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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2025

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File No. 000-56605

GOUVERNEUR BANCORP, INC.

(Exact Name of Registrant as Specified in Its Charter)


Maryland (Statement or Other Jurisdiction of Incorporation or Organization)	37-2102925 (I.R.S. Employer Identification No.)

42 Church Street, Gouverneur, New York (Address of Principal Executive Offices)	13642 (Zip Code)

(315) 287-2600

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Date File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer ☐
Non-accelerated filer	☒	Smaller reporting company ☒
		Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares outstanding of the issuer’s common stock, as of February 10, 2026: 1,062,979 shares.

Table of Contents

GOUVERNEUR BANCORP, INC.

Table of Contents


		Page No.

PART I.	FINANCIAL INFORMATION	3

Item 1.	Financial Statements (Unaudited)	3

	Consolidated Statements of Financial Condition at December 31, 2025 and September 30, 2025	3

	Consolidated Statements of Earnings for the Three Months Ended December 31, 2025 and 2024	4

	Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended December 31, 2025 and 2024	5

	Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended December 31, 2025 and 2024	6

	Consolidated Statements of Cash Flows for the Three Months Ended December 31, 2025 and 2024	7

	Notes to Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	36

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	44

Item 4.	Controls and Procedures	46

PART II.	OTHER INFORMATION	47

Item 1.	Legal Proceedings	47

Item 1A.	Risk Factors	47

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	47

Item 3.	Defaults Upon Senior Securities	47

Item 4.	Mine Safety Disclosures	47

Item 5.	Other Information	47

Item 6.	Exhibits	48

SIGNATURES		49

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1.Financial Statements - Unaudited

GOUVERNEUR BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(In thousands, except share and per share data)


		December 31,			September 30,
		2025			2025
		(unaudited)
Assets:
Cash and due from banks		$	3,481		$	3,949
Interest-bearing deposits in bank			1,228			710
Total cash and cash equivalents			4,709			4,659

Securities available-for-sale, at fair value			42,797			40,931

Loans receivable, net of allowance for credit losses: December 31, 2025: $1,112 and September 30, 2025:
$1,100 and net of discount at December 31, 2025: $689 and September 30, 2025: $714 and
deferred loan fees of $495 at December 31, 2025 and $483 at September 30, 2025			133,133			131,504

Investments in restricted stock, at cost			1,022			1,109
Bank owned life insurance			6,892			7,307
Premises and equipment, net			2,869			2,904
Foreclosed real estate, net			158			105
Core deposit intangible, net			1,213			1,294
Goodwill			4,237			4,237
Accrued interest receivable and other assets			4,846			4,478
Total assets		$	201,876		$	198,528

Liabilities:
Deposits:
Non-interest-bearing demand		$	17,660		$	18,167
NOW and money market			51,965			46,870
Savings and club			51,925			53,712
Time certificates			36,968			36,031
Total deposits			158,518			154,780

Advances from the Federal Home Loan Bank			5,000			7,000
Advanced payments from borrowers for taxes and insurance			1,493			501
Accrued interest payable and other liabilities			4,240			4,139
Total liabilities			169,251			166,420

Shareholders' Equity:
Preferred stock, $.01 par value: December 31, 2025 and September 30, 2025: 25,000,000 shares authorized;
none issued and outstanding			—			—
Common stock, $.01 par value: December 31, 2025 and September 30, 2025: 75,000,000 shares authorized;
December 31, 2025: 1,107,134 issued and 1,064,130 outstanding and
September 30, 2025: 1,107,134 issued and 1,050,945 outstanding			11			11
Additional paid-in capital			6,342			6,514
Unearned common stock held by employee stock ownership plan
(unallocated shares December 31, 2025: 46,277: September 30, 2025: 50,133)			(463)			(501)
Retained earnings			29,165			28,972
Accumulated other comprehensive loss			(1,875)			(2,187)
Authorized but unissued stock, at cost, (shares December 31, 2025: 43,004: September 30, 2025: 56,189)			(555)			(701)
Total shareholders' equity			32,625			32,108
Total liabilities and shareholders' equity		$	201,876		$	198,528

See accompanying notes to consolidated financial statements.

Table of Contents

GOUVERNEUR BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF EARNINGS

(In thousands, except per share data) (Unaudited)


		Three Months Ended
		December 31,
		2025			2024
Interest income:
Loans, net		$	1,825		$	1,692
Securities-taxable			262			305
Securities-non-taxable			132			128
Other short-term investments			21			41
Total interest income			2,240			2,166

Interest expense:
Deposits			348			411
Net swap income on deposit hedge			—			(10)
Borrowings – short term and long term			63			—
Total interest expense			411			401

Net interest income			1,829			1,765
Provision (benefit) for credit losses:
Loans			14			15
Unfunded commitments			(1)			—
Net interest income after provision for credit losses			1,816			1,750

Non-interest income:
Service charges			93			83
ATM card fees			65			65
Gain on life insurance death benefit			103			—
Earnings on investment in life insurance			48			41
Earnings (losses) on deferred fees plan			23			(6)
Unrealized loss on swap agreements			—			(9)
Earnings on secondary market programs			12			15
Other non-interest income			1			55
Total non-interest income, net			345			244

Non-interest expenses:
Salaries and employee benefits			899			873
Directors fees			94			96
Earnings (losses) on deferred fees plan			23			(6)
Building, occupancy and equipment			242			224
Data processing			105			107
Postage and supplies			22			22
Professional fees			150			156
Intangibles amortization			81			93
Foreclosed assets, net			(18)			1
Other non-interest expense			256			269
Total non-interest expenses, net			1,854			1,835

Income before income tax expense (benefit)			307			159
Income tax expense (benefit)			20			(1)
Net income		$	287		$	160

Earnings per common share – basic		$	0.28		$	0.15
Earnings per common share – diluted		$	0.28		$	0.15

See accompanying notes to consolidated financial statements.

