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What changed in Pioneer Bancorp, Inc./MD's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Pioneer Bancorp, Inc./MD's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+474 added−443 removedSource: 10-K (2026-03-12) vs 10-K (2024-09-25)

Top changes in Pioneer Bancorp, Inc./MD's 2025 10-K

474 paragraphs added · 443 removed · 330 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

125 edited+30 added−36 removed175 unchanged
Biggest changeIn addition, the factors described under the headings “Critical Accounting Policies and Estimates” in Part II, Item 7, and “Risk Factors” in Part I, Item 1A, as well as other possible factors not listed, could cause our actual results to differ materially from those expressed in forward-looking statements, including, without limitation, the following: ● inflation and changes in market interest rates that reduce our margins and yields, reduce the fair value of financial instruments or reduce our volume of loan originations, or increase the level of defaults, losses and prepayments on loans we have made and make, whether held in our portfolio or sold in the secondary market; ● risks related to the variety of litigation, investigations, and other proceedings described in the “Legal Proceedings” section of this report; ● general economic conditions, either nationally or in our market area, that are worse than expected; ● Certain events in the recent past involving the failure of financial institutions which have adversely affected market sentiment toward regional banks, which may result in decreased deposits and increased regulatory costs that could adversely affect our liquidity, our business, and the market price of our common stock; ● competition within our market area that is stronger than expected; 3 Table of Contents ● changes in the level and direction of loan delinquencies and charge-offs and changes in estimates of the adequacy of our allowance for credit losses; ● our ability to access cost-effective funding; ● fluctuations in real estate values and both residential and commercial real estate market conditions; ● demand for loans and deposits in our market area; ● changes in our partnership with a third-party mortgage banking company; ● our ability to continue to implement our business strategies; ● competition among depository and other financial institutions, as well as other non-traditional competitors; ● adverse changes in the securities markets; ● changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements; ● our ability to manage market risk, credit risk and operational risk; ● our ability to enter new markets successfully and capitalize on growth opportunities; ● the imposition of tariffs or other domestic or international governmental polices impacting the value of the products of our borrowers; ● our ability to successfully integrate into our operations any assets, liabilities or systems we may acquire, as well as new management personnel or customers, and our ability to realize related revenue synergies and cost savings within expected time frames and any goodwill charges related thereto; ● changes in consumer spending, borrowing and savings habits; ● our ability to maintain our reputation; ● our ability to prevent or mitigate fraudulent activity; ● changes in our costs of legal expenses, including defending against significant litigation; ● any future FDIC insurance premium increases, or special assessments, which may adversely affect our earnings; ● fluctuations in the stock market, which may have a significant adverse effect on transaction fees, client activity and client investment portfolio gains and losses related to our wealth management business; ● a breach in security of our information systems, including the occurrence of a cyber incident or a deficiency in cyber security; ● political instability or civil unrest; ● acts of war or terrorism or pandemics such as the recent COVID-19 pandemic; 4 Table of Contents ● changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board (the “FASB”), the Securities and Exchange Commission (the “SEC”) or the Public Company Accounting Oversight Board; ● our ability to attract and retain key employees; ● our ability to evaluate the amount and timing of recognition of future tax assets and liabilities; ● our compensation expense associated with equity benefits allocated or awarded to our employees; and ● changes in the financial condition, results of operations or future prospects of issuers of securities that we own.
Biggest changeIn addition, the factors described under the headings “Critical Accounting Policies and Estimates” in Part II, Item 7, and “Risk Factors” in Part I, Item 1A, as well as other possible factors not listed, could cause our actual results to differ materially from those expressed in forward-looking statements, including, without limitation, the following: ● inflation and changes in market interest rates that could reduce our margins and yields, reduce the fair value of financial instruments or reduce our volume of loan originations, or increase the level of defaults, losses and prepayments on loans we have made and make, whether held in our portfolio or sold in the secondary market; ● risks related to the variety of litigation, investigations, and other proceedings described in the “Legal Proceedings” section of this report, including associated legal expenses; ● general economic conditions, either nationally or in our market area, that are worse than expected, including any resulting changes in consumer spending, borrowing and savings habits, the effect of labor shortages on our operations and those of our customers, and supply chain disruptions affecting economic conditions; ● increased competition, including competition among other institutions within our market area as well as other non-traditional competitors; ● changes in the level and direction of loan delinquencies and charge-offs and changes in estimates of the adequacy of our allowance for credit losses; 3 Table of Contents ● our ability to access cost-effective funding; ● fluctuations in real estate values and both residential and commercial real estate market conditions; ● our business may be adversely affected by increased political and regulatory scrutiny of environmental matters; ● demand for loans and deposits in our market area; ● changes in our partnership with a third-party mortgage banking company; ● our ability to continue to implement our business strategies, including entering new markets successfully, capitalizing on growth opportunities, and attracting and retaining key employees; ● our ability to successfully integrate into our operations any assets, liabilities, systems, personnel or customers we have or may in the future acquire, including our ability to realize related revenue synergies and cost savings within expected time frames and any goodwill charges related thereto; ● changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements, any future FDIC insurance premium increases or special assessments, and the results of regulatory examinations, reviews or other inquiries that may result in additional costs, fines, penalties, or restrictions on our business activities ; ● our ability to manage market risk, credit risk and operational risk; ● the imposition of tariffs or other domestic or international governmental polices; ● our ability to maintain our reputation; ● our ability to prevent or mitigate fraudulent activity; ● fluctuations or adverse changes in the stock market, which may have a significant adverse effect on transaction fees, client activity and client investment portfolio gains and losses related to our wealth management business; ● certain events in the recent past involving the failure of financial institutions which have adversely affected market sentiment toward regional banks, which may result in decreased deposits and increased regulatory costs that could adversely affect our liquidity, our business, and the market price of our common stock; ● an increasing federal government budget deficit, the failure of the federal government to raise the federal debt ceiling, or a potential federal government shutdown; ● changes in liquidity, including the size and composition of our deposit portfolio and the percentage of uninsured deposits in the portfolio; ● a breach in security of our information systems, including the occurrence of a cyber incident or a deficiency in cyber security; ● our reliance on, and the potential failure of, third-party vendors to perform as expected; 4 Table of Contents ● political instability or civil unrest, acts of war or terrorism, pandemics, major catastrophes such as earthquakes, floods or other natural or human disasters, the related disruption to local, regional and global economic activity and financial markets, and the impact that any of the foregoing may have on us and our customers; ● changes in accounting policies and practices, as may be adopted by the bank and other regulatory agencies, the Financial Accounting Standards Board (the “FASB”), the Securities and Exchange Commission (the “SEC”) or the Public Company Accounting Oversight Board; ● our ability to attract and retain key employees; ● our ability to evaluate the amount and timing of recognition of future tax assets and liabilities; ● our compensation expense associated with equity benefits allocated or awarded to our employees; and ● changes in the financial condition, results of operations or future prospects of issuers of securities that we own.
We originate loans primarily to established local developers to finance the construction of commercial and multi-family properties or to acquire land for development of commercial and multi-family properties and to fund infrastructure improvements. We also provide construction loans primarily to local developers for 11 Table of Contents the construction of one- to four-family residential developments.
We originate commercial construction loans primarily to established developers to finance the construction of commercial and multi-family properties or to acquire land for development of commercial and multi-family properties and to fund infrastructure improvements. We also provide construction loans to 11 Table of Contents local developers for the construction of one- to four-family residential developments.
The fixed aggregate fee we pay to acquire the loan and servicing rights are deferred as part of the loan balance and amortized over the contractual life of the loan under the interest method. We purchase for our portfolio both fixed-rate single-family mortgage loans, as well as adjustable-rate single-family loans, with maturities up to 30 years.
The fixed aggregate fee we pay to acquire the loan and servicing rights are deferred as part of the loan balance and amortized over the contractual life of the loan under the interest method. We purchase for our portfolio both fixed-rate single-family mortgage loans, as well as adjustable-rate single-family mortgage loans, with maturities up to 30 years.
The staff loan committee can approve individual loans of up to prescribed limits, depending on the type of the loan. Loans in excess of the staff loan committee’s loan approval authority require the approval of our board of directors.
The staff loan committee can approve individual loans of up to prescribed limits, depending on the type of loan. Loans in excess of the staff loan committee’s loan approval authority require the approval of our board of directors.
Pioneer Bancorp, MHC and the Company are bank holding companies registered with the Federal Reserve Board and subject to regulations, examination, supervision and reporting requirements applicable to bank holding companies. In addition, the Federal Reserve Board has enforcement authority over Pioneer Bancorp, MHC and the Company and their non-bank subsidiaries.
Pioneer Bancorp, MHC and the Company are bank holding companies registered with the Federal Reserve Board and are subject to regulations, examination, supervision and reporting requirements applicable to bank holding companies. In addition, the Federal Reserve Board has enforcement authority over Pioneer Bancorp, MHC and the Company and their non-bank subsidiaries.
Any company that seeks to acquire “control” within the meaning of the Bank Holding Company Act, and the Federal Reserve Board regulations issued thereunder, must receive the prior approval of the Federal Reserve Board under that Act and, upon the acquisition, becomes a “bank holding company” subject to registration, examination and regulation by the Federal Reserve Board.
Any company that seeks to acquire “control” within the meaning of the Bank Holding Company Act, and the Federal Reserve Board regulations issued thereunder, must receive the prior approval of the Federal Reserve Board under the Bank Holding Company Act and, upon the acquisition, becomes a “bank holding company” subject to registration, examination and regulation by the Federal Reserve Board.
Certain forward-looking statements are included in this Form 10-K, principally in the sections captioned “Business,” “Risk Factors,” and “Management's Discussion and Analysis of Financial Condition and Results of Operations.” These forward-looking statements include, but are not limited to: ● statements of our goals, intentions and expectations; ● statements regarding our business plans, prospects, growth and operating strategies; ● statements regarding the quality of our loan and investment portfolios; and ● estimates of our risks, contingencies and future costs and benefits.
Certain forward-looking statements are included in this Form 10-K, principally in the sections captioned “Business,” “Risk Factors,” and “Management's Discussion and Analysis of Financial Condition and Results of Operations.” These forward-looking statements include, but are not limited to: ● statements of our goals, intentions and expectations; ● statements regarding our business plans, prospects, growth and operating strategies; ● statements regarding the expected quality of our loan and investment portfolios; and ● estimates of our risks, contingencies and future costs and benefits.
Federal regulations provide for the classification of loans and other assets, such as debt and equity securities considered to be of lesser quality, as “substandard,” “doubtful” or “loss.” An asset is considered “substandard” if it is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any.
Classified Assets . Federal regulations provide for the classification of loans and other assets, such as debt and equity securities considered to be of lesser quality, as “substandard,” “doubtful” or “loss.” An asset is considered “substandard” if it is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any.
While scheduled loan payments and income on interest earning assets are relatively stable sources of funds, deposit inflows and outflows can vary widely and are influenced by prevailing interest rates, market conditions and levels of competition. Deposit Accounts. The substantial majority of our deposits are from depositors who reside in our primary market area.
While scheduled loan payments and income on interest earning assets are relatively stable sources of funds, deposit inflows and outflows can vary widely and are influenced by prevailing interest rates, market conditions and levels of competition. Deposit Accounts. The majority of our deposits are from depositors who reside in our primary market area.
However, our construction loans for the construction of one- to four-family residential developments do not convert to permanent residential real estate loans. Loans can be made with a maximum loan-to-value ratio of 75% of the appraised market value upon completion of the project.
However, our construction loans for the construction of one- to four-family residential developments do not convert to permanent residential real estate loans. Commercial construction loans can be made with a maximum loan-to-value ratio of 75% of the appraised market value upon completion of the project.
Purchases of residential real estate loans up to $750,000 from the Mortgage Banking Company must be approved by one of the following officers: the President and Chief Executive Officer, Chief Credit Officer, Chief Financial Officer, Chief Administrative Officer or the Bank Operations Vice President.
Purchases of residential real estate loans up to $750,000 from the Mortgage Banking Company must be approved by one of the following officers: the President and Chief Executive Officer, Chief Credit Officer, Chief Financial Officer, Chief Administrative Officer or the Bank Operations Senior Vice President.
Sarbanes-Oxley Act of 2002. The Sarbanes-Oxley Act is intended to improve corporate responsibility, provide for enhanced penalties for accounting and auditing improprieties at publicly traded companies and protect investors by improving the accuracy and reliability of corporate disclosures pursuant to the securities laws.
The Sarbanes-Oxley Act is intended to improve corporate responsibility, provide for enhanced penalties for accounting and auditing improprieties at publicly traded companies and protect investors by improving the accuracy and reliability of corporate disclosures pursuant to the securities laws.
Moreover, the Federal Reserve Board has issued an interim final rule applicable to federally-chartered mutual holding companies, stating that it will not object to dividend waivers under certain circumstances, provided (1) the mutual holding company’s members have approved the dividend waivers by a majority of eligible votes, (2) each officer or trustee of the mutual holding company and mid-tier stock holding company, and any tax-qualified or non-tax qualified stock benefit plan in which such individual participates that holds any shares of stock to which the waiver would apply waives the right to receive any dividends declared, or the dividend waivers are approved by a majority of the entire board of trustees of the mutual holding company with any officer or trustee of the mutual holding company having any direct or indirect ownership interest in the common stock of the subsidiary mid-tier holding company abstaining from the board of directors vote, and (3) any dividends waived by the mutual holding company are considered in determining an appropriate exchange ratio in the event of a conversion of the mutual holding company to stock form.
Moreover, the Federal Reserve Board has issued an interim final rule applicable to federally-chartered mutual holding companies, stating that it will not object to dividend waivers under certain circumstances, provided (1) the mutual holding company’s members have approved the dividend waivers by a majority of eligible votes, (2) each officer or trustee of the mutual holding company and mid-tier stock holding company, and any tax-qualified or non-tax qualified stock benefit plan in which such individual participates that holds any shares of stock to which the waiver would apply waives the right to receive any dividends declared, or the dividend waivers are approved by a majority of the entire board of trustees of the mutual holding company with any officer or trustee of the mutual holding company having any direct or indirect ownership interest in the common stock of the subsidiary mid-tier holding company abstaining from the board of directors vote, and 29 Table of Contents (3) any dividends waived by the mutual holding company are considered in determining an appropriate exchange ratio in the event of a conversion of the mutual holding company to stock form.
Banking organizations are required to notify their primary federal regulator as soon as possible and no later than 36 hours of determining that a “computer-security incident” that arises to the level of a “notification incident” has occurred.
Banking organizations are required to notify their primary federal regulator as soon as possible and no later than 36 hours after determining that a “computer-security incident” that arises to the level of a “notification incident” has occurred.
Pioneer Bancorp, MHC is subject to comprehensive regulation and examination by the Federal Reserve Board and is chartered by the New York State Department of Financial Services (the “NYSDFS”). 5 Table of Contents Pioneer Bank, National Association General The Bank operates 22 retail banking offices in Albany, Greene, Rensselaer, Saratoga, Schenectady and Warren Counties, as well as a wealth management office in Columbia County in New York.
Pioneer Bancorp, MHC is subject to comprehensive regulation and examination by the Federal Reserve Board and is chartered by the New York State Department of Financial Services (the “NYSDFS”). 5 Table of Contents ​ Pioneer Bank, National Association General The Bank operates 21 retail banking offices in Albany, Greene, Rensselaer, Saratoga, Schenectady and Warren Counties, as well as a wealth management office in Columbia County in New York.
Some of the principal activities that the Federal Reserve Board has determined by regulation to be so closely related to banking are: (1) making or servicing loans; (2) performing certain data processing services; (3) providing discount brokerage services; (4) acting as fiduciary, investment or financial advisor; (5) leasing personal or real property; (6) making investments in corporations or projects designed primarily to promote community welfare; and (7) acquiring a savings and loan association whose direct and indirect activities are limited to those permitted for bank holding companies.
Some of the principal activities that the Federal Reserve Board has determined by regulation to be so closely related to banking are: (1) making or servicing loans; (2) performing certain data processing services; (3) providing discount brokerage services; (4) acting as fiduciary, 28 Table of Contents investment or financial advisor; (5) leasing personal or real property; (6) making investments in corporations or projects designed primarily to promote community welfare; and (7) acquiring a savings and loan association whose direct and indirect activities are limited to those permitted for bank holding companies.
Debt securities investment accounting guidance requires that, at the time of purchase, we designate a debt security as held to maturity, available for sale, or trading, depending on our ability and intent. U.S. Governmental Securities. We maintain these investments, to the extent appropriate, for liquidity purposes, at zero risk weighting for capital purposes and as collateral for borrowings.
Debt securities investment accounting guidance requires that, at the time of purchase, we designate a debt security as held to maturity, available for sale, or trading, depending on our ability and intent. U.S. Treasury Securities. We maintain these investments, to the extent appropriate, for liquidity purposes, at zero risk weighting for capital purposes and as collateral for borrowings.
All of our commercial real estate loans are subject to our underwriting procedures and guidelines, including requiring borrowers to generally have cash infusions of at least 10% of the loan amount or project cost and that properties with a loan in excess of $500,000 are subject to inspections to verify if appropriate maintenance is being performed.
All of our commercial real estate loans are subject to our underwriting procedures and guidelines, including requiring borrowers to generally have cash infusions of at least 15% of the loan amount or project cost and that properties with a loan in excess of $500,000 are subject to inspections to verify if appropriate maintenance is being performed.
Expansion into the insurance and employee benefit services business has enabled the Bank to evolve from a traditional depository institution into a full-service financial services organization. All disclosures in this Annual Report on Form 10-K relating to the Bank are consolidated to include the activities of Pioneer Insurance Agency, Inc. Pioneer Financial Services, Inc.
Expansion into the insurance and employee benefit services business has enabled the Bank to evolve from a traditional depository institution into a full-service financial services organization. All disclosures in this Annual Report on Form 10-K relating to the Bank are consolidated to include the activities of Pioneer Insurance Agency, Inc. Pioneer Consulting Solutions, Inc.
On June 9, 2023, the SEC approved the Nasdaq proposed clawback listing standards, including the amendments that delayed the effective date of the rules to October 2, 2023. Each listed issuer, including the Company, was required to adopt a clawback policy within 60 days after the effective date, or December 1, 2023. The Company met the requirement.
On June 9, 2023, the SEC approved the Nasdaq proposed clawback listing standards, including the amendments that delayed the effective date of the rules to October 2, 2023. Each listed issuer, including the Company, was required to adopt a clawback policy within 60 days after the effective date, or December 1, 2023.
Our commercial real estate loans are generally appraised by outside independent appraisers approved by the board of directors. Personal guarantees are often obtained from commercial real estate borrowers. The borrower’s financial information on such loans is monitored on an ongoing basis by requiring periodic financial statement updates.
Our commercial real estate loans are generally appraised by outside independent appraisers approved by the board of directors. Personal guarantees are routinely obtained from commercial real estate borrowers. The borrower’s financial information on such loans is monitored on an ongoing basis by requiring periodic financial statement updates.
Treasury obligations, securities of various government-sponsored enterprises, municipal securities, residential mortgage-backed securities and collateralized mortgage obligations, deposits at the FHLBNY, and corporate debt securities (limited to no more than 10% of total assets and no more than 15% of our capital in any single issuer).
Treasury obligations, securities of various government agencies and government-sponsored enterprises, including residential mortgage-backed securities and collateralized mortgage obligations, municipal securities, deposits at the FHLBNY, and corporate debt securities (limited to no more than 10% of total assets and no more than 15% of our capital in any single issuer).
Section 22(h) of the Federal Reserve Act also 27 Table of Contents requires that loans to directors, executive officers and principal stockholders be made on terms substantially the same as, and following credit underwriting procedures that are not less stringent than, those prevailing at the time for comparable transactions with unaffiliated persons, and also requires approval by the majority of the board of directors for certain loans.
Section 22(h) of the Federal Reserve Act also requires that loans to directors, executive officers and principal stockholders be made on terms substantially the same as, and following credit underwriting procedures that are not less stringent than, those prevailing at the time for comparable transactions with unaffiliated persons, and also requires approval by the majority of the board of directors for certain loans.
Depending on the collateral used to secure the loans, commercial and industrial loans are made in amounts generally of up to 75% of the value of the collateral securing the loan. We generally do not make unsecured commercial and industrial loans. Personal guarantees are often obtained from commercial and industrial borrowers.
