Gouverneur Bancorp (GOVB) posts stronger Q1 2026 earnings and capital

Filing Impact

(High)

Filing Sentiment

(Neutral)

Form Type

10-Q

Rhea-AI Filing Summary

Gouverneur Bancorp, Inc. reported stronger results for the quarter ended December 31, 2025. Net income rose to $287,000 from $160,000 a year earlier, with basic and diluted earnings per share increasing to $0.28 from $0.15.

Net interest income improved to $1.83 million from $1.77 million, while total non-interest income increased to $345,000 from $244,000, helped by a $103,000 gain on a life insurance death benefit. Non-interest expenses were relatively stable at $1.85 million.

Total assets grew to $201.9 million from $198.5 million at September 30, 2025, driven by loans receivable of $134.4 million and securities available-for-sale of $42.8 million. Total deposits increased to $158.5 million. Comprehensive income reached $599,000, reflecting improved unrealized gains on securities and post-retirement items.

Capital ratios remained very strong, with the Bank’s total capital ratio at 25.5% and Tier 1 leverage ratio at 13.9%, well above “well-capitalized” thresholds. The company paid a semi-annual cash dividend of $0.09 per share, totaling $94,000.

Insights

Quarter shows solid earnings growth and very strong capital.

Gouverneur Bancorp delivered higher profitability, with net income of $287,000 versus $160,000 a year earlier and net interest income rising to $1.83M. Non-interest income also improved, supported by life insurance-related gains and higher service and fee revenue.

Credit quality indicators appear stable, with an allowance for credit losses on loans of $1.11M and total loans of $134.4M. Nonaccrual loans totaled $991,000, and the bank uses detailed internal grading and collateral-dependent analysis to manage risk.

Regulatory capital is well above requirements, with a total capital ratio of 25.5% and Tier 1 leverage of 13.9% as of December 31, 2025. The semi-annual dividend of $0.09 per share and comprehensive income of $599,000 underscore balance-sheet resilience, while future filings may show how loan and securities growth trends continue.

02/12/2026 - 09:01 AM

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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2025

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File No. 000-56605

GOUVERNEUR BANCORP, INC.

(Exact Name of Registrant as Specified in Its Charter)


Maryland (Statement or Other Jurisdiction of Incorporation or Organization)	37-2102925 (I.R.S. Employer Identification No.)

42 Church Street, Gouverneur, New York (Address of Principal Executive Offices)	13642 (Zip Code)

(315) 287-2600

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
None

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. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Date File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ 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 definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer ☐
Non-accelerated filer	☒	Smaller reporting company ☒
		Emerging growth 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 ☒

The number of shares outstanding of the issuer’s common stock, as of February 10, 2026: 1,062,979 shares.

Table of Contents

GOUVERNEUR BANCORP, INC.

Table of Contents


		Page No.

PART I.	FINANCIAL INFORMATION	3

Item 1.	Financial Statements (Unaudited)	3

	Consolidated Statements of Financial Condition at December 31, 2025 and September 30, 2025	3

	Consolidated Statements of Earnings for the Three Months Ended December 31, 2025 and 2024	4

	Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended December 31, 2025 and 2024	5

	Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended December 31, 2025 and 2024	6

	Consolidated Statements of Cash Flows for the Three Months Ended December 31, 2025 and 2024	7

	Notes to Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	36

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	44

Item 4.	Controls and Procedures	46

PART II.	OTHER INFORMATION	47

Item 1.	Legal Proceedings	47

Item 1A.	Risk Factors	47

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	47

Item 3.	Defaults Upon Senior Securities	47

Item 4.	Mine Safety Disclosures	47

Item 5.	Other Information	47

Item 6.	Exhibits	48

SIGNATURES		49

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1.Financial Statements - Unaudited

GOUVERNEUR BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(In thousands, except share and per share data)


		December 31,			September 30,
		2025			2025
		(unaudited)
Assets:
Cash and due from banks		$	3,481		$	3,949
Interest-bearing deposits in bank			1,228			710
Total cash and cash equivalents			4,709			4,659

Securities available-for-sale, at fair value			42,797			40,931

Loans receivable, net of allowance for credit losses: December 31, 2025: $1,112 and September 30, 2025:
$1,100 and net of discount at December 31, 2025: $689 and September 30, 2025: $714 and
deferred loan fees of $495 at December 31, 2025 and $483 at September 30, 2025			133,133			131,504

Investments in restricted stock, at cost			1,022			1,109
Bank owned life insurance			6,892			7,307
Premises and equipment, net			2,869			2,904
Foreclosed real estate, net			158			105
Core deposit intangible, net			1,213			1,294
Goodwill			4,237			4,237
Accrued interest receivable and other assets			4,846			4,478
Total assets		$	201,876		$	198,528

Liabilities:
Deposits:
Non-interest-bearing demand		$	17,660		$	18,167
NOW and money market			51,965			46,870
Savings and club			51,925			53,712
Time certificates			36,968			36,031
Total deposits			158,518			154,780

Advances from the Federal Home Loan Bank			5,000			7,000
Advanced payments from borrowers for taxes and insurance			1,493			501
Accrued interest payable and other liabilities			4,240			4,139
Total liabilities			169,251			166,420

Shareholders' Equity:
Preferred stock, $.01 par value: December 31, 2025 and September 30, 2025: 25,000,000 shares authorized;
none issued and outstanding			—			—
Common stock, $.01 par value: December 31, 2025 and September 30, 2025: 75,000,000 shares authorized;
December 31, 2025: 1,107,134 issued and 1,064,130 outstanding and
September 30, 2025: 1,107,134 issued and 1,050,945 outstanding			11			11
Additional paid-in capital			6,342			6,514
Unearned common stock held by employee stock ownership plan
(unallocated shares December 31, 2025: 46,277: September 30, 2025: 50,133)			(463)			(501)
Retained earnings			29,165			28,972
Accumulated other comprehensive loss			(1,875)			(2,187)
Authorized but unissued stock, at cost, (shares December 31, 2025: 43,004: September 30, 2025: 56,189)			(555)			(701)
Total shareholders' equity			32,625			32,108
Total liabilities and shareholders' equity		$	201,876		$	198,528

See accompanying notes to consolidated financial statements.

Table of Contents

GOUVERNEUR BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF EARNINGS

(In thousands, except per share data) (Unaudited)


		Three Months Ended
		December 31,
		2025			2024
Interest income:
Loans, net		$	1,825		$	1,692
Securities-taxable			262			305
Securities-non-taxable			132			128
Other short-term investments			21			41
Total interest income			2,240			2,166

Interest expense:
Deposits			348			411
Net swap income on deposit hedge			—			(10)
Borrowings – short term and long term			63			—
Total interest expense			411			401

Net interest income			1,829			1,765
Provision (benefit) for credit losses:
Loans			14			15
Unfunded commitments			(1)			—
Net interest income after provision for credit losses			1,816			1,750

Non-interest income:
Service charges			93			83
ATM card fees			65			65
Gain on life insurance death benefit			103			—
Earnings on investment in life insurance			48			41
Earnings (losses) on deferred fees plan			23			(6)
Unrealized loss on swap agreements			—			(9)
Earnings on secondary market programs			12			15
Other non-interest income			1			55
Total non-interest income, net			345			244

Non-interest expenses:
Salaries and employee benefits			899			873
Directors fees			94			96
Earnings (losses) on deferred fees plan			23			(6)
Building, occupancy and equipment			242			224
Data processing			105			107
Postage and supplies			22			22
Professional fees			150			156
Intangibles amortization			81			93
Foreclosed assets, net			(18)			1
Other non-interest expense			256			269
Total non-interest expenses, net			1,854			1,835

Income before income tax expense (benefit)			307			159
Income tax expense (benefit)			20			(1)
Net income		$	287		$	160

Earnings per common share – basic		$	0.28		$	0.15
Earnings per common share – diluted		$	0.28		$	0.15

See accompanying notes to consolidated financial statements.

Table of Contents

GOUVERNEUR BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands, except per share data) (Unaudited)


		Three Months Ended
		December 31,
		2025			2024
Net Income		$	287		$	160
Other comprehensive income (loss) net of tax:
Unrealized gain (loss) on securities:
Unrealized holding gain (loss) arising during period			375			(1,424)
Deferred tax expense (benefit)			79			(299)
Unrealized holding gain (loss), net of deferred taxes			296			(1,125)

Post-retirement benefit (expense)			20			(8)
Deferred tax expense (benefit)			4			(2)
Post-retirement benefit (expense), net of deferred taxes			16			(6)

Total other comprehensive income (loss)			312			(1,131)
Total comprehensive income (loss)		$	599		$	(971)

See accompanying notes to consolidated financial statements.

Table of Contents

GOUVERNEUR BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

Three Months Ended December 31, 2025 and 2024

(In thousands, except share and per share data) (Unaudited)


								Unearned									Accumulated
					Additional			Common						Authorized			Other			Total
		Common			Paid-in			Stock			Retained			but Unissued			Comprehensive			Shareholders'
		Stock			Capital			held by ESOP			Earnings			Stock			Income (Loss)			Equity
Balance at September 30, 2024		$	11		$	6,487		$	(540)		$	28,413		$	—		$	(1,606)		$	32,765
Comprehensive loss:
Net income			—			—			—			160			—			—			160
Net pension and postretirement benefit, net of deferred taxes			—			—			—			—			—			(6)			(6)
Change in unrealized losses on securities available-for-sale, net of deferred taxes			—			—			—			—			—			(1,125)			(1,125)
Total comprehensive loss																					(971)
Repurchase of Authorized Stock (344 shares)			—			—			—			—			(4)			—			(4)
ESOP shares committed to be released (3,856 shares)			—			3			39			—			—			—			42
Cash dividends declared, $0.08 per share			—			—			—			(89)			—			—			(89)
Balance at December 31, 2024 (unaudited)		$	11		$	6,490		$	(501)		$	28,484		$	(4)		$	(2,737)		$	31,743

Balance at September 30, 2025		$	11		$	6,514		$	(501)		$	28,972		$	(701)		$	(2,187)		$	32,108
Comprehensive income:
Net income			—			—			—			287			—			—			287
Net pension and postretirement expense, net of deferred taxes			—			—			—			—			—			16			16
Change in unrealized losses on securities available-for-sale, net of deferred taxes			—			—			—			—			—			296			296
Total comprehensive income																					599
Restricted stock expense			—			11			—			—			—			—			11
Stock option expense			—			8			—			—			—			—			8
Issuance of restricted stock from authorized but unissued stock (16,677 shares)			—			(206)			—			—			206			—			—
Repurchase of Authorized Stock (3,492 shares)			—			—			—			—			(60)			—			(60)
ESOP shares committed to be released (3,856 shares)			—			15			38			—			—			—			53
Cash dividends declared, $0.09 per share			—			—			—			(94)			—			—			(94)
Balance at December 31, 2025 (unaudited)		$	11		$	6,342		$	(463)		$	29,165		$	(555)		$	(1,875)		$	32,625

See accompanying notes to consolidated financial statements.

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GOUVERNEUR BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands) (Unaudited)


		Three Months Ended
		December 31,
		2025			2024

Cash flows from operating activities:
Net Income		$	287		$	160
Adjustments to reconcile net income to net cash and cash equivalents provided by operating activities:
Provision for credit losses			13			15
Net amortization of deferred fees on loans			22			19
Net amortization of securities premiums and discounts			(110)			(139)
Depreciation			49			56
Net amortization of core deposits intangible			81			93
ESOP shares committed to be released			53			42
Proceeds from life insurance death benefit			566			—
Gain on life insurance death benefit			(103)			—
Earnings on investment in bank owned life insurance			(48)			(41)
Stock based compensation expense			19			—
(Increase) Decrease in accrued interest receivable and other assets			(453)			239
Increase (Decrease) in accrued interest payable and other liabilities			83			(104)
Net cash provided by operating activities			459			340
Cash flows from investing activities:
Securities available for sale:
Proceeds from maturities and principal reductions of securities (AFS)			3,609			958
Purchases of securities (AFS)			(4,990)			(429)
Redemptions of FHLB stock			87			2
Net increase in loans receivable			(1,677)			(704)
Additions to premises and equipment			(14)			(65)
Net cash used in investing activities			(2,985)			(238)
Cash flows from financing activities:
Net increase (decrease) in deposits			3,738			(230)
Net change in short-term borrowings			(2,000)			—
Advance payments by borrowers for property taxes and insurance, net			992			864
Repurchase of authorized stock			(60)			(4)
Cash dividends paid to common stock shareholders			(94)			(89)
Net cash provided by financing activities			2,576			541
Net increase in cash and cash equivalents			50			643
Cash and cash equivalents – Beginning of Period			4,659			6,370
Cash and cash equivalents – End of Period		$	4,709		$	7,013
Supplemental disclosures:
Cash paid during the period for interest		$	410		$	382
Loans receivable transferred to foreclosed assets during the year			12			—

See accompanying notes to consolidated financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

NOTE 1: BASIS OF PRESENTATION

The accompanying consolidated financial statements include the accounts of Gouverneur Bancorp, Inc. (“Bancorp”) and Gouverneur Savings and Loan Association (the “Bank”), the wholly owned and only direct subsidiary of Bancorp, and GS&L Municipal Bank, the wholly owned and only subsidiary of the Bank, (collectively referred to as the “Company”) as of December 31, 2025 (unaudited) and September 30, 2025 and for the three-month periods ended December 31, 2025 and 2024 (unaudited). These consolidated financial statements were prepared in accordance with instructions for Form 10-Q and, therefore, do not include information or footnotes necessary for a complete presentation of financial condition, results of operations, and cash flows in conformity with generally accepted accounting principles in the United States of America.