Table of Contents

GOUVERNEUR BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands, except per share data) (Unaudited)


		Three Months Ended
		December 31,
		2025			2024
Net Income		$	287		$	160
Other comprehensive income (loss) net of tax:
Unrealized gain (loss) on securities:
Unrealized holding gain (loss) arising during period			375			(1,424)
Deferred tax expense (benefit)			79			(299)
Unrealized holding gain (loss), net of deferred taxes			296			(1,125)

Post-retirement benefit (expense)			20			(8)
Deferred tax expense (benefit)			4			(2)
Post-retirement benefit (expense), net of deferred taxes			16			(6)

Total other comprehensive income (loss)			312			(1,131)
Total comprehensive income (loss)		$	599		$	(971)

See accompanying notes to consolidated financial statements.

Table of Contents

GOUVERNEUR BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

Three Months Ended December 31, 2025 and 2024

(In thousands, except share and per share data) (Unaudited)


								Unearned									Accumulated
					Additional			Common						Authorized			Other			Total
		Common			Paid-in			Stock			Retained			but Unissued			Comprehensive			Shareholders'
		Stock			Capital			held by ESOP			Earnings			Stock			Income (Loss)			Equity
Balance at September 30, 2024		$	11		$	6,487		$	(540)		$	28,413		$	—		$	(1,606)		$	32,765
Comprehensive loss:
Net income			—			—			—			160			—			—			160
Net pension and postretirement benefit, net of deferred taxes			—			—			—			—			—			(6)			(6)
Change in unrealized losses on securities available-for-sale, net of deferred taxes			—			—			—			—			—			(1,125)			(1,125)
Total comprehensive loss																					(971)
Repurchase of Authorized Stock (344 shares)			—			—			—			—			(4)			—			(4)
ESOP shares committed to be released (3,856 shares)			—			3			39			—			—			—			42
Cash dividends declared, $0.08 per share			—			—			—			(89)			—			—			(89)
Balance at December 31, 2024 (unaudited)		$	11		$	6,490		$	(501)		$	28,484		$	(4)		$	(2,737)		$	31,743

Balance at September 30, 2025		$	11		$	6,514		$	(501)		$	28,972		$	(701)		$	(2,187)		$	32,108
Comprehensive income:
Net income			—			—			—			287			—			—			287
Net pension and postretirement expense, net of deferred taxes			—			—			—			—			—			16			16
Change in unrealized losses on securities available-for-sale, net of deferred taxes			—			—			—			—			—			296			296
Total comprehensive income																					599
Restricted stock expense			—			11			—			—			—			—			11
Stock option expense			—			8			—			—			—			—			8
Issuance of restricted stock from authorized but unissued stock (16,677 shares)			—			(206)			—			—			206			—			—
Repurchase of Authorized Stock (3,492 shares)			—			—			—			—			(60)			—			(60)
ESOP shares committed to be released (3,856 shares)			—			15			38			—			—			—			53
Cash dividends declared, $0.09 per share			—			—			—			(94)			—			—			(94)
Balance at December 31, 2025 (unaudited)		$	11		$	6,342		$	(463)		$	29,165		$	(555)		$	(1,875)		$	32,625

See accompanying notes to consolidated financial statements.

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GOUVERNEUR BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands) (Unaudited)


		Three Months Ended
		December 31,
		2025			2024

Cash flows from operating activities:
Net Income		$	287		$	160
Adjustments to reconcile net income to net cash and cash equivalents provided by operating activities:
Provision for credit losses			13			15
Net amortization of deferred fees on loans			22			19
Net amortization of securities premiums and discounts			(110)			(139)
Depreciation			49			56
Net amortization of core deposits intangible			81			93
ESOP shares committed to be released			53			42
Proceeds from life insurance death benefit			566			—
Gain on life insurance death benefit			(103)			—
Earnings on investment in bank owned life insurance			(48)			(41)
Stock based compensation expense			19			—
(Increase) Decrease in accrued interest receivable and other assets			(453)			239
Increase (Decrease) in accrued interest payable and other liabilities			83			(104)
Net cash provided by operating activities			459			340
Cash flows from investing activities:
Securities available for sale:
Proceeds from maturities and principal reductions of securities (AFS)			3,609			958
Purchases of securities (AFS)			(4,990)			(429)
Redemptions of FHLB stock			87			2
Net increase in loans receivable			(1,677)			(704)
Additions to premises and equipment			(14)			(65)
Net cash used in investing activities			(2,985)			(238)
Cash flows from financing activities:
Net increase (decrease) in deposits			3,738			(230)
Net change in short-term borrowings			(2,000)			—
Advance payments by borrowers for property taxes and insurance, net			992			864
Repurchase of authorized stock			(60)			(4)
Cash dividends paid to common stock shareholders			(94)			(89)
Net cash provided by financing activities			2,576			541
Net increase in cash and cash equivalents			50			643
Cash and cash equivalents – Beginning of Period			4,659			6,370
Cash and cash equivalents – End of Period		$	4,709		$	7,013
Supplemental disclosures:
Cash paid during the period for interest		$	410		$	382
Loans receivable transferred to foreclosed assets during the year			12			—

See accompanying notes to consolidated financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

NOTE 1: BASIS OF PRESENTATION

The accompanying consolidated financial statements include the accounts of Gouverneur Bancorp, Inc. (“Bancorp”) and Gouverneur Savings and Loan Association (the “Bank”), the wholly owned and only direct subsidiary of Bancorp, and GS&L Municipal Bank, the wholly owned and only subsidiary of the Bank, (collectively referred to as the “Company”) as of December 31, 2025 (unaudited) and September 30, 2025 and for the three-month periods ended December 31, 2025 and 2024 (unaudited). These consolidated financial statements were prepared in accordance with instructions for Form 10-Q and, therefore, do not include information or footnotes necessary for a complete presentation of financial condition, results of operations, and cash flows in conformity with generally accepted accounting principles in the United States of America.

