0001823365us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2022-12-31

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended ~~September 30, 2020~~March 31, 2023

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

For the transition period from to

Commission file number ~~0-000~~001-39883

Generations Bancorp NY, Inc.

(Exact name of registrant as specified in its charter)

Maryland		85-3659943
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

20 East Bayard Street

Seneca Falls, New York13148

(Address of principal executive offices)

(Zip Code)

~~(315)~~ (315) 568-5855

(Registrant’s telephone number, including area code)

~~(Former name, former address and former fiscal year, if changed since last report)~~

Securities registered pursuant to Section 12(b) of the Act: ~~None~~


Title of each class	Ticker Symbol	Name of each exchange on which registered
Common Stock, $0.01 par value	GBNY	The NASDAQ Stock Market, LLC

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

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes⌧☒ No ◻☐

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

Large accelerated filer ◻☐		Accelerated filer ◻☐

Non-accelerated filer ⌧☒		Smaller reporting company ⌧☒
		Emerging growth company ⌧☒

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

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

No2,341,152 shares of the ~~Registrant~~Registrant’s common stock, par value $0.01 per share, were issued and outstanding as of ~~December 24, 2020.~~May 5, 2023.

Table of Contents

Index


	Page
PART I. FINANCIAL INFORMATION	1

Item 1. Condensed Consolidated Financial Statements	1

Condensed Consolidated Statements of Financial Condition – ~~September 30, 2020~~ March 31, 2023 (Unaudited) and December 31, ~~2019~~2022	1

Condensed Consolidated Statements of Income – Three-month ~~and Nine-month~~ Periods Ended ~~September 30, 2020~~March 31, 2023 and ~~2019~~2022 (Unaudited)	2

Condensed Consolidated Statements of Comprehensive Income (Loss) – Three-month ~~and Nine-month~~ Periods Ended ~~September 30, 2020~~March 31, 2023 and ~~2019~~2022 (Unaudited)	3

Condensed Consolidated Statements of Changes in Shareholders’ Equity – Three-month ~~and Nine-month~~ Periods Ended ~~September 30, 2020~~March 31, 2023 and ~~2019~~2022 (Unaudited)	4

Condensed Consolidated Statements of Cash Flows – ~~Nine-month~~ Three-month Periods Ended ~~September 30, 2020~~March 31, 2023 and ~~2019~~2022 (Unaudited)	5

Notes to Condensed Consolidated Financial Statements (Unaudited)	6

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	4649

Item 3. Quantitative and Qualitative Disclosures About Market Risk	57

Item 4. Controls and Procedures	57

PART II. OTHER INFORMATION	57

Item 1. Legal Proceedings	57

Item 1A. Risk Factors	57

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	58

Item 3. Defaults Upon Senior Securities	58

Item 4. Mine Safety Disclosures	58

Item 5. Other Information	58

Item 6. Exhibits	59

Signatures	60

Table of Contents

~~EXPLANATORY NOTE~~PART I. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

Generations Bancorp NY, Inc., a Maryland corporation (the “Company” or the “Registrant”), was formed on August 31, 2020 to serve as the successor to Seneca-Cayuga Bancorp, Inc., and as the savings and loan holding company for Generations Bank (the “Bank”) upon consummation of the Bank’s second-step mutual holding company conversion. As of September 30, 2020, the conversion had not been completed, and, as of that date, the Registrant had no assets or liabilities, and had not conducted any business other than that of an organizational nature. Accordingly, financial and other information of Seneca-Cayuga Bancorp, Inc. is included in this Quarterly Report.

~~Table of Contents~~

~~Seneca-Cayuga Bancorp, Inc.~~

Condensed Consolidated Statements of Financial Condition

At March 31,

At December 31,
(In thousands, except share data)

2023

2022

(Unaudited)

ASSETS:




Cash and due from banks

$
4,021

$
3,955
Interest earning deposits

2,020

4,049
Total cash and cash equivalents

6,041

8,004
Interest-earning time deposits in banks

680

—
Investment securities available-for-sale, at fair value

33,208

33,050
Investment securities held-to-maturity (fair value 2023-$1,309, 2022-$1,301)

1,552

1,587
Equity investment securities, at fair value

315

307
Federal Home Loan Bank stock, at cost

990

1,740
Loans

311,024

306,377
Less: Allowance for credit losses

(2,653)

(2,497)
Loans receivable, net

308,371

303,880
Premises and equipment, net

14,757

14,863
Bank-owned life insurance

7,379

7,351
Pension plan asset

11,240

10,697
Foreclosed real estate & repossessed assets

152

12
Goodwill

792

792
Intangible assets, net

702

718
Accrued interest receivable

1,319

1,304
Other assets

1,704

1,988
Total assets

$
389,202

$
386,293

LIABILITIES AND SHAREHOLDERS' EQUITY:




Deposits:




Noninterest-bearing

$
52,518

$
54,609
Interest-bearing

284,515

263,069
Total deposits

337,033

317,678
Short-term borrowings

1,940

16,200
Long-term borrowings

8,357

10,334
Advances from borrowers for taxes and insurance

1,825

2,653
Other liabilities

2,526

2,100
Total liabilities

351,681

348,965
Shareholders' equity:




Preferred stock, par value $0.01; 1,000,000 shares authorized; none issued

—

—
Common stock, par value $0.01; 14,000,000 shares authorized in 2023 and 2022; 2,341,152 and 2,348,748 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively

23

24
Additional paid in capital

22,983

23,002
Retained earnings

22,353

22,512
Accumulated other comprehensive loss

(6,107)

(6,467)
Stock held in rabbi trust

(698)

(698)
Unearned ESOP shares, at cost

(1,033)

(1,045)
Total shareholders' equity

37,521

37,328
Total liabilities and shareholders' equity

$
389,202

$
386,293

September 30,

December 31,

(In thousands, except share data)

2020

2019


(unaudited)

ASSETS:





Cash and due from banks

$
3,750

$
6,685

Interest earning deposits

8,498

6,763

Total cash and cash equivalents

12,248

13,448

Investment securities available-for-sale, at fair value

23,132

30,627

Investment securities held-to-maturity (fair value 2020-$1,653, 2019-$2,110)

1,616

2,078

Equity investment securities, at fair value

594

2,579

Federal Home Loan Bank stock, at cost

2,120

2,267

Loans

292,863

261,280

Less: Allowance for loan losses

2,116

1,660

Loans receivable, net

290,747

259,620

Premises and equipment, net

16,946

17,588

Bank-owned life insurance

6,997

6,893

Pension plan asset

8,440

7,605

Foreclosed real estate & repossessed assets

8

70

Goodwill

792

792

Intangible assets, net

864

913

Accrued interest receivable

1,426

1,215

Other assets

1,760

1,854

Total assets

$
367,690

$
347,549

LIABILITIES AND SHAREHOLDERS' EQUITY:





Deposits:





Noninterest-bearing

$
51,865

$
38,098

Interest-bearing

251,503

245,240

Total deposits

303,368

283,338

Long-term borrowings

30,064

31,448

Subordinated debt

1,235

735

Advances from borrowers for taxes and insurance

1,337

2,712

Other liabilities

1,908

1,085

Total liabilities

337,912

319,318

Shareholders' equity:





Preferred stock, par value $0.01; 1,000,000 shares authorized; none issued

—

—

Common stock, par value $0.01; 9,000,000 shares authorized; 2,551,940 shares issued in 2020 and 2019; 2,463,507 and 2,467,507 shares outstanding in 2020 and 2019

26

26

Additional paid in capital

11,956

11,962

Retained earnings

19,918

18,571

Accumulated other comprehensive loss

(1,170)

(1,662)

Treasury stock, at cost; 88,433 and 84,433 shares in 2020 and 2019

(615)

(573)

Stock held in rabbi trust

(290)

—

Unearned ESOP shares, at cost

(47)

(93)

Total shareholders' equity

29,778

28,231

Total liabilities and shareholders' equity

$
367,690

$
347,549

The accompanying notes are an integral part of the condensed consolidated financial statements.

Table of Contents

~~Seneca-Cayuga~~Generations Bancorp NY, Inc.
Condensed Consolidated Statements of (Loss) Income (Unaudited)

Three Months

Nine Months

Ended September 30,

Ended September 30,
(In thousands, except per share data)

2020

2019

2020

2019

(unaudited)

(unaudited)
Interest and dividend income:








Loans, including fees

$
3,149

$
2,892

$
9,183

$
8,716
Debt and equity securities:





Taxable

11

35

64

79
Tax-exempt

199

165

696

470
Interest earning deposits

1

8

11

42
Other

32

33

103

93
Total interest income

3,392

3,133

10,057

9,400
Interest expense:








Deposits

561

609

1,800

1,831
Short-term borrowings

2

23

2

24
Long-term borrowings

144

126

457

384
Subordinated debt

20

15

49

44
Total interest expense

727

773

2,308

2,283
Net interest income

2,665

2,360

7,749

7,117
Provision for loan losses

150

90

330

270
Net interest income after provision for loan losses

2,515

2,270

7,419

6,847
Noninterest income:








Banking fees and service charges

370

424

1,099

1,191
Mortgage banking income, net

11

16

36

69
Insurance commissions

180

194

586

631
Investment services commissions

2

44

86

213
Earnings on bank-owned life insurance

37

34

104

97
Unrealized gains (losses) on equity securities

2

62

(176)

273
Net gain on sale of securities

509

237

509

264
Other charges, commissions & fees

34

21

431

29
Total noninterest income

1,145

1,032

2,675

2,767
Noninterest expense:








Compensation and benefits

1,290

1,438

4,048

4,558
Occupancy and equipment

522

564

1,573

1,694
Service charges

503

548

1,453

1,582
Regulatory assessments

79

23

213

162
Professional and other services

135

126

401

316
Advertising

108

100

325

300
Other expenses

360

330

935

918
Total noninterest expenses

2,997

3,129

8,948

9,530
Income before income taxes

663

173

1,146

84
Expense (Benefit) for income taxes

23

—

(201)

—
Net income

640

173

1,347

84
Net income available to common shareholders

$
640

$
173

$
1,347

$
84
Earnings per common share

$
0.26

$
0.07

$
0.55

$
0.04

Three Months Ended March 31,
(In thousands, except per share data)

2023

2022

Interest and dividend income:


Loans, including fees

$
3,348

$
2,950
Debt and equity securities:



Taxable

239

162
Tax-exempt

101

112
Interest-earning deposits

45

16
Other

39

9
Total interest income

3,772

3,249
Interest expense:




Deposits

1,122

277
Short-term borrowings

88

—
Long-term borrowings

38

77
Total interest expense

1,248

354
Net interest income

2,524

2,895
Provision for loan losses

165

150
Provision for unfunded commitments

—

—
Provision for available-for-sale securities

—

—
Total provision for credit losses

165

150
Net interest income after provision for credit losses

2,359

2,745
Noninterest income:




Banking fees and service charges

364

375
Mortgage banking income, net

8

9
Insurance commissions

129

197
Earnings on bank-owned life insurance

28

27
Change in fair value on equity securities

8

(12)
Other charges, commissions & fees

39

20
Total noninterest income

576

616
Noninterest expense:




Compensation and benefits

1,408

1,235
Occupancy and equipment

513

485
Service charges

507

506
Regulatory assessments

64

63
Professional and other services

191

190
Advertising

107

108
Other expenses

337

303
Total noninterest expenses

3,127

2,890
(Loss) Income before income tax (benefit) expense

(192)

471
Income tax (benefit) expense

(40)

75
Net (loss) income

$
(152)

$
396
Net (loss) income available to common shareholders

$
(152)

$
396
Basic and diluted (losses) earnings per common share

$
(0.07)

$
0.17

The accompanying notes are an integral part of the condensed consolidated financial statements.

Table of Contents

~~Seneca-Cayuga~~Generations Bancorp NY, Inc.
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

Three Months Ended March 31,
(In thousands)

2023

2022

Net (loss) income

$
(152)

$
396
Other comprehensive income (loss), before tax:




Unrealized gains (losses) on securities available-for-sale:


Unrealized holding gains (losses) arising during the period

415

(2,245)
Net unrealized (gains) losses on securities available-for-sale

415

(2,245)
Defined benefit pension plan:




Reclassification of amortization of net losses recognized in net pension expense

40

—
Net change in defined benefit pension plan asset

40

—
Other comprehensive income (loss), before tax

455

(2,245)
Tax effect

(95)

471
Other comprehensive income (loss), net of tax

360

(1,774)
Total comprehensive income (loss)

$
208

$
(1,378)

Three Months Ended September 30,

Nine Months Ended September 30,
(In thousands)

2020

2019

2020

2019

(unaudited)

(unaudited)
Net income

$
640

$
173

$
1,347

$
84
Other comprehensive  income (loss), before tax:








Unrealized gains on securities available-for-sale:








Unrealized holding gains arising during the period

157

428

1,003

884
Reclassification adjustment for net gains included in net income

(480)

(237)

(480)

(264)
Net unrealized gains on securities available-for-sale

(323)

191

523

620
Defined benefit pension plan:








Reclassification of amortization of  net losses recognized in net pension expense

33

47

100

143
Net change in defined benefit pension plan asset

33

47

100

143
Other comprehensive income (loss), before tax

(290)

238

623

763
Tax effect

61

(50)

(131)

(167)
Other comprehensive income (loss), net of tax

(229)

188

492

596
Total comprehensive income

$
411

$
361

$
1,839

$
680

The accompanying notes are an integral part of the condensed consolidated financial statements.

Table of Contents

~~Seneca-Cayuga~~Generations Bancorp NY, Inc.
Condensed Consolidated Statements of Changes in Shareholders’ Equity (Unaudited)







Accumulated





Stock



Three Months Ended

Additional

Other

Unearned

Held by

Ended September 30,

Common

Paid in

Retained

Comprehensive

Treasury

ESOP

Rabbi

(In thousands, except share data)

Stock

Capital

Earnings

Loss

Stock

Shares

Trust

Total
Balance, June 30, 2020

$
26

$
11,958

$
19,278

$
(941)

$
(615)

$
(62)

$
(290)

$
29,354
Net income

—

—

640

—

—

—

—

640
Other comprehensive loss

—

—

—

(229)

—

—

—

(229)
ESOP shares committed to be released (6,221 shares)

—

(2)

—

—

—

15

—

13
Balance, September 30, 2020

$
26

$
11,956

$
19,918

$
(1,170)

$
(615)

$
(47)

$
(290)

$
29,778

Three Months Ended

Ended September 30 2019

Balance, June 30, 2019

$
26

$
11,960

$
18,395

$
(2,003)

$
(570)

$
(124)

$
—

$
27,684
Net income

—

—

173

—

—

—

—

173
Other comprehensive income

—

—

—

188

—

—

—

188
Repurchase of common stock

—

—

—

—

(2)

—

—

(2)
ESOP shares committed to be released (6,221 shares)

—

1

—

—

—

15

—

16
Balance, September 30, 2019

$
26

$
11,961

$
18,568

$
(1,815)

$
(572)

$
(109)

$
—

$
28,059







Accumulated





Stock



Nine Months Ended

Additional

Other

Unearned

Held by

Ended September 30,

Common

Paid in

Retained

Comprehensive

Treasury

ESOP

Rabbi

(In thousands, except share data)

Stock

Capital

Earnings

Loss

Stock

Shares

Trust

Total
Balance, January 1, 2020

$
26

$
11,962

$
18,571

$
(1,662)

2
(573)

$
(93)

$
—

$
28,231
Net income

—

—

1,347

—

—

—

—

1,347
Other comprehensive income

—

—

—

492

—

—

—

492
Purchase of common stock for SERPs

—

—

—

—

—

—

(290)

(290)
Repurchase of common stock

—

—

—

—

(42)

—

—

(42)
ESOP shares committed to be released (6,221 shares)

—

(6)

—

—

—

46

—

40
Balance, September 30, 2020

26

$
11,956

$
19,918

$
(1,170)

$
(615)

$
(47)

$
(290)

$
29,778

Nine Months Ended

Ended September 30,

Balance, January 1, 2019

$
26

$
11,958

$
18,484

$
(2,411)

$
(532)

$
(156)

$
—

$
27,369
Net loss

—

—

84

—

—

—

—

84
Other comprehensive income

—

—

—

596

—

—

—

596
Repurchase of common stock

—

—

—

—

(40)

—

—

(40)
ESOP shares committed to be released (6,221 shares)

—

3

—

—

—

47

—

50
Balance, September 30, 2019

$
26

$
11,961

$
18,568

$
(1,815)

$
(572)

$
(109)

$
—

$
28,059
~~(1)~~ Includes reclassification adjustment from accumulated other comprehensive loss to retained earnings to reflect the accounting treatment of the change in fair values of equity securities in accordance with the adoption of Accounting Standard Update 2016-01.







Accumulated

Stock





Additional

Other

Held by

Unearned

Common

Paid in

Retained

Comprehensive

Rabbi

ESOP

(In thousands, except share data)

Stock

Capital

Earnings

Loss

Trust

Shares

Total
Balance, December 31, 2022

$
24

$
23,002

$
22,512

$
(6,467)

$
(698)

$
(1,045)

$
37,328
Net loss

—

—

(152)

—

—

—

(152)
Other comprehensive income

—

—

—

360

—

—

360
Effect of stock repurchase plan

(1)

(73)

(7)

—

—

—

(81)
Stock-based compensation

—

53

—

—

—

—

53
ESOP shares committed to be released

—

1

—

—

—

12

13
Balance, March 31, 2023

$
23

$
22,983

$
22,353

$
(6,107)

$
(698)

$
(1,033)

$
37,521

Balance, December 31, 2021

$
26

$
24,494

$
21,669

$
(966)

$
(654)

$
(1,090)

$
43,479
Net income

—

—

396

—

—

—

396
Other comprehensive loss

—

—

—

(1,774)

—

—

(1,774)
ESOP shares committed to be released

—

2

—

—

—

12

14
Balance, March 31, 2022

$
26

$
24,496

$
22,065

$
(2,740)

$
(654)

$
(1,078)

$
42,115

The accompanying notes are an integral part of the condensed consolidated financial statements.

Table of Contents

~~Seneca-Cayuga~~Generations Bancorp NY, Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited)

Nine Months Ended September 30,

(In thousands)

2020

2019


(unaudited)

OPERATING ACTIVITIES





Net income (loss)

$
1,347

$
84

Adjustments to reconcile net income (loss) to net cash provided by operating activities:





Provision for loan losses

330

270

Deferred income tax benefit

(201)

—

Realized losses (gains) on sales of:





Real estate acquired through foreclosure

—

3

Premises and equipment

—

36

Available-for-sale investment securities

(480)

(264)

Equity securities

(29)

—

Writedown of premises and equipment to fair value

25

—

Writedown of other real estate owned to fair value

30

—

Unrealized (gains) losses on equity securities

176

(273)

Directors' retirement plan net gains

(98)

4

Depreciation

795

815

Amortization of intangible asset

49

38

Amortization of fair value adjustment to purchased loan portfolio

(52)

(40)

ESOP expense

46

47

Amortization of deferred loan costs

306

(845)

Earnings on bank-owned life insurance

(104)

(97)

Change in pension plan assets

(734)

(700)

Net amortization of premiums and discounts on investment securities

(21)

56

Net change in accrued interest receivable

(211)

(55)

Net change in other assets and liabilities

(1,198)

578

Net cash provided by (used in) operating activities

(24)

(343)

INVESTING ACTIVITIES





Purchase of equity investment securities

(1)

(77)

Purchase of investment securities available-for-sale

(2,008)

(8,841)

Net proceeds from the (purchase of) redemption of Federal Home Loan Bank stock

147

(346)

Proceeds from maturities and principal reductions of:





Available-for-sale investment securities

1,422

1,708

Held-to-maturity investment securities

457

455

Proceeds from sale of:





Available-for-sale investment securities

9,110

259

Equity investment securities

2,422

8,670

Real estate acquired through foreclosure

60

17

Premises and equipment

—

95

Net change in loans

(31,711)

(6,597)

Purchase of premises and equipment

(178)

(864)

Net cash used in investing activities

(20,280)

(5,521)

FINANCING ACTIVITIES





Net change in demand deposits, savings accounts, and money market accounts

39,392

(2,612)

Net change in time deposits

(18,722)

(1,550)

Net change in brokered time deposits

(640)

—

Net repayments of from short-term borrowings

—

1,850

Payments on long-term borrowings

(7,384)

(5,846)

Proceeds from subordinated debt offering

500

Proceeds from long-term borrowings

6,000

13,000

Repurchase of common stock

(42)

(40)

Net cash provided by financing activities

19,104

4,802

Decrease in cash and cash equivalents

(1,200)

(1,062)

Cash and cash equivalents at beginning of period

13,448

9,135

Cash and cash equivalents at end of period

$
12,248

$
8,073

Supplemental Cash Flows Information





Cash paid during the period for:





Interest

$
2,225

$
2,264

Transfer of loans to foreclosed real estate

28

—

Three Months Ended March 31,
(In thousands)

2023

2022
OPERATING ACTIVITIES




Net (loss) income

$
(152)

$
396
Adjustments to reconcile net income to net cash provided by operating activities:




Provision for loan losses

165

150
Deferred income tax benefit

(65)

(407)
Change in fair value on equity securities

(8)

12
Depreciation

238

235
Amortization of intangible asset

16

16
Amortization of fair value adjustment to purchased loan portfolio

(17)

(17)
ESOP expense

13

14
Stock-based compensation

53

—
Amortization of deferred loan costs

43

27
Earnings on bank-owned life insurance

(28)

(27)
Change in pension plan assets

(503)

(581)
Net amortization of premiums and discounts on investment securities

31

75
Net change in accrued interest receivable

(15)

(25)
Net change in other assets and liabilities

(148)

(464)
Net cash used in operating activities

(377)

(596)
INVESTING ACTIVITIES



Purchase of investment securities available-for-sale

(835)

(2,258)
Net change in interest-earning time deposits in banks

(680)

—
Net proceeds from the redemption of Federal Home Loan Bank stock

750

115
Proceeds from maturities and principal reductions of:


Available-for-sale investment securities

1,062

837
Held-to-maturity investment securities

34

62
Proceeds from sale of:


Real estate and repossessed assets acquired

112

27
Premises and equipment

15

—
Net change in loans

(4,934)

3,475
Purchase of premises and equipment

(147)

(72)
Net cash (used in) provided by investing activities

(4,623)

2,186
FINANCING ACTIVITIES




Net change in demand deposits, savings accounts, and money market accounts

(10,095)

2,156
Net change in time deposits

29,450

706
Net change in short-term borrowings

(14,260)

—
Payments on long-term borrowings

(1,977)

(1,782)
Effect of stock repurchase plan

(81)

—
Net cash provided by financing activities

3,037

1,080
Net change in cash and cash equivalents

(1,963)

2,670
Cash and cash equivalents at beginning of period

8,004

20,997
Cash and cash equivalents at end of period

$
6,041

$
23,667
Supplemental Cash Flows Information




Cash paid during the period for:




Interest

$
1,155

$
348
Transfer of loans to foreclosed real estate and repossessed assets

252

—

The accompanying notes are an integral part of the condensed consolidated financial statements.

Table of Contents

~~Seneca-Cayuga~~Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1.Nature of Operations

Generations Bancorp NY, Inc. (“Generations Bancorp”) is a Maryland corporation that was organized in August 2020 as part of the Seneca-Cayuga Bancorp, Inc. ~~(the “Holding Company”~~(“Seneca-Cayuga”) isconversion from the mutual holding company structure to a ~~federally chartered~~fully public stock holding company ~~and a~~structure. Prior to the conversion, Generations Bank was the wholly owned subsidiary of Seneca-Cayuga and The Seneca Falls Savings Bank, MHC ~~(the “Mutual Holding Company”~~(“MHC”), which owned 60.1% of Seneca-Cayuga’s common stock. On January 13, 2021, Generations Bancorp sold 1,477,575 of its common stock in a ~~federally chartered mutual holding company. At September 30, 2020 and December 31, 2019,~~stock offering, (which included 109,450 shares issued to the ~~Mutual Holding Company owned 1,480,715 shares, or 60.10% and 60.01%, respectively,~~ESOP) representing the ownership interest of the ~~Holding Company’s outstanding stock,~~MHC for gross proceeds of $14.8 million and net proceeds of $13.2 million. The exchange ratio of previously held shares by public shareholders (i.e., shareholders other than the ~~remaining Holding Company stock is held by the public or has been repurchased by the Holding Company. The Mutual Holding Company activity is not included~~MHC) of Seneca-Cayuga was 0.9980 as applied in the ~~accompanying consolidated financial statements.~~conversion offering. References herein to the “Company” include Generations Bancorp subsequent to the completion of the conversion and Seneca-Cayuga prior to the completion of the conversion.

Generations Bank (the “Bank”) is a ~~wholly owned subsidiary of the Holding Company. Originally called~~federally chartered savings bank headquartered in Seneca Falls, ~~Savings Bank,~~New York. We were organized in 1870 and have operated continuously since that time in the ~~Bank changed its name~~northern Finger Lakes Region of New York State which is located in ~~2012~~the central to improve name and brand recognition. On September 29, 2018, Medina Savings and Loan Association (“MSL”), a mutual savings and loan association owned by its depositors, was merged into the Bank as additional retail offices, expanding our market footprint. All assets and liabilitiesnorthwestern portion of MSL were acquired and the consideration given in exchange for this mutual transaction was the issuance of Holding Company stock to our Mutual Holding Company. Based on a third party appraised value of MSL, 171,440 shares were issued to the Mutual Holding Company.New York State.

~~Effective December 31, 2018, the Bank officially established~~ Generations Commercial Bank (the “Commercial Bank”), is a New York State chartered limited-purpose commercial bank formed expressly to enable local municipalities to deposit public funds with the Bank in accordance with existing NYS municipal ~~law. Although having received regulatory approval~~law and ~~funding~~is a wholly owned subsidiary of the ~~Commercial Bank with $2,500,000 in capital in the year-end December 31, 2018, the Commercial Bank opened for business on January 2, 2019.~~Bank.

