability to predict results or the effect of future plans or strategies or qualitative or quantitative changes based on market risk exposure is inherently uncertain. Factors that could affect actual results include but are not limited to:
(a)
changes in general market interest rates,
(b)
changes in general economic conditions,
(c)
credit risk,
(d)
continued period of high inflation could adversely impact customers,
(e)
cybersecurity risks,
(f)
bank failures,
32
Index
(g)
changes in general business and economic trends,
(h)
legislative and regulatory changes,
(i)
monetary and fiscal policies of the U.S. Treasury and the Federal Reserve,
(j)
changes in the quality or composition of Greene County Bancorp, Inc.’s loan and investment portfolios,
(k)
deposit flows,
(l)
competition, and
(m)
demand for financial services in Greene County Bancorp, Inc.’s market area.
These factors should be considered in evaluating the forward-looking statements, and undue reliance should not be placed on such statements, since results in future periods may differ materially from those currently expected because of various risks and uncertainties.
Non-GAAP Financial Measures
Regulation G, a rule adopted by the Securities and Exchange Commission (“SEC”), applies to certain SEC filings, including earnings releases, made by registered companies that contain “non-GAAP financial measures.” “GAAP” is generally accepted accounting principles in the United States of America. Under Regulation G, companies making public disclosures containing non-GAAP financial measures must also disclose, along with each non-GAAP financial measure, certain additional information, including a reconciliation of the non-GAAP financial measure to the closest comparable GAAP financial measure (if a comparable GAAP measure exists) and a statement of the Company’s reasons for utilizing the non-GAAP financial measure as part of its financial disclosures. The SEC has exempted from the definition of “non-GAAP financial measures” certain commonly used financial measures that are not based on GAAP. When these exempted measures are included in public disclosures, supplemental information is not required. Financial institutions like the Company and its subsidiary banks are subject to an array of bank regulatory capital measures that are financial in nature but are not based on GAAP and are not easily reconcilable to the closest comparable GAAP financial measures, even in those cases where a comparable measure exists. The Company follows industry practice in disclosing its financial condition under these various regulatory capital measures, including period-end regulatory capital ratios for itself and its subsidiary banks, in its periodic reports filed with the SEC, and it does so without compliance with Regulation G, on the widely-shared assumption that the SEC regards such non-GAAP measures to be exempt from Regulation G. The Company uses in this Report additional non-GAAP financial measures that are commonly utilized by financial institutions and have not been specifically exempted by the SEC from Regulation G. The Company provides, as supplemental information, such non-GAAP measures included in this Report as described immediately below.
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.
Critical Accounting Policies
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.
33
Index
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.
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.
The Company’s policies on the CECL method for allowance for credit losses are disclosed in Note 1, Summary of significant accounting policies with the audited consolidated financial statements and notes presented in the Annual Report on Form 10-K for the fiscal year ended June 30, 2025.
Comparison of Financial Condition at December 31, 2025 and June 30, 2025
ASSETS
Total assets of the Company were $3.1 billion at December 31, 2025 and $3.0 billion at June 30, 2025, an increase of $106.4 million, or 3.5%. Securities available-for-sale and held-to-maturity increased $89.7 million, or 7.9%, to $1.2 billion at December 31, 2025 as compared to $1.1 billion at June 30, 2025. Net loans receivable increased $58.6 million, or 3.6%, to $1.7 billion at December 31, 2025 as compared to $1.6 billion at June 30, 2025.
CASH AND CASH EQUIVALENTS
Total cash and cash equivalents for the Company were $124.1 million at December 31, 2025 and $183.1 million at June 30, 2025, a decrease of $59.0 million, or 32.2%. 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 December 31, 2025 and June 30, 2025.
SECURITIES
Securities available-for-sale and held-to-maturity increased $89.7 million, or 7.9%, to $1.2 billion at December 31, 2025 as compared to $1.1 billion at June 30, 2025. Securities purchases totaled $459.6 million during the six months ended December 31, 2025, and consisted primarily of $219.3 million of U.S. Treasuries, $189.5 million of state and political subdivision securities, $37.9 million of mortgage-backed securities, $9.0 million of corporate debt securities, and $3.9 million of collateralized mortgage obligations. Principal pay-downs and maturities during the six months ended December 31, 2025 amounted to $364.9 million, primarily consisting of $180.0 million of U.S. Treasuries, $153.4 million of state and political subdivision securities, $21.3 million of mortgage-backed securities, $8.3 million of corporate debt securities, and $1.9 million of collateralized mortgage obligations. Sales during the quarter ended December 31, 2025, amounted to $5.4 million of Federal Agency securities and $ 2.9 million of U.S. Treasury securities. At December 31, 2025, 57.8% 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 32.4% of our securities portfolio at December 31, 2025, do not contain sub-prime loans and are not exposed to the credit risk associated with such lending.
34
Index
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 December 31, 2025 and June 30, 2025. Refer to the financial statements Note 3, Securities for the complete fair value of securities.
|
December 31, 2025
|
June 30, 2025
|
|||||||||||||||
|
(Dollars in thousands)
|
Balance
|
Percentage
of portfolio |
Balance
|
Percentage
of portfolio | ||||||||||||
|
Securities available-for-sale:
|
||||||||||||||||
|
U.S. Treasury securities
|
$ | 47,505 | 3.9 | % | $ | 10,453 | 0.9 | % | ||||||||
|
U.S. government sponsored enterprises
|
6,400 | 0.5 | 11,644 | 1.0 | ||||||||||||
|
State and political subdivisions
|
227,450 | 18.6 | 209,844 | 18.5 | ||||||||||||
|
Mortgage-backed securities-residential
|
36,144 | 3.0 | 31,587 | 2.8 | ||||||||||||
|
Mortgage-backed securities-multifamily
|
75,911 | 6.2 | 74,597 | 6.6 | ||||||||||||
|
Corporate debt securities
|
18,180 | 1.5 | 17,937 | 1.6 | ||||||||||||
|
Total securities available-for-sale
|
411,590 | 33.7 | 356,062 | 31.4 | ||||||||||||
|
Securities held-to-maturity:
|
||||||||||||||||
|
U.S. Treasury securities
|
15,877 | 1.3 | 15,850 | 1.4 | ||||||||||||
|
State and political subdivisions
|
479,390 | 39.2 | 460,919 | 40.7 | ||||||||||||
|
Mortgage-backed securities-residential
|
159,926 | 13.1 | 138,468 | 12.2 | ||||||||||||
|
Mortgage-backed securities-multifamily
|
123,656 | 10.1 | 130,119 | 11.6 | ||||||||||||
|
Corporate debt securities
|
31,419 | 2.6 | 30,763 | 2.7 | ||||||||||||
|
Other securities
|
26 | 0.0 | 28 | 0.0 | ||||||||||||
|
Total securities held-to-maturity
|
810,294 | 66.3 | 776,147 | 68.6 | ||||||||||||
|
Total securities (at carrying value)
|
$ | 1,221,884 | 100.0 | % | $ | 1,132,209 | 100.0 | % | ||||||||
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.
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 $616,000 and $548,000 at December 31, 2025 and June 30, 2025, respectively.
LOANS
Net loans receivable increased $58.6 million, or 3.6%, to $1.7 billion at December 31, 2025 as compared to $1.6 billion at June 30, 2025. Loan growth experienced during the six months ended December 31, 2025, consisted primarily of $43.5 million in commercial real estate loans, $12.9 million in commercial loans, and $6.5 million in home equity loans. The allowance for credit losses on loans increased $1.2 million, or 5.9%, to $21.3 million at December 31, 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. 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 its 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.
35
Index
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.
| December 31, 2025 | June 30, 2025 | |||||||||||||||
|
(Dollars in thousands)
|
Balance |
Percentage of portfolio | Balance |
Percentage of portfolio | ||||||||||||
|
Residential real estate
|
$ | 414,829 | 24.6 | % | $ | 417,719 | 25.7 | % | ||||||||
|
Commercial real estate
|
1,097,997 | 65.1 | 1,054,504 | 64.8 | ||||||||||||
|
Home equity
|
40,574 | 2.4 | 34,103 | 2.1 | ||||||||||||
| Consumer | 4,106 | 0.2 | 4,311 | 0.3 | ||||||||||||
|
Commercial
|
129,678 | 7.7 | 116,769 | 7.1 | ||||||||||||
|
Total gross loans(1)(2)
|
1,687,184 | 100.0 | % | 1,627,406 | 100.0 | % | ||||||||||
|
Allowance for credit losses on loans
|
(21,334 | ) | (20,146 | ) | ||||||||||||
|
Total net loans
|
$ | 1,665,850 | $ | 1,607,260 | ||||||||||||
(1)
Loan balances include net deferred fees/(costs) of ($483,000) and ($567,000) at December 31, 2025 and at June 30, 2025, respectively.