Gouverneur Bancorp, Inc. is a Maryland corporation that was incorporated in June 2023 to be the successor to Gouverneur Bancorp, Inc., a federally chartered corporation (the “Mid-Tier Holding Company”), upon completion of the second-step conversion of the Bank from the two-tier mutual holding company structure to the stock holding company structure. Cambray Mutual Holding Company (“Cambray”) was the former mutual holding company for the Mid-Tier Holding Company prior to the completion of the second-step conversion. In conjunction with the second-step conversion, each of Cambray Mutual Holding Company and the Mid-Tier Holding Company merged out of existence and now cease to exist. The second-step conversion was completed on October 31, 2023, at which time the Company sold, for gross proceeds of $7.2 million, a total of 723,068 shares of common stock at $10.00 per share, including 57,845 shares sold to the Bank’s employee stock ownership plan. As part of the second-step conversion, each of the existing outstanding shares of Mid-Tier Holding Company common stock owned by persons other than Cambray Mutual Holding Company was converted into 0.5334 shares of Bancorp common stock.

In September 2022, the Bank completed its acquisition of Citizens Bank of Cape Vincent (“CBCV”), a commercial bank headquartered in Cape Vincent, New York. In conjunction with the acquisition of CBCV in September 2022, the Bank formed the limited purpose GS&L Municipal Bank in order to continue to hold CBCV’s municipal deposits and continue to compete for such deposits in the future. GS&L Municipal Bank is a limited purpose commercial bank that is a wholly owned subsidiary of the Bank and operates under the same regulatory and operating framework as the Bank. GS&L Municipal Bank is a New York chartered limited purpose commercial bank organized to solicit municipal deposits from local government entities such as towns, cities, school districts, fire districts and other municipalities. The Bank views GS&L Municipal Bank as a source of low cost and stable source of funds that will further the Bank’s commitment to the communities in which the Bank operates.

All adjustments, consisting of only normal recurring adjustments or accruals, which are necessary for a fair presentation of the consolidated financial statements have been made at and for the three-month periods ended December 31, 2025 and 2024. The results of operations for the three-month period ended December 31, 2025 are not necessarily indicative of the results which may be expected for an entire fiscal year or any other period.

The data in the consolidated statements of financial condition for September 30, 2025 was derived from the Company’s audited consolidated financial statements as of and for the year ended September 30, 2025. That data, along with the interim financial information presented in the consolidated statements of financial condition, earnings, comprehensive income (loss), shareholders’ equity and cash flows should be read in conjunction with the Company’s audited consolidated financial statements as of and for the year ended September 30, 2025, including the notes thereto. Certain amounts for the three-month period ended December 31, 2024 were reclassified to conform to the presentation for the three-month period ended December 31, 2025.

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements of the Company include the accounts of Bancorp and its wholly-owned subsidiary, the Bank, and the Bank’s wholly owned subsidiary, GS&L Municipal Bank.

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At December 31, 2025, GS&L Municipal Bank held $22.9 million of the Bank’s $42.8 million investment securities portfolio and $23.7 million of the Bank’s deposits.

All significant intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates in Preparation of Financial Statements

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for credit losses. In connection with the determination of the estimated allowance for credit losses, management obtains independent appraisals for significant properties that act as collateral for portfolio loans.

The Company’s loans are generally secured by specific items of collateral including real property, consumer assets, and business assets. Although the Company has a diversified portfolio, a substantial portion of its debtors’ ability to honor their contracts is dependent on local economic conditions. While management uses available information to recognize credit losses on loans and foreclosed assets, further reductions in the carrying amounts of loans and foreclosed assets may be necessary, based on changes in local economic conditions. In addition, regulatory agencies, as an integral part of their examination process, periodically review the estimated losses on loans and foreclosed assets. Such agencies may require the Company to recognize additional losses based on their judgments about information available to them at the time of their examination. Because of these factors, it is reasonably possible that the estimated credit losses on loans and foreclosed assets may change materially in the near term. However, the amount of the change that is reasonably possible cannot be estimated.

Recent Accounting Pronouncements

The Company’s significant accounting policies followed in the preparation of the unaudited consolidated financial statements are disclosed in Note 2 of the audited financial statements and notes for the year ended September 30, 2025 and are contained in the Company’s Annual Report on Form 10-K for the year ended September 30, 2025. There have been no significant changes to the application of significant accounting policies since September 30, 2025.

Allowance for Credit Losses – Available for Sale Securities

For available for sale securities, management evaluates all investments in an unrealized loss position on a quarterly basis, and more frequently when economic or market conditions warrant such evaluation. If the Company has the intent to sell the security or it is more likely than not that the Company will be required to sell the security, the security is written down to fair value and the entire loss is recorded in earnings.

If either of the above criteria is not met, the Company evaluates whether the decline in fair value is the result of credit losses or other factors. In making the assessment, the Company may consider various factors including the extent to which fair value is less than amortized cost, performance on any underlying collateral, downgrades in the ratings of the security by a rating agency, the failure of the issuer to make scheduled interest or principal payments and adverse conditions specifically related to the security. If the assessment indicates that a credit loss exists, the present value of cash flows expected to be collected are compared to the amortized cost basis of the security and any excess is recorded as an allowance for credit loss, limited by the amount that the fair value is less that the amortized cost basis. Any amount of unrealized loss that has not been recorded through an allowance for credit loss is recognized in other comprehensive income.

Changes in the allowance for credit loss are recorded as provision for (benefit from) credit loss expense on the accompanying consolidated statements of earnings. Losses are charged against the allowance for credit loss when

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management believes an available for sale security is confirmed to be uncollectible or when either of the criteria regarding intent or requirement to sell is met. At December 31, 2025 and September 30, 2025 there was no allowance for credit loss related to the available for sale securities portfolio.

