XML 21 R10.htm IDEA: XBRL DOCUMENT

Securities

6 Months Ended

Dec. 31, 2023

(3) Securities

The following tables summarize the amortized cost and fair value of securities available-for-sale by major type:

	At December 31, 2023
(In thousands)	Amortized Cost⁽¹⁾		Unrealized Gains		Unrealized Losses		Fair Value
U.S. government sponsored enterprises	$	13,048	$	-	$	1,989	$	11,059
U.S. Treasury securities		18,292		-		1,575		16,717
State and political subdivisions		162,736		1,099		1		163,834
Mortgage-backed securities-residential		27,925		-		3,540		24,385
Mortgage-backed securities-multi-family		90,805		-		17,557		73,248
Corporate debt securities		19,831		41		1,306		18,566
Total securities available-for-sale	$	332,637	$	1,140	$	25,968	$	307,809

	At June 30, 2023
(In thousands)	Amortized Cost ⁽¹⁾		Unrealized Gains		Unrealized Losses		Fair Value
U.S. government sponsored enterprises	$	13,054	$	-	$	2,231	$	10,823
U.S. Treasury securities		18,349		-		1,849		16,500
State and political subdivisions		137,343		670		2		138,011
Mortgage-backed securities-residential		29,586		-		3,985		25,601
Mortgage-backed securities-multi-family		91,016		-		18,930		72,086
Corporate debt securities		19,805		-		1,693		18,112
Total securities available-for-sale	$	309,153	$	670	$	28,690	$	281,133

(1)

Amortized cost excludes accrued interest receivable of $3.6 million and $2.9 million at December 31, 2023 and June 30, 2023, respectively, which is included in accrued interest receivable in the consolidated statements of financial condition.

There was no allowance for credit losses on securities available-for-sale at the quarter ended December 31, 2023.

The following tables summarize the amortized cost, fair value, and allowance for credit loss on securities held-to-maturity by major type:

	At December 31, 2023
(In thousands)	Amortized Cost⁽¹⁾		Unrealized Gains		Unrealized Losses		Fair Value		Allowance⁽²⁾		Net Carrying Value
U.S. Treasury securities	$	33,747	$	-	$	1,808	$	31,939	$	-	$	33,747
State and political subdivisions		463,515		6,243		31,654		438,104		46		463,469
Mortgage-backed securities-residential		34,912		-		2,969		31,943		-		34,912
Mortgage-backed securities-multi-family		145,915		-		17,282		128,633		-		145,915
Corporate debt securities		23,212		5		2,660		20,557		438		22,774
Other securities		37		-		-		37		1		36
Total securities held-to-maturity	$	701,338	$	6,248	$	56,373	$	651,213	$	485	$	700,853

	At June 30, 2023
(In thousands)	Amortized Cost⁽¹⁾		Unrealized Gains		Unrealized Losses		Fair Value		Allowance⁽²⁾		Net Carrying Value
U.S. Treasury securities	$	33,705	$	-	$	2,438	$	31,267	$	-	$	33,705
State and political subdivisions		478,756		5,178		30,662		453,272		-		478,756
Mortgage-backed securities-residential		37,186		-		3,625		33,561		-		37,186
Mortgage-backed securities-multi-family		155,046		-		20,324		134,722		-		155,046
Corporate debt securities		21,632		-		3,426		18,206		-		21,632
Other securities		38		-		-		38		-		38
Total securities held-to-maturity	$	726,363	$	5,178	$	60,475	$	671,066	$	-	$	726,363

(1)

Amortized cost excludes accrued interest receivable of $4.5 million and $3.9 million at December 31, 2023 and June 30, 2023, respectively, which is included in accrued interest receivable in the consolidated statements of financial condition.

(2)

The Company adopted ASU 2016-13 (CECL) on July 1, 2023. For periods subsequent to adoption, an allowance is calculated under the CECL methodology. The periods prior to adoption did not have an allowance for credit losses under applicable GAAP for those periods.

U.S. Treasury and mortgage-backed securities are issued by U.S. government entities and agencies. These securities are either explicitly and/or implicitly guaranteed by the U.S. government as to timely repayment of principal and interest, are highly rated by major rating agencies, and have a long history of zero credit losses. Therefore, the Company determined a zero credit loss assumption, and did not calculate or record an allowance for credit loss for these securities. An allowance for credit losses on investment securities held-to-maturity as of December 31, 2023 has been recorded for certain municipal securities issued by state and political subdivisions and corporate debt securities to account for expected lifetime credit loss using the CECL methodology.

The Company’s current policies generally limit securities investments to U.S. Government and securities of government sponsored enterprises, federal funds sold, municipal bonds, corporate debt obligations, subordinated debt of banks and certain mutual funds. In addition, the Company’s policies permit investments in mortgage-backed securities, including securities issued and guaranteed by Fannie Mae, Freddie Mac, and GNMA, and collateralized mortgage obligations issued by these entities. As of December 31, 2023, 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 balance sheet interest rate swaps or caps.

The following table summarizes the activity in the allowance for credit losses on securities held-to-maturity:

(In thousands)	Three months ended December 31, 2023			Six months ended December 31, 2023
Balance beginning of period	$	498		$	-
Adoption of ASU 2016-13 (CECL) on July 1, 2023		-			503
Benefit for credit losses		(13	)		(18	)
Balance end of period	$	485		$	485

The following table shows fair value and gross unrealized losses, aggregated by security category and length of time that individual securities have been in a continuous unrealized loss position, at December 31, 2023.