The Bank maintains its executive offices and main retail location in Seneca Falls, New York, ~~with retail~~in addition to seven full-service offices ~~in Waterloo,~~and one drive-through facility located Auburn, Farmington, Geneva, ~~Auburn,~~Medina, Phelps, Union Springs, ~~Phelps, Farmington, Medina~~ and ~~Albion,~~Waterloo, New York. The Bank is a community-oriented savings institution whose business primarily consists of accepting deposits from customers within its market area and investing those funds in loans secured by one- to four-family residential real estate, commercial real estate, business or personal assets, and in investment securities. ~~The Bank also offers financial and investments services to its customers through licensed employees.~~

In addition, Generations Agency, Inc. (the “Agency”) offers personal and commercial insurance products through licensed employees in the same market area. The Agency is the Bank’s ~~wholly-owned~~wholly owned subsidiary.

~~General~~

The Boards of Directors of Seneca-Cayuga Bancorp Inc., The Seneca Falls Savings Bank, MHC, Generations Bank and Generations Bancorp have adopted a plan of conversion pursuant to which Generations Bank will reorganize from a mutual holding company structure to a stock holding company structure. Public stockholders of Seneca-Cayuga Bancorp will receive shares in Generations Bancorp in exchange for their shares of Seneca-Cayuga Bancorp common stock based on an exchange ratio. This conversion to a stock holding company structure also includes the offering by Generations Bancorp of shares of its common stock to eligible depositors of Generations Bank, eligible depositors of Generations Commercial Bank and to the public, including Seneca-Cayuga Bancorp stockholders, in a subscription offering and, if necessary, in a community offering and/or in a separate offering through a syndicate of broker-dealers. Following the conversion and offering, The Seneca Falls Savings Bank, MHC and Seneca-Cayuga Bancorp will no longer exist, and Generations Bancorp will be the parent company of Generations Bank.

The plan of conversion provides that we will offer shares of common stock for sale in the subscription offering to eligible account holders, our tax-qualified employee benefit plans, including our employee stock ownership plan, supplemental eligible account holders, and other members (qualifying depositors). In addition, we may

~~Table of Contents~~

~~Seneca-Cayuga Bancorp, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Unaudited)~~

~~offer common stock for sale in a community offering to members of the general public, with a preference given in the following order:~~

~~(i)~~

~~Natural persons (including trusts of natural persons) residing in the New York counties of Cayuga, Seneca, Ontario and Orleans; and~~

~~(ii)~~

~~Seneca-Cayuga Bancorp’s public stockholders at the close of business November 2, 2020.~~

Upon completion of the offering, the holders of common stock of Generations Bancorp will have voting rights in Generations Bancorp. They will elect Generations Bancorp’s board of directors and act on other matters as are required to be presented to them under Maryland law or as otherwise presented to them by the board of directors. Generally, each holder of common stock will be entitled to one vote per share and will not have any right to cumulate votes in the election of directors. Any person who beneficially owns more than 10% of the then-outstanding shares of Generations Bancorp’s common stock, however, will not be permitted to vote any of the shares of common stock held in excess of the 10% limit. If Generations Bancorp issues shares of preferred stock, holders of preferred stock may also possess voting rights. Certain matters may require the approval of 80% of our outstanding common stock.

We do not intend to pay dividends following the completion of the offering. However, our board of directors will have the authority to declare dividends on our shares of common stock, subject to statutory and regulatory requirements. In determining whether to pay a cash dividend and the amount of such cash dividend, the board of directors would take into account a number of factors, including capital requirements, our financial condition and results of operations, other uses of the funds for the long-term value of shareholders, tax considerations, statutory and regulatory limitations and general economic conditions. Special cash dividends, stock dividends or return 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.

Conversion costs will be deferred and reduce the proceeds from the shares sold in the Conversion. If the Conversion is not completed, all costs will be expensed. There were no conversion costs recorded at December 31, 2019. At September 30, 2020 the company has capitalized $514,000 in conversion costs. The Conversion will be accounted for as a change in corporate form with the historic basis of the Company’s assets, liabilities and equity unchanged as a result.

Interim Financial Statements

The interim condensed consolidated financial statements as of ~~September 30, 2020,~~March 31, 2023, and for the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2023 and ~~2019,~~2022, are unaudited and reflect all normal recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. Such adjustments are the only adjustments contained in these unaudited consolidated financial statements. These unaudited condensed consolidated financial statements have been prepared according to the rules and regulations of the Securities and Exchange Commission, and therefore certain information and footnote disclosures normally included in the financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) have been omitted. The results of operations for the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2023 are not necessarily indicative of the results to be achieved for the remainder of the year ending December 31, ~~2020,~~2023, or any other period.

Certain prior period data presented in the consolidated financial statements ~~have~~has been reclassified to conform ~~with~~to current year presentation. The accompanying condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto of the Company for the year ended December 31, ~~2019~~2022 included in the Company’s Annual Report on Form ~~S-1.~~10-K for the year ended December 31, 2022. Reference is made to the accounting policies of the Company described in the Notes to Financial Statements contained in the Annual Report on Form ~~S-1.~~10-K for the year ended December 31, 2022.

The Company's significant accounting policies followed in the preparation of the unaudited consolidated financial statements are disclosed in Note 2 of the audited financial statements and notes for the year ended December 31, 2022

Table of Contents

~~Seneca-Cayuga~~Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

and are contained in the Company's Annual Report on Form 10-K. There have been no significant changes to the application of significant accounting policies since December 31, 2022, except for the following:

Accounting Standards Adopted in 2023

On January 1, 2023, the Company adopted ASU 2016-13 Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASC 326). This standard replaced the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (“CECL”) methodology. CECL requires an estimate of credit losses for the remaining estimated life of the financial asset using historical experience, current conditions, and reasonable and supportable forecasts and generally applies to financial assets measured at amortized cost, including loan receivables and held-to-maturity debt securities, and some off-balance sheet credit exposures such as unfunded commitments to extend credit. Financial assets measured at amortized cost will be presented at the net amount expected to be collected by using an allowance for credit losses. In addition, CECL made changes to the accounting for available-for-sale debt securities. One such change is to require credit losses to be presented as an allowance rather than as a write-down on available-for-sale debt securities if management does not intend to sell and does not believe that it is more likely than not, they will be required to sell. The Company adopted ASC 326 and all related subsequent amendments thereto effective January 1, 2023 using the modified retrospective approach for all financial assets measured at amortized cost and off-balance sheet credit exposures. The Company adopted ASC 326 using the prospective transition approach for debt securities for which other-than-temporary impairment had been recognized prior to January 1, 2023. As of December 31, 2022, the Company did not have any other-than-temporarily impaired investment securities. Therefore, upon adoption of ASC 326, the Company determined that an allowance for credit losses on available-for-sale securities was not deemed material.

Allowance for Credit Losses – Held-to-Maturity Securities

Management measures expected credit losses on held-to-maturity debt securities on a collective basis by major security type. Accrued interest receivable on held-to-maturity debt securities totaled $1,000 at March 31, 2023 and was excluded from the estimate of credit losses. Management classifies the held-to-maturity portfolio into the following major security types: mortgage-backed securities or structured certificates of deposit. All the mortgage-backed securities held by the Company are issued by government-sponsored corporations. These securities are either explicitly or implicitly guaranteed by the U.S. government and have a long history of no credit losses. The structured certificates of deposit are all fully insured by the Federal Deposit Insurance Corporation as no one security exceeds the $250,000 insurance limit. As a result, no allowance for credit losses was recorded on held-to-maturity at March 31, 2023.

Allowance for Credit Losses – Available-for-Sale Securities

For available-for-sale securities, management evaluates all investments in an unrealized loss position on a quarterly basis, and more frequently when economic or market conditions warrant such evaluation. If the Company has the intent to sell the security or it is more likely than not that the Company will be required to sell the security, the security is written down to fair value and the entire loss is recorded in earnings. If either of the above criteria is not met, the Company evaluates whether the decline in fair value is the result of credit losses or other factors. In making the assessment, the Company may consider various factors including the extent to which fair value is less than amortized cost, performance on any underlying collateral, downgrades in the ratings of the security by a rating agency, the failure of the issuer to make scheduled interest or principal payments, and adverse conditions specifically related to the security. If the assessment indicates that a credit loss exists, the present value of cash flows expected to be collected are compared to the amortized cost basis of the security and any excess is recorded as an allowance for credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any amount of unrealized loss that has not been recorded through an allowance for credit loss is recognized in other comprehensive income. Changes in the allowance for credit loss are recorded as provision for (or reversal of) credit loss expense. Losses are charged against the allowance for credit loss when management believes an available for sale security is confirmed to be uncollectible

Table of Contents

Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

or when either of the criteria regarding intent or requirement to sell is met. At March 31, 2023, there was no allowance for credit loss related to the available for sale portfolio. Accrued interest receivable on available for sale debt securities totaled $309,000 at March 31, 2023 and was excluded from the estimate of credit losses.

Loans

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at amortized cost. Amortized cost is the principal balance outstanding, net of purchase premiums and discounts and deferred fees and costs. Accrued interest receivable related to loans totaled $987,000 at March 31, 2023 and was reported in accrued interest receivable on the consolidated balance sheets. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using methods that approximate a level yield without anticipating prepayments. The accrual of interest is generally discontinued when a loan becomes 90 days past due and is not well collateralized and in the process of collection, or when management believes, after considering economic and business conditions and collection efforts, that the principal or interest will not be collectible in the normal course of business. Past due status is based on contractual terms of the loan. A loan is considered to be past due when a scheduled payment has not been received 30 days after the contractual due date. All accrued interest is reversed against interest income when a loan is placed on nonaccrual status. Interest received on such loans is accounted for using the cost-recovery method, until qualifying for return to accrual. Under the cost-recovery method, interest income is not recognized until the loan balance is reduced to zero. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current, there is a sustained period of repayment performance, and future payments are reasonably assured.

Allowance for Credit Losses - Loans

The allowance for credit losses is a valuation account that is deducted from the loans' amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the allowance when management believes the uncollectibility of a loan balance is confirmed. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off. Accrued interest receivable is included in the estimate of credit losses. The allowance for credit losses represents management’s estimate of lifetime credit losses inherent in loans as of the balance sheet date. The allowance for credit losses is estimated by management using relevant available information, from both internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. The Company measures expected credit losses for loans on a pooled basis when similar risk characteristics exist. The Company has identified the following portfolio segments: multi-family, commercial business, nonresidential real estate, manufactured homes, home equity loans, and residential real estate, commercial lines of credit, direct automobile, indirect automobile, manufactured homes, other consumer, other consumer lines of credit, recreational vehicles, student loans, and residential construction loans. The Company utilizes the advanced vintage, probability of default, and weighted average remaining maturity methods considering relevant information about past events, current conditions, and reasonable and supportable forecasts. The Company utilizes a reasonable and supportable forecast period of 3 – 10 years depending upon the portfolio segment. Subsequent to this forecast period the Company reverts, on a straight-line basis over the applicable segment period, to historical loss experience to inform its estimate of losses for the remaining contractual life of each portfolio.

Additionally, the allowance for credit losses calculation includes subjective adjustments for qualitative risk factors that are likely to cause estimated credit losses to differ from historical experience. These qualitative adjustments may increase or reduce reserve levels and include adjustments for volume and loan mix, economics, and delinquency and loan quality. Loans that do not share risk characteristics are evaluated on an individual basis. When management determines that foreclosure is probable and the borrower is experiencing financial difficulty, the expected credit losses are based on the fair value of collateral at the reporting date adjusted for selling costs as appropriate.

Table of Contents

Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Allowance for Credit Losses – Unfunded Commitments

Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit issued to meet customer financing needs. The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for off-balance sheet loan commitments is represented by the contractual amount of those instruments. Such financial instruments are recorded when they are funded. The Company records an allowance for credit losses on off-balance sheet credit exposures, unless the commitments to extend credit are unconditionally cancelable, through a charge to provision for unfunded commitments in the Company’s income statements. The allowance for credit losses on off-balance sheet credit exposures is estimated by loan segment at each balance sheet date under the current expected credit loss model using the same methodologies as portfolio loans, taking into consideration the likelihood that funding will occur as well as any third-party guarantees. The allowance for unfunded commitments is included in other liabilities on the Company’s consolidated balance sheets.

Table of Contents

Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

2. Accumulated Other Comprehensive ~~Income (Loss)~~Loss

The balances and changes in the components of accumulated other comprehensive ~~income (loss),~~loss, net of tax, are as follows:

Unrealized



Accumulated

Unrealized



Accumulated

(Losses) Gains

Defined

Other

(Losses) Gains

Defined

Other
Three Months Ended September 30,

on Securities

Benefit

Comprehensive
Three Months Ended March 31,

on Securities

Benefit

Comprehensive
(In thousands)

Available-for-Sale

Pension Plan

Income (Loss)

Available-for-Sale

Pension Plan

Loss

(unaudited)

Balance, June 30, 2020

$
1,326

$
(2,267)

$
(941)
Balance, December 31, 2022

$
(3,905)

$
(2,562)

$
(6,467)
Other comprehensive gain before reclassifications

124

—

124

328

—

328
Amounts reclassified from AOCI to the income statement

(379)

26

(353)
Net current-period other comprehensive income (loss)

(255)

26

(229)
Balance, September 30, 2020

$
1,071

$
(2,241)

$
(1,170)
Amounts reclassified from AOCI to the statements of (loss) income

—

32

32
Net current-period other comprehensive income

328

32

360
Balance, March 31, 2023

$
(3,577)

$
(2,530)

$
(6,107)

Balance, June 30, 2019

$
595

$
(2,598)

$
(2,003)
Other comprehensive gain before reclassifications

360

—

360
Amounts reclassified from AOCI to the income statement

(209)

37

(172)
Net current-period other comprehensive income

151

37

188
Balance, September 30, 2019

$
746

$
(2,561)

$
(1,815)

Unrealized



Accumulated

(Losses) Gains

Defined

Other
Nine Months Ended September 30,

on Securities

Benefit

Comprehensive
(In thousands)

Available-for-Sale

Pension Plan

Income (Loss)

(unaudited)
Balance, January 1, 2020

$
658

$
(2,320)

$
(1,662)
Other comprehensive gain before reclassifications

792

—

792
Amounts reclassified from AOCI to the income statement

(379)

79

(300)
Net current-period other comprehensive income

413

79

492
Balance, September 30, 2020

$
1,071

$
(2,241)

$
(1,170)

Balance, January 1, 2019

$
262

$
(2,673)

$
(2,411)
Other comprehensive gain before reclassifications

693

—

693
Amounts reclassified from AOCI to the income statement

(209)

112

(97)
Net current-period other comprehensive income

484

112

596
Balance, September 30, 2019

$
746

$
(2,561)

$
(1,815)
Balance, December 31, 2021

$
215

$
(1,181)

$
(966)
Other comprehensive loss before reclassifications

(1,774)

—

(1,774)
Net current-period other comprehensive loss

(1,774)

—

(1,774)
Balance, March 31, 2022

$
(1,559)

$
(1,181)

$
(2,740)

~~Table of Contents~~

~~Seneca-Cayuga Bancorp, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Unaudited)~~

The following table presents the amounts reclassified out of each component of accumulated other comprehensive ~~loss for the nine months ended September 30, 2020 and 2019 and for years ended December 31, 2019:~~loss:


	Amounts Reclassified From AOCI⁽²⁾
	For Three Months				For Nine Months
	Ended September 30,				Ended September 30,				Affected Line Item in the	Three months ended March 31,				Affected Line Item in the
(In thousands)	2020		2019		2020		2019		Statement of Income	2023		2022		Statement of Income

	(unaudited)				(unaudited)
Available-for-sale securities:
Realized gain on sale of securities	$	(480)	$	(237)	$	(480)	$	(264)	Net gain on sale of securities
Tax effect		101		50		101		55	Expense for income taxes
	$	(379)	$	(187)	$	(379)	$	(209)	Net income
Defined benefit pension plan:
Retirement plan net losses recognized in net periodic pension cost	$	33	$	47	$	100	$	143	Compensation and benefits	$	40	$	—	Compensation and benefits
Tax effect		(7)		(10)		(21)		(31)	Benefit for income taxes		(8)		—	Income tax (benefit) expense
	$	26	$	37	$	79	$	112	Net income	$	32	$	—	Net (loss) income

⁽²⁾ ~~Amounts in parentheses indicate debits in net income.~~Table of Contents

Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

3. Earnings Per Common Share
Basic earnings per common share is calculated by dividing net income by the weighted-average number of common shares outstanding during the period. ~~The~~Diluted earnings per share is calculated in a manner similar to that of basic earnings per share except that the weighted-average number of common shares outstanding is increased to include the number of incremental common shares that would have been outstanding under the treasury stock method if all potentially dilutive common shares (such as stock options) issued became vested during the period. Based on the calculation, there was ~~2,456,000,for~~no impact on earnings per share as the ~~nine months ended September 30, 2020 and 2019 and 2,458,000 and 2,456,000~~stock options were considered anti-dilutive for the three months ended ~~September 30, 2020 and for 2019. The Company has not granted any~~March 31, 2023. On March 28, 2022, the Board of Directors authorized a stock repurchase program to repurchase approximately 83,300 shares, or approximately 3.4%, of the Company’s outstanding common stock. On May 19, 2022, the 2022 Equity Incentive Plan (the “Plan”) which includes initial grants of restricted stock ~~awards or~~and stock options to outside directors, was approved by the Company’s stockholders. On June 14, 2022, the Board of Directors of the Company approved restricted stock and stock option grants to senior management. An aggregate of 132,977 stock options and ~~had no potentially dilutive~~53,191 shares of restricted stock were granted to directors and senior management during the period ended June 30, 2022. The grants to directors and senior management vest over a five-year period in equal annual installments, with the first installment vesting on the first anniversary date of the grant and succeeding installments on each anniversary thereafter, through 2027. On July 25, 2022, the Board of Directors authorized a second stock repurchase program to acquire up to 87,000 shares, or approximately 3.6%, of the Company’s outstanding common stock ~~equivalents.~~at the conclusion of the first stock repurchase program. Unallocated common shares held by the ESOP are not included in the weighted-average number of common shares outstanding for purposes of calculating basic earnings per common share until they are committed to be released.
~~On May 20, 2008,~~The following table sets forth the ~~Board~~calculation of Directors of the Company authorized a stock repurchase program pursuant to which the Company was authorized to repurchase up to 5% of its outstanding shares (excluding shares held by Seneca Falls Savings Bank, MHC, the Company’s mutual holding company), or up to 119,025 shares. The timing of the repurchases will depend on certain factors, including but not limited to, market conditionsbasic and prices, the Company’s liquidity requirements and alternative uses of capital. Repurchased shares are held as treasury stock and are available for general corporate purposes. The Company conducts such repurchases in accordance with a Rule 10b5 1 trading plan.diluted earnings per share.

Three Months Ended March 31,
(In thousands, except per share data)

2023

2022
Net (loss) income available to common stockholders

$
(152)

$
396
Weighted-average common shares outstanding

2,240

2,351
(Losses) Earnings per common share - basic and diluted

$
(0.07)

$
0.17

911

Table of Contents

~~Seneca-Cayuga~~Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

4.Securities
Investments in securities available-for-sale, held-to-maturity, and equity ~~at September 30, 2020 and December 31, 2019~~ are summarized as follows:

September 30, 2020 (unaudited)

At March 31, 2023

Gross

Gross

Gross

Gross

Amortized

Unrealized

Unrealized

Fair

Amortized

Unrealized

Unrealized

Fair
(in thousands)

Cost

Gains

Losses

Value

Cost

Gains

Losses

Value
Securities available-for-sale:

Residential mortgage-backed - US agency and GSEs

$
41

$
2

$
(1)

$
42
Residential mortgage-backed - US agency and Government Sponsored Enterprise ("GSE")

$
24

$
—

$
(1)

$
23
Corporate bonds

20,789

21

(2,931)

17,879
State and political subdivisions

21,735

1,355

—

23,090

16,922

4

(1,620)

15,306
Total securities available-for-sale

$
21,776

$
1,357

$
(1)

$
23,132

$
37,735

$
25

$
(4,552)

$
33,208

Securities held-to-maturity:
















Structured certificates of deposit

$
650

$
—

$
(215)

$
435
Residential mortgage-backed - US agency and GSEs

$
1,616

$
41

$
(4)

$
1,653

902

1

(29)

874
Total securities held-to-maturity

$
1,616

$
41

$
(4)

$
1,653

$
1,552

$
1

$
(244)

$
1,309

Equity securities:
















Large cap equity mutual fund

$
33





$
33

$
40





$
40
Other mutual funds

561





561

275





275
Total of equity securities

$
594





$
594

$
315





$
315

December 31, 2019



Gross

Gross



Amortized

Unrealized

Unrealized

Fair
(in thousands)


Cost


Gains


Losses


Value
Securities available-for-sale:








Residential mortgage-backed - US agency and GSEs

$
48

$
2

$
—

$
50
State and political subdivisions

29,746

903

(72)

30,577
Total securities available-for-sale

$
29,794

$
905

$
(72)

$
30,627

Securities held-to-maturity:








Residential mortgage-backed - US agency and GSEs

2,078

36

(4)

2,110
Total securities held-to-maturity

$
2,078

$
36

$
(4)

$
2,110

Equity securities:








Large cap equity mutual fund

$
31





$
31
Other mutual funds

2,548





2,548
Total of equity securities

$
2,579





$
2,579

1012

Table of Contents

~~Seneca-Cayuga~~Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

At December 31, 2022



Gross

Gross



Amortized

Unrealized

Unrealized

Fair
(in thousands)

Cost

Gains

Losses

Value
Securities available-for-sale:








Residential mortgage-backed - US agency and GSEs

$
25

$
—

$
(1)

$
24
Corporate bonds

21,032

58

(2,896)

18,194
State and political subdivisions

16,935

2

(2,105)

14,832
Total securities available-for-sale

$
37,992

$
60

$
(5,002)

$
33,050

Securities held-to-maturity:








Structured certificates of deposit

$
650

$
—

$
(252)

$
398
Residential mortgage-backed - US agency and GSEs

937

1

(35)

903
Total securities held-to-maturity

$
1,587

$
1

$
(287)

$
1,301

Equity securities:








Large cap equity mutual fund

$
37





$
37
Other mutual funds

270





270
Total of equity securities

$
307





$
307

Gross unrealized losses on investment securities and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, is as follows:

At March 31, 2023

12 Months or Less

More than 12 Months

Total

Gross

Gross

Gross

Fair

Unrealized

Fair

Unrealized

Fair

Unrealized
(in thousands)

Value

Losses

Value

Losses

Value

Losses
Securities available-for-sale:












Residential mortgage-backed - US agency and GSEs

$
—

$
—

$
18

$
(1)

$
18

$
(1)
Corporate bonds

5,778

(278)

11,041

(2,653)

16,819

(2,931)
State and political subdivisions

8,640

(725)

5,794

(895)

14,434

(1,620)
Total securities available-for-sale

$
14,418

$
(1,003)

$
16,853

$
(3,549)

$
31,271

$
(4,552)
Securities held-to-maturity:












Structured certificates of deposit

$
435

$
(215)

$
—

$
—

$
435

$
(215)
Residential mortgage-backed - US agency and GSEs

607

(21)

196

(8)

803

(29)
Total securities held-to-maturity

$
1,042

$
(236)

$
196

$
(8)

$
1,238

$
(244)

September 30, 2020 (unaudited)

12 Months or Less

More than 12 Months

Total

Gross

Gross

Gross

Fair

Unrealized

Fair

Unrealized

Fair

Unrealized
(in thousands)

Value

Losses

Value

Losses

Value

Losses
Securities available-for-sale:












Residential mortgage-backed - US agency and GSEs

$
25

$
(1)

$
—

$
—

$
25

$
(1)
Total securities available-for-sale

$
25

$
(1)

$
—

$
—

$
25

$
(1)
Securities held-to-maturity:












Residential mortgage-backed - US agency and GSEs

$
165

$
(2)

$
99

$
(2)

$
264

$
(4)
Total securities held-to-maturity

$
165

$
(2)

$
99

$
(2)

$
264

$
(4)
13

Table of Contents

Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

At December 31, 2022

12 Months or Less

More than 12 Months

Total

Gross

Gross

Gross

Fair

Unrealized

Fair

Unrealized

Fair

Unrealized
(in thousands)

Value

Losses

Value

Losses

Value

Losses
Securities available-for-sale:


















Residential mortgage-backed - US agency and GSEs

$
—

$
—

$
19

$
(1)

$
19

$
(1)
Corporate bonds

7,028

(725)

8,105

(2,171)

15,133

(2,896)
State and political subdivisions

10,330

(1,421)

4,133

(684)

14,463

(2,105)
Total securities available-for-sale

$
17,358

$
(2,146)

$
12,257

$
(2,856)

$
29,615

$
(5,002)
Securities held-to-maturity:












Structured certificates of deposit

$
—

$
—

$
398

$
(252)

$
398

$
(252)
Residential mortgage-backed - US agency and GSEs

691

(26)

206

(9)

897

(35)
Total securities held-to-maturity

$
691

$
(26)

$
604

$
(261)

$
1,295

$
(287)

December 31, 2019

12 Months or Less

More than 12 Months

Total

Gross

Gross

Gross

Fair

Unrealized

Fair

Unrealized

Fair

Unrealized
(in thousands)

Value

Losses

Value

Losses

Value

Losses
Securities available-for-sale:


















Residential mortgage-backed - US agency and GSEs*

$
—

$
—

$
4

$
—

$
4

$
—
State and political subdivisions

8,779

(72)

—

—

8,779

(72)
Total securities available-for-sale

$
8,779

$
(72)

$
4

$
—

$
8,783

$
(72)
Securities held-to-maturity:












Residential mortgage-backed - US agency and GSEs

$
68

$
(1)

$
217

$
(3)

$
285

$
(4)
Total securities held-to-maturity

$
68

$
(1)

$
217

$
(3)

$
285

$
(4)
* Gross unrealized losses are less than $1,000.