Depending on the collateral used to secure the loans, commercial and industrial loans are made in amounts generally of up to 75% of the value of the collateral securing the loan. We generally do not make unsecured commercial and industrial loans. Personal guarantees are routinely obtained from commercial and industrial borrowers.
Institutions that have not exercised the AOCI opt-out have AOCI incorporated into common equity Tier 1 capital (including unrealized gains and losses on available- 25 Table of Contents for-sale-securities). The Bank exercised the opt-out election regarding the treatment of AOCI. Calculation of all types of regulatory capital is subject to deductions and adjustments specified in the regulations.
Institutions that have not exercised the AOCI opt-out have AOCI incorporated into common equity Tier 1 capital (including unrealized gains and losses on available-for-sale-securities). The Bank exercised the opt-out election regarding the treatment of AOCI. Calculation of all types of regulatory capital is subject to deductions and adjustments specified in the regulations.
The Company has policies, procedures and systems designed to comply with this Act and its implementing regulations, and the Company will review and document such policies, procedures and systems to ensure continued compliance. Incentive Compensation . In October 2022, the SEC adopted a final rule implementing the incentive-based compensation recovery (“clawback”) provisions of the Dodd-Frank Act.
The Company has policies, procedures and systems designed to comply with the Sarbanes-Oxley Act and its implementing regulations, and the Company will review and document such policies, procedures and systems to ensure continued compliance. Incentive Compensation . In October 2022, the SEC adopted a final rule implementing the incentive-based compensation recovery (“clawback”) provisions of the Dodd-Frank Act.
Therefore, unless Federal Reserve Board regulations or policy change by allowing Pioneer Bancorp, MHC to waive the receipt of dividends declared by the Company without diluting minority stockholders, it is unlikely that the Company will pay any dividends. 30 Table of Contents Possible Conversion of Pioneer Bancorp, MHC to Stock Form.
Therefore, unless Federal Reserve Board regulations or policy change by allowing Pioneer Bancorp, MHC to waive the receipt of dividends declared by the Company without diluting minority stockholders, it is unlikely that the Company will pay any dividends. Possible Conversion of Pioneer Bancorp, MHC to Stock Form.
Our marketing strategies focus on the strength of our knowledge of local consumer and small business markets, as well as expanding relationships with current customers and reaching out to develop new, profitable business relationships. 6 Table of Contents Competition We face significant competition for deposits and loans.
Our marketing strategies focus on the strength of our knowledge of local consumer and small business markets, as well as expanding relationships with current customers and reaching out to develop new, profitable business relationships. Competition We face significant competition for deposits and loans.
These statutes and regulations provide for a range of sanctions for non-compliance with their terms, including imposition of administrative fines and remedial orders, and referral to the Attorney General for prosecution of a civil action for actual and punitive damages and injunctive relief. 28 Table of Contents Cybersecurity.
These statutes and regulations provide for a range of sanctions for non-compliance with their terms, including imposition of administrative fines and remedial orders, and referral to the Attorney General for prosecution of a civil action for actual and punitive damages and injunctive relief. Cybersecurity.
A national bank may not pay a dividend if the dividend does not comply with applicable regulatory capital requirements, and the Bank may be further limited in payment of cash dividends if it does not maintain the capital conservation buffer described previously. 26 Table of Contents Prompt Corrective Regulatory Action.
A national bank may not pay a dividend if the dividend does not comply with applicable regulatory capital requirements, and the Bank may be further limited in payment of cash dividends if it does not maintain the capital conservation buffer described previously. Prompt Corrective Regulatory Action.
Loans that exceed that limit are considered “jumbo loans.” At June 30, 2024, we had $38.1 million in jumbo loans. 12 Table of Contents Our purchased loans generally adhere to the following guidelines: (1) the loan is an owner-occupied one- to four-family residential mortgage loan; (2) the loan does not provide for negative amortization of principal, such as “Option Arm” loans, where the borrower can pay less than the interest owed on the loan, resulting in an increased principal balance during the life of the loan; (3) the loan is not an “interest only” mortgage loan; (4) the maximum loan term is 30 years; (5) the loan has a loan-to-value ratio up to a maximum of 90%, provided, however, that the loan-to-value ratio may exceed 90% as long as the borrower obtains private mortgage insurance; and (6) the borrower has a maximum debt-to-income ratio of 45%.
Loans that exceed that limit are considered “jumbo loans.” At December 31, 2025, we had $25.8 million in jumbo loans. 12 Table of Contents Our purchased loans generally adhere to the following guidelines: (1) the loan is an owner-occupied one- to four-family residential mortgage loan; (2) the loan does not provide for negative amortization of principal, such as “Option Arm” loans, where the borrower can pay less than the interest owed on the loan, resulting in an increased principal balance during the life of the loan; (3) the loan is not an “interest only” mortgage loan; (4) the maximum loan term is 30 years; (5) the loan has a loan-to-value ratio up to a maximum of 90%, provided, however, that the loan-to-value ratio may exceed 90% as long as the borrower obtains private mortgage insurance; and (6) the borrower has a maximum debt-to-income ratio of 45%.
Pioneer Insurance Agency, Inc. also offers employee benefits products and consulting services under the name Pioneer Benefits Consulting, including group health, dental, disability and life insurance products and defined contribution and defined benefit administration and human resource management services. Pioneer Insurance Agency, Inc. operates from the Bank’s headquarters in Albany, New York.
Pioneer Insurance Agency, Inc. also offers employee benefits products and consulting services under the name Pioneer Benefits Consulting, including group health, dental, disability and life insurance products and defined contribution and defined benefit administration. Pioneer Insurance Agency, Inc. operates from the Bank’s headquarters in Albany, New York.
The description is limited to certain material aspects of certain statutes and regulations that are addressed, and is not intended to be a complete list or description of such statutes and regulations and their effects on the Bank, the Company and Pioneer Bancorp, MHC.
The description is limited to certain material aspects of certain statutes and regulations that are addressed, and is not intended to be a complete list or description of such statutes and regulations and their effects on the Bank, the Company, Pioneer Capital Markets, Inc. and Pioneer Bancorp, MHC.
The allowance for credit losses on loans, as reported in our consolidated statements of condition, is adjusted by a provision for credit losses, which is recognized in earnings, and reduced by the charge-off of loans, net of 17 Table of Contents recoveries.
The allowance for credit losses on loans, as reported in our consolidated statements of condition, is adjusted by a provision for credit losses, which is recognized in earnings, and reduced by the charge-off of loans, net of recoveries.
The New York State alternative tax rate is 0.1875% for tax years 2021-2024. Qualified community banks and thrift institutions that maintain a qualified loan portfolio are entitled to a specially computed modification that reduces the income taxable to New York State. ​ 33 Table of Contents
The New York State alternative tax rate is 0.1875% for tax years 2021-2025. Qualified community banks and thrift institutions that maintain a qualified loan portfolio are entitled to a specially computed modification that reduces the income taxable to New York State. ​ 32 Table of Contents
Because of these and other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements. We disclaim any obligation to revise or update any forward-looking statements contained in this Annual Report on Form 10-K to reflect future events or developments. Pioneer Bancorp, Inc.
Because of these and other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements. We disclaim any obligation to revise or update any forward-looking statements contained in this Annual Report on Form 10-K to reflect future events or developments, except as required by applicable law. Pioneer Bancorp, Inc.
If the OCC determines that a national bank fails to meet any standard prescribed by the guidelines, the agency may require the institution to submit to the agency an acceptable plan to achieve compliance with the standard and take other appropriate action. Loans-to-One-Borrower.
If 25 Table of Contents the OCC determines that a national bank fails to meet any standard prescribed by the guidelines, the agency may require the institution to submit to the agency an acceptable plan to achieve compliance with the standard and take other appropriate action. Loans-to-One-Borrower.
Interest rates and payments on our adjustable-rate loans adjust generally every five years and generally are indexed to the comparable FHLBNY amortizing advance indications, plus a margin.
Interest rates and payments on our adjustable-rate loans adjust generally every five years and generally are indexed to the comparable FHLBNY amortizing advance indications, plus a margin, subject to an interest rate floor.
If we foreclose on a multi-family real estate loan, the marketing and liquidation period to convert the real estate to cash can be a lengthy process with substantial holding costs.
If we foreclose on a commercial real estate loan, the marketing and liquidation period to convert the real estate to cash can be a lengthy process with substantial holding costs.
The regulatory structure also gives the regulatory authorities extensive discretion in connection with their supervisory and 24 Table of Contents enforcement activities and examination policies, including policies regarding classifying assets and establishing an adequate allowance for credit losses on loans for regulatory purposes.
The regulatory structure also gives the regulatory authorities extensive discretion in connection with their supervisory and enforcement activities and examination policies, including policies regarding classifying assets and establishing an adequate allowance for credit losses on loans for regulatory purposes.
For commercial loans, loans in excess of the commercial officers’ lending limits require approval from our staff loan committee, which is comprised of the President and Chief Executive Officer, Chief Credit Officer, Chief Financial Officer, Chief Banking Officer, Chief Strategy and Innovations Officer, Credit Administration Senior Vice President, and Commercial Senior Vice Presidents.
For commercial loans, loans in excess of the commercial credit officers’ lending limits require approval from our staff loan committee, which is comprised of the President and Chief Executive Officer, Chief Credit Officer, Chief Financial Officer, Chief Banking Officer, Commercial Lending Senior Vice President, and Vice Presidents of Commercial Credit and Business Banking.
This regulatory and supervisory structure establishes a comprehensive framework of the activities in which a depository institution may engage and is intended primarily for the protection of the FDIC’s Deposit Insurance Fund, depositors and the banking system.
The Bank is also a member of the FHLBNY. This regulatory and supervisory structure establishes a comprehensive framework of the activities in which a depository institution may engage and is intended primarily for the protection of the FDIC’s Deposit Insurance Fund, depositors and the banking system.
Set forth below is a brief description of material regulatory requirements that are applicable to the Bank, the Company and Pioneer Bancorp, MHC.
Set forth below is a brief description of material regulatory requirements that are applicable to the Bank, the Company, Pioneer Capital Markets, Inc. and Pioneer Bancorp, MHC.
The OCC also has authority to establish individual minimum capital requirements in appropriate cases upon determination that an institution’s capital level is, or is likely to become, inadequate in light of the particular circumstances. At June 30, 2024, the Bank exceeded each of its capital requirements. Standards for Safety and Soundness.
The OCC also has authority to establish individual minimum capital requirements in appropriate cases upon determination that an institution’s capital level is, or is likely to become, inadequate in light of the particular circumstances. At December 31, 2025, the Bank exceeded each of its capital requirements. Standards for Safety and Soundness.
The Bank may also establish subsidiaries that engage in activities permitted for the Bank as well as certain other activities. Capital Requirements. Under OCC regulations, the Bank is subject to a comprehensive capital framework for U.S. banking organizations that was effective January 2015 (the Basel III capital rules).
The Bank may also establish subsidiaries that engage in activities permitted for the Bank as well as certain other activities. 24 Table of Contents Capital Requirements. Under OCC regulations, the Bank is subject to the Basel III capital rules, a comprehensive capital framework for U.S. banking organizations that became effective in January 2015.
“Critically undercapitalized” institutions are subject to additional measures including, subject to a narrow exception, the appointment of a receiver or conservator within 270 days after it is determined to be critically undercapitalized. Transactions with Affiliates and Regulation W of the Federal Reserve Board. Transactions between banks and their affiliates are governed by federal law.
Critically undercapitalized institutions are subject to additional measures including, subject to a narrow exception, the appointment of a receiver or conservator within 270 days after the institution is determined to be critically undercapitalized. 26 Table of Contents Transactions with Affiliates and Regulation W of the Federal Reserve Board. Transactions between banks and their affiliates are governed by federal law.
An institution is classified as “critically undercapitalized” if it has a ratio of tangible equity (as defined in the regulations) to total assets equal to or less than 2.0%. At June 30, 2024, the Bank was classified as a “well capitalized” institution.
An institution is classified as “critically undercapitalized” if it has a ratio of tangible equity (as defined in the regulations) to total assets equal to or less than 2.0%. At December 31, 2025, the Bank was classified as a “well capitalized” institution.
Allowance for Credit Losses on Loans Effective July 1, 2023, the measurement of Current Expected Credit Losses (“CECL”) on loans requires an estimate of the credit losses expected over the life of an exposure (or pool of exposures).
Allowance for Credit Losses on Loans The measurement of Current Expected Credit Losses (“CECL”) on loans requires an estimate of the credit losses expected over the life of an exposure (or pool of exposures).
Delinquencies and Asset Quality Delinquency Procedures. System-generated late notices are mailed to a borrower after the late payment “grace period,” which is 15 days in the case of all loans secured by residential or commercial real estate and 15 days in the case of commercial and industrial and most consumer loans.
System-generated late notices are mailed to a borrower after the late payment “grace period,” which is 15 days in the case of all loans secured by residential real estate, commercial real estate, or commercial and industrial loans, as well as most consumer loans.
Pioneer Financial Services, Inc., a New York corporation and wholly owned subsidiary of the Bank, provides wealth management services to the Bank’s customers in partnership with LPL Financial, a registered broker dealer. The Bank incorporated Pioneer Financial Services, Inc. in 1997. It had $1.13 billion of assets under management at June 30, 2024.
Pioneer Financial Services, Inc., a New York corporation and wholly owned subsidiary of the Bank, provides wealth management services to the Bank’s customers in partnership with LPL Financial, a registered broker dealer. The Bank incorporated Pioneer Financial Services, Inc. in 1997. It had $1.4 billion of assets under management at December 31, 2025.
At June 30, 2024, $41.0 million of our home equity loans and lines of credit were in a junior lien position, nearly all of which were second mortgages. We face the risk that the collateral will be insufficient to compensate us for loan losses and costs of foreclosure, after repayment of the senior mortgages, if applicable.
At December 31, 2025, $45.9 million of our home equity loans and lines of credit were in a junior lien position, nearly all of which were second mortgages. We face the risk that the collateral will be insufficient to compensate us for loan losses and costs of foreclosure, after repayment of the senior mortgages, if applicable.
At June 30, 2024, commercial and industrial loans totaled $101.2 million, or 7.4% of our total loan portfolio. Customers for these loans include professional businesses, family-owned businesses and not-for-profit businesses. As part of our relationship-driven focus, we generally require our commercial borrowers to maintain a deposit account with us, which improves our interest rate spread, margin and overall profitability.
At December 31, 2025, commercial and industrial loans totaled $124.9 million, or 7.5% of our total loan portfolio. Customers for these loans include professional businesses, family-owned businesses and not-for-profit businesses. As part of our relationship-driven focus, we generally require our commercial borrowers to maintain a deposit account with us, which improves our interest rate spread, margin and overall profitability.
We refer to loans that conform to the Fannie Mae guidelines as “conforming loans.” We also purchase for our portfolio loans above the maximum conforming loan limits as established by the Office of Federal Housing Enterprise Oversight, which at June 30, 2024 was $766,550 for single-family homes in our market area.
We refer to loans that conform to the Fannie Mae guidelines as “conforming loans.” We also purchase for our portfolio loans above the maximum conforming loan limits as established by the Office of Federal Housing Enterprise Oversight, which at December 31, 2025 was $806,500 for single-family homes in our market area.
As of June 30, 2024, the Bank was in compliance with the loan-to-one-borrower limitations. Dividends. Federal law and OCC regulations govern cash dividends by a national bank.
As of December 31, 2025, the Bank was in compliance with the loan-to-one-borrower limitations. Dividends. Federal law and OCC regulations govern cash dividends by a national bank.
We originate a variety of adjustable-rate multi-family residential real estate loans with terms and amortization periods generally of up to 25 years (or 30 years if the age of the collateral is less than 10 years old), which may include balloon payments.
Our multi-family real estate loans are generally secured by properties consisting of five to 100 rental units. We originate a variety of adjustable-rate multi-family residential real estate loans with terms and amortization periods generally of up to 25 years (or 30 years if the age of the collateral is less than 10 years old), which may include balloon payments.
We also originate rehabilitation loans, enabling a borrower to partially or totally refurbish an existing structure, which are structured as construction loans and monitored in the same manner. At June 30, 2024, commercial construction loans totaled $118.4 million, or 8.7% of our total loan portfolio. Most of these loans are secured by properties located in our primary market area.
We also originate rehabilitation loans, enabling a borrower to partially or totally refurbish an existing structure, which are structured as construction loans and monitored in the same manner. At December 31, 2025, commercial construction loans totaled $169.7 million, or 10.2% of our total loan portfolio. Most of these loans are secured by properties located in our primary market area.
Home Equity Loans and Lines of Credit. We offer home equity loans and home equity lines of credit, both of which are secured by either first mortgages or second mortgages on owner occupied, one- to four-family residences. At June 30, 2024, outstanding home equity loans and equity lines of credit totaled $92.8 million, or 6.8% of total loans outstanding.
Home Equity Loans and Lines of Credit. We offer home equity loans and home equity lines of credit, both of which are secured by either first mortgages or second mortgages on owner-occupied, one- to four-family residences. At December 31, 2025, outstanding home equity loans and equity lines of credit totaled $97.6 million, or 5.8% of total loans outstanding.
If an “undercapitalized” national bank fails to submit an acceptable plan, it is treated as if it is “significantly undercapitalized.” “Significantly undercapitalized” national banks must comply with one or more of a number of additional restrictions, including an order by the OCC to sell sufficient voting stock to become adequately capitalized, requirements to reduce total assets, cease receipt of deposits from correspondent banks or dismiss directors or officers, and limitations on interest rates paid on deposits, compensation of executive officers and capital distributions by the parent holding company.
Significantly undercapitalized national banks must comply with one or more of a number of additional restrictions, including an order by the OCC to sell sufficient voting stock to become adequately capitalized, requirements to reduce total assets, cease receipt of deposits from correspondent banks or dismiss directors or officers, and limitations on interest rates paid on deposits, compensation of executive officers and capital distributions by the parent holding company.
Our loan origination and purchase activity has been and may continue to be adversely affected by the high interest rate environment, which typically results in decreased loan demand. We generally do not purchase whole loans from third parties other than the residential mortgage loans described above.
Our loan origination and purchase activity has been and may continue to be adversely affected by a higher interest rate environment, which typically results in decreased loan demand. We do purchase whole loans from third parties, which primarily are residential mortgage loans described above.
As a result, the nature of these loans makes them more difficult for management to monitor and evaluate. 10 Table of Contents At June 30, 2024, multi-family real estate loans, which we consider a sub-category of commercial real estate loans, totaled $107.9 million, or 26.6% of our commercial real estate loan portfolio.
As a result, the nature of these loans makes them more difficult for management to monitor and evaluate. 10 Table of Contents At December 31, 2025, multi-family real estate loans, which we consider a sub-category of commercial real estate loans, totaled $127.9 million, or 27.4% of our commercial real estate loan portfolio.
We also had undrawn amounts on the commercial construction loans totaling $52.7 million at June 30, 2024. Our commercial construction loans are generally interest-only loans that provide for the payment of interest during the construction phase, which is usually 12 to 24 months.
We also had undrawn amounts on the commercial construction loans totaling $66.4 million at December 31, 2025. Our commercial construction loans are generally interest-only loans that provide for the payment of interest during the construction phase, which is usually 12 to 24 months.
At June 30, 2024, we had consolidated total assets of $1.9 billion, total deposits of $1.6 billion and shareholders’ equity of $296.5 million. The Bank is subject to comprehensive regulation and examination by the OCC and by the Federal Deposit Insurance Corporation (the “FDIC”) as the Bank’s insurer of deposit accounts. Our website address is www.pioneerny.com .
At December 31, 2025, we had consolidated total assets of $2.15 billion, total deposits of $1.74 billion and shareholders’ equity of $323.9 million. The Bank is subject to comprehensive regulation and examination by the OCC and by the Federal Deposit Insurance Corporation (the “FDIC”) as the Bank’s insurer of deposit accounts. Our website address is www.pioneerny.com .
Such activities can include insurance underwriting and investment banking. As of June 30, 2024, Pioneer Bancorp, MHC and the Company were not “financial holding companies.” 29 Table of Contents Capital. The Federal Reserve Board must establish for all bank holding companies minimum consolidated capital requirements that are as stringent as those required for their insured depository subsidiaries.