Accrued interest receivable on available for sale debt securities totaled $216,000 and $214,000 at December 31, 2025 and September 30, 2025, respectively, and was excluded from the estimate of credit losses.

Loans

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at amortized cost. Amortized cost is the principal balance outstanding, net of purchase premiums and discounts and deferred fees and costs. Accrued interest receivable related to loans totaled $442,000 and $415,000 at December 31, 2025 and September 30, 2025, respectively, and is included as a component of accrued interest receivable and other assets on the consolidated statements of financial condition. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using methods that approximate a level yield without anticipating prepayments.

The accrual of interest is generally discontinued when a loan becomes 90 days past due and is not well collateralized and in the process of collection, or when management believes, after considering economic and business conditions and collection efforts, that the principal or interest will not be collectible in the normal course of business. Past due status is based on contractual terms of the loan. A loan is considered to be past due when a scheduled payment has not been received within 30 days after the contractual due date.

All accrued interest is reversed against interest income when a loan is placed on nonaccrual status. Interest received on such loans is accounted for using the cost-recovery method, until qualifying for return to accrual. Under the cost-recovery method, interest income is not recognized until the past due loan balance is reduced to zero. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current, there is a sustained period of repayment performance (generally six consecutive months), and future payments are reasonably assured.

Allowance for Credit Losses – Loans

The allowance for credit losses on loans is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the allowance for credit losses when management believes the uncollectibility of a loan balance is confirmed. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off.

The allowance for credit losses on loans represents management’s estimate of lifetime credit losses inherent in loans as of the balance sheet date. The allowance for credit losses on loans is estimated by management using relevant available information, from both internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. The Company uses a probability of default/loss given default model to determine the allowance for credit losses.

Management measures expected credit losses for loans on a pooled basis when similar risk characteristics exist. Management has identified the following portfolio segments and calculates the allowance for credit losses for each using a discounted cash flow and remaining life methodology. The segments using a discounted cash flow methodology are as follows:

Real Estate Residential

1-4 family residential construction loans

Other construction loans and all land development and other land loans

Revolving, open-end loans secured by 1-4 family residential properties and extended under lines of credit

Secured by first liens

Secured by junior liens

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Real Estate Commercial

Commercial and industrial loans – commercial mortgage

Loans secured by owner-occupied, nonfarm nonresidential properties

Loans secured by other nonfarm nonresidential properties

Loans secured by multifamily (5 or more) properties

Commercial Secured

Loans to finance agricultural production and other loans to farmers

Commercial and industrial loans

Obligations (other than securities and leases) of states and political subdivisions in the US

Commercial Unsecured

Commercial and industrial loans – unsecured

Unsecured other loans

Consumer

Other revolving credit plans

Automobile loans

Other consumer loans

The discounted cash flow method calculates the expected cash flows to be received over the life of each individual loan in a pool.

The segments using a remaining life methodology are as follows:

Commercial Unsecured

Other loans (commercial overdraft loans)

Consumer

Other loans (consumer overdraft loans)

Individually evaluated loans are evaluated and valued at the time the loan is identified as not having risk characteristics common with other loans within its pool. In these instances, credit loss is measured on a case by case basis. The fair value of the loan is determined using either present value of the expected future cash flows discounted at the loan’s effective interest rate or, for collateral dependent loans, the fair value of the collateral less the selling, administrative costs, and other expenses necessary to liquidate the collateral. Collateral may be real estate and/or business assets including equipment, inventory and/or accounts receivable.

The remaining life methodology uses average annual charge-off rates and the remaining life of the loan to estimate the allowance for credit losses. The average annual charge-off rate is applied to the amortization adjusted remaining life of the loan to determine the unadjusted lifetime historical charge-off rate.

Additionally, the allowance for credit losses calculation includes subjective adjustments for qualitative risk factors that are likely to cause estimated credit losses to differ from historical experience. These qualitative adjustments may increase or reduce reserve levels and include adjustments for lending management experience and risk tolerance, asset quality and portfolio trends, loan review and audit results, loan portfolio growth, industry concentrations, trends in underlying collateral, external factors and economic conditions not already captured.

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Loans that do not share risk characteristics are evaluated on an individual basis and are excluded from the pooled loan analysis. When management determines that foreclosure is probable and the borrower is experiencing financial difficulty, the expected credit losses are based on the fair value of the related collateral at the reporting dated unadjusted for selling costs as appropriate.

Allowance for Credit Losses – Unfunded Commitments

Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit issued to meet customer financing needs. The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for off—balance sheet loan commitments is represented by the contractual amount of those instruments. Such financial instruments are recorded when they are funded.

The Company records an allowance for credit losses for off-balance sheet credit exposures, unless the commitments to extend credit are unconditionally cancelable, through a charge to provision for credit loss on unfunded commitments in the Company’s statements of earnings. The allowance for credit losses for off-balance sheet credit exposures is estimated by loan segment at each balance sheet date in accordance with ASC 326, Financial Instruments – Credit Losses, using the same methodologies as portfolio loans, taking into consideration the likelihood that funding will occur as well as any third-party guarantees. The allowance for credit losses on unfunded commitments is included as a component of accrued interest payable and other liabilities on the Company’s consolidated statements of financial condition.

Revenue Recognition

The majority of the Company’s revenue is generated from interest income on loans which are outside the scope of ASC 606, Revenue from Contracts with Customers.

The Company’s sources of income that fall within the scope of ASC 606 include service charges on deposits, interchange fees and gains and losses on sales of other real estate, all of which are presented as components of noninterest income on the accompanying statements of earnings. Below is a summary of the revenue streams that fall within the scope of ASC 606.