(2)
Loan balances exclude accrued interest receivable of $7.7 million and $7.0 million at December 31, 2025 and at June 30, 2025, respectively, which is included in accrued interest receivable in the consolidated statement of financial condition.
Commercial and commercial real estate loans
classified as substandard and special mention totaled $36.8 million at December
31, 2025, and $39.4 million at June 30, 2025, a decrease of $2.6 million. The
decrease in the loans classified during the period ended December 31, 2025, was
primarily due to upgrades of commercial real estate loans that were considered
to be performing and paying in accordance with the terms of their loan
agreements and commercial real estate loans that were paid off during the
period. Of the loans classified as substandard or special mention, $36.1
million were performing at December 31, 2025. There were no loans classified as
doubtful or loss at December 31, 2025 or June 30, 2025.
The following table presents commercial real estate loans by concentrations:
|
At December 31, 2025
|
||||||||
|
(Dollars in thousands)
|
Balance
|
Percentage of
total | ||||||
|
Owner occupied:
|
||||||||
|
Warehouse
|
$ | 43,718 | 4.0 | % | ||||
|
Mixed use real estate
|
28,462 | 2.6 | ||||||
|
Office building
|
20,932 | 1.9 | ||||||
|
Retail
|
18,069 | 1.6 | ||||||
|
Firehouse
|
9,710 | 0.9 | ||||||
|
Other
|
44,356 | 4.0 | ||||||
|
Total owner occupied
|
165,247 | 15.0 | ||||||
|
Non-owner occupied:
|
||||||||
|
Multi-family
|
288,254 | 26.3 | ||||||
|
Retail plaza
|
135,495 | 12.3 | ||||||
|
Mixed use real estate
|
106,377 | 9.7 | ||||||
|
Office building
|
86,679 | 7.9 | ||||||
|
Construction
|
77,586 | 7.1 | ||||||
|
Motel/hotel
|
61,890 | 5.6 | ||||||
|
Warehouse
|
53,610 | 4.9 | ||||||
|
Other
|
122,750 | 11.2 | ||||||
|
Total non-owner occupied
|
932,750 | 85.0 | ||||||
|
Total commercial real estate
|
$ | 1,097,997 | 100.0 | % | ||||
Commercial real estate loans are the largest segment of the Company’s loan portfolio and are comprised of 85.0% in non-owner occupied loans and 15.0% 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 57.7%, and the Company’s owner occupied commercial real estate loans have a weighted average LTV of approximately 50.1%, as of December 31, 2025. The Company’s commercial real estate loans are primarily made within our market area in Greene, Columbia, Albany, Ulster, Rensselaer, and Saratoga 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.
36
Index
As of December 31, 2025, the Company’s largest commercial real estate concentration was non-owner occupied multi-family loans at $288.3 million, or 26.3% of total commercial real estate loans. Non-owner occupied multi-family loans provide much needed housing for the residents located in our market area and have historically performed well with strong credit metrics. As of December 31, 2025, the weighted average LTV was approximately 57.3% for the non-owner occupied multi-family loan segment.
As of December 31, 2025, non-owner occupied construction loans were $77.6 million, or 7.1% 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 $7.2 million of the Company’s construction exposure. Construction loans are primarily comprised of approximately 41.2% multi-family buildings, 23.6% mixed use real estate, 12.4% self-storage and 12.0% condominiums.
The Company’s outstanding balance of non-owner occupied commercial real estate office loans were $86.7 million, or 7.9% of total commercial real estate loans as of December 31, 2025. The office loans are primarily low-rise, non-metropolitan buildings, located within our geographic footprint. As of December 31, 2025, the weighted average LTV was approximately 59.0% for the non-owner occupied office loan segment.
ALLOWANCE FOR CREDIT LOSSES
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.
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.
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.
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.
The ACL on loans totaled $21.3 million at December 31, 2025, compared to $20.1 million at June 30, 2025. The ACL on loans to total loans receivable was 1.26% at December 31, 2025 compared to 1.24% at June 30, 2025. The increase in the ACL on loans from December 31, 2025 to June 30, 2025, was primarily attributable to an increase in loan volume and growth in securities held-to-maturity that require an allowance.
Net charge-offs on loans amounted to $140,000 and
$95,000 for the three months ended December 31, 2025 and 2024, respectively, an
increase of $45,000. Net charge-offs totaled $200,000 and $209,000 for the six
months ended December 31, 2025 and 2024, respectively. There were no material
charge-offs in any loan segment during the three and six months ended December
31, 2025.
At December 31, 2025, the allowance for credit losses on unfunded commitments totaled $1.5 million as compared to $1.8 million at June 30, 2025, a decrease of $319,000, or 18.0%. The decrease in the provision for the six months ended December 31, 2025, was primarily due to a decrease in the Company’s contractual obligation to extend credit.
37
Index
Non-accrual Loans and Non-performing Assets
Non-performing assets consist of non-accrual loans, loans over 90 days past due, and other real estate owned that has been acquired in partial or full satisfaction of the loan obligation or upon foreclosure, and non-performing securities.
Generally, management places loans on non-accrual status once the loans have become 90 days or more delinquent. A non-accrual loan is defined as a loan in which collectability is questionable and therefore interest on the loan will no longer be recognized on an accrual basis. A loan is not placed back on accrual status until the borrower has demonstrated the ability and willingness to make timely payments on the loan. A loan does not have to be 90 days delinquent in order to be classified as non-performing and may be placed on non-accrual when circumstances indicate that the borrower may be unable to meet the contractual principal or interest payments. The threshold for evaluating classified and non-performing loans specifically evaluated for individual credit loss is $250,000. Foreclosed real estate represents property acquired through foreclosure and is valued at the lower of the carrying amount or fair value, less any estimated disposal costs. The Company monitors loan modifications made to borrowers experiencing financial difficulty. As of December 31, 2025, three loans have been modified in the last 12 months with a total amortized basis of $2.8 million. As of December 31, 2024, there were four loans modified with a total amortized basis of $6.7 million.
Analysis of Non-accrual Loans and Non-performing Assets
|
(Dollars in thousands)
|
December 31, 2025
|
June 30, 2025
| ||||||
|
Non-accrual loans:
|
||||||||
|
Residential real estate
|
$ | 2,294 | $ | 2,265 | ||||
|
Commercial real estate
|
605 | 628 | ||||||
|
Home equity
|
216 | 30 | ||||||
|
Consumer
|
17 | 2 | ||||||
|
Commercial
|
129 | 135 | ||||||
|
Total non-accrual loans
|
$ | 3,261 | $ | 3,060 | ||||
|
Total non-performing assets
|
$ | 3,261 | $ | 3,060 | ||||
|
Non-accrual loans to total loans
|
0.20 | % | 0.19 | % | ||||
|
Non-performing loans to total loans
|
0.20 | % | 0.19 | % | ||||
|
Non-performing assets to total assets
|
0.10 | % | 0.10 | % | ||||
|
Allowance for credit losses on loans to non-performing loans
|
654.22 | % | 658.37 | % | ||||
|
Allowance for credit losses on loans to non-accrual loans
|
654.22 | % | 658.37 | % |
At December 31, 2025 and June 30, 2025, there were no loans delinquent greater than 90 days and accruing.
Non-performing assets amounted to $3.3 million and $3.1 million at December 31, 2025 and June 30, 2025, respectively. Loans on non-accrual status totaled $3.3 million at December 31, 2025, of which there were four residential real estate loans totaling $668,000 and one commercial real estate loans totaling $142,000 in the process of foreclosure. Included in non-accrual loans were $2.0 million of loans which were less than 90 days past due at December 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 $3.1 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.
DEPOSITS
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.
