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Securities

9 Months Ended

Mar. 31, 2025

(3) Securities

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


		At March 31, 2025
(In thousands)		Amortized cost (1)		Unrealized gains		Unrealized losses		Fair value
U.S. Treasury securities	$	10,819	$	-	$	444	$	10,375
U.S. government sponsored enterprises		13,032		-		1,556		11,476
State and political subdivisions		207,811		1,355		-		209,166
Mortgage-backed securities-residential		35,740		139		3,253		32,626
Mortgage-backed securities-multi-family		88,970		-		14,985		73,985
Corporate debt securities		18,401		73		670		17,804
Total securities available-for-sale	$	374,773	$	1,567	$	20,908	$	355,432


		At June 30, 2024
(In thousands)		Amortized cost (1)		Unrealized gains		Unrealized losses		Fair value
U.S. Treasury securities	$	43,024	$	-	$	1,829	$	41,195
U.S. government sponsored enterprises		13,042		-		2,068		10,974
State and political subdivisions		169,842		828		1		170,669
Mortgage-backed securities-residential		40,402		67		3,894		36,575
Mortgage-backed securities-multi-family		90,261		-		17,961		72,300
Corporate debt securities		19,608		15		1,335		18,288
Total securities available-for-sale	$	376,179	$	910	$	27,088	$	350,001

(1) Amortized cost excludes accrued interest receivable of $5.2 million and $4.0 million at March 31, 2025 and June 30, 2024, 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 as of quarter ended March 31, 2025 and June 30, 2024.

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


		At March 31, 2025
(In thousands)		Amortized cost (1)		Unrealized gains		Unrealized losses		Fair value		Allowance		Net carrying value
U.S. Treasury securities	$	20,836	$	-	$	1,036	$	19,800	$	-	$	20,836
State and political subdivisions		459,108		7,029		35,414		430,723		41		459,067
Mortgage-backed securities-residential		135,874		916		2,670		134,120		-		135,874
Mortgage-backed securities-multi-family		139,845		-		13,242		126,603		-		139,845
Corporate debt securities		26,068		59		1,710		24,417		380		25,688
Other securities		29		-		-		29		1		28
Total securities held-to-maturity	$	781,760	$	8,004	$	54,072	$	735,692	$	422	$	781,338


		At June 30, 2024
(In thousands)		Amortized cost (1)		Unrealized gains		Unrealized losses		Fair value		Allowance		Net carrying value
U.S. Treasury securities	$	23,785	$	-	$	1,749	$	22,036	$	-	$	23,785
State and political subdivisions		450,343		4,541		40,235		414,649		44		450,299
Mortgage-backed securities-residential		48,033		51		3,314		44,770		-		48,033
Mortgage-backed securities-multi-family		143,363		-		17,397		125,966		-		143,363
Corporate debt securities		25,282		12		2,505		22,789		438		24,844
Other securities		31		-		-		31		1		30
Total securities held-to-maturity	$	690,837	$	4,604	$	65,200	$	630,241	$	483	$	690,354

(1)

Amortized cost excludes accrued interest receivable of $6.0 million and $4.1 million at March 31, 2025 and June 30, 2024, respectively, which is included in accrued interest receivable in the consolidated statements of financial condition.

U.S. Treasury and mortgage-backed securities are issued by U.S. government entities and agencies. These securities are either explicitly and/or implicitly guaranteed by the U.S. government as to timely repayment of principal and interest, are highly rated by major rating agencies, and have a long history of zero credit losses. Therefore, the Company determined a zero credit loss assumption and did not calculate or record an allowance for credit loss for these securities. An allowance for credit losses on investment securities held-to-maturity has been recorded for certain municipal securities issued by state and political subdivisions and corporate debt securities, to account for expected lifetime credit loss using the 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 March 31, 2025, all mortgage-backed securities including collateralized mortgage obligations were securities of government sponsored enterprises, no private-label mortgage-backed securities or collateralized mortgage obligations were held in the securities portfolio. The Company’s investments in state and political subdivisions securities generally are municipal obligations that are general obligations supported by the general taxing authority of the issuer, and in some cases are insured. The obligations issued by school districts are supported by state aid. Primarily, these investments are issued by municipalities within New York State.

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

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


(In thousands)		Three months ended March 31, 2025			Nine months ended March 31, 2025
Balance at beginning of period	$	439		$	483
Benefit for credit losses		(17	)		(61	)
Balance at end of period	$	422		$	422


(In thousands)		Three months ended March 31, 2024		Nine months ended March 31, 2024
Balance at beginning of period	$	485	$	-
Adoption of ASU 2016-13 (CECL) on July 1, 2023		-		503
Provision (benefit) for credit losses		13		(5	)
Balance at end of period	$	498	$	498

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 March 31, 2025.


