INVESTMENT SECURITIES

6 Months Ended

Dec. 31, 2024

INVESTMENT SECURITIES

INVESTMENT SECURITIES

4.        INVESTMENT SECURITIES

The amortized cost and estimated fair value of securities available for sale are as follows (dollars in thousands):

			Gross		Gross
	Amortized		Unrealized		Unrealized		Estimated
	Cost		Gains		Losses		Fair Value
December 31, 2024
U.S. Treasury	$	217,412	$	162	$	(868)	$	216,706
Mortgage-backed securities:
U.S. Government agency securities		20,517		—		(1,189)		19,328
Government-sponsored enterprises		17,522		—		(633)		16,889
Collateralized mortgage obligations:
U.S. Government agency securities		18,009		—		(461)		17,548
Government-sponsored enterprises		33,489		1		(249)		33,241
Municipal obligations		17,782		51		(8)		17,825
Total available for sale securities	$	324,731	$	214	$	(3,408)	$	321,537
June 30, 2024
U.S. Treasury	$	247,479	$	1	$	(3,931)	$	243,549
Municipal obligations		13,419		5		(8)		13,416
Other debt securities		212		305		(73)		444
Total available for sale securities	$	261,110	$	311	$	(4,012)	$	257,409
June 30, 2023
U.S. Treasury	$	396,464	$	2	$	(18,737)	$	377,729
Municipal obligations		53,492		9		(67)		53,434
Other debt securities		261		309		(66)		504
Total available for sale securities	$	450,217	$	320	$	(18,870)	$	431,667

The Company elected to exclude accrued interest receivable from the amortized cost basis of debt securities. Accrued interest receivable on available for sale debt securities totaled $1.3 million and $1.4 million at December 31, 2024 and June 30, 2024, respectively, and is excluded from the estimate of credit losses and reported in accrued interest receivable in the consolidated statement of condition.

There was no allowance for credit losses for securities available for sale as of December 31, 2024 and June 30, 2024.

The amortized cost and estimated fair value of securities held to maturity are as follows (dollars in thousands):

			Gross		Gross
	Amortized		Unrealized		Unrealized		Estimated		Allowance for		Net Carrying
	Cost		Gains		Losses		Fair Value		Credit Losses		Value
December 31, 2024
Corporate debt securities	$	22,000		59		(3,181)	$	18,878	$	216	$	21,784
Municipal obligations		3,616		—		(37)		3,579		—		3,616
Total held to maturity securities	$	25,616	$	59	$	(3,218)	$	22,457	$	216	$	25,400
June 30, 2024
Corporate debt securities	$	22,000	$	55	$	(2,898)	$	19,157	$	262	$	21,738
Municipal obligations		3,352		—		(72)		3,280		—		3,352
Total held to maturity securities	$	25,352	$	55	$	(2,970)	$	22,437	$	262	$	25,090
June 30, 2023
Corporate debt securities	$	20,000	$	—	$	(2,049)	$	17,951	$	—	$	20,000
Municipal obligations		3,949		—		(156)		3,793		—		3,949
Total held to maturity securities	$	23,949	$	—	$	(2,205)	$	21,744	$	—	$	23,949

Accrued interest receivable on held to maturity debt securities totaled $254,000 and $220,000 at December 31, 2024 and June 30, 2024, respectively, and is excluded from the estimate of credit losses and is reported in accrued interest receivable in the consolidated statement of condition.

There were no held to maturity securities that were 30 days or more past due or classified as non-accrual as of December 31, 2024 and June 30, 2024.

The following tables present the activity in the allowance for credit losses on securities held-to-maturity (dollars in thousands):

	For the Six Months Ended December 31, 2024
	Beginning								Ending
	Balance		Provisions		Charge-offs		Recoveries		Balance
Corporate debt securities	$	262	$	(46)	$	—	$	—	$	216
Municipal obligations		—		—		—		—		—
Total	$	262	$	(46)	$	—	$	—	$	216

	For the Six Months Ended December 31, 2023
	Beginning								Ending
	Balance		Provisions		Charge-offs		Recoveries		Balance
Corporate debt securities	$	—	$	238	$	—	$	—	$	238
Municipal obligations		—		—		—		—		—
Total	$	—	$	238	$	—	$	—	$	238