Gouverneur Bancorp, Inc. is a Maryland corporation that was incorporated in June 2023 to be the successor to Gouverneur Bancorp, Inc., a federally chartered corporation (the “Mid-Tier Holding Company”), upon completion of the second-step conversion of the Bank from the two-tier mutual holding company structure to the stock holding company structure. Cambray Mutual Holding Company (“Cambray”) was the former mutual holding company for the Mid-Tier Holding Company prior to the completion of the second-step conversion. In conjunction with the second-step conversion, each of Cambray Mutual Holding Company and the Mid-Tier Holding Company merged out of existence and now cease to exist. The second-step conversion was completed on October 31, 2023, at which time the Company sold, for gross proceeds of $7.2 million, a total of 723,068 shares of common stock at $10.00 per share, including 57,845 shares sold to the Bank’s employee stock ownership plan. As part of the second-step conversion, each of the existing outstanding shares of Mid-Tier Holding Company common stock owned by persons other than Cambray Mutual Holding Company was converted into 0.5334 shares of Bancorp common stock.

In September 2022, the Bank completed its acquisition of Citizens Bank of Cape Vincent (“CBCV”), a commercial bank headquartered in Cape Vincent, New York. In conjunction with the acquisition of CBCV in September 2022, the Bank formed the limited purpose GS&L Municipal Bank in order to continue to hold CBCV’s municipal deposits and continue to compete for such deposits in the future. GS&L Municipal Bank is a limited purpose commercial bank that is a wholly owned subsidiary of the Bank and operates under the same regulatory and operating framework as the Bank. GS&L Municipal Bank is a New York chartered limited purpose commercial bank organized to solicit municipal deposits from local government entities such as towns, cities, school districts, fire districts and other municipalities. The Bank views GS&L Municipal Bank as a source of low cost and stable source of funds that will further the Bank’s commitment to the communities in which the Bank operates.

All adjustments, consisting of only normal recurring adjustments or accruals, which are necessary for a fair presentation of the consolidated financial statements have been made at and for the three-month periods ended December 31, 2025 and 2024. The results of operations for the three-month period ended December 31, 2025 are not necessarily indicative of the results which may be expected for an entire fiscal year or any other period.

The data in the consolidated statements of financial condition for September 30, 2025 was derived from the Company’s audited consolidated financial statements as of and for the year ended September 30, 2025. That data, along with the interim financial information presented in the consolidated statements of financial condition, earnings, comprehensive income (loss), shareholders’ equity and cash flows should be read in conjunction with the Company’s audited consolidated financial statements as of and for the year ended September 30, 2025, including the notes thereto. Certain amounts for the three-month period ended December 31, 2024 were reclassified to conform to the presentation for the three-month period ended December 31, 2025.

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements of the Company include the accounts of Bancorp and its wholly-owned subsidiary, the Bank, and the Bank’s wholly owned subsidiary, GS&L Municipal Bank.

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At December 31, 2025, GS&L Municipal Bank held $22.9 million of the Bank’s $42.8 million investment securities portfolio and $23.7 million of the Bank’s deposits.

All significant intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates in Preparation of Financial Statements

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for credit losses. In connection with the determination of the estimated allowance for credit losses, management obtains independent appraisals for significant properties that act as collateral for portfolio loans.

The Company’s loans are generally secured by specific items of collateral including real property, consumer assets, and business assets. Although the Company has a diversified portfolio, a substantial portion of its debtors’ ability to honor their contracts is dependent on local economic conditions. While management uses available information to recognize credit losses on loans and foreclosed assets, further reductions in the carrying amounts of loans and foreclosed assets may be necessary, based on changes in local economic conditions. In addition, regulatory agencies, as an integral part of their examination process, periodically review the estimated losses on loans and foreclosed assets. Such agencies may require the Company to recognize additional losses based on their judgments about information available to them at the time of their examination. Because of these factors, it is reasonably possible that the estimated credit losses on loans and foreclosed assets may change materially in the near term. However, the amount of the change that is reasonably possible cannot be estimated.

Recent Accounting Pronouncements

The Company’s significant accounting policies followed in the preparation of the unaudited consolidated financial statements are disclosed in Note 2 of the audited financial statements and notes for the year ended September 30, 2025 and are contained in the Company’s Annual Report on Form 10-K for the year ended September 30, 2025. There have been no significant changes to the application of significant accounting policies since September 30, 2025.

Allowance for Credit Losses – Available for Sale Securities

For available for sale securities, management evaluates all investments in an unrealized loss position on a quarterly basis, and more frequently when economic or market conditions warrant such evaluation. If the Company has the intent to sell the security or it is more likely than not that the Company will be required to sell the security, the security is written down to fair value and the entire loss is recorded in earnings.

If either of the above criteria is not met, the Company evaluates whether the decline in fair value is the result of credit losses or other factors. In making the assessment, the Company may consider various factors including the extent to which fair value is less than amortized cost, performance on any underlying collateral, downgrades in the ratings of the security by a rating agency, the failure of the issuer to make scheduled interest or principal payments and adverse conditions specifically related to the security. If the assessment indicates that a credit loss exists, the present value of cash flows expected to be collected are compared to the amortized cost basis of the security and any excess is recorded as an allowance for credit loss, limited by the amount that the fair value is less that the amortized cost basis. Any amount of unrealized loss that has not been recorded through an allowance for credit loss is recognized in other comprehensive income.

Changes in the allowance for credit loss are recorded as provision for (benefit from) credit loss expense on the accompanying consolidated statements of earnings. Losses are charged against the allowance for credit loss when

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management believes an available for sale security is confirmed to be uncollectible or when either of the criteria regarding intent or requirement to sell is met. At December 31, 2025 and September 30, 2025 there was no allowance for credit loss related to the available for sale securities portfolio.

Accrued interest receivable on available for sale debt securities totaled $216,000 and $214,000 at December 31, 2025 and September 30, 2025, respectively, and was excluded from the estimate of credit losses.

Loans

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at amortized cost. Amortized cost is the principal balance outstanding, net of purchase premiums and discounts and deferred fees and costs. Accrued interest receivable related to loans totaled $442,000 and $415,000 at December 31, 2025 and September 30, 2025, respectively, and is included as a component of accrued interest receivable and other assets on the consolidated statements of financial condition. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using methods that approximate a level yield without anticipating prepayments.

The accrual of interest is generally discontinued when a loan becomes 90 days past due and is not well collateralized and in the process of collection, or when management believes, after considering economic and business conditions and collection efforts, that the principal or interest will not be collectible in the normal course of business. Past due status is based on contractual terms of the loan. A loan is considered to be past due when a scheduled payment has not been received within 30 days after the contractual due date.

All accrued interest is reversed against interest income when a loan is placed on nonaccrual status. Interest received on such loans is accounted for using the cost-recovery method, until qualifying for return to accrual. Under the cost-recovery method, interest income is not recognized until the past due loan balance is reduced to zero. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current, there is a sustained period of repayment performance (generally six consecutive months), and future payments are reasonably assured.

Allowance for Credit Losses – Loans

The allowance for credit losses on loans is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the allowance for credit losses when management believes the uncollectibility of a loan balance is confirmed. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off.

The allowance for credit losses on loans represents management’s estimate of lifetime credit losses inherent in loans as of the balance sheet date. The allowance for credit losses on loans is estimated by management using relevant available information, from both internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. The Company uses a probability of default/loss given default model to determine the allowance for credit losses.

Management measures expected credit losses for loans on a pooled basis when similar risk characteristics exist. Management has identified the following portfolio segments and calculates the allowance for credit losses for each using a discounted cash flow and remaining life methodology. The segments using a discounted cash flow methodology are as follows:

Real Estate Residential

1-4 family residential construction loans

Other construction loans and all land development and other land loans

Revolving, open-end loans secured by 1-4 family residential properties and extended under lines of credit

Secured by first liens

Secured by junior liens

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Real Estate Commercial

Commercial and industrial loans – commercial mortgage

Loans secured by owner-occupied, nonfarm nonresidential properties

Loans secured by other nonfarm nonresidential properties

Loans secured by multifamily (5 or more) properties

Commercial Secured

Loans to finance agricultural production and other loans to farmers

Commercial and industrial loans

Obligations (other than securities and leases) of states and political subdivisions in the US

Commercial Unsecured

Commercial and industrial loans – unsecured

Unsecured other loans

Consumer

Other revolving credit plans

Automobile loans

Other consumer loans

The discounted cash flow method calculates the expected cash flows to be received over the life of each individual loan in a pool.

The segments using a remaining life methodology are as follows:

Commercial Unsecured

Other loans (commercial overdraft loans)

Consumer

Other loans (consumer overdraft loans)

Individually evaluated loans are evaluated and valued at the time the loan is identified as not having risk characteristics common with other loans within its pool. In these instances, credit loss is measured on a case by case basis. The fair value of the loan is determined using either present value of the expected future cash flows discounted at the loan’s effective interest rate or, for collateral dependent loans, the fair value of the collateral less the selling, administrative costs, and other expenses necessary to liquidate the collateral. Collateral may be real estate and/or business assets including equipment, inventory and/or accounts receivable.

The remaining life methodology uses average annual charge-off rates and the remaining life of the loan to estimate the allowance for credit losses. The average annual charge-off rate is applied to the amortization adjusted remaining life of the loan to determine the unadjusted lifetime historical charge-off rate.

Additionally, the allowance for credit losses calculation includes subjective adjustments for qualitative risk factors that are likely to cause estimated credit losses to differ from historical experience. These qualitative adjustments may increase or reduce reserve levels and include adjustments for lending management experience and risk tolerance, asset quality and portfolio trends, loan review and audit results, loan portfolio growth, industry concentrations, trends in underlying collateral, external factors and economic conditions not already captured.

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Loans that do not share risk characteristics are evaluated on an individual basis and are excluded from the pooled loan analysis. When management determines that foreclosure is probable and the borrower is experiencing financial difficulty, the expected credit losses are based on the fair value of the related collateral at the reporting dated unadjusted for selling costs as appropriate.

Allowance for Credit Losses – Unfunded Commitments

Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit issued to meet customer financing needs. The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for off—balance sheet loan commitments is represented by the contractual amount of those instruments. Such financial instruments are recorded when they are funded.

The Company records an allowance for credit losses for off-balance sheet credit exposures, unless the commitments to extend credit are unconditionally cancelable, through a charge to provision for credit loss on unfunded commitments in the Company’s statements of earnings. The allowance for credit losses for off-balance sheet credit exposures is estimated by loan segment at each balance sheet date in accordance with ASC 326, Financial Instruments – Credit Losses, using the same methodologies as portfolio loans, taking into consideration the likelihood that funding will occur as well as any third-party guarantees. The allowance for credit losses on unfunded commitments is included as a component of accrued interest payable and other liabilities on the Company’s consolidated statements of financial condition.

Revenue Recognition

The majority of the Company’s revenue is generated from interest income on loans which are outside the scope of ASC 606, Revenue from Contracts with Customers.

The Company’s sources of income that fall within the scope of ASC 606 include service charges on deposits, interchange fees and gains and losses on sales of other real estate, all of which are presented as components of noninterest income on the accompanying statements of earnings. Below is a summary of the revenue streams that fall within the scope of ASC 606.

Service charges on deposits, ATM, and interchange fees – Fees from these services are either transaction-based, for which the performance obligations are satisfied at a point in time when the individual transaction is processed, or set periodic service charges, for which the performance obligations are satisfied over the period the service is provided. Transaction-based fees are recognized as revenue at a point in time when the transaction is processed, and periodic service charges are recognized as revenue over a period of time equivalent to the service period and as performance obligations are met.

Gains and losses on sales of foreclosed assets – The Company records a gain or loss from the sale of foreclosed assets at a point in time when control of the property transfers to the buyer, which generally occurs at the time of the executed deed. When the Company finances the sale of foreclosed assets to the buyer, the Company assesses whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction price is probable. Once these criteria are met, the foreclosed asset is derecognized and the gain or loss on sale is recorded upon the transfer of control of the property to the buyer.

NOTE 3: EARNINGS PER COMMON SHARE

Basic earnings per common share represent income available to common shareholders divided by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflect additional common shares that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustment to income that would result from the assumed issuance. Unallocated common shares held by the ESOP are not included in the weighted-average number of common shares outstanding for purposes of calculating basic earnings per common share until they are committed to be released.

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The table below sets forth the computation of basic and diluted earnings per common share for the three-month periods ended December 31, 2025 (unaudited) and 2024 (In thousands, except per share data).


	Three Months Ended
	December 31,
Basic earnings per share:	2025			2024
Net income	$	287		$	160
Weighted average common shares outstanding used to calculate
basic and diluted earnings per common share		1,032			1,054
Basic earnings per common share	$	0.28		$	0.15
Diluted earnings per common share	$	0.28		$	0.15

There were no dilutive or antidilutive shares at December 31, 2025 or 2024.

