Securities

12 Months Ended

Jun. 30, 2022

Securities [Abstract]

Securities

Note 3. Securities

The Company’s current policies generally limit securities investments to U.S. Government and securities of government sponsored enterprises, federal funds sold, municipal bonds, corporate debt obligations, subordinated debt of banks and certain mutual funds.  In addition, the Company’s policies permit investments in mortgage-backed securities, including securities issued and guaranteed by Fannie Mae, Freddie Mac, and GNMA, and collateralized mortgage obligations issued by these entities.  As of June 30, 2022, all mortgage-backed securities including collateralized mortgage obligations were securities of government sponsored enterprises, no private-label mortgage-backed securities or collateralized mortgage obligations were held in the securities portfolio.  The Company’s investments in state and political subdivisions securities generally are municipal obligations that are general obligations supported by the general taxing authority of the issuer, and in some cases are insured.  The obligations issued by school districts are supported by state aid.  Primarily, these investments are issued by municipalities within New York State.

The Company’s current securities investment strategy utilizes a risk management approach of diversified investing among three categories: short-, intermediate- and long-term. The emphasis of this approach is to increase overall investment securities yields while managing interest rate risk.  The Company will only invest in high quality securities as determined by management’s analysis at the time of purchase.  The Company generally does not engage in any derivative or hedging transactions, such as interest rate swaps or caps.

Securities at June 30, 2022 consisted of the following:

(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Securities available-for-sale:
U.S. government sponsored enterprises	$	13,066	$	-	$	1,747	$	11,319
U.S. treasury securities		20,158		-		1,731		18,427
State and political subdivisions		247,978		374		276		248,076
Mortgage-backed securities-residential		33,186		-		3,289		29,897
Mortgage-backed securities-multi-family		99,353		-		15,644		83,709
Corporate debt securities		17,884		-		1,250		16,634
Total securities available-for-sale		431,625		374		23,937		408,062
Securities held-to-maturity:
U.S. treasury securities		33,623		-		1,643		31,980
State and political subdivisions		493,897		2,760		35,747		460,910
Mortgage-backed securities-residential		42,461		1		2,242		40,220
Mortgage-backed securities-multi-family		171,921		2		13,895		158,028
Corporate debt securities		19,900		16		651		19,265
Other securities		50		-		-		50
Total securities held-to-maturity		761,852		2,779		54,178		710,453
Total securities	$	1,193,477	$	3,153	$	78,115	$	1,118,515

Securities at June 30, 2021 consisted of the following:

(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized  Losses		Estimated Fair Value
Securities available-for-sale:
U.S. government sponsored enterprises	$	13,079	$	36	$	212	$	12,903
U.S. treasury securities		19,672		165		1		19,836
State and political subdivisions		200,436		220		-		200,656
Mortgage-backed securities-residential		34,861		287		167		34,981
Mortgage-backed securities-multi-family		119,359		1,042		994		119,407
Corporate debt securities		3,008		129		30		3,107
Total securities available-for-sale		390,415		1,879		1,404		390,890
Securities held-to-maturity:
U.S. treasury securities		10,938		28		2		10,964
State and political subdivisions		341,364		17,184		303		358,245
Mortgage-backed securities-residential		28,450		584		90		28,944
Mortgage-backed securities-multi-family		100,330		4,635		12		104,953
Corporate debt securities		9,892		111		65		9,938
Other securities		5,940		58		-		5,998
Total securities held-to-maturity		496,914		22,600		472		519,042
Total securities	$	887,329	$	24,479	$	1,876	$	909,932

The following table shows fair value and gross unrealized losses, aggregated by security category and length of time that individual securities have been in a continuous unrealized loss position, at June 30, 2022.

	Less Than 12 Months						More Than 12 Months						Total
(In thousands, except number of securities)	Fair Value		Unrealized Losses		Number of Securities		Fair Value		Unrealized Losses		Number of Securities		Fair Value		Unrealized Losses		Number of Securities
Securities available-for-sale:
U.S. government sponsored enterprises	$	11,319	$	1,747		5	$	-	$	-		-	$	11,319	$	1,747		5
U.S. treasury securities		18,427		1,731		8		-		-		-		18,427		1,731		8
State and political subdivisions		140,324		276		148		-		-		-		140,324		276		148
Mortgage-backed securities-residential		29,872		3,289		27		-		-		-		29,872		3,289		27
Mortgage-backed securities-multi-family		71,631		12,868		29		12,078		2,776		5		83,709		15,644		34
Corporate debt securities		16,634		1,250		16		-		-		-		16,634		1,250		16
Total securities available-for-sale		288,207		21,161		233		12,078		2,776		5		300,285		23,937		238
Securities held-to-maturity:
U.S. treasury securities		31,980		1,643		9		-		-		-		31,980		1,643		9
State and political subdivisions		353,837		35,564		2,362		735		183		5		354,572		35,747		2,367
Mortgage-backed securities-residential		39,865		2,242		27		-		-		-		39,865		2,242		27
Mortgage-backed securities-multi-family		155,726		13,895		68		-		-		-		155,726		13,895		68
Corporate debt securities		10,751		651		11		-		-		-		10,751		651		11
Total securities held-to-maturity		592,159		53,995		2,477		735		183		5		592,894		54,178		2,482
Total securities	$	880,366	$	75,156		2,710	$	12,813	$	2,959		10	$	893,179	$	78,115		2,720