Service charges on deposits, ATM, and interchange fees – Fees from these services are either transaction-based, for which the performance obligations are satisfied at a point in time when the individual transaction is processed, or set periodic service charges, for which the performance obligations are satisfied over the period the service is provided. Transaction-based fees are recognized as revenue at a point in time when the transaction is processed, and periodic service charges are recognized as revenue over a period of time equivalent to the service period and as performance obligations are met.

Gains and losses on sales of foreclosed assets – The Company records a gain or loss from the sale of foreclosed assets at a point in time when control of the property transfers to the buyer, which generally occurs at the time of the executed deed. When the Company finances the sale of foreclosed assets to the buyer, the Company assesses whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction price is probable. Once these criteria are met, the foreclosed asset is derecognized and the gain or loss on sale is recorded upon the transfer of control of the property to the buyer.

NOTE 3: EARNINGS PER COMMON SHARE

Basic earnings per common share represent income available to common shareholders divided by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflect additional common shares that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustment to income that would result from the assumed issuance. Unallocated common shares held by the ESOP are not included in the weighted-average number of common shares outstanding for purposes of calculating basic earnings per common share until they are committed to be released.

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The table below sets forth the computation of basic and diluted earnings per common share for the three-month periods ended December 31, 2025 (unaudited) and 2024 (In thousands, except per share data).


	Three Months Ended
	December 31,
Basic earnings per share:	2025			2024
Net income	$	287		$	160
Weighted average common shares outstanding used to calculate
basic and diluted earnings per common share		1,032			1,054
Basic earnings per common share	$	0.28		$	0.15
Diluted earnings per common share	$	0.28		$	0.15

There were no dilutive or antidilutive shares at December 31, 2025 or 2024.

NOTE 4: COMPREHENSIVE INCOME (LOSS)

Comprehensive income (loss), presented in the consolidated statements of shareholders’ equity, consists of net income and the net change for the period in after-tax unrealized gains or losses on securities available for sale and post-retirement benefits.

The following table shows the components of accumulated other comprehensive loss on the accompanying consolidated statements of financial condition at December 31, 2025 (unaudited) and September 30, 2025:



	December 31,		September 30,
	2025		2025

	(In Thousands)

Unrealized Loss on Available-for-Sale Securities, net	$	(2,079)	$	(2,454)
Deferred Tax Effect		436		515
Net Unrealized Loss on Available-for-Sale Securities		(1,643)		(1,939)

Unrealized Loss for Other Postretirement Obligations	$	(294)	$	(314)
Deferred Tax Effect		62		66
Net Unrealized Loss for Other Postretirement Obligations		(232)		(248)

Total Accumulated Other Comprehensive Loss	$	(1,875)	$	(2,187)

NOTE 5: INVESTMENT SECURITIES

The amortized cost of debt securities and their approximate fair value at December 31, 2025 (unaudited) is represented in the table below:


			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value

	(unaudited) (In Thousands)
AVAILABLE FOR SALE
U.S. Government Treasuries	$	3,927	$	4	$	—	$	3,931
U.S. Government Agencies		5,752		32		—		5,784
Mortgaged-Backed Securities		12,595		49		(329)		12,315
Municipal Securities		21,111		104		(1,945)		19,270
SBA Securities		1,491		8		(2)		1,497
	$	44,876	$	197	$	(2,276)	$	42,797

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The amortized cost of debt securities and their approximate fair value at September 30, 2025 is represented in the table below.


			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
AVAILABLE FOR SALE
U.S. Government Treasuries	$	2,415	$	1	$	—	$	2,416
U.S. Government Agencies		6,712		23		(1)		6,734
Mortgaged-Backed Securities		11,433		41		(355)		11,119
Municipal Securities		21,282		74		(2,243)		19,113
SBA Securities		1,543		8		(2)		1,549
	$	43,385	$	147	$	(2,601)	$	40,931

The amortized cost and fair value of debt securities, by contractual maturity, at December 31, 2025 (unaudited) is as shown below. Expected maturities will differ from contractual maturities call or prepay obligations with or without call or prepayment penalties.


	Debt Securities
	Available-for-Sale
	Amortized
	Cost		Fair Value

		(In Thousands)
Due Within One Year	$	5,880	$	5,889
Due After One Year Through Five Years		4,917		4,944
Due After Five Years Through Ten Years		6,645		6,515
Due After Ten Years		13,348		11,637
		30,790		28,985
Mortgage-Backed & SBA Securities with no set maturity		14,086		13,812
	$	44,876	$	42,797

The amortized cost and fair value of debt securities, by contractual maturity, at September 30, 2025 is as shown below.


	Debt Securities
	Available-for-Sale
	Amortized
	Cost		Fair Value

	(In Thousands)
Due Within One Year	$	4,868	$	4,875
Due After One Year Through Five Years		5,556		5,578
Due After Five Years Through Ten Years		6,279		6,108
Due After Ten Years		13,706		11,702
		30,409		28,263
Mortgage-Backed & SBA Securities with no set maturity		12,976		12,668
	$	43,385	$	40,931

There were no realized gains and losses from the sale of available-for-sale investments for the three-month periods ended December 31, 2025 and 2024.