NOTE 4: COMPREHENSIVE INCOME (LOSS)

Comprehensive income (loss), presented in the consolidated statements of shareholders’ equity, consists of net income and the net change for the period in after-tax unrealized gains or losses on securities available for sale and post-retirement benefits.

The following table shows the components of accumulated other comprehensive loss on the accompanying consolidated statements of financial condition at December 31, 2025 (unaudited) and September 30, 2025:



	December 31,		September 30,
	2025		2025

	(In Thousands)

Unrealized Loss on Available-for-Sale Securities, net	$	(2,079)	$	(2,454)
Deferred Tax Effect		436		515
Net Unrealized Loss on Available-for-Sale Securities		(1,643)		(1,939)

Unrealized Loss for Other Postretirement Obligations	$	(294)	$	(314)
Deferred Tax Effect		62		66
Net Unrealized Loss for Other Postretirement Obligations		(232)		(248)

Total Accumulated Other Comprehensive Loss	$	(1,875)	$	(2,187)

NOTE 5: INVESTMENT SECURITIES

The amortized cost of debt securities and their approximate fair value at December 31, 2025 (unaudited) is represented in the table below:


			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value

	(unaudited) (In Thousands)
AVAILABLE FOR SALE
U.S. Government Treasuries	$	3,927	$	4	$	—	$	3,931
U.S. Government Agencies		5,752		32		—		5,784
Mortgaged-Backed Securities		12,595		49		(329)		12,315
Municipal Securities		21,111		104		(1,945)		19,270
SBA Securities		1,491		8		(2)		1,497
	$	44,876	$	197	$	(2,276)	$	42,797

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The amortized cost of debt securities and their approximate fair value at September 30, 2025 is represented in the table below.


			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
AVAILABLE FOR SALE
U.S. Government Treasuries	$	2,415	$	1	$	—	$	2,416
U.S. Government Agencies		6,712		23		(1)		6,734
Mortgaged-Backed Securities		11,433		41		(355)		11,119
Municipal Securities		21,282		74		(2,243)		19,113
SBA Securities		1,543		8		(2)		1,549
	$	43,385	$	147	$	(2,601)	$	40,931

The amortized cost and fair value of debt securities, by contractual maturity, at December 31, 2025 (unaudited) is as shown below. Expected maturities will differ from contractual maturities call or prepay obligations with or without call or prepayment penalties.


	Debt Securities
	Available-for-Sale
	Amortized
	Cost		Fair Value

		(In Thousands)
Due Within One Year	$	5,880	$	5,889
Due After One Year Through Five Years		4,917		4,944
Due After Five Years Through Ten Years		6,645		6,515
Due After Ten Years		13,348		11,637
		30,790		28,985
Mortgage-Backed & SBA Securities with no set maturity		14,086		13,812
	$	44,876	$	42,797

The amortized cost and fair value of debt securities, by contractual maturity, at September 30, 2025 is as shown below.


	Debt Securities
	Available-for-Sale
	Amortized
	Cost		Fair Value

	(In Thousands)
Due Within One Year	$	4,868	$	4,875
Due After One Year Through Five Years		5,556		5,578
Due After Five Years Through Ten Years		6,279		6,108
Due After Ten Years		13,706		11,702
		30,409		28,263
Mortgage-Backed & SBA Securities with no set maturity		12,976		12,668
	$	43,385	$	40,931

There were no realized gains and losses from the sale of available-for-sale investments for the three-month periods ended December 31, 2025 and 2024.

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Information pertaining to securities with gross unrealized losses at December 31, 2025 (unaudited), aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position are as follows:


	Less than Twelve months				Over Twelve Months				Total
	Gross				Gross				Gross
	Unrealized				Unrealized				Unrealized
	Losses		Fair Value		Losses		Fair Value		Losses		Fair Value

	(In Thousands)
December 31, 2025
Securities Available-for-Sale:
US Government Treasuries & Agencies	$	—	$	1,496	$	—	$	—	$	—	$	1,496
Mortgage-backed & SBA Securities		16		2,254		315		5,189		331		7,443
Municipal Securities		2		503		1,943		10,926		1,945		11,429
	$	18	$	4,253	$	2,258	$	16,115	$	2,276	$	20,368

Information pertaining to securities with gross unrealized losses at September 30, 2025 aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position are as follows:


	Less than Twelve months				Over Twelve Months				Total
	Gross				Gross				Gross
	Unrealized				Unrealized				Unrealized
	Losses		Fair Value		Losses		Fair Value		Losses		Fair Value

	(In Thousands)
September 30, 2025
Securities Available-for-Sale:
US Government Treasuries & Agencies	$	1	$	1,370	$	—	$	994	$	1	$	2,364
Mortgage-backed & SBA Securities		91		4,559		266		3,237		357		7,796
Municipal Securities		68		2,568		2,175		9,130		2,243		11,698
	$	160	$	8,497	$	2,441	$	13,361	$	2,601	$	21,858

In management’s opinion, the unrealized losses primarily reflect changes in interest rates subsequent to the acquisition of specific securities. The Company had 11 and 26 securities in an unrealized loss position of less than twelve months at December 31, 2025 and September 30, 2025, respectively, and 74 and 66 securities in an unrealized loss position of 12 months or more at December 31, 2025 and September 30, 2025, respectively. The Company has the intent and the ability to hold such securities until maturity or market price recovery. Management believes that the unrealized losses do not represent credit impairment of the securities and therefore no allowance for credit loss has been recorded as of December 31, 2025 or September 30, 2025.

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NOTE 6: LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES

The components of loans receivable, net, at December 31, 2025 (unaudited) and September 30, 2025 are as shown in the table below:


	As of December 31,		As of September 30,
	2025		2025

	Total Loans
	(unaudited)
	(In Thousands)
Real Estate Mortgages:
Residential	$	111,341	$	109,700
Commercial		11,337		10,807
Construction - Commercial		140		140
Construction - Residential		3,100		3,292
Home Equity		2,294		2,142
Other Loans:
Commercial Non-Mortgage		2,310		2,408
Automobile		1,579		1,849
Passbook		353		368
Consumer		1,985		2,129
Total Loans		134,439		132,835
Net Deferred Loan Fees		495		483
Net Discounts on Purchased Loans		(689)		(714)
Allowance for Credit Losses		(1,112)		(1,100)
Loans Receivable, Net	$	133,133	$	131,504

The outstanding principal balance and the related carrying amount of the Company’s loans acquired in the 2022 Citizens Bank of Cape Vincent acquisition were as shown in the table below at December 31, 2025 (unaudited) and September 30, 2025:


		December 31, 2025		September 30, 2025
		(unaudited)
		(In Thousands)
Purchased Credit Impaired Loans
Outstanding Principal Balance		$	—	$	—
Carrying Amount		$	—	$	—
Purchased Non-Credit Impaired Loans
Outstanding Principal Balance		$	25,651	$	26,372
Carrying Amount		$	24,962	$	25,658
Total Purchased Loans
Outstanding Principal Balance		$	25,651	$	26,372
Carrying Amount		$	24,962	$	25,658

The Company did not hold any loans with deteriorated credit quality as of December 31, 2025 or September 30, 2025. The Company did acquire a commercial secured performing loan which was subsequently classified as Substandard to ensure proper oversight and monitoring of the loan. The loan has performed in accordance with its modified loan terms for over four years. This loan was restructured in September 2023. Proceeds from the restructuring paid off current principal and interest due in the amount of $505,000. The borrower retained the same interest rate of 6.00% and received a 5-year callable note with 25-year amortization in exchange for extra real estate collateral. A $108,000 second position commercial mortgage was placed on the guarantor’s primary residence behind the Bank’s first position residential mortgage. The restructuring enhanced the Bank’s loan-to-value position while providing the borrower with a lower payment than the original contractual terms. The capitalization of interest, interest rate below market terms, and extension of the maturity date were concessions made to the borrower in exchange for additional collateral. Interest income on a restructured loan

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is accrued once the borrower demonstrates the ability to pay under the restructured terms for sustained period of repayment performance, which is generally six consecutive months. The loan was removed from non-accrual status during the third quarter of fiscal year 2024. This loan has a negative fair value adjustment as a result of purchase price accounting of $36,000 at December 31, 2025.

The Company sells first mortgage loans to third parties in the ordinary course of business, principally to the FHLB, a large purchaser of loans. These serviced loans are not included in the balances on the accompanying statements of financial condition, but the Company continues to collect the principal and interest payments on behalf of FHLB for a servicing fee. At December 31, 2025 and September 30, 2025, the total outstanding principal balance on these serviced loans was $11.1 million and $11.2 million, respectively.

The tables below present, by portfolio segment, the changes in the allowance for credit losses and the recorded investment in loans for the three-months ended December 31, 2025 and 2024 (unaudited), and the year ended September 30, 2025.

Allowance for credit losses and recorded investment in loans as of and for the three months ended December 31, 2025 was as follows:


		Real Estate			Real Estate			Commercial			Commercial
		Residential			Commercial			Secured			Unsecured			Consumer		Total
								(In Thousands)			(Unaudited)
Allowance for Credit Losses:
Beginning Balance		$	859		$	148		$	38		$	1		$	54	$	1,100
Charge-offs			—			—			—			—			(3)		(3)
Recoveries			—			—			—			—			1		1
Transfer			(9)			12			—			(1)			(2)		—
Provisions			14			—			—			—			—		14
Ending Balance		$	864		$	160		$	38		$	—		$	50	$	1,112
Ending Balance: Individually
Evaluated		$	11		$	—		$	—		$	—		$	—	$	11
Ending Balance: Collectively
Evaluated		$	853		$	160		$	38		$	—		$	50	$	1,101
Loans Receivable:
Ending Balance		$	116,735		$	11,477		$	2,299		$	11		$	3,917	$	134,439
Ending Balance: Individually
Evaluated		$	212		$	746		$	—		$	—		$	—	$	958
Ending Balance: Collectively
Evaluated		$	116,523		$	10,731		$	2,299		$	11		$	3,917	$	133,481

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Allowance for credit losses and recorded investment in loans as of and for the three months ended December 31, 2024 was as follows:


		Real Estate			Real Estate			Commercial			Commercial
		Residential			Commercial			Secured			Unsecured			Consumer		Total

		(In Thousands)
Allowance for Credit Losses:
Beginning Balance		$	799		$	156		$	40		$	—		$	68	$	1,063
Charge-offs			—			—			—			—			(20)		(20)
Recoveries			—			—			—			—			1		1
Transfer			(9)			(4)			(3)			—			16		—
Provisions			15			—			—			—			—		15
Ending Balance		$	805		$	152		$	37		$	—		$	65	$	1,059
Ending Balance: Individually
Evaluated		$	—		$	—		$	—		$	—		$	—	$	—
Ending Balance: Collectively
Evaluated		$	805		$	152		$	37		$	—		$	65	$	1,059

Allowance for credit losses and recorded investment in loans as of September 30, 2025 was as follows:


		Real Estate			Real Estate			Commercial			Commercial
		Residential			Commercial			Secured			Unsecured			Consumer		Total

		(In Thousands)
Allowance for Credit Losses:
Ending Balance: Collectively
Evaluated		$	859		$	148		$	38		$	1		$	54	$	1,100
Loans Receivable:
Ending Balance		$	115,134		$	10,947		$	2,372		$	36		$	4,346	$	132,835
Ending Balance: Individually
Evaluated		$	45		$	753		$	—		$	—		$	92	$	890
Ending Balance: Collectively
Evaluated		$	115,089		$	10,194		$	2,372		$	36		$	4,254	$	131,945

The following table presents performing and nonperforming real estate loans based on payment activity as of December 31, 2025 and September 30, 2025. Real estate loans include residential and commercial mortgages, construction loans and home equity loans. Payment activity is reviewed by management on a quarterly basis to determine how loans are performing. Loans are considered to be nonperforming when the number of days delinquent exceeds 89 days or the loan terms are modified with a borrower experiencing financial difficulty. The loan may only be returned to performing status after considering the borrower’s sustained repayment performance for a reasonable period, generally twelve consecutive months of current payments with no past due occurrences.

Performing and nonperforming real estate loans as of December 31, 2025 and September 30, 2025 were as follows:


	As of December 31,		As of September 30,
	2025		2025
	(unaudited)
	(In Thousands)
Performing	$	127,237	$	125,402
Nonperforming		975		679
Total real estate loans	$	128,212	$	126,081

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Credit quality indicators as of December 31, 2025 and September 30, 2025 are as follows:

Internally assigned grade as a subsection of the “Pass” (ratings 1 – 4) credit risk profile:

1 — Good

Loans in this category are to an individual or a well-established business in excellent financial condition with strong liquidity and a history of consistently high levels of earnings and cash flow and debt service capacity. Supported by high quality financial statements (including recent statements and sufficient historical fiscal statements), borrower has excellent repayment history and possesses a documented source of repayment. Industry conditions are favorable and borrower’s business management is well qualified with sufficient debt. Borrower and/or key personnel exhibit unquestionable character. Good loans may be characterized by high quality liquid collateral and very strong personal guarantors.