38
Index
Deposits totaled $2.6 billion at December 31, 2025 and June 30, 2025, respectively. The Company had $31.6 million and $51.6 million brokered deposits at December 31, 2025 and June 30, 2025, respectively. NOW deposits increased $48.1 million, or 2.5%, when comparing December 31, 2025 and June 30, 2025. Certificates of deposits decreased $22.2 million, or 9.7%, money market deposits decreased $16.1 million, or 15.7%, noninterest bearing deposits decreased $5.0 million, or 4.5%, and savings deposits decreased $3.6 million, or 1.4%, when comparing December 31, 2025 and June 30, 2025.
The following table summarizes deposits by major categories:
|
(Dollars in thousands)
|
December 31, 2025
|
Percentage
of portfolio |
June 30, 2025
|
Percentage
of portfolio | ||||||||||||
|
Noninterest-bearing deposits
|
$ | 105,171 | 4.0 | % | $ | 110,163 | 4.2 | % | ||||||||
|
Certificates of deposit
|
205,948 | 7.8 | 228,174 | 8.6 | ||||||||||||
|
Savings deposits
|
242,930 | 9.2 | 246,488 | 9.3 | ||||||||||||
|
Money market deposits
|
86,686 | 3.3 | 102,787 | 3.9 | ||||||||||||
|
NOW deposits
|
2,000,305 | 75.7 | 1,952,223 | 74.0 | ||||||||||||
|
Total deposits
|
$ | 2,641,040 | 100.0 | % | $ | 2,639,835 | 100.0 | % |
The following table summarizes deposits by depositor type:
|
(Dollars in thousands)
|
December 31, 2025
|
Percentage
of portfolio |
June 30, 2025
|
Percentage
of portfolio | ||||||||||||
|
Business deposits
|
$ | 511,930 | 19.4 | % | $ | 499,964 | 18.9 | % | ||||||||
|
Retail deposits
|
910,168 | 34.4 | 903,767 | 34.2 | ||||||||||||
|
Municipal deposits
|
1,187,377 | 45.0 | 1,184,514 | 44.9 | ||||||||||||
|
Brokered deposits
|
31,565 | 1.2 | 51,590 | 2.0 | ||||||||||||
|
Total deposits
|
$ | 2,641,040 | 100.0 | % | $ | 2,639,835 | 100.0 | % |
The Company’s deposit base and liquidity position continues to be strong, and the deposit base is well diversified across segments to meet the transactional and investment needs of our customers. Municipal deposits are primarily from local New York State government entities, such as counties, cities, villages and towns, as well as school districts and fire departments. There is a seasonal component to municipal deposits levels associated with annual tax collections and fiscal spending patterns. In general, municipal balances increase at the end of the first and third quarters of our fiscal year. Municipal deposits above the FDIC insured limit are required to be collateralized by irrevocable municipal letters of credits issued by the Federal Home Loan Bank, municipal bonds, US Treasuries or government agency securities. Additionally, the Company offers large retail, business and municipal customers the ability to enhance FDIC insurance coverage, by electing to participate their deposit balance into a national deposit network.
The Company has many long-standing relationships with municipal entities throughout its market areas and their deposits have provided a stable funding source for the Company. The Company has a separate municipal department for the retention, management, and monitoring of municipal relationships.
Uninsured deposits represents the portion of deposit accounts that exceed the FDIC insurance limit. The Company calculates its uninsured deposit balances based on the methodologies and assumptions used for regulatory reporting requirements, which includes affiliate deposits and collateralized deposits.
The following table summarizes total uninsured deposits based on the same methodologies and assumptions used for the Bank’s regulatory reporting:
|
(Dollars in thousands)
|
December 31, 2025
|
June 30, 2025
| ||||||
|
Estimated amount of uninsured for the Bank of Greene County
|
$ | 361,606 | $ | 388,060 | ||||
|
Estimated amount of uninsured for Greene County Commercial Bank(1)
|
1,092,354 | 1,049,268 | ||||||
|
Uninsured deposits, per regulatory requirements
|
$ | 1,453,960 | $ | 1,437,328 |
(1)
All of Greene County Commercial Bank deposits in excess of FDIC insurance limits are fully collateralized.
39
Index
The following table estimates uninsured deposits after certain exclusions:
|
(Dollars in thousands)
|
December 31, 2025 | June 30, 2025 | ||||||
|
Uninsured deposits, per regulatory requirements
|
$ | 1,453,960 | $ | 1,437,328 | ||||
|
Less: Affiliate deposits
|
(40,896 | ) | (59,018 | ) | ||||
|
Collateralized deposits
|
(1,092,354 | ) | (1,049,268 | ) | ||||
|
Uninsured deposits, after exclusions
|
$ | 320,710 | $ | 329,042 | ||||
|
Immediately available liquidity(1)
|
$ | 337,371 | $ | 422,398 | ||||
|
Uninsured deposits coverage
|
105.2 | % | 128.4 | % |
(1)
Reflects $124.1 million and $183.1 million of cash and cash equivalents, $194.9 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 December 31, 2025 and June 30, 2025, respectively.
Uninsured deposits after exclusions represent 12.1% and 12.5% of total deposits as of December 31, 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.
BORROWINGS
At December 31, 2025, the Bank had pledged approximately
$681.5 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 $429.0 million at December 31, 2025, of which there
were $180.0 million of overnight borrowings, $4.2 million long-term fixed rate
borrowings and $50.0 million irrevocable municipal letters of credit outstanding
at December 31, 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.
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 December 31, 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.
The Bank pledges securities and certificates of deposit as collateral at the Federal Reserve Bank discount window for overnight borrowings. At December 31, 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 December 31, 2025 and June 30, 2025.
The Bank has established unsecured lines of credit with Atlantic Community Bankers Bank for $15.0 million and three other financial institutions for $90.0 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 December 31, 2025 and June 30, 2025.
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 were callable on September 17, 2025 and had a floating interest rate of 8.99%. On October 1, 2025, the Company redeemed the entire outstanding principal amount of $20.0 million. The redemption was funded by cash on hand.
On September 15, 2021, the Company entered into SNPAs with 18 qualified institutional investors, issued at 3.00% Fixed-to-Floating Rate due September 15, 2031, in the aggregate principal amount of $30.0 million, carried net of issuance costs of $499,000 amortized over a period of 60 months. These notes are callable on September 15, 2026. At December 31, 2025, there were $29.9 million of these SNPAs outstanding, net of issuance costs.
40
Index
The sales of the SNPAs were made in a private placement to accredited investors under the exemption from registration provided under Securities and Exchange Commission Rule 506. The Notes are not registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
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.
At December 31, 2025, there were no other long-term borrowings and therefore, no scheduled maturities of long-term borrowings.
EQUITY
Shareholders’ equity increased to $258.3 million at December 31, 2025 as compared to $238.8 million at June 30, 2025, resulting primarily from net income of $19.2 million and a decrease in accumulated other comprehensive loss of $1.8 million, partially offset by dividends declared and paid of $1.6 million.
When market interest rates rise, the fair value of the fixed income bond portfolio will decrease, resulting in additional unrealized losses, and depending on the extent of the rise in interest rates, the increase in unrealized losses could be significant. The non-credit portion of unrealized losses are recorded to accumulated other comprehensive income (loss), a component of Shareholders' Equity. A significant increase in market rates may have a negative impact on book value per share. The Company's bond portfolio is expected to mature at par and therefore the unrealized losses in the portfolio that result from higher market interest rates will decrease as the bonds become closer to maturity. However, if the Company were required to sell investment securities with an unrealized loss for any reason, including liquidity needs, the unrealized loss would become realized and reduce both net income for the reported period and regulatory capital, which as currently reported, excludes unrealized losses on investment securities.
The
Federal Reserve has reduced the federal funds interest rate by 100 basis points
in the third and fourth quarters of 2024, and 75 basis points in the third and
fourth quarters of 2025, from the recent high of 5.25 percent. With the recent Federal
Reserve rate cuts, the long-term interest rates began to decrease. This
resulted in the fair values of the fixed income bond portfolio to increase and therefore
decreased the unrealized loss position as of December 31, 2025. Additionally,
the Company continued to purchase investment securities in the higher interest
rate environment, decreasing the unrealized loss position.