The Company conducts a formal review of investment securities on a quarterly basis for the presence of ~~other-than-temporary impairment (“OTTI”).~~credit-related and non-credit-related losses. Management assesses whether ~~OTTI~~a loss is present when the fair value of a debt security is less than its amortized cost basis at the statement of financial condition date. ~~Under these circumstances, OTTI is considered to~~Unrealized losses on corporate bonds have ~~occurred (1) if we~~not been recognized into income because the issuer(s) bonds are of high credit quality (rated AA or higher), management does not intend to sell ~~the security; (2) if~~and it is ~~“more~~ likely ~~than not” we~~that management will not be required to sell the ~~security before~~securities prior to their anticipated recovery, ~~of its amortized cost basis; or (3)~~and the ~~present~~decline in fair value ofis largely due to changes in interest rates and other market conditions. The issuer(s) continue to make timely principal and interest payments on the bonds. The fair value is expected ~~cash flows is not sufficient~~ to recover the entire amortized cost basis. Credit-related OTTI is recognized in earnings while non-credit-related OTTI on securities not expected to be sold is recognized in other comprehensive income. Non-credit-related OTTI is based on other factors, including illiquidity. Presentation of OTTI is made in the consolidated statement of operations on a gross basis, including both the portion recognized in earnings as well as the portion recorded in other comprehensive income. Normally, the gross OTTI would then be offset by the amount of non-credit-related OTTI, showing the net as the impact on earnings. All OTTI charges have been credit-related to date, and therefore no offset has been presented on the consolidated statements of income.bond(s) approach maturity.
~~Twelve~~Seventeen government agency and government sponsored enterprise ~~(GSE)~~(“GSE”) residential mortgage-backed security holdings have an unrealized loss as of ~~September 30, 2020.~~March 31, 2023. The securities were issued by the Federal National Mortgage Association ~~(FNMA)~~(“FNMA”), Federal Home Loan Mortgage Corporation ~~(FHLMC)~~(“FHLMC”), and the Government

~~Table of Contents~~

~~Seneca-Cayuga Bancorp, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Unaudited)~~

National Mortgage Association ~~(GNMA)~~(“GNMA”). ~~All of the nine~~The government-backed securities that have unrealized losses are immaterial, with each of these securities having value deficiencies of ~~$1,200~~$2,900 or less. ~~None~~

There are 107 bond issues held by the Company that have an unrealized loss as of March 31, 2023. The bonds are issued by well-established municipalities and corporate entities with semi-annual interest payments. All interest payments have historically been made timely. The value of the bonds held is closely correlated with long-term interest rates, and as interest rates increase, the bond values decrease. Within this portfolio are seven bonds issued by corporate entities that have an aggregate loss of $2.1 million. These bonds have variable rates and reprice based upon the spread between intermediate Treasury bond yields and long-term Treasury bond yields and will respond positively with the steepening of the Treasury yield curve. We anticipate full recovery of our investment over time and have no plans to sell the securities ~~demonstrate a steadily increasing loss ratio and~~in the near term.

Market values of the securities fluctuate in reaction to the uncertainty of the economy. Principal and interest continue to be received on all securities as anticipated. The Company has the ability and intent to hold the securities through maturity or recovery of its amortized cost basis. With the government guarantees in place, management does not expect losses on these securities. No ~~OTTI is~~credit-related or non-credit-related losses are deemed present on these securities.

The Company monitors the credit quality of the debt securities held-to-maturity on a quarterly basis. At March 31, 2023 the amortized cost of debt securities held-to-maturity totaled $1.6 million. Structured certificates of deposit totaled $650,000 and are fully insured by the Federal Deposit Insurance Corporation as no one security exceeds the

Table of Contents

Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

$250,000 insurance limit. Residential mortgage-backed securities totaled $902,000 and are backed by the full faith of the U.S. government. As a result, no credit-related or non-credit related losses are deemed present on these securities.
The following is a summary of the amortized cost and estimated fair values of debt securities at ~~September 30, 2020,~~March 31, 2023, by remaining term to contractual maturity other than mortgage-backed securities. Actual maturities may differ from these amounts because certain issuers have the right to call or redeem their obligations prior to contractual maturity. The contractual maturities of mortgage-backed securities generally exceed 20 years; however, the effective average life is expected to be substantially shorter due to anticipated repayments and prepayments.

September 30, 2020 (unaudited)

At March 31, 2023

Securities

Securities

Securities

Securities

Available-for-Sale

Held-to-Maturity

Available-for-Sale

Held-to-Maturity

Amortized

Estimated

Amortized

Estimated

Amortized

Estimated

Amortized

Estimated
(in thousands)

Cost

Fair Value

Cost

Fair Value

Cost

Fair Value

Cost

Fair Value
Due in one year or less

$
974

$
974

$
—

$
—

$
1,265

$
1,261

$
—

$
—
Due over one year through five years

534

560

—

—

3,149

3,043

—

—
Due over five through ten years

4,629

4,934

—

—

4,339

3,721

—

—
Due after ten years

15,598

16,622

—

—

28,958

25,160

—

—

21,735

23,090

—

—

37,711

33,185

—

—
Structured certificates of deposit

—

—

650

435
Residential mortgage-backed securities

41

42

1,616

1,653

24

23

902

874
Total

$
21,776

$
23,132

$
1,616

$
1,653

$
37,735

$
33,208

$
1,552

$
1,309

~~Gross~~There were no gross realized gains ~~(losses)~~or losses on sales and redemptions of ~~available-for sale~~available-for-sale securities ~~are detailed below:~~

Three Months Ended

Nine Months Ended

September 30,

September 30,
(In thousands)

2020

2019

2020

2019

(unaudited)

(unaudited)

(unaudited)

(unaudited)
Realized gains

$
480

$
264

$
480

$
264
Realized losses

—

—

—

—

$
480

$
264

$
480

$
264

for the three months ended March 31, 2023 and 2022. Gains and losses on the sales of securities are recognized in income when sold, using the specific identification method, on a trade date basis.

Securities with a fair value of ~~$22,243,000~~$11,291,000 and ~~$21,773,000~~$10,045,000 were pledged to collateralize certain deposit arrangements at ~~September 30, 2020~~March 31, 2023 and December 31, ~~2019~~2022 respectively.

1215

Table of Contents

~~Seneca-Cayuga~~Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

5.Loans Receivable
Major classifications of loans ~~at September 30, 2020 and December 31, 2019~~ are as follows:

September 30,

December 31,

At March 31,

At December 31,
(In thousands)

2020

2019


2023

2022

(unaudited)

Originated Loans





Originated Loans:




Residential mortgages:








One- to four-family

$
115,845

$
120,208

$
135,392

$
129,448
Construction

—

828

209

387

115,845

121,036

135,601

129,835
Commercial loans:








Real estate - nonresidential

25,334

33,581

14,830

15,262
Multi-family

5,158

5,585

849

854
Construction

92

100

Commercial business

27,014

14,028

11,471

11,594

57,598

53,294

27,150

27,710
Consumer:








Home equity and junior liens

10,066

10,170

10,781

11,027
Manufactured homes

38,072

23,769

51,826

50,989
Automobile

22,004

21,083

24,557

24,339
Student

2,267

2,251

1,740

1,803
Recreational vehicle

13,547

263

25,955

26,909
Other consumer

4,073

1,724

7,432

7,125

90,029

59,260

122,291

122,192
Total originated loans

263,472

233,590

285,042

279,737
Net deferred loan costs

10,585

4,986

15,994

16,274
Less allowance for loan losses

(2,116)

(1,660)

(2,653)

(2,497)
Net originated loans

$
271,941

$
236,916

$
298,383

$
293,514

1316

Table of Contents

~~Seneca-Cayuga~~Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

September 30,

December 31,

(In thousands)

2020

2019


(unaudited)

Acquired Loans





Residential mortgages:





One- to four-family

$
15,225

$
18,506

Construction

—

—

15,225

18,506

Commercial loans:





Real estate - nonresidential

1,979

2,115

Commercial business

372

404

2,351

2,519

Consumer:





Home equity and junior liens

1,461

1,833

Other consumer

211

361

1,672

2,194

Total acquired loans

19,248

23,219

Net deferred loan costs

(69)

(91)

Fair value credit and yield adjustment

(373)

(424)

Net acquired loans

$
18,806

$
22,704

At March 31,

At December 31,
(In thousands)

2023

2022

Acquired Loans:





Residential mortgages:




One- to four-family

$
8,303

$
8,553

8,303

8,553
Commercial loans:




Real estate - nonresidential

1,390

1,419
Commercial business

68

83

1,458

1,502
Consumer:




Home equity and junior liens

438

535
Other consumer

42

47

480

582
Total acquired loans

10,241

10,637
Net deferred loan costs

(52)

(53)
Fair value credit and yield adjustment

(201)

(218)
Net acquired loans

$
9,988

$
10,366

September 30,

December 31,

At March 31,

At December 31,
(In thousands)

2020

2019


2023

2022

(unaudited)

Total Loans



Total Loans:



Residential mortgages:









One- to four-family

$
131,070

$
138,714

$
143,695

$
138,001
Construction

—

828

209

387

131,070

139,542

143,904

138,388
Commercial loans:








Real estate - nonresidential

27,313

35,696

16,220

16,681
Multi-family

5,158

5,585

849

854
Construction

92

100

Commercial business

27,386

14,432

11,539

11,677

59,949

55,813

28,608

29,212
Consumer:








Home equity and junior liens

11,527

12,003

11,219

11,562
Manufactured homes

38,072

23,769

51,826

50,989
Automobile

22,004

21,083

24,557

24,339
Student

2,267

2,251

1,740

1,803
Recreational vehicle

13,547

263

25,955

26,909
Other consumer

4,284

2,085

7,474

7,172

91,701

61,454

122,771

122,774
Total Loans

282,720

256,809

295,283

290,374
Net deferred loan costs

10,516

4,895

15,942

16,221
Fair value credit and yield adjustment

(373)

(424)

(201)

(218)
Less allowance for loan losses

(2,116)

(1,660)

(2,653)

(2,497)
Loans receivable, net

$
290,747

$
259,620

$
308,371

$
303,880

1417

Table of Contents

~~Seneca-Cayuga~~Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The Company ~~grants~~originates residential mortgage, commercial, and consumer loans to customers, ~~throughout~~principally located in the Finger Lakes ~~region~~Region of New York State ~~which includes parts of Cayuga, Seneca, Wayne, Yates~~ and ~~Ontario counties as well as~~extending north to Orleans ~~County as a result of the 2018 merger.~~County. Although the Company has a diversified loan portfolio, a substantial portion of its debtors’ abilities to honor their contracts is dependent upon the counties’ employment and economic conditions. To further diversify the loan portfolio, the Company also purchases loans that have been originated outside of the region. High quality automobile loans, originated in the Northeastern United States, are purchased regularly from ~~BCI Financial Corporation,~~ a Connecticut ~~Company.~~based company. In 2019, the Company also began to purchase modular home loans originated throughout the United States, ~~from Triad Financial Services, Inc., who~~the seller of which then services the loans for the Company. In 2020, the Company began to purchase automobile and recreational vehicle loans originated in New York ~~State~~State. In 2022, the Company began to purchase one- to four-family, owner-occupied residential real estate loans from ~~OneSource Financial.~~a third-party originator. These loans are serviced by the Company and primarily located in Cayuga, Ontario, Orleans, and Seneca counties.

Loan Origination / Risk Management

The Company has lending policies and procedures in place that are designed to maximize loan income within an acceptable level of risk. Management reviews and approves these policies and procedures on a regular basis. A reporting system supplements the review process by frequently providing management with reports related to loan production, loan quality, loan delinquencies, non-performing, and potential problem loans. Diversification in the loan portfolio is a means of managing risk associated with fluctuations in economic conditions.

The loan portfolio is segregated into risk rating categories based on the borrower’s overall financial condition, repayment sources, guarantors, and value of collateral, if appropriate. The risk ratings are evaluated at least annually for commercial ~~loans unless~~loans. Risk ratings are also reviewed when credit deficiencies arise, such as delinquent loan payments, for commercial, residential mortgage, or consumer loans. Credit quality risk ratings include regulatory classifications of special mention, substandard, doubtful, and loss. Loans classified as loss are considered uncollectible and are charged to the allowance for loan loss. Loans not classified are rated as pass.

1518

Table of Contents

~~Seneca-Cayuga~~Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The following table presents the classes of the loan portfolio summarized by the ~~pass rating and the classified ratings of special mention, substandard and doubtful within the Company’s internal risk rating system as of September 30, 2020 and December 31 2019:~~credit quality indicator:

September 30, 2020 (unaudited)

At March 31, 2023

Special

Special

(In thousands)

Pass

Mention

Substandard

Doubtful

Total

Pass

Mention

Substandard

Doubtful

Total
Originated Loans










Originated Loans:










Residential mortgages:




















One- to four-family

$
111,445

$
1,793

$
2,607

$
—

$
115,845

$
132,450

$
1,364

$
1,578

$
—

$
135,392
Construction

—

—

—

—

—

209

—

—

—

209

111,445

1,793

2,607

—

115,845

132,659

1,364

1,578

—

135,601
Commercial loans:


















Real estate - nonresidential

20,289

1,708

3,337

—

25,334

12,458

1,677

695

—

14,830
Multi-family

5,158

—

—

—

5,158

849

—

—

—

849
Construction

92

—

—

—

92
Commercial business

24,213

476

2,325

—

27,014

8,355

2,465

651

—

11,471

49,752

2,184

5,662

—

57,598

21,662

4,142

1,346

—

27,150
Consumer:




















Home equity and junior liens

10,007

20

39

—

10,066

10,669

18

94

—

10,781
Manufactured homes

37,646

240

186

—

38,072

51,433

25

368

—

51,826
Automobile

21,933

28

43

—

22,004

24,468

50

39

—

24,557
Student

2,267

—

—

—

2,267

1,681

—

59

—

1,740
Recreational vehicle

13,547

—

—

—

13,547

25,613

67

275

—

25,955
Other consumer

4,029

15

29

—

4,073

7,352

53

27

—

7,432

89,429

303

297

—

90,029

121,216

213

862

—

122,291
Total originated loans

$
250,626

$
4,280

$
8,566

$
—

$
263,472

$
275,537

$
5,719

$
3,786

$
—

$
285,042



Special







(In thousands)

Pass

Mention

Substandard

Doubtful

Total
Acquired Loans










Residential mortgages:










One- to four-family

$
14,460

$
532

$
233

$
—

$
15,225

14,460

532

233

—

15,225
Commercial loans:










Real estate - nonresidential

1,979

—

—

—

1,979
Commercial business

372

—

—

—

372

2,351

—

—

—

2,351
Consumer:










Home equity and junior liens

1,417

—

44

—

1,461
Other consumer

211

—

—

—

211

1,628

—

44

—

1,672
Total acquired loans

$
18,439

$
532

$
277

$
—

$
19,248

1619

Table of Contents

~~Seneca-Cayuga~~Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

At March 31, 2023

Special

(In thousands)

Pass

Mention

Substandard

Doubtful

Total
Acquired Loans:










Residential mortgages:








One- to four-family

$
8,089

$
89

$
125

$
—

$
8,303

8,089

89

125

—

8,303
Commercial loans:










Real estate - nonresidential

1,390

—

—

—

1,390
Commercial business

68

—

—

—

68

1,458

—

—

—

1,458
Consumer:










Home equity and junior liens

389

14

35

—

438
Other consumer

34

—

8

—

42

423

14

43

—

480
Total acquired loans

$
9,970

$
103

$
168

$
—

$
10,241

At March 31, 2023



Special







Special

(In thousands)

Pass

Mention

Substandard

Doubtful

Total

Pass

Mention

Substandard

Doubtful

Total
Total Loans










Total Loans:










Residential mortgages:




















One- to four-family

$
125,905

$
2,325

$
2,840

$
—

$
131,070

$
140,539

$
1,453

$
1,703

$
—

$
143,695
Construction

—

—

—

—

—

209

—

—

—

209

125,905

2,325

2,840

—

131,070

140,748

1,453

1,703

—

143,904
Commercial loans:




















Real estate - nonresidential

22,268

1,708

3,337

—

27,313

13,848

1,677

695

—

16,220
Multi-family

5,158

—

—

—

5,158

849

—

—

—

849
Construction

92

—

—

—

92
Commercial business

24,585

476

2,325

—

27,386

8,423

2,465

651

—

11,539

52,103

2,184

5,662

—

59,949

23,120

4,142

1,346

—

28,608
Consumer:




















Home equity and junior liens

11,424

20

83

—

11,527

11,058

32

129

—

11,219
Manufactured homes

37,646

240

186

—

38,072

51,433

25

368

—

51,826
Automobile

21,933

28

43

—

22,004

24,468

50

39

—

24,557
Student

2,267

—

—

—

2,267

1,681

—

59

—

1,740
Recreational vehicle

13,547

—

—

—

13,547

25,613

67

275

—

25,955
Other consumer

4,240

15

29

—

4,284

7,386

53

35

—

7,474

91,057

303

341

—

91,701

121,639

227

905

—

122,771
Total loans

$
269,065

$
4,812

$
8,843

$
—

$
282,720

$
285,507

$
5,822

$
3,954

$
—

$
295,283

December 31, 2019

Special

(In thousands)

Pass

Mention

Substandard

Doubtful

Total
Originated Loans










Residential mortgages:










One- to four-family

$
116,414

$
2,159

$
1,635

$
—

$
120,208
Construction

828

—

—

—

828

117,242

2,159

1,635

—

121,036
Commercial loans:










Real estate - nonresidential

29,192

1,479

2,910

—

33,581
Multi-family

5,585

—

—

—

5,585
Construction

100

—

—

—

100
Commercial business

10,222

1,798

2,008

—

14,028

45,099

3,277

4,918

—

53,294
Consumer:










Home equity and junior liens

10,030

96

44

—

10,170
Manufactured homes

23,686

83

—

—

23,769
Automobile

20,975

54

54

—

21,083
Student

2,251

—

—

—

2,251
Recreational vehicle

263

—

—

—

263
Other consumer

1,721

2

1

—

1,724

58,926

235

99

—

59,260
Total originated loans

$
221,267

$
5,671

$
6,652

$
—

$
233,590

1720

Table of Contents

~~Seneca-Cayuga~~Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

At December 31, 2022

Special

(In thousands)

Pass

Mention

Substandard

Doubtful

Total
Originated Loans:










Residential mortgages:










One- to four-family

$
125,949

$
1,066

$
2,433

$
—

$
129,448
Construction

387

—

—

—

387

126,336

1,066

2,433

—

129,835
Commercial loans:








Real estate - nonresidential

12,870

1,691

701

—

15,262
Multi-family

854

—

—

—

854
Commercial business

8,349

2,529

716

—

11,594

22,073

4,220

1,417

—

27,710
Consumer:










Home equity and junior liens

10,891

14

122

—

11,027
Manufactured homes

50,297

324

368

—

50,989
Automobile

24,188

130

21

—

24,339
Student

1,735

—

68

—

1,803
Recreational vehicle

26,445

329

135

—

26,909
Other consumer

7,004

121

—

—

7,125

120,560

918

714

—

122,192
Total originated loans

$
268,969

$
6,204

$
4,564

$
—

$
279,737

At December 31, 2022

Special

(In thousands)

Pass

Mention

Substandard

Doubtful

Total
Acquired Loans:










Residential mortgages:










One- to four-family

$
8,335

$
45

$
173

$
—

$
8,553

8,335

45

173

—

8,553
Commercial loans:










Real estate - nonresidential

1,419

—

—

—

1,419
Commercial business

83

—

—

—

83

1,502

—

—

—

1,502
Consumer:










Home equity and junior liens

485

—

50

—

535
Other consumer

47

—

—

—

47

532

—

50

—

582
Total acquired loans

$
10,369

$
45

$
223

$
—

$
10,637

Special







(In thousands)

Pass

Mention

Substandard

Doubtful

Total
Acquired Loans










Residential mortgages:










One- to four-family

$
17,387

$
805

$
314

$
—

$
18,506

17,387

805

314

—

18,506
Commercial loans:










Real estate - nonresidential

2,115

—

—

—

2,115
Commercial business

404

—

—

—

404

2,519

—

—

—

2,519
Consumer:










Home equity and junior liens

1,746

—

87

—

��
1,833
Other consumer

361

—

—

—

361

2,107

—

87

—

2,194
Total acquired loans

$
22,013

$
805

$
401

$
—

$
23,219
21

Table of Contents

Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

At December 31, 2022

Special

(In thousands)

Pass

Mention

Substandard

Doubtful

Total
Total Loans:










Residential mortgages:










One- to four-family

$
134,284

$
1,111

$
2,606

$
—

$
138,001
Construction

387

—

—

—

387

134,671

1,111

2,606

—

138,388
Commercial loans:










Real estate - nonresidential

14,289

1,691

701

—

16,681
Multi-family

854

—

—

—

854
Commercial business

8,432

2,529

716

—

11,677

23,575

4,220

1,417

—

29,212
Consumer:










Home equity and junior liens

11,376

14

172

—

11,562
Manufactured homes

50,297

324

368

—

50,989
Automobile

24,188

130

21

—

24,339
Student

1,735

—

68

—

1,803
Recreational vehicle

26,445

329

135

—

26,909
Other consumer

7,051

121

—

—

7,172

121,092

918

764

—

122,774
Total loans

$
279,338

$
6,249

$
4,787

$
—

$
290,374



Special







(In thousands)

Pass

Mention

Substandard

Doubtful

Total
Total Loans










Residential mortgages:










One- to four-family

$
133,801

$
2,964

$
1,949

$
—

$
138,714
Construction

828

—

—

—

828

134,629

2,964

1,949

—

139,542
Commercial loans:










Real estate - nonresidential

31,307

1,479

2,910

—

35,696
Multi-family

5,585

—

—

—

5,585
Construction

100

—

—

—

100
Commercial business

10,626

1,798

2,008

—

14,432

47,618

3,277

4,918

—

55,813
Consumer:










Home equity and junior liens

11,776

96

131

—

12,003
Manufactured homes

23,686

83

—

—

23,769
Automobile

20,975

54

54

—

21,083
Student

2,251

—

—

—

2,251
Recreational vehicle

263

—

—

—

263
Other consumer

2,082

2

1

—

2,085

61,033

235

186

—

61,454
Total loans

$
243,280

$
6,476

$
7,053

$
—

$
256,809

Management has reviewed its loan portfolio and determined that, to the best of its knowledge, little or no exposure exists to sub-prime or other high-risk residential mortgages. The Company is not in the practice of originating these types of loans.
The Company did originate a small portfolio of sub-prime automobile loans in 2014. Upon assessment of the higher risk in this portfolio, the lending product was discontinued. It is anticipated to pay down quickly over a short-term. The allowance for loan losses was increased to cover the exposure inherent in the sub-prime automobile portfolio. The total outstanding balance of this discontinued sub-prime portfolio was $22,000 and $181,000 at September 30, 2020 and December 31, 2019, respectively. Of the amount outstanding, $18,000 and $125,000 of these loans were current and paying as agreed at September 30, 2020, and December 31, 2019, respectively.

~~Table of Contents~~

~~Seneca-Cayuga Bancorp, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Unaudited)~~

Non-accrual and Past Due Loans

Loans are considered past due if the required principal and interest payments have not been received within thirty days of the payment due date.

For all classes of loans receivable, the accrual of interest is discontinued when the contractual payment of principal or interest has become 90 days past due or management has serious doubts about further collectability of principal or interest, even though the loan may be currently performing. A loan may remain on accrual status if it is in the process of collection and is either guaranteed or well secured. When a loan is placed on non-accrual status, unpaid interest is reversed and charged to interest income. Interest received on non-accrual loans, including impaired loans, generally is either applied against principal or reported as interest income, according to management’s ~~judgement~~judgment as to the collectability of principal. Generally, loans are restored to accrual status when the obligation is brought current, has performed in accordance with the contractual terms for a reasonable period of time, and the ultimate collectability of the total contractual principal and interest is no longer in doubt. Non-accrual troubled debt restructurings are restored to accrual status if principal and interest payments, under the modified terms, are current for six consecutive months after modification.

When future collectability of the recorded loan balance is expected, interest income may be recognized on a cash basis. In the case where a non-accrual loan had been partially charged off, recognition of interest on a cash basis is limited to that which would have been recognized on the recorded loan balance at the contractual interest rate. Cash interest receipts in excess of that amount are recorded as recoveries to allowance for loan losses until prior charge-offs have been fully recovered.