2 — Satisfactory

Loans in this category are to borrowers with many of the same qualities as a Good loan, however, certain characteristics are not as strong (i.e. cyclical nature of earnings, lower quality financial statements, less liquid collateral, less favorable industry trends, etc.). Borrower still has good credit, will exhibit financial strength, excellent repayment history, and good present and future earnings potential. The primary source of repayment is readily apparent with strong secondary sources of repayment available. Management is capable, with sufficient depth, and character of borrower is well established.

3 — Acceptable

Loans in this category are to borrowers of average strength with acceptable financial condition (businesses fall within acceptable tolerances of other similar companies represented in the RMA annual statement studies), with satisfactory record of earnings and sufficient historical and projected cash flow to service the debt. Business borrower’s management is capable and reliable. Borrower has satisfactory repayment history, and primary and secondary sources of repayment can be clearly identified. Acceptable loans may exhibit some deficiency or vulnerability to changing economic or industry conditions.

4 — Watch

Loans in this category have a chance of resulting in a loss. Characteristics of this level of assets include, but are not limited to; the borrower has only a fair credit rating with minimal recent credit problems, cash flow is currently adequate to meet the required debt repayments, but will not be sufficient in the event of significant adverse developments, borrower has limited access to alternative sources of financing, possibly at unfavorable terms, some management weaknesses exist, collateral, generally required, is sufficient to make likely the recovery of the value of the loan in the event of default, but liquidating the collateral may be difficult or expensive. In addition, the guarantor would achieve this credit rating if it borrowed individually from the Bank.

5 — Special Mention

Loans in this category are usually made to well-established businesses with local operations. Special Mention loans have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or in the institution’s credit position at some future date. Special Mention loans are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification. The Special Mention category is not to be used as a means of avoiding a clear decision to classify a loan or pass it without criticism. Neither should it include loans listed merely “for the record” when uncertainties and complexities, perhaps coupled with large size, create some reservations about the loan. If weaknesses or evidence of imprudent handling cannot be identified, inclusion of such loans in Special Mention is not justified. Special Mention loans have characteristics which corrective management action would remedy. Loans in this category should remain for a relatively short period of time.

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6 — Substandard

Loans classified as Substandard are inadequately protected by the current sound net worth or paying capacity of the borrower or the collateral pledged, if any. Loans in this category have well-defined weaknesses that jeopardize the repayment. Loans which might be included in the category have potential for problems due to weakening economic or market conditions. They are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. Substandard loans may include loans which are likely to require liquidation of collateral to effect repayment, and other loans where the character or ability to repay has become suspect. Loss potential, while existing in the aggregate amount of the substandard assets, does not have to exist in individual assets classified as Substandard.

7 — Doubtful

Loans classified as Doubtful have all the weaknesses in those classified as Substandard with the added characteristics that the weaknesses make collection or liquidation in full on the basis of current existing facts, conditions, and value highly questionable and improbable. Although possibility of loss is extremely high, classification of these loans as loss has been deferred to specific pending factors or events, which may strengthen the loan value (i.e., possibility of additional collateral, injection of capital, collateral liquidation, debt structure, economic recovery, etc.).

8 — Loss

Loans classified as Loss are considered uncollectible and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this basically worthless asset even though partial recovery may be affected in the future.

The information for each of the credit quality indicators is updated on a quarterly basis in conjunction with the determination of the adequacy of the allowance for credit losses.

Credit risk profile for loans receivable held in portfolio by internally assigned grade as of December 31, 2025:


	Pass		Special Mention		Substandard		Doubtful		Total

	(unaudited)
	(In Thousands)
Mortgage Loans on Real Estate
Residential, One to Four Family	$	114,229	$	164	$	—	$	48	$	114,441
Home Equity		2,294		—		—		—		2,294
Commercial		10,731		—		746		—		11,477
Total Mortgage Loans on Real Estate		127,254		164		746		48		128,212
Commercial		2,310		—		—		—		2,310
Consumer		3,917		—		—		—		3,917
Total Loans	$	133,481	$	164	$	746	$	48	$	134,439

Credit risk profile for loans receivable held in portfolio by internally assigned grade as of September 30, 2025:


	Pass		Special Mention		Substandard		Doubtful		Total

	(In Thousands)
Mortgage Loans on Real Estate
Residential, One to Four Family	$	112,947	$	—	$	—	$	45	$	112,992
Home Equity		2,142		—		—		—		2,142
Commercial		10,194		—		753		—		10,947
Total Mortgage Loans on Real Estate		125,283		—		753		45		126,081
Commercial		2,408		—		—		—		2,408
Consumer		4,254		92		—		—		4,346
Total Loans	$	131,945	$	92	$	753	$	45	$	132,835

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Aging Analysis of Past Due Financing Receivables by Class

Following are tables which include an aging analysis of the recorded investment of past due financing receivables as of December 31, 2025 and September 30, 2025. Any loans that are greater than 89 days past due as to interest and principal and still accruing interest are (1) well secured and in the process of collection or (2) real estate loans or loans exempt under regulatory rules from being classified as nonaccruals.

An aged analysis of past due financing receivables by class of financing receivable for loans held in portfolio as of December 31, 2025 are as follows:


					90 Days or						Total		90 Days or
	30 – 59 Days		60 – 89 Days		Greater		Total				Financing		Greater and
	Past Due		Past Due		Past Due		Past Due		Current		Receivable		Still accruing

	(In Thousands)
Residential Mortgage	$	408	$	323	$	541	$	1,272	$	115,463	$	116,735	$	—
Commercial Mortgage		24		—		68		92		11,385		11,477		—
Commercial		16		—		—		16		2,294		2,310		—
Consumer		9		—		—		9		3,908		3,917		—
Total Loans	$	457	$	323	$	609	$	1,389	$	133,050	$	134,439	$	—

An aged analysis of past due financing receivables by class of financing receivable for loans held in portfolio as of September 30, 2025, are as follows:


													90 Days or
					90 Days or						Total		Greater
	30 – 59 Days		60 – 89 Days		Greater		Total				Financing		and Still
	Past Due		Past Due		Past Due		Past Due		Current		Receivable		accruing

	(In Thousands)
Residential Mortgage	$	132	$	461	$	575	$	1,168	$	113,966	$	115,134	$	—
Commercial Mortgage		—		25		—		25		10,922		10,947		—
Commercial		16		—		—		16		2,392		2,408		—
Consumer		19		—		—		19		4,327		4,346		—
Total Loans	$	167	$	486	$	575	$	1,228	$	131,607	$	132,835	$	—

Loan Modifications Made to Borrowers Experiencing Financial Difficulty

The allowance for credit losses incorporates an estimate of lifetime expected credit losses and is recorded on each asset upon asset origination or acquisition. The starting point for the estimate of the allowance for credit losses is historical loss information, which includes losses from loan modifications of receivables made to borrowers experiencing financial difficulty. An assessment of whether a borrower is experiencing financial difficulty is made at the time of a loan modification.

Because the effect of most loan modifications made to borrowers experiencing financial difficulty is already included in the allowance for credit losses, a change to the allowance for credit losses is generally not recorded upon modification.

There were no modified loans made to borrowers experiencing financial difficulty during the three months ended December 31, 2025 or 2024.

Collateral Dependent Loans

Collateral dependent loans are individually evaluated loans upon which repayment is dependent on the operation or sale of the underlying collateral. For collateral dependent loans, the amortized cost of the loan is adjusted to fair value of the collateral, which is reassessed on a periodic basis. The Company uses the fair value of underlying collateral, less the selling, administrative costs, and other expenses necessary to liquidate the collateral in order to estimate the allowance for credit losses for individually evaluated collateral dependent loans.

As of December 31, 2025, the Company had one collateral dependent loan within the residential real estate loan segment with an outstanding balance of $48,000. The fair value of the collateral securing the loan is $40,000. Based on the Company’s policy of adjusting the amortized cost to fair value, a specific allowance for credit losses of $11,200 was recorded as a component of individually evaluated loans. As of September 30, 2025, the Company had the same collateral dependent loan outstanding with an outstanding balance of $45,000.

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Vintage Analysis

The following table presents the Company’s recorded investment in loans by credit quality indicators by year of origination as of December 31, 2025:


	Term Loans by Fiscal Year of Origination
(In Thousands)	2026		2025		2024		2023		2022		Prior		Revolving		Total


Real Estate - Residential
Pass	$	3,784	$	17,135	$	8,895	$	9,343	$	13,848	$	61,224	$	2,294	$	116,523
Special Mention		—		164		—		—		—		—		—		164
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		48		—		48
Total Real Estate - Residential	$	3,784	$	17,299	$	8,895	$	9,343	$	13,848	$	61,272	$	2,294	$	116,735

Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Real Estate - Commercial
Pass	$	609	$	1,543	$	730	$	1,726	$	575	$	5,548	$	—	$	10,731
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		509		—		237		—		746
Doubtful		—		—		—		—		—		—		—		—
Total Real Estate - Commercial	$	609	$	1,543	$	730	$	2,235	$	575	$	5,785	$	—	$	11,477

Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Commercial - Secured
Pass	$	28	$	642	$	477	$	344	$	32	$	776	$	—	$	2,299
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
Total Commercial - Secured	$	28	$	642	$	477	$	344	$	32	$	776	$	—	$	2,299

Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Commercial - Unsecured
Pass	$	—	$	—	$	—	$	—	$	—	$	11	$	—	$	11
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
Total Commercial - Unsecured	$	—	$	—	$	—	$	—	$	—	$	11	$	—	$	11

Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Consumer
Pass	$	199	$	776	$	913	$	1,026	$	378	$	625	$	—	$	3,917
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
Total Consumer	$	199	$	776	$	913	$	1,026	$	378	$	625	$	—	$	3,917

Current period gross write-offs	$	3	$	—	$	—	$	—	$	—	$	—	$	—	$	3

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Nonaccrual Loans

The following table is a summary of the Company’s nonaccrual loans by major categories as of December 31, 2025 (unaudited) and September 30, 2025:



		December 31, 2025							September 30, 2025
		Nonaccrual loans		Nonaccrual loans		Total Nonaccrual			Nonaccrual loans		Nonaccrual loans		Total Nonaccrual
(In Thousands)		with No Allowance		with an Allowance		Loans			with No Allowance		with an Allowance		Loans
Real Estate - Residential		$	—	$	883	$	883		$	—	$	679	$	679
Real Estate - Commercial			—		92		92			—		—		—
Commercial - Secured			—		16		16			—		16		16
Commercial - Unsecured			—		—		—			—		—		—
Consumer			—		—		—			—		—		—
Total Loans		$	—	$	991	$	991		$	—	$	695	$	695

The Company recognized no interest income on nonaccrual loans during the three months ended December 31, 2025 or 2024.

The following table represents the accrued interest receivable written off by reversing interest income during the three months ended December 31, 2025 and 2024:




		For the Nine Months Ended
		June 30, 2025			June 30, 2024

		(In Thousands)
Real Estate - Residential		$	15		$	20
Real Estate - Commercial			1			—
Commercial - Secured			—			—
Commercial - Unsecured			—			—
Consumer			—			1
Total Loans		$	16		$	21

NOTE 7: GOODWILL AND INTANGIBLE ASSETS

The goodwill and intangible assets arising from the fiscal 2022 acquisition of Citizens Bank of Cape Vincent is accounted for in accordance with the accounting guidance in FASB ASC Topic 350, Intangibles- Goodwill and Other. The Company recorded goodwill of $4.2 million and core deposit intangibles of $2.5 million in connection with the acquisition. As of December 31, 2025 (unaudited) and September 30, 2025, intangible assets, net, consisted of $1.2 million and $1.3 million, respectively, of core deposit intangibles, which are amortized over an estimated original useful life of ten years.

The Company performs its annual impairment evaluation on September 30 and will perform more frequently if events and circumstances indicate that the fair value is less than its carrying value.

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Goodwill and core deposit intangibles at December 31, 2025 (unaudited) and September 30, 2024 are summarized as follows:


	As of December 31,						As of September 30,
	2025						2025
	Gross				Net		Gross				Net
	Carrying		Accumulated		Carrying		Carrying		Accumulated		Carrying
	Amount		Amortization		Amount		Amount		Amortization		Amount

	(In Thousands)
Goodwill	$	4,237	$	—	$	4,237	$	4,237	$	—	$	4,237
Core Deposit Intangible		2,542		(1,329)		1,213		2,542		(1,248)		1,294
	$	6,779	$	(1,329)	$	5,450	$	6,779	$	(1,248)	$	5,531

No impairments of goodwill were recognized for the three months ended December 31, 2025 or 2024. Amortization expense for other intangible assets was $81,000 and $93,000 for the three months ended December 31, 2025 and 2024, respectively. The estimated aggregate amortization expense for each of the five succeeding fiscal years and thereafter, as of December 31, 2025, is summarized below:



Fiscal Year Ending
September 30,
(In Thousands)
2026	$	242
2027		277
2028		231
2029		185
2030		139
Thereafter		139
	$	1,213

NOTE 8: FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET CREDIT RISK

The Bank is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and to sell loans. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated statements of financial condition.

The Bank’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit is represented by the contractual amount of those instruments. The Bank uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments.

A summary of financial instrument commitments at December 31, 2025 (unaudited) and September 30, 2025 is shown below.