On September 17, 2019, the Board of Directors of the Company adopted a stock repurchase program. Under the repurchase program, the Company may repurchase up to 400,000 shares of its common stock. Repurchases are made at management’s discretion at prices management considers to be attractive and in the best interests of both the Company and its stockholders, subject to the availability of stock, general market conditions, the trading price of the stock, alternative uses for capital, and the Company’s financial performance. For the three and six months ended December 31, 2025, the Company did not repurchase any shares.
|
Selected Equity Data:
|
||||||||
| At December 31, 2025 | At June 30, 2025 | |||||||
|
Shareholders’ equity to total assets, at end of period
|
8.21 | % | 7.85 | % | ||||
|
Book value per share(1)
|
$ | 15.17 | $ | 14.03 | ||||
|
Closing market price of common stock
|
$ | 22.23 | $ | 22.22 | ||||
| For the six months ended December 31, | ||||||||
| 2025 | 2024 | |||||||
|
Average shareholders’ equity to average assets
|
8.23 | % | 7.71 | % | ||||
|
Dividend payout ratio(2)
|
17.70 | % | 22.22 | % | ||||
|
Actual dividends paid to net income(3)
|
8.17 | % | 22.33 | % | ||||
(1) Shareholders’ equity divided by outstanding shares.
(2) The dividend payout ratio has been calculated based on the dividends declared per share divided by basic earnings per share. No adjustments have been made for dividends waived by Greene County Bancorp, MHC (“MHC”), the owner of 54.1% of the Company’s shares outstanding.
(3) Dividends declared divided by net income. The MHC waived its right to receive dividends declared during the three months ended March 31, 2024, June 30, 2024, March 31, 2025, June 30, 2025, September 30, 2025, and December 31, 2025. Dividends declared during the three months ended September 30, 2024, and December 31, 2024, were paid to the MHC. The MHC’s ability to waive the receipt of dividends is dependent upon annual approval of its members as well as receiving the non-objection of the Federal Reserve Board.
41
Index
Comparison of Operating Results for the Three and Six Months Ended December 31, 2025 and 2024
Average Balance Sheet
The following table sets forth certain information relating to the Company for the three and six months ended December 31, 2025 and 2024. For the periods indicated, the total dollar amount of interest income from average interest-earning assets and the resultant yields, as well as the interest expense on average interest-bearing liabilities, are expressed in both dollars and rates. No tax equivalent adjustments made. Average balances were based on daily averages. Average loan balances include non-performing loans. The loan yields include net amortization of certain deferred fees and costs that are considered adjustments to yields.
| Three months ended December 31, | ||||||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||||||
|
(Dollars in thousands)
|
Average outstanding balance |
Interest earned / paid |
Average yield / rate |
Average outstanding balance |
Interest earned / paid |
Average yield / rate | ||||||||||||||||||
|
Interest-earning Assets:
|
||||||||||||||||||||||||
|
Loans receivable, net(1)
|
$ | 1,680,049 | $ | 22,413 | 5.34 | % | $ | 1,517,478 | $ | 19,480 | 5.13 | % | ||||||||||||
|
Securities non-taxable
|
682,463 | 5,422 | 3.18 | 657,173 | 4,943 | 3.01 | ||||||||||||||||||
|
Securities taxable
|
549,075 | 4,696 | 3.42 | 467,014 | 3,550 | 3.04 | ||||||||||||||||||
|
Interest-bearing bank balances and federal funds
|
82,301 | 910 | 4.42 | 112,245 | 1,397 | 4.98 | ||||||||||||||||||
|
FHLB stock
|
3,450 | 56 | 6.49 | 2,353 | 48 | 8.16 | ||||||||||||||||||
|
Total interest-earning assets
|
2,997,338 | 33,497 | 4.47 | % | 2,756,263 | 29,418 | 4.27 | % | ||||||||||||||||
|
Cash and due from banks
|
13,348 | 12,124 | ||||||||||||||||||||||
|
Allowance for credit losses on loans
|
(21,403 | ) | (19,861 | ) | ||||||||||||||||||||
|
Allowance for credit losses on securities held-to-maturity
|
(599 | ) | (465 | ) | ||||||||||||||||||||
|
Other noninterest-earning assets
|
113,064 | 102,531 | ||||||||||||||||||||||
|
Total assets
|
$ | 3,101,748 | $ | 2,850,592 | ||||||||||||||||||||
|
Interest-Bearing Liabilities:
|
||||||||||||||||||||||||
|
Savings and money market deposits
|
$ | 328,027 | $ | 350 | 0.43 | % | $ | 344,438 | $ | 368 | 0.43 | % | ||||||||||||
|
NOW deposits
|
2,106,237 | 11,778 | 2.24 | 1,903,899 | 12,637 | 2.65 | ||||||||||||||||||
|
Certificates of deposit
|
211,392 | 1,797 | 3.40 | 172,089 | 1,733 | 4.03 | ||||||||||||||||||
|
Borrowings
|
60,190 | 513 | 3.41 | 65,348 | 612 | 3.75 | ||||||||||||||||||
|
Total interest-bearing liabilities
|
2,705,846 | 14,438 | 2.13 | % | 2,485,774 | 15,350 | 2.47 | % | ||||||||||||||||
|
Noninterest-bearing deposits
|
108,946 | 117,809 | ||||||||||||||||||||||
|
Other noninterest-bearing liabilities
|
33,869 | 30,597 | ||||||||||||||||||||||
|
Shareholders' equity
|
253,087 | 216,412 | ||||||||||||||||||||||
|
Total liabilities and equity
|
$ | 3,101,748 | $ | 2,850,592 | ||||||||||||||||||||
|
Net interest income
|
$ | 19,059 | $ | 14,068 | ||||||||||||||||||||
|
Net interest rate spread
|
2.34 | % | 1.80 | % | ||||||||||||||||||||
|
Net earnings assets
|
$ | 291,492 | $ | 270,489 | ||||||||||||||||||||
|
Net interest margin
|
2.54 | % | 2.04 | % | ||||||||||||||||||||
|
Average interest-earning assets to average interest-bearing liabilities
|
110.77 | % | 110.88 | % | ||||||||||||||||||||
(1)
Calculated net of deferred loan fees and costs, loan discounts, and loans in process.
42
Index
| Six months ended December 31, | ||||||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||||||
|
(Dollars in thousands
|
Average outstanding balance |
Interest earned / paid |
Average yield / rate |
Average outstanding balance |
Interest earned / paid |
Average yield / rate | ||||||||||||||||||
|
Interest-earning Assets:
|
||||||||||||||||||||||||
|
Loans receivable, net(1)
|
$ | 1,663,954 | $ | 44,386 | 5.34 | % | $ | 1,503,778 | $ | 38,723 | 5.15 | % | ||||||||||||
|
Securities non-taxable
|
675,992 | 10,688 | 3.16 | 633,256 | 9,411 | 2.97 | ||||||||||||||||||
|
Securities taxable
|
509,835 | 8,565 | 3.36 | 454,929 | 6,864 | 3.02 | ||||||||||||||||||
|
Interest-bearing bank balances and federal funds
|
60,389 | 1,384 | 4.58 | 78,760 | 2,086 | 5.30 | ||||||||||||||||||
|
FHLB stock
|
3,174 | 97 | 6.11 | 2,199 | 103 | 9.37 | ||||||||||||||||||
|
Total interest-earning assets
|
2,913,344 | 65,120 | 4.47 | % | 2,672,922 | 57,187 | 4.28 | % | ||||||||||||||||
|
Cash and due from banks
|
12,858 | 12,223 | ||||||||||||||||||||||
|
Allowance for credit losses on loans
|
(20,874 | ) | (19,504 | ) | ||||||||||||||||||||
|
Allowance for credit losses on securities held-to-maturity
|
(574 | ) | (474 | ) | ||||||||||||||||||||
|
Other noninterest-earning assets
|
110,232 | 101,469 | ||||||||||||||||||||||
|
Total assets
|
$ | 3,014,986 | $ | 2,766,636 | ||||||||||||||||||||
|
Interest-Bearing Liabilities:
|
||||||||||||||||||||||||
|
Savings and money market deposits
|
$ | 336,268 | 770 | 0.46 | % | $ | 352,392 | $ | 799 | 0.45 | % | |||||||||||||
|
NOW deposits
|
2,009,615 | 22,874 | 2.28 | 1,813,606 | 24,379 | 2.69 | ||||||||||||||||||
|
Certificates of deposit
|
210,926 | 3,644 | 3.46 | 160,417 | 3,366 | 4.20 | ||||||||||||||||||
|
Borrowings
|
65,717 | 1,253 | 3.81 | 74,504 | 1,439 | 3.86 | ||||||||||||||||||
|
Total interest-bearing liabilities
|
2,622,526 | 28,541 | 2.18 | % | 2,400,919 | 29,983 | 2.50 | % | ||||||||||||||||
|
Noninterest-bearing deposits
|
110,388 | 121,551 | ||||||||||||||||||||||
|
Other noninterest-bearing liabilities
|
33,958 | 30,752 | ||||||||||||||||||||||
|
Shareholders' equity
|
248,114 | 213,414 | ||||||||||||||||||||||
|
Total liabilities and equity
|
$ | 3,014,986 | $ | 2,766,636 | ||||||||||||||||||||
|
Net interest income
|
$ | 36,579 | $ | 27,204 | ||||||||||||||||||||
|
Net interest rate spread
|
2.29 | % | 1.78 | % | ||||||||||||||||||||
|
Net earnings assets
|
$ | 290,818 | $ | 272,003 | ||||||||||||||||||||
|
Net interest margin
|
2.51 | % | 2.04 | % | ||||||||||||||||||||
|
Average interest-earning assets to average interest-bearing liabilities
|
111.09 | % | 111.33 | % | ||||||||||||||||||||
(1)
Calculated net of deferred loan fees and costs, loan discounts, and loans in process.