Such activities can include insurance underwriting and investment banking. As of December 31, 2025, Pioneer Bancorp, MHC and the Company elected to be “financial holding companies.” Capital. The Federal Reserve Board must establish for all bank holding companies minimum consolidated capital requirements that are as stringent as those required for their insured depository subsidiaries.
As of June 30, 2024, unemployment rates, according to the New York State Department of Labor, were 3.5% for Albany County, 3.7% for Greene County, 3.4% for Rensselaer County, 3.0% for Saratoga County, 3.7% for Schenectady County and 3.3% for Warren County.
As of December 31, 2025, unemployment rates, according to the New York State Department of Labor, were 3.3% for Albany County, 3.7% for Greene County, 3.5% for Rensselaer County, 2.9% for Saratoga County, 3.7% for Schenectady County and 4.2% for Warren County.
Pioneer Insurance Agency, Inc. Pioneer Insurance Agency, Inc. is a full-service insurance agency offering personal and commercial insurance, including homeowners, automobile and comprehensive business insurance, and works with major national insurance companies as well as specialty markets.
Pioneer Insurance Agency, Inc., a New York corporation and wholly owned subsidiary of the Bank, is a full-service insurance agency offering personal and commercial insurance, including homeowners, automobile and comprehensive business insurance, and works with major national insurance companies as well as specialty markets.
The Bank also sells commercial and consumer insurance products and employee benefit products and services through Pioneer Insurance Agency, Inc., its insurance agency subsidiary formally known as Anchor Agency, Inc., and provides wealth management services through its subsidiary, Pioneer Financial Services, Inc.
The Bank also sells commercial and consumer insurance products and employee benefit products and services through Pioneer Insurance Agency, Inc., provides wealth management services through its subsidiary, Pioneer Financial Services, Inc. and provides human resources consulting services through its subsidiary, Pioneer Consulting Solutions, Inc.
For the year ended June 30, 2024, we purchased for our portfolio $207.3 million of loans originated through the Mortgage Banking Company. As part of purchasing the loans, we typically acquire the servicing rights to the loans in order to best assist the customer relationship.
For the calendar year ended December 31, 2025, we purchased for our portfolio $152.4 million of loans originated through the Mortgage Banking Company. As part of purchasing the loans, we typically acquire the servicing rights to the loans in order to best assist the customer relationship.
At June 30, 2024, based on the 15% limitation, the Bank’s loans-to-one-borrower limit was approximately $35.3 million. On the same date, the Bank had no borrower with outstanding balances in excess of this amount. Our lending is subject to written underwriting standards and origination procedures.
At December 31, 2025, based on the 15% limitation, the Bank’s loans-to-one-borrower limit was approximately $43.5 million. On the same date, the Bank had no borrower or group of related borrowers with outstanding balances in excess of this amount. Our lending is subject to written underwriting standards and origination procedures.
Our borrowings consist of advances from the FHLBNY. As of June 30, 2024, the Company pledged approximately $605.8 million of residential mortgage, home equity and commercial loans as collateral for borrowings and stand-by letters of credit at the FHLBNY.
Our borrowings consist of advances from the FHLBNY. As of December 31, 2025, the Company pledged approximately $777.1 million of residential mortgage, home equity and commercial loans as collateral for borrowings and stand-by letters of credit at the FHLBNY.
At June 30, 2024, our residential mortgage loans consisted of $327.3 million of fixed-rate loans and $306.5 million of adjustable-rate loans. Most of these one- to four-family residential properties are located in our primary market area and many are underwritten according to Fannie Mae guidelines.
At December 31, 2025, our residential mortgage loans consisted of $446.2 million of fixed-rate loans and $347.5 million of adjustable-rate loans. Most of these one- to four-family residential properties are located in our primary market area and many are underwritten according to Fannie Mae guidelines.
As of June 30, 2024, the unemployment rates for the United States, New York State and the Capital Region of New York were 4.3%, 4.3% and 3.4%, respectively.
As of December 31, 2025, the unemployment rates for the United States, New York State and the Capital Region of New York were 4.1%, 4.4% and 3.3%, respectively.
At June 30, 2024, we had $406.2 million in commercial real estate loans, representing 29.7% of our total loan portfolio. Our commercial real estate loans are secured primarily by multi-family properties, office buildings, industrial facilities, retail facilities and other commercial properties, substantially all of which are located in our primary market area.
At December 31, 2025, we had $466.5 million in commercial real estate loans, representing 27.9% of our total loan portfolio. Our commercial real estate loans are secured primarily by multi-family properties, office buildings, industrial facilities, retail facilities and other commercial properties, substantially all of which are located in our primary market area.
Our consumer loans primarily consist of personal loans to the owners of certain commercial businesses who have commercial loans with us, and to a lesser extent, loans on automobiles and overdraft accounts. At June 30, 2024, consumer loans were $13.5 million, or 1.0% of our total loan portfolio.
Our consumer loans primarily consist of personal loans to the owners of certain commercial businesses who have commercial loans with us, and to a lesser extent, loans on automobiles, overdraft accounts and other unsecured consumer loans. At December 31, 2025, consumer loans were $19.2 million, or 1.1% of our total loan portfolio.
We primarily participate in commercial real estate loans (including multi-family real estate loans), commercial and industrial loans and commercial construction loans. We also purchase participation interests in loans where we are not the lead lender. We underwrite our participation interest in the loans that we purchase according to our own underwriting criteria and procedures.
We also purchase participation interests in loans where we are not the lead lender. We underwrite our participation interest in the loans that we purchase according to our own underwriting criteria and procedures.
As of June 30, 2024, the aggregate amount of all our certificates of deposit in amounts greater than or equal to $250,000 (the FDIC insurance limit) was approximately $16.5 million.
As of December 31, 2025, the aggregate amount of all our certificates of deposit in amounts greater than or equal to $250,000 (the FDIC insurance limit) was approximately $27.4 million.
The Bank, as a member of the Federal Home Loan Bank of New York, is required to acquire and hold shares of capital stock in the Federal Home Loan Bank of New York. The Bank was in compliance with this requirement at June 30, 2024. Holding Company Regulation Federal Holding Company Regulation .
The Bank, as a member of the FHLBNY, is required to acquire and hold shares of capital stock in the FHLBNY. The Bank was in compliance with this requirement at December 31, 2025. Holding Company Regulation Federal Holding Company Regulation .
Since January 2016, all of our residential mortgage loans have been purchases through our relationship with an unaffiliated mortgage banking company. We also invest in securities, which have historically consisted primarily of U.S. Government and agency obligations, municipal obligations and corporate debt securities.
Since January 2016, all of our residential mortgage loans have been purchased through our relationship with an unaffiliated mortgage banking company. We also invest in securities, which consist primarily of U.S. Treasury obligations, securities of various government agencies and government-sponsored enterprises, including mortgage-backed securities and collateralized mortgage obligations, municipal obligations and corporate debt securities.
Pioneer Bancorp, MHC Pioneer Bancorp, MHC was formed as a New York mutual holding company and will, for as long as it is in existence, own a majority of the outstanding shares of the Company’s common stock.
The Company is subject to comprehensive regulation and examination by the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”). Pioneer Bancorp, MHC Pioneer Bancorp, MHC was formed as a New York mutual holding company and will, for as long as it is in existence, own a majority of the outstanding shares of the Company’s common stock.
The following table sets forth the amortized cost and estimated fair value of our securities portfolio (excluding Federal Home Loan Bank of New York and Federal Reserve Bank of New York common stock) at the dates indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At June 30, ​ ​ 2024 ​ 2023 ​ ​ Amortized ​ Estimated ​ Amortized ​ Estimated ​ Cost Fair Value Cost Fair Value ​ ​ (In thousands) Securities available for sale: ​ ​ ​ ​ U.S.
We invest in corporate debt securities issued primarily by companies in the financial sector. 19 Table of Contents The following table sets forth the amortized cost and estimated fair value of our securities portfolio (excluding Federal Home Loan Bank of New York and Federal Reserve Bank of New York common stock) at the dates indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At December 31, ​ ​ 2025 ​ 2024 ​ ​ Amortized ​ Estimated ​ Amortized ​ Estimated ​ ​ ​ ​ Cost ​ ​ ​ Fair Value ​ ​ ​ Cost ​ ​ ​ Fair Value ​ ​ (In thousands) Securities available for sale: ​ ​ ​ ​ ​ ​ ​ ​ U.S.
We do not know of any practice, condition or violation that might lead to termination of the Bank’s deposit insurance. The FDIC assesses insured depository institutions to maintain the Deposit Insurance Fund. Under the FDIC’s risk-based assessment system, institutions deemed less risky pay lower assessments.
As of the date of this Annual Report on Form 10-K, the Bank is not aware of any practice, condition or violation that might lead to termination of its deposit insurance. The FDIC assesses insured depository institutions to maintain the Deposit Insurance Fund. Under the FDIC’s risk-based assessment system, institutions deemed less risky pay lower assessments.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRisks Related to Operations ● We use a third party to originate residential mortgage loans. ● Our business strategy involves moderate growth, and our financial condition and results of operations may be adversely affected if we fail to grow or fail to manage our growth effectively. ● We continually encounter technological changes and the failure to understand and adapt to these changes could hurt our business. ● We are subject to stringent capital requirements, which may adversely impact our return on equity, require us to raise additional capital, or restrict us from paying dividends or repurchasing shares. ● Our success depends on attracting and retaining certain key personnel. ● Systems failures or breaches of our network security could subject us to increased operating costs as well as litigation and other liabilities. ● Our risk management framework may not be effective in mitigating risk and reducing the potential for significant losses. ● We are a community financial institution and our ability to maintain our reputation is critical to the success of our business and the failure to do so may materially adversely affect our performance. ● Severe weather, acts of terrorism, geopolitical and other external events could impact our ability to conduct business. 35 Table of Contents Risks Relating to Ownership of Our Common Stock ● Pioneer Bancorp, MHC’s majority control of our common stock will enable it to exercise voting control over most matters put to a vote of stockholders and will prevent stockholders from forcing a sale or a second-step conversion transaction you may find advantageous. ● Our common stock is not heavily traded, and the stock price may fluctuate significantly. ● Federal Reserve Board regulations and policy effectively prohibit Pioneer Bancorp, MHC from waiving the receipt of dividends, which will likely preclude us from paying any dividends on our common stock. ● Various factors may make takeover attempts more difficult to achieve. ● We are an emerging growth company, and if we elect to comply only with the reduced reporting and disclosure requirements applicable to emerging growth companies, our common stock may be less attractive to investors. ​ Risks Related to Changes in Macroeconomic Conditions, Interest Rates and Inflation Our business may be adversely affected by economic downturns in our market area and the national economy.
Biggest changeRisks Related to Liquidity ● A lack of liquidity could adversely affect our financial condition and results of operations. ● Municipal deposits are price sensitive and could result in an increase in interest expense or funding fluctuations. ​ Risks Related to Our Insurance and Wealth Management Businesses ● Conditions in insurance markets could adversely affect our earnings. ● Involvement in wealth management creates risks associated with the industry Risks Related to Operations ● Strong competition within our market area may reduce our profits and slow growth. ● We use a mortgage banking company to originate residential mortgage loans. ● Our financial condition and results of operations may be adversely affected if we fail to grow or fail to manage our growth effectively. ● We continually encounter technological changes and the failure to understand and adapt to these changes could hurt our business. ● We are subject to stringent capital requirements, which may adversely impact our return on equity, require us to raise additional capital, or restrict us from paying dividends or repurchasing shares. ● Our success depends on attracting and retaining certain key personnel. ● Systems failures or breaches of our network security could subject us to increased operating costs as well as litigation and other liabilities. ● Our risk management framework may not be effective in mitigating risk and reducing the potential for significant losses. ● We are a community financial institution and our ability to maintain our reputation is critical to the success of our business and the failure to do so may materially adversely affect our performance. ● Severe weather, acts of terrorism, geopolitical and other external events could impact our ability to conduct business. ● Impairment of goodwill could adversely affect our financial condition and results of operations. ● The risks presented by acquisitions could adversely affect our financial condition and results of operations. ● New lines of business or new products and services may subject us to additional risks. ● The development and use of artificial intelligence (“AI”) presents risks and challenges that may adversely impact our business. ​ Risks Relating to Ownership of Our Common Stock ● Pioneer Bancorp, MHC’s majority control of our common stock will enable it to exercise voting control over most matters put to a vote of stockholders and will prevent stockholders from forcing a sale or a second-step conversion transaction you may find advantageous. ● Our common stock is not heavily traded, and the stock price may fluctuate significantly. ● Federal Reserve Board regulations and policy effectively prohibit Pioneer Bancorp, MHC from waiving the receipt of dividends, which will likely preclude us from paying any dividends on our common stock. ● Various factors may make takeover attempts more difficult to achieve. 34 Table of Contents Risks Related to Changes in Macroeconomic Conditions, Interest Rates and Inflation Our business may be adversely affected by economic downturns in our market area and the national economy.
We purchase commercial real estate, commercial and industrial and commercial construction loan participations (loans made by a group of lenders, including us, who share or participate in a specific loan) secured by properties outside our market area in which we are not the lead lender.
We purchase commercial real estate loan participations, commercial and industrial loan participations, and commercial construction loan participations (loans made by a group of lenders, including us, who share or participate in a specific loan) secured by properties outside our market area in which we are not the lead lender.
These estimates are based upon currently available information and are subject to significant judgment, a variety of assumptions and known and unknown uncertainties. See “Item 3 – Legal Proceedings,” for details. As a result, the ultimate outcome of our legal or regulatory actions could have a material adverse effect on the Company’s financial condition and results of operations.
These estimates are based upon currently available information and are subject to significant judgment, a variety of assumptions and known and unknown uncertainties. As a result, the ultimate outcome of our legal or regulatory actions could have a material adverse effect on the Company’s financial condition and results of operations. See “Item 3 – Legal Proceedings,” for details.
We are susceptible to fraudulent activity committed against us or our clients, which has in the past and may continue to result in negative impacts to the Company which may include, but are not limited to, financial losses or increased costs to us or our clients, disclosure or misuse of our information or our client information, misappropriation of assets, privacy breaches against our clients, litigation, governmental and regulatory sanctions and penalties, or damage to our reputation.
We are susceptible to fraudulent activity committed against us or our clients, which has and may continue to result in negative impacts to the Company which may include, but are not limited to, financial losses or increased costs to us or our clients, disclosure or misuse of our information or our client information, misappropriation of assets, privacy breaches against our clients, litigation, governmental and regulatory sanctions and penalties, or damage to our reputation.
Inflation risk is the risk that the value of assets or income from investments will be worth less in the future as inflation decreases the value of money. As a result of sustained inflationary pressures, the Federal Reserve Board has increased the federal funds rate to a target range of 5.25% to 5.50% as of June 30, 2024.
Inflation risk is the risk that the value of assets or income from investments will be worth less in the future as inflation decreases the value of money. As a result of sustained inflationary pressures, the Federal Reserve Board increased the federal funds rate to a target range of 5.25% to 5.50% as of June 30, 2024.
Over the next several years, we expect to experience moderate growth in our total assets and deposits, and the scale of our operations. Achieving our growth targets requires us to attract customers that currently bank at other financial institutions in our market.
Over the next several years, we expect to experience growth in our total assets and deposits, and the scale of our operations. Achieving our growth targets requires us to attract customers that currently bank at other financial institutions in our market.
In addition, if it is determined that we have engaged in an unfair or deceptive act or practice, our regulators may issue an order to cease and desist and impose a fine us.
In addition, if it is determined that we have engaged in an unfair or deceptive act or practice, our regulators may issue an order to cease and desist and impose a fine on us.
If our reputation is negatively affected as a result of certain actions we take, by the actions of our employees, by our inability to conduct our operations in a manner that is appealing to current or prospective customers, or otherwise, our business and, therefore, our operating results may be materially adversely affected. 52 Table of Contents Severe weather, acts of terrorism, geopolitical and other external events could impact our ability to conduct business.
If our reputation is negatively affected as a result of certain actions we take, by the actions of our employees, by our inability to conduct our operations in a manner that is appealing to current or prospective customers, or otherwise, our business and, therefore, our operating results may be materially adversely affected. 49 Table of Contents Severe weather, acts of terrorism, geopolitical and other external events could impact our ability to conduct business.
In response to these threats there has been heightened regulatory focus on data privacy and cybersecurity from our federal and state banking regulators and as a result, we must comply with an evolving set of legal requirements in this area, including substantive cybersecurity standards as well as requirements for notifying regulators and affected individuals in the event of a data security incident.
In response to these threats there has been heightened regulatory focus on data privacy and cybersecurity from our banking regulators and as a result, we must comply with an evolving set of legal requirements in this area, including substantive cybersecurity standards as well as requirements for notifying regulators and affected individuals in the event of a data security incident.
Lawmakers’ failure to address the federal debt ceiling in a timely manner, downgrades of the U.S. credit rating and uncertain credit and financial market conditions may affect the stability of securities issued or guaranteed by the federal government, which may affect the valuation or liquidity of our investment securities portfolio and increase future borrowing costs.
Lawmakers’ failure to address the federal debt ceiling in a timely manner, downgrades of the U.S. credit rating, potential government shutdowns, and uncertain credit and financial market conditions may affect the stability of securities issued or guaranteed by the federal government, which may affect the valuation or liquidity of our investment securities portfolio and increase future borrowing costs.
Local economic conditions have a significant impact on our residential real estate, commercial real estate, construction, commercial and industrial and consumer lending, including, the ability of borrowers to repay these loans and the value of the collateral securing these loans. Economic conditions in our primary market continue to be impacted by the inflationary and high interest rate environment.
Local economic conditions have a significant impact on our residential real estate, commercial real estate, construction, commercial and industrial and consumer lending, including, the ability of borrowers to repay these loans and the value of the collateral securing these loans. Economic conditions in our primary market continue to be impacted by the inflationary and current interest rate environment.
These loans carry a greater credit risk than loans secured by one- to four-family properties. ● A portion of our loan portfolio is comprised of commercial and industrial loans secured by accounts receivable, inventory, equipment or other business assets, the deterioration in value of which could increase the potential for future losses. ● We make and hold in our portfolio commercial construction loans, which are considered to have greater credit risk than residential loans made by financial institutions. ● Our allowance for credit losses on loans may not be sufficient to absorb losses in our loan portfolio. ● If our non-performing assets increase, our earnings will be adversely affected. ● A portion of our loan portfolio consists of loan participations secured by properties outside our market area.
These loans carry a greater credit risk than loans secured by one- to four-family properties. ● A portion of our loan portfolio is comprised of commercial and industrial loans secured by accounts receivable, inventory, equipment or other business assets, the deterioration in value of which could increase the potential for future losses. ● We make and hold in our portfolio commercial construction loans, which are considered to have greater credit risk than residential mortgage loans. ● Our allowance for credit losses on loans may not be sufficient to absorb losses in our loan portfolio. ● If our non-performing assets increase, our earnings will be adversely affected. ● A portion of our loan portfolio consists of loan participations secured by properties outside our market area.
If customers continue to move money out of bank deposits and into other investments such as money market funds, we would lose a relatively low-cost source of funds, which would increase our funding costs and reduce net interest income.
If customers move money out of bank deposits and into other investments such as money market funds, we would lose a relatively low-cost source of funds, which would increase our funding costs and reduce net interest income.
We rely on our ability to gather deposits, make investments and effectively manage the repayment and maturity schedules of loans to ensure that there is adequate liquidity to fund our operations and pay our obligations.
Liquidity is essential to our business. We rely on our ability to gather deposits, make investments and effectively manage the repayment and maturity schedules of loans to ensure that there is adequate liquidity to fund our operations and pay our obligations.
If our assumptions prove to be incorrect, or if certain intervening events occur (like fraud by a customer or the COVID-19 pandemic), our allowance for credit losses on loans may not be sufficient to cover losses in our loan portfolio, and adjustments may be necessary to address different economic conditions or adverse developments in our loan portfolio.
If our assumptions prove to be incorrect, or if certain intervening events occur (like fraud by a customer or a pandemic), our allowance for credit losses on loans may not be sufficient to cover losses in our loan portfolio, and adjustments may be necessary to address different economic conditions or adverse developments in our loan portfolio.
Further, the effects of climate change may negatively impact regional 45 Table of Contents and local economic activity, which could lead to an adverse effect on our customers and impact the communities in which we operate. Overall, climate change, its effects and the resulting, unknown impact could have a material adverse effect on our financial condition and results of operations.