	December 31,			September 30,
	2025			2025
	(unaudited)
	(In Thousands)
Commitments to Grant Loans	$	1,896		$	3,107
Unfunded Commitments Under Lines of Credit	$	4,341		$	4,168

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since some of the commitments are expected to expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements.

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The Bank evaluates each customer’s credit worthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Bank upon extension of credit, is based on management’s credit evaluation of the customer and generally consists of real estate.

Commitments and Contingencies

Outstanding letters of credit written are conditional commitments issued by the Company to guarantee the performance by a customer to a third party. The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for standby letters of credit is represented by the contractual amount of those instruments. The Bank uses the same credit policies in making conditional obligations as it does for on-balance sheet instruments. The Company had four standby letters of credit totaling $178,000 with no amounts outstanding as of December 31, 2025 and September 30, 2025.

The credit risk involved in issuing letters of credit is essentially the same as that involved in extending other loan commitments. The Company requires collateral and personal guarantees supporting these letters of credit as deemed necessary. Management believes that the proceeds obtained through a liquidation of such collateral in the event of a default, and the enforcement of personal guarantees would be sufficient to cover the maximum potential amount of future payments required under the corresponding guarantees.

Unfunded Commitments

The Company maintains an allowance for credit losses for off-balance sheet credit exposures such as unfunded balances for existing lines of credit, commitments to extend future credit, as well as both standby and commercial letters of credit when there is a contractual obligation to extend credit and when this extension of credit is not unconditionally cancellable (i.e. commitment cannot be canceled at any time). The allowance for credit losses for off-balance sheet credit exposures is adjusted through the provision for credit loss expense on the accompanying consolidated statements of earnings. The estimate includes consideration of the likelihood that funding will occur, which is based on a historical funding study derived from internal information, and an estimate of expected credit losses on commitments expected to be funded over its estimated life, which are the same loss rates that are used in computing the allowance for credit losses on loans, and are discussed within this note. The allowance for credit losses for unfunded loan commitments of $22,000 and $23,000 at December 31, 2025 and September 30, 2025, respectively, is separately classified on the consolidated statements of financial condition within accrued interest payable and other liabilities.

The following table presents the balance and activity in the allowance for credit losses for unfunded loan commitments for the three months ended December 31, 2025 and 2024.


	For the Three Months Ended
	December 31, 2025		December 31, 2024

	(unaudited)
	(In Thousands)
Allowance for Credit Losses:
Beginning Balance	$	23	$	25
Provision for credit loss - unfunded commitments		(1)		—
Ending Balance	$	22	$	25

NOTE 9: REGULATORY CAPITAL REQUIREMENTS

The Bank is subject to regulatory capital requirements administered by banking regulators. Failure to meet minimum capital requirements can trigger certain mandatory — and possibly additional discretionary — actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

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U.S. Basel III Capital Rules

In 2013, the Federal Reserve Board approved final rules (the “U.S. Basel III Capital Rules”) establishing a new comprehensive capital framework for U.S. banking organizations and implementing the Basel Committee on Banking Supervision’s December 2010 framework for strengthening international capital standards. The U.S. Basel III Capital Rules substantially revised the risk-based capital requirements applicable to bank holding companies and depository institutions.

The U.S. Basel III Capital Rules require the Bank to:

●	Meet a minimum Common Equity Tier 1 Capital ratio of 4.50% of risk-weighted assets and a minimum Tier 1 Capital ratio of 6.00% of risk-weighted assets;

●	Continue to require a minimum Total Capital ratio of 8.00% of risk-weighted assets and a minimum Tier 1 Leverage Capital ratio of 4.00% of average assets;

●	Maintain a “capital conservation buffer” of 2.50% above the minimum risk-based capital requirements, which must be maintained to avoid restrictions on capital distributions and certain discretionary bonus payments; and

●

Comply with a revised definition of capital to improve the ability of regulatory capital instruments to absorb losses. Certain non-qualifying capital instruments, including cumulative preferred stock and TruPS, will be excluded as a component of Tier 1 capital for institutions of the Company’s size.

The U.S. Basel III Capital Rules use a standardized approach for risk weightings that expand the risk-weightings for assets and off-balance sheet exposures from the previous 0%, 20%, 50% and 100% categories to a much larger and more risk-sensitive number of categories, depending on the nature of the assets and off-balance sheet exposures, resulting in higher risk weights for a variety of asset categories.

The capital conservation buffer at December 31, 2025 and September 30, 2025 is 2.50%. The Bank exceeded these “well-capitalized” and “capital conservation buffer” ratios for all periods presented.

As of December 31, 2025 and September 30, 2025, the Bank’s capital levels meet the fully phased-in minimum capital requirements, including the new capital conservation buffers, as prescribed in the U.S. Basel III Capital Rules.

As of December 31, 2025 and September 30, 2025, the most recent notification from the Federal Deposit Insurance Corporation (“FDIC”) categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since the most recent notification that management believes have changed the Bank’s prompt corrective action category.

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There are no comparable minimum capital requirements that apply to the Company as a savings and loan holding company. The Bank’s actual and required capital amounts and ratios are presented in the table below:


										Minimum to be Well
										Capitalized Under Prompt
					Minimum Capital					Corrective Action
	Actual				Requirement					Provisions
	Amount ($)		Ratio (%)		Amount ($)			Ratio (%)		Amount ($)			Ratio (%)

	(In Thousands)
As of December 31, 2025 (unaudited)
Total Capital (to Risk-Weighted Assets)	$	28,695	25.5	≥	$	8,998	≥	8.0	≥	$	11,248	≥	10.0
Tier 1 Capital (to Risk-Weighted Assets)		27,561	24.5	≥		6,749	≥	6.0	≥		8,998	≥	8.0
Tier 1 Common Equity (to Risk-Weighted Assets)		27,561	24.5	≥		5,061	≥	4.5	≥		7,311	≥	6.5
Tier 1 Leverage Ratio (to Adjusted Total Assets)		27,561	13.9	≥		7,904	≥	4.0	≥		9,880	≥	5.0
Capital Conservation Buffer on Tier 1 Common Equity		28,695	17.5	≥		7,873	≥	7.0	≥		N/A	≥	N/A

As of September 30, 2025
Total Capital (to Risk-Weighted Assets)	$	28,255	25.2	≥	$	8,976	≥	8.0	≥	$	11,221	≥	10.0
Tier 1 Capital (to Risk-Weighted Assets)		27,133	24.2	≥		6,732	≥	6.0	≥		8,976	≥	8.0
Tier 1 Common Equity (to Risk-Weighted Assets)		27,133	24.2	≥		5,049	≥	4.5	≥		7,293	≥	6.5
Tier 1 Leverage Ratio (to Adjusted Total Assets)		27,133	13.9	≥		7,798	≥	4.0	≥		9,747	≥	5.0
Capital Conservation Buffer on Tier 1 Common Equity		28,255	17.2	≥		7,854	≥	7.0	≥		N/A	≥	N/A

GS&L Municipal Bank’s actual and required capital amounts and ratios are as follows:


											Minimum to be Well
											Capitalized Under Prompt
						Minimum Capital					Corrective Action
	Actual					Requirement					Provisions
	Amount ($)			Ratio (%)		Amount ($)			Ratio (%)		Amount ($)			Ratio (%)

	(In Thousands)
As of December 31, 2025 (unaudited)
Total Capital (to Risk-Weighted Assets)	$	14,756		83.0	≥	$	1,423	≥	8.0	≥	$	1,779	≥	10.0
Tier 1 Capital (to Risk-Weighted Assets)		14,756		83.0	≥		1,067	≥	6.0	≥		1,423	≥	8.0
Tier 1 Common Equity (to Risk-Weighted Assets)		14,756		83.0	≥		800	≥	4.5	≥		1,156	≥	6.5
Tier 1 Leverage Ratio (to Adjusted Total Assets)		14,756		39.3	≥		1,501	≥	4.0	≥		1,876	≥	5.0
Capital Conservation Buffer on Tier 1 Common Equity		14,756		75.0	≥		1,245	≥	7.0	≥		N/A	≥	N/A

As of September 30, 2025
Total Capital (to Risk-Weighted Assets)	$	14,571		93.9	≥	$	1,242	≥	8.0	≥	$	1,552	≥	10.0
Tier 1 Capital (to Risk-Weighted Assets)		14,571		93.9	≥		931	≥	6.0	≥		1,242	≥	8.0
Tier 1 Common Equity (to Risk-Weighted Assets)		14,571		93.9	≥		699	≥	4.5	≥		1,009	≥	6.5
Tier 1 Leverage Ratio (to Adjusted Total Assets)		14,571		40.0	≥		1,458	≥	4.0	≥		1,822	≥	5.0
Capital Conservation Buffer on Tier 1 Common Equity		14,571		85.9	≥		1,087	≥	7.0	≥		N/A	≥	N/A

NOTE 10: RETAINED EARNINGS

The Company declared and paid a semi-annual cash dividend of $0.09 per share totaling $94,000 in the first quarter of fiscal year 2026. The Company declared and paid semi-annual cash dividends of $0.08 per share in November 2024 and May 2025, totaling $174,000 in fiscal year 2025.

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NOTE 11: FAIR VALUE MEASUREMENTS

Determination of Fair Value

The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. In accordance with ASC 820, Fair Value Measurements and Disclosures, the fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument.

Recent fair value guidance provides a consistent definition of fair value, which focuses on exit price in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. If there has been a significant decrease in the volume and level of activity for the asset or liability, a change in valuation technique or the use of multiple valuation techniques may be appropriate. In such instances, determining the price at which willing market participants would transact at the measurement date under current market conditions depends on the facts and circumstances and requires the use of significant judgment. The fair value, a reasonable point within the range, is most representative of fair value under current market conditions.

Fair Value Hierarchy

In accordance with ASC 820, the Company groups its financial assets and financial liabilities generally measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value as follows:

●

Level 1 — Valuation is based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 1 assets and liabilities generally include debt and equity securities that are traded in an active exchange market. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities.

●

Level 2 — Valuation is based on inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly. The valuation may be based on quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability.

●

Level 3 — Valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which determination of fair value requires significant management judgment or estimation.

The types of instruments valued based on quoted market prices in active markets include most U.S. government and agency securities, liquid mortgage products, active listed equities and most money market securities. Such instruments are generally classified within Level 1 or Level 2 of the fair value hierarchy. As required by ASC 820, the Company does not adjust the quoted price for such instruments.

The types of instruments valued based on quoted prices in markets that are not active, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency include most investment-grade and high-yield corporate bonds, less liquid mortgage products, less liquid equities, state, municipal and provincial obligations, and certain physical commodities. Such instruments are generally classified within Level 2 of the fair value hierarchy.

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Level 3 is for positions that are not traded in active markets or are subject to transfer restrictions. Valuations are adjusted to reflect illiquidity and/or non-transferability, and such adjustments are generally based on available market evidence. In the absence of such evidence, management’s best estimate is used.

For collateral dependend loans, market value is measured based on the value of the collateral securing these loans and is classified at a Level 3 in the fair value hierarchy. The value of business equipment, inventory and accounts receivable collateral is based on the net book value on the business’ financial statements and, if necessary, discounted based on management’s review and analysis. Appraised and reported values may be discounted based on management’s historical knowledge, changes in market conditions from the time of valuation and/or management’s expertise and knowledge of the client’s business. Individually evaluated loans are reviewed and evaluated on at least a quarterly basis for credit loss and adjusted accordingly, based on the same factors previously identified.

Foreclosed properties are adjusted to fair value upon transfer of the loans to foreclosed properties. Subsequently, foreclosed properties are carried at the lower of carrying value or fair value. The estimated fair value for foreclosed properties included in Level 3 is determined by independent market-based appraisals and other available market information, less costs to sell, that may be reduced further based on market expectations or an executed sales agreement. If fair value of the collateral deteriorates subsequent to initial recognition, the Company records the foreclosed properties as a nonrecurring Level 3 adjustment. Valuation techniques are consistent with those techniques applied in prior periods.

The following table presents the assets required to be measured and reported on a recurring basis on the Company’s Consolidated Statements of Financial Condition at their fair value as of December 31, 2025 (unaudited) and September 30, 2025 by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.


					Quoted Prices in
					Active Markets
					for Identical			Significant Other			Significant
		Total			Assets/Liabilities			Observable			Unobservable
		Fair Value			(Level 1 )			Inputs (Level 2)			Inputs (Level 3)

		(In Thousands)
December 31, 2025 (unaudited)

U.S. Government Treasuries		$	3,931		$	—		$	3,931		$	—
U.S. Government Agencies			5,784			—			5,784			—
Mortgaged-Backed Securities			12,315			—			12,315			—
Municipal Securities			19,270			—			19,270			—
SBA Securities			1,497			—			1,497			—
Available-for-Sale Securities		$	42,797		$	—		$	42,797		$	—

September 30, 2025

U.S. Government Treasuries		$	2,416		$	—		$	2,416		$	—
U.S. Government Agencies			6,734			—			6,734			—
Mortgaged-Backed Securities			11,119			—			11,119			—
Municipal Securities			19,113			—			19,113			—
SBA Securities			1,549			—			1,549			—
Available-for-Sale Securities		$	40,931		$	—		$	40,931		$	—

Certain assets and liabilities may be required to be measured at fair value on a nonrecurring basis in periods subsequent to their initial recognition. Generally, nonrecurring valuation is the result of the application of other accounting pronouncements which require assets and liabilities to be assessed for impairment or recorded at the lower of cost or fair value.