Non-GAAP to GAAP Reconciliation
The following table summarizes the adjustments made to arrive at the fully taxable-equivalent net interest margins.
|
Taxable-equivalent net interest income and net interest margin
|
For the three months ended December 31, |
For the six months ended December 31, |
||||||||||||||
|
(Dollars in thousands)
|
2025 | 2024 | 2025 | 2024 | ||||||||||||
|
Net interest income (GAAP)
|
$ | 19,059 | $ | 14,068 | $ | 36,579 | $ | 27,204 | ||||||||
|
Tax-equivalent adjustment(1)
|
2,174 | 1,867 | 4,284 | 3,579 | ||||||||||||
|
Net interest income fully taxable-equivalent basis (non-GAAP)
|
$ | 21,233 | $ | 15,935 | $ | 40,863 | $ | 30,783 | ||||||||
|
Average interest-earning assets (GAAP)
|
$ | 2,997,338 | $ | 2,756,263 | $ | 2,913,344 | $ | 2,672,922 | ||||||||
|
Net interest margin fully taxable-equivalent basis (non-GAAP)
|
2.83 | % | 2.31 | % | 2.81 | % | 2.30 | % | ||||||||
(1)
Interest income calculated on a taxable-equivalent basis (non-GAAP) includes the additional amount of interest income that would have been earned if the Company’s investment in tax-exempt securities and loans had been subject to federal and New York State income taxes yielding the same after-tax income. The rate used for this adjustment was 21% for federal income taxes and 4.44% for New York State income taxes for the periods ended December 31, 2025 and 2024, respectively.
43
Index
Rate / Volume Analysis
The following table presents the extent to which changes in interest rates and changes in the volume of interest-earning assets and interest-bearing liabilities have affected the Company’s interest income and interest expense during the periods indicated. Information is provided in each category with respect to:
(i)
Change attributable to changes in volume (changes in volume multiplied by prior rate);
(ii)
Change attributable to changes in rate (changes in rate multiplied by prior volume); and
(iii)
The net change.
The changes attributable to the combined impact of volume and rate have been allocated proportionately to the changes due to volume and the changes due to rate.
| Three months ended December 31, 2025 versus 2024 |
Six months ended December 31, 2025 versus 2024 |
|||||||||||||||||||||||
| Increase/(decrease) Due to |
Total increase/ | Increase/(decrease) Due to |
Total increase/ | |||||||||||||||||||||
|
(In thousands)
|
Volume
|
Rate
|
(decrease)
|
Volume
|
Rate
|
(decrease)
| ||||||||||||||||||
|
Interest-earning assets:
|
||||||||||||||||||||||||
|
Loans receivable, net(1)
|
$ | 2,122 | $ | 811 | $ | 2,933 | $ | 4,206 | $ | 1,457 | $ | 5,663 | ||||||||||||
|
Securities non-taxable
|
194 | 285 | 479 | 656 | 621 | 1,277 | ||||||||||||||||||
|
Securities taxable
|
670 | 476 | 1,146 | 880 | 821 | 1,701 | ||||||||||||||||||
|
Interest-bearing bank balances and federal funds
|
(343 | ) | (144 | ) | (487 | ) | (444 | ) | (258 | ) | (702 | ) | ||||||||||||
|
FHLB stock
|
19 | (11 | ) | 8 | 37 | (43 | ) | (6 | ) | |||||||||||||||
|
Total interest-earning assets
|
2,662 | 1,417 | 4,079 | 5,335 | 2,598 | 7,933 | ||||||||||||||||||
|
Interest-bearing liabilities:
|
||||||||||||||||||||||||
|
Savings and money market deposits
|
(18 | ) | 0 | (18 | ) | (43 | ) | 14 | (29 | ) | ||||||||||||||
|
NOW deposits
|
1,240 | (2,099 | ) | (859 | ) | 2,461 | (3,966 | ) | (1,505 | ) | ||||||||||||||
|
Certificates of deposit
|
360 | (296 | ) | 64 | 939 | (661 | ) | 278 | ||||||||||||||||
|
Borrowings
|
(46 | ) | (53 | ) | (99 | ) | (168 | ) | (18 | ) | (186 | ) | ||||||||||||
|
Total interest-bearing liabilities
|
1,536 | (2,448 | ) | (912 | ) | 3,189 | (4,631 | ) | (1,442 | ) | ||||||||||||||
|
Net change in net interest income
|
$ | 1,126 | $ | 3,865 | $ | 4,991 | $ | 2,146 | $ | 7,229 | $ | 9,375 | ||||||||||||
(1)
Calculated net of deferred loan fees, loan discounts, and loans in process.
GENERAL
Return on average assets and return on average equity are common methods of measuring operating results. Annualized return on average assets increased to 1.33% for the three months ended December 31, 2025 as compared to 1.05% for the three months ended December 31, 2024. Annualized return on average equity increased to 16.27% for the three months ended December 31, 2025 as compared to 13.84% for the three months ended December 31, 2024. Annualized return on average assets increased to 1.27% for the six months ended December 31, 2025 as compared to 0.99% for the six months ended December 31, 2024. Annualized return on average equity increased to 15.45% for the six months ended December 31, 2025 as compared to 12.89% for the six months ended December 31, 2024. The increase in return on average assets and average equity for the three and six months ended December 31, 2025 was primarily the result of net income outpacing growth in the balance sheet.
Net income amounted to $10.3 million for the three months ended December 31, 2025 as compared to $7.5 million for the three months ended December 31, 2024, an increase of $2.8 million. Net income amounted to $19.2 million for the six months ended December 31, 2025 as compared to $13.8 million for the six months ended December 31, 2024, an increase of $5.4 million.
Average assets increased $251.2 million, or 8.8%, to $3.1 billion for the three months ended December 31, 2025 as compared to $2.9 billion for the three months ended December 31, 2024. Average equity increased $36.7 million, or 17.0%, to $253.1 million for the three months ended December 31, 2025 as compared to $216.4 million for the three months ended December 31, 2024. Average assets increased $248.4 million, or 9.0%, to $3.0 billion for the six months ended December 31, 2025 as compared to $2.8 billion for the six months ended December 31, 2024. Average equity increased $34.7 million, or 16.3%, to $248.1 million for the six months ended December 31, 2025 as compared to $213.4 million for the six months ended December 31, 2024.
44
Index
INTEREST INCOME
Interest income amounted to $33.5 million for the three months ended December 31, 2025 as compared to $29.4 million for the three months ended December 31, 2024, an increase of $4.1 million, or 13.9%. Interest income amounted to $65.1 million for the six months ended December 31, 2025 as compared to $57.2 million for the six months ended December 31, 2024, an increase of $7.9 million, or 13.9%. The increase in the average balances on loans and securities had the greatest impact on interest income when comparing the 2025 and 2024 periods. The increase in yields of loans and securities also increased during the comparative periods contributing to higher interest income.
Average loan balances increased $162.6 million and $160.2 million and the yield on loans increased 21 and 19 basis points when comparing the three and six months ended December 31, 2025 and 2024, respectively. The average balance of securities increased $107.4 million and $97.6 million and the yield on such securities increased 27 and 26 basis points when comparing the three and six months ended December 31, 2025 and 2024, respectively. Average interest-bearing bank balances and federal funds decreased $29.9 million and $18.4 million and the yield on interest-bearing bank balances and federal funds decreased 56 and 72 basis points when comparing the three and six months ended December 31, 2025 and 2024, respectively.