	Less than 12 Months					More than 12 Months					Total
(In thousands, except number of securities)		Fair value		Unrealized losses	Number of securities		Fair value		Unrealized losses	Number of securities		Fair value		Unrealized losses	Number of securities
Securities available-for-sale:
U.S. Treasury securities	$	239	$	1	1	$	10,136	$	443	5	$	10,375	$	444	6
U.S. government sponsored enterprises		-		-	-		11,476		1,556	5		11,476		1,556	5
State and political subdivisions		-		-	-		42		-	1		42		-	1
Mortgage-backed securities-residential		11		-	2		21,305		3,253	21		21,316		3,253	23
Mortgage-backed securities-multi-family		-		-	-		73,985		14,985	30		73,985		14,985	30
Corporate debt securities		-		-	-		15,801		670	11		15,801		670	11
Total securities available-for-sale		250		1	3		132,745		20,907	73		132,995		20,908	76
Securities held-to-maturity:
U.S. Treasury securities		-		-	-		19,800		1,036	6		19,800		1,036	6
State and political subdivisions		32,802		612	240		239,101		34,802	1,600		271,903		35,414	1,840
Mortgage-backed securities-residential		31,424		209	7		27,314		2,461	27		58,738		2,670	34
Mortgage-backed securities-multi-family		-		-	-		126,603		13,242	49		126,603		13,242	49
Corporate debt securities		489		11	1		21,869		1,699	18		22,358		1,710	19
Total securities held-to-maturity		64,715		832	248		434,687		53,240	1,700		499,402		54,072	1,948
Total securities	$	64,965	$	833	251	$	567,432	$	74,147	1,773	$	632,397	$	74,980	2,024


	Less than 12 months					More than 12 months					Total
(In thousands, except number of securities)		Fair value		Unrealized losses	Number of securities		Fair value		Unrealized losses	Number of securities		Fair value		Unrealized losses	Number of securities
Securities available-for-sale:
U.S. Treasury securities	$	24,574	$	215	1	$	16,621	$	1,614	8	$	41,195	$	1,829	9
U.S. government sponsored enterprises		-		-	-		10,974		2,068	5		10,974		2,068	5
State and political subdivisions		-		-	-		62		1	1		62		1	1
Mortgage-backed securities-residential		1,913		8	2		22,700		3,886	23		24,613		3,894	25
Mortgage-backed securities-multi-family		-		-	-		72,300		17,961	31		72,300		17,961	31
Corporate debt securities		-		-	-		16,360		1,335	16		16,360		1,335	16
Total securities available-for-sale		26,487		223	3		139,017		26,865	84		165,504		27,088	87
Securities held-to-maturity:
U.S. Treasury securities		-		-	-		22,036		1,749	7		22,036		1,749	7
State and political subdivisions		32,215		474	294		278,521		39,761	2,025		310,736		40,235	2,319
Mortgage-backed securities-residential		-		-	-		29,510		3,314	28		29,510		3,314	28
Mortgage-backed securities-multi-family		-		-	-		125,966		17,397	47		125,966		17,397	47
Corporate debt securities		-		-	-		20,276		2,505	41		20,276		2,505	41
Total securities held-to-maturity		32,215		474	294		476,309		64,726	2,148		508,524		65,200	2,442
Total securities	$	58,702	$	697	297	$	615,326	$	91,591	2,232	$	674,028	$	92,288	2,529

There were no transfers of securities available-for-sale to held-to-maturity during the three and nine months ended March 31, 2025 and 2024. During the three and nine months ended March 31, 2025, a loss of $665,000 was recognized from a sale of two securities available-for-sale with a total par value of $7.0 million. The proceeds were used to fund higher yielding investments. During the three and nine months ended March 31, 2024, there were no sales of securities and no gains or losses were recognized.

The estimated fair values of debt securities at March 31, 2025, by contractual maturity are shown below. Expected maturities may differ from contractual maturities, because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

(In thousands)


Securities available-for-sale	Amortized cost		Fair value
Within one year	$	209,706	$	210,996
After one year through five years		29,934		28,850
After five years through ten years		10,423		8,975
After ten years		-		-
Total securities available-for-sale		250,063		248,821
Mortgage-backed securities		124,710		106,611
Total securities available-for-sale		374,773		355,432

Securities held-to-maturity
Within one year		57,162		56,926
After one year through five years		164,448		162,784
After five years through ten years		184,614		167,486
After ten years		99,817		87,773
Total securities held-to-maturity		506,041		474,969
Mortgage-backed securities		275,719		260,723
Total securities held-to-maturity		781,760		735,692
Total securities	$	1,156,533	$	1,091,124

At March 31, 2025 and June 30, 2024, securities with an aggregate fair value of $981.2 million and $894.5 million, respectively, were pledged as collateral for deposits in excess of FDIC insurance limits for various municipalities placing deposits with the Commercial Bank. At March 31, 2025 and June 30, 2024, securities with an aggregate fair value of $18.1 million and $40.0 million, respectively, were pledged as collateral for potential borrowings at the Federal Reserve Bank discount window. The Company did not participate in any securities lending programs during the three and nine months ended March 31, 2025 or 2024.

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 nine months ended March 31, 2025 or 2024.