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Fair values of assets measured on a nonrecurring basis at December 31, 2025 (unaudited) and September 30, 2025 are shown in the following table:


					Quoted Prices in
					Active Markets
					for Identical			Significant Other			Significant
		Total			Assets/Liabilities			Observable			Unobservable
		Fair Value			(Level 1 )			Inputs (Level 2)			Inputs (Level 3)

		(In Thousands)
December 31, 2025 (unaudited)
Individually Evaluated Loans (collateral dependent)		$	48		$	—		$	—		$	48

Foreclosed Real Estate, Net		$	158		$	—		$	—		$	158

September 30, 2025
Individually Evaluated Loans (collateral dependent)		$	45		$	—		$	—		$	45

Foreclosed Real Estate, Net		$	105		$	—		$	—		$	105

The table below presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which Level 3 inputs were used to determine fair value at December 31, 2025 (unaudited) and at September 30, 2025.


	Valuation Techniques	Unobservable Inputs	Weighted Average Range

Individually Evaluated Loans (collateral dependent)	Appraisal of Collateral	Appraisal Adjustments	25% - 25% (25%)
	(Sales Approach)	Costs to Sell	6% - 10% (8%)
	Discounted Cash Flow
Foreclosed Real Estate, Net	Appraisal of Collateral	Appraisal Adjustments	25% - 25% (25%)
	(Sales Approach)	Costs to Sell	6% - 10% (8%)

ASC 820 requires disclosures of the estimated fair value of certain financial instruments and the methods and significant assumptions used to estimate their fair values. Certain financial instruments and all non-financial instruments are excluded from the scope of the guidance.

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The estimated fair values of financial instruments at December 31, 2025 (unaudited) and at September 30, 2025 are as follows:


		Fair Value	December 31, 2025						September 30, 2025
		Level	Carrying Value			Fair Value			Carrying Value			Fair Value

			(unaudited)
			(In Thousands)
Financial Assets
Cash and due from banks		1	$	3,481		$	3,481		$	3,949		$	3,949
Interest bearing deposits with banks		1		1,228			1,228			710			710
Available for sale debt securities		2		42,797			42,797			40,931			40,931
Portfolio loans, net of deferred fees and allowance for credit losses		3		133,133			122,788			131,504			118,282
Investments in restricted stock		2		1,022			1,022			1,109			1,109
Accrued interest receivable		1		681			681			629			629

Financial Liabilities
Deposits		2	$	158,518		$	131,373		$	154,780		$	128,120
Accrued interest payable		1		6			6			4			4

The methods and assumptions that were used to estimate the fair value of financial assets and financial liabilities that are measured at fair value on a recurring and non-recurring basis have been previously disclosed. A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below:

Cash and due from banks — Due to their short-term nature, the carrying amount of cash and due from banks approximates fair value and is categorized in Level 1 of the fair value hierarchy.

Interest bearing deposits with banks — Due to their short-term nature, the carrying amount of interest-bearing deposits in other financial institutions approximates fair value and is categorized in Level 1 of the fair value hierarchy.

Available for sale securities — For those available for sale debt securities where quoted prices are unavailable, fair values are calculated based on market prices of similar securities and, therefore, are classified as Level 2 within the valuation hierarchy.

Portfolio loans — The fair value of loans is estimated by discounting future cash flows using current rates at which similar loans would be made to borrowers with similar credit ratings and is categorized in Level 3 of the fair value hierarchy. Acquired loans (impaired and non-impaired) are initially recorded at their acquisition-date fair values using Level 3 inputs. Fair values are based on a discounted cash flow methodology that involves assumptions and judgments as to credit risk, expected life time losses, environmental factors, collateral values, discount rates, expected payments and expected prepayments.

Investments in restricted stock — No secondary market exists for FHLB or Atlantic Community Bankers Bank stock. The stock is bought and sold at par and management believes the carrying amount approximates fair value and is categorized in Level 2 of the fair value hierarchy.

Accrued interest receivable — Due to their short-term nature, the carrying amount approximates fair value and is categorized in Level 1 of the fair value hierarchy.

Deposits — Fair value of deposits with no stated maturity, such as demand deposits, savings, and money market accounts, is estimated using discounted cash flows applying short-term interest rates currently offered on FHLB advances. Fair value of fixed rate time deposits is estimated using discounted cash flows applying interest rates currently offered on similar time deposits. Deposits are categorized in Level 2 of the fair value hierarchy.

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Accrued interest payable — Due to their short-term nature, the carrying amount approximates fair value and is categorized in Level 1 of the fair value hierarchy.

NOTE 12: LEASES

A lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration.

The leases in which the Company is the lessee include real estate properties for a branch office facility and a lending office facility under noncancelable operating lease arrangements, whose current maturity dates are November 2026 and January 2027, respectively. The Company’s real estate lease agreements include an option to renew at the Company’s discretion which is not included in the maturity schedule below as management is not reasonably certain to exercise the renewal option. The Bank also leases a copier under the terms of an operating lease agreement which will expire in June 2026.

ASC 842, Leases, requires the Company to recognize a right-of-use (“ROU”) asset and corresponding lease liability included in other assets and other liabilities, respectively, on the Company’s consolidated statements of financial condition.

Future maturities of operating lease liabilities with initial or remaining terms of one year or more as of December 31, 2025 are as follows for the respective future fiscal years ending September 30 (in thousands):


		(unaudited)
2026		$	24
2027			5
		$	29

Operating lease expense for the branch office and lending office amounted to $7,000 and $4,000 for the three months ended December 31, 2025 and 2024, respectively. Operating lease expense for the equipment was approximately $1,000 for both the three months ended December 31, 2025 and 2024.

The following tables presents information about the Company’s leases as of December 31, 2025 (unaudited) and September 30, 2025, respectively:


	December 31, 2025		September 30, 2025

	(In Thousands)

Operating lease right of use assets	$	29	$	37
Operating lease liabilities		29		37
Weighted average remaining lease term, in years:		0.91 years		1.15 years

The following table presents information about the Company’s lease activity for the three months ended December 31, 2025 and 2024, respectively:


	For the Three Months Ended
	December 31, 2025		December 31, 2024

	(unaudited)
	(In Thousands)
Lease expense:
Operating lease expense:	$	8	$	6
Total lease expense:	$	8	$	6
Cash paid for amounts included in measurement of lease liabilities:	$	8	$	6

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NOTE 13: PARENT COMPANY FINANCIAL INFORMATION


Gouverneur Bancorp, Inc.

CONDENSED STATEMENTS OF FINANCIAL CONDITION - PARENT COMPANY ONLY
As of December 31, 2025 (unaudited) and September 30, 2025

	December 31, 2025		September 30, 2025
	(unaudited)
	(In Thousands, Except Share and Per Share Amounts)
Assets
Cash and Cash Equivalents:
Cash and due from banks	$	1,095	$	1,273
Interest bearing deposits with banks		—		—
Total Cash and Cash Equivalents		1,095		1,273

ESOP loan receivable		478		501

Accrued interest receivable and other assets		170		165
Investment in subsidiary		31,506		30,860

Total Assets	$	33,249	$	32,799

Liabilities and Shareholders' Equity
Accrued interest payable and other liabilities	$	624	$	691

Total Liabilities		624		691

Shareholders' Equity
Preferred stock, $.01 par value: December 31, 2025 and September 30, 2025:
25,000,000 shares authorized; none issued and outstanding		—		—
Common stock, $.01 par value: December 31, 2025 and September 30, 2025:
75,000,000 shares authorized; December 31, 2025: 1,107,134 issued and 1,064,130 outstanding
and September 30, 2025: 1,107,134 issued and 1,050,945 outstanding		11		11
Additional paid-in capital		6,342		6,514
Unearned common stock held by employee stock ownership plan
(unallocated shares December 31, 2025: 46,277: September 30, 2025: 50,133)		(463)		(501)
Retained earnings		29,165		28,972
Authorized but unissued stock, at cost, (shares December 31, 2025: 43,004: September 30, 2025: 56,189)		(555)		(701)
Accumulated other comprehensive loss		(1,875)		(2,187)
Total Shareholders' Equity		32,625		32,108

Total Liabilities and Shareholders' Equity	$	33,249	$	32,799

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Gouverneur Bancorp, Inc.

CONDENSED STATEMENTS OF EARNINGS - PARENT COMPANY ONLY
For the Three Months Ended December 31, 2025 and 2024 (unaudited)

	Three Months Ended December 31,
	2025		2024

	(unaudited)
	(In Thousands, except per share data)
Interest Income:
Loans receivable, including fees	$	43	$	44

Total Interest Income		43		44

Net Interest Income		43		44

Non-interest Income:
Earnings on deferred fees plan		7		7
Earnings from subsidiaries		333		192

Total Non-interest Income		340		199

Non-interest Expenses:
Directors' fees		22		22
Earnings on deferred fees plan		7		7
Professional fees		34		30
Other non-interest expenses		33		24

Total Non-interest Expenses		96		83

Income before Income Tax Expense		287		160

Income Tax Expense		—		—

Net Income	$	287	$	160

Basic and Diluted Earnings Per Share	$	0.28	$	0.15

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Gouverneur Bancorp, Inc.

CONDENSED STATEMENTS OF CASH FLOWS - PARENT COMPANY ONLY


	Three Months Ended December 31,
	2025		2024

	(unaudited)
	(In Thousands)
Cash Flows from Operating Activities:
Net income	$	287	$	160
Adjustments to reconcile net income to net cash and cash equivalents provided by operating activities:
Equity in undistributed net earnings of subsidiaries		(333)		(192)
ESOP shares committed to be released		53		42
Stock based compensation expense		19		—
Change in accrued interest receivable and other assets		(5)		4
Change in accrued interest payable and other liabilities		(68)		(48)

Net Cash Used in Operating Activities		(47)		(34)

Cash Flows from Investing Activities:
Net decrease in loans receivable		23		21

Net Cash Provided by Investing Activities		23		21

Cash Flows from Financing Activities:
Repurchase of authorized stock		(60)		(4)
Cash dividends paid		(94)		(89)

Net Cash Used in Financing Activities		(154)		(93)

Net Decrease in Cash and Cash Equivalents		(178)		(106)

Cash and Cash Equivalents - Beginning of Period		1,273		2,440

Cash and Cash Equivalents - End of Period	$	1,095	$	2,334

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ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

Statements contained in this report that are not historical facts may constitute forward-looking statements (within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended), which involve significant risks and uncertainties. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and is including this statement for purposes of invoking these safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by the use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” “plan,” or similar expressions. The Company’s ability to predict results or the actual effect of future plans or strategies is inherently uncertain and actual results may differ from those predicted. The Company undertakes no obligation to update these forward-looking statements in the future.

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

Critical Accounting Policies

We consider accounting policies involving significant judgments and assumptions by management that have, or could have, a material impact on the carrying value of certain assets or on income to be critical accounting policies. We consider these accounting policies to be our critical accounting policies. The judgments and assumptions we use are based on historical experience and other factors, which we believe to be reasonable under the circumstances. Actual results could differ from these judgments and estimates under different conditions, resulting in a change that could have a material impact on the carrying values of our assets and liabilities and our results of operations.

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Allowance for Credit Losses

We consider the allowance for credit losses to be a critical accounting policy. Note 2 to the Company’s Consolidated Financial Statements for the three months ended December 31, 2025 discusses significant accounting policies, including the allowance for credit losses in accordance with ASC 326, which changes the methodology under which management calculates its reserve for loans and investment securities, now referred to as the allowance for credit losses. Although we believe that we use the best information available to establish the allowance for credit losses, future adjustments to the allowance may be necessary if economic conditions differ substantially from the assumptions used in making the evaluation.

Our financial results are affected by the changes in and the level of the allowance for credit losses. This process involves our analysis of complex internal and external variables, and it requires that we exercise judgement to estimate an appropriate allowance for credit losses. As a result of the uncertainty associated with this subjectivity, we cannot assure the precision of the amount reserved, should we experience sizeable loan losses in any particular period. For example, changes in the financial condition of individual borrowers, economic conditions, or the condition of various markets in which collateral may be sold could require us to significantly decrease or increase the level of the allowance for credit losses. Such an adjustment could materially affect net income as a result of the change in provision for credit losses. We also have approximately $1.1 million as of December 31, 2025 in non-performing assets consisting primarily of $975 thousand non-performing real estate loans. We continue to assess the collectability of these loans and update our appraisals on these loans as appropriate.

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

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

Collectively Evaluated Loans

We establish a general allowance for loans that share common risk characteristics to recognize the expected lifetime credit losses associated with lending activities, but which, unlike specific allowances, has not been allocated to particular problem assets. This general valuation allowance is determined by segregating the loans by loan category and using historical experience, current conditions, and reasonable and supportable forecasts to estimate the expected lifetime credit losses inherent in each loan portfolio. The allowance may be adjusted for significant factors that, in management’s judgment, affect the collectability of the portfolio as of the evaluation date. These significant factors may include changes in lending policies and procedures, changes in existing general economic and business conditions affecting our primary market area, credit quality trends, collateral value, loan volumes and concentrations, seasoning of the loan portfolio, recent loss experience in particular segments of the portfolio, duration of the current business cycle and bank regulatory examination results. The applied loss factors are re-evaluated quarterly to ensure their relevance in the current real estate environment.