Table of Contents

Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

An age analysis of past due loans, segregated by class of loans, as ~~of September 30, 2020 and December 31, 2019~~ are as follows:

September 30, 2020 (unaudited)

At March 31, 2023

90 Days

90 Days

30-59 Days

60-89 Days

or More

Total

Total Loans

Total Loans

30-59 Days

60-89 Days

or More

Total

Total Loans

Total Loans
(In thousands)

Past Due

Past Due

Past Due

Past Due

Current

Receivable

Past Due

Past Due

Past Due

Past Due

Current

Receivable
Originated Loans












Originated Loans:












Residential mortgage loans:
























One- to four-family

$
2,359

$
1,083

$
2,307

$
5,749

$
110,096

$
115,845

$
3,062

$
—

$
1,578

$
4,640

$
130,752

$
135,392
Construction

—

—

—

—

—

—

—

—

—

—

209

209

2,359

1,083

2,307

5,749

110,096

115,845

3,062

—

1,578

4,640

130,961

135,601
Commercial loans:
























Real estate - nonresidential

561

114

912

1,587

23,747

25,334

428

—

412

840

13,990

14,830
Multi-family

—

42

—

42

5,116

5,158

391

—

—

391

458

849
Construction

—

—

—

—

92

92
Commercial business

428

208

157

793

26,221

27,014

536

—

116

652

10,819

11,471

989

364

1,069

2,422

55,176

57,598

1,355

—

528

1,883

25,267

27,150
Consumer loans:
























Home equity and junior liens

64

31

39

134

9,932

10,066

182

—

94

276

10,505

10,781
Manufactured homes

495

120

186

801

37,271

38,072

819

25

368

1,212

50,614

51,826
Automobile

147

50

43

240

21,764

22,004

368

50

40

458

24,099

24,557
Student

—

—

—

—

2,267

2,267

—

—

59

59

1,681

1,740
Recreational vehicle

—

—

29

29

13,518

13,547

537

67

275

879

25,076

25,955
Other consumer

26

15

—

41

4,032

4,073

94

53

27

174

7,258

7,432

732

216

297

1,245

88,784

90,029

2,000

195

863

3,058

119,233

122,291
Total originated loans

$
4,080

$
1,663

$
3,673

$
9,416

$
254,056

$
263,472

$
6,417

$
195

$
2,969

$
9,581

$
275,461

$
285,042

1923

Table of Contents

~~Seneca-Cayuga~~Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

90 Days

��

30-59 Days

60-89 Days

or More

Total

Total Loans

Total Loans
(In thousands)

Past Due

Past Due

Past Due

Past Due

Current

Receivable
Acquired Loans












Residential mortgage loans:












One- to four-family

$
275

$
133

$
233

$
641

$
14,584

$
15,225
Construction

—

—

—

—

—

—

275

133

233

641

14,584

15,225
Commercial loans:












Real estate - nonresidential

—

—

—

—

1,979

1,979
Commercial business

—

—

—

—

372

372

—

—

—

—

2,351

2,351
Consumer loans:












Home equity and junior liens

—

—

44

44

1,417

1,461
Other consumer

2

—

—

2

209

211

2

—

44

46

1,626

1,672
Total acquired loans

$
277

$
133

$
277

$
687

$
18,561

$
19,248

At March 31, 2023

90 Days

30-59 Days

60-89 Days

or More

Total

Total Loans

Total Loans
(In thousands)

Past Due

Past Due

Past Due

Past Due

Current

Receivable
Acquired Loans:












Residential mortgage loans:










One- to four-family

$
158

$
—

$
125

$
283

$
8,020

$
8,303

158

—

125

283

8,020

8,303
Commercial loans:












Real estate - nonresidential

—

—

—

—

1,390

1,390
Commercial business

—

—

—

—

68

68

—

—

—

—

1,458

1,458
Consumer loans:












Home equity and junior liens

—

—

35

35

403

438
Other consumer

—

—

8

8

34

42

—

—

43

43

437

480
Total acquired loans

$
158

$
—

$
168

$
326

$
9,915

$
10,241

At March 31, 2023

90 Days

90 Days

30-59 Days

60-89 Days

or More

Total

Total Loans

Total Loans

30-59 Days

60-89 Days

or More

Total

Total Loans

Total Loans
(In thousands)

Past Due

Past Due

Past Due

Past Due

Current

Receivable

Past Due

Past Due

Past Due

Past Due

Current

Receivable
Total Loans












Total Loans:












Residential mortgage loans:
























One- to four-family

$
2,634

$
1,216

$
2,540

$
6,390

$
124,680

$
131,070

$
3,220

$
—

$
1,703

$
4,923

$
138,772

$
143,695
Construction

—

—

—

—

—

—

—

—

—

—

209

209

2,634

1,216

2,540

6,390

124,680

131,070

3,220

—

1,703

4,923

138,981

143,904
Commercial loans:
























Real estate - nonresidential

561

114

912

1,587

25,726

27,313

428

—

412

840

15,380

16,220
Multi-family

—

42

—

42

5,116

5,158

391

—

—

391

458

849
Construction

—

—

—

—

92

92
Commercial business

428

208

157

793

26,593

27,386

536

—

116

652

10,887

11,539

989

364

1,069

2,422

57,527

59,949

1,355

—

528

1,883

26,725

28,608
Consumer loans:
























Home equity and junior liens

64

31

83

178

11,349

11,527

182

—

129

311

10,908

11,219
Manufactured homes

495

120

186

801

37,271

38,072

819

25

368

1,212

50,614

51,826
Automobile

147

50

43

240

21,764

22,004

368

50

40

458

24,099

24,557
Student

—

—

—

—

2,267

2,267

—

—

59

59

1,681

1,740
Recreational vehicle

181

21

—

202

13,345

13,547

537

67

275

879

25,076

25,955
Other consumer

28

15

29

72

4,212

4,284

94

53

35

182

7,292

7,474

915

237

341

1,493

90,208

91,701

2,000

195

906

3,101

119,670

122,771
Total loans

$
4,538

$
1,817

$
3,950

$
10,305

$
272,415

$
282,720

$
6,575

$
195

$
3,137

$
9,907

$
285,376

$
295,283

2024

Table of Contents

~~Seneca-Cayuga~~Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

December 31, 2019

90 Days

30-59 Days

60-89 Days

or More

Total

Total Loans

Total Loans
(In thousands)

Past Due

Past Due

Past Due

Past Due

Current

Receivable
Originated Loans


















Residential mortgage loans:












One- to four-family

$
2,963

$
1,656

$
1,945

$
6,564

$
113,644

$
120,208
Construction

—

—

—

—

828

828

2,963

1,656

1,945

6,564

114,472

121,036
Commercial loans:












Real estate - nonresidential

350

1,388

912

2,650

30,931

33,581
Multi-family

—

—

—

—

5,585

5,585
Construction

—

—

—

—

100

100
Commercial business

540

24

73

637

13,391

14,028

890

1,412

985

3,287

50,007

53,294
Consumer loans:












Home equity and junior liens

80

71

67

218

9,952

10,170
Manufactured homes

179

83

—

262

23,507

23,769
Automobile

207

54

54

315

20,768

21,083
Student

35

—

—

35

2,216

2,251
Recreational vehicle

—

—

—

—

263

263
Other consumer

57

2

—

59

1,665

1,724

558

210

121

889

58,371

59,260
Total originated loans

$
4,411

$
3,278

$
3,051

$
10,740

$
222,850

$
233,590

At December 31, 2022

90 Days

30-59 Days

60-89 Days

or More

Total

Total Loans

Total Loans
(In thousands)

Past Due

Past Due

Past Due

Past Due

Current

Receivable
Originated Loans:


















Residential mortgage loans:












One- to four-family

$
2,967

$
1,158

$
2,432

$
6,557

$
122,891

$
129,448
Construction

—

—

—

—

387

387

2,967

1,158

2,432

6,557

123,278

129,835
Commercial loans:












Real estate - nonresidential

254

—

416

670

14,592

15,262
Multi-family

—

—

—

—

854

854
Commercial business

129

—

158

287

11,307

11,594

383

—

574

957

26,753

27,710
Consumer loans:












Home equity and junior liens

193

85

122

400

10,627

11,027
Manufactured homes

696

324

368

1,388

49,601

50,989
Automobile

402

130

21

553

23,786

24,339
Student

—

—

68

68

1,735

1,803
Recreational vehicle

1,005

329

135

1,469

25,440

26,909
Other consumer

95

122

—

217

6,908

7,125

2,391

990

714

4,095

118,097

122,192
Total originated loans

$
5,741

$
2,148

$
3,720

$
11,609

$
268,128

$
279,737

At December 31, 2022

90 Days

90 Days

30-59 Days

60-89 Days

or More

Total

Total Loans

Total Loans

30-59 Days

60-89 Days

or More

Total

Total Loans

Total Loans
(In thousands)

Past Due

Past Due

Past Due

Past Due

Current

Receivable

Past Due

Past Due

Past Due

Past Due

Current

Receivable
Acquired Loans

Acquired Loans:

Residential mortgage loans:
























One- to four-family

$
457

$
293

$
314

$
1,064

$
17,442

$
18,506

$
268

$
103

$
173

$
544

$
8,009

$
8,553

—

—

—

—

—

—

268

103

173

544

8,009

8,553
Commercial loans:

457

293

314

1,064

17,442

18,506












Real estate - nonresidential













—

—

—

—

1,419

1,419
Commercial business

—

—

—

—

2,115

2,115

—

—

—

—

83

83
Other commercial and industrial

—

—

—

—

404

404

—

—

—

—

1,502

1,502

—

—

—

—

2,519

2,519












Consumer loans:













Home equity and junior liens

11

63

87

161

1,672

1,833

—

—

50

50

485

535
Other consumer

1

18

—

19

342

361

8

—

—

8

39

47

12

81

87

180

2,014

2,194

8

—

50

58

524

582
Total acquired loans

$
469

$
374

$
401

$
1,244

$
21,975

$
23,219

$
276

$
103

$
223

$
602

$
10,035

$
10,637

2125

Table of Contents

~~Seneca-Cayuga~~Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

90 Days

30-59 Days

60-89 Days

or More

Total

Total Loans

Total Loans
(In thousands)

Past Due

Past Due

Past Due

Past Due

Current

Receivable
Total Loans












Residential mortgage loans:












One- to four-family

$
3,420

$
1,949

$
2,259

$
7,628

$
131,086

$
138,714
Construction

—

—

—

—

828

828

3,420

1,949

2,259

7,628

131,914

139,542
Commercial loans:












Real estate - nonresidential

350

1,388

912

2,650

33,046

35,696
Multi-family

—

—

—

—

5,585

5,585
Construction

—

—

—

—

100

100
Commercial business

540

24

73

637

13,795

14,432

890

1,412

985

3,287

52,526

55,813
Consumer loans:












Home equity and junior liens

91

134

154

379

11,624

12,003
Manufactured homes

179

83

—

262

23,507

23,769
Automobile

207

54

54

315

20,768

21,083
Student

35

—

—

35

2,216

2,251
Recreational vehicle

—

—

—

—

263

263
Other consumer

58

20

—

78

2,007

2,085

570

291

208

1,069

60,385

61,454
Total loans

$
4,880

$
3,652

$
3,452

$
11,984

$
244,825

$
256,809

At December 31, 2022

90 Days

30-59 Days

60-89 Days

or More

Total

Total Loans

Total Loans
(In thousands)

Past Due

Past Due

Past Due

Past Due

Current

Receivable
Total Loans:












Residential mortgage loans:












One- to four-family

$
3,235

$
1,261

$
2,605

$
7,101

$
130,900

$
138,001
Construction

—

—

—

—

387

387

3,235

1,261

2,605

7,101

131,287

138,388
Commercial loans:












Real estate - nonresidential

254

—

416

670

16,011

16,681
Multi-family

—

—

—

—

854

854
Commercial business

129

—

158

287

11,390

11,677

383

—

574

957

28,255

29,212
Consumer loans:












Home equity and junior liens

193

85

172

450

11,112

11,562
Manufactured homes

696

324

368

1,388

49,601

50,989
Automobile

402

130

21

553

23,786

24,339
Student

—

—

68

68

1,735

1,803
Recreational vehicle

1,005

329

135

1,469

25,440

26,909
Other consumer

103

122

—

225

6,947

7,172

2,399

990

764

4,153

118,621

122,774
Total loans

$
6,017

$
2,251

$
3,943

$
12,211

$
278,163

$
290,374

Non-accrual loans, segregated by class of loan, were as follows:

September 30,

December 31,

At March 31,

At December 31,
(In thousands)

2020

2019


2023

2022

(Unaudited)

Residential mortgage loans:









1-4 family first-lien

$
2,540

$
2,259

Construction

—

—

One- to four-family

$
1,703

$
2,605

2,540

2,259

1,703

2,605
Commercial loans:








Real estate - nonresidential

912

2,509

412

416
Real estate - multi-family

—

—

Construction

—

—

Other commercial and industrial

157

1,195

Commercial business

537

587

1,069

3,704

949

1,003
Consumer loans:








Home equity and junior liens

83

154

129

172
Manufactured homes

186

—

368

368
Automobile

43

54

40

21
Student

—

—

59

68
Recreational Vehicle

29

Recreational vehicle

275

135
Other consumer

—

—

35

—

341

208

906

764
Total non-accrual loans

$
3,950

$
6,171

$
3,558

$
4,372

~~Table of Contents~~

~~Seneca-Cayuga Bancorp, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Unaudited)~~

There were no loans past due more than ninety days and still accruing interest at ~~September 30, 2020~~March 31, 2023 and December 31, ~~2019. The increase in~~2022.

Table of Contents

Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Loan Modifications

Prior to January 1, 2023, the ~~nonresidential and commercial loans that are non-accrual is attributable to one commercial relationship totaling $2.7 million that experienced performance issues and~~Company was restructured in December 2019. Although the loans are all current at year-end the restructure met the criteria for a Troubled Debt Restructuring, and as such, the accrual of interest has been suspended until the loans perform under the modified terms for a period of Nine Months.

~~Troubled Debt Restructurings~~

~~The Company is~~ required to disclose certain activities related to Troubled Debt ~~Restructurings (TDR)~~Restructuring (“TDR”) in accordance with accounting guidance. Certain loans ~~have been~~were modified in a TDR where economic concessions have been granted to a borrower who is experiencing, or is expected to experience, financial difficulties. These economic concessions could include a reduction in the loan interest rate, extension of payment terms, reduction of principal amortization, or other actions that the Company would not otherwise consider for a new loan with similar risk characteristics. The recorded investment for each TDR loan is determined by the outstanding balance less the allowance associated with the loan.

The allowance for credit losses incorporates an estimate of lifetime expected credit losses and is recorded on each asset upon asset origination or acquisition. The starting point for the estimate of the allowance for credit losses is historical loss information, which includes losses from modifications of receivables to borrowers experiencing financial difficulty. The Company uses a probability of default/loss given default model to determine the allowance for credit losses. An assessment of whether a borrower is experiencing financial difficulty is made on the date of a modification. Because the effect of most modifications made to borrowers experiencing financial difficulty is already included in the allowance for credit losses because of the measurement methodologies used to estimate the allowance, a change to the allowance for credit losses is generally not recorded upon modification. Occasionally, the Company modifies loans by providing principal forgiveness on certain of its real estate loans. When principal forgiveness is provided, the amortized cost basis of the asset is written off against the allowance for credit losses. The amount of the principal forgiveness is deemed to be uncollectible; therefore, that portion of the loan is written off, resulting in a reduction of the amortized cost basis and a corresponding adjustment to the allowance for credit losses. In some cases, the Company will modify a certain loan by providing multiple types of concessions. Typically, one type of concession, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession, such as principal forgiveness, may be granted.

There were no loans that had been modified as a TDR during the year ended December 31, 2022.

At December 31, ~~2019, all ten~~2022, the Company had seven TDR loans, with an outstanding balance of $2.5 million, in the portfolio that had been modified by making concessions to maturity dates and, in some cases, lowering the interest rate from the original contract. At January 1, 2023, as part of the ~~modified loans are still outstanding, for a total of $81,000. Two~~adoption of the ~~outstanding auto TDRs are in non-accrual status due to delinquency greater than 90 days. Each~~CECL standard, two of ~~the other remaining TDR loans continues to accrue interest and have not defaulted since restructuring. Although~~ these loans ~~are considered impaired because they are TDR, they have not been assigned a specific reserve due~~totaling $270,000 were returned to the ~~small balance of the individual loans.~~

~~At September 30, 2020, six of the modified loans are outstanding, for a total of $47,000. One of the outstanding auto TDRs is in non-accrual status due~~general pool to ~~delinquency greater than 90 days. Each of the other remaining TDR loans continues to accrue interest and not defaulted since restructuring.~~

Asbe collectively reviewed as a result of the merger in 2018, the Company acquired two consumer loans that met the criteria of a TDR. The two loans had an outstanding balance at December 31, 2018 of approximately $17,000. During 2019, one of those loans failed to perform under the modified terms and the balance of $7,000 was charged off against our loan allowance.making regularly scheduled payments as agreed. The remaining ~~consumer loan had an outstanding balance at December 31, 2019 of $7,000. This was paid in full after year-end.~~

In 2019, the Company modified a commercial loan that was originated through a program with Bankers Healthcare Group (BHG). This loan is also serviced by BHG, who maintains a 50% recourse share in losses from this loan program portfolio. BHG deferred payments for the borrowerfive loans totaling $2.2 million will continue to bring the loan current after significant delinquency had occurred, making concessions to the maturity date but not the rate or principal due. The principal balance of this loan at December 31, 2019 is $25,000. Since modification, the loan continues to make regular on-time payments under the terms of the modification and is now considered current, but will be ~~reported as a TDR until the outstanding balance is paid in full. The loan balance was $15,000 at September 30, 2020.~~

In 2018, a local automobile dealership with whom the Company has had a long-standing commercial relationship, began to experience cash flow concerns. At that time, additional loans were purchased from the dealership but, in order to ease the dealership’s cash flow and the payment process, the outstanding balance was re-amortized as one debt to one maturity date. The resulting consolidated balance was classified as a commercial loan to the dealership and considered a TDR. Although this loan remained current, the rest of the relationship began to suffer delinquencies and the borrowers needed assistance in determining their cash flow needs and sources. In December 2019, the Company restructured the entire relationship, which included the purchased loans consolidated in the previous year, a nonresidential mortgage, a dealer floorplan line of credit and two commercial term loans. All loans were cross-collateralized, additional collateral was obtained and temporary concessions were made as to loan interest rates and amortization. At September 30, 2020 and December 31, 2019, the total

~~Table of Contents~~

~~Seneca-Cayuga Bancorp, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Unaudited)~~

~~balance of the restructured loans in this relationship is $2,573,000 and $2,718,000, respectively. Regular weekly~~individually reviewed although regularly scheduled payments have been ~~received in accordance with~~made as agreed. There were no loans modified to borrowers experiencing financial difficulties during the ~~modified terms.~~three months ended March 31, 2023.

Impaired Loans

Prior to January 1, 2023, a loan is considered impaired when based on current information and events it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower including the length of the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan-by-loan basis for commercial loans by either the present value of expected future cash flows discounted at the loan’s effective interest rate or the fair value of the collateral if the loan is ~~collateral dependent.~~

collateral-dependent.

2427

Table of Contents

~~Seneca-Cayuga~~Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The Company designates individually evaluated loans on nonaccrual status as collateral-dependent loans, as well as other loans that management of the Company designates as having higher risk. Collateral-dependent loans are loans for which the repayment is expected to be provided substantially through the operation or sale of the collateral and the borrower is experiencing financial difficulty. These loans do not share common risk characteristics and are not included within the collectively evaluated loans for determining the allowance for credit losses. Under CECL, for collateral-dependent loans, the Company has adopted the practical expedient to measure the allowance for credit losses based on the fair value of collateral. The allowance for credit losses is calculated on an individual loan basis based on the shortfall between the fair value of the loan's collateral, which is adjusted for liquidation costs/discounts, and amortized cost. If the fair value of the collateral exceeds the amortized cost, no allowance is required.
The following table presents an analysis of collateral-dependent loans of the Company as of March 31, 2023:

Residential

Business

Commercial

Total
(In thousands)

properties

assets

Land

property

Other

Loans
One- to four-family

$
1,520

$
—

$
—

$
—

$
—

$
1,520
Real estate - nonresidential

29

—

—

—

—

29
Total loans

$
1,549

$
—

$
—

$
—

$
—

$
1,549

The following table summarizes collateral-dependent loan information by portfolio class:

At March 31, 2023

Average

Interest

recorded

income
(In thousands)

investment

recognized

One- to four-family residential mortgages

$
1,704

$
5
Commercial real estate - nonresidential

698

3
Commercial business

683

3
Home equity and junior liens

128

—

$
3,213

$
11

The following table summarizes impaired ~~loans~~loan information by portfolio ~~class as of September 30, 2020 and December 31, 2019:~~class:

September 30, 2020

At December 31, 2022

Unpaid

Unpaid



Recorded

Principal

Related

Recorded

principal

Related
(In thousands)

Investment

Balance

Allowance


investment

balance

allowance

(unaudited)

(unaudited)

(unaudited)

With no related allowance recorded:













One- to four-family residential mortgages

$
1,724

$
1,754

$
—

$
2,560

$
2,641

$
—
Construction residential mortgages

—

—

—

Commercial real estate - nonresidential

354

354

—

701

801

—
Multi-family

—

—

—

Construction commercial

—

—

—

Commercial business

809

809

—

717

729

—
Home equity and junior liens

72

72

—

181

191

—
Manufactured homes

—

—

—

Automobile

—

—

—

Student

—

—

—

Other consumer

—

—

—

With an allowance recorded:







One- to four-family residential mortgages

915

915

81

Construction residential mortgages

—

—

—

Commercial real estate - nonresidential

552

552

276

Multi-family

—

—

—

Construction commercial

—

—

—

Commercial business

737

737

256

Home equity and junior liens

—

—

—

Manufactured homes

—

—

—

Automobile

45

45

11

Student

—

—

—

Other consumer

—

—

—

Total:












One- to four-family residential mortgages

2,639

2,669

81

2,560

2,641

—
Construction residential mortgages

—

—

—

Commercial real estate - nonresidential

906

906

276

701

801

—
Multi-family

—

—

—

Construction commercial

—

—

—

Commercial business

1,546

1,546

256

717

729

—
Home equity and junior liens

72

72

—

181

191

—
Manufactured homes

—

—

—

Automobile

45

45

11

Student

—

—

—

Other consumer

—

—

—

$
5,208

$
5,238

$
624

$
4,159

$
4,362

$
—

2528

Table of Contents

~~Seneca-Cayuga~~Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

December 31, 2019

Unpaid



Recorded

Principal

Related

(In thousands)

Investment

Balance

Allowance

With no related allowance recorded:







One- to four-family residential mortgages

$
2,150

$
2,180

$
—

Construction residential mortgages

—

—

—

Commercial real estate - nonresidential

2,472

2,472

—

Multi-family

—

—

—

Construction commercial

—

—

—

Commercial business

1,622

1,622

—

Home equity and junior liens

131

131

—

Manufactured homes

—

—

—

Automobile

81

81

—

Student

—

—

—

Other consumer

—

—

—

With an allowance recorded:







One- to four-family residential mortgages

132

132

7

Construction residential mortgages

—

—

—

Commercial real estate - nonresidential

438

438

250

Multi-family

—

—

—

Construction commercial

—

—

—

Commercial business

385

385

133

Home equity and junior liens

—

—

—

Manufactured homes

—

—

—

Automobile

—

—

—

Student

—

—

—

Other consumer

1

1

1

Total:







One- to four-family residential mortgages

2,282

2,312

7

Construction residential mortgages

—

—

—

Commercial real estate - nonresidential

2,910

2,910

250

Multi-family

—

—

—

Construction commercial

—

—

—

Commercial business

2,007

2,007

133

Home equity and junior liens

131

131

—

Manufactured homes

—

—

—

Automobile

81

81

—

Student

—

—

—

Other consumer

1

1

1

$
7,412

$
7,442

$
391

The following table presents the amortized cost information of loans on non-accrual status:

Interest income

Non-accrual loans

recognized on

with no allowance

Amortized cost of loans on

non-accrual loans

for credit losses

non-accrual status

as of

as of
(In thousands)

January 1, 2023

March 31, 2023

March 31,2023

March 31, 2023

Residential mortgage loans:

One- to four-family

$
2,605

$
1,738

$
2

$
1,581

Commercial loans:

Real estate - nonresidential

416

412

—

412
Commercial business

587

537

—

537

Consumer loans:

Home equity and junior liens

172

128

—

129
Manufactured homes

368

368

—

368
Automobile

21

38

—

40
Student

68

59

—

59
Recreational vehicle

135

205

5

275
Other consumer

—

31

1

35

$
4,372

$
3,516

$
8

$
3,436

Income recognized on a cash basis was not materially different than interest income recognized on an accrual basis for the periods.