INTEREST EXPENSE
Interest expense amounted to $14.4 million for the three months ended December 31, 2025 as compared to $15.4 million for the three months ended December 31, 2024, a decrease of $912,000, or 5.9%. Interest expense amounted to $28.5 million for the six months ended December 31, 2025 as compared to $30.0 million for the six months ended December 31, 2024, a decrease of $1.4 million, or 4.8%. The decrease during the three and six months ended December 31, 2025, was primarily due to the decrease in the average cost of funds, partially offset by the increase in the average balance of interest-bearing liabilities. The decrease in the cost of NOW deposits had the greatest impact on interest expense when comparing the three and six months ended December 31, 2025 and 2024.
The cost of NOW deposits decreased 41 basis points for the three and six months ended December 31, 2025 and 2024, respectively, and the cost of certificates of deposit decreased 63 and 74 basis points when comparing the three and six months ended December 31, 2025 and 2024, respectively. The growth in interest-bearing liabilities was primarily due to an increase in average NOW deposits of $202.3 million and $196.0 million and an increase in average certificates of deposits of $39.3 million and $50.5 million when comparing the three and six months ended December 31, 2025 and 2024, respectively. This was partially offset by a decrease in average savings and money market deposits of $16.4 million and $16.1 million, and a decrease in borrowings of $5.2 million and $8.8 million when comparing the three and six months ended December 31, 2025 and 2024. Yields on interest-bearing deposits decreased when comparing the three and six months ended December 31, 2025 and 2024, as the Company continued a strategic reduction in deposit rates that aligns with the Federal Reserve’s rate cuts.
NET INTEREST INCOME
Net interest income increased $5.0 million to $19.1
million for the three months ended December 31, 2025, from $14.1 million for
the three months ended December 31, 2024. Net interest income increased $9.4
million to $36.6 million for the six months ended December 31, 2025, from $27.2
million for the six months ended December 31, 2024. The increase in net
interest income for the three and six months ended December 31, 2025, was due
to an increase in the average balance of interest-earning assets, which increased
$241.1 million and $240.4 million when comparing the three and six months ended
December 31, 2025 and 2024, respectively, an increase in interest rates earned
on interest-earning assets, which increased 20 and 19 basis points when
comparing the three and six months ended December 31, 2025 and 2024,
respectively, and a decrease in interest rates earned on interest-bearing
liabilities, which decreased 34 and 32 basis points when comparing the three
and six months ended December 31, 2025 and 2024, respectively. The increase in
net interest income was offset by an increase in the average balance of
interest-bearing liabilities, which increased $220.1 million and $221.6 million
when comparing the three and six months ended December 31, 2025 and 2024,
respectively.
Net interest rate spread increased 54 basis points to 2.34% for the three months ended December 31, 2025 as compared to 1.80% for the three months ended December 31, 2024. Net interest rate spread increased 51 basis points to 2.29% for the six months ended December 31, 2025 as compared to 1.78% for the six months ended December 31, 2024.
Net interest margin increased 50 basis points to 2.54% for the three months ended December 31, 2025 as compared to 2.04% for the three months ended December 31, 2024. Net interest margin increased 47 basis points to 2.51% for the six months ended December 31, 2025 as compared to 2.04% for the six months ended December 31, 2024. The increase in net interest rate spread and margin during the three and six months ended December 31, 2025, was due to increases in interest income on loans and securities, as they continue to reprice at higher yields and the interest rates earned on new balances were higher than the historic low levels from the prior periods, and the reduction in deposit rates.
45
Index
Net interest income on a taxable-equivalent basis includes the additional amount of interest income that would have been earned if the Company’s investment in tax-exempt securities and loans had been subject to federal and New York State income taxes yielding the same after-tax income. Tax equivalent net interest margin was 2.83% and 2.31% for the three months ended December 31, 2025 and 2024, respectively, and was 2.81% and 2.30% for the six months ended December 31, 2025 and 2024, respectively.
The Company closely monitors its interest rate risk, and the Company will continue to monitor and prudently manage the asset and liability mix to address the risks or potential negative effects of changes in interest rates. Management attempts to mitigate the interest rate risk through balance sheet composition. Several strategies are used to help manage interest rate risk such as maintaining a high level of liquid assets such as short-term federal funds sold and various investment securities and maintaining a high concentration of less interest-rate sensitive and lower-costing core deposits.
PROVISION FOR CREDIT LOSSES
Management continues to closely monitor asset quality and adjust the level of the allowance for credit losses. The amount recognized for the provision for credit losses is determined by management based on its ongoing analysis of the adequacy of the allowance for credit losses. Provision for credit losses amounted to $199,000 and $478,000 for the three months ended December 31, 2025 and 2024, respectively, and $1.5 million and $1.1 million for the six months ended December 31, 2025 and 2024, respectively. The provision for the six months ended December 31, 2025, was primarily attributable to an increase in loan volume and growth in securities held-to-maturity that require an allowance. The allowance for credit losses on loans to total loans receivable was 1.26% at December 31, 2025 as compared to 1.24% at June 30, 2025.
NONINTEREST INCOME
|
(Dollars in thousands)
|
For the three months ended December 31, |
Change from prior year |
For the six months ended December 31, |
Change from prior year |
||||||||||||||||||||||||||||
|
Noninterest income:
|
2025 | 2024 | Amount | Percent | 2025 | 2024 | Amount | Percent | ||||||||||||||||||||||||
|
Service charges on deposit accounts
|
$ | 1,306 | $ | 1,273 | $ | 33 | 2.6 | % | $ | 2,604 | $ | 2,499 | $ | 105 | 4.2 | % | ||||||||||||||||
|
Debit card fees
|
1,103 | 1,063 | 40 | 3.8 | 2,203 | 2,164 | 39 | 1.8 | ||||||||||||||||||||||||
|
Investment services
|
271 | 252 | 19 | 7.5 | 548 | 500 | 48 | 9.6 | ||||||||||||||||||||||||
|
E-commerce fees
|
29 | 34 | (5 | ) | (14.7 | ) | 56 | 71 | (15 | ) | (21.1 | ) | ||||||||||||||||||||
|
Bank-owned life insurance
|
674 | 637 | 37 | 5.8 | 1,326 | 1,285 | 41 | 3.2 | ||||||||||||||||||||||||
|
Net loss on sale of securities available-for-sale
|
(576 | ) | - | (576 | ) | 100.0 | (576 | ) | - | (576 | ) | 100.0 | ||||||||||||||||||||
|
Other operating income
|
349 | 616 | (267 | ) | (43.3 | ) | 981 | 1,093 | (112 | ) | (10.2 | ) | ||||||||||||||||||||
|
Total noninterest income
|
$ | 3,156 | $ | 3,875 | $ | (719 | ) | (18.6 | )% | $ | 7,142 | $ | 7,612 | $ | (470 | ) | (6.2 | )% | ||||||||||||||
Noninterest income decreased $719,000, or 18.6%, to $3.2 million for the three months ended December 31, 2025 compared to $3.9 million for the three months ended December 31, 2024. The decrease during the three months ended December 31, 2025, was primarily due to a $576,000 loss on sales of securities available-for-sale, a decrease in income earned on customer interest rate swap contracts of $209,000 and a $99,000 decrease in loan fees, including in other operating income. Noninterest income decreased $470,000, or 6.2%, to $7.1 million for the six months ended December 31, 2025 as compared to $7.6 million for the six months ended December 31, 2024. The decrease during the six months ended December 31, 2025, was primarily due to a $576,000 loss on sales of securities available-for-sale and a decrease in loan fees of $103,000.