Individually Evaluated Loans

We establish a specific allowance when loans are determined to not share common risk characteristics with pooled loans. The allowance is measured by determining the present value of expected future cash flows or, for collateral-dependent loans, the fair value of the collateral less estimated selling expenses. Factors in identifying a specific problem loan include but are not limited to: (1) the strength of the customer’s personal or business cash flows; (2) the availability of other sources of repayment; (3) the amount due or past due; (4) the type and value of collateral; (5) the strength of our collateral position; (6) the estimated cost to sell the collateral; and (7) the borrower’s effort to cure the delinquency. In addition, for loans secured by real estate, we consider the extent of any past due and unpaid property taxes applicable to the property serving as collateral on the mortgage.

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Although we believe that we use the best information available to establish the allowance for credit losses, future adjustments to the allowance for credit losses may be necessary and any material increase in the allowance for credit losses may adversely affect our financial condition and results of operations.

Furthermore, while we believe we have established our allowance for credit losses in accordance with accounting principles generally accepted in the United States of America, as an integral part of their examination process, regulators will periodically review our allowance for credit losses. The regulators may have judgments different than management’s, and we may determine to increase our allowance for credit loss as a result of these regulatory reviews.

Fair Value Measurements

We follow the guidance of FASB ASC 820, Fair Value Measurements and Disclosures. This guidance permits entities to measure many financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. This guidance clarifies that 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. Under this guidance, fair value measurements are not adjusted for transaction costs. The guidance establishes a fair value hierarchy 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).

Goodwill

Goodwill represents the excess cost of the fiscal 2022 acquisition of Citizens Bank of Cape Vincent over the fair value of acquired tangible assets and liabilities and identifiable intangible assets. When calculating goodwill in accordance with FASB ASC 805-30-55-3, we evaluate whether the fair value of equity of the acquired company is a more reliable measure than the fair value of the equity interests transferred. We consider the assumptions required to calculate the fair value of equity of an acquired company using discounted cash flow models (income approach) and/or change of control premium models (market approach) which are generally based on a higher level of market participant inputs and therefore a lower level of subjectivity when compared to the assumptions required to calculate the fair value of equity interests transferred under a fair value pricing model. As a result, we consider the calculation of the fair value of the equity of an acquired company to be more reliable than the calculation of the fair value of the equity interests transferred. Goodwill is assessed at least annually for impairment and any such impairment will be recognized in the period identified. Goodwill is not amortized but is evaluated annually for impairment.

Comparison of Financial Condition at December 31, 2025 and September 30, 2025

Total assets increased by $3.4 million, or 1.69%, to $201.9 million at December 31, 2025 from $198.5 million at September 30, 2025. The increase in assets was primarily due to an increase in net loans receivable, net of $1.6 million and an increase in securities available for sale of $1.9 million resulting from an increase in market value from fluctuations in market rates and purchases, partially offset by a decrease in bank-owned life insurance resulting from the receipt of $566 thousand of death benefit proceeds.

Cash and cash equivalents increased by $0.1 million, or 1.07%, to $4.7 million at December 31, 2025 from $4.6 million at September 30, 2025. The increase in cash and cash equivalents can be primarily attributed to an increase in deposits of $3.7 million and the receipt of bank-owned life insurance death proceeds of $0.6 million, partially offset by an increase in loans receivable, net of $1.6 million and purchases of securities available for sale of $1.4 million for municipal deposit collateral requirements.

Loans receivable, net of the allowance for credit losses, increased by $1.6 million, or 1.24%, to $133.1 million at December 31, 2025 from $131.5 million at September 30, 2025. The increase in loans receivable, net of the allowance for credit losses, was primarily due to an increase in originated loans by $2.3 million, partially offset by a decrease in total acquired loans of $0.7 million due to loan repayments.

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Securities available for sale increased by $1.9 million, or 4.56%, to $42.8 million at December 31, 2025 from $40.9 million at September 30, 2025. The increase was primarily due to reinvested proceeds for municipal deposit collateral requirements along with an increase in the market value on the portfolio. The unrealized loss on securities available for sale included in other comprehensive loss was $1.6 million at December 31, 2025, compared to $1.9 million at September 30, 2025, primarily due to fluctuations in market rates impacting the fair value of the investment portfolio.

Total deposits increased by $3.7 million, or 2.42%, to $158.5 million at December 31, 2025 from $154.8 million at September 30, 2025. The increase in deposits can primarily be attributed to a $2.8 million increase in non-maturing deposits a $0.9 million increase in time deposits. The overall increase in deposits can be attributed to seasonal fluctuations with commercial and municipal deposits during the period. Uninsured deposits, which are the portion of deposit accounts that exceed the FDIC insurance limit, currently set at $250,000 per insured account, were approximately $34.1 million at December 31, 2025 and $31.6 million at September 30, 2025. Municipal deposits held at GS&L Municipal Bank accounted for approximately $21.8 million and $18.0 million of the uninsured deposits at December 31, 2025 and September 30, 2025, respectively. At December 31, 2025, we had $58.2 million in available liquidity with the Federal Home Loan Bank of New York and $4.7 million in cash and cash equivalents, which was sufficient to cover 100% of our uninsured and uncollateralized deposits. Municipal deposits held by GS&L Municipal Bank are fully collateralized by available for sale government and collateralized mortgage obligation securities.

Federal Home Loan Bank advances decreased by $2.0 million, or 28.57%, to $5.0 million at December 31, 2025 from $7.0 million at September 30, 2025. The decrease in advances was primarily due to an increase in customer deposits, partially offset by an increase in loans receivable, net of allowance for credit losses.

Shareholders’ equity increased by $0.5 million, or 1.61%, to $32.6 million at December 31, 2025 from $32.1 million at September 30, 2025. The increase in shareholders’ equity was primarily a result of net income and a $0.3 million increase to the market value adjustment on the securities portfolio included in the accumulated other comprehensive income component, partially offset by the repurchase of common stock of $0.1 million which was returned to authorized but unissued stock. The Company also declared and paid dividends of $0.09 per share totaling $94,000 during the three months ended December 31, 2025.

Results of Operations for the Three Months Ended December 31, 2025 and 2024

Financial Highlights

Net income for the three months ended December 31, 2025 was $287,000, compared to $160,000 for the three months ended December 31, 2024. Net income for the three months ended December 31, 2025 was higher than the three months ended December 31, 2024 primarily due to a $103,000 gain recognized from a bank-owned life insurance death benefit and a $64,000 increase in net interest income. The Company also recorded a $13,000 provision for credit losses for the three months ended December 31, 2025 compared to a $15,000 provision for credit losses for the three months ended December 31, 2024. Interest expense for the three months ended December 31, 2025 was $411,000 compared to $401,000 for the three months ended December 31, 2024, primarily due to a $63,000 increase in interest expense in Federal Home Loan Bank advances, partially offset by a $53,000 decrease in interest expense on deposits.

Net Interest Income

Net interest income totaled $1.8 million for the three months ended December 31, 2025 and also for the three months ended December 31, 2024. Net interest income for the three months ended December 31, 2025 increased by $64,000, or 3.63%, primarily due to an increase in interest income on loans of $133,000 and a decrease in interest expense on deposits of $53,000, partially offset by an increase in interest expense in Federal Home Loan Bank advances of $63,000.

Interest income increased by $74,000, or 3.42%, for the three months ended December 31, 2025 due to an increase in loan income from an increase in loan origination and loan repricing, partially offset by a decrease in interest on taxable securities.

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Interest expense increased by $10,000, or 2.49%, due to the increase in Federal Home Loan Bank borrowing interest expense, partially offset by a decrease in interest expense on deposits.

Net interest margin increased by 7 basis points, to 4.06% compared to 3.99% for the three months ended December 31, 2025 driven primarily by an increase in net interest income and a slight decrease in interest earning assets.

Provision for Credit Losses

Management recorded credit loss provisions of $13,000 and $15,000 for the three months ended December 31, 2025 and 2024, respectively. Based on a review of the loans that were in the loan portfolio at December 31, 2025, management believes that the allowance is maintained at a level that represents its best estimate of inherent credit losses in the loan portfolio that were both probable and reasonably estimable.

Non-performing loans were $991,000 and $695,000 at December 31, 2025 and September 30, 2025, respectively. At December 31, 2025 and September 30, 2025, non-performing loans consisted of $975 thousand and $679 thousand of non-performing residential mortgage loans, respectively.

Non-Interest Income

The following table sets forth a summary of non-interest income for the periods indicated:


		Three Months Ended December 31,					Change
		2025			2024		Amount		Percent

		(Dollars in thousands)
		(unaudited)
Service charges		$	93		$	83	$	10	12.05	%
ATM card fees			65			65		—	—	%
Gain on life insurance death benefit			103			—		103	100.00	%
Earnings on investment in life insurance			48			41		7	17.07	%
Earnings on deferred fees plan			23			(6)		29	483.33	%
Unrealized loss on swap agreement			—			(9)		9	100.00	%
Earnings on secondary market programs			12			15		(3)	20.00	%
Other non-interest income			1			55		(54)	98.18	%
Total non-interest income, net		$	345		$	244	$	101

The increase in total non-interest income for the three months ended December 31, 2025, was primarily due to a $103,000 gain recognized from a bank-owned life insurance death benefit. Earnings on deferred fees plan increased $29,000 for the three months ended December 31, 2025 compared to the same period last year, primarily due to fluctuations with market rates. Other non-interest income decreased $54,000 for the three months ended December 31, 2025 compared to the same period last year, primarily due to additional income from a tax-related refund recognized in the comparable period last year that did not recur this quarter.

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Non-Interest Expense

The following table sets forth an analysis of non-interest expense for the periods indicated:


		Three Months Ended December 31,					Change
		2025			2024		Amount		Percent

		(Dollars in thousands)
		(unaudited)
Salaries and employee benefits		$	899		$	873	$	26	2.98	%
Other non-interest expense			256			269		(13)	4.83	%
Building, occupancy and equipment			242			224		18	8.04	%
Professional fees			150			156		(6)	3.85	%
Data processing			105			107		(2)	1.87	%
Directors fees			94			96		(2)	2.08	%
Intangibles amortization expense			81			93		(12)	12.90	%
Earnings (losses) on deferred fees plan			23			(6)		29	483.33	%
Postage and supplies			22			22		—	—	%
Foreclosed assets, net			(18)			1		(19)	1,900.00	%
Total non-interest expense		$	1,854		$	1,835	$	19

The increase in total non-interest expense included a $29,000 increase in expenses on the earnings on deferred fees plan, primarily due to fluctuations with market rates. Foreclosed assets, net decreased $19,000 to a net benefit of $18,000 for the three months ended December 31, 2025, compared to net expense of $1,000 for the three months ended December 31, 2024. The change was primarily due to a favorable fair value adjustment on a foreclosed property during the three months ended December 31, 2025.

Income Taxes

The Company recorded an income tax expense of $20,000 for the three months ended December 31, 2025 and an income tax benefit of $1,000 for the three months ended December 31, 2024. The increase in income taxes resulted from an increase in pre-tax book income and a change in tax-exempt income. The Company’s effective income tax rates were 6.51% and (0.63)% for the three months ended December 31, 2025 and 2024, respectively. The increase in the effective income tax rate for the three months ended December 31, 2025, as compared to the three months ended December 31, 2024, was primarily related to the increase in pre-tax book income and fluctuations in permanent tax differences.

Asset Quality

From time to time, as part of our loss mitigation strategy, we may renegotiate the loan terms based on the economic or legal reasons related to the borrower’s financial difficulties. There were no loans modified to borrowers experiencing financial difficulty during the three months ended December 31, 2025. Loans modified to borrowers experiencing financial difficulty may be considered to be non-performing and, if so, are placed on non-accrual, except for those that have established a sufficient performance history (generally a minimum of six consecutive months of performance) under the terms of the restructured loan.

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Average Balances and Yields

The following tables set forth average balance sheets, average yields and costs, and certain other information for the periods indicated. No tax-equivalent yield adjustments have been made, as the effects would be immaterial. All average balances are daily average balances. Non-accrual loans were included in the computation of average balances only. The yields set forth below include the effect of deferred fees, discounts, and premiums that are amortized or accreted to interest income or interest expense. Deferred loan fees totaled $495,000 and $440,000 for the three months ended December 31, 2025 and 2024, respectively.


