Securities

9 Months Ended

Sep. 30, 2025

Securities

Securities

3. Securities

The amortized cost and fair values of securities, with gross unrealized gains and losses are as follows:

	Amortized		Unrealized		Unrealized		Allowance for		Fair
	Cost		Gains		Losses		Credit Losses		Value
	(In thousands)
Available-for-sale securities:
September 30, 2025 (Unaudited):
U.S. Treasury securities	$	23,845	$	34	$	(43)	$	—	$	23,836
U.S. Government Agency securities		1,000		—		(109)		—		891
Municipal securities		17,053		—		(2,501)		(498)		14,054
Mortgage-backed securities and collateralized mortgage obligations		9,365		—		(892)		—		8,473
Corporate securities		9,920		12		(152)		—		9,780
	$	61,183	$	46	$	(3,697)	$	(498)	$	57,034
December 31, 2024:
U.S. Treasury securities	$	15,923	$	4	$	(116)	$	—	$	15,811
U.S. Government Agency securities		1,000		—		(162)		—		838
Municipal securities		17,151		—		(2,372)		(498)		14,281
Mortgage-backed securities and collateralized mortgage obligations		6,862		—		(1,107)		—		5,755
Corporate securities		10,152		8		(361)		—		9,799
	$	51,088	$	12	$	(4,118)	$	(498)	$	46,484

Government agency and U.S. Treasury securities include notes and bonds with fixed rates. Mortgage-backed securities and collateralized mortgage obligations consist of securities that are issued by Fannie Mae (“FNMA”), Freddie Mac (“FHLMC”), Ginnie Mae (“GNMA”), and Small Business Administration (“SBIC”) and are collateralized by residential mortgages. Municipal securities consist of government obligation and revenue bonds. Corporate securities consist of fixed and variable rate bonds with large financial institutions.

Investment securities with carrying amounts of $34.4 million and $22.2 million were pledged to secure deposits and for other purposes required or permitted by law at September 30, 2025 and December 31, 2024, respectively.

The amortized cost and fair value of debt securities based on the contractual maturity are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations.

	September 30, 2025				December 31, 2024
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
	(Unaudited)
Due in one year or less	$	21,421	$	20,880	$	14,225	$	13,723
Due after one year through five years		17,889		17,135		15,878		15,107
Due after five years through ten years		9,073		7,946		9,840		8,566
Due after ten years		3,435		2,600		4,283		3,333
Mortgage-backed securities and collateralized mortgage obligations		9,365		8,473		6,862		5,755
	$	61,183	$	57,034	$	51,088	$	46,484

The Company did not sell available-for-sale securities during the three or nine months ended September 30, 2025 and September 30, 2024.

Management has reviewed its loan, mortgage-backed securities and collateralized mortgage obligations portfolios and determined that, to the best of its knowledge, little or no exposure exists to sub-prime or other high-risk residential mortgages. The Company is not in the practice of investing in, or originating, these types of investments or loans.

Information pertaining to securities with gross unrealized losses aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position follows:

	Less than Twelve Months				Twelve Months and Greater
	Gross				Gross
	Unrealized		Fair		Unrealized		Fair
	Losses		Value		Losses		Value
	(In thousands)
September 30, 2025 (Unaudited):
U.S. Treasury securities	$	(3)	$	6,059	$	(40)		891
U.S. Government Agency securities		—		—		(109)		2,956
Municipal securities		—		—		(2,501)		11,181
Mortgage-backed securities and collateralized mortgage obligations		—		—		(892)		5,492
Corporate securities		—		—		(152)		7,876
	$	(3)	$	6,059	$	(3,694)	$	28,396
December 31, 2024:
U.S. Treasury securities	$	—	$	—	$	(116)	$	2,874
U.S. Government Agency securities		—		—		(162)		839
Municipal securities		(24)		1,114		(2,348)		11,769
Mortgage-backed securities and collateralized mortgage obligations		—		—		(1,107)		5,755
Corporate securities		(4)		896		(357)		8,402
	$	(28)	$	2,010	$	(4,090)	$	29,639

Unrealized losses on U.S. treasury securities, government agency securities, mortgage-backed securities, collateral mortgage obligations, corporate securities, and municipal securities, have not been recognized into income because these losses are attributable to changes in interest rates, not credit quality, and because management does not intend to sell and will not be required to sell these securities prior to recovery or maturity.

At September 30, 2025, one U.S. Treasury was at a loss position for less than one year. At September 30, 2025, one government agency, one U.S. Treasury, thirty-one municipal, four mortgage-backed, ten collateralized mortgage obligation securities and eleven corporate securities were in a continuous loss position for more than twelve months.

At December 31, 2024, one corporate security and three municipal securities were at a loss position for less than one year. At December 31, 2024, one government agency, one U.S. Treasury, thirty-two municipal securities, four mortgage-backed, ten collateralized mortgage obligation securities and twelve corporate securities were in a continuous loss position for more than twelve months.

Allowance for Credit Losses for Debt Securities:

The following table presents the allowance for credit losses on available-for-sale debt securities:

	Municipal Securities
	(In thousands)
September 30, 2025 (Unaudited):
Balance, beginning of period	$	498
Provision for credit losses, not previously recorded		—
Balance, end of period	$	498
September 30, 2024:
Balance, beginning of period	$	90
Provision for credit losses, not previously recorded		—
Balance, end of period	$	90

At September 30, 2025 and December 31, 2024, the fair value of available-for-sale securities in an unrealized loss position for which an allowance for credit losses has been recorded was $451,000. The allowance relates to Madison County Capital Resource Corp. (Cazenovia College) bond that was in default at September 30, 2025 and December 31, 2024. The bond is collateralized with all the assets and real estate of the issuer which will be monetized to satisfy bond holders. The fair value was determined using a discounted cash flow analysis resulting in Level 3 classification (see Note 10.  Fair Value Measurement and Fair Value of Financial Instruments).