Further, the effects of climate change may negatively impact regional and local economic activity, which could lead to an adverse effect on our customers and impact the communities in which we operate. Overall, climate change, its effects and the resulting, unknown impact could have a material adverse effect on our financial condition and results of operations.
Computer break-ins, phishing and other disruptions could also jeopardize the security of information stored in and transmitted through our computer systems and 51 Table of Contents network infrastructure, which may result in significant liability to us and may cause existing and potential customers to refrain from doing business with us.
Computer break-ins, phishing and other disruptions could also jeopardize the security of information stored in and transmitted through our computer systems and network infrastructure, which may result in significant liability to us and may cause existing and potential customers to refrain from doing business with us.
Should we discontinue this relationship or otherwise be unable to use this mortgage banking company in the future, our ability to purchase residential mortgage loans may be disrupted unless we are able to find a suitable replacement or have or re-develop the capability to originate residential mortgage loans through our lending staff.
Should we discontinue this relationship or otherwise be unable to use this mortgage banking company in the future, our ability to purchase residential mortgage loans may be disrupted unless we are able to find a suitable replacement or develop the capability to originate residential mortgage loans in-house through our lending staff.
Any future determination to pay cash dividends will be made by our board of directors and will depend upon our financial condition, results of operations, 53 Table of Contents capital requirements, restrictions under Federal Reserve Board regulations and policy, our business strategy and other factors that our board of directors deems relevant.
Any future determination to pay cash dividends will be made by our board of directors and will depend upon our financial condition, results of operations, capital requirements, restrictions under Federal Reserve Board regulations and policy, our business strategy and other factors that our board of directors deems relevant.
For example, if it is determined that we have failed to operate according to the regulations, policies and directives of our regulators, we would be subject to sanctions for non-compliance, including seizure of the property and business of the bank and 43 Table of Contents suspension or revocation of our charter.
For example, if it is determined that we have failed to operate according to the regulations, policies and directives of our regulators, we would be subject to sanctions for non-compliance, including seizure of the property and business of the Bank and suspension or revocation of our charter.
Given our dependence on high-average balance municipal deposits as a source of funds, our inability to retain such funds could significantly and adversely affect our liquidity. Further, our municipal deposits are primarily demand deposit accounts and are therefore more sensitive to interest rate risk.
Given our dependence on high-average balance municipal deposits as a source of funds, our inability to retain such funds could significantly and adversely affect our liquidity. Further, our municipal deposits are primarily demand 45 Table of Contents deposit accounts and are therefore more sensitive to interest rate risk.
A material increase in our non-performing construction loans could have a material adverse effect on our financial condition and results of operation. 40 Table of Contents Our allowance for credit losses on loan may not be sufficient to absorb losses in our loan portfolio.
A material increase in our non-performing construction loans could have a material adverse effect on our financial condition and results of operation. Our allowance for credit losses on loans may not be sufficient to absorb losses in our loan portfolio.
Our involvement in any such matters, whether tangential or otherwise, and even if the matters are ultimately determined in our favor, could also cause significant harm to our reputation and divert management’s attention from the operation of our business.
Our involvement in any such matters, whether 40 Table of Contents tangential or otherwise, and even if the matters are ultimately determined in our favor, could also cause significant harm to our reputation and divert management’s attention from the operation of our business.
Although we, with the help of third-party service providers, intend to continue to implement security technology, establish operational procedures designed to prevent such damage, including cybersecurity controls, our security measures may not be successful.
Although we, with the help of third-party service providers, intend to continue to 48 Table of Contents implement security technology, establish operational procedures designed to prevent such damage, including cybersecurity controls, our security measures may not be successful.
Should we add more staff in such an event, our compensation expense would increase. Our income may be negatively affected if our residential mortgage lending program is disrupted. Our business strategy involves moderate growth, and our financial condition and results of operations may be adversely affected if we fail to grow or fail to manage our growth effectively.
Should we add more staff in such an event, our compensation expense would increase. Our income may be negatively affected if our residential mortgage lending program is disrupted. Our financial condition and results of operations may be adversely affected if we fail to grow or fail to manage our growth effectively.
However, our competitors may have greater resources to invest in technological improvements, we may not always have capital levels which are sufficient to support a robust investment in our technology infrastructure or we may not be able to effectively implement new technology-driven 50 Table of Contents products and services or be successful in marketing these products and services to our customers.
However, our competitors may have greater resources to invest in technological improvements, we may not always have capital levels which are sufficient to support a robust investment in our technology infrastructure or we may not be able to effectively implement new technology-driven products and services or be successful in marketing these products and services to our customers.
Further, though certain legal fees and expenses associated with these proceedings have been borne by our insurance carriers, up to applicable coverage limits and deductibles, such limits 42 Table of Contents and deductibles have been met and/or exceeded, and we do not expect to recognize any additional insurance recoveries related to these claims.
Further, though certain legal fees and expenses associated with these proceedings have been borne by our insurance carriers, up to applicable coverage limits and deductibles, such limits and deductibles have been met and/or exceeded, and we do not expect to recognize any additional insurance recoveries related to these claims.
We may experience operational challenges as we implement these new technology enhancements or products, which could impair our ability to realize the anticipated benefits from such new technology or require us to incur significant costs to remedy any such challenges in a timely manner.
We may experience operational challenges as we implement these new technology enhancements or products, which could impair our ability 47 Table of Contents to realize the anticipated benefits from such new technology or require us to incur significant costs to remedy any such challenges in a timely manner.
For example, Pioneer Bancorp, MHC may exercise its voting control to defeat a stockholder nominee for election to the board of directors of the Company and will be able to elect all of the directors of the Company.
For example, Pioneer Bancorp, MHC may 51 Table of Contents exercise its voting control to defeat a stockholder nominee for election to the board of directors of the Company and will be able to elect all of the directors of the Company.
For loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its customers.
For loans secured by accounts receivable, the 37 Table of Contents availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its customers.
Consequently, a problem with one or more loans could require us to significantly increase our provision for credit losses. In addition, banking regulators periodically review our allowance for credit losses on loans and may require us to increase our provision for credit losses or recognize additional loan charge-offs.
Consequently, a problem with one or more loans could require us to significantly increase our provision for credit losses. In addition, banking 38 Table of Contents regulators periodically review our allowance for credit losses on loans and may require us to increase our provision for credit losses or recognize additional loan charge-offs.
The most significant risks include the following: Risks Related to Changes in Macroeconomic Conditions, Interest Rates and Inflation ● Our business may be adversely affected by economic downturns in our market area and the national economy. ● Changes in interest rates may reduce our profits. ● Inflation can have an adverse impact on our business and on our customers. ● Certain events involving the failure of financial institutions may adversely affect our business, and the market price of our common stock. ● Lawmakers’ failure to address the federal debt ceiling in a timely manner, downgrades of the U.S. credit rating and uncertain credit and financial market conditions may affect the stability of securities issued or guaranteed by the federal government, which may affect the valuation or liquidity of our investment securities portfolio and increase future borrowing costs. ● Changes in market conditions, changes in discount rates, changes in mortality assumptions or lower returns on assets may increase required contributions to, and costs associated with, our tax-qualified defined benefit plan in future periods.
The most significant risks include the following: Risks Related to Changes in Macroeconomic Conditions, Interest Rates and Inflation ● Our business may be adversely affected by economic downturns in our market area and the national economy. ● Changes in interest rates may reduce our profits. ● Inflation can have an adverse impact on our business and on our customers. ● Lawmakers’ failure to address the federal debt ceiling in a timely manner, downgrades of the U.S. credit rating, potential government shutdowns, and uncertain credit and financial market conditions may affect the stability of securities issued or guaranteed by the federal government, which may affect the valuation or liquidity of our investment securities portfolio and increase future borrowing costs. ● Changes in market conditions, changes in discount rates, changes in mortality assumptions or lower returns on assets may increase required contributions to, and costs associated with, our tax-qualified defined benefit plan in future periods. ● Changes in the valuation of our securities portfolio may reduce our profits and our capital levels.
Further, instability in the U.S. political, credit and financial market conditions may increase our future borrowing costs. 38 Table of Contents Changes in market conditions, changes in discount rates, changes in mortality assumptions or lower returns on assets may increase required contributions to, and costs associated with, our tax-qualified defined benefit plan in future periods.
Instability in the U.S. political, credit and financial market conditions may increase our future borrowing costs. Changes in market conditions, changes in discount rates, changes in mortality assumptions or lower returns on assets may increase required contributions to, and costs associated with, our tax-qualified defined benefit plan in future periods.
We face potential heightened cybersecurity risks as more people continue to work from home following the COVID-19 pandemic, including our customers, our employees and the employees of our vendors. While we have implemented appropriate safeguards to protect our employees from potential cybersecurity threats while they work from home, these security measures may not be successful.
We face potential heightened cybersecurity risks as people continue to work from home, including our customers, our employees and the employees of our vendors. While we have implemented appropriate safeguards to protect our employees from potential cybersecurity threats while they work from home, these security measures may not be successful.
Our bank regulators could require us to implement additional policies and procedures consistent with their interpretation of the guidance that may result in additional costs to us or that may result in a curtailment of our commercial real estate and multi-family lending and/or the requirement that we maintain higher levels of regulatory capital, either of which would adversely affect our loan originations and profitability.
Our bank regulators could require us to implement additional policies and procedures consistent with their interpretation of the guidance if in the future our concentration levels increased and that may result in additional costs to us or that may result in a curtailment of our commercial real estate and multi-family lending and/or the requirement 43 Table of Contents that we maintain higher levels of regulatory capital, either of which would adversely affect our loan originations and profitability.
Many of our competitors have greater resources than we have. Our ability to successfully attract and retain wealth management clients is dependent upon our ability to compete with competitors’ investment products, level of investment performance, client services and marketing and distribution capabilities. If we are not successful, our results of operations and financial condition may be negatively impacted.
Our ability to successfully attract and retain wealth management clients is dependent upon our ability to compete with competitors’ investment products, level of investment performance, client services and marketing and distribution capabilities. If we are not successful, our results of operations and financial condition may be negatively impacted.
Areas requiring significant estimates and assumptions by management includes the items discussed in the proceedings described in “Item 3 – Legal Proceedings,” “Part II, Item 8–Financial Statements and Supplementary Data- Note 14 – Commitments and Contingent Liabilities – Legal Proceedings and Other Contingent Liabilities,” and the items described in our “Critical Accounting Policies and Estimates,” our evaluation of the legal remedies available to the Bank related to the potentially fraudulent activities and our evaluation of the adequacy of our allowance for credit losses on loans.
Areas requiring significant estimates and assumptions by management includes the items discussed in the proceedings described in “Item 3 – Legal Proceedings,” “Part II, Item 8 – Financial Statements and Supplementary Data – Note 14 – Commitments and Contingent Liabilities – Legal Proceedings and Other Contingent Liabilities,” and the items described in our “Critical Accounting Policies and Estimates,” our evaluation of the legal remedies available to the Bank related to the potentially fraudulent activities and our evaluation of the adequacy of our allowance for credit losses on loans. 44 Table of Contents Changes in accounting standards could affect reported earnings.
If we are unable to effectively compete in our market area, our profitability would be negatively affected. The greater resources and broader offering of deposit and loan products of some of our competitors may also limit our ability to increase our interest-earning assets. Risks Related to Operations We use a third party to originate residential mortgage loans.
If we are unable to effectively compete in our market area, our profitability would be negatively affected. The greater resources and broader offering of deposit and loan products of some of our competitors may also limit our ability to increase our interest-earning assets. We use a mortgage banking company to originate residential mortgage loans.
Our most important source of funds is deposits. 47 Table of Contents Deposit balances can decrease when customers perceive alternative investments as providing a better risk/return tradeoff, which are strongly influenced by external factors such as changes in interest rates, local and national economic conditions, the availability and attractiveness of alternative investments, and perceptions of the stability of the financial services industry generally and of our institution specifically.
Deposit balances can decrease when customers perceive alternative investments as providing a better risk/return tradeoff, which are strongly influenced by external factors such as changes in interest rates, local and national economic conditions, the availability and attractiveness of alternative investments, and perceptions of the stability of the financial services industry generally and of our institution specifically.
An inability to raise funds through deposits, borrowings, the sale and maturities of loans and securities and other sources could have a substantial negative effect on liquidity.
An inability to raise funds through deposits, borrowings, the sale and maturities of loans and securities and other sources could have a substantial negative effect on liquidity. Our most important source of funds is deposits.
At June 30, 2024, $101.2 million, or 7.4% of our total loan portfolio, was comprised of commercial and industrial loans and lines of credit to a variety of small and medium-sized businesses in our market area collateralized by general business assets including, among other things, accounts receivable and inventory, and we may augment this collateral with additional liens on real property.
At December 31, 2025, $124.9 million, or 7.5% of our total loan portfolio, was comprised of commercial and industrial loans and lines of credit to a variety of small and medium-sized businesses in our market area collateralized by general business assets including, among other things, accounts receivable and inventory, and we may augment this collateral with additional liens on real property.
In addition, a decrease in the discount rate and/or changes in the mortality assumptions used to determine pension obligations could increase the estimated value of our pension obligations, which would require us to increase the amounts of future contributions to the plan, thereby reducing our equity and our costs associated with the plan may substantially increase in future periods.
In addition, a decrease in the discount rate and/or changes in the mortality assumptions used to determine pension obligations could increase the estimated value of our pension obligations, which would require us to increase the amounts of future contributions to the plan, thereby reducing our equity and our costs associated with the plan may substantially increase in future periods. 36 Table of Contents Changes in the valuation of our securities portfolio may reduce our profits and our capital levels.
Based on these factors, we have a concentration in loans of the type described in (ii) above of 138.7% of our total capital at June 30, 2024. The purpose of the guidance is to assist banks in developing risk management practices and capital levels commensurate with the level and nature of real estate concentrations.
Based on these factors, we have a concentration in loans of the type described in (ii) above of 153.3% of our total capital at December 31, 2025. The purpose of the guidance is to assist banks in developing risk management practices and capital levels commensurate with the level and nature of real estate concentrations.
As we have diversified our sources of income, we have become increasingly reliant on non-interest income, including insurance fees and commissions. Revenue from these sources could be negatively affected by fluctuating premiums in the insurance markets or other factors beyond our control.
Risks Related to Our Insurance and Wealth Management Businesses Conditions in insurance markets could adversely affect our earnings. As we have diversified our sources of income, we have become increasingly reliant on non-interest income, including insurance fees and commissions. Revenue from these sources could be negatively affected by fluctuating premiums in the insurance markets or other factors beyond our control.
There can be no assurance that such incidents or losses will not occur again or that such acts will be detected in a timely manner. We maintain a system of internal controls and other measures to mitigate against such risks, including data processing system failures and errors, and customer fraud.
While we maintain a system of internal controls and other measures to mitigate against such risks, there can be no assurance that fraudulent incidents or losses will not occur again or that such acts will be detected in a timely manner.
While these types of arrangements may generate more income than our traditional commercial loans that we originate and hold in our portfolio, they generally have greater credit risk because they involve lending to borrowers with higher risk profiles, the issuance of more complex financial instruments and the valuation of more complex underlying collateral.
While these types of arrangements may generate more income than our traditional commercial loans that we originate and hold in our portfolio, they generally have greater credit risk because they involve lending to borrowers with higher risk profiles, the issuance of more complex financial instruments and the valuation of more complex underlying collateral. 39 Table of Contents Risks Related to Legal, Regulatory, Fraud and Compliance Matters We are subject to fraud and compliance risk.
If we are forced to pay higher rates on our municipal accounts to retain those funds, or if we are unable to retain such funds and we are forced to resort to other sources of funds for our lending and investment activities, such as borrowings from the FHLBNY, the interest expense associated with these other funding sources may be higher than the rates we are currently paying on our municipal deposits, which would adversely affect our net income. ​ 48 Table of Contents Risks Related to Our Insurance and Wealth Management Businesses Conditions in insurance markets could adversely affect our earnings.
If we are forced to pay higher rates on our municipal accounts to retain those funds, or if we are unable to retain such funds and we are forced to resort to other sources of funds for our lending and investment activities, such as borrowings from the FHLBNY, the interest expense associated with these other funding sources may be higher than the rates we are currently paying on our municipal deposits, which would adversely affect our net income.
Given that future deterioration in the U.S. credit and financial markets is a possibility, no assurance can be made that losses or significant deterioration in the fair value of our U.S. government issued or guaranteed investments will not occur. At June 30, 2024, we had approximately $243.5 million invested in U.S. government and agency obligations.
Given that future deterioration in the U.S. credit and financial markets is a possibility, no assurance can be made that losses or significant deterioration in the fair value of our U.S. government issued or guaranteed investments will not occur. At December 31, 2025, we had approximately $200.9 million invested in U.S. government, U.S. government agency obligations and Government-sponsored enterprises obligations.
We also had undrawn amounts on the commercial construction loans totaling $52.7 million at June 30, 2024. The primary credit risks associated with construction lending are underwriting risks, project risks and market risks. Project risks include cost overruns, borrower credit risk, project completion risk, general contractor credit risk, and environmental and other hazard risks.
We also had undrawn amounts on the commercial construction loans totaling $66.4 million at December 31, 2025. The primary credit risks associated with construction lending are underwriting risks, project risks and market risks. Project risks include cost overruns, borrower credit risk, project completion risk, general contractor credit risk, and environmental and other hazard risks.
We have experienced fraudulent activities that are adversely impacting our current financial performance and results of operations. See “Part II, Item 8–Financial Statements and Supplementary Data- Note 14 – Commitments and Contingent Liabilities – Legal Proceedings and Other Contingent Liabilities,” for details. We expect these activities to continue to negatively impact our financial performance and results of operations.
We have experienced fraudulent activities that are adversely impacting our current financial performance and results of operations. See “Part II, Item 8 – Financial Statements and Supplementary Data – Note 14 – Commitments and Contingent Liabilities – Legal Proceedings and Other Contingent Liabilities,” and “Item 3 – Legal Proceedings,” for further details on these fraudulent activities and their impacts.
As of June 30, 2024, we have not elected the community bank leverage ratio framework and accordingly the Basel III capital requirements remain applicable.
As of December 31, 2025, we have not elected the community bank leverage ratio framework and accordingly the Basel III capital requirements remain applicable.
At June 30, 2024, approximately $1.3 billion, or 91.6%, of our total loan portfolio was secured by real estate, most of which is located in our primary lending market, the Capital Region of New York and surrounding markets.
At December 31, 2025, approximately $1.5 billion, or 91.4%, of our total loan portfolio was secured by real estate, most of which is located in our primary lending market, the Capital Region of New York and surrounding markets.
Once such activities are detected, financial institutions are obligated to file suspicious activity reports with the U.S. Treasury’s Office of Financial Crimes Enforcement Network. These rules require financial institutions to establish procedures for identifying and verifying the identity of customers that open new financial accounts. Failure to comply with these regulations could result in fines or sanctions.
Once such activities are detected, financial 41 Table of Contents institutions are obligated to file suspicious activity reports with the U.S. Treasury’s Office of Financial Crimes Enforcement Network. These rules require financial institutions to establish procedures for identifying and verifying the identity of customers that open new financial accounts.
Also, additional or modified regulations may adversely affect our wealth management operations. In addition, our wealth management operations, are dependent on a small number of established financial advisors, whose departure could result in the loss of a significant number of client accounts.
In addition, our wealth management operations, are dependent on a small number of established financial advisors, whose departure could result in the loss of a significant number of client accounts.
We also provide commercial construction loans to local developers for the construction of one- to four-family residential developments, and originate rehabilitation loans, enabling the borrower to partially or totally refurbish an existing structure. At June 30, 2024, commercial construction loans were $118.4 million, or 8.7% of our total loan portfolio.
We also provide commercial construction loans to local developers for the construction of one- to four-family residential developments, and originate rehabilitation loans, enabling the borrower to partially or totally refurbish an existing structure. At December 31, 2025, commercial construction loans were $169.7 million, or 10.2% of our total loan portfolio.
Fluctuations in market value may be caused by changes in market interest rates, lower market prices for securities and limited investor demand. Management evaluates securities for credit losses on a quarterly basis, with more frequent evaluation for selected issues.