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Information pertaining to securities with gross unrealized losses at December 31, 2025 (unaudited), aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position are as follows:


	Less than Twelve months				Over Twelve Months				Total
	Gross				Gross				Gross
	Unrealized				Unrealized				Unrealized
	Losses		Fair Value		Losses		Fair Value		Losses		Fair Value

	(In Thousands)
December 31, 2025
Securities Available-for-Sale:
US Government Treasuries & Agencies	$	—	$	1,496	$	—	$	—	$	—	$	1,496
Mortgage-backed & SBA Securities		16		2,254		315		5,189		331		7,443
Municipal Securities		2		503		1,943		10,926		1,945		11,429
	$	18	$	4,253	$	2,258	$	16,115	$	2,276	$	20,368

Information pertaining to securities with gross unrealized losses at September 30, 2025 aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position are as follows:


	Less than Twelve months				Over Twelve Months				Total
	Gross				Gross				Gross
	Unrealized				Unrealized				Unrealized
	Losses		Fair Value		Losses		Fair Value		Losses		Fair Value

	(In Thousands)
September 30, 2025
Securities Available-for-Sale:
US Government Treasuries & Agencies	$	1	$	1,370	$	—	$	994	$	1	$	2,364
Mortgage-backed & SBA Securities		91		4,559		266		3,237		357		7,796
Municipal Securities		68		2,568		2,175		9,130		2,243		11,698
	$	160	$	8,497	$	2,441	$	13,361	$	2,601	$	21,858

In management’s opinion, the unrealized losses primarily reflect changes in interest rates subsequent to the acquisition of specific securities. The Company had 11 and 26 securities in an unrealized loss position of less than twelve months at December 31, 2025 and September 30, 2025, respectively, and 74 and 66 securities in an unrealized loss position of 12 months or more at December 31, 2025 and September 30, 2025, respectively. The Company has the intent and the ability to hold such securities until maturity or market price recovery. Management believes that the unrealized losses do not represent credit impairment of the securities and therefore no allowance for credit loss has been recorded as of December 31, 2025 or September 30, 2025.

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NOTE 6: LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES

The components of loans receivable, net, at December 31, 2025 (unaudited) and September 30, 2025 are as shown in the table below:


	As of December 31,		As of September 30,
	2025		2025

	Total Loans
	(unaudited)
	(In Thousands)
Real Estate Mortgages:
Residential	$	111,341	$	109,700
Commercial		11,337		10,807
Construction - Commercial		140		140
Construction - Residential		3,100		3,292
Home Equity		2,294		2,142
Other Loans:
Commercial Non-Mortgage		2,310		2,408
Automobile		1,579		1,849
Passbook		353		368
Consumer		1,985		2,129
Total Loans		134,439		132,835
Net Deferred Loan Fees		495		483
Net Discounts on Purchased Loans		(689)		(714)
Allowance for Credit Losses		(1,112)		(1,100)
Loans Receivable, Net	$	133,133	$	131,504

The outstanding principal balance and the related carrying amount of the Company’s loans acquired in the 2022 Citizens Bank of Cape Vincent acquisition were as shown in the table below at December 31, 2025 (unaudited) and September 30, 2025:


		December 31, 2025		September 30, 2025
		(unaudited)
		(In Thousands)
Purchased Credit Impaired Loans
Outstanding Principal Balance		$	—	$	—
Carrying Amount		$	—	$	—
Purchased Non-Credit Impaired Loans
Outstanding Principal Balance		$	25,651	$	26,372
Carrying Amount		$	24,962	$	25,658
Total Purchased Loans
Outstanding Principal Balance		$	25,651	$	26,372
Carrying Amount		$	24,962	$	25,658

The Company did not hold any loans with deteriorated credit quality as of December 31, 2025 or September 30, 2025. The Company did acquire a commercial secured performing loan which was subsequently classified as Substandard to ensure proper oversight and monitoring of the loan. The loan has performed in accordance with its modified loan terms for over four years. This loan was restructured in September 2023. Proceeds from the restructuring paid off current principal and interest due in the amount of $505,000. The borrower retained the same interest rate of 6.00% and received a 5-year callable note with 25-year amortization in exchange for extra real estate collateral. A $108,000 second position commercial mortgage was placed on the guarantor’s primary residence behind the Bank’s first position residential mortgage. The restructuring enhanced the Bank’s loan-to-value position while providing the borrower with a lower payment than the original contractual terms. The capitalization of interest, interest rate below market terms, and extension of the maturity date were concessions made to the borrower in exchange for additional collateral. Interest income on a restructured loan

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is accrued once the borrower demonstrates the ability to pay under the restructured terms for sustained period of repayment performance, which is generally six consecutive months. The loan was removed from non-accrual status during the third quarter of fiscal year 2024. This loan has a negative fair value adjustment as a result of purchase price accounting of $36,000 at December 31, 2025.

The Company sells first mortgage loans to third parties in the ordinary course of business, principally to the FHLB, a large purchaser of loans. These serviced loans are not included in the balances on the accompanying statements of financial condition, but the Company continues to collect the principal and interest payments on behalf of FHLB for a servicing fee. At December 31, 2025 and September 30, 2025, the total outstanding principal balance on these serviced loans was $11.1 million and $11.2 million, respectively.

The tables below present, by portfolio segment, the changes in the allowance for credit losses and the recorded investment in loans for the three-months ended December 31, 2025 and 2024 (unaudited), and the year ended September 30, 2025.

Allowance for credit losses and recorded investment in loans as of and for the three months ended December 31, 2025 was as follows:


		Real Estate			Real Estate			Commercial			Commercial
		Residential			Commercial			Secured			Unsecured			Consumer		Total
								(In Thousands)			(Unaudited)
Allowance for Credit Losses:
Beginning Balance		$	859		$	148		$	38		$	1		$	54	$	1,100
Charge-offs			—			—			—			—			(3)		(3)
Recoveries			—			—			—			—			1		1
Transfer			(9)			12			—			(1)			(2)		—
Provisions			14			—			—			—			—		14
Ending Balance		$	864		$	160		$	38		$	—		$	50	$	1,112
Ending Balance: Individually
Evaluated		$	11		$	—		$	—		$	—		$	—	$	11
Ending Balance: Collectively
Evaluated		$	853		$	160		$	38		$	—		$	50	$	1,101
Loans Receivable:
Ending Balance		$	116,735		$	11,477		$	2,299		$	11		$	3,917	$	134,439
Ending Balance: Individually
Evaluated		$	212		$	746		$	—		$	—		$	—	$	958
Ending Balance: Collectively
Evaluated		$	116,523		$	10,731		$	2,299		$	11		$	3,917	$	133,481