2629

Table of Contents

~~Seneca-Cayuga~~Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The following ~~table presents~~tables present the ~~average recorded investment in impaired loans:~~

For the Three Months Ended

For the Nine months

For the Year ended

Ended September 30,

Ended September 30

December 31,

2020

2020

2019


Average

Average

Average

Recorded

Recorded

Recorded

(In thousands)

Investment (unaudited)

Investment (unaudited)

Investment







One- to four-family residential mortgages

$
2,642

$
2,652

$
2,309

Construction residential mortgages

—

—

—

Commercial real estate - nonresidential

6,907

913

1,453

Multi-family

—

—

—

Construction commercial

—

—

—

Commercial business

1,543

1,601

1,038

Home equity and junior liens

72

73

132

Manufactured homes

—

—

—

Automobile

46

48

89

Student

—

—

—

Other consumer

—

—

1

11,210

5,287

$
5,022

~~The following table presents interest income recognized on impaired~~ loans ~~the three- and nine-months periods:~~

Three Months Ended

Nine Months Ended

September 30,

September 30,

2020

2019

2020

2019

(unaudited)

(unaudited)

(unaudited)

(unaudited)
One- to four-family residential mortgages
$
15

$
11

$
61

$
42
Construction residential mortgages

—

—

—

—
Commercial real estate - nonresidential

4

13

14

37
Multi-family

—

—

—

—
Construction commercial

—

—

—

—
Commercial business

17

25

43

65
Home equity and junior liens

2

1

4

3
Manufactured homes

—

—

—

—
Automobile

1

—

3

—
Student

—

—

—

—
Other consumer

—

—

—

—

$
39

$
50

$
125

$
147

6.~~Allowance for Loan Loss~~
~~Changes in the allowance for loan losses and information pertaining~~ to ~~the allocation~~customers as of ~~the allowance for loan losses and balances of the allowance for loan losses and loans receivable~~March 31, 2023 based on ~~individual and collective~~year of origination within each credit quality indicator:

At March 31, 2023

2023

2022

2021

2020

2019

Prior

Total
Originated Loans:

Residential mortgage loans:

4 Internal grade

$
5,942

$
42,955

$
11,040

$
11,993

$
12,135

$
48,594

$
132,659
5 Internal grade

—

—

28

—

140

1,196

1,364
6 Internal grade

—

—

—

118

—

1,460

1,578

$
5,942

$
42,955

$
11,068

$
12,111

$
12,275

$
51,250

$
135,601
Current period gross writeoffs

$
—

$
—

$
—

$
—

$
—

$
—

$
—
Current period recoveries

—

—

—

—

—

—

—
Current period net writeoffs

$
—

$
—

$
—

$
—

$
—

$
—

$
—

Commercial loans:

2 Internal grade

$
—

$
—

$
—

$
—

$
—

$
387

$
387
3 Internal grade

—

175

618

297

995

6,711

8,796
4 Internal grade

10

2,897

752

205

97

8,518

12,479
5 Internal grade

—

—

—

—

2,180

1,962

4,142
6 Internal grade

—

—

—

—

42

1,304

1,346

$
10

$
3,072

$
1,370

$
502

$
3,314

$
18,882

$
27,150
Current period gross writeoffs

$
—

$
—

$
—

$
—

$
—

$
—

$
—
Current period recoveries

—

—

—

—

—

2

2
Current period net writeoffs

$
—

$
—

$
—

$
—

$
—

$
2

$
2

Consumer loans:

4 Internal grade

$
4,048

$
27,836

$
30,792

$
35,818

$
10,404

$
12,318

$
121,216
5 Internal grade

—

—

79

61

30

43

213
6 Internal grade

—

45

254

402

2

159

862

$
4,048

$
27,881

$
31,125

$
36,281

$
10,436

$
12,520

$
122,291
Current period gross writeoffs

$
—

$
—

$
(1)

$
—

$
—

$
(18)

$
(19)
Current period recoveries

—

—

—

—

—

7

7
Current period net writeoffs

$
—

$
—

$
(1)

$
—

$
—

$
(11)

$
(12)

2730

Table of Contents

~~Seneca-Cayuga~~Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

At March 31, 2023

2023

2022

2021

2020

2019

Prior

Total
Acquired Loans:

Residential mortgage loans:

4 Internal grade

$
—

$
—

$
—

$
—

$
—

$
8,089

$
8,089
5 Internal grade

—

—

—

—

—

89

89
6 Internal grade

—

—

—

—

—

125

125

$
—

$
—

$
—

$
—

$
—

$
8,303

$
8,303
Current period gross writeoffs

$
—

$
—

$
—

$
—

$
—

$
—

$
—
Current period recoveries

—

—

—

—

—

1

1
Current period net writeoffs

$
—

$
—

$
—

$
—

$
—

$
1

$
1

Commercial loans:

4 Internal grade

$
—

$
—

$
—

$
—

$
—

$
1,458

$
1,458
5 Internal grade

—

—

—

—

—

—

—
6 Internal grade

—

—

—

—

—

—

—

$
—

$
—

$
—

$
—

$
—

$
1,458

$
1,458
Current period gross writeoffs

$
—

$
—

$
—

$
—

$
—

$
—

$
—
Current period recoveries

—

—

—

—

—

—

—
Current period net writeoffs

$
—

$
—

$
—

$
—

$
—

$
—

$
—

Consumer loans:

4 Internal grade

$
—

$
—

$
—

$
—

$
—

$
423

$
423
5 Internal grade

—

—

—

—

—

14

14
6 Internal grade

—

—

—

—

—

43

43

$
—

$
—

$
—

$
—

$
—

$
480

$
480
Current period gross writeoffs

$
—

$
—

$
—

$
—

$
—

$
—

$
—
Current period recoveries

—

—

—

—

—

—

—
Current period net writeoffs

$
—

$
—

$
—

$
—

$
—

$
—

$
—
~~impairment evaluation by loan portfolio class at and for the three months and nine months ended September 30, 2020 are summarized as follows:~~

For the Three months ended

September 30, 2020 (unaudited)

One- to four-

Construction

Commercial

Commercial

family

residential

real estate

real estate

Construction

Commercial
(In thousands)

residential

mortgage

nonresidential

multi-family

commercial

business
Allowance for loan losses:













Beginning Balance

$
549

$
1

$
509

$
41

$
—

$
380
Charge-offs

—

—

(48)

—

—

—
Recoveries

—

—

—

5

—

—
Provision for loan losses

44

(1)

10

(27)

—

174
Ending balance

$
593

$
—

$
471

$
19

$
—

$
554

For the Three Months ended

September 30, 2020 (cont'd) (unaudited)

Home equity

Manufactured

Recreational

Other

(In thousands)

and junior liens

Homes

Automobile

Student

Vehicle


Consumer

Unallocated

Total
Allowance for loan losses:

Beginning Balance

$
38

$
—

$
134

$
70

$
—

$
46

$
228

$
1,996
Charge-offs

—

—

(15)

—

—

—

—

(63)
Recoveries

—

—

27

2

2

(3)

—

31
Provision for loan losses

(12)

69

(13)

86

(2)

16

(194)

150
Ending balance

$
26

$
69

$
133

$
158

$
—

$
59

$
34

$
2,116

For the Nine months ended

September 30, 2020 (unaudited)

One- to four-

Construction

Commercial

Commercial

family

residential

real estate

real estate

Construction

Commercial
(In thousands)

residential

mortgage

nonresidential

multi-family

commercial

business
Allowance for loan losses:













Beginning Balance

$
375

$
2

$
421

$
17

$
—

$
527
Charge-offs

(8)

—

(48)

—

—

—
Recoveries

2

—

—

14

—

140
Provision for loan losses

224

(2)

98

(12)

—

(113)
Ending balance

$
593

$
—

$
471

$
19

$
—

$
554
Ending balance:  related to loans individually evaluated for impairment

$
81

$
—

$
276

$
—

$
—

$
256
Ending balance:  related to loans collectively evaluated for impairment

$
512

$
—

$
195

$
19

$
—

$
298
Loans receivable:












Ending balance

$
131,070

$
—

$
27,313

$
5,158

$
92

$
27,386
Ending balance: individually evaluated for impairment

$
2,639

$
—

$
906

$
—

$
—

$
1,546
Ending balance: collectively evaluated for impairment

$
128,431

$
—

$
26,407

$
5,158

$
92

$
25,840

2831

Table of Contents

~~Seneca-Cayuga~~Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

For the Nine Months ended

September 30, 2020 (cont'd) (unaudited)

Home equity

Manufactured

Recreational

Other

(In thousands)

and junior liens

Homes

Automobile

Student

Vehicle


Consumer

Unallocated

Total
Allowance for loan losses:

Beginning Balance

$
50

$
—

$
142

$
69

$
—

$
35

$
22

$
1,660
Charge-offs

—

—

(44)
��

—

(14)

(3)

—

(117)
Recoveries

12

—

62

2

2

9

—

243
Provision for loan losses

(36)

69

(27)

87

12

18

12

330
Ending balance

$
26

$
69

$
133

$
158

$
—

$
59

$
34

$
2,116
Ending balance: related to loans individually evaluated for impairment

$
—

$
—

$
11

$
—

$
—

$
—

$
—

$
624
Ending balance: related to loans collectively evaluated for impairment

$
26

$
69

$
122

$
158

$
—

$
59

$
34

$
1,492
Loans receivable:
















Ending balance

$
11,527

$
38,072

$
22,004

$
2,267

$
13,547

$
4,284

$
—

$
282,720
Ending balance: individually evaluated for impairment

$
72

$
—

$
45

$
—

$
—

$
—

$
—

$
5,208
Ending balance: collectively evaluated for impairment

$
11,455

$
38,072

$
21,959

$
2,267

$
13,547

$
4,284

$
—

$
277,512

At March 31, 2023

2023

2022

2021

2020

2019

Prior

Total
Total Loans:

Residential mortgage loans:

4 Internal grade

$
5,942

$
42,955

$
11,040

$
11,993

$
12,135

$
56,683

$
140,748
5 Internal grade

—

—

28

—

140

1,285

1,453
6 Internal grade

—

—

—

118

—

1,585

1,703

$
5,942

$
42,955

$
11,068

$
12,111

$
12,275

$
59,553

$
143,904
Current period gross writeoffs

$
—

$
—

$
—

$
—

$
—

$
—

$
—
Current period recoveries

—

—

—

—

—

1

1
Current period net writeoffs

$
—

$
—

$
—

$
—

$
—

$
1

$
1

Commercial loans:

2 Internal grade

$
—

$
—

$
—

$
—

$
—

$
387

$
387
3 Internal grade

—

175

618

297

995

6,711

8,796
4 Internal grade

10

2,897

752

205

97

9,976

13,937
5 Internal grade

—

—

—

—

2,180

1,962

4,142
6 Internal grade

—

—

—

—

42

1,304

1,346

$
10

$
3,072

$
1,370

$
502

$
3,314

$
20,340

$
28,608
Current period gross writeoffs

$
—

$
—

$
—

$
—

$
—

$
—

$
—
Current period recoveries

—

—

—

—

—

2

2
Current period net writeoffs

$
—

$
—

$
—

$
—

$
—

$
2

$
2

Consumer loans:

4 Internal grade

$
4,048

$
27,836

$
30,792

$
35,818

$
10,404

$
12,741

$
121,639
5 Internal grade

—

—

79

61

30

57

227
6 Internal grade

—

45

254

402

2

202

905

$
4,048

$
27,881

$
31,125

$
36,281

$
10,436

$
13,000

$
122,771
Current period gross writeoffs

$
—

$
—

$
(1)

$
—

$
—

$
(18)

$
(19)
Current period recoveries

—

—

—

—

—

7

7
Current period net writeoffs

$
—

$
—

$
(1)

$
—

$
—

$
(11)

$
(12)

December 31, 2019

One- to four-

Construction

Commercial

Commercial

family

residential

real estate

real estate

Construction

Commercial
(In thousands)

residential

mortgage

nonresidential

multi-family

commercial

business
Allowance for loan losses:

Beginning Balance

$
314

$
1

$
202

$
12

$
—

$
523
Charge-offs

(42)

—

(18)

—

—

(106)
Recoveries

2

—

—

9

—

79
Provision for loan losses

101

1

237

(4)

—

31
Ending balance

$
375

$
2

$
421

$
17

$
—

$
527
Ending balance: related to loans individually evaluated for impairment

$
7

$
—

$
250

$
—

$
—

$
133
Ending balance: related to loans collectively evaluated for impairment

$
368

$
2

$
171

$
17

$
—

$
394
Loans receivable:












Ending balance

$
138,714

$
828

$
35,696

$
5,585

$
100

$
14,432
Ending balance: individually evaluated for impairment

$
2,282

$
—

$
2,910

$
—

$
—

$
2,007
Ending balance: collectively evaluated for impairment

$
136,432

$
828

$
32,786

$
5,585

$
100

$
12,425

2932

Table of Contents

~~Seneca-Cayuga~~Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

6.Allowance for Loan Loss
The following table summarizes the activity related to the allowance for credit losses for the three months ended March 31, 2023:

Additional

Allowance

Recognized

Credit

Due to

Loss

Writeoffs

Adoption

Expense

During

Recoveries

Beginning

of

for the

the

During

Ending
(In thousands)

Balance

Topic 326

Period

Period

the Period

Balance
Residential mortgage loans:

One- to four-family

$
787

$
—

$
155

$
—

$
1

$
943
Construction

2

—

(1)

—

—

1

Commercial loans:

Real estate - nonresidential

319

—

281

—

—

600
Multi-family

4

—

(4)

—

—

—
Commercial business

248

—

29

—

2

279

Consumer loans:

Home equity and junior liens

65

—

16

(11)

—

70
Manufactured homes

110

—

(110)

—

—

—
Automobile

135

—

119

—

5

259
Student

55

—

(34)

(7)

1

15
Recreational vehicle

646

—

(512)

—

—

134
Other consumer

126

—

226

(1)

1

352

$
2,497

$
—

$
165

$
(19)

$
10

$
2,653

At March 31, 2023 there was no liability recorded for unfunded loan commitments.

Prior to the adoption of ASC 326 on January 1, 2023, the Company calculated the allowance for loan losses under the incurred loss methodology. The following tables are disclosures related to the allowance for loan losses in prior periods.

December 31, 2019 (cont'd)

Home equity

Manufactured

Other

(In thousands)

and junior liens

Homes

Automobile

Student

Consumer

Unallocated

Total
Allowance for loan losses:

Beginning Balance

$
58

$
—

$
228

$
50

$
28

$
132

$
1,548
Charge-offs

—

—

(137)

(25)

(68)

—

(396)
Recoveries

—

—

52

1

5

—

148
Provision for loan losses

(8)

—

(1)

43

70

(110)

360
Ending balance

$
50

$
—

$
142

$
69

$
35

$
22

$
1,660
Ending balance: related to














loans individually evaluated














for impairment

$
—

$
—

$
—

$
—

$
1

$
—

$
391
Ending balance: related to














loans collectively evaluated














for impairment

$
50

$
—

$
142

$
69

$
34

$
22

$
1,269
Loans receivable:














Ending balance

$
12,003

$
23,769

$
21,083

$
2,251

$
2,348

$
—

$
256,809
Ending balance: individually














evaluated for impairment

$
131

$
—

$
81

$
—

$
1

$
—

$
7,412
Ending balance: collectively














evaluated for impairment

$
11,872

$
23,769

$
21,002

$
2,251

$
2,347

$
—

$
249,397
33

Table of Contents

Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Three Months Ended March 31, 2022

One- to four-

Construction

family

residential

Real estate

Construction

Commercial
(In thousands)

residential

mortgage

nonresidential

Multi-family

commercial

business
Allowance for loan losses:













Beginning balance

$
688

$
—

$
630

$
2

$
—

$
161
Charge-offs

(10)

—

—

—

—

—
Recoveries

15

—

—

—

—

—
Provision for loan losses

46

—

14

1

—

48
Ending balance

$
739

$
—

$
644

$
3

$
—

$
209
Ending balance:  related to loans individually evaluated for impairment

$
—

$
—

$
—

$
—

$
—

$
12
Ending balance:  related to loans collectively evaluated for impairment

$
739

$
—

$
644

$
3

$
—

$
197
Loans receivable:












Ending balance

$
111,291

$
—

$
20,857

$
452

$
—

$
12,298
Ending balance: individually evaluated for impairment

$
2,158

$
—

$
416

$
—

$
—

$
128
Ending balance: collectively evaluated for impairment

$
109,133

$
—

$
20,441

$
452

$
—

$
12,170

Three Months Ended March 31, 2022 (cont'd)

Home equity

Manufactured

Recreational

Other

(In thousands)

and junior liens

homes

Automobile

Student

vehicle

consumer

Unallocated

Total
Allowance for loan losses:

Beginning balance

$
39

$
102

$
107

$
64

$
—

$
48

$
—

$
1,841
Charge-offs

—

—

(40)

—

—

—

—

(50)
Recoveries

—

—

17

1

—

—

—

33
Provision (credit) for loan losses

4

14

23

(1)

—

1

—

150
Ending balance

$
43

$
116

$
107

$
64

$
—

$
49

$
—

$
1,974
Ending balance: related to loans individually evaluated for impairment

$
—

$
—

$
—

$
—

$
—

$
—

$
—

$
12
Ending balance: related to loans collectively evaluated for impairment

$
43

$
116

$
107

$
64

$
—

$
49

$
—

$
1,962
Loans receivable:
















Ending balance

$
10,433

$
48,116

$
22,025

$
2,102

$
28,692

$
5,309

$
—

$
261,575
Ending balance: individually evaluated for impairment

$
112

$
—

$
—

$
—

$
—

$
—

$
—

$
2,814
Ending balance: collectively evaluated for impairment

$
10,321

$
48,116

$
22,025

$
2,102

$
28,692

$
5,309

$
—

$
258,761

Table of Contents

Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Year Ended December 31, 2022

One- to four-

Construction

family

residential

Real estate

Construction

Commercial
(In thousands)

residential

mortgage

nonresidential

Multi-family

commercial

business
Allowance for loan losses:

Beginning balance

$
688

$
—

$
630

$
2

$
—

$
161
Charge-offs

(37)

—

—

—

—

(14)
Recoveries

18

—

—

—

—

2
Provision (credit) for loan losses

118

2

(311)

2

—

99
Ending balance

$
787

$
2

$
319

$
4

$
—

$
248
Ending balance: related to loans individually evaluated for impairment

$
—

$
—

$
—

$
—

$
—

$
—
Ending balance: related to loans collectively evaluated for impairment

$
787

$
2

$
319

$
4

$
—

$
248
Loans receivable:












Ending balance

$
138,001

$
387

$
16,681

$
854

$
—

$
11,677
Ending balance: individually evaluated for impairment

$
2,560

$
—

$
701

$
—

$
—

$
717
Ending balance: collectively evaluated for impairment

$
135,441

$
387

$
15,980

$
854

$
—

$
10,960

Year Ended December 31, 2022 (cont'd)

Home equity

Manufactured

Recreational

Other

(In thousands)

and junior liens

homes

Automobile

Student

vehicle

consumer

Unallocated

Total
Allowance for loan losses:

Beginning balance

$
39

$
102

$
107

$
64

$
—

$
48

$
—

$
1,841
Charge-offs

(10)

—

(59)

(29)

(1)

(2)

—

(152)
Recoveries

—

—

149

3

1

4

—

177
Provision (credit) for loan losses

36

8

(62)

17

646

76

—

631
Ending balance

$
65

$
110

$
135

$
55

$
646

$
126

$
—

$
2,497
Ending balance: related to loans individually evaluated for impairment

$
—

$
—

$
—

$
—

$
—

$
—

$
—

$
—
Ending balance: related to loans collectively evaluated for impairment

$
65

$
110

$
135

$
55

$
646

$
126

$
—

$
2,497
Loans receivable:
















Ending balance

$
11,562

$
50,989

$
24,339

$
1,803

$
26,909

$
7,172

$
—

$
290,374
Ending balance: individually evaluated for impairment

$
181

$
—

$
—

$
—

$
—

$
—

$
—

$
4,159
Ending balance: collectively evaluated for impairment

$
11,381

$
50,989

$
24,339

$
1,803

$
26,909

$
7,172

$
—

$
286,215

The risk characteristics within the loan portfolio vary depending on the loan segment. Consumer loans generally are repaid from personal sources of income. Risks associated with consumer loans primarily include general economic risks such as declines in the local economy creating higher rates of unemployment. Those conditions may also lead to

Table of Contents

Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

a decline in collateral values should the Company be required to repossess the collateral securing consumer loans. These economic risks also impact the commercial loan segment, however, commercial loans are considered to have greater risk than consumer loans as the primary source of repayment is from the cash flow of the business customer. Loans secured by real estate provide the best collateral protection and thus significantly reduce the inherent risk in the portfolio.

7.Employee Benefit Plans
The Company provides pension benefits for eligible employees through two defined benefit pension plans (the “Plans”). The following tables set forth the changes in the Plans’ ~~benefit obligations, fair value of plan assets and the plans’ funded status as of December 31:~~net periodic pension benefit:

Generations Bank Plan:

For the Three Months Ended September

Three Months Ended March 31,
(In thousands)

2020

2019

2023

2022
Net Periodic Expenses recognized in income:

(unaudited)
Net periodic expenses recognized in income:

Service cost

$
103

$
94

$
60

$
108
Interest cost

112

119

118

102
Expected return on plan assets

(335)

(309)

(307)

(384)
Amortization of net losses

34

50

40

-
Net periodic pension benefit

(86)

(46)

$
(89)

$
(174)





For the Nine Months Ended September

2020

2019
Net Periodic Expenses recognized in income:

(unaudited)
Service cost

309

283
Interest cost

336

358
Expected return on plan assets

(1,004)

(929)
Amortization of net losses

101

150
Net periodic pension benefit

(258)

(138)

Medina Savings and Loan Plan:

Three Months Ended March 31,
(In thousands)

2023

2022
Net periodic expenses recognized in income:

Service cost

$
3

$
8
Interest cost

34

28
Expected return on plan assets

(90)

(115)
Net periodic pension benefit

$
(53)

$
(79)

3036

Table of Contents

~~Seneca-Cayuga~~Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Medina Savings and Loan Plan:

For the Three months Ended September
(In thousands)

2020

2019
Net Periodic Expenses recognized in income:

(unaudited)
Service cost

$
7

$
5
Interest cost

36

25
Expected return on plan assets

(108)

(79)
Amortization of net losses

—

(2)
Net periodic pension benefit

(65)

(51)





For the Nine Months Ended September

2020

2019
Net Periodic Expenses recognized in income:

(unaudited)
Service cost

21

14
Interest cost

107

75
Expected return on plan assets

(322)

(237)
Amortization of net losses

—

(7)
Net periodic pension benefit

(194)

(155)

8. Stock-Based Compensation

A summary of the Company’s stock option activity and8.related information for its option plans for the three months ended March 31, 2023 is as follows:

Three Months Ended March 31, 2023

Weighted Average

Exercise Price Per

Options

Share
Outstanding at beginning of year

132,977

$
11.61
Grants

—

—
Exercised

—

—
Outstanding at quarter end

132,977

$
11.61

Exercisable at quarter end

—

$
—

There were no stock options granted for the three-month period ended March 31, 2022.

The grants to senior management and directors vest over a five-year period in equal annual installments, with the first installment vesting on the first anniversary date of the grant and succeeding installments on each anniversary thereafter, through 2027.

The compensation expense of the awards is based on the fair value of the instruments on the date of grant. The Company recorded compensation expense in the amount of $22,000 for the three months ended March 31, 2023.

An aggregate of 53,191 shares of restricted stock were granted to directors and senior management during the year ended December 31, 2022. These shares of restricted stock vest in the same manner as the stock options described above. The Company recorded compensation expense in the amount of $31,000 for the three months ended March 31, 2023.

9.Regulatory Capital
The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities, and certain ~~off-balance-sheet~~off-balance sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.
Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain amounts and ratios (set forth in the table below) of total core and Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier 1 capital (as defined) to total adjusted assets (as defined).
The final rules implementing Basel Committee on Banking Supervision’s capital guidelines for U.S. banks (BASEL III rules) became effective for the Bank on January 1, 2015 with full compliance with all of the requirements being phased in over a multi-year schedule, and fully phased in by January 1, 2019. Under ~~the BASEL III rules,~~applicable regulation, the Bank must hold a 2.50% capital conservation
buffer above the adequately capitalized risk-based capital ratios. The ~~capital conservation buffer is being phased in from 0.0% for 2015 to 2.50% by 2019. The capital conservation buffer for 2019 was 2.50%. The~~ net unrealized gain or loss on ~~available for sale~~available-for-sale securities is not included in computing regulatory capital. Management believes as of ~~September 30, 2020~~March 31, 2023 and December 31, ~~2019,~~2022, the Bank meets all capital adequacy requirements to which ~~they are~~it is subject.
As of December 31, 2019, the most recent notification from the Federal Deposit Insurance Corporation categorized the Bank as “well capitalized” under the regulatory framework for prompt corrective action. To be categorized as “well capitalized” the Bank must maintain minimum total core, risk-based, Tier 1 risk-based and common equity Tier 1 leverage ratios as set forth in the table. There are no conditions or events since that notification that management believes have changed the Bank’s category.

3137

Table of Contents

~~Seneca-Cayuga~~Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The Bank’s actual capital amounts and ratios ~~as of September 30, 2020 and December 31, 2019~~ are as follows:

Minimum

Minimum

To Be "Well-

For Capital

Minimum

Capitalized"

Adequacy Plus Capital

For Capital

Under Prompt

Conservation Buffer

Actual

Adequacy Purposes

Corrective Provisions

Basel III Phase-In

(Dollars in thousands)

Amount

Ratio

Amount

Ratio

Amount

Ratio

Amount

Ratio

As of September 30, 2020 (unaudited):





















Common Equity Tier 1 Capital*

$
27,165

11.56
%
$
11,441

4.50
%
$
16,526

6.50
%
$
17,797

7.00
%
Total Capital (to Risk-Weighted Assets)

$
33,713

13.26
%
$
20,340

8.00
%
$
25,425

10.00
%
$
26,696

10.50
%
Tier 1 Capital* (to Risk-Weighted Assets)

$
27,165

12.43
%
$
15,255

6.00
%
$
20,340

8.00
%
$
21,611

8.50
%
Core Capital (to Total Adjusted Assets)

$
31,597

8.54
%
$
14,798

4.00
%
$
18,498

5.00
%
$
16,648

4.50
%
As of December 31, 2019:

















Common Equity Tier 1 Capital*

$
27,343

11.23
%
$
10,962

4.50
%
$
15,834

6.50
%
$
17,052

7.00
%
Total Capital (to Risk-Weighted Assets)

$
31,219

12.82
%
$
19,488

8.00
%
$
24,359

10.00
%
$
25,577

10.50
%
Tier 1 Capital* (to Risk-Weighted Assets)

$
27,343

12.13
%
$
14,616

6.00
%
$
19,488

8.00
%
$
20,706

8.50
%
Core Capital (to Total Adjusted Assets)

$
29,559

8.37
%
$
14,118

4.00
%
$
17,648

5.00
%
$
15,883

4.50
%
*

Minimum

To Be "Well-

Minimum

Capitalized"

For Capital

Under Prompt

Actual

Adequacy Purposes

Corrective Provisions

(in thousands)

Amount

Ratio

Amount

Ratio

Amount

Ratio

As of March 31, 2023















Common Equity Tier 1 Capital

$
39,965

13.46
%
$
13,362

4.50
%
$
19,301

6.50
%
Total Capital (to Risk-Weighted Assets)

$
42,618

14.35
%
$
23,755

8.00
%
$
29,694

10.00
%
Tier 1 Capital (to Risk-Weighted Assets)

$
39,965

13.46
%
$
17,816

6.00
%
$
23,755

8.00
%
Tier 1 Capital (to Total Adjusted Assets)

$
39,965

10.32
%
$
15,498

4.00
%
$
19,372

5.00
%
As of December 31, 2022:











Common Equity Tier 1 Capital

$
41,127

13.87
%
$
13,347

4.50
%
$
19,278

6.50
%
Total Capital (to Risk-Weighted Assets)

$
43,624

14.71
%
$
23,727

8.00
%
$
29,659

10.00
%
Tier 1 Capital (to Risk-Weighted Assets)

$
41,127

13.87
%
$
17,795

6.00
%
$
23,727

8.00
%
Tier 1 Capital (to Total Adjusted Assets)

$
41,127

10.98
%
$
14,989

4.00
%
$
18,736

5.00
%

~~Tier 1 Capital is reduced by low-level recourse for mortgages sold to FHLB.~~
The Company’s goal is to maintain a strong capital position, consistent with the risk profile of its subsidiary bank that supports growth and expansion activities while at the same time exceeding regulatory standards. At ~~September 30, 2020~~March 31, 2023 and December 31, ~~2019,~~2022, Generations Bank exceeded all regulatory required minimum capital ratios and met the regulatory definition of a “well-capitalized” institution, i.e. ~~a core capital ratio~~Tier 1 Capital (to Total Adjusted Asset) exceeding 5%5.00%, a common equity Tier 1 capital ratio exceeding 6.50%, a Tier 1 risk-based capital ratio exceeding 8%8.00%, and a total risk-based capital ratio exceeding ~~10%~~10.00%.