Our securities portfolio may be affected by fluctuations in market value, potentially reducing accumulated other comprehensive income or earnings. Fluctuations in market value may be caused by changes in market interest rates, lower market prices for securities and limited investor demand. Management evaluates securities for credit losses on a quarterly basis, with more frequent evaluation for selected issues.
At June 30, 2024, there were $14.4 million commercial construction, $2.4 million commercial real estate and no commercial and industrial loan participations outside our market area. At June 30, 2024, no loan participations were delinquent 60 days or more. If our underwriting of these participation loans is not sufficient, our non-performing loans may increase and our earnings may decrease.
At December 31, 2025, there were $37.9 million commercial construction, $21.0 million commercial real estate and no commercial and industrial loan participations outside our market area. At December 31, 2025, no loan participations were delinquent 60 days or more. If our underwriting of these participation loans is not sufficient, our non-performing loans may increase and our earnings may decrease.
If additional borrowers become delinquent and do not pay their loans and we are unable to successfully manage our non-performing assets, our losses and troubled assets could increase significantly, which could have a material adverse effect on our financial condition and results of operations. ​ 41 Table of Contents A portion of our loan portfolio consists of loan participations secured by properties outside our market area.
If additional borrowers become delinquent and do not pay their loans and we are unable to successfully manage our non-performing assets, our losses and troubled assets could increase significantly, which could have a material adverse effect on our financial condition and results of operations.
At June 30, 2024, $440.3 million, or 28.4% of our total deposits, consisted of municipal deposits from local government entities such as towns, cities, school districts and other municipalities, which are collateralized by letters of credit from the FHLBNY and investment securities. These deposits may be more volatile than other deposits.
At December 31, 2025, $451.9 million, or 26.0% of our total deposits, consisted of municipal deposits from local government entities such as towns, cities, school districts and other municipalities, which are collateralized by letters of credit from the FHLBNY and investment securities. These deposits may be more volatile than other deposits.
The ultimate outcome of any such proceedings cannot be predicted with any certainty. It also remains possible that other private parties or governmental authorities will pursue additional claims against the Bank as a result of the Bank’s dealings with certain of the Mann Entities or as a result of the actions taken by the Pioneer Parties.
It also remains possible that other private parties or governmental authorities will pursue additional claims against the Bank as a result of the Bank’s dealings with certain of the Mann Entities or as a result of the actions taken by the Pioneer Parties (each as defined below).
This could require increasing our allowance for credit losses on loans to address the decrease in the value of the real estate securing our loans, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects. Our loan portfolio consists of a high percentage of loans secured by commercial real estate.
This could require increasing our allowance for credit losses on loans to address the decrease in the value of the real estate securing our loans, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects. Changes in interest rates may reduce our profits.
Loan participations may have a higher risk of loss than loans we originate because we are not the lead lender and we have limited control over credit monitoring.
A portion of our loan portfolio consists of loan participations secured by properties outside our market area. Loan participations may have a higher risk of loss than loans we originate because we are not the lead lender and we have limited control over credit monitoring.
Furthermore, our customers are also affected by inflation and the rising costs of goods and services used in their households and businesses, which could have a negative impact on their ability to repay their loans with us. 37 Table of Contents Certain events involving the failure of financial institutions may adversely affect our business, and the market price of our common stock.
Furthermore, our customers are also affected by inflation and the rising costs of goods and services used in their households and businesses, which could have a negative impact on their ability to repay their loans with us.
During 2022 and 2023, the Federal Reserve Board in order to combat high inflation increased the Fed Funds target range multiple times to its current target range of 5.25% to 5.50% as of June 30, 2024. The current consensus is that rates will likely be decreased during the second half of calendar 2024 and 2025.
During 2022 and 2023, the Federal Reserve Board in order to combat high inflation increased the Fed Funds target range multiple times to a target range of 5.25% to 5.50% as of June 30, 2024.
In addition, we are involved in a number of legal, regulatory, governmental and other proceedings, claims or investigations. See “Item 3 – Legal Proceedings,” for details.
In addition, as described above, we are involved in a number of legal, regulatory, governmental and other proceedings, claims or investigations.
These loans carry a greater credit risk than loans secured by one- to four-family properties. Our loan portfolio includes commercial real estate loans, primarily loans secured by multi-family properties, office buildings, industrial facilities, retail facilities and other commercial properties. At June 30, 2024, our commercial real estate loans totaled $406.2 million, or 29.7%, of our total loan portfolio.
Risks Related to Lending Our loan portfolio consists of a high percentage of loans secured by commercial real estate. These loans carry a greater credit risk than loans secured by one- to four-family properties. Our loan portfolio includes commercial real estate loans, primarily loans secured by multi-family properties, office buildings, industrial facilities, retail facilities and other commercial properties.
There also are provisions in our articles of incorporation that may be used to delay or block a takeover attempt, including a provision that generally prohibits any person, other than Pioneer Bancorp, MHC, from voting more than 10% of the shares of common stock outstanding.
Also, a bank holding company must obtain the prior approval of the Federal Reserve Board before, among other things, acquiring direct or indirect ownership or control of more than 5% of any class of voting shares of any bank, including the Bank. 52 Table of Contents There also are provisions in our articles of incorporation that may be used to delay or block a takeover attempt, including a provision that generally prohibits any person, other than Pioneer Bancorp, MHC, from voting more than 10% of the shares of common stock outstanding.
As our commercial real estate loans increase, the corresponding risks and potential for losses from these loans may also increase, which would adversely affect our business, financial condition and results of operations. 39 Table of Contents A portion of our loan portfolio is comprised of commercial and industrial loans secured by accounts receivable, inventory, equipment or other business assets, the deterioration in value of which could increase the potential for future losses.
A portion of our loan portfolio is comprised of commercial and industrial loans secured by accounts receivable, inventory, equipment or other business assets, the deterioration in value of which could increase the potential for future losses.
These obligations have increased our operating expenses and could divert our management’s attention from our operations. Risks Related to Liquidity A lack of liquidity could adversely affect our financial condition and results of operations. Liquidity is essential to our business.
Any failure to achieve and maintain an effective internal control environment could have a material adverse effect on our business and stock price. These obligations have increased our operating expenses and could divert our management’s attention from our operations. Risks Related to Liquidity A lack of liquidity could adversely affect our financial condition and results of operations.
At June 30, 2024, our non-performing assets, which consist of non-performing loans and other real estate owned, were $9.2 million, or 0.49% of total assets.
At December 31, 2025, our non-performing assets, which consist of non-performing loans and other real estate owned, were $11.3 million, or 0.52% of total assets.
Decreases in interest rates can result in increased prepayments of loans and mortgage-related securities, as borrowers refinance to reduce their borrowing costs. Under these circumstances, we are subject to reinvestment risk as we may have to reinvest such loan or securities prepayments into lower-yielding assets, which may also negatively impact our income.
Under these circumstances, we are subject to reinvestment risk as we may have to reinvest such loan or securities prepayments into lower-yielding assets, which may also negatively impact our income.
Due to strong competition, our wealth management business may not be able to attract and retain clients. Competition is strong because there are numerous well-established and successful investment management and wealth advisory firms including commercial banks and trust companies, investment advisory firms, mutual fund companies, stock brokerage firms, and other financial companies.
Competition is strong because there are numerous well-established and successful investment management and wealth advisory firms including commercial banks and trust companies, investment advisory firms, mutual fund companies, stock brokerage firms, and other financial companies. Many of our competitors have greater resources than we have.
Risks Related to Legal, Regulatory, Fraud and Compliance Matters ● We are subject to fraud and compliance risk. ● We are a defendant in a variety of litigation and other actions, which may have a material adverse effect on our financial condition and results of operations. ● We are subject to sanctions and other negative actions if regulatory agencies with supervisory authority over us determine that we failed to comply with applicable laws and regulations. ● Conversion to a national bank subjects the Bank to new and potentially heightened examination and reporting requirements that may increase our costs of operations and compliance. ● Non-compliance with the USA PATRIOT Act, Bank Secrecy Act, or other laws and regulations will subject us to fines or sanctions. ● We are subject to the Community Reinvestment Act (“CRA”) and fair lending laws, and failure to comply with these laws could lead to material penalties. ● The level of our commercial real estate loan portfolio subjects us to additional regulatory scrutiny. 34 Table of Contents ● We are subject to environmental liability risk associated with lending activities. ● Climate change and related legislative and regulatory initiatives may materially affect our business and results of operations. ● Increasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks.
Risks Related to Legal, Regulatory, Fraud and Compliance Matters ● We are subject to fraud and compliance risk. ● We are a defendant in a variety of litigation and other actions, which may have a material adverse effect on our financial condition and results of operations. ● We are subject to sanctions and other negative actions if regulatory agencies with supervisory authority over us determine that we failed to comply with applicable laws and regulations. ● Non-compliance with the USA PATRIOT Act, Bank Secrecy Act, or other laws and regulations will subject us to fines or sanctions. ● Changes in laws and regulations and the cost of compliance with new laws and regulations may adversely affect our operations and our income. ● Our earnings are significantly affected by the fiscal and monetary policies of the federal government and its agencies. ● We are subject to the Community Reinvestment Act (“CRA”) and fair lending laws, and failure to comply with these laws could lead to material penalties. ● Our broker-dealer business subjects us to regulatory risks. ● The level of our commercial real estate loan portfolio subjects us to additional regulatory scrutiny. ● We are subject to environmental liability risk associated with lending activities. 33 Table of Contents ● Environmental matters and related legislative and regulatory initiatives may materially affect our business and results of operations. ​ Risks Relating to Accounting Matters ● Changes in management’s estimates and assumptions may have a material impact on our consolidated financial statements and our financial condition or operating results. ● Changes in accounting standards could affect reported earnings. ● The cost of additional finance and accounting systems, procedures and controls in order to satisfy our public company reporting requirements has increased and will continue to increase our expenses.
The cost of additional finance and accounting systems, procedures and controls in order to satisfy our public company reporting requirements has increased and will continue to increase our expenses. As a result of the completion of our initial public offering, we became a public reporting company.
In some cases, we could be required to apply new or revised guidance retroactively. The cost of additional finance and accounting systems, procedures and controls in order to satisfy our public company reporting requirements has increased and will continue to increase our expenses.
We originate and purchase commercial construction loans primarily to local developers to finance the construction of commercial and multi-family properties or to acquire land for development of commercial and multi-family properties and to finance infrastructure improvements.
We make and hold in our portfolio commercial construction loans, which are considered to have greater credit risk than residential mortgage loans. We originate and purchase commercial construction loans primarily to developers to finance the construction of commercial and multi-family properties or to acquire land for development of commercial and multi-family properties and to finance infrastructure improvements.
At June 30, 2024 and assuming a 200 basis points decrease in market interest rates, we estimate that our net portfolio value would increase by $52.2 million, or 16.9%. Additionally, at June 30, 2024, and assuming a 200 basis points increase in market interest rates, we estimate that our net portfolio value would decrease by $72.1 million, or 23.4%.
At December 31, 2025 and assuming a 100 basis points decrease in market interest rates, we estimate that our net portfolio value would increase by $29.9 million, or 9.6%.
Risks Related to Lending ● We have a significant number of loans secured by real estate, and a downturn in the local real estate market could negatively impact our profitability. ● Our loan portfolio consists of a high percentage of loans secured by commercial real estate.
Risks Related to Lending ● Our loan portfolio consists of a high percentage of loans secured by commercial real estate.
The CFPB, the United States Department of Justice and other federal agencies are responsible for enforcing these laws and regulations.
The CRA, the Equal Credit Opportunity Act, the Fair Housing Act and other fair lending laws and regulations impose nondiscriminatory lending requirements on financial institutions. The CFPB, the United States Department of Justice and other federal agencies are responsible for enforcing these laws and regulations.
A significant decline in fees and commissions or trading losses suffered in the investment portfolio could adversely affect our income and potentially require the contribution of additional capital to support our operations. We may not be able to attract and retain wealth management clients.
A significant decline in fees and commissions or trading losses suffered in the investment portfolio could adversely affect our income and potentially require the contribution of additional capital to support our operations. 46 Table of Contents Risks Related to Operations Strong competition within our market area may reduce our profits and slow growth.
Changes in accounting standards could affect reported earnings. The bodies responsible for establishing accounting standards, including the FASB, the SEC and bank regulators, periodically change the financial accounting and reporting guidance that governs the preparation of our financial statements.
The bodies responsible for establishing accounting standards, including the FASB, the SEC and bank regulators, periodically change the financial accounting and reporting guidance that governs the preparation of our financial statements. These changes can be hard to predict and can materially impact how we record and report our financial condition and results of operations.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeAlthough cybersecurity threats, including those stemming from prior incidents, have not materially affected the Company in the previous fiscal year, and there are no known imminent cybersecurity threats that are reasonably likely to materially affect our business strategy, results of operations, or financial condition, we cannot guarantee that we will remain unaffected in the future.
Biggest changeAlthough cybersecurity threats, including those stemming from prior incidents, have not materially affected the Company’s business strategy, results of operations, or financial condition in the previous fiscal year, we cannot guarantee that we will remain unaffected in the future.
During an incident response process, the Chief Administrative Officer serves as the incident manager. The Chief Administrative Officer has over 15 years of experience in leadership and management of information technology, cybersecurity, and incident response programs.
During an incident response process, the Chief Administrative Officer serves as the incident manager. The Chief Administration Officer has over 15 years of experience in leadership and management of information technology, cybersecurity, and incident response programs.
On a quarterly and as-needed basis the board of directors receives updates on cybersecurity risks and the actions taken by 55 Table of Contents management to monitor and mitigate those risks, including key risk indicators, test results, reporting of recent threats and how the Company is managing those threats, along with pertinent information to allow the board of directors to evaluate the effectiveness of the information security program.
On a quarterly and as-needed basis the board of directors receives updates on cybersecurity risks and the actions taken by management to monitor and mitigate those risks, including key risk indicators, test results, reporting of recent threats and how the Company is managing those threats, along with pertinent information to allow the board of directors to evaluate the effectiveness of the information security program.
Information regarding risks from material cybersecurity threats can be found under the section captioned “Risks Related to Operations” contained in Item 1A. Risk Factors. ​ ​ ​ ​ ​ 56 Table of Contents
Information regarding risks from material cybersecurity threats can be found under the section captioned “Risks Related to Operations” contained in Item 1A. Risk Factors. ​ ​ 54 Table of Contents
The SVP – Information Technology, is a Certified Community Banker Technology Officer, has 20 years of experience in the information technology field, and is responsible for developing and implementing the Company’s information security program.
The SVP – Information Technology, is a Certified Community Banker Technology Officer, has 20 years of experience in the information technology field, and is responsible for overseeing the development and implementation of the Company’s information security systems.
Governance The board of directors is responsible for oversight of our information security program and fulfills this responsibility through regular reporting and updates provided by the ISSC, members of management and other third parties contracted to assess and test the effectiveness of the Company’s information security and cybersecurity program.
Annual cybersecurity assessments are conducted by the Company’s information technology team on its information systems using industry-standard guidelines and tools. 53 Table of Contents Governance The board of directors is responsible for oversight of our information security program and fulfills this responsibility through regular reporting and updates provided by the ISSC, members of management and other third parties contracted to assess and test the effectiveness of the Company’s information security and cybersecurity program.
The Company performs ongoing monitoring, including the review of cybersecurity practices, of third parties using a risk-based approach to determine the extent and frequency of periodic assessments. Annual cybersecurity assessments are conducted by the Company’s information technology team on its information systems using industry-standard guidelines and tools.
The Company performs ongoing monitoring, including the review of information security and cybersecurity practices, of third parties using a risk-based approach to determine the extent and frequency of periodic assessments.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeProperties The following table sets forth information regarding our offices as of June 30, 2024. ​ ​ ​ ​ ​ ​ Leased or Year Acquired Location ​ Owned ​ or Leased ​ ​ ​ ​ ​ Main Office: 652 Albany Shaker Road, Albany, NY 12211 Owned (1) 2016 ​ ​ ​ ​ ​ Other Properties: 21 Second Street, Troy, NY 12180 Leased 2016 531 Troy-Schenectady Road, Latham, NY 12110 Owned 2008 2000 Second Avenue, Watervliet, NY 12189 Leased 2017 1828 Altamont Avenue, Schenectady, NY 12305 Owned 2012 1208 Route 146, Clifton Park, NY 12065 Leased 1995 10 Kendall Way, Malta, NY 12020 Owned 2016 78 Main Avenue, Wynantskill, NY 12198 Owned 2014 712 Hoosick Street, Brunswick, NY 12180 Owned 2015 329 Glenmont Road, Glenmont, NY 12077 Leased 2014 142 Saratoga Avenue, Waterford, NY 12188 Owned 2015 1770 Central Avenue, Albany, NY 12205 Leased 2019 602 North Greenbush Road, Rensselaer, NY 12144 Leased 2017 90 State Street, Albany, NY 12207 Leased 2013 1881‑1883 Western Avenue, Albany, NY 12203 Owned 2018 184 Delaware Avenue, Delmar, NY 12054 Owned 2010 843 Route 146, Clifton Park, NY 12065 Leased 2012 426 State Street, Schenectady, NY 12305 Leased 2014 440 Main Street, Cairo, NY 12413 Owned 2016 11565 NY‑32, Greenville, NY 12083 Leased 2016 739 Upper Glen Street, Queensbury, NY 12804 Leased 2017 100 Mohawk Street, Cohoes, NY 12047 Owned 2017 1 Hudson City Centre, Hudson, NY 12534 ​ Leased ​ 2023 (1) The property is subject to a ground lease.
Biggest changeProperties The following table sets forth information regarding our offices as of December 31, 2025. ​ ​ ​ ​ ​ ​ ​ ​ ​ Leased or ​ ​ ​ Year Acquired Location ​ Owned ​ or Leased ​ ​ ​ ​ ​ Main Office: ​ ​ 652 Albany Shaker Road, Albany, NY 12211 Owned (1) 2016 ​ ​ ​ ​ ​ Other Properties: ​ ​ 21 Second Street, Troy, NY 12180 Leased 2016 531 Troy-Schenectady Road, Latham, NY 12110 Owned 2008 2000 Second Avenue, Watervliet, NY 12189 Leased 2017 1828 Altamont Avenue, Schenectady, NY 12305 Owned 2012 10 Kendall Way, Malta, NY 12020 Owned 2016 78 Main Avenue, Wynantskill, NY 12198 Owned 2014 712 Hoosick Street, Brunswick, NY 12180 Owned 2015 329 Glenmont Road, Glenmont, NY 12077 Leased 2014 142 Saratoga Avenue, Waterford, NY 12188 Owned 2015 1770 Central Avenue, Albany, NY 12205 Leased 2019 602 North Greenbush Road, Rensselaer, NY 12144 Leased 2017 90 State Street, Albany, NY 12207 Leased 2013 1881 Western Avenue, Albany, NY 12203 Owned 2018 184 - 190 Delaware Avenue, Delmar, NY 12054 Owned 2010 843 Route 146, Clifton Park, NY 12065 Leased 2012 426 State Street, Schenectady, NY 12305 Leased 2014 440 Main Street, Cairo, NY 12413 Owned 2016 11565 NY‑32, Greenville, NY 12083 Leased 2016 739 Upper Glen Street, Queensbury, NY 12804 Leased 2017 100 Mohawk Street, Cohoes, NY 12047 Owned 2017 1 Hudson City Centre, Hudson, NY 12534 ​ Leased ​ 2023 3440 Toringdon Way, Suite 205, Charlotte, NC 28277 ​ Leased ​ 2025 (1) The property is subject to a ground lease.
We believe that the current facilities are adequate to meet our present and foreseeable needs, subject to possible future expansion. For more information on the Company’s properties, see Notes 2, 7 and 18 set forth in Part II, Item 8 Financial Statements and Supplementary Data, of this Annual Report. ITEM 3.
For more information on the Company’s properties, see Notes 2, 7 and 18 set forth in Part II, Item 8 Financial Statements and Supplementary Data, of this Annual Report.
The Company and the Bank maintain their executive offices as well as an operations center, customer call center and a retail banking center at the main office. The Bank operates 22 retail banking offices in Albany, Greene, Rensselaer, Saratoga, Schenectady and Warren Counties, as well as a wealth management office in Columbia County in New York.
The Company and the Bank maintain their executive offices as well as an operations center, customer call center and a retail banking center at the main office.