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Allowance for credit losses and recorded investment in loans as of and for the three months ended December 31, 2024 was as follows:


		Real Estate			Real Estate			Commercial			Commercial
		Residential			Commercial			Secured			Unsecured			Consumer		Total

		(In Thousands)
Allowance for Credit Losses:
Beginning Balance		$	799		$	156		$	40		$	—		$	68	$	1,063
Charge-offs			—			—			—			—			(20)		(20)
Recoveries			—			—			—			—			1		1
Transfer			(9)			(4)			(3)			—			16		—
Provisions			15			—			—			—			—		15
Ending Balance		$	805		$	152		$	37		$	—		$	65	$	1,059
Ending Balance: Individually
Evaluated		$	—		$	—		$	—		$	—		$	—	$	—
Ending Balance: Collectively
Evaluated		$	805		$	152		$	37		$	—		$	65	$	1,059

Allowance for credit losses and recorded investment in loans as of September 30, 2025 was as follows:


		Real Estate			Real Estate			Commercial			Commercial
		Residential			Commercial			Secured			Unsecured			Consumer		Total

		(In Thousands)
Allowance for Credit Losses:
Ending Balance: Collectively
Evaluated		$	859		$	148		$	38		$	1		$	54	$	1,100
Loans Receivable:
Ending Balance		$	115,134		$	10,947		$	2,372		$	36		$	4,346	$	132,835
Ending Balance: Individually
Evaluated		$	45		$	753		$	—		$	—		$	92	$	890
Ending Balance: Collectively
Evaluated		$	115,089		$	10,194		$	2,372		$	36		$	4,254	$	131,945

The following table presents performing and nonperforming real estate loans based on payment activity as of December 31, 2025 and September 30, 2025. Real estate loans include residential and commercial mortgages, construction loans and home equity loans. Payment activity is reviewed by management on a quarterly basis to determine how loans are performing. Loans are considered to be nonperforming when the number of days delinquent exceeds 89 days or the loan terms are modified with a borrower experiencing financial difficulty. The loan may only be returned to performing status after considering the borrower’s sustained repayment performance for a reasonable period, generally twelve consecutive months of current payments with no past due occurrences.

Performing and nonperforming real estate loans as of December 31, 2025 and September 30, 2025 were as follows:


	As of December 31,		As of September 30,
	2025		2025
	(unaudited)
	(In Thousands)
Performing	$	127,237	$	125,402
Nonperforming		975		679
Total real estate loans	$	128,212	$	126,081

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Credit quality indicators as of December 31, 2025 and September 30, 2025 are as follows:

Internally assigned grade as a subsection of the “Pass” (ratings 1 – 4) credit risk profile:

1 — Good

Loans in this category are to an individual or a well-established business in excellent financial condition with strong liquidity and a history of consistently high levels of earnings and cash flow and debt service capacity. Supported by high quality financial statements (including recent statements and sufficient historical fiscal statements), borrower has excellent repayment history and possesses a documented source of repayment. Industry conditions are favorable and borrower’s business management is well qualified with sufficient debt. Borrower and/or key personnel exhibit unquestionable character. Good loans may be characterized by high quality liquid collateral and very strong personal guarantors.

2 — Satisfactory

Loans in this category are to borrowers with many of the same qualities as a Good loan, however, certain characteristics are not as strong (i.e. cyclical nature of earnings, lower quality financial statements, less liquid collateral, less favorable industry trends, etc.). Borrower still has good credit, will exhibit financial strength, excellent repayment history, and good present and future earnings potential. The primary source of repayment is readily apparent with strong secondary sources of repayment available. Management is capable, with sufficient depth, and character of borrower is well established.

3 — Acceptable

Loans in this category are to borrowers of average strength with acceptable financial condition (businesses fall within acceptable tolerances of other similar companies represented in the RMA annual statement studies), with satisfactory record of earnings and sufficient historical and projected cash flow to service the debt. Business borrower’s management is capable and reliable. Borrower has satisfactory repayment history, and primary and secondary sources of repayment can be clearly identified. Acceptable loans may exhibit some deficiency or vulnerability to changing economic or industry conditions.

4 — Watch

Loans in this category have a chance of resulting in a loss. Characteristics of this level of assets include, but are not limited to; the borrower has only a fair credit rating with minimal recent credit problems, cash flow is currently adequate to meet the required debt repayments, but will not be sufficient in the event of significant adverse developments, borrower has limited access to alternative sources of financing, possibly at unfavorable terms, some management weaknesses exist, collateral, generally required, is sufficient to make likely the recovery of the value of the loan in the event of default, but liquidating the collateral may be difficult or expensive. In addition, the guarantor would achieve this credit rating if it borrowed individually from the Bank.

5 — Special Mention

Loans in this category are usually made to well-established businesses with local operations. Special Mention loans have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or in the institution’s credit position at some future date. Special Mention loans are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification. The Special Mention category is not to be used as a means of avoiding a clear decision to classify a loan or pass it without criticism. Neither should it include loans listed merely “for the record” when uncertainties and complexities, perhaps coupled with large size, create some reservations about the loan. If weaknesses or evidence of imprudent handling cannot be identified, inclusion of such loans in Special Mention is not justified. Special Mention loans have characteristics which corrective management action would remedy. Loans in this category should remain for a relatively short period of time.

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6 — Substandard

Loans classified as Substandard are inadequately protected by the current sound net worth or paying capacity of the borrower or the collateral pledged, if any. Loans in this category have well-defined weaknesses that jeopardize the repayment. Loans which might be included in the category have potential for problems due to weakening economic or market conditions. They are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. Substandard loans may include loans which are likely to require liquidation of collateral to effect repayment, and other loans where the character or ability to repay has become suspect. Loss potential, while existing in the aggregate amount of the substandard assets, does not have to exist in individual assets classified as Substandard.