	For the Fiscal Year Ended June 30, 2024
	Beginning								Ending
	Balance		Provisions		Charge-offs		Recoveries		Balance
Corporate debt securities	$	—	$	262	$	—	$	—	$	262
Municipal obligations		—		—		—		—		—
Total	$	—	$	262	$	—	$	—	$	262

The estimated fair value and gross unrealized losses aggregated by security category and length of time such securities have been in a continuous unrealized loss position, is summarized as follows (dollars in thousands):

	December 31, 2024
	Less than 12 Months				12 Months or Longer				Total
	Estimated		Unrealized		Estimated		Unrealized		Estimated		Unrealized
	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
Securities available for sale:
U.S. Treasury	$	14,432	$	(4)	$	128,283	$	(864)	$	142,715	$	(868)
Mortgage-backed securities:
U.S. Government agency securities		19,328		(1,189)		—		—		19,328		(1,189)
Government-sponsored enterprises		16,889		(633)		—		—		16,889		(633)
Collateralized mortgage obligations:
U.S. Government agency securities		17,548		(461)		—		—		17,548		(461)
Government-sponsored enterprises		31,128		(248)		11		(1)		31,139		(249)
Municipal obligations		6,437		(8)		—		—		6,437		(8)
	$	105,762	$	(2,543)	$	128,294	$	(865)	$	234,056	$	(3,408)
Securities held to maturity:
Corporate debt securities	$	—	$	—	$	16,819	$	(3,181)	$	16,819	$	(3,181)
Municipal obligations		—		—		3,579		(37)		3,579		(37)
	$	—	$	—	$	20,398	$	(3,218)	$	20,398	$	(3,218)

	June 30, 2024
	Less than 12 Months				12 Months or Longer				Total
	Estimated		Unrealized		Estimated		Unrealized		Estimated		Unrealized
	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
Securities available for sale:
U.S. Treasury	$	19,580	$	(12)	$	219,059	$	(3,919)	$	238,639	$	(3,931)
Municipal obligations		3,723		(8)		—		—		3,723		(8)
Other debt securities		—		—		90		(73)		90		(73)
	$	23,303	$	(20)	$	219,149	$	(3,992)	$	242,452	$	(4,012)
Securities held to maturity:
Corporate debt securities	$	—	$	—	$	17,102	$	(2,898)	$	17,102	$	(2,898)
Municipal obligations		—		—		3,280		(72)		3,280		(72)
	$	—	$	—	$	20,382	$	(2,970)	$	20,382	$	(2,970)

	June 30, 2023
	Less than 12 Months				12 Months or Longer				Total
	Estimated		Unrealized		Estimated		Unrealized		Estimated		Unrealized
	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
Securities available for sale:
U.S. Treasury	$	104,145	$	(1,975)	$	268,782	$	(16,762)	$	372,927	$	(18,737)
Municipal obligations		47,781		(67)		—		—		47,781		(67)
Other debt securities		14		(1)		107		(65)		121		(66)
	$	151,940	$	(2,043)	$	268,889	$	(16,827)	$	420,829	$	(18,870)
Securities held to maturity:
Corporate debt securities	$	—	$	—	$	17,951	$	(2,049)	$	17,951	$	(2,049)
Municipal obligations		—		—		3,793		(156)		3,793		(156)
	$	—	$	—	$	21,744	$	(2,205)	$	21,744	$	(2,205)

Unrealized losses on securities available for sale have not been recognized into income because the issuers' debt securities are of high credit quality (rated AA or higher), management does not intend to sell, and it is likely that management will not be required to sell the securities prior to their anticipated recovery, and the decline in fair value is largely due to changes in interest rates and other market conditions. The issuers continue to make timely principal and interest payments on the securities. The fair value is expected to recover as the securities approach maturity.

As a result of the Company adopting the CECL guidance using the prospective transition approach for debt securities for which other-than-temporary impairment had been recognized prior to July 1, 2023, the amortized cost basis remains the same before and after the effective date of the CECL guidance. The effective interest rate on these debt securities was not changed. Amounts previously recognized in accumulated other comprehensive income as of July 1, 2023 relating to improvements in cash flows expected to be collected will be accreted into income over the remaining life of the asset. Recoveries of amounts previously written off relating to improvements in cash flows after July 1, 2023 will be recorded in earnings when received.