Removed
Legal Proceedings Certain legal proceedings in which we are involved are discussed in “Part II, Item 8–Financial Statements and Supplementary Data- Note 14 – Commitments and Contingent Liabilities – Legal Proceedings and Other Contingent Liabilities.”
Added
The Bank operates 21 retail banking offices in Albany, Greene, Rensselaer, Saratoga, Schenectady and Warren Counties, as well as a wealth management office in Columbia County in New York, and Pioneer Capital Markets, Inc.’s office located in North Carolina. We believe that the current facilities are adequate to meet our present and foreseeable needs, subject to possible future expansion.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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ITEM 3. Legal Proceedings 57 ITEM 4 Mine Safety Disclosures 57 ITEM 5 Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 58 ITEM 6. [Reserved] 59 ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 60
Added
ITEM 3. Legal Proceedings Certain legal proceedings in which we are involved are discussed in “Part II, Item 8–Financial Statements and Supplementary Data – Note 14 – Commitments and Contingent Liabilities – Legal Proceedings and Other Contingent Liabilities”.
Added
For a full description of the legal proceedings and a historical description of these proceedings, see Part I, Item 1 - Consolidated Financial Statements - Note 8 - Commitments and Contingent Liabilities - Legal Proceedings and Other Contingent Liabilities in the Company’s Quarterly Report on Form 10-Q as filed with the SEC on November 7, 2025 . ​ 55 Table of Contents

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe following table reports information regarding repurchases by the Company of its common stock in each month of the quarter ended June 30, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Number ​ ​ ​ ​ ​ ​ ​ of Shares Maximum ​ ​ ​ ​ ​ ​ ​ ​ Purchased as ​ Number of ​ ​ ​ ​ ​ ​ ​ ​ Part of ​ Shares that ​ ​ ​ ​ ​ ​ ​ ​ Publicly ​ May Yet Be ​ ​ Total Number ​ Average Price ​ Announced ​ Purchased ​ ​ of Shares ​ Paid Per ​ Plans or ​ Under Plans or Period ​ Purchased ​ Share ​ Programs ​ Programs (1) April 1 through April 30, 2024 ​ ​ — ​ $ — ​ ​ — ​ ​ — May 1 through May 31, 2024 ​ ​ — ​ ​ — ​ ​ — ​ ​ 1,298,883 June 1 through June 30, 2024 ​ ​ 106,386 ​ ​ 9.97 ​ ​ 106,386 ​ ​ 1,192,497 Total ​ ​ 106,386 ​ $ 9.97 ​ ​ 106,386 ​ ​ 1,192,497 ​ (1) On May 21, 2024, the Company announced it adopted a stock repurchase program.
Biggest changeThere were no sales of unregistered securities during the year ended December 31, 2025. ​ ​ The following table reports information regarding repurchases by the Company of its common stock in each month of the three months ended December 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Number ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ of Shares ​ ​ ​ Maximum ​ ​ ​ ​ ​ ​ ​ ​ Purchased as ​ Number of ​ ​ ​ ​ ​ ​ ​ ​ Part of ​ Shares that ​ ​ ​ ​ ​ ​ ​ ​ Publicly ​ May Yet Be ​ ​ Total Number ​ Average Price ​ Announced ​ Purchased ​ ​ of Shares ​ Paid Per ​ Plans or ​ Under Plans or Period ​ Purchased ​ Share ​ Programs ​ Programs (1) (2) October 1 through October 31, 2025 ​ ​ - ​ $ - ​ ​ - ​ ​ 28,333 November 1 through November 30, 2025 ​ ​ - ​ ​ - ​ ​ - ​ ​ 28,333 December 1 through December 31, 2025 ​ ​ 28,333 ​ ​ 14.56 ​ ​ 28,333 ​ ​ 1,254,027 Total ​ ​ 28,333 ​ $ 14.56 ​ ​ 28,333 ​ ​ 1,254,027 ​ (1) On May 21, 2024, the Company announced it adopted its first stock repurchase program.
The repurchase program permits shares to be repurchased in open market or private transactions, through block trades, and pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the Securities and Exchange Commission. The repurchase program has no expiration date. ​ 58 Table of Contents ​
The repurchase program permits shares to be repurchased in open market or private transactions, through block trades, and pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the Securities and Exchange Commission. The repurchase program has no expiration date. ​ ​
The stock repurchase program authorizes the Company to repurchase up to an aggregate of 1,298,883 shares, or approximately 5% of its then outstanding shares.
The stock repurchase program authorized the Company to repurchase up to an aggregate of 1,298,883 shares, or approximately 5% of its then outstanding shares. The Company completed its initial stock repurchase program.
ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The common stock of the Company has been listed on The Nasdaq Capital Market under the symbol “PBFS” since July 18, 2019. At September 13, 2024, the Company had approximately 894 stockholders of record.
ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The common stock of the Company has been listed on The Nasdaq Capital Market under the symbol “PBFS” since July 18, 2019. At March 6, 2026, the Company had approximately 809 stockholders of record.
Special cash dividends, stock dividends or returns of capital, to the extent permitted by regulations and policies of the Federal Reserve Board and the OCC, may be paid in addition to, or in lieu of, regular cash dividends. There were no sales of unregistered securities during the year ended June 30, 2024.
Special cash dividends, stock dividends or returns of capital, to the extent permitted by regulations and policies of the Federal Reserve Board and the OCC, may be paid in addition to, or in lieu of, regular cash dividends.
Added
The shares were repurchased at an average price of $11.83 per share. 56 Table of Contents (2) On December 17, 2025, the Company announced the adoption of its second stock repurchase program. The stock repurchase program authorizes the Company to repurchase up to an aggregate of 1,254,027 shares , or approximately 5% of its then outstanding shares.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeSelect Financial Data The following tables set forth selected historical financial and other data for the Company on a consolidated basis at and for the years ended June 30, 2024 and 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ At June 30, ​ 2024 2023 ​ ​ (In thousands) Selected Financial Condition Data: ​ ​ Total assets ​ $ 1,895,404 ​ $ 1,856,191 Cash and cash equivalents ​ 165,190 ​ 150,478 Securities available for sale ​ 257,409 ​ 431,667 Securities held to maturity ​ 25,090 ​ 23,949 Equity securities ​ ​ — ​ ​ 2,413 Federal Reserve Bank of New York and Federal Home Loan Bank of New York stock ​ 3,546 ​ 1,196 Net loans receivable ​ 1,344,069 ​ 1,144,169 Premises and equipment, net ​ 40,105 ​ 41,617 Bank-owned life insurance ​ 16,009 ​ 16,322 Deposits ​ 1,550,252 ​ 1,541,851 Shareholders’ equity ​ 296,528 ​ 266,700 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended June 30, ​ 2024 2023 ​ ​ (In thousands except for per share amounts) Selected Operating Data: ​ ​ Interest and dividend income ​ $ 88,316 ​ $ 71,033 Interest expense ​ 21,803 ​ 5,492 Net interest income ​ 66,513 ​ 65,541 Provision for credit losses ​ 2,700 ​ — Net interest income after provision for credit losses ​ 63,813 ​ 65,541 Noninterest income ​ 16,330 ​ 14,148 Noninterest expense ​ 60,734 ​ 51,834 Income before income taxes ​ 19,409 ​ 27,855 Income tax expense ​ 4,149 ​ 5,907 Net income ​ ​ 15,260 ​ ​ 21,948 Earnings per share (basic and diluted) ​ $ 0.61 ​ $ 0.87 ​ ​ 61 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ At or For the Years Ended June 30, ​ 2024 2023 ​ ​ ​ ​ ​ ​ Performance Ratios: Return on average assets 0.80 % 1.15 % Return on average equity 5.42 % 8.73 % Interest rate spread (1) 3.01 % 3.50 % Net interest margin (2) 3.78 % 3.72 % Non-interest expenses to average assets 3.18 % 2.71 % Efficiency ratio (3) 73.31 % 65.05 % Average interest-earning assets to average interest-bearing liabilities 161.98 % 170.32 % ​ ​ ​ ​ ​ ​ Capital Ratios (4): Average equity to average assets 14.77 % 13.16 % Total capital to risk weighted assets 19.66 % 20.11 % Tier 1 capital to risk weighted assets 18.40 % 18.85 % Common equity tier 1 capital to risk weighted assets 18.40 % 18.85 % Tier 1 capital to average assets 11.65 % 11.47 % ​ ​ ​ ​ ​ ​ Asset Quality Ratios: Allowance for credit losses as a percentage of total loans 1.60 % 1.94 % Allowance for credit losses as a percentage of non-performing loans 240.92 % 126.41 % Net charge-offs to average outstanding loans during the year 0.04 % 0.01 % Non-performing loans as a percentage of total loans 0.66 % 1.53 % Non-performing loans as a percentage of total assets 0.48 % 0.96 % Total non-performing assets as a percentage of total assets 0.49 % 0.96 % ​ ​ ​ ​ ​ ​ Other: Number of offices 23 22 Number of full-time equivalent employees 270 256 (1) Represents the difference between the weighted average yield on average interest-earning assets and the weighted average cost of interest-bearing liabilities for the years.
Biggest changeSelect Financial Data The following tables set forth selected historical financial and other data for the Company on a consolidated basis at and for the dates indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At December 31, 2025 ​ ​ ​ At December 31, 2024 ​ ​ (In thousands) Selected Financial Condition Data: ​ ​ ​ ​ Total assets ​ $ 2,150,684 ​ $ 1,979,730 Cash and cash equivalents ​ 133,675 ​ 96,521 Securities available for sale ​ 220,431 ​ 321,537 Securities held to maturity ​ 41,521 ​ 25,400 Federal Reserve Bank of New York and Federal Home Loan Bank of New York stock ​ 6,090 ​ 5,283 Net loans receivable ​ 1,646,255 ​ 1,434,575 Premises and equipment, net ​ 35,576 ​ 35,480 Bank-owned life insurance ​ 15,306 ​ 15,956 Deposits ​ 1,739,178 ​ 1,586,183 Shareholders’ equity ​ 323,861 ​ 304,553 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the ​ For the ​ For the ​ ​ Year Ended ​ Six Months Ended ​ Fiscal Year Ended ​ ​ December 31, ​ December 31, ​ June 30, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 ​ ​ ​ 2024 ​ ​ (In thousands except for per share amounts) Selected Operating Data: ​ ​ ​ ​ ​ ​ ​ ​ Interest and dividend income ​ $ 109,530 ​ $ 48,832 ​ $ 41,642 ​ $ 88,316 Interest expense ​ 30,382 ​ 13,362 ​ 9,659 ​ 21,803 Net interest income ​ 79,148 ​ 35,470 ​ 31,983 ​ 66,513 Provision for credit losses ​ 3,695 ​ 220 ​ 1,870 ​ 2,700 Net interest income after provision for credit losses ​ 75,453 ​ 35,250 ​ 30,113 ​ 63,813 Noninterest income ​ 17,140 ​ 8,809 ​ 8,409 ​ 16,330 Noninterest expense ​ 66,104 ​ 31,648 ​ 30,199 ​ 60,734 Income before income taxes ​ 26,489 ​ 12,411 ​ 8,323 ​ 19,409 Income tax expense ​ 6,202 ​ 2,811 ​ 1,712 ​ 4,149 Net income ​ ​ 20,287 ​ ​ 9,600 ​ ​ 6,611 ​ ​ 15,260 Net earnings per common share: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic ​ $ 0.83 ​ $ 0.38 ​ $ 0.26 ​ $ 0.61 Diluted ​ $ 0.83 ​ $ 0.38 ​ $ 0.26 ​ $ 0.61 ​ ​ 59 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At or For the ​ At or For the ​ ​ At or For the ​ ​ ​ Year Ended ​ Six Months Ended ​ ​ Fiscal Year Ended ​ ​ ​ December 31, ​ December 31, ​ ​ June 30, ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 ​ ​ ​ ​ 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Performance Ratios: ​ ​ ​ ​ ​ Return on average assets (1) 0.98 % 0.99 % 0.70 % ​ 0.80 % Return on average equity (1) 6.47 % 6.31 % 4.80 % ​ 5.42 % Interest rate spread (1) (2) 3.22 % 3.14 % 3.01 % ​ 3.01 % Net interest margin (1) (3) 4.07 % 3.99 % 3.71 % ​ 3.78 % Non-interest expenses to average assets (1) 3.18 % 3.28 % 3.19 % ​ 3.18 % Efficiency ratio (4) 68.65 % 71.47 % 74.76 % ​ 73.31 % Average interest-earning assets to average interest-bearing liabilities 154.53 % 158.84 % 164.48 % ​ 161.98 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Capital Ratios (5): ​ ​ ​ ​ ​ Average equity to average assets 15.08 % 15.74 % 14.55 % ​ 14.77 % Total capital to risk weighted assets 17.56 % 19.24 % 19.57 % ​ 19.66 % Tier 1 capital to risk weighted assets 16.30 % 17.99 % 18.31 % ​ 18.40 % Common equity Tier 1 capital to risk weighted assets 16.30 % 17.99 % 18.31 % ​ 18.40 % Tier 1 capital to average assets 11.53 % 12.07 % 11.30 % ​ 11.65 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Asset Quality Ratios: ​ ​ ​ ​ ​ Allowance for credit losses as a percentage of total loans 1.51 % 1.49 % 1.66 % ​ 1.60 % Allowance for credit losses as a percentage of non-performing loans 224.93 % 414.60 % 178.27 % ​ 240.92 % Net charge-offs to average outstanding loans during the period (1) 0.01 % — % 0.06 % ​ 0.04 % Non-performing loans as a percentage of total loans 0.67 % 0.36 % 0.93 % ​ 0.66 % Non-performing loans as a percentage of total assets 0.52 % 0.27 % 0.65 % ​ 0.48 % Total non-performing assets as a percentage of total assets 0.52 % 0.27 % 0.65 % ​ 0.49 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other: ​ ​ ​ ​ ​ Number of offices 23 23 23 ​ 23 Number of full-time equivalent employees 269 272 262 ​ 270 (1) Annualized for the six month periods ended December 31, 2024 and 2023.
Please read the information in this section in conjunction with the business and financial information regarding the Company, the Bank and the audited consolidated financial statements that appear starting on page 74 of this Annual Report on Form 10-K. Overview Net Interest Income. Our primary source of income is net interest income.
Please read the information in this section in conjunction with the business and financial information regarding the Company, the Bank and the audited consolidated financial statements that appear starting on page 75 of this Annual Report on Form 10-K. Overview Net Interest Income. Our primary source of income is net interest income.
We provide opportunities for our employees to engage in meaningful ways in the community and expect to enhance this engagement through the philanthropic efforts of the Pioneer Bank Charitable Foundation. Critical Accounting Policies and Estimates The discussion and analysis of the financial condition and results of operations are based on our financial statements, which are prepared in conformity with GAAP.
We provide opportunities for our employees to engage in meaningful ways in the community and expect to enhance this engagement through the philanthropic efforts of the Pioneer Bank Charitable Foundation. ​ 62 Table of Contents Critical Accounting Policies and Estimates The discussion and analysis of the financial condition and results of operations are based on our financial statements, which are prepared in conformity with GAAP.
Salaries and employee benefits consist primarily of salaries and wages paid to our employees, payroll taxes, and expenses for worker’s compensation and disability insurance, health insurance, retirement plans and other employee benefits, as well as commissions and other incentives.
Salaries and employee benefits consist primarily of salaries and wages paid to our employees, payroll taxes, and expenses for worker’s compensation and disability insurance, health insurance, retirement plans and other employee benefits, as well as commissions, share-based compensation and other incentives.
The information in this section has been derived in part from the audited consolidated financial statements that appear beginning on page 74 of this Annual Report on Form 10-K.
The information in this section has been derived in part from the audited consolidated financial statements that appear beginning on page 75 of this Annual Report on Form 10-K.
We have embarked on a sales enablement strategy that is focused on engaging in a multidisciplinary approach to customer interaction. Based on the foregoing, our attractive market area and strategic investment in technology to enhance the customer experience, we believe we are well-positioned to strategically grow our balance sheet.
We have embarked on a sales enablement strategy that is focused on engaging in a multidisciplinary approach to customer interaction. Based on the foregoing, our attractive market area and strategic investment in technology to enhance the customer experience, we believe we are well-positioned to strategically grow our customer relationships.
Interest rates do not necessarily move in the same direction or to the same extent as the prices of goods and services. ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk This Item is not applicable, as the Company is a “smaller reporting company.”
Interest rates do not necessarily move in the same direction or to the same extent as the prices of goods and services. 74 Table of Contents ​ ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk This Item is not applicable, as the Company is a “smaller reporting company.”
The allowance for credit losses on loans and securities held to maturity, as reported in our consolidated statements of condition, are adjusted by a provision for credit losses, which is recognized in earnings, and reduced by the 66 Table of Contents charge-offs, net of recoveries.
The allowance for credit losses on loans and securities held to maturity, as reported in our consolidated statements of condition, are adjusted by a provision for credit losses, which is recognized in earnings, and reduced by the charge-offs, net of recoveries.
Recent Accounting Pronouncements Please refer to Note 2 in the Notes to the consolidated financial statements that appear starting on page 81 of this Annual Report on Form 10-K for a description of recent accounting pronouncements that may affect our financial condition and results of operations.
Recent Accounting Pronouncements Please refer to Note 2 in the Notes to the consolidated financial statements that appear in this Annual Report on Form 10-K for a description of recent accounting pronouncements that may affect our financial condition and results of operations.
The increase in the average cost of interest-bearing deposits was primarily due to the repricing of certain interest-bearing deposit accounts in response to changes in market interest rates and the higher interest rate environment, as well as a shift in the mix of deposits towards higher cost interest-bearing accounts.
The increase in the average cost of interest-bearing deposits was due primarily to the repricing of certain interest-bearing deposit accounts in response to changes in market interest rates, as well as a shift in the mix of deposits towards higher cost interest-bearing accounts.
GDP growth would increase the model’s total calculated allowance for credit losses on loans by $1.1 million, or 5.2%, assuming qualitative adjustments are kept at current levels. While management’s current evaluation of the allowance for credit losses indicates that the allowance is appropriate, the allowance may need to be increased under adversely different conditions or assumptions.
GDP growth would increase the model’s total calculated 63 Table of Contents allowance for credit losses on loans by $1.5 million, or 5.9%, assuming qualitative adjustments are kept at current levels. While management’s current evaluation of the allowance for credit losses indicates that the allowance is appropriate, the allowance may need to be increased under adversely different conditions or assumptions.
Our non-interest income also includes litigation-related income, net gain or losses on equity securities, net gain or losses on sales and calls of available for sale securities, net gain or loss on disposal of assets, other gains and losses, and miscellaneous income. Non-Interest Expense.
Our non-interest income also includes litigation-related income, net gain or losses on equity securities, net gain or losses on sales and calls of available for sale securities, other gains and losses, and miscellaneous income. Non-Interest Expense.
The financial instruments include commitments to originate loans, unused lines of credit and standby letters of credit, which involve elements of credit and interest rate risk in excess of the amount recognized in the consolidated balance sheets. Our exposure to credit loss is represented by the contractual amount of the instruments.
The financial instruments include commitments to originate loans, unused lines of credit and standby letters of credit, which involve elements of credit and interest rate risk in excess of the amount recognized in the consolidated statements of condition. Our exposure to credit loss is represented by the contractual amount of the instruments.
We believe that there will be opportunities to cross-sell these products to our deposit and borrower customers which may further increase our non-interest income, and also to cross-sell our banking services and products to 65 Table of Contents customers and clients of Pioneer Insurance Agency, Inc. and Pioneer Financial Services, Inc.
We believe that there will be opportunities to cross-sell these products to our deposit and borrower customers which may further increase our non-interest income, and also to cross-sell our banking services and products to customers and clients of Pioneer Insurance Agency, Inc., Pioneer Financial Services, Inc., and Pioneer Consulting Solutions, Inc.
At June 30, 2024, we had a $20.0 million unsecured line of credit with a correspondent bank with no outstanding balance, as well as the ability to borrow from the Federal Reserve Bank of New York through the discount window lending program, and access to the reciprocal and brokered deposit markets.
At December 31, 2025, we had a $20.0 million unsecured line of credit with a correspondent bank with no outstanding balance, as well as the ability to borrow from the Federal Reserve Bank of New York through the discount window lending program, and access to the reciprocal and brokered deposit markets.