46
Index
NONINTEREST EXPENSE
|
(Dollars in thousands)
|
For the three months ended December 31, |
Change from prior year |
For the six months ended December 31, |
Change from prior year |
||||||||||||||||||||||||||||
|
Noninterest expense:
|
2025 | 2024 | Amount | Percent | 2025 | 2024 | Amount | Percent | ||||||||||||||||||||||||
|
Salaries and employee benefits
|
$ | 6,223 | $ | 5,653 | $ | 570 | 10.1 | % | $ | 12,379 | $ | 11,531 | $ | 848 | 7.4 | % | ||||||||||||||||
|
Occupancy expense
|
656 | 615 | 41 | 6.7 | 1,309 | 1,251 | 58 | 4.6 | ||||||||||||||||||||||||
|
Equipment and furniture expense
|
214 | 193 | 21 | 10.9 | 419 | 343 | 76 | 22.2 | ||||||||||||||||||||||||
|
Service and data processing fees
|
781 | 773 | 8 | 1.0 | 1,568 | 1,540 | 28 | 1.8 | ||||||||||||||||||||||||
|
Computer software, supplies and support
|
558 | 404 | 154 | 38.1 | 998 | 759 | 239 | 31.5 | ||||||||||||||||||||||||
|
Advertising and promotion
|
147 | 127 | 20 | 15.7 | 247 | 204 | 43 | 21.1 | ||||||||||||||||||||||||
|
FDIC insurance premiums
|
370 | 347 | 23 | 6.6 | 737 | 669 | 68 | 10.2 | ||||||||||||||||||||||||
|
Legal and professional fees
|
479 | 245 | 234 | 95.5 | 885 | 609 | 276 | 45.3 | ||||||||||||||||||||||||
|
Other
|
1,031 | 1,029 | 2 | 0.2 | 1,978 | 2,030 | (52 | ) | (2.6 | ) | ||||||||||||||||||||||
|
Total noninterest expense
|
$ | 10,459 | $ | 9,386 | $ | 1,073 | 11.4 | % | $ | 20,520 | $ | 18,936 | $ | 1,584 | 8.4 | % | ||||||||||||||||
Noninterest expense increased $1.1 million, or 11.4%, to $10.5 million for the three months ended December 31, 2025 compared to $9.4 million for the three months ended December 31, 2024. The increase during the three months ended December 31, 2025, was primarily due to an increase of $570,000 in salaries and employee benefits, an increase of $234,000 in legal and professional fees, an increase of $193,000 of defined benefit pension expense due to the Board approved termination of the Pension Plan, included in other expenses, and an increase of $154,000 in computer software, supplies and support expenses. This was partially offset by a $197,000 decrease in the unfunded commitment expense, due to a decrease in the Company’s contractual obligation to extend credit, included in other expenses. Noninterest expense increased $1.6 million, or 8.4%, to $20.5 million for the six months ended December 31, 2025 compared to $18.9 million for the six months ended December 31, 2024. The increase during the six months ended December 31, 2025, was primarily due to an increase of $848,000 in salaries and employee benefits costs, an increase of $276,000 in legal and professional fees, an increase of $252,000 in charitable contributions as the Bank made a $250,000 charitable donation to the Bank of Greene County Charitable Foundation, included in other expense, an increase of $239,000 in computer software, supplies and support fees, and an increase of $188,000 of defined benefit pension expense. This was partially offset by a $744,000 decrease in the unfunded commitment expense.
INCOME TAXES
Provision for income taxes reflects the expected tax associated with the pre-tax income generated for the given period and certain regulatory requirements. The effective tax rate was 10.9% and 11.9% for the three and six months ended December 31, 2025, and 7.3% and 6.9% for the three and six months ended December 31, 2024, respectively. The statutory tax rate is impacted by the benefits derived from tax-exempt bond and loan income, the Company’s real estate investment trust subsidiary income, income received on the bank owned life insurance and tax credits, to arrive at the effective tax rate. The increase during the three and six months ended December 31, 2025, is primarily due to higher pre-tax income and reflects a lower mix of tax-exempt income from municipal bonds, tax advantage loans, and bank owned life insurance in proportion to pre-tax income.
LIQUIDITY AND CAPITAL RESOURCES
Market risk is the risk of loss in a financial instrument arising from adverse changes in market rates and/or prices such as interest rates, foreign currency exchange rates, commodity prices, and equity prices. The Company’s most significant form of market risk is interest rate risk since the majority of the Company’s assets and liabilities are sensitive to changes in interest rates. The Company’s primary sources of funds are deposits and proceeds from principal and interest payments on loans, mortgage-backed securities and debt securities, with lines of credit available through the Federal Home Loan Bank, Atlantic Community Bankers Bank and three other financial institutions, as needed. While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit outflows, mortgage prepayments, and lending activities are greatly influenced by general interest rates, economic conditions and competition. At December 31, 2025, the Company had $124.1 million in cash and cash equivalents, representing 3.9% of total assets, and had $379.0 million available in unused lines of credit.
As needed, to enhance strong levels of liquidity and to fund loan demand, the Bank and Commercial Bank (the “Banks”) may accept brokered deposits, generally in denominations of less than $250,000, from national brokerage networks, custodial deposit networks or through IntraFi’s one-way CDARS and ICS products, including IntraFi’s Insured Network Deposits (“IND”). The Banks combined can place and obtain brokered deposits up to 30% of total deposits, in the amount of $760.7 million based on policy. Additionally, both Banks participate in the IntraFi reciprocal (“two-way”) CDARS and the ICS products, which provides for reciprocal two-way transactions among other institutions, facilitated by IntraFi, for the purpose of maximizing FDIC insurance for depositors.
47
Index
The Company had $31.6 million and $51.6 million brokered deposits as of December 31, 2025 and June 30, 2025, respectively.
Ensuring adequate liquidity to meet the Company’s cash and collateral obligations and due to the speed at which the movement of deposits may exit the bank, the Company’s primary liquidity measurement is focused on forward cash flows and the time sequence of available liquidity. This liquidity time sequence is determined by when cash becomes available in the Bank's Federal Reserve Account and then analyzed in time intervals of Minute 1, Day 1, Week 1 and Month 1.
The Company’s secondary liquidity measurement is On-Balance Sheet liquidity, which utilizes cash and cash equivalents, the market value of unpledged securities and the market value of pledged but unencumbered securities.
At December 31, 2025, liquidity measures were as follows:
Primary:
|
Minute 1: (Cash and cash equivalents / non-contractual deposits)
|
8.22 | % | ||
|
Day 1: (Minute 1 liquidity plus same day borrowing capacity / non-contractual deposits)
|
29.31 | % | ||
|
Week 1: (Day 1 liquidity plus unpledged marketable investments and one-third brokered deposit capacity / non-contractual deposits)
|
50.13 | % | ||
|
Month 1: (Week 1 liquidity plus remaining borrowing capacity / non-contractual deposits)
|
106.25 | % | ||
|
Secondary:
|
||||
|
On-Balance Sheet: (Cash plus unpledged and unencumbered securities / non-contractual deposits)
|
13.20 | % |
The Company’s off-balance sheet credit exposures at December 31, 2025:
| (In thousands) | ||||
| Unfunded loan commitments | $ | 129,318 | ||
| Unused lines of credit | 128,903 | |||
| Standby letters of credit | 543 | |||
| Total commitments | $ | 258,764 |
The Company anticipates that it will have sufficient funds available to meet current commitments and other funding needs based on the level of cash and cash equivalents as well as the investments available-for-sale portfolio and borrowing capacity.
48
Index
The Bank of Greene County and its wholly owned subsidiary, Greene County Commercial Bank, met all applicable regulatory capital requirements at December 31, 2025 and June 30, 2025.
