SECURITIES

12 Months Ended

Dec. 31, 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
(In thousands)	Cost		Gains		Losses		Credit Losses		Value
Available-for-sale securities:
December 31, 2025:
U.S. Treasury securities	$	14,775	$	36	$	(16)	$	—	$	14,795
U.S. Government Agency securities		1,000		—		(100)		—		900
Municipal securities		16,406		3		(2,364)		(518)		13,527
Mortgage-backed securities and collateralized mortgage obligations		11,796		10		(891)		—		10,915
Corporate securities		8,608		12		(122)		—		8,498
	$	52,585	$	61	$	(3,493)	$	(518)	$	48,635
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 $27.8 million and $22.2 million were pledged to secure deposits and for other purposes required or permitted by law at December 31, 2025 and 2024, respectively. The Company had pledged collateralized mortgage obligations with a book value of $5.1 million and market value of $4.6 million at December 31, 2025, and a book value of $178,000 and a market value of $165,000 at December 31, 2024, to a local municipality collateralizing their deposits. The Company has pledged New York municipal bonds with a book value of $1.4 million and a market value of $1.2 million at December 31, 2025, and a book value of $337,000 and a market value of $282,000 at December 31, 2024, to the link deposit program.

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.

	At December 31, 2025				At December 31, 2024
	Amortized		Fair		Amortized		Fair
(In thousands)	Cost		Value		Cost		Value
Due in one year or less	$	14,434	$	13,868	$	14,225	$	13,723
Due after one year through five years		13,866		13,185		15,878		15,107
Due after five years through ten years		9,056		7,986		9,840		8,566
Due after ten years		3,433		2,681		4,283		3,333
		40,789		37,720		44,226		40,729
Mortgage-backed securities and collateralized mortgage obligations		11,796		10,915		6,862		5,755
	$	52,585	$	48,635	$	51,088	$	46,484

The Company did not sell available-for-sale securities during the years ended December 31, 2025 and 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
(In thousands)	Losses		Value		Losses		Value
December 31, 2025:
U.S. Treasury securities	$	(1)	$	996	$	(15)		2,984
U.S. Government Agency securities		—		—		(100)		900
Municipal securities		(1)		1,025		(2,363)		11,300
Mortgage-backed securities and collateralized mortgage obligations		(32)		3,871		(859)		5,359
Corporate securities		—		—		(122)		5,718
	$	(34)	$	5,892	$	(3,459)	$	26,261
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 December 31, 2025, one U.S. Treasury, two municipal, and two collateralized mortgage obligation securities were in a loss position for less than one year. At December 31, 2025, one government agency, one U.S. treasury, thirty-one municipal, four mortgage-backed, ten collateralized mortgage obligation securities and eight 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 in a continuous loss position for less than one year. At December 31, 2024, one government agency, one U.S. Treasury, thirty-two municipal, four mortgage-backed, ten collateralized mortgage obligation, 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.

(In thousands)	Municipal Securities
December 31, 2025:
Balance, beginning of period	$	498
Provision for credit losses, not previously recorded		20
Balance, end of period	$	518
December 31, 2024:
Balance, beginning of period	$	47
Provision for credit losses, not previously recorded		451
Balance, end of period	$	498

At December 31, 2025 and 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 $148,000 and $474,000, respectively. This is comprised of the Madison County Capital Resource Corp. (Cazenovia College) bond that was in default at December 31, 2025 and 2024. The bond is collateralized with all the assets and real estate of the issuer which will be monetized to satisfy bond holders.