Assumptions are instrumental in determining the value of properties. Overly optimistic assumptions or negative changes to assumptions could significantly affect the valuation of a property securing a loan and the related allowance determined. Management carefully reviews the assumptions supporting such appraisals to determine that the resulting values reasonably reflect amounts realizable on the related loans.
Overly optimistic assumptions or negative changes to assumptions could significantly affect the valuation of a property securing a loan and the related allowance determined. Management carefully reviews the assumptions supporting such appraisals to determine that the resulting values reasonably reflect amounts realizable on the related loans.
The increase in average yield on securities was due to higher market rates of interest for new securities that were purchased during the year ended June 30, 2024 partially replacing the sale and scheduled maturities of lower yielding U.S. government and agency and municipal obligation securities.
The increase in average yield on securities was due to higher market rates of interest for new securities that were purchased during the year ended December 31, 2025, partially replacing the sale and scheduled maturities of lower yielding U.S. government and agency and municipal obligation securities.
The matters underlying the accrued liability and estimated range of possible losses are unpredictable and may change from time to time, and actual losses may vary significantly from the current estimate and accrual which could have a material negative effect on our financial results. The estimated range of possible loss does not represent our maximum loss exposure.
The matters underlying the accrued liability and estimated range of possible losses are unpredictable and may change from time to time, and actual losses may vary significantly from the current estimate and accrual which could have a material negative effect on our financial results.
Our non-interest expenses consist of salaries and employee benefits, net occupancy and equipment, data processing, advertising and marketing, insurance premiums, federal deposit insurance premiums, professional fees, litigation-related expense, and other general and administrative expenses.
Our non-interest expense consist of salaries and employee benefits, net occupancy and equipment, data processing, advertising and marketing, insurance premiums, federal deposit insurance premiums, professional fees, goodwill impairment loss, and other general and administrative expenses.
We believe that we had enough sources of liquidity to satisfy our short and long-term liquidity needs as of June 30, 2024. While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and loan prepayments are greatly influenced by general interest rates, economic conditions, and competition.
We believe that we had enough sources of liquidity to satisfy our short and long-term liquidity needs as of December 31, 2025. ​ 73 Table of Contents While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and loan prepayments are greatly influenced by general interest rates, economic conditions, and competition.
Professional fees include legal and other consulting expenses. 60 Table of Contents Litigation-related expense includes expenses related to legal proceedings, exclusive of legal fees and expenses. Other general and administrative expenses include expenses for office supplies, postage, telephone, insurance and other miscellaneous operating expenses. Income Tax Expense.
Professional fees include legal and other consulting expenses. 58 Table of Contents Other general and administrative expenses include expenses for office supplies, postage, telephone, insurance, l itigation-related expense, which includes expenses related to legal proceedings, and other miscellaneous operating expenses. Income Tax Expense.
We cannot accurately predict what the impact of the events described in “Mann Entities Related Fraudulent Activity” above and in the “Legal Proceedings” section may have on our liquidity and capital resources. For example, costs associated with potentially prosecuting, litigating or settling any litigation, satisfying any adverse judgments, if any, or other regulatory proceedings, could be significant.
We cannot accurately predict what the impact of the events described in the “Legal Proceedings” section may have on our liquidity and capital resources. For example, costs associated with prosecuting, litigating or settling any litigation, satisfying any adverse judgments, if any, could be significant.
The effect on net interest income of the decrease in the average balance of net interest-earning assets for the fiscal year ended June 30, 2024 was offset by the asset allocation shift to higher yielding assets. Provision for Credit Losses.
The effect on net interest income of the decrease in the average balance of net interest-earning assets for the six months ended December 31, 2024 was offset by the asset allocation shift to higher yielding assets. Provision for Credit Losses.
At June 30, 2024, we exceeded all applicable regulatory capital requirements, and were considered “well capitalized” under regulatory guidelines. See Note 16 in the Notes to the consolidated financial statements for further information. 73 Table of Contents Off-Balance Sheet Arrangements and Aggregate Contractual Obligations Off-Balance Sheet Arrangements.
At December 31, 2025, we exceeded all applicable regulatory capital requirements, and were considered “well capitalized” under regulatory guidelines. See Note 16 in the Notes to the consolidated financial statements for further information. Off-Balance Sheet Arrangements and Aggregate Contractual Obligations Off-Balance Sheet Arrangements.
Net occupancy and equipment expenses, which are the fixed and variable costs of buildings and equipment, consist primarily of depreciation charges, rental expenses, furniture and equipment expenses, maintenance, real estate taxes and costs of utilities.
Net occupancy and equipment expenses, which are the fixed and variable costs of buildings and equipment, consist primarily of depreciation charges, rental expenses, furniture and equipment expenses, maintenance, real estate taxes, net gain or loss on disposal or impairment of premises and equipment, and costs of utilities.
For those matters for which a loss is reasonably possible and estimable, whether in excess of an accrued liability or where there is no accrued liability, the Company’s estimated range of possible loss is $0 to $54.4 million in excess of the accrued liability, if any, as of June 30, 2024.
For those matters for which a loss is reasonably possible and estimable, whether in excess of an accrued liability or where there is no accrued liability, the Company’s estimated range of possible loss is $0 to $38.8 million in excess of the accrued liability, if any, as of December 31, 2025.
In addition, at June 30, 2024, we had $21.9 million in standby letters of credit outstanding. See Note 14 in the Notes to the consolidated financial statements for further information. Contractual Obligations. In the ordinary course of our operations, we enter into certain contractual obligations.
In addition, at December 31, 2025, we had $27.4 million in standby letters of credit outstanding. See Note 14 in the Notes to the consolidated financial statements for further information. Contractual Obligations. In the ordinary course of our operations, we enter into certain contractual obligations.
Our most liquid assets are cash and cash equivalents. The levels of these assets are dependent on our operating, financing, lending and investing activities during any period. At June 30, 2024, cash and cash equivalents totaled $165.2 million. Securities classified as available-for-sale, which provide additional sources of liquidity, totaled $257.4 million at June 30, 2024.
Our most liquid assets are cash and cash equivalents. The levels of these assets are dependent on our operating, financing, lending and investing activities during any period. At December 31, 2025, cash and cash equivalents totaled $133.7 million. Securities classified as available-for-sale, which provide additional sources of liquidity, totaled $220.4 million at December 31, 2025.
The decrease was primarily due to a $8.9 million increase in non-interest expense and a $2.7 million increase in the provision for credit losses, partially offset by a $2.2 million increase in non-interest income, a $1.0 million increase in net interest income and a $1.8 million decrease in income tax expense. Interest and Dividend Income.
The increase was primarily due to a $3.5 million increase in net interest income, a $1.7 million decrease in the provision for credit losses, and a $400,000 increase in non-interest income, partially offset by a $1.4 million increase in non-interest expense and a $1.1 million increase in income tax expense. Interest and Dividend Income.
The increase in the average yield on interest-earning assets was driven by an increase in variable rate loan yields and yields on interest-earning deposits with banks due to the current higher interest rate environment, as well as due to market related increases in interest rates on new loans and an asset allocation shift, using investment securities’ cash flow to fund higher yielding assets.
The increase in the average yield on interest-earning assets was driven by market related increases in interest rates on new loans and an asset allocation shift, using investment securities’ cash flow to fund higher yielding assets.
We are committed to maintaining a strong liquidity position. We monitor our liquidity position on a daily basis. We anticipate that we will have sufficient funds to meet our current funding commitments. Certificates of deposit due within one year of June 30, 2024 totaled $156.7 million, or 10.1%, of total deposits.
We are committed to maintaining a strong liquidity position. We monitor our liquidity position on a daily basis. We anticipate that we will have sufficient funds to meet our current funding commitments. Certificates of deposit due within one year of December 31, 2025 totaled $263.8 million, or 15.2%, of total deposits.
Interest income on loans increased due to a 51 basis points increase in the average yield on loans to 5.72% for the year ended June 30, 2024 from 5.21% for the year ended June 30, 2023, coupled with a $206.2 million increase in the average balance of loans to $1.27 billion for the year ended June 30, 2024 from $1.06 billion for the year ended June 30, 2023.
Interest income on loans increased due to a 18 basis points increase in the average yield on loans to 5.90% for the year ended December 31, 2025 from 5.72% for the fiscal year ended June 30, 2024, coupled with a $287.2 million increase in the average balance of loans to $1.55 billion for the year ended December 31, 2025 from $1.27 billion for the fiscal year ended June 30, 2024.
The increase in certificates of deposit was primarily related to a migration of funds from non-interest-bearing demand, savings, and other lower rate interest-bearing accounts. The increase in demand accounts and money market accounts was primarily related to growth in municipal and commercial deposits and a migration of funds from non-interest bearing demand, savings and other lower rate interest-bearing accounts.
The increase in certificates of deposit was primarily due to an increase in brokered deposits, and by a migration of funds from savings and other lower rate interest-bearing accounts. The increase in money market accounts was primarily due to a migration of funds from savings and other lower rate interest-bearing accounts.
The increase was due primarily to an increase of $199.9 million, or 17.5%, in net loans receivable, an increase of $14.7 million, or 9.8%, in cash and cash equivalents and an increase of $1.1 million, or 4.8%, in securities held to maturity, offset in part by a decrease of $174.3 million, or 40.4%, in securities available for sale.
The increase was due primarily to an increase of $211.7 million, or 14.8%, in net loans receivable and an increase of $37.2 million, or 38.5%, in cash and cash equivalents, offset in part by a decrease of $101.1 million, or 31.4%, in securities available for sale. Cash and Cash Equivalents.
Interest Expense. Interest expense increased $16.3 million, or 297.0%, to $21.8 million for the year ended June 30, 2024 from $5.5 million for the year ended June 30, 2023 as a result of an increase in interest expense on deposits, as well as, on borrowings and other.
Interest Expense. Interest expense increased $8.6 million, or 39.3%, to $30.4 million for the year ended December 31, 2025 from $21.8 million for the fiscal year ended June 30, 2024 as a result of an increase in interest expense on deposits, borrowings and other.
The increase was primarily due to an increase in the average yield on interest-earning assets of 99 basis points, partially offset by a decrease in the average balance of interest-earning assets of $1.9 million, an increase in the average cost of interest-bearing liabilities of 148 basis points and an increase in the average balance of interest-bearing liabilities of $52.1 million.
The increase was primarily due to an increase in the average yield on interest-earning assets of 67 basis points and an increase in the average balance of interest-earning assets of $54.3 million, partially offset by an increase in the average cost of interest-bearing liabilities of 54 basis points and an increase in the average balance of interest-bearing liabilities of $71.5 million.
Interest expense on interest-bearing deposits increased primarily due to a 149 basis points increase in the average cost of interest-bearing deposits to 1.95% for the year ended June 30, 2024 from 0.46% for the year ended June 30, 2023 and an increase in average interest-bearing deposits of $50.0 million to $1.06 billion for the year ended June 30, 2024 from $1.01 billion for the year ended June 30, 2023.
Interest expense on interest-bearing deposits increased primarily due to a 39 basis points increase in the average cost of interest-bearing deposits to 2.34% for the year ended December 31, 2025 from 1.95% for the fiscal year ended June 30, 2024 and an increase in average interest-bearing deposits of $143.1 million to $1.20 billion for the year ended December 31, 2025 from $1.06 billion for the fiscal year ended June 30, 2024.
Interest expense on interest-bearing deposits increased $16.1 million, or 347.4%, to $20.7 million for the year ended June 30, 2024 from $4.6 million for the year ended June 30, 2023.
Interest expense on interest-bearing deposits increased $7.4 million, or 36.1%, to $28.1 million for the year ended December 31, 2025 from $20.7 million for the fiscal year ended June 30, 2024.
Average Balances and Yields The following table sets forth average balances, average yields and costs, and certain other information for the years indicated. No tax-equivalent yield adjustments have been made, as the effects would be immaterial. All average balances are daily average balances. Non-accrual loans were included in the computation of average balances.
No tax-equivalent yield adjustments have been made, as the effects would be immaterial. All average balances are daily average balances. Non-accrual loans were included in the computation of average balances.
Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Our primary sources of funds are deposits, principal and interest payments on loans and securities, and proceeds from calls, maturities and sales of securities. We also have the ability to borrow from the FHLBNY.
Our primary sources of funds are deposits, principal and interest payments on loans and securities, and proceeds from calls, maturities and sales of securities. We also have the ability to borrow from the FHLBNY.
Once the loss contingency is deemed to be both probable and estimable, we establish an accrued liability and record a corresponding amount of litigation-related expense.
Once the loss contingency is deemed to be both probable and estimable, we establish an accrued liability and record a corresponding amount of litigation-related expense. We continue to monitor the matters for further developments that could affect the amount of the accrued liability that has been previously established.
At June 30, 2024, we had the ability to borrow up to $497.2 million, of which none was utilized for borrowings and $200.0 million was utilized as collateral for letters of credit issued to secure municipal deposits.
At December 31, 2025, we had the ability to borrow up to $622.0 million, of which $50.0 million was utilized for borrowings and $245.0 million was utilized as collateral for letters of credit issued to secure municipal deposits.
Comparison of Operating Results for the Years Ended June 30, 2024 and June 30, 2023 General. Net income decreased by $6.6 million, or 30.5%, to $15.3 million for the year ended June 30, 2024 from $21.9 million for the year ended June 30, 2023.
Comparison of Operating Results for the Year Ended December 31, 2025 and the Fiscal Year Ended June 30, 2024 General. Net income increased by $5.0 million, or 32.9%, to $20.3 million for the year ended December 31, 2025 from $15.3 million for the fiscal year ended June 30, 2024.
The decrease in the average balance of securities was due to the sales of U.S. government and agency securities, and maturities of U.S. government and agency and municipal obligation securities, outpacing purchases during the year ended June 30, 2024, in conjunction with an asset allocation shift, using investment securities’ cash flow to fund higher yielding assets.
The decrease in the average balance of securities was due to the maturities of U.S. government and agency and municipal obligation securities, outpacing purchases during the year ended December 31, 2025 and due to the sales of U.S. government and agency securities during the fiscal year ended June 30, 2024 as part of a balance sheet repositioning in which the Company sold $74.5 million of lower-yielding available for sale securities with an average book yield of approximately 0.83%, in conjunction with an asset allocation shift, using investment securities’ cash flow to fund higher yielding assets.
Interest income on securities decreased due to a $144.2 million decrease in the average balance of securities to $382.3 million for the year ended June 30, 2024 from $526.5 million for the year ended June 30, 2023, partially offset by a 67 basis points increase in the average yield on securities to 2.55% for the year ended June 30, 2024 from 1.88% for the year ended June 30, 2023.
Interest income on securities increased due to a 199 basis points increase in the average yield on securities to 4.54% for the year ended December 31, 2025 from 2.55% for the fiscal year ended June 30, 2024, partially offset by a $56.3 million decrease in the average balance of securities to $326.0 million for the year ended December 31, 2025 from $382.3 million for the fiscal year ended June 30, 2024.
We substantially grew our wealth management services business with the acquisition of Ward Financial Management, LTD’s business in 2018, three wealth management practices’ businesses in fiscal year 2022 and with the acquisition of certain assets of Hudson Financial, LLC in fiscal year 2024. At June 30, 2024, Pioneer Financial Services, Inc. had $1.13 billion of assets under management.
We substantially grew our wealth management services business with the acquisitions of Ward Financial Management, LTD’s business in 2018, three wealth management practices’ businesses in fiscal year 2022 and Hudson Financial, LLC’s business in fiscal year 2024.
During the year ended June 30, 2024 we strategically increased our portfolio of non-commercial loans, in part to take advantage of the substantial recent increase in market rates, through the purchases of residential mortgage loans, increasing that portfolio by $170.6 million or 36.8% as compared to the prior year. Diversify our products and services to increase non-interest income.
During the calendar year ended December 31, 2025, we strategically increased our portfolio of non-commercial loans, in part to take advantage of the higher interest rate environment, through the purchases of residential mortgage loans, increasing that portfolio by $104.1 million or 15.1% as compared to December 31, 2024. ​ 61 Table of Contents Diversify our products and services to increase non-interest income.
The allowance for credit losses on loans was $21.8 million at June 30, 2024 compared to $22.5 million at June 30, 2023, representing 1.60% and 1.94% of total loans outstanding, respectively.
Non-performing assets were $5.2 million, or 0.27% of total assets, at December 31, 2024, compared to $9.2 million, or 0.49% of total assets, at June 30, 2024. The allowance for credit losses on loans was $21.8 million at December 31, 2024 and at June 30, 2024, representing 1.49% and 1.60% of total loans outstanding, respectively. Non-Interest Income.
We continue to monitor these matters for further developments that could affect the amount of the accrued liability that has been established. See Item 3 – “Legal Proceedings” and “Part II, Item 8–Financial Statements and Supplementary Data- Note 14 – Commitments and Contingent Liabilities – Legal Proceedings and Other Contingent Liabilities” elsewhere in this report for more information.
See Item 3 – “Legal Proceedings” and “Part II, Item 8 – Financial Statements and Supplementary Data – Note 14 – Commitments and Contingent Liabilities – Legal Proceedings and Other Contingent Liabilities” elsewhere in this report for more information.
Interest income on interest-earning deposits with banks and other increased $261,000, or 4.4%, to $6.2 million for the year ended June 30, 2024 from $5.9 million for the year ended June 30, 2023.
Interest income on interest-earning deposits with banks and other decreased $3.1 million, or 50.3%, to $3.1 million for the year ended December 31, 2025 from $6.2 million for the fiscal year ended June 30, 2024.
Actual results may differ from these estimates under different assumptions or conditions, resulting in a change that could have a material impact on the carrying value of our assets and liabilities and our results of operations. The JOBS Act contains provisions that, among other things, reduce certain reporting requirements for qualifying public companies.
Actual results may differ from these estimates under different assumptions or conditions, resulting in a change that could have a material impact on the carrying value of our assets and liabilities and our results of operations. The following represent our critical accounting policies and estimates: Allowance for Credit Losses.
All loan information presented as of June 30, 2023 or a prior date is presented in accordance with previously applicable GAAP (the incurred loss method). As a substantial percentage of our loan portfolio is collateralized by real estate, appraisals of the underlying value of property securing loans are critical in determining the amount of the allowance required for specific loans.
As a substantial percentage of our loan portfolio is collateralized by real estate, appraisals of the underlying value of property securing loans are critical in determining the amount of the allowance required for specific loans. Assumptions are instrumental in determining the value of properties.
Effective July 1, 2023, the measurement of Current Expected Credit Losses (“CECL”) on financial instruments requires an estimate of the credit losses expected over the life of an exposure (or pool of exposures).
The allowance for credit losses consists of the allowance for credit losses on loans, securities held to maturity and unfunded commitments. The measurement of Current Expected Credit Losses (“CECL”) on financial instruments requires an estimate of the credit losses expected over the life of an exposure (or pool of exposures).
The net interest rate spread decreased 49 basis points to 3.01% for the year ended June 30, 2024 from 3.50% for the year ended June 30, 2023. Net interest margin increased 6 basis points to 3.78% for the year ended June 30, 2024 from 3.72% for the year ended June 30, 2023.
The net interest rate spread increased 21 basis points to 3.22% for the year ended December 31, 2025 from 3.01% for the fiscal year ended June 30, 2024. Net interest margin increased 29 basis points to 4.07% for the year ended December 31, 2025 from 3.78% for the fiscal year ended June 30, 2024.
At June 30, 2024, we had $303.9 million of commitments to originate loans, comprised of $183.5 million of commitments under commercial loans and lines of credit (including $52.7 million of unadvanced portions of commercial construction loans), $70.6 million of commitments under home equity loans and lines of credit, $42.8 million of commitments to purchase residential mortgage loans, and $7.0 million of unfunded commitments under consumer lines of credit.
At December 31, 2025, we had $350.1 million of commitments to originate loans, comprised of $210.1 million of commitments under commercial loans and lines of credit (including $66.4 million of unadvanced portions of commercial construction loans), $78.3 million of commitments under home equity loans and lines of credit, $54.8 million of commitments to purchase residential mortgage loans, and $6.9 million of unfunded commitments under consumer lines of credit.