|
(Dollars in thousands)
|
Actual | For capital adequacy purposes |
To be well capitalized under prompt corrective action provisions |
Capital conservation buffer |
||||||||||||||||||||||||||||
|
The Bank of Greene County
|
Amount | Ratio | Amount | Ratio | Amount | Ratio | Actual | Required | ||||||||||||||||||||||||
|
As of December 31, 2025:
|
||||||||||||||||||||||||||||||||
|
Total risk-based capital
|
$ | 315,317 | 16.9 | % | $ | 149,393 | 8.0 | % | $ | 186,742 | 10.0 | % | 8.89 | % | 2.50 | % | ||||||||||||||||
|
Tier 1 risk-based capital
|
291,974 | 15.6 | 112,045 | 6.0 | 149,393 | 8.0 | 9.64 | 2.50 | ||||||||||||||||||||||||
|
Common equity tier 1 capital
|
291,974 | 15.6 | 84,034 | 4.5 | 121,382 | 6.5 | 11.14 | 2.50 | ||||||||||||||||||||||||
|
Tier 1 leverage ratio
|
291,974 | 9.4 | 124,667 | 4.0 | 155,834 | 5.0 | 5.37 | 2.50 | ||||||||||||||||||||||||
|
As of June 30, 2025:
|
||||||||||||||||||||||||||||||||
|
Total risk-based capital
|
$ | 293,952 | 16.6 | % | $ | 141,305 | 8.0 | % | $ | 176,632 | 10.0 | % | 8.64 | % | 2.50 | % | ||||||||||||||||
|
Tier 1 risk-based capital
|
271,869 | 15.4 | 105,979 | 6.0 | 141,305 | 8.0 | 9.39 | 2.50 | ||||||||||||||||||||||||
|
Common equity tier 1 capital
|
271,869 | 15.4 | 79,484 | 4.5 | 114,811 | 6.5 | 10.89 | 2.50 | ||||||||||||||||||||||||
|
Tier 1 leverage ratio
|
271,869 | 9.2 | 117,646 | 4.0 | 147,057 | 5.0 | 5.24 | 2.50 | ||||||||||||||||||||||||
|
Greene County Commercial Bank
|
||||||||||||||||||||||||||||||||
|
As of December 31, 2025:
|
||||||||||||||||||||||||||||||||
|
Total risk-based capital
|
$ | 127,715 | 50.2 | % | $ | 20,359 | 8.0 | % | $ | 25,448 | 10.0 | % | 42.19 | % | 2.50 | % | ||||||||||||||||
|
Tier 1 risk-based capital
|
127,715 | 50.2 | 15,269 | 6.0 | 20,359 | 8.0 | 44.19 | 2.50 | ||||||||||||||||||||||||
|
Common equity tier 1 capital
|
127,715 | 50.2 | 11,452 | 4.5 | 16,541 | 6.5 | 45.69 | 2.50 | ||||||||||||||||||||||||
|
Tier 1 leverage ratio
|
127,715 | 8.9 | 57,262 | 4.0 | 71,577 | 5.0 | 4.92 | 2.50 | ||||||||||||||||||||||||
|
As of June 30, 2025:
|
||||||||||||||||||||||||||||||||
|
Total risk-based capital
|
$ | 122,243 | 46.9 | % | $ | 20,871 | 8.0 | % | $ | 26,089 | 10.0 | % | 38.86 | % | 2.50 | % | ||||||||||||||||
|
Tier 1 risk-based capital
|
122,243 | 46.9 | 15,654 | 6.0 | 20,871 | 8.0 | 40.86 | 2.50 | ||||||||||||||||||||||||
|
Common equity tier 1 capital
|
122,243 | 46.9 | 11,740 | 4.5 | 16,958 | 6.5 | 42.36 | 2.50 | ||||||||||||||||||||||||
|
Tier 1 leverage ratio
|
122,243 | 9.1 | 53,543 | 4.0 | 66,929 | 5.0 | 5.13 | 2.50 | ||||||||||||||||||||||||
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
Not applicable to smaller reporting companies.
Item 4.
Controls and Procedures
Our management, under the supervision and with the participation of the Chief Executive Officer (who is our principal executive officer) and Chief Financial Officer (who is our principal financial and accounting officer), evaluated the effectiveness of the design and operation of its disclosure controls and procedures, as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), at the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective to ensure that information required to be disclosed in the reports, that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
There were no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended December 31, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
49
Index
Because of its inherent limitations, management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all error and fraud. Any control system is based upon assumptions and can provide only reasonable, not absolute, assurance that its objective will be met. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. No evaluation of control can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, with the Company have been detected.
Part II.
Other Information
Item 1.
Legal Proceedings
The Company, including its subsidiaries, are not currently the subject of any material pending legal proceedings, other than ordinary routine litigation occurring in the normal course of their business. On an ongoing basis, the Company is often the subject of, or a party to, various legal claims by other parties against the Company, by the Company against other parties, or involving the Company, which arise in the normal course of business.
Item 1A.
Risk Factors
Not applicable to smaller reporting companies.
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
a)
Not applicable.
b)
Not applicable.
c)
On September 17, 2019, the Board of Directors of the Company adopted a stock repurchase program. Under the repurchase program, the Company is authorized to repurchase up to 400,000 shares of its common stock. Repurchases will be made at management’s discretion at prices management considers to be attractive and in the best interests of both the Company and its stockholders, subject to the availability of stock, general market conditions, the trading price of the stock, alternative uses for capital, and the Company’s financial performance. There were no additional share repurchases during the quarter ended December 31, 2025.
Item 3.
Defaults Upon Senior Securities
Not applicable.
Item 4.
Mine Safety Disclosures
Not applicable.
Item 5.
Other Information
No director or officer of the Company adopted terminated
Item 6.
Exhibits
Exhibits
|
31.1
|
Certification of Chief Executive Officer, adopted pursuant to Rule 13a-14(a)/15d-14(a)
|
|
|
31.2
|
Certification of Chief Financial Officer, adopted pursuant to Rule 13a-14(a)/15d-14(a)
|
|
|
32.1
|
Statement of Chief Executive Officer, furnished pursuant to U.S.C. Section 1350
|
|
|
32.2
|
Statement of Chief Financial Officer, furnished pursuant to U.S.C. Section 1350
|
|
| 101 | The following materials from Greene County Bancorp, Inc. Form 10-Q for the quarter ended December 31, 2025, formatted in Inline Extensible Business Reporting Language (iXBRL): (i) the Consolidated Statements of Financial Condition, (ii) the Consolidated Statements of Income, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Changes in Shareholders’ Equity, (v) Consolidated Statements of Cash Flows and (iv) Notes to Consolidated Financial Statements, (detail tagged). | |
| 104 | Cover Page Integrative Data File (formatted in iXBRL and included in exhibit 101). |
50
Index
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed by the undersigned thereunto duly authorized.
|
Greene County Bancorp, Inc.
|
|
|
Date: February 6, 2026
|
|
|
By: /s/ Donald E. Gibson
|
|
|
Donald E. Gibson
|
|
|
President and Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
|
|
Date: February 6, 2026
|
|
|
By: /s/ Nick Barzee
|
|
|
Nick Barzee
|
|
|
Senior Vice President,
|
|
|
Chief Financial Officer
|
|
| (Principal Financial and Accounting Officer) |
FAQ
How did Greene County Bancorp (GCBC) perform in the quarter ended December 31, 2025?
Greene County Bancorp generated stronger results, with quarterly net income of $10.3 million, up from $7.5 million a year earlier. Net interest income increased to $19.1 million as interest income outpaced interest expense, supporting higher earnings per share of $0.60.
What were Greene County Bancorp’s key revenue and expense trends for GCBC this quarter?
Total interest income rose to $33.5 million, compared with $29.4 million in the prior-year quarter, driven mainly by higher loan and securities yields. Total interest expense decreased slightly to $14.4 million, helping net interest income increase to $19.1 million.
How strong is Greene County Bancorp’s (GCBC) balance sheet as of December 31, 2025?
Total assets reached $3.15 billion, up from $3.04 billion at June 30, 2025. Loans receivable, net, grew to $1.67 billion, and securities totaled about $1.22 billion. Deposits were stable around $2.64 billion, with added short-term Federal Home Loan Bank borrowings.
What is the credit quality of Greene County Bancorp’s (GCBC) loan portfolio?
Credit quality remained solid. Non-accrual loans totaled $3.3 million on total gross loans of $1.69 billion. The allowance for credit losses on loans increased to $21.3 million, reflecting management’s quantitative models and qualitative adjustments under the current expected credit loss framework.
Did Greene County Bancorp (GCBC) change its dividend during the period?
The company maintained its dividend. On October 22, 2025, the board declared a quarterly cash dividend of $0.10 per share, implying an annual rate of $0.40 per share. The dividend was paid on November 28, 2025, to shareholders of record as of November 14, 2025.
What actions did Greene County Bancorp (GCBC) take regarding its pension plan?
The bank is terminating its frozen defined benefit pension plan effective September 30, 2025. During the quarter, it began the termination process and recognized a $199,000 settlement charge. Plan assets of $4.0 million essentially matched the $4.0 million projected benefit obligation at period end.
How did Greene County Bancorp (GCBC) manage its funding and capital this quarter?
Short-term borrowings increased to $180.0 million, while subordinated notes payable declined to $29.9 million after a $20.0 million repayment. Total shareholders’ equity rose to $258.3 million, supported by retained earnings growth and improved accumulated other comprehensive loss.
Greene Cnty Bancorp Inc
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Banks - Regional
Savings Institutions, Not Federally Chartered
United States
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