		For the Three Months Ended December 31,
		2025								2024
		Average								Average
		Outstanding						Average		Outstanding						Average
		Balance			Interest			Yield/Rate		Balance			Interest			Yield/Rate

		(Dollars in thousands)
		(unaudited)
Interest-earning assets⁽¹⁾:
Loans		$	131,865		$	1,825		5.49	%	$	124,630		$	1,692		5.39	%
Securities			44,941			394		3.48	%		47,800			433		3.59	%
Other short term investments			2,062			21		4.04	%		3,130			41		5.20	%
Total interest-earning assets			178,868			2,240		4.97	%		175,560			2,166		4.89	%
Noninterest-earning assets			22,018								22,110
Total assets		$	200,886							$	197,670

Interest-bearing liabilities⁽¹⁾:
Regular savings and club deposits			53,689			19		0.14	%		58,299			19		0.13	%
Money market and NOW deposits⁽²⁾			49,756			26		0.21	%		46,999			5		0.04	%
Certificates of deposit			36,229			303		3.32	%		37,797			377		3.96	%
Total interest-bearing deposits			139,674			348		0.99	%		143,095			401		1.11	%
Federal Home Loan Bank advances and other borrowings			6,362			63		3.93	%		—			—		—	%
Total interest-bearing liabilities			146,036			411		1.12	%		143,095			401		1.11	%
Noninterest-bearing demand deposits			20,875								19,328
Other noninterest-bearing liabilities			1,554								3,071
Total liabilities			168,465								165,494
Total shareholders’ equity			32,421								32,176
Total liabilities and shareholders’ equity		$	200,886							$	197,670
Net interest income					$	1,829							$	1,765
Net interest rate spread⁽³⁾								3.85	%							3.78	%
Net interest-earning assets⁽⁴⁾		$	32,832							$	32,465
Net interest margin⁽⁵⁾								4.06	%							3.99	%
Average interest-earning assets to interest-bearing liabilities								1.22	x							1.23	x

(1)	The following table provides a reconciliation of the impact of swap agreements in the table above with respect to the following items:


		For the Three Months Ended December 31,
		2025			2024

		(Dollars in thousands)
Interest on money market and NOW deposit accounts		$	26		$	5
Impact of swap agreements			—			(10)
Interest on deposits, excluding impact of swap agreements		$	26		$	15

(2)	Interest on money market and NOW deposit accounts includes net interest on swap agreements hedged against deposits.

(3)	Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities.

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(4)	Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.

(5)	Net interest margin represents net interest income divided by average total interest-earning assets.

Rate/Volume Analysis

The following table presents the effects of changing rates and volumes on our net interest income for the periods indicated. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate). The total column represents the sum of the prior columns. For purposes of this table, changes attributable to both rate and volume, which cannot be segregated, have been allocated proportionately based on the changes due to rate and the changes due to volume. There were no out-of-period items or adjustments required to be excluded from the table below.


		Three Months Ended December 31, 2025
		Compared to
		Three Months Ended December 31, 2024
		Increase (Decrease) Due to				Total Increase
		Volume		Rate		(Decrease)

		(In thousands)
Interest-earning assets:
Loans		101		32		133
Securities		(26)		(13)		(39)
Other short-term investments		(12)		(8)		(20)
Total interest-earning assets		63		11		74

Interest-bearing liabilities:
Regular savings and club deposits		(1)		1		—
Money market and NOW deposits		—		21		21
Certificates of deposit		(15)		(59)		(74)
Total deposits		(16)		(37)		(53)
Federal Home Loan Bank advances and other borrowings		63		—		63
Total interest-bearing liabilities		47		(37)		10

Change in net interest income		16		48		64

Liquidity and Capital Resources

Liquidity describes our ability to meet the financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Our primary sources of funds are deposits, principal and interest payments on loans and securities, proceeds from the sale of loans and proceeds from sales and maturities of securities. We also rely on borrowings from the Federal Home Loan Bank as supplemental sources of funds. At December 31, 2025, there $5.0 million in outstanding advances from the Federal Home Loan Bank, and we had the ability to borrow an additional $58.2 million. Additionally, at December 31, 2025, we had a line of credit with the Federal Reserve Discount Window totaling $5.0 million and a second line of credit with Atlantic Community Bankers Bank totaling $4.0 million. At December 31, 2025, there were no outstanding balances under any of these additional credit facilities.

While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and loan prepayments are greatly influenced by general interest rates, economic conditions and competition. Our most liquid assets are cash and cash equivalents and available-for-sale investment securities. The levels of these assets are dependent on our operating, financing, lending and investing activities during any given period.

Our cash flows are comprised of three primary classifications: cash flows from operating activities, investing activities and financing activities. Net cash provided by operating activities was $0.5 million and $0.3 million for the three months ended December 31, 2025 and 2024, respectively. Net cash used in investing activities, which consists primarily of disbursements for loan originations and purchases and the purchase of securities available-for-sale, offset by principal

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collections on loans, proceeds from sales, maturities and principal payments received on securities available-for-sale, was $3.0 million and $0.2 million for the three months ended December 31, 2025 and 2024, respectively. Net cash provided by financing activities, consisting primarily of activity in deposit accounts and Federal Home Loan Bank advances, was $2.6 million for the three months ended December 31, 2025 and was $0.5 million for the three months ended December 30, 2024.

We are committed to maintaining a strong liquidity position. We monitor our liquidity position on a daily basis. We anticipate that we will have sufficient funds to meet our current funding commitments. We have no material commitments for capital expenditures as of December 31, 2025. Our current strategy is to increase core deposits and utilize FHLB advances and brokered deposits to fund loan growth. We did not have any brokered deposits as of December 31, 2025 or September 30, 2025.

Gouverneur Bancorp, Inc. is a separate legal entity from the Bank and must provide for its own liquidity to pay its operating expenses and other financial obligations and to fund repurchases of shares of common stock. Bancorp’s primary source of income is dividends received from the Bank. The amount of dividends that the Bank may declare and pay to Bancorp is governed by applicable bank regulations. At December 31, 2025 and September 30, 2025, Bancorp (on an unconsolidated basis) had liquid assets of $1.1 million and $1.3 million, respectively.

At December 31, 2025 and September 30, 2025, the Bank exceeded all of its regulatory capital requirements. Management is not aware of any conditions or events that would change the Bank’s categorization as well-capitalized.

ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest rate risk is defined as the exposure to current and future earnings and capital that arises from adverse movements in interest rates. Depending on a bank’s asset/liability structure, adverse movements in interest rates could be either rising or falling interest rates. For example, a bank with predominantly long-term fixed-rate assets and short-term liabilities could have an adverse earnings exposure to a rising rate environment. Conversely, a short-term or variable-rate asset base funded by longer-term liabilities could be negatively affected by falling rates. This is referred to as re-pricing or maturity mismatch risk.

Interest rate risk also arises from changes in the slope of the yield curve (yield curve risk), from imperfect correlations in the adjustment of rates earned and paid on different instruments with otherwise similar re-pricing characteristics (basis risk), and from interest rate related options embedded in our assets and liabilities (option risk).

Our objective is to manage our interest rate risk by determining whether a given movement in interest rates affects our net interest income and the market value of our portfolio equity in a positive or negative way and to execute strategies to maintain interest rate risk within established limits. The results at December 31, 2025 indicate the level of risk within the parameters of our model. Our management believes that the December 31, 2025 results indicate a profile that reflects interest rate risk exposures in both rising and declining rate environments for both net interest income and economic value.

Economic value of equity, or “EVE,” is an economic concept that gauges the impact of interest rate changes on fair market values of assets, liabilities, and equity. EVE captures the change in economic value of the Bank even though that change may not be reflected in our accounting books and records. EVE shows management the “capital at risk” of the Bank based on the underlying values of all components of the balance sheet. As at measure of interest rate risk, it is separate and distinct from earnings at risk. EVE is a measure of long-term interest rate risk, and earnings at risk is a measure of short-term interest rate risk.

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The table below sets forth, as of December 31, 2025, the calculation of the estimated changes in our net interest income that would result from the designated immediate changes in the United States Treasury yield curve.


At December 31, 2025
Change in Interest Rates	Net Interest Income		Year 1 Change
(basis points)⁽¹⁾	Year 1 Forecast		from Level
	(Dollars in thousands)
	(unaudited)
+400	6,768		(906)
+300	6,979		(695)
+200	7,209		(465)
+100	7,440		(234)
Level	7,674		—
-100	7,753		79
-200	7,745		71
-300	7,566		(108)
-400	7,487		(187)

(1)	Assumes an immediate uniform change in interest rates at all maturities.

The tables below set forth, as of December 31, 2025, the calculation of the estimated changes in our EVE that would result from the designated immediate changes in the United States Treasury yield curve.


At December 31, 2025
Change in Interest		Estimated		Estimated Increase (Decrease) in			EVE as a Percentage of Present
Rates (basis points)⁽¹⁾		EVE⁽²⁾		EVE			Value of Assets⁽³⁾
									Increase
							EVE		(Decrease)
				Amount	Percent		Ratio⁽⁴⁾		(basis points)

				(Dollars in thousands)
				(unaudited)
+400		35,994		(13,640)	(27.48)	%	22.45	%	(3.46)	%
+300		38,848		(10,786)	(21.73)	%	23.28	%	(2.63)	%
+200		41,943		(7,691)	(15.50)	%	24.10	%	(1.81)	%
+100		45,076		(4,558)	(9.18)	%	24.80	%	(1.11)	%
—		49,634		—	—		25.91	%	—
-100		52,703		3,069	6.18	%	26.13	%	0.22	%
-200		52,269		2,635	5.31	%	24.98	%	(0.93)	%
-300		48,565		(1,069)	(2.15)	%	22.64	%	(3.27)	%
-400		48,315		(1,319)	(2.66)	%	21.85	%	(4.06)	%

(1)	Assumes an immediate uniform change in interest rates at all maturities.

(2)	EVE is the discounted present value of expected cash flows from assets, liabilities and off-balance sheet contracts.

(3)	Present value of assets represents the discounted present value of incoming cash flows on interest-earning assets.

(4)	EVE ratio represents EVE divided by the present value of assets.

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ITEM 4.CONTROLS AND PROCEDURES

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of 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, our disclosure controls and procedures were effective to ensure (1) that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms; and (2) that they are alerted in a timely manner about material information relating to the Company required to be filed in its periodic Securities and Exchange Commission filings.

During the quarter ended December 31, 2025, there were no changes in the Company’s internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

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PART II – OTHER INFORMATION

ITEM 1.LEGAL PROCEEDINGS

The Company is involved in various legal actions and claims, from time to time, arising in the normal course of business. In the opinion of management, these legal actions and claims are not expected to have a material adverse impact on the Company’s financial condition.

ITEM 1A.RISK FACTORS

For information regarding the Company’s risk factors, refer to the “Risk Factors” in Item 1A of the Company’s Annual Report on Form 10-K for the year ended September 30, 2025, filed with the Securities and Exchange Commission on December 19, 2025. As of December 31, 2025, the risk factors of the Company have not changed materially from those disclosed in the Form 10-K.

ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On December 11, 2024, the Company announced that its Board of Directors had authorized a stock repurchase program to acquire up to 55,356 shares, or 5%, of the Company’s then issued and outstanding common stock. The stock repurchase program was the Company’s first repurchase program since completing its second-step conversion and related stock offering in October 2023.

On July 24, 2025, the Company announced that its Board of Directors had authorized a second stock repurchase program to acquire up to 52,778 shares, or 5% of the Company’s then issued and outstanding common stock.

The following table provides information on repurchases by the Company of its common stock under the Company’s stock repurchase program during the three months ended December 31, 2025:


						Total Number of Shares	Maximum Number of
						Purchased as Part of	Shares that May Yet Be
		Total Number of		Average Price Paid		Publicly Announced	Purchased Under the
Period		Shares Purchased		Per share		Plans or Programs	Plans or Programs
October 1 to 31, 2025		—		$	—	56,189	51,945
November 1 to 30, 2025		39			15.04	56,228	51,906
December 1 to 31, 2025		3,453			17.27	59,681	48,453
Total		3,492		$	17.25	59,681

ITEM 3.DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4.MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.OTHER INFORMATION

During the fiscal quarter ended December 31, 2025, none of our directors or officers informed us of the adoption of or termination of a “Rule 10b5-1 trading agreement” or non-Rule 10b5-1 trading agreement, as those terms are defined in Item 408 of Regulation S-K.

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ITEM 6.EXHIBITS


Exhibit No.		Description

3.1		Articles of Incorporation of Gouverneur Bancorp, Inc. (Incorporated by reference to Exhibit 3.1 to Gouverneur Bancorp, Inc.’s Registration Statement on Form S-1 (Registration No. 333-272548))

3.2		Bylaws of Gouverneur Bancorp, Inc. (Incorporated by reference to Exhibit 3.2 to Gouverneur Bancorp, Inc.’s Registration Statement on Form S-1 (Registration No. 333-272548))

31.1		Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer of Gouverneur Bancorp, Inc.

31.2		Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer of Gouverneur Bancorp, Inc.

32.0		Certification of Chief Executive Officer and Chief Financial Officer of Gouverneur Bancorp, Inc. Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.0		The following materials from the Company’s Quarterly Report to Stockholders on Form 10-Q for the quarter ended December 31, 2025, inline formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Financial Condition, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Changes in Stockholder’s Equity, (v) the Consolidated Statements of Cash Flows and (vi) the Notes to Consolidated Financial Statements.

104.0		Cover Page Interactive Data File (embedded within the Inline XBRL document and included in Exhibit 101)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		GOUVERNEUR BANCORP, INC.


Date:	February 12, 2026	By:	/s/ Stephen M. Jefferies
			Stephen M. Jefferies
			President and Chief Executive Officer
			(Principal Executive Officer)


Date:	February 12, 2026	By:	/s/ James D. Campanaro
			James D. Campanaro
			Vice President and Chief Financial Officer
			(Principal Financial and Accounting Officer)

Source: View Original Filing on SEC EDGAR

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