By letter dated September 10, 2020, based on its supervisory profile, the Office of the Comptroller of the Currency (“OCC”) established higher individual minimum capital ratios for Generations Bank. Specifically, effective September 10, 2020, Generations Bank is required to maintain a leverage ratio of 8.00% and a total capital ratio of 12.00%. The individual minimum capital ratios will remain in effect until terminated, modified, or suspended in writing by the OCC.

9.10.Commitments and Contingencies
Credit Commitments
The Bank is a party to financial instruments with off-balance sheet risk in the normal course of business in order to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit, which involve, to varying degrees, elements of credit, interest rate, or liquidity risk in excess of the amount recognized in the consolidated statements of financial condition. The Bank’s exposure to credit loss in the event of non-performance by the other party to the financial instrument for commitments to extend credit is represented by the contractual amounts of those instruments. The Bank has experienced minimal credit losses to date on its financial instruments with off-balance sheet risk and management does not anticipate any significant losses on its commitments to extend credit outstanding at ~~September 30, 2020.~~

~~Table of Contents~~March 31, 2023.

~~Seneca-Cayuga Bancorp, Inc.~~

~~Notes to Condensed Consolidated~~ Financial ~~Statements~~

~~(Unaudited)~~

~~At September 30, 2020 and December 31, 2019, financial~~ instruments whose contract amounts represent credit risk consist of the following:

At March 31,

At December 31,
(In thousands)

2023

2022

Commitments to grant loans

$
1,381

$
6,400
Unfunded commitments under lines of credit

14,459

14,789

September 30,

December 31,

(In thousands)

2020

2019


(unaudited)

Commitments to grant loans

$
5,529

$
4,847

Unfunded commitments under lines of credit

16,034

17,072

Standby letters of credit

—

400

38

Table of Contents

Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. The Bank uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since some of the commitment amounts are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Bank evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Bank upon extension of credit, is based on management’s credit evaluation of the counter party. Collateral held varies but may include residential real estate and income-producing commercial properties. Loan commitments, including unused lines of credit and standby letters of credit, outstanding at ~~September 30, 2020~~March 31, 2023 with fixed interest rates amounted to approximately ~~$16.0~~$5.1 million. Loan commitments, including unused lines of credit and standby letters of credit, outstanding at ~~September 30, 2020~~March 31, 2023 with variable interest rates amounted to approximately ~~$5.5~~$10.7 million. Loan commitments, including unused lines of credit and standby letters of credit, outstanding at December 31, ~~2019~~2022 with fixed interest rates amounted to approximately ~~$10.5~~$9.6 million. Loan commitments, including unused lines of credit and standby letters of credit, outstanding at December 31, ~~2019~~2022 with variable interest rates amounted to approximately ~~$11.8~~$11.6 million.

Unfunded commitments under revolving credit lines and overdraft protection agreements are commitments for possible future extensions of credit to existing customers. These lines of credit usually do not contain a specified maturity date and may not be drawn upon to the total extent to which the Company is committed.

Letters of credit written are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Generally, all letters of credit, when issued have expiration dates. The credit risk involved in issuing letters of credit is essentially the same as those that are involved in extending loan facilities to customers. The Company generally holds collateral and/or personal guarantees supporting these commitments. Management believes that the proceeds obtained through a liquidation of collateral and the enforcement of guarantees would be sufficient to cover the potential amount of future payments required under the corresponding guarantees.

The Company maintains a separate reserve for credit losses on off-balance sheet credit exposures, including unfunded loan commitments, which is included in other liabilities on the consolidated balance sheet. The reserve for credit losses on off-balance sheet credit exposures is adjusted as a provision for credit losses in the income statement. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life, utilizing the same models and approaches for the Company's other loan portfolio segments described above, as these unfunded commitments share similar risk characteristics as its loan portfolio segments. The Company has identified the unfunded portion of certain lines of credit as unconditionally cancellable credit exposures, meaning the Company can cancel the unfunded commitment at any time. No credit loss estimate is reported for off-balance sheet credit exposures that are unconditionally cancellable by the Company or for undrawn amounts under such arrangements that may be drawn prior to the cancellation of the arrangement. On January 1, 2023, the Company did not record an adjustment for unfunded commitments for the adoption of ASC Topic 326. For the three months ended March 31, 2023, the Company recorded a provision for credit losses for unfunded commitments of $0. At March 31, 2023, the liability for credit losses on off-balance sheet credit exposures included in other liabilities was $0.

Commitments to Originate and Sell ~~one-~~One- to four-family Residential Mortgages

The Bank has ~~entered into agreements with~~sold and funded $68.6 million of loans to the Federal Home Loan Bank of New York as part of its ~~Mortgage Partnership Finance Program~~mortgage partnership finance program (“MPF Program”) to originate and sell one- to four-family residential mortgages. The contracts call for the Bank to provide “best efforts” to meet the commitment, with no penalties to be paid in the event the Bank is not able to fulfill the commitment. At September 30, 2020 and December 31, 2019, there were no open contracts.

The Bank generally makes a determination whether to sell a loan between the time the loan is committed to be closed and the day after closing. If a loan is selected to be sold, a commitment to deliver the loan by a certain date is made under the MPF Program. At September 30, 2020 and December 31, 2019, the Bank had no open commitments to deliver loans.

~~Table of Contents~~

~~Seneca-Cayuga Bancorp, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Unaudited)~~

In the event that the Bank is not able to deliver a specific loan committed, substitutions can generally be made. Otherwise, the Bank may extend the commitment for a fee, or the Bank is required to pay a pair-off fee. There were no extension or pair-off fees paid by the Bank for the periods ended September 30, 2020 and December 31, 2019. The Bank has sold and funded $68.6 million under the MPF Program,, inclusive of USDA loans, to date. The principal outstanding balance on loans sold under the MPF Program is ~~$12.5~~$8.0 million at ~~September 30, 2020.~~March 31, 2023. The Bank continues to service loans sold under the MPF Program.

Under the terms of the MPF Program, there is limited recourse ~~back~~ to the Bank for loans that do not perform in accordance with the terms of the loan agreement. Each loan that is sold under the program is “credit enhanced” such that the

Table of Contents

Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

individual loan’s rating is raised to “AA,” as determined by the Federal Home Loan Bank of New York. The sum of each individual loan’s credit enhancement represents the total recourse back to the Bank. The total recourse back to the Bank for loans sold was ~~$2.2 million~~$707,000 at ~~December~~March 31, ~~2019.~~2023. A portion of the recourse is offset by a “first loss account” to which funds are allocated by the Federal Home Loan Bank of New York annually in January. The balance of the “first loss account” allocated to the Bank ~~is $78,500~~was $93,000 at ~~September 30, 2020.~~March 31, 2023. In addition, many of the loans sold under the MPF Program have primary mortgage insurance, which reduces the Bank’s overall exposure. The potential liability for the recourse is considered when the Bank determines its allowance for loan losses.

~~Lease Commitments~~

As part of the MSL merger, the Bank took on the assignment of a non-cancelable operating lease with Wal-Mart East for the space occupied by the Albion retail office. This lease is set to expire on May 31, 2021. Lease expense, since the merger, is included in occupancy expense and was $34,000 for the nine month periods ended September 30, 2020 and 2019 and $45,000 for the year ending December 31, 2019.
~~Future minimum lease commitments under the operating lease are as follows:~~

September 30,

December 31,
(In thousands)

2020

2019

(unaudited)



2020

11

46
2021

19

19

$
30

$
65

~~The lease contains an option to extend for additional periods, which are not included in the commitments above. There are no plans to renew this lease.~~

~~10.~~11.Revenue from Contracts with Customers
The majority of the Company’s revenue-generating transactions are not subject to ASC Topic 606, including revenue generated from financial instruments, such as loans and investment securities, which are presented in our consolidated statements of operations as components of net interest income. All of the Company’s revenue from contracts with customers in the scope of Topic 606 is recognized within non-interest income.

~~Table of Contents~~

~~Seneca-Cayuga Bancorp, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Unaudited)~~

The following table presents revenues subject to Topic ~~606 for the three and nine month periods ended September 30, 2020.~~606:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,				Three Months Ended March 31,
(In thousands)	2020		2019		2020		2019		2023		2022

	(unaudited)				(unaudited)
Service charges on deposit accounts	$	132	$	123	$	443	$	528	$	134	$	150
Debit card interchange and surcharge income		218		198		561		559		183		188
Investment services income		2		44		86		213
Insurance commission and fees		180		194		586		631
Insurance commissions										129		197
Loan servicing fees		54		51		125		104		45		35
	$	586	$	610	$	1,801	$	2,035	$	491	$	570

Service charges on deposit accounts: The Company earns fees from its deposit customers for transaction-based, account maintenance, and overdraft services. Transaction-based fees, which ~~included~~include services such as stop payment charges, wire transfers, and official check charges, are recognized at the time the transaction is executed as that is the point in time the Company fulfills the customer’s request. Account maintenance and inactivity fees, which relate primarily to monthly maintenance and servicing, are recognized at the ~~time the~~ end of the month in which maintenance occurs. Overdraft fees are recognized at the point in time that the overdraft occurs. Service charges on ~~deposits~~deposit accounts are withdrawn from the customer’s account balance.

Debit card interchange and surcharge income: The Company earns interchange income from debit cardholder transactions conducted through the MasterCard International Inc. payment network. Additionally, ATM surcharges are also assessed on foreign (non-customer) users atwho use the Company’s ATM network of machines. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and foreign surcharges are a fixed fee per transaction. Both are recognized daily, concurrently with the transaction processing services provided to the cardholder.

~~Investment services income~~: Prior to June 30, 2020 the Company earned fees from investment brokerage services provided to its customers by an employee who acted as an agent for a third-party service provider, Cadaret Grant. The Company received commissions from Cadaret Grant on a monthly basis based upon customer activity and balances held for the month. The Company employed the agent that arranged the relationship between the customer and the brokerage service provider. Investment brokerage commissions are presented gross based on the commission percentage earned. All related costs are recorded as operating expense. The Company sold this line of business to a third party at June 30, 2020.

Insurance commissions ~~and fees~~: Regular commissions are earned upon the effective date of bound insurance coverage. They are paid by the insurance carrier and recorded by the Company through a monthly ~~remittance.~~remittance which are subject to the Management Agreement with the Northwoods Corporation (“Northwoods”) which became effective on April 1, 2022. Contingent commissions are based on a contract but are dependent, not only on the level of policies bound with the carrier, but also on loss claim levels experienced through the last day of the year, volume growth, or shrinkage. The Agency’s business is not considered to be significant to the carriers, and many of our insurance carriers are combined under an umbrella with other independent agents, making the contingent commission earned dependent on a calculation that includes the experience of others. As such, the level of contingent commissions is not readily determinable until it is paid, but does not have a significant impact on the Company’s financial results.

Table of Contents

Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Loan servicing fees: The majority of income derived from loans is excluded from the scope of the amended guidance on accounting for revenue from contracts with customers. However, servicing fee revenue is generated in the form of late charges on customer loans. Late fees are transaction-based and are recognized at the point in time that the customer has exceeded the loan payment grace-period and the Company has earned the fee based on loan note. Fees are assessed as a percentage of the past-due loan payment amount.

~~Table of Contents~~

~~Seneca-Cayuga Bancorp, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Unaudited)~~

~~11.~~12.Fair Value Disclosures

Management uses its best judgment in estimating the fair value of the Company’s financial assets and liabilities; however, there are inherent weaknesses in any estimation technique. Therefore, for substantially all financial assets and liabilities, the fair value estimates herein are not necessarily indicative of the amounts the Company could have realized in a sale transaction on the dates indicated. The estimated fair value amounts have been measured as of their respective reporting dates and have not been re-evaluated or updated for purposes of these financial statements subsequent to those respective dates. As such, the estimated fair values of these financial assets and liabilities subsequent to the respective reporting dates may be different from the amounts reported at each reporting date.

The Company uses fair value measurements to record fair value adjustments to certain financial assets and liabilities and to determine fair value disclosures. The fair value of a financial asset or liability is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is best determined based upon quoted market prices. However, in some instances, there may be no quoted market prices for the Company’s various financial assets and liabilities. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the financial asset or liability.

Fair value measurement guidance established a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy are as follows:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date of identical, unrestricted assets or liabilities.

Level 2: Quoted prices in markets that are not active, or inputs that are observable directly or indirectly, for substantially the full term of the asset or liability.

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e. supported with little or no market activity).

An asset or liability’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. There have been no changes in valuation techniques during the periods ended ~~September 30, 2020~~March 31, 2023 and December 31, ~~2019.~~2022.

The following information should not be interpreted as an estimate of the fair value of the entire Company since a fair value calculation is only provided for a limited portion of the Company’s assets and liabilities. Due to a wide range of valuation techniques and the degree of subjectivity used in making the estimates, comparison between the Company’s disclosures and those of other companies may not be meaningful. The following methods and assumptions were used to estimate the fair values of the Company’s assets and liabilities at ~~September 30, 2020~~March 31, 2023 and December 31, ~~2019.~~2022.

Cash and due from banks: The carrying amounts of cash and due from banks approximate fair values.

Table of Contents

Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Interest-earning deposits: The carrying amounts of interest-earning term deposits held in banks approximate fair values.

~~Table of Contents~~

~~Seneca-Cayuga Bancorp, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Unaudited)~~

Investment securities: The fair values of trading, available-for-sale, held-to-maturity, and equity securities are obtained from an independent third party and are based on quoted prices on a nationally recognized exchange (Level 1), where available. At this time, only the equity securities qualify as a Level 1 valuation. If quoted prices are not available, fair values are measured by utilizing matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2). Management made no adjustment to the fair value quotes that were received from the independent third party pricing service. ~~In 2019,~~

Sensitivity of significant unobservable inputs: The following is a description of the ~~Company purchased municipal bonds from local government entities. Since these deals were constructed~~sensitivity of significant unobservable inputs, the interrelationships between ~~the Company~~those inputs and the small local government entities, they have not been evaluated by a third party service, and there was no discernable market for these investments. As such, it is deemed that the carrying value approximatedother unobservable inputs used in recurring fair value ~~(Level 3).~~measurement and how those inputs might magnify or mitigate the effect of changes in the unobservable inputs on the fair value measurement.

Municipal ~~Bonds:~~

bonds: The significant unobservable inputs used in the fair value measurement of the Company’s municipal bonds are premiums for unrated securities and marketability discounts. Significant increases (decreases) in either of those inputs in isolation would result in a significantly lower (higher) fair value measurement. In general, changes in either of those inputs will not affect the other input. The Company receives scheduled principal and interest payments from the municipalities based on the terms of the bonds. Management receives valuations on these investments on a quarterly basis from an outside party. As such, the carrying value is deemed to approximate fair value (Level 3).

Federal Home Loan Bank ~~(FHLB)~~(“FHLB”) stock: The carrying value of FHLB stock approximates fair value based on the redemption provisions of the FHLB, resulting in a Level 2 classification. There have been no identified events or changes in circumstances that may have a significant adverse effect on the FHLB stock.

Loans receivable: The fair values of loans, excluding impaired loans, are estimated using discounted cash flow analyses, using market rates at the statement of financial condition date that reflect the credit and interest rate risk inherent in the loans, resulting in a Level 3 classification. Projected future cash flows are calculated based upon contractual maturity or call dates, projected repayments and prepayments of principal. Future cash flows are then discounted using the Bank’s weighted average rate on new loans and thus the resulting fair value represents exit pricing. Generally, for variable rate loans that reprice frequently and with no significant changes in credit risk, fair values are based on carrying values.

~~Impaired~~Collateral-dependent and impaired loans: Impaired loans are those loans in which the Company has measured impairment generally based on the fair value of the loan’s collateral. Fair value is generally determined based upon independent ~~third party~~third-party appraisals of the properties or discounted cash flows based upon expected proceeds. These assets are included as Level 3 fair values, based upon the lowest level of input that is significant to the fair value measurements. The fair value consists of loan balances less their valuation allowances.

Deposits: The fair values disclosed for demand deposits (e.g., interest and non-interest checking) are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amounts), and are therefore classified as Level 1. Savings and money market account fair values are based on estimated decay rates and current costs. Fair values for fixed rate certificates of deposit, including brokered deposits, are estimated using a discounted cash flow calculation that applies interest rates currently being offered in the market on certificates to a schedule of aggregated expected monthly maturities on time deposits. Due to the inputs necessary to calculate the fair value, savings and time deposits are considered Level 3 valuations that estimate exit pricing.

Accrued interest: The carrying amounts of accrued interest receivable and payable approximate fair value, and due to the short-term (30 days or less) nature of the balances, are considered Level 1.

Table of Contents

Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Borrowings: Fair values of FHLB advances are estimated using discounted cash flow analysis, based on quoted prices for new FHLB advances with similar credit risk characteristics, terms and remaining maturity, resulting in

~~Table of Contents~~

~~Seneca-Cayuga Bancorp, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Unaudited)~~

a Level 2 classification. These prices obtained from this active market represent a fair value that is deemed to represent the transfer price if the liability were assumed by a third party.

~~Subordinated Debt: The carrying value is deemed to approximate the fair value.~~

The following table presents a comparison of the carrying amount and estimated fair value of the Company’s financial ~~instruments at September 30, 2020, and December 31, 2019:~~instruments:


	September 30, 2020 (unaudited)										At March 31, 2023
	Carrying								Fair		Carrying								Fair
(In thousands)	Amount		Level 1		Level 2		Level 3		Value		Amount		Level 1		Level 2		Level 3		Value
Financial assets:
Cash and cash equivalents	$	12,248	$	12,248	$	—	$	—	$	12,248	$	6,041	$	6,041	$	—	$	—	$	6,041
Interest-earning time deposits in banks												680		—		680		—		680
Securities available-for-sale		23,132		—		19,940		3,192		23,132		33,208		—		31,463		1,745		33,208
Securities held-to-maturity		1,616		—		1,653		—		1,653		1,552		—		1,309		—		1,309
Equity securities		594		594		—		—		594		315		315		—		—		315
Loans receivable		290,747		—		—		292,289		292,289
Federal Home Loan Bank of New York stock		2,120		—		2,120		—		2,120
Loans receivable, net												308,371		—		—		287,669		287,669
FHLB stock												990		—		990		—		990
Accrued interest receivable		1,426		1,426		—		—		1,426		1,319		1,319		—		—		1,319

Financial liabilities:
Deposits	$	303,368	$	84,301	$	—	$	220,930	$	305,231	$	337,033	$	87,724	$	—	$	235,657	$	323,381
Short-term borrowings												1,940		—		1,940		—		1,940
Long-term borrowings		30,064		—		31,848		—		31,848		8,357		—		7,286		—		7,286
Subordinated debt		1,235		—		1,235		—		1,235
Accrued interest payable		187		187		—		—		187		255		255		—		—		255


	December 31, 2019										At December 31, 2022
	Carrying								Fair		Carrying								Fair
(In thousands)	Amount		Level 1		Level 2		Level 3		Value		Amount		Level 1		Level 2		Level 3		Value
Financial assets:
Cash and cash equivalents	$	13,448	$	13,448	$	—	$	—	$	13,448	$	8,004	$	8,004	$	—	$	—	$	8,004
Securities available-for-sale		30,627		—		28,115		2,512		30,627		33,050		—		31,335		1,715		33,050
Securities held-to-maturity		2,078		—		2,110		—		2,110		1,587		—		1,301		—		1,301
Equity securities		2,579		2,579		—		—		2,579		307		307		—		—		307
Loans receivable		259,620		—		—		262,929		262,929
Federal Home Loan Bank of New York stock		2,267		—		2,267		—		2,267
Loans receivable, net												303,880		—		—		294,897		294,897
FHLB stock												1,740		—		1,740		—		1,740
Accrued interest receivable		1,215		1,215		—		—		1,215		1,304		1,304		—		—		1,304

Financial liabilities:
Deposits	$	283,338	$	65,623	$	—	$	218,004	$	283,627	$	317,678	$	92,745	$	—	$	211,598	$	304,343
Short-term borrowings												16,200		—		16,311		—		16,311
Long-term borrowings		31,448		—		32,874		—		32,874		10,334		—		15,081		—		15,081
Subordinated debt		735		—		735		—		735
Accrued interest payable		104		104		—		—		104		162		162		—		—		162

3843

Table of Contents

~~Seneca-Cayuga~~Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The following tables summarize assets measured at fair value on a recurring basis, ~~at September 30, 2020 and December 31, 2019,~~ segregated by the level of valuation inputs within the hierarchy utilized to measure fair value:

September 30, 2020 (unaudited)

At March 31, 2023

Total Fair

Total Fair
(In thousands)

Level 1

Level 2

Level 3

Value

Level 1

Level 2

Level 3

Value
Securities available-for-sale:
















Debt investment securities:
















Residential mortgage-backed - US agency and GSEs

$
—

$
42

$
—

$
42

$
—

$
23

$
—

$
23
Corporate bonds

—

17,879

—

17,879
Municipal bonds

—

19,898

3,192

23,090

—

13,561

1,745

15,306
Equity investment securities:
















Large cap equity mutual fund

33

—

—

33

40

—

—

40
Other mutual funds

561

—

—

561

275

—

—

275
Total investment securities

$
594

$
19,940

$
3,192

$
23,726

$
315

$
31,463

$
1,745

$
33,523

December 31, 2019

At December 31, 2022

Total Fair

Total Fair
(In thousands)

Level 1

Level 2

Level 3

Value

Level 1

Level 2

Level 3

Value
Securities available-for-sale:
















Debt investment securities:
















Residential mortgage-backed - US agency and GSEs

$
—

$
50

$
—

$
50

$
—

$
24

$
—

$
24
Corporate bonds

—

18,194

—

18,194
Municipal bonds

—

28,065

2,512

30,577

—

13,117

1,715

14,832
Equity investment securities:
















Large cap equity mutual fund

31

—

—

31

37

—

—

37
Other mutual funds

2,548

—

—

2,548

270

—

—

270
Total investment securities

$
2,579

$
28,115

$
2,512

$
33,206

$
307

$
31,335

$
1,715

$
33,357

The changes in Level 3 assets measured at estimated fair value on a recurring basis during the periods ~~ended September 30, 2020 and December 31, 2019:~~noted:


Investment

Investment
(In thousands)

Securities

Securities

(unaudited)

Balance - January 1, 2020

$
2,512
Balance - December 31, 2022

$
1,715
Total gains realized/unrealized:




Included in earnings

—
Included in other comprehensive income

—

38
Purchases

1,159
Principal payments

(479)
Sales

—
Balance - September 30, 2020

$
3,192
Principal payments/maturities

(8)
Balance - March 31, 2023

$
1,745


Investment
(In thousands)

Securities
Balance - December 31, 2021

$
3,010
Total gains realized/unrealized:


Included in other comprehensive income

329
Principal payments/maturities

(834)
Balance - March 31, 2022

$
2,505

3944

Table of Contents

~~Seneca-Cayuga~~Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Investment
(In thousands)

Securities
Balance - January 1, 2019

$
—
Total gains realized/unrealized:

Included in earnings

—
Included in other comprehensive income

—
Purchases

2,528
Principal payments

(16)
Sales

—
Balance - December 31, 2019

$
2,512

In 2020 and 2019, the Company purchased municipal bonds from local government entities and those bonds are being held in the Company’s vault. The Company receives scheduled principal and interest payments from the municipalities based on the terms of the bonds. Since there was no discernable market for these investments, management is unable to determine a good estimate of fair value. As such, the carrying value is deemed to approximate fair value (Level 3).

~~Sensitivity of Significant Unobservable Inputs:~~

The following is a description of the sensitivity of significant unobservable inputs, the interrelationships between those inputs and other unobservable inputs used in recurring fair value measurement and how those inputs might magnify or mitigate the effect of changes in the unobservable inputs on the fair value measurement.

~~Municipal Bonds~~: The significant unobservable inputs used in the fair value measurement of the Company’s municipal bonds are premiums for unrated securities and marketability discounts. Significant increases (decreases) in either of those inputs isolation would result in a significantly lower (higher) fair value measurement. In general, changes in either of those inputs will not affect the other input.

Certain assets and liabilities are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment).
The following tables summarize assets measured at fair value on a nonrecurring basis ~~at September 30, 2020 and December 31, 2019~~ segregated by the level of valuation inputs within the hierarchy utilized to measure fair value:

At September 30, 2020 (unaudited)

At March 31, 2023

Total Fair

Total Fair
(In thousands)

Level 1

Level 2

Level 3

Value

Level 1

Level 2

Level 3

Value
Impaired loans

$
—

$
—

$
1,625

$
1,625
Collateral-dependent loans

$
—

$
—

$
102

$
102
Foreclosed real estate & repossessed assets

—

—

8

8

—

—

152

152

December 31, 2019

At December 31, 2022

Total Fair

Total Fair
(In thousands)

Level 1

Level 2

Level 3

Value

Level 1

Level 2

Level 3

Value
Impaired loans

$
—

$
—

$
565

$
565

$
—

$
—

$
—

$
—
Foreclosed real estate & repossessed assets

—

—

70

70

—

—

12

12

There have been no transfers of assets in or out of any fair value measurement level.