The Company does not believe the available for sale securities that were in an unrealized loss position as of December 31, 2024 and June 30, 2024, which consisted of 52 and 104 individual securities, respectively, represented a credit loss impairment. Available for sale debt securities in unrealized loss positions are evaluated for impairment related to credit losses at least quarterly. As of December 31, 2024 and June 30, 2024, the majority of the available for sale securities in an unrealized loss position consisted of debt securities issued by U.S. government agencies or U.S. government-sponsored enterprises that carry the explicit and/or implicit guarantee of the U.S. government, which are widely recognized as “risk-free” and have a long history of zero credit losses. Total gross unrealized losses were primarily attributable to changes in interest rates, relative 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 its amortized cost basis, which may be at maturity.  

None of the Company’s held to maturity debt securities were past due or on nonaccrual status as of December 31, 2024 and June 30, 2024. There was no accrued interest reversed against interest income for the six months ended December 31, 2024 and the fiscal year ended June 30, 2024, as all securities remained on accrual status. In addition, there were no collateral dependent held to maturity debt securities as of December 31, 2024 and June 30, 2024. An allowance for credit losses on held to maturity debt securities is recorded to account for expected lifetime credit losses.  

Prior to the adoption of CECL, the Company evaluated its portfolio for other than temporary impairment. At June 30, 2023 there were 165 debt securities with unrealized losses. Unrealized losses on debt securities are primarily related to increases in credit spreads since the securities were purchased. Unrealized losses on other debt securities are not considered other-than-temporary based upon analysis completed by management considering credit rating of the instrument, length of time each security has spent in an unrealized loss position and the strength of the underlying collateral.

During the fiscal year ended June 30, 2023, management reviewed all other debt securities which were rated less than investment grade for impairment, resulting in no additional impairment charges in fiscal 2023. In fiscal 2023, 54 securities with an amortized cost of $219,000 and remaining par value of $1.5 million were evaluated.

The following table sets forth information with regard to contractual maturities of debt securities (dollars in thousands). Securities not due at a single maturity date are shown separately.

	December 31, 2024
	Amortized		Estimated
	Cost		Fair Value
Securities available for sale:
Due in one year or less	$	191,162	$	190,433
Due after one to five years		47,399		47,461
Due after five to ten years		22,571		22,463
Due after ten years		63,599		61,180
	$	324,731	$	321,537
Securities held to maturity:
Due in one year or less	$	2,861	$	2,824
Due after one to five years		755		755
Due after five to ten years		22,000		18,878
	$	25,616	$	22,457

Maturities of mortgage-backed securities and collateralized mortgage obligations are included based on their contractual lives. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

During the six months ended December 31, 2024, the Company received $350,000 in proceeds from the sale of securities available for sale, realizing net gains of $165,000. The realized net gains was comprised of $253,000 of gross gains and $88,000 of gross losses. During the fiscal year ended June 30, 2024, the Company received $74.5 million in proceeds from the sale of securities available for sale, realizing gross losses of $5.6 million. There were no sales of securities available for sale for the fiscal year ended June 30, 2023.

There were no sales of securities held to maturity for the six months ended December 31, 2024 and the fiscal years ended June 30, 2024 and 2023.

During the fiscal year ended June 30, 2024, the Company received $3.1 million in proceeds from the sale of equity securities. There were no sales of equity securities for the year ended June 30, 2023.

As of December 31, 2024, June 30, 2024 and June 30, 2023, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of the Company’s equity. As of December 31, 2024, June 30, 2024 and June 30, 2023, the carrying value of available for sale securities pledged to secure FHLBNY advances and municipal deposits was $313.6 million, $254.1 million and $428.5 million, respectively.

The portion of unrealized gains and losses for the period that relates to equity securities still held at the reporting date are as follows (dollars in thousands):

		For the Six Months Ended,	For the Fiscal Year Ended,
		December 31, 2024		2024	2023
Net gain recognized during the period on equity securities	$	—	$	735	$	374
Less: Net gains recognized during the period on equity securities sold during the period		—		735		—
Unrealized gains recognized during reporting period on equity securities still held at reporting date	$	—	$	—	$	374