7 — Doubtful

Loans classified as Doubtful have all the weaknesses in those classified as Substandard with the added characteristics that the weaknesses make collection or liquidation in full on the basis of current existing facts, conditions, and value highly questionable and improbable. Although possibility of loss is extremely high, classification of these loans as loss has been deferred to specific pending factors or events, which may strengthen the loan value (i.e., possibility of additional collateral, injection of capital, collateral liquidation, debt structure, economic recovery, etc.).

8 — Loss

Loans classified as Loss are considered uncollectible and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this basically worthless asset even though partial recovery may be affected in the future.

The information for each of the credit quality indicators is updated on a quarterly basis in conjunction with the determination of the adequacy of the allowance for credit losses.

Credit risk profile for loans receivable held in portfolio by internally assigned grade as of December 31, 2025:


	Pass		Special Mention		Substandard		Doubtful		Total

	(unaudited)
	(In Thousands)
Mortgage Loans on Real Estate
Residential, One to Four Family	$	114,229	$	164	$	—	$	48	$	114,441
Home Equity		2,294		—		—		—		2,294
Commercial		10,731		—		746		—		11,477
Total Mortgage Loans on Real Estate		127,254		164		746		48		128,212
Commercial		2,310		—		—		—		2,310
Consumer		3,917		—		—		—		3,917
Total Loans	$	133,481	$	164	$	746	$	48	$	134,439

Credit risk profile for loans receivable held in portfolio by internally assigned grade as of September 30, 2025:


	Pass		Special Mention		Substandard		Doubtful		Total

	(In Thousands)
Mortgage Loans on Real Estate
Residential, One to Four Family	$	112,947	$	—	$	—	$	45	$	112,992
Home Equity		2,142		—		—		—		2,142
Commercial		10,194		—		753		—		10,947
Total Mortgage Loans on Real Estate		125,283		—		753		45		126,081
Commercial		2,408		—		—		—		2,408
Consumer		4,254		92		—		—		4,346
Total Loans	$	131,945	$	92	$	753	$	45	$	132,835

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Aging Analysis of Past Due Financing Receivables by Class

Following are tables which include an aging analysis of the recorded investment of past due financing receivables as of December 31, 2025 and September 30, 2025. Any loans that are greater than 89 days past due as to interest and principal and still accruing interest are (1) well secured and in the process of collection or (2) real estate loans or loans exempt under regulatory rules from being classified as nonaccruals.

An aged analysis of past due financing receivables by class of financing receivable for loans held in portfolio as of December 31, 2025 are as follows:


					90 Days or						Total		90 Days or
	30 – 59 Days		60 – 89 Days		Greater		Total				Financing		Greater and
	Past Due		Past Due		Past Due		Past Due		Current		Receivable		Still accruing

	(In Thousands)
Residential Mortgage	$	408	$	323	$	541	$	1,272	$	115,463	$	116,735	$	—
Commercial Mortgage		24		—		68		92		11,385		11,477		—
Commercial		16		—		—		16		2,294		2,310		—
Consumer		9		—		—		9		3,908		3,917		—
Total Loans	$	457	$	323	$	609	$	1,389	$	133,050	$	134,439	$	—

An aged analysis of past due financing receivables by class of financing receivable for loans held in portfolio as of September 30, 2025, are as follows:


													90 Days or
					90 Days or						Total		Greater
	30 – 59 Days		60 – 89 Days		Greater		Total				Financing		and Still
	Past Due		Past Due		Past Due		Past Due		Current		Receivable		accruing

	(In Thousands)
Residential Mortgage	$	132	$	461	$	575	$	1,168	$	113,966	$	115,134	$	—
Commercial Mortgage		—		25		—		25		10,922		10,947		—
Commercial		16		—		—		16		2,392		2,408		—
Consumer		19		—		—		19		4,327		4,346		—
Total Loans	$	167	$	486	$	575	$	1,228	$	131,607	$	132,835	$	—

Loan Modifications Made to Borrowers Experiencing Financial Difficulty

The allowance for credit losses incorporates an estimate of lifetime expected credit losses and is recorded on each asset upon asset origination or acquisition. The starting point for the estimate of the allowance for credit losses is historical loss information, which includes losses from loan modifications of receivables made to borrowers experiencing financial difficulty. An assessment of whether a borrower is experiencing financial difficulty is made at the time of a loan modification.

Because the effect of most loan modifications made to borrowers experiencing financial difficulty is already included in the allowance for credit losses, a change to the allowance for credit losses is generally not recorded upon modification.

There were no modified loans made to borrowers experiencing financial difficulty during the three months ended December 31, 2025 or 2024.

Collateral Dependent Loans

Collateral dependent loans are individually evaluated loans upon which repayment is dependent on the operation or sale of the underlying collateral. For collateral dependent loans, the amortized cost of the loan is adjusted to fair value of the collateral, which is reassessed on a periodic basis. The Company uses the fair value of underlying collateral, less the selling, administrative costs, and other expenses necessary to liquidate the collateral in order to estimate the allowance for credit losses for individually evaluated collateral dependent loans.

As of December 31, 2025, the Company had one collateral dependent loan within the residential real estate loan segment with an outstanding balance of $48,000. The fair value of the collateral securing the loan is $40,000. Based on the Company’s policy of adjusting the amortized cost to fair value, a specific allowance for credit losses of $11,200 was recorded as a component of individually evaluated loans. As of September 30, 2025, the Company had the same collateral dependent loan outstanding with an outstanding balance of $45,000.

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Vintage Analysis

The following table presents the Company’s recorded investment in loans by credit quality indicators by year of origination as of December 31, 2025:

Term Loans by Fiscal Year of Origination

Gouverneur Bancorp, Inc./MD/ 10-Q