4045

Table of Contents

~~Seneca-Cayuga~~Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The following table presents additional quantitative information about assets measured at fair value on a recurring basis and for which Level 3 inputs were used to determine fair value:

Quantitative Information about Level 3 Fair Value Measurements

Valuation
Unobservable
Range

Techniques

Input

(Weighted Avg.)
Investment type-

Other Investments

Scheduled principal

Cost to Sell

0%

and interest payments

Carrying value

100%

The following table presents quantitative information about Level 3 fair value measurements for assets measured at fair value on a nonrecurring basis at ~~September 30, 2020 (unaudited)~~March 31, 2023 and December 31, ~~2019:~~2022:

Quantitative Information about Level 3 Fair Value Measurements

Valuation

Unobservable

Range

Techniques

Input

(Weighted Avg.)
~~Impaired~~Collateral-dependent and impaired loans -

Appraisal of collateral

Appraisal Adjustments

  5%  - 35% (20)%
~~1-4 family~~One-to four-family residential



Costs to Sell

  5% - 15% (10)%






~~Impaired~~Collateral-dependent and impaired loans -

Appraisal of collateral

Appraisal Adjustments

  5%  - 35% (25)%
Commercial ~~real estate~~business



Changes in property condition

10% - 20% (15)%



Costs to Sell

  5% - 15% (10)%

~~Impaired loans -~~
~~USDA Guarantee~~
~~Government guaranteed portion~~
~~20% (20)%~~
~~Other commercial and industrial~~






Foreclosed real estate and repossessed assets -

Appraisal of collateral

Appraisal Adjustments

  5%  - 35% (25)%



Changes in property condition

10% - 20% (15)%



Costs to Sell

  5% - 15% (10)%

~~Impaired~~Collateral-dependent loans: ~~At the time a loan is considered impaired, it is valued at the lower of cost or fair value. Impaired~~Collateral-dependent loans carried at fair value ~~generally~~have been partially charged-off or receive a specific ~~valuation~~allocations of the allowance for credit losses. The Company evaluates and values collateral-dependent impaired loans at the time the loan ~~losses. For~~is identified as impaired, and the fair values of such loans are estimated using Level 3 inputs in the fair value hierarchy. Each loan’s collateral ~~dependent loans,~~value has a unique appraisal and management’s discount of the value is based on the factors unique to each impaired loan. The significant unobservable input in determining the fair value is ~~commonly based~~management’s subjective discount on ~~recent real estate appraisals.~~appraisals of the collateral securing the loan. In addition, a discount is typically applied to account for estimated costs to sell. These real estate appraisals may include up to three approaches to value: the sales comparison approach, the income approach (for income-producing property) and the cost approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available, if applicable. Although the fair value of the property normally will be based on an appraisal, the valuation should be consistent with the price that a market participant will pay to purchase the property at the measurement date. Circumstances may exist that indicate that the appraised value is not an accurate measurement of the property’s current fair value. Examples of such circumstances include changed economic conditions since the last appraisal, stale appraisals, or imprecision and subjectivity in the appraisal process. Appraisal adjustments may be made by management to reflect these conditions resulting in a discount of the appraised value. In addition, a discount is typically applied to account for estimated costs to sell. Non-real estate collateral may be valued using an appraisal, net book value per the borrower’s financial statements, or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuations, and management’s expertise and knowledge of the client and client’s business. ~~The methods used to determine the fair values of impaired loans typically result in a Level 3 fair value classification.~~ Impaired loans are evaluated on a quarterly basis for additional impairment and adjusted accordingly.

Table of Contents

Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Foreclosed real estate & repossessed assets: Assets acquired through foreclosure, transfers in lieu of foreclosure or repossession are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. Similar to the impaired loan disclosures above, fair value is commonly based on recent real estate appraisals, or estimated value from auction house or qualified dealer, and adjusted as deemed necessary by independent appraisers and management and estimated costs to sell resulting in a level 3 fair value classification. Foreclosed and repossessed assets are evaluated on a monthly basis to determine whether an additional reduction in the fair value less estimated costs to sell should be recorded.

~~Table of Contents~~

~~Seneca-Cayuga Bancorp, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Unaudited)~~

13.Segment Information

The Company has three primary business segments, its community banking franchise, its insurance agency, and a limited-purpose commercial ~~bank, which opened for business in 2019 to provide municipal banking services.~~bank.

The community banking segment provides financial services to consumers and businesses principally in the Finger Lakes Region and Orleans County of New York State. These services include providing various types of loans to customers, accepting deposits, mortgage banking, and other traditional banking services. Parent company and treasury function income is included in the community-banking segment, as the majority of effort for these functions is related to this segment. Major revenue sources include net interest income and service fees on deposit ~~accounts and investment services commission.~~accounts. Expenses include personnel and branch-network support charges.

The insurance agency segment offers insurance coverage to businesses and individuals in the Finger Lakes Region. The insurance activities consist of those conducted through the Bank’s wholly owned subsidiary, Generations Agency. The primary revenue source is commissions. ~~Expenses include~~Pursuant to a Management Agreement, which became effective on April 1, 2022, personnel and office support ~~charges.~~charges were assumed by Northwoods.

The municipal banking segment is a New York State chartered limited-purpose commercial bank formed expressly to enable local municipalities, primarily within the Finger Lakes Region and Northwest New York State, to deposit public funds with the Commercial Bank in accordance with existing NYS municipal law. The Commercial Bank ~~opened for business on January 2, 2019 and~~ is a wholly owned subsidiary of the Bank. The major revenue source is net interest income. Expenses include ~~personnel,~~ rent and support charges for using the assets and technology of the Bank.

Table of Contents

Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Information about the segments is presented in the following ~~table~~tables as of and for the periods ~~ended September 30, 2020 and 2019:~~as noted:

Three Months Ended September 30,

Three Months Ended March 31,

2020

2019

2023

2022

(unaudited)

Community

Municipal

Community

Municipal

Community

Municipal

Community

Municipal

Banking

Insurance

Banking

Banking

Insurance

Banking

(unaduited)

Banking

Insurance

Banking

Banking

Insurance

Banking

(In thousands)

Activities

Activities

Activities

Total

Activities

Activities

Activities

Total

Activities

Activities

Activities

Total

Activities

Activities

Activities

Total
Net interest income

$
2,542

$
—

$
123

$
2,665

$
2,339

$
—

$
21

$
2,360

$
2,465

$
—

$
59

$
2,524

$
2,835

$
—

$
60

$
2,895
Provision for loan losses

150

—

—

150

90

—

—

90

165

—

—

165

150

—

—

150
Net interest income after provision for loan losses

2,392

—

123

2,515

2,249

—

21

2,270

2,300

—

59

2,359

2,685

—

60

2,745
Total noninterest income

499

182

480

1,161

838

194

—

1,032

449

127

—

576

421

195

—

616
Compensation and benefits

(1,180)

(92)

(18)

(1,290)

(1,312)

(108)

(19)

(1,439)

(1,408)

—

—

(1,408)

(1,149)

(86)

—

(1,235)
Other noninterest expense

(1,651)

(39)

(33)

(1,723)

(1,603)

(64)

(23)

(1,690)

(1,699)

—

(20)

(1,719)

(1,604)

(30)

(21)

(1,655)
(Loss) income before income taxes

60

51

552

663

172

22

(21)

173
Provision for income taxes

23

—

—

23

—

—

—

—
Income before income tax expense

(358)

127

39

(192)

353

79

39

471
Income tax (benefit) expense

(48)

—

8

(40)

68

—

7

75
Net (loss) income

$
37

$
51

$
552

$
640

$
172

$
22

$
(21)

$
173

$
(310)

$
127

$
31

$
(152)

$
285

$
79

$
32

$
396

~~Table of Contents~~

~~Seneca-Cayuga Bancorp, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Unaudited)~~

Nine Months Ended September 30,

2020

2019

(unaudited)

Community

Municipal

Community

Municipal

Banking

Insurance

Banking

Banking

Insurance

Banking

(In thousands)

Activities

Activities

Activities

Total

Activities

Activities

Activities

Total

Net interest income

$
7,357

$
—

$
392

$
7,749

$
7,064

$
8

$
45

$
7,117

Provision for loan losses

330

—

—

330

270

—

—

270

Net interest income after provision for loan losses

7,027

—

392

7,419

6,794

8

45

6,847

Total noninterest income

1,604

591

480

2,675

2,132

635

—

2,767

Compensation and benefits

(3,704)

(287)

(56)

(4,047)

(4,188)

(332)

(38)

(4,558)

Other noninterest expense

(4,694)

(128)

(78)

(4,900)

(4,777)

(148)

(47)

(4,972)

(Loss) income before income taxes

233

176

738

1,147

(39)

163

(40)

84

Benefit for income taxes

(201)

—

—

(201)

—

—

—

—

Net (loss) income

$
434

$
176

$
738

$
1,348

$
(39)

$
163

$
(40)

$
84

Total assets

$
364,098

$
1,411

$
50,123

$
415,632

$
351,078

$
2,379

$
12,353

$
365,810

The following represents a reconciliation of the Company’s reported segment assets:


	At
	September 30,		At December 31,		At March 31,		At December 31,
(In thousands)	2020		2019		2023		2022
		(unaudited)
Total assets for reportable segments	$	415,632	$	416,102	$	407,556	$	402,776
Elimination of intercompany balances		(47,942)		(68,553)		(18,354)		(16,483)
Consolidated total assets	$	367,690	$	347,549	$	389,202	$	386,293

The accounting policies of each segment are the same as those described in the summary of significant accounting policies.

~~13. Recently Adopted and~~14. Recently Issued Accounting Pronouncements

~~On January 1, 2019,~~There are no new accounting pronouncements applicable to the Company adopted ASU No. 2016-02, which amended guidance on “Leases (Topic 842)”. The new guidance establishes the principles to report transparent and economically neutral information about the assets and liabilities that arise from leases. The objective of this standard is to present a more faithful representation of the rights and obligations arising from leases by requiring lessees to recognize the lease assets and lease liabilities that arise from leases in the statement of financial position and to disclose qualitative and quantitative information about lease transactions, such as information about variable lease payments and options to renew and terminate leases. at March 31, 2023.

15. Subsequent Events

The Company has ~~one lease expiring in September 2021, and~~evaluated subsequent events through May 8, 2023, which is the ~~obligation under~~date the ~~lease is not significant. Further details of the lease commitment are provided in Note 9 to these Condensed Consolidated Financial Statements.~~consolidated financial statements were issued.

In August 2018, the FASB issued ASU 2018-15, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350 40), Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a

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~~Seneca-Cayuga Bancorp, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Unaudited)~~

Service Contract” (“ASU 2018-15”). The amendments in ASU 2018-15 broaden the scope of ASC Subtopic 350 40 to include costs incurred to implement a hosting arrangement that is a service contract. The amendments align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The costs are capitalized or expensed depending on the nature of the costs and the project stage during which they are incurred, consistent with the accounting for internal-use software costs. The amendments in ASU 2018-15 result in consistent capitalization of implementation costs of a hosting arrangement that is a service contract and implementation costs incurred to develop or obtain internal use software (and hosting arrangements that include an internal-use software license). The accounting for the service element of a hosting arrangement that is a service contract is not affected by the amendments in ASU 2018-15. For public business entities, the ASU is effective for interim and annual reporting periods beginning after December 15, 2019, with early adoption permitted. The Company early adopted ASU 2018-15, effective January 1, 2019.

In September 2016, the FASB issued ASU No. 2016-13, “Measurement of Credit Losses on Financial Instruments.” This ASU significantly changes how entities will measure credit losses for most financial assets and certain other instruments that aren’t measured at fair value through net income.

In issuing the standard, the FASB is responding to criticism that today’s guidance delays recognition of credit losses. The standard will replace today’s “incurred loss” approach with an “expected loss” model. The new model, referred to as the current expected credit loss (“CECL”) model, will apply to: (1) financial assets subject to credit losses and measured at amortized cost, and (2) certain off-balance sheet credit exposures. This includes, but is not limited to, loans, leases, held-to-maturity securities, loan commitments, and financial guarantees.

The CECL model does not apply to available-for-sale (“AFS”) debt securities. For AFS debt securities with unrealized losses, entities will measure credit losses in a manner similar to what they do today, except that the losses will be recognized as allowances rather than reductions in the amortized cost of the securities. As a result, entities will recognize improvements to estimated credit losses immediately in earnings rather than as interest income over time, as they do today.

The ASU also simplifies the accounting model for purchased credit-impaired debt securities and loans. ASU 2016-13 also expands the disclosure requirements regarding an entity’s assumptions, models, and methods for estimating the allowance for loan and lease losses. In addition, entities will need to disclose the amortized cost balance for each class of financial asset by credit quality indicator, disaggregated by the year of origination.

ASU No. 2016-13 is effective for public business entities that are U.S. Securities and Exchange Commission (SEC) filers for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. For SEC filers that are Smaller Reporting Companies, all other public business entities, and other non-public entities, the amendments are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (i.e., modified retrospective approach).

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~~Seneca-Cayuga Bancorp, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Unaudited)~~

The Company is currently evaluating the impact of these amendments to the Company’s financial position and results of operations and currently does not know or cannot reasonably quantify the impact of the adoption of the amendments as a result of the complexity and extensive changes from these amendments. The Allowance for Loan Losses (ALL) estimate is material to the Company and given the change from an incurred loss model to a methodology that considers the credit loss over the life of the loan, there is the potential for an increase in the ALL at adoption date. The Company is anticipating a significant change in the processes and procedures to calculate the ALL, including changes in assumptions and estimates to consider expected credit losses over the life of the loan versus the current accounting practice that utilizes the incurred loss model. In addition, the current accounting policy and procedures for the other-than-temporary impairment on available-for-sale securities will be replaced with an allowance approach. The Company continues to collect and retain historical loan and credit data. The Company is in the process of identifying data gaps. Certain CECL models are currently being evaluated. The Audit Committee is informed of ongoing CECL developments. For additional information on the allowance for loan losses, see Notes 5 and 6 to these condensed consolidated financial statements.

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ITEM 2. ~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~Management’s Discussion and Analysis of Financial Condition and Results of Operations
General

Management’s discussion and analysis of the financial condition and results of operations at and for the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2023 and ~~2019~~2022 is intended to assist in understanding the financial condition and results of operations of the Company. The information contained in this section should be read in conjunction with the unaudited financial statements and the notes thereto, appearing on Part I, Item 1 of this quarterly report on Form 10-Q.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This quarterly report contains forward-looking statements, which can be identified by the use of words such as “estimate,” “project,” “believe,” “intend,” “anticipate,” “plan,” “seek,” “expect” and words of similar meaning. 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 asset quality of our loan and investment portfolios; and
● estimates of our risks and future costs and benefits.
These forward-looking statements are based on current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change.
The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements:
● ~~conditions relating to the Covid-19 pandemic, including the severity and duration of the associated economic slowdown either nationally or in our market area, that are worse than expected;~~
● general economic conditions, either nationally or in our market areas, that are worse than expected;
● changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for loan losses;
● government-imposed limitations on our ability to foreclose on or repossess collateral for our loans;
● government-mandated forbearance programs;
● the success of our consumer loan portfolio, much of which is purchased from third-party originators, and is secured by collateral outside of our market area, including in particular, automobile, recreational vehicle and manufactured home loans,
● our ability to access cost-effective funding, including by increasing core deposits and reducing reliance on wholesale funds;
● fluctuations in real estate values ~~and~~in both residential and commercial real estate market conditions;

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●

demand for loans and deposits in our market area;

●

our ability to implement and change our business strategies;

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●

the performance and availability of purchased loans;

●

competition among depository and other financial institutions;

●

inflation and changes in the interest rate environment that reduce our margins and yields, the fair value of financial instruments, or our level of loan originations, or increase the level of defaults, losses and prepayments on loans we have made and make;

●

adverse changes in the securities or secondary mortgage markets;

●

changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements, including as a result of Basel III;

●

the impact of the Dodd-Frank Act and the implementing regulations;

●

changes in the quality or composition of our loan or investment portfolios;

●

technological changes that may be more difficult or expensive than expected;

●

the inability of third-party providers to perform as expected, including third-party loan originators;

●

our ability to manage market risk, credit risk, and operational risk in the current economic environment;

●

our ability to enter new markets successfully and capitalize on growth opportunities;

●

our ability to successfully integrate into our operations any assets, liabilities, customers, systems, and management personnel we may acquire 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;

●

changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission, or the Public Company Accounting Oversight Board;

●

our ability to retain key employees;

●

our compensation expense associated with equity 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.

Because of these and a wide variety of other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements.

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Critical Accounting Policies

There are no material changes to the critical accounting policies disclosed in ~~Generations Bancorp NY, Inc.’s Prospectus dated November 12, 2020, as filed with~~ the ~~Securities and Exchange Commission pursuant to Securities Act Rule 424(b)(3) on November 20, 2020.~~

The following tables set forth selected historical financial and other data of Seneca-Cayuga Bancorp for the periods and at the dates indicated. This information is only a summary and it should be read in conjunction with the business and financial information contained elsewhere in this QuarterlyAnnual Report on Form ~~10-Q,~~10-K for the ~~financial statements beginning on page F-1. The information at~~year ended December 31, ~~2019 is derived~~2022 except as noted in ~~part from, and should be read together with,~~Note 1 to this Form 10-Q for the ~~audited consolidated financial statements and notes thereto~~adoption of ~~Seneca-Cayuga Bancorp at page F-1~~the CECL accounting standard.

Table of ~~Generations Bancorp prospectus dated November 12, 2020 and filed with the SEC on November 20, 2020.~~ Contents

The information ~~at September 30, 2020 and~~ for the three months ended March 31, 2023 and ~~nine months ended September 30, 2020 and 2019~~2022 is unaudited, but reflects all normal recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. The results of operations for the three months ~~and nine months~~ ended ~~September 30, 2020~~March 31, 2023 are not necessarily indicative of the results to be achieved for the remainder of the year ending December 31, ~~2020~~2023 or any other period.

At September 30,

At December 31,


2020

2019

(In thousands)
Selected Financial Condition Data:






Total assets

$
367,690

$
347,549
Cash and cash equivalent

12,248

13,448
Available-for-sale securities

23,132

30,627
Securities held to maturity

1,616

2,078
Equity securities

594

2,579
Loans, net

290,747

259,620
Premises and equipment, net

16,946

17,588
Bank-owned life insurance

6,997

6,893
Pension plan asset

8,440

7,605
Federal Home Loan Bank stock, at cost

2,120

2,267
Accrued interest receivable

1,426

1,215
Goodwill and intangible assets, net

1,656

1,705
Other assets

1,760

1,854
Foreclosed real estate and repossessed assets

8

70
Total liabilities

337,912

319,318
Deposits

303,368

283,338
Borrowings

30,064

31,448
Holding company borrowings and subordinated debt

1,235

735
Other liabilities

1,908

1,085
Escrowed funds

1,337

2,712
Total equity

29,778

28,231

48Emerging Growth Company Status

~~Table~~

The Company qualifies as an “emerging growth company” under the Jumpstart Our Business Startups Act of ~~Contents~~

For the Three Months Ended

For the Nine Months Ended

September 30,

September 30,


2020

2019

2020

2019

(In thousands)
Selected Operating Data:












Interest and dividend income

$
3,392

$
3,133

$
10,057

$
9,400
Interest expense

727

773

2,308

2,283
Net interest income

2,665

2,360

7,749

7,117
Provision for loan losses

150

90

330

270
Net interest income after provision for loan losses

2,515

2,270

7,419

6,847
Noninterest income

1,145

1,032

2,675

2,767
Noninterest expenses

2,997

3,129

8,948

9,530
Income before income tax (provision) credit

663

173

1,146

84
Provision (credit) for income tax

23

—

(201)

—
Net income

$
640

$
173

$
1,347

$
84

~~Table~~2012 (the “JOBS Act”). For as long as the Company is an emerging growth company, it may choose to take advantage of ~~Contents~~exemptions from various reporting requirements applicable to other public companies. An emerging growth company may elect to use the extended transition period to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies, but must make such election when the company is first required to file a registration statement. The Company has elected to use the extended transition period described above and intends to maintain its emerging growth company status as allowed under the JOBS Act.

For the Three Months Ended

For the Nine Months Ended

September 30, (1)

September 30, (1)


2020

2019

2020

2019

Performance Ratios:









Return on average assets

0.69
%
0.22
%
0.50
%
0.04
%
Return on average equity

8.66
%
2.50
%
6.20
%
0.41
%
Interest rate spread (2)

3.26
%
3.44
%
3.28
%
3.49
%
Net interest margin (3)

3.25
%
3.40
%
3.25
%
3.45
%
Noninterest expense to average total assets

3.25
%
3.94
%
3.32
%
4.02
%
Efficiency ratio (4)

78.66
%
92.25
%
85.84
%
96.40
%
Average interest-earning assets to average interest-bearing liabilities

97.88
%
96.64
%
97.28
%
96.41
%
Average equity to average total assets

8.00
%
8.70
%
8.07
%
8.71
%









Asset Quality Ratios:









Non-performing assets to total assets

1.08
%
2.64
%
1.08
%
2.64
%
Non-performing loans to total loans

1.40
%
3.41
%
1.40
%
3.41
%
Allowance for loan losses to non-performing loans

53.56
%
20.24
%
53.56
%
20.24
%
Allowance for loan losses to total loans

0.75
%
0.69
%
0.75
%
0.69
%









Capital Ratios:









Common equity Tier 1 capital to risk-weighted assets

11.56
%
11.62
%
11.56
%
11.62
%
Total capital (to risk-weighted assets)

13.26
%
13.47
%
13.26
%
13.47
%
Tier 1 capital (to risk-weighted assets)

12.43
%
12.71
%
12.43
%
12.71
%
Tier 1 capital (to total assets)

8.54
%
8.94
%
8.54
%
8.94
%









Other:









Number of full-service offices

11

12

11

12

Number of full-time equivalent employees

102

104

102

104

~~(1)~~

~~Annualized where appropriate.~~

~~(2)~~

~~Represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.~~

~~(3)~~

~~Represents net interest income as a percentage of average interest-earning assets.~~

~~(4)~~

~~Represents non-interest expenses divided by the sum of net interest income and non-interest income.~~

Comparison of Financial Condition at ~~September 30, 2020~~March 31, 2023 and December 31, ~~2019~~2022

Total Assets. Total assets increased ~~$20.1~~$2.9 million, or ~~5.8%~~0.8%, to ~~$367.7~~$389.2 million at ~~September 30, 2020~~March 31, 2023 from ~~$347.5~~$386.3 million at December 31, ~~2019.~~2022. The increase resulted primarily from increases in net loans of ~~$31.1~~$4.5 million and in pension plan assets of ~~$835,000,~~$543,000, partially offset ~~in part~~ by ~~decreases~~a decrease in cash and cash equivalents of ~~$1.2 million, in equity securities of~~ $2.0 ~~million and in securities held available-for-sale of $7.5~~ million.

Net Loans. Net loans increased ~~$31.1~~$4.5 million, or ~~12.0%~~1.5%, to ~~$290.7~~$308.4 million at ~~September 30, 2020~~March 31, 2023 from ~~$259.6~~$303.9 million at December 31, ~~2019.~~2022. The increase resulted ~~primarily~~ from increases ~~in manufactured home~~

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loans of $14.3 million, or 60.2%, recreational vehicle loans of $13.3 million, or 5,070.6%, commercial business loans of $13.0 million, which includes $10.0 million of PPP loans, or 89.8%, other consumer loans of $2.2 million, or 105.4%, and automobile loans of $921,000, or 4.4%, offset in part by decreases in one- to four-family residential real estate loans of ~~$7.6~~$5.7 million, or ~~5.5%~~4.1%, manufactured home loans of $837,000, or 1.6%, other consumer loans of $302,000, or 4.2%, and automobile loans of $218,000, or 0.9%, partially offset by decreases in recreational vehicle loans of $954,000, or 3.6%, nonresidential loans of ~~$8.4 million,~~$461,000, or ~~23.5%~~2.8%, and home equity loans and lines of credit of $343,000, or 3.0%.

Net deferred fees ~~increased $5.6 million,~~decreased $279,000, or ~~114.8%~~1.7%, during the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2023, representing primarily fees paid for purchased loans net of amortization, which ~~are amortized~~is over the estimated loan lives.

Consistent with our business strategy, we intend to continue ~~to increase~~ the purchase and origination of residential mortgage, automobile, ~~recreational vehicle~~ and manufactured home loans. During the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2023, we purchased ~~$7.6~~$6.7 million of residential mortgage loans, $2.7 million of automobile loans, ~~$13.5 million of recreational vehicle loans~~ and ~~$17.5~~$1.9 million of manufactured home loans. ~~Additionally, to supplement originations, we intend to begin purchasing one- to four-family residential real estate loans.~~

~~Investment Securities.~~ ~~Securities available-for-sale decreased $7.5 million,~~Pension Plan Assets. Pension plan assets increased $543,000, or ~~24.5%~~5.1%, to ~~$23.1~~$11.2 million at ~~September 30, 2020~~March 31, 2023 from ~~$30.6~~$10.7 million at December 31, 2019. The decrease in securities available-for-sale resulted from the sale of $8.8 million of municipal bonds, partially offset by purchases of $1.1 million of municipal bonds and a $523,000 increase in unrealized gains.

Equity investment securities, which are comprised of mutual funds invested in preferred stock and municipal bonds and equity securities held in a directors’ retirement plan rabbi trust decreased $2.0 million, or 77.0%, to $594,000 at September 30, 2020 from $2.6 million at December 31, 2019 as a result of management’s decision to sell the mutual funds to eliminate the volatility of changing market prices.

~~Premises and Equipment.~~ Premises and equipment decreased $642,000, or 3.7%, to $16.9 million at September 30, 2020 from $17.6 million at December 31, 2019. The decrease resulted primarily from recognition of depreciation expense of $795,000.

~~Pension Plan Assets.~~ ~~Pension plan assets increased $835,000, or 11.0%, to $8.4 million at September 30, 2020 from $7.6 million at December 31, 2019.~~2022. The increase resulted from estimated returns on pension assets of ~~$1.3 million~~$397,000 and employer contributions of ~~$281,000,~~$361,000, partially offset by estimated benefits paid of ~~$330,000~~$63,000 and interest costs of ~~$443,000.~~$152,000.