	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	$	-	$	-		-	$	11,059	$	1,989		5	$	11,059	$	1,989		5
U.S. Treasury securities		778		41		2		15,939		1,534		6		16,717		1,575		8
State and political subdivisions		-		-		-		83		1		1		83		1		1
Mortgage-backed securities-residential		-		-		-		24,379		3,540		26		24,379		3,540		26
Mortgage-backed securities-multi-family		-		-		-		73,248		17,557		31		73,248		17,557		31
Corporate debt securities		-		-		-		16,623		1,306		16		16,623		1,306		16
Total securities available-for-sale		778		41		2		141,331		25,927		85		142,109		25,968		87
Securities held-to-maturity:
U.S. Treasury securities		-		-		-		31,939		1,808		8		31,939		1,808		8
State and political subdivisions		11,853		182		131		298,626		31,472		2,149		310,479		31,654		2,280
Mortgage-backed securities-residential		3		-		2		31,940		2,969		27		31,943		2,969		29
Mortgage-backed securities-multi-family		-		-		-		128,633		17,282		52		128,633		17,282		52
Corporate debt securities		3,090		409		3		16,582		2,251		16		19,672		2,660		19
Total securities held-to-maturity		14,946		591		136		507,720		55,782		2,252		522,666		56,373		2,388
Total securities	$	15,724	$	632		138	$	649,051	$	81,709		2,337	$	664,775	$	82,341		2,475

	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	$	-	$	-		-	$	10,823	$	2,231		5	$	10,823	$	2,231		5
U.S. Treasury securities		761		57		2		15,739		1,792		6		16,500		1,849		8
State and political subdivisions		-		-		-		82		2		1		82		2		1
Mortgage-backed securities-residential		476		29		7		25,125		3,956		21		25,601		3,985		28
Mortgage-backed securities-multi-family		2,679		182		1		69,407		18,748		30		72,086		18,930		31
Corporate debt securities		2,352		40		2		15,760		1,653		15		18,112		1,693		17
Total securities available-for-sale		6,268		308		12		136,936		28,382		78		143,204		28,690		90
Securities held-to-maturity:
U.S. Treasury securities		-		-		-		31,267		2,438		8		31,267		2,438		8
State and political subdivisions		40,412		520		448		295,479		30,142		2,018		335,891		30,662		2,466
Mortgage-backed securities-residential		1,982		120		12		31,579		3,505		18		33,561		3,625		30
Mortgage-backed securities-multi-family		5,362		245		2		129,360		20,079		54		134,722		20,324		56
Corporate debt securities		10,236		2,012		9		7,970		1,414		10		18,206		3,426		19
Total securities held-to-maturity		57,992		2,897		471		495,655		57,578		2,108		553,647		60,475		2,579
Total securities	$	64,260	$	3,205		483	$	632,591	$	85,960		2,186	$	696,851	$	89,165		2,669

There were no transfers of securities available-for-sale to held-to-maturity during the three and six months ended December 31, 2023 and 2022, respectively. During the three and six months ended December 31, 2023, there were no sales of securities and no gains or losses were recognized. During the three and six months ended December 31, 2022, a loss of $251,000 was recognized from one sale of an available-for-sale security. The proceeds were used to fund higher yielding loans.

The estimated fair values of debt securities at December 31, 2023, by contractual maturity are shown below. Expected maturities may differ from contractual maturities, because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

(In thousands)

Securities available-for-sale	Amortized Cost		Fair Value
Within one year	$	163,173	$	164,266
After one year through five years		40,328		37,375
After five years through ten years		8,906		7,342
After ten years		1,500		1,193
Total securities available-for-sale		213,907		210,176
Mortgage-backed and asset-backed securities		118,730		97,633
Total securities available-for-sale		332,637		307,809

Securities held-to-maturity
Within one year		59,515		59,094
After one year through five years		164,587		160,857
After five years through ten years		157,796		147,834
After ten years		138,613		122,852
Total securities held-to-maturity		520,511		490,637
Mortgage-backed securities		180,827		160,576
Total securities held-to-maturity		701,338		651,213
Total securities	$	1,033,975	$	959,022

At December 31, 2023 and June 30, 2023, securities with an aggregate fair value of $809.1 million and $904.8 million, respectively, were pledged as collateral for deposits in excess of FDIC insurance limits for various municipalities placing deposits with the Commercial Bank. At December 31, 2023 and June 30, 2023, securities with an aggregate fair value of $24.3 million and $20.8 million, respectively, were pledged as collateral for potential borrowings at the Federal Reserve Bank discount window and the Bank Term Funding Program. The Company did not participate in any securities lending programs during the three and six months ended December 31, 2023 or 2022.

Federal Home Loan Bank Stock

Federal law requires a member institution of the Federal Home Loan Bank (“FHLB”) system to hold stock of its district FHLB according to a predetermined formula. This stock is restricted in that it can only be sold to the FHLB or to another member institution, and all sales of FHLB stock must be at par. As a result of these restrictions, FHLB stock is carried at cost. FHLB stock is held as a long-term investment and its value is determined based on the ultimate recoverability of the par value. Estimated credit loss of this investment is evaluated quarterly and is a matter of judgment that reflects management’s view of the FHLB’s long-term performance, which includes factors such as the following: its operating performance; the severity and duration of declines in the fair value of its net assets related to its capital stock amount; its commitment to make payments required by law or regulation and the level of such payments in relation to its operating performance; the impact of legislative and regulatory changes on the FHLB, and accordingly, on the members of the FHLB; and its liquidity and funding position. After evaluating these considerations, the Company concluded that the par value of its investment in FHLB stock will be recovered and, therefore, no credit loss was recorded during the three and six months ended December 31, 2023 or 2022.