The yields set forth below include the effect of deferred costs and fees, discounts, and premiums that are amortized or accreted to interest income or interest expense, as applicable. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended June 30, ​ ​ 2024 ​ 2023 ​ ​ Average ​ ​ ​ Average ​ ​ ​ ​ ​ Outstanding ​ ​ ​ ​ Average ​ Outstanding ​ ​ ​ ​ Average ​ ​ ​ Balance ​ Interest ​ Yield/Cost ​ Balance ​ Interest ​ Yield/Cost ​ ​ ​ (Dollars in thousands) Interest-earning assets: ​ ​ ​ ​ Loans ​ $ 1,265,455 ​ $ 72,378 5.72 % $ 1,059,250 ​ $ 55,231 5.21 % Securities ​ 382,258 ​ 9,750 2.55 % 526,460 ​ 9,875 1.88 % Interest-earning deposits ​ 113,092 ​ 6,188 5.47 % 176,965 ​ 5,927 3.35 % Total interest-earning assets ​ 1,760,805 ​ 88,316 5.02 % 1,762,675 ​ 71,033 4.03 % Non-interest-earning assets ​ 146,575 ​ ​ ​ ​ 146,677 ​ ​ ​ ​ Total assets ​ $ 1,907,380 ​ ​ ​ ​ $ 1,909,352 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-bearing liabilities: ​ ​ ​ ​ ​ Demand deposits ​ $ 167,498 ​ $ 3,153 1.88 % $ 175,227 ​ $ 968 0.55 % Savings deposits ​ 275,317 ​ 199 0.07 % 315,536 ​ 116 0.04 % Money market deposits ​ 493,187 ​ 12,968 2.63 % 450,969 ​ 2,979 0.66 % Certificates of deposit ​ 124,632 ​ 4,352 3.49 % 68,911 ​ 557 0.81 % Total interest-bearing deposits ​ 1,060,634 ​ 20,672 1.95 % 1,010,643 ​ 4,620 0.46 % Borrowings and other ​ 26,399 ​ 1,131 4.28 % 24,284 ​ 872 3.59 % Total interest-bearing liabilities ​ 1,087,033 ​ 21,803 2.01 % 1,034,927 ​ 5,492 0.53 % Non-interest-bearing deposits ​ ​ 494,916 ​ ​ ​ ​ ​ ​ ​ 584,762 ​ ​ ​ ​ ​ ​ Other non interest-bearing liabilities ​ 43,758 ​ ​ ​ ​ 38,394 ​ ​ ​ ​ Total liabilities ​ 1,625,707 ​ ​ ​ ​ 1,658,083 ​ ​ ​ ​ Total shareholders’ equity ​ 281,673 ​ ​ ​ ​ 251,269 ​ ​ ​ ​ Total liabilities and shareholders’ equity ​ $ 1,907,380 ​ ​ ​ ​ $ 1,909,352 ​ ​ ​ ​ Net interest income ​ ​ ​ ​ $ 66,513 ​ ​ ​ $ 65,541 ​ Net interest rate spread (1) ​ ​ ​ ​ ​ ​ 3.01 % ​ ​ ​ ​ 3.50 % Net interest-earning assets (2) ​ $ 673,772 ​ ​ ​ ​ $ 727,748 ​ ​ ​ ​ Net interest margin (3) ​ ​ ​ ​ ​ ​ 3.78 % ​ ​ ​ ​ 3.72 % Average interest-earning assets to interest-bearing liabilities ​ 161.98 % ​ ​ ​ 170.32 % ​ ​ ​ (1) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.
The yields set forth below include the effect of deferred costs and fees, discounts, and premiums that are amortized or accreted to interest income or interest expense, as applicable. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ ​ For the Fiscal Year Ended ​ ​ ​ December 31, 2025 ​ June 30, 2024 ​ ​ ​ ​ Average ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding ​ ​ ​ ​ Average ​ Outstanding ​ ​ ​ ​ Average ​ ​ Balance ​ Interest ​ Yield/Cost ​ Balance ​ Interest ​ Yield/Cost ​ ​ (Dollars in thousands) Interest-earning assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans ​ $ 1,552,647 ​ $ 91,639 5.90 % ​ $ 1,265,455 ​ $ 72,378 5.72 % Securities ​ 326,025 ​ 14,816 4.54 % ​ 382,258 ​ 9,750 2.55 % Interest-earning deposits ​ 67,476 ​ 3,075 4.56 % ​ 113,092 ​ 6,188 5.47 % Total interest-earning assets ​ 1,946,148 ​ 109,530 5.63 % ​ 1,760,805 ​ 88,316 5.02 % Non-interest-earning assets ​ 132,660 ​ ​ ​ ​ ​ ​ 146,575 ​ ​ ​ ​ ​ Total assets ​ $ 2,078,808 ​ ​ ​ ​ ​ ​ $ 1,907,380 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-bearing liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Demand deposits ​ $ 135,356 ​ $ 2,757 2.04 % ​ $ 167,498 ​ $ 3,153 1.88 % Savings deposits ​ 257,420 ​ 347 0.13 % ​ 275,317 ​ 199 0.07 % Money market deposits ​ 620,087 ​ 17,974 2.90 % ​ 493,187 ​ 12,968 2.63 % Certificates of deposit ​ 190,851 ​ 7,057 3.70 % ​ 124,632 ​ 4,352 3.49 % Total interest-bearing deposits ​ 1,203,714 ​ 28,135 2.34 % ​ 1,060,634 ​ 20,672 1.95 % Borrowings and other ​ 55,697 ​ 2,247 4.03 % ​ 26,399 ​ 1,131 4.28 % Total interest-bearing liabilities ​ 1,259,411 ​ 30,382 2.41 % ​ 1,087,033 ​ 21,803 2.01 % Non-interest-bearing deposits ​ 476,731 ​ ​ ​ ​ ​ ​ ​ ​ 494,916 ​ ​ ​ ​ ​ ​ Other non interest-bearing liabilities ​ ​ 29,252 ​ ​ ​ ​ ​ ​ 43,758 ​ ​ ​ ​ ​ Total liabilities ​ 1,765,394 ​ ​ ​ ​ ​ ​ 1,625,707 ​ ​ ​ ​ ​ Total shareholders’ equity ​ 313,414 ​ ​ ​ ​ ​ ​ 281,673 ​ ​ ​ ​ ​ Total liabilities and shareholders’ equity ​ $ 2,078,808 ​ ​ ​ ​ ​ ​ $ 1,907,380 ​ ​ ​ ​ ​ Net interest income ​ ​ ​ $ 79,148 ​ ​ ​ ​ ​ $ 66,513 ​ ​ Net interest rate spread (1) ​ ​ ​ ​ ​ 3.22 % ​ ​ ​ ​ ​ 3.01 % Net interest-earning assets (2) ​ $ 686,737 ​ ​ ​ ​ ​ ​ $ 673,772 ​ ​ ​ ​ ​ Net interest margin (3) ​ ​ ​ ​ ​ 4.07 % ​ ​ ​ ​ ​ 3.78 % Average interest-earning assets to interest-bearing liabilities ​ 154.53 % ​ ​ ​ ​ ​ 161.98 % ​ ​ ​ ​ ​ (1) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.
The increase was the result of a 99 basis points increase in the average yield on interest-earning assets to 5.02% for the year ended June 30, 2024, from 4.03% for the year ended June 30, 2023, partially offset by a decrease in the average balance of interest-earning assets of $1.9 million.
The increase was the result of a 61 basis points increase in the average yield on interest-earning assets to 5.63% for the year ended December 31, 2025, from 5.02% for the fiscal year ended June 30, 2024 and due to a $185.3 million increase in the average balance of interest-earning assets to $1.95 billion for the year ended December 31, 2025 from $1.76 billion for the fiscal year ended June 30, 2024.
Interest income on interest-earning deposits with banks and other increased due to a 212 basis points increase in the average yield on interest-earning deposits with banks and other to 5.47% for the year ended June 30, 2024 from 3.35% for the year ended June 30, 2023 primarily due to an increase in yields on interest-earning deposits with banks due to higher market interest rates, partially offset by a decrease of $63.9 million in average balances on interest-earning deposits with banks and other to $113.1 million for the year ended June 30, 2024 from $177.0 million for the year ended June 30, 2023 related to the shift in composition of interest-earning assets from cash and cash equivalents to loans.
The average yield on interest-earning deposits with banks and other decreased by 30 basis points to 5.27% for the six months ended December 31, 2024 from 5.57% for the six months ended December 31, 2023 primarily due to a decrease in yields on interest-earning deposits with banks due to changes in market interest rates, partially offset by an increase of $1.8 million in average balances on interest-earning deposits with banks and other to $81.9 million for the six months ended December 31, 2024 from $80.1 million for the six months ended December 31, 2023.
Noninterest income increased primarily as a result of $6.0 million of income from the previously disclosed settlement of litigation as described in “Recent Developments” and also from a $2.3 million increase in insurance and wealth management services income, offset in part by a $5.6 million loss on the sale of securities available for sale from the balance sheet repositioning transaction as described in “Recent Developments,” as well as a $614,000 decrease in bank-owned life insurance income during the year ended June 30, 2024 due to recognition of a death benefit in the year ended June 30, 2023.
The increase in noninterest income for the year ended December 31, 2025 was primarily due to an increase in insurance and wealth management services income and other noninterest income, and a $5.6 million loss on the sale of securities available for sale as part of a balance sheet repositioning during the fiscal year ended June 30, 2024, offset in part by $6.0 million of income from the previously announced settlement of litigation and net gain on equity securities sales during the fiscal year ended June 30, 2024.
For additional details regarding legal, other proceedings and related matters see “Item 8 – Financial Statements and Supplementary Data – Note 14 – Commitments and Contingent Liabilities – Legal Proceedings and Other Contingent Liabilities.” ​ ​ 64 Table of Contents Business Strategy Our business strategy is to operate as a well-capitalized and profitable diversified financial institution focused on our relationship-based model of customer engagement which we believe will result in growth through new customer acquisition, deepened existing customer relationships, and further market penetration.
Business Strategy Our business strategy is to operate as a well-capitalized and profitable diversified financial institution focused on our relationship-based model of creating customer advocacy by way of our highly engaged employees, which we believe will result in growth through new customer acquisition, deepened existing customer relationships, and further market penetration.
We continue to monitor the matters for further developments, including our 67 Table of Contents interactions with various regulatory agencies with supervisory authority over us, that could affect the amount of the accrued liability that has been previously established.
We continue to monitor these matters for further developments that could affect the amount of the accrued liability that has been established.
The provision for credit losses was $2.7 million for the year ended June 30, 2024, as compared to no provision for credit losses for the year ended June 30, 2023. The provision for credit losses for the year ended June 30, 2024 was primarily due to growth in the loan portfolio offset in part by improvements in asset quality.
The decrease in the provision for credit losses for the six months ended December 31, 2024 was primarily due to improvements in asset quality and economic conditions, offset in part by growth in the loan portfolio.
Net Interest Income. Net interest income increased $972,000, or 1.5%, to $66.5 million for the year ended June 30, 2024 compared to $65.5 million for the year ended June 30, 2023.
Net interest income increased $12.6 million, or 19.0%, to $79.1 million for the year ended December 31, 2025 from $66.5 million for the fiscal year ended June 30, 2024.
Non-interest expense increased $8.9 million, or 17.2%, to $60.7 million for the year ended June 30, 2024 compared to $51.8 million for the year ended June 30, 2023.
Non-interest expense increased $5.4 million, or 8.8%, to $66.1 million for the year ended December 31, 2025 from $60.7 million for the fiscal year ended June 30, 2024.
The increase was primarily due to a 148 basis points increase in the average cost of interest-bearing liabilities to 2.01% for the year ended June 30, 2024 from 0.53% for the year ended June 30, 2023, as well as, a shift in the mix of interest-bearing liabilities to higher interest rate liability accounts.
The increase was primarily due to a 54 basis points increase in the average cost of interest-bearing liabilities to 2.38% for the six months ended December 31, 2024 from 1.84% for the six months ended December 31, 2023, as well as a shift in the mix of interest-bearing liabilities to higher interest rate liability accounts. 71 Table of Contents Interest expense on interest-bearing deposits increased $4.0 million, or 43.5%, to $13.0 million for the six months ended December 31, 2024 from $9.0 million for the six months ended December 31, 2023.
Interest and dividend income increased $17.3 million, or 24.3%, to $88.3 million for the year ended June 30, 2024, from $71.0 million for the year ended June 30, 2023 due to increases in interest income on loans and interest-earning deposits and other.
Interest and dividend income increased $21.2 million, or 24.0%, to $109.5 million for the year ended December 31, 2025 from $88.3 million for the fiscal year ended June 30, 2024.
(2) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities. (3) Net interest margin represents net interest income divided by average total interest-earning assets. ​ 68 Table of Contents Rate/Volume Analysis The following table presents the effects of changing rates and volumes on our net interest income for the years indicated.
(4) Annualized. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 66 Table of Contents Rate/Volume Analysis The following table presents the effects of changing rates and volumes on our net interest income for the periods indicated.
By deposit category, demand accounts increased by $19.2 million, or 13.8%, to $158.0 million at June 30, 2024 from $138.8 million at June 30, 2023, money market accounts increased by $50.7 million, or 11.0%, to $513.6 million at June 30, 2024 from $462.9 million at June 30, 2023, and certificate of deposits increased by $50.0 million, or 42.8%, to $167.0 million at June 30, 2024 from $117.0 million at June 30, 2023, offset in part by a decrease in non-interest-bearing demand accounts of $80.8 million, or 15.4%, to $445.3 million at June 30, 2024 from $526.1 million at June 30, 2023, and a decrease in savings accounts of $30.7 million, or 10.3%, to $266.3 million at June 30, 2024 from $297.0 at June 30, 2023.
By deposit category, certificate of deposits increased by $94.7 million, or 54.2%, to $269.5 million at December 31, 2025 from $174.8 million at December 31, 2024; money market accounts increased by $75.0 million, or 13.4%, to $633.5 million at December 31, 2025 from $558.5 million at December 31, 2024; and non-interest-bearing demand accounts increased by $1.8 million, or 0.4%, to $456.1 million at December 31, 2025 from $454.3 million at December 31, 2024, offset in part by a decrease in savings accounts of $10.5 million, or 4.0%, to $249.7 million at December 31, 2025 from $260.2 million at December 31, 2024 and a decrease in interest-bearing demand accounts of $8.0 million, or 5.8%, to $130.4 million at December 31, 2025 from $138.4 million at December 31, 2024.
Total shareholders’ equity of $296.5 million at June 30, 2024 increased $29.8 million, or 11.2%, from $266.7 million at June 30, 2023 primarily as a result of net income of $15.3 million, a decrease in accumulated other comprehensive loss of $14.5 million, and the net increase of $507,000 related to the day-one CECL adjustment, partially offset by the repurchase of common stock of $1.1 million.
Shareholders’ equity of $323.9 million at December 31, 2025 increased $19.3 million, or 6.3%, from $304.6 million at December 31, 2024 primarily as a result of net income of $20.3 million and an increase in accumulated other comprehensive income of $8.5 million, partially offset by the repurchase of common stock of $11.3 million.
The increase in our effective tax rate was primarily due to the decrease in tax-exempt income for the year ended June 30, 2024 as compared to the prior year. ​ 72 Table of Contents Liquidity and Capital Resources Liquidity. Liquidity describes our ability to meet the financial obligations that arise in the ordinary course of business.
Our effective tax rate was 22.6% for the six months ended December 31, 2024 compared to 20.6% for the six months ended December 31, 2023. The increase in our effective tax rate was primarily due to the decrease in tax-exempt income for the six months ended December 31, 2024 as compared to the prior-year period. Liquidity and Capital Resources Liquidity.
Interest expense on borrowings and other liabilities increased $259,000 to $1.1 milion for the year ended June 30, 2024 from $872,000 for the year ended June 30, 2023 due primarily to increases in average borrowings and other liabilities of $2.1 million to $26.4 million for the year ended June 30, 2024 from $24.3 million for the year ended June 30, 2023, as well as the average cost of borrowings and other liabilities of 69 basis points as a result of the higher interest rate environment.
Interest expense on borrowings and other liabilities increased $1.1 million, or 98.7%, to $2.2 million for the year December 31, 2025 from $1.1 million for the fiscal year ended June 30, 2024 due primarily to a $29.3 million increase in average borrowings and other liabilities to $55.7 million for the year ended December 31, 2025 from $26.4 million for the fiscal year ended June 30, 2024, partially offset by a decrease in the average cost of borrowings and other liabilities of 25 basis points, to 4.03% for the year ended December 31, 2025 from 4.28% for the fiscal year ended June 30, 2024. 69 Table of Contents Net Interest Income.
Total securities held to maturity of $25.1 million at June 30, 2024 increased $1.1 million, or 4.8%, from $23.9 million at June 30, 2023. The increase was primarily due to purchases of $4.1 million offset in part by maturities of $2.7 million and a provision for credit losses of $262,000 during the year ended June 30, 2024. Net Loans Receivable.
The decrease was primarily due to maturities, paydowns and calls of $212.7 million, offset in part by purchases of $102.0 million of securities during the year ended December 31, 2025. Securities Held to Maturity. Total securities held to maturity of $41.5 million at December 31, 2025 increased $16.1 million, or 63.5%, from $25.4 million at December 31, 2024.
Income tax expense decreased $1.8 million to $4.1 million for the year ended June 30, 2024 from $5.9 million for the year ended June 30, 2023, due to a decrease in income before income taxes. Our effective tax rate was 21.4% for the year ended June 30, 2024 compared to 21.2% for the year ended June 30, 2023.
Income tax expense increased $2.1 million, or 49.5%, to $6.2 million for the year ended December 31, 2025 from $4.1 million for the fiscal year ended June 30, 2024, due to an increase in income before income taxes.
Core deposits are our least costly source of funds which improves our interest rate spread and also contributes non-interest income from account- related services. Ongoing focus on our commitment to an engaged workforce. We maintain our focus on ways to further enhance the employee engagement of our team.
Ongoing focus on our commitment to an engaged workforce. We maintain our focus on ways to further enhance the employee engagement of our team.
Average interest-earning assets of $1.76 billion for the year ended June 30, 2024 decreased by $1.9 milllion from the year ended June 30, 2023. Interest income on loans increased $17.2 million, or 31.0%, to $72.4 million for the year ended June 30, 2024 from $55.2 million for the year ended June 30, 2023.
The increase in average interest-earning assets was primarily due to the increase in the average balance of loans . 68 Table of Contents Interest income on loans increased $19.2 million, or 26.6%, to $91.6 million for the year ended December 31, 2025 from $72.4 million for the fiscal year ended June 30, 2024.
Net interest-earning assets decreased by $53.9 million to $673.8 million for the year ended June 30, 2024 from $727.7 million 71 Table of Contents for the year ended June 30, 2023.
Net interest-earning assets increased by $12.9 million to $686.7 million for the year ended December 31, 2025 from $673.8 million for the fiscal year ended June 30, 2024. Provision for Credit Losses. The provision for credit losses was $3.7 million for the year ended December 31, 2025, compared to $2.7 million for the fiscal year ended June 30, 2024.
Non-Interest Income. Non-interest income increased $2.2 million, or 15.4%, to $16.3 million for the year ended June 30, 2024 as compared to $14.1 million for the year ended June 30, 2023.
Noninterest expense of $31.6 million for the six months ended December 31, 2024 increased $1.4 million, or 4.8%, as compared to $30.2 million for the six months ended December 31, 2023.
The increase in average yield on loans was primarily due to loans tied 70 Table of Contents to variable short-term rates which increased during the year ended June 30, 2024 as well as due to market related increases in interest rates on new loans.
The increase in average yield on loans was primarily due to market related increases in interest rates on new loans. The increase in the average balance of loans was principally due to purchases of residential mortgage loans.
We intend to consider future acquisition opportunities to expand our insurance, wealth management or other complementary financial services businesses. Increase our Share of Lower-Cost Core Deposits . Core deposits represent our best opportunity to develop customer relationships that enable us to cross-sell the products and services of our complementary subsidiaries.
Core deposits represent our best opportunity to develop customer relationships that enable us to cross-sell the products and services of our complementary subsidiaries. We continue to emphasize offering core deposits (demand deposit accounts, savings accounts and money market accounts) to individuals, businesses and municipalities located in our market area.
Total assets of $1.90 billion at June 30, 2024 increased $39.2 million, or 2.1%, from $1.86 billion at June 30, 2023.
Total assets of $2.15 billion at December 31, 2025 increased $171.0 million, or 8.6%, from $1.98 billion at December 31, 2024.

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