The following table shows fair value and gross unrealized losses, aggregated by security category and length of time that individual securities have been in a continuous unrealized loss position, at June 30, 2021.

	Less Than 12 Months						More Than 12 Months						Total
(In thousands, except number of securities)	Fair Value		Unrealized Losses		Number of Securities		Fair Value		Unrealized Losses		Number of Securities		Fair Value		Unrealized Losses		Number of Securities
Securities available-for-sale:
U.S. government sponsored enterprises	$	6,787	$	212		2	$	-	$	-		-	$	6,787	$	212		2
U.S. treasury securities		1,970		1		1		-		-		-		1,970		1		1
Mortgage-backed securities-residential		19,071		167		4		-		-		-		19,071		167		4
Mortgage-backed securities-multi-family		59,176		933		21		2,469		61		1		61,645		994		22
Corporate debt securities		970		30		1		-		-		-		970		30		1
Total securities available-for-sale		87,974		1,343		29		2,469		61		1		90,443		1,404		30
Securities held-to-maturity:
U.S. treasury securities		1,991		2		1		-		-		-		1,991		2		1
State and political subdivisions		42,751		303		76		-		-		-		42,751		303		76
Mortgage-backed securities-residential		12,839		90		2		-		-		-		12,839		90		2
Mortgage-backed securities-multi-family		3,890		12		3		-		-		-		3,890		12		3
Corporate debt securities		2,506		36		2		471		29		1		2,977		65		3
Total securities held-to-maturity		63,977		443		84		471		29		1		64,448		472		85
Total securities	$	151,951	$	1,786		113	$	2,940	$	90		2	$	154,891	$	1,876		115

Management evaluated these securities considering the factors as outlined in Note 1 of these consolidated financial statements, and based on this evaluation, the Company does not consider these investments to be other-than-temporarily impaired at June 30, 2022.  Management believes that the reasons for the decline in fair value are due to the rising interest rates at the reporting date.  As of June 30, 2022, unrealized losses were primarily attributable to changes in interest rates as it relates to when the investment securities were purchased, and not due to the credit quality of the investment securities. The Company does not intend to sell, nor is it more likely than not, that the Company will be required to sell the security before recovery of the amortized cost basis.

There were no transfers of securities available-for-sale to held-to-maturity during the year ended June 30, 2022 or 2021. During the years ended June 30, 2022 and 2021, there were no sales of securities and no gains or losses were recognized.  There were no other-than-temporary impairment losses recognized during the years ended June 30, 2022 and 2021.

The estimated fair values of debt securities at June 30, 2022, by contractual maturity are shown below.  Expected maturities may differ from contractual maturities, because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

(In thousands)

Available-for-sale debt securities	Amortized Cost		Fair Value
Within one year	$	247,893	$	247,992
After one year through five years		19,679		18,436
After five years through ten years		30,014		26,753
After ten years		1,500		1,275
Total available-for-sale debt securities		299,086		294,456
Mortgage-backed and asset-backed securities		132,539		113,606
Total available-for-sale securities		431,625		408,062
Held-to-maturity debt securities
Within one year		67,643		67,283
After one year through five years		166,934		163,809
After five years through ten years		136,661		130,164
After ten years		176,232		150,949
Total held-to-maturity debt securities		547,470		512,205
Mortgage-backed securities		214,382		198,248
Total held-to-maturity securities		761,852		710,453
Total securities	$	1,193,477	$	1,118,515

As of June 30, 2022 and 2021, respectively, securities with an aggregate fair value of $892.9 million and $892.1 million were pledged as collateral for deposits in excess of FDIC insurance limits for various municipalities placing deposits with the Commercial Bank.  As of June 30, 2022 and 2021, securities with an aggregate fair value of $17.4 million and $3.9 million, respectively, were pledged as collateral for potential borrowings at the Federal Reserve Bank discount window. The Company did not participate in any securities lending programs during the years ended June 30, 2022 or 2021.