~~Deposits.~~ ~~Deposits increased $20.0~~Cash and Cash Equivalents. Cash and cash equivalents decreased $2.0 million, or ~~7.1%~~24.5%, to ~~$303.4~~$6.0 million at ~~September 30, 2020~~March 31, 2023 from ~~$283.3~~$8.0 million at December 31, ~~2019. Noninterest-bearing deposits~~2022 as a result of increased ~~$13.7~~loan originations along with repayments of our FHLB advances.

Deposits. Deposits increased $19.4 million, or ~~36.1%~~6.1%, to ~~$51.9~~$337.0 million at ~~September 30, 2020~~March 31, 2023 from ~~$38.1 million as of December 31, 2019. Interest-bearing accounts increased $6.3 million, or 2.6%, to $251.5 million at September 30, 2020 from $245.2~~$317.7 million at December 31, ~~2019.~~2022. Interest-bearing ~~checking~~ accounts increased ~~$4.9~~$21.4 million, or ~~17.8%~~8.2%, to ~~$32.4~~$284.5 million at ~~September 30, 2020~~March 31, 2023 from ~~$27.5~~$263.1 million at December 31, ~~2019.~~2022. The largest increase in interest-bearing deposits was in ~~savings accounts~~certificates of deposit which increased ~~$19.9~~$29.5 million, or ~~23.4%. Additionally, money market accounts increased $794,000, or 3.2%~~27.8%, to ~~$25.7~~$135.3 million at ~~September 30, 2020~~March 31, 2023 from ~~$24.9~~$105.8 million at December 31, ~~2019 and certificates~~2022 as customers shifted funds from lower yielding core deposit accounts into higher yielding certificate of deposit specials. Interest-bearing checking accounts decreased ~~$19.4~~$2.9 million, or ~~18.0%~~7.7%, to ~~$88.2~~$35.2 million at ~~September 30, 2020~~March 31, 2023 from ~~$107.6~~$38.1 million at December 31, ~~2019.~~2022. Savings accounts decreased $2.7 million, or 2.9%, to $90.0 million at March 31, 2023 from $92.6 million at December 31, 2022. Money market accounts decreased $2.4 million, or 9.0%, to $24.1 million at March 31, 2023 from $26.5 million at December 31, 2022. Noninterest-bearing deposits decreased $2.1 million, or 3.8%, to $52.5 million at March 31, 2023 from $54.6 million at December 31, 2022.

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Municipal deposits held at Generations Commercial Bank ~~totaled $43.5~~increased $1.1 million, or 14.9%, to $8.8 million at ~~September 30, 2020 and~~March 31, 2023 from $7.6 million at December 31, 2019. Also, in light of the current historically low interest rate environment, in October 2020 we allowed a significant amount of municipal deposits to roll off at maturity without bidding for these ongoing relationships.2022.

Federal Home Loan Bank Advances. Short-term Federal Home Loan Bank advances decreased ~~$1.4~~$14.3 million, or ~~4.4%~~88.0%, to ~~$30.1~~$1.9 million at ~~September 30, 2020~~March 31, 2023 from ~~$31.4~~$16.2 million at December 31, ~~2019. The average cost~~2022 as a result of ~~outstanding advances from the~~ repayments. Long-termFederal Home Loan Bank ~~was 2.11% at September 30, 2020, compared to our weighted average rate on deposits of 0.82% at that date.~~

~~Subordinated Debt and Other Borrowings.~~ ~~Subordinated debt and other borrowings increased $500,000,~~advances decreased $2.0 million, or ~~68.0%~~19.1%, to ~~$1.2~~$8.4 million at ~~September 30, 2020~~March 31, 2023 from ~~$735,000 at December 31, 2019. In July 2020, we obtained $500,000 of~~

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~~debt at a fixed rate of 6.0% maturing February 15, 2021. It is our intention to repay this debt with net proceeds of the offering. The subordinated debt matures June 30, 2021.~~

~~Total Equity.~~ ~~Total equity increased $1.5 million, or 5.5%, to $29.8 million at September 30, 2020 from $28.2~~$10.3 million at December 31, ~~2019.~~2022 as a result of repayments.

Total Equity. Total equity increased $193,000, or 0.5%, to $37.5 million at March 31, 2023 from $37.3 million at December 31, 2022. The increase ~~resulted~~was primarily ~~from net income of $1.3 million during the period and~~due to a ~~$492,000~~ decrease in accumulated other comprehensive loss of $360,000 as a result of an increase in the fair market value of our investment securities available-for-sale, offset in part by ~~recording~~a net loss of $152,000 during the ~~$290,000 fair value of our shares of common stock held in supplemental executive retirement plans.~~three months ended March 31, 2023.

~~Forbearances Programs in Response to Government actions and the Covid-19 Pandemic~~

In March 2020, we began communicating with our business customers to ascertain whether the Covid-19 pandemic and economic shutdown had or was expected to have a significant adverse effect on their respective businesses. We also provided loan customers an opportunity to defer payments for up to five months. At June 30, 2020, 227 customers with loan balances of $28.9 million had deferred loan payments pursuant to this program. At September 30, 2020, all of these loans had returned to their regular payments cycles. When the loans come off deferment, the maturity has been extended such that the monthly payment remains the same, except for those loans with escrow. For loans with escrow, an escrow analysis was performed and the escrow portion of the payment was adjusted to make up any shortage. We have not deferred our recognition of interest income with respect to loans subject to deferment. As of the date of this prospectus, we are unable to determine the aggregate amount of loans that will likely become delinquent after the respective deferral; however, we are monitoring these loans and we have identified customers with loans totaling $10.4 million that we believe may experience significant adverse impact to their finances or related businesses due to the Covid-19 pandemic.

At September 30, 2020, a one- to four-family residential real estate loan with a $65,000 balance was 90 days delinquent and a one- to four-family residential real estate loan with a balance of $391,000 was 30 days delinquent. Additionally, at this date, one relationship with five loans totaling $515,000 were 60 days delinquent and had been classified as substandard subsequent to June 30, 2020. The loans are secured by residential investor properties.

Our nonperforming loans may increase significantly later in 2020 as loan modifications expire and the impact of current government stimulus programs wanes, and therefore we anticipate that our loan loss provision will be greater in the remainder of the year ending December 31, 2020, as compared to comparable periods in 2019, when our provision was relatively low by historical standards due to the positive economic conditions at that time.

Comparison of Operating Results for the Three Months Ended ~~September 30, 2020~~March 31, 2023 and ~~2019~~2022

General. Net ~~income~~loss for the three months ended ~~September 30, 2020~~March 31, 2023 was ~~$640,000,~~$152,000 as compared to ~~$173,000~~net income of $396,000 for the three months ended ~~September 30, 2019, an increase~~March 31, 2022, a decrease of ~~$467,000~~$548,000, or ~~269.9%~~138.4%. The ~~increase~~decrease was ~~primarily~~ due to a ~~$305,000 increase~~$371,000 decrease in net interest income and a ~~$132,000~~$40,000 decrease in noninterest income along with a $237,000 increase in noninterest expense and a ~~$113,000~~$15,000 increase in ~~noninterest income.~~provision for credit losses, partially offset by a $115,000 decrease in income tax expense.

Interest and Dividend Income. Interest and dividend income increased ~~$259,000,~~$523,000, or ~~8.3%~~16.1%, to ~~$3.4~~$3.8 million for the three months ended ~~September 30, 2020~~March 31, 2023 from ~~$3.1~~$3.2 million for the three months ended ~~September 30, 2019.~~March 31, 2022. This increase was primarily attributable to ~~increases of $257,000~~a $398,000 increase in interest on loans ~~receivable.~~receivable, a net increase of $66,000 in interest on investment securities, and an increase in interest on interest-earning deposits of $29,000. The average balance of loans increased ~~$40.2~~$30.4 million, or ~~16.2%~~11.0%, to ~~$288.0~~$307.2 million for the three months ended ~~September 30, 2020~~March 31, 2023 from ~~$247.8~~$276.8 million for the three months ended ~~September 30, 2019, while the~~March 31, 2022. The average yield on loans ~~decreased 30~~increased 10 basis points to ~~4.37% for the 2020 period from 4.67% for the 2019 period, reflecting the lower market interest rate environment period to period.~~

~~Interest Expense.~~ ~~Total interest expense decreased $46,000, or 6.0%, to $727,000~~4.36% for the three months ended ~~September 30, 2020~~March 31, 2023 from ~~$773,000~~4.26% for the three months ended ~~September 30, 2019.~~March 31, 2022, reflecting an increase in higher-yielding loans quarter over quarter. The average balance of investment securities decreased $4.4 million, or 11.2%, to $34.8 million for the three months ended March 31, 2023 from $39.2 million for the three months ended March 31, 2022. The average yield on investment securities increased 111 basis points to 3.91% for the 2023 period from 2.80% for the 2022 period due to rising interest rates and lower premium amortization expense during the three months ended March 31, 2023.

Interest Expense. Total interest expense increased $894,000, or 252.5%, to $1.2 million for the three months ended March 31, 2023 from $354,000 for the three months ended March 31, 2022. Interest expense on total interest-bearing deposits ~~decreased $48,000,~~increased $845,000, or ~~7.9%~~305.1%, to $561,000 for the three months ended September 30, 2020 from $609,000 for the three months ended September 30, 2019, primarily due to the lower market interest rate environment resulting in a decrease of $27,000 in interest expense for money market accounts and a decrease of $18,000 in interest expense for certificates of deposit. The average rates paid on our money market accounts decreased 47 basis points

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and on our certificates of deposit decreased 36 basis points when comparing the 2020 and 2019 periods. There was no significant change in borrowings cost during the comparable periods as most of the advances are fixed rate.

~~Net Interest Income~~. ~~Net interest income increased $305,000, or 12.9%, to $2.7~~$1.1 million for the three months ended ~~September 30, 2020~~March 31, 2023 from ~~$2.4~~$277,000 for the three months ended March 31, 2022. The increase was attributable to an increase of $49.9 million, or 64.8%, in the average balance of certificate of deposit accounts to $127.0 million for the three months ended ~~September 30, 2019.~~March 31, 2023 from $77.1 million for the three months ended March 31, 2022, in addition to an increase in the average cost of 250 basis points to 3.12% for the three months ended March 31, 2023 from 0.62% for the same period in 2022. Interest expense on borrowings increased $49,000, or 63.6%, to $126,000 for the three months ended March 31, 2023 from $77,000 for the three months ended March 31, 2022, as a result of an increase in the average borrowing costs of 115 basis points to 3.01% for the three months ended March 31, 2023 from 1.86% for the three months ended March 31, 2022 due to rising interest rates. The average balance of borrowings increased $199,000, or 1.2%, to $16.8 million for the three months ended March 31, 2023 from $16.6 million for the three months ended March 31, 2022.

Net Interest Income. Net interest income decreased $371,000, or 12.8%, to $2.5 million for the three months ended March 31, 2023 from $2.9 million for the three months ended March 31, 2022. Our net interest rate spread decreased 75 basis points to ~~3.26%~~2.63% for the three months ended ~~September 30, 2020~~March 31, 2023 from ~~3.44%~~3.38% for the three months ended ~~September 30, 2019.~~March 31, 2022. Our net interest margin decreased 56 basis points to ~~3.25%~~2.90% for the ~~2020 period~~three months ended March 31, 2023 from ~~3.40%~~3.46% for the ~~2019 period.~~same period in 2022. Net interest rate spread and net interest margin were affected primarily by the ~~decrease~~increase in ~~market interest rates~~the cost of our interest-bearing liabilities between the comparable periods.

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Provision for ~~Loan~~Credit Losses. Based on management’s analysis of the allowance for ~~loan~~credit losses described in Note ~~2(g)~~6 of our interim consolidated financial statements ~~“Summary of Significant Accounting Policies – Allowance~~“Allowance for ~~Loan~~Credit Losses,” we recorded a provision for credit losses of $165,000 for the three months ended March 31, 2023 as compared to a provision for loan losses of $150,000 for the three months ended ~~September 30, 2020 and a provision for loan losses of $90,000 for the three months ended September 30, 2019.~~March 31, 2022. The allowance for ~~loan~~credit losses was ~~$2.1~~$2.7 million, or ~~0.75%~~0.90%, of total loans at ~~September 30, 2020,~~March 31, 2023 as compared to ~~$1.7~~$2.5 million, or ~~0.65%~~0.86%, of total loans at December 31, ~~2019.~~2022. The increase in provision for ~~loan~~credit losses for the 2023 period was primarily due to overall growth in the ~~2020 period was due primarily to an increase in total loans with an emphasis on loans purchased secured by manufactured homes, automobiles and recreational vehicles.~~loan portfolio.

Noninterest Income. Noninterest income ~~increased $113,000,~~decreased $40,000, or ~~10.9%~~6.5%, to ~~$1.1 million~~$576,000 for the three months ended ~~September 30, 2020~~March 31, 2023 from ~~$1.0 million~~$616,000 for the three months ended ~~September 30, 2019.~~March 31, 2022. The ~~increase~~decrease was primarily due to a ~~$272,000 increase~~decrease in ~~net gains on securities sold,~~insurance commissions, partially offset ~~partially~~ by ~~decreases~~increases in ~~several noninterest income sources. Net unrealized losses~~change in fair value on equity securities ~~increased $60,000. Service fees decreased $54,000 as fewer fees were assessed when the Covid-19 crisis began. Investment services~~and other charges, commissions, and fees. Insurance commissions decreased ~~$42,000 and we experienced a $14,000 decrease in insurance commissions.~~

~~Noninterest Expense.~~ ~~Noninterest expense decreased $132,000,~~$68,000, or ~~4.2%~~34.5%, to ~~$3.0 million~~$129,000 for the three months ended ~~September 30, 2020~~March 31, 2023 from $197,000 for the three months ended March 31, 2022 as a result of the Management Agreement with Northwoods whereby Northwoods assumed customer service responsibilities for Generations Insurance Agency, Inc. effective April 1, 2022. Change in fair value on equity securities increased $20,000, or 166.7%, to $8,000 for the three months ended March 31, 2023 from a loss of $12,000 for the three months ended March 31, 2022 due to an increase in the fair market value of our equity securities. Other charges, commissions, and fees increased $19,000, or 95.0%, to $39,000 for the three months ended March 31, 2023 from $20,000 for the three months ended March 31, 2022 primarily due to a gain recognized on the sale of a foreclosed property.

Noninterest Expense. Noninterest expense increased $237,000, or 8.2%, to $3.1 million for the three months ended September 30, 2019. Compensation and benefits decreased $148,000, or 10.3%, due to a reduction in the number of employees. Occupancy and equipment expense decreased $42,000, or 7.4%, due to savings realized on maintenance contracts. Service charges decreased $45,000, or 8.2%, due to the elimination of duplicative IT service fees related to our 2018 merger with Medina Savings and Loan Association. These savings were partially offset by a $56,000 increase in regulatory assessments and a $25,000 loss on other real estate owned.

~~Federal Income Taxes.~~ ~~An income tax expense of $23,000 was recorded during the three months ended September 30, 2020 compared to no income tax expense~~March 31, 2023 from $2.9 million for the three months ended ~~September 30, 2019.~~

~~Comparison of Operating Results for the Nine Months Ended September 30, 2020 and 2019~~

~~General.~~ ~~Net income for the nine months ended September 30, 2020 was $1.3 million, compared to $84,000 for the nine months ended September 30, 2019, an increase of $1.3 million. The increase was~~March 31, 2022 primarily due to ~~a $632,000~~an increase in ~~net interest income,~~compensation and benefits. Compensation and benefits increased $173,000, or 14.0%, to $1.4 million for the three months ended March 31, 2023 from $1.2 million for the three months ended March 31, 2022 as a ~~$582,000~~result of annual merit increases for our employees as well as a decrease in ~~noninterest~~pension expense ~~and~~benefit.

Income Taxes. Income tax expense decreased $115,000, or 153.3%, to an income tax benefit of ~~$201,000, partially offset by a $92,000 decrease in noninterest income.~~

~~Interest and Dividend Income.~~ ~~Interest and dividend income increased $657,000, or 7.0%, to $10.1 million~~$40,000 for the ~~nine~~three months ended ~~September 30, 2020 from $9.4 million~~March 31, 2023 as compared to income tax expense of $75,000 for the ~~nine~~three months ended ~~September 30, 2019.~~March 31, 2022. The effective tax rate was 20.8% for the three months ended March 31, 2023 as compared to 15.9% for the three months ended March 31, 2022. The statutory tax rate was impacted by the benefits derived from tax-exempt bond income, as well as income received on bank-owned life insurance. The increase in the current quarter’s effective tax rate was ~~primarily attributable~~a result of an increase in permanent tax differences and state tax expense proportional to ~~increases of $467,000 in interest on loans receivable and $211,000 in interest from securities. The average balance of loans increased $28.2 million, or 11.4%, to $274.6 million~~total income, which was a loss for the ~~nine~~three months ended September 30, 2020 from $246.4 million for the nine months ended September 30, 2019, due to the purchase of loans secured by manufactured homes, automobiles and recreational vehicles. The average yield on loans decreased 26 basis points to 4.46% for the 2020 period from 4.72% for the 2019 period, reflecting the lower market interest rate environment period to period.March 31, 2023.

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The average balance of investment securities increased $10.4 million to $33.6 million for the nine months ended September 30, 2020 from $23.2 million for the nine months ended September 30, 2019. The increase resulted primarily from the purchase of municipal securities and an increase in unrealized gains in the portfolio. The average yield on investment securities decreased 15 basis points to 3.01% during the 2020 period from 3.16% from the 2019 period.

~~Interest Expense.~~ Interest expense was $2.3 million for the nine months ended September 30, 2020 and 2019. Increases in interest expense of certificates of deposit of $132,000 and in borrowings of $56,000 between the comparable periods were offset by decreases of $85,000 and $77,000 in money market accounts interest expense and savings accounts interest expense, respectively. The average cost of deposits and borrowings all decreased during the comparable periods due to the lower market interest rate environment.

~~Net Interest Income~~. Net interest income increased $632,000, or 8.9%, to $7.8 million for the nine months ended September 30, 2020 from $7.1 million for the nine months ended September 30, 2019. Our net interest rate spread decreased 21 basis points to 3.28% for the nine months ended September 30, 2020 from 3.49% for the nine months ended September 30, 2019. Our net interest margin decreased 20 basis points to 3.25% for the 2020 period from 3.45% for the 2019 period. Net interest rate spread and net interest margin were affected by the decrease in interest rates during the comparative periods in the 2020 and 2019 periods.

~~Provision for Loan Losses.~~ Based on management’s analysis of the allowance for loan losses described in Note 2(g) of our consolidated financial statements “Summary of Significant Accounting Policies – Allowance for Loan Losses,” we recorded a provision for loan losses of $330,000 for the nine months ended September 30, 2020 and a provision for loan losses of $270,000 for the nine months ended September 30, 2019. The increased provision for loan losses in the 2020 period was due primarily to an increase in total loans with an emphasis on loans purchased secured by manufactured homes, automobiles and recreational vehicles.

~~Noninterest Income.~~Noninterest income decreased $92,000, or 3.3%, to $2.7 million for the nine months ended September 30, 2020 from $2.8 million for the nine months ended September 30, 2019. The decrease was primarily due to a $449,000 increase in unrealized losses on equity securities, a $127,000 decrease on investment securities revenue and a $92,000 decrease in service fees, offset in part by a $245,000 net gain realized on the sale of securities and $330,000 gain realized on the sale of the investment services book of business.

~~Noninterest Expense.~~ Noninterest expense decreased $582,000, or 6.1%, to $8.9 million for the nine months ended September 30, 2020 from $9.5 million for the nine months ended September 30, 2019. Compensation and benefits decreased $510,000, or 11.2%, due to a reduction of employees. Occupancy and equipment expense decreased $121,000, or 7.1%, due to savings realized on maintenance contracts. Service charges decreased $129,000, or 8.2%, due to the elimination of IT-related service fees related to our 2018 merger with Medina Savings and Loan Association. These savings were partially offset by an $85,000, or 26.9%, increase in professional and other services fees due to higher legal and accounting costs and a $51,000 increase in regulatory assessments.

~~Federal Income Taxes.~~ An income tax benefit of $201,000 was recorded during the nine months ended September 30, 2020 compared to no income tax expense for the nine months ended September 30, 2019. The benefit recorded in 2020 resulted from our ability to carryback a net operating loss pursuant to The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”).

Average Balances and ~~Yields~~Yields.. The following ~~tables set~~table sets forth average balance sheets, average yield and costs, and certain other information at the dates and for the ~~period~~periods indicated. No tax-equivalent yield adjustments have been made. Any adjustments necessary to present yields on a tax-equivalent basis are insignificant. All average balances are daily average balances. Non-accrual loans were included in the computation of average balances, but have been reflected in the table as loans carrying a zero yield. The yields set forth below include the effect of deferred fees, discounts and premiums that are amortized or accreted to interest income or interest expense. Net deferred loan costs amortized totaled approximately $482,000 and $443,000 for the three months ended March 31, 2023 and 2022, respectively.

Three Months Ended March 31,

2023

2022

Average

Average

Balance

Balance

Outstanding

Interest

Yield/ Rate

Outstanding

Interest

Yield/ Rate

Interest-earning assets:

Loans

$
307,222

$
3,348

4.36
%
$
276,800

$
2,950

4.26
%
Securities

34,803

340

3.91

39,201

274

2.80

Interest-earning deposits

5,356

45

3.36

17,392

16

0.37

Other

1,287

39

12.12

1,384

9

2.60

Total interest-earning assets

348,668

3,772

4.33

334,777

3,249

3.88

Non-interest-earning assets

41,013

41,549

Total assets

$
389,681

$
376,326

Interest-bearing liabilities:

Demand deposits

$
32,999

$
25

0.30
%
$
46,352

$
14

0.12
%
Money market accounts

25,401

22

0.35

32,007

28

0.35

Savings accounts

91,735

86

0.37

112,171

115

0.41

Certificates of deposit

127,010

989

3.12

77,076

120

0.62

Total interest-bearing deposits

277,145

1,122

1.62

267,606

277

0.41

Borrowings

16,768

126

3.01

16,569

77

1.86

Total interest-bearing liabilities

293,913

1,248

1.70

284,175

354

0.50

Other non-interest bearing liabilities

58,499

49,153

Total liabilities

352,412

333,328

Equity

37,269

42,998

Total liabilities and equity

$
389,681

$
376,326

Net interest income

$
2,524

$
2,895

Interest rate spread

2.63
%

3.38
%
Net interest-earning assets

$
54,755

$
50,602

Net interest margin

2.90
%

3.46
%
Average interest-earning assets to average

interest-bearing liabilities

118.63
%

117.81
%

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For the Three Months Ended September 30,

2020

2019

Average

Average

Balance

Balance

Outstanding

Interest

Yield/ Rate

Outstanding

Interest

Yield/ Rate

Interest-earning assets:

Loans

$
287,993

$
3,149

4.37
%

$
247,845

$
2,892

4.67
%
Securities

29,351

210

2.86

24,406

200

3.28

Interest earning deposits

8,712

1

0.005

2,757

8

1.16

Other

2,174

32

5.89

2,235

33

5.91

Total interest-earning assets

328,230

3,392

4.13

277,243

3,133

4.52

Non-interest-earning assets

40,971

40,301

Total assets

$
369,201

$
317,544

Interest-bearing liabilities:

Demand deposits

$
83,840

$
12

0.06
%

$
65,587

$
11

0.07
%
Money market accounts

25,325

22

0.35

23,955

49

0.82

Savings accounts

100,914

125

0.50

86,402

129

0.6

Certificates of deposit

94,270

402

1.71

81,085

420

2.07

Total interest-bearing deposits

304,349

561

0.074

257,029

609

0.95

Borrowings

30,984

166

2.14

29,851

164

2.20

Total interest-bearing liabilities

335,333

727

0.87

286,880

773

1.08

Other non-interest bearing liabilities

4,320

3,031

Total liabilities

339,653

289,911

Equity

29,548

27,633

Total liabilities and equity

$
369,201

$
317,544

Net interest income

$
2,665

$
2,360

Interest rate spread

3.26
%

3.44
%

Net interest-earning assets

$
(7,103)

$
(9,637)

Net interest margin

3.25
%

3.40
%

Average interest-earning assets to average

to interest-bearing liabilities

97.88
%

96.64
%

Loan and Asset Quality and Allowance for Credit Losses. The following table represents information concerning the aggregate amount of non-performing assets at the indicated dates:

At March 31,

At December 31,
(In thousands)

2023

2022

Non-accrual loans:

Residential:

One- to four-family

$
1,703

$
2,605
Commercial:

Real estate - nonresidential

412

416
Commercial business

537

587
Consumer:




Home equity and junior liens

129

172
Manufactured homes

368

368
Automobile

40

21
Student

59

68
Recreational vehicle

275

135
Other consumer

35

—
Total non-accrual loans

$
3,558

$
4,372

Real estate owned:

Residential:

One- to four-family

$
152

$
12
Total real estate owned

$
152

$
12

Total non-performing assets

$
3,710

$
4,384

Ratios:

Total non-performing loans to total loans

1.20%

1.51%
Total non-performing loans to total assets

0.91%

1.13%
Total non-performing assets to total assets

0.95%

1.13%

Non-performing assets include non-accrual loans, non-accruing TDRs (prior to January 1, 2023), and foreclosed real estate. The Company generally places a loan on non-accrual status and ceases accruing interest when loan payment performance is deemed unsatisfactory and the loan is past due 90 days or more. At March 31, 2023 there were no loans that were past due 90 days or more and still accruing interest.

As indicated in the table above, non-performing assets were $3.7 million at March 31, 2023 and $4.4 million at December 31, 2022. At March 31, 2023, the Bank had 29 non-performing one- to four-family residential mortgage loans for $1.7 million, two non-performing nonresidential loans for $412,000, three non-performing commercial business loans for $537,000, six home equity loans and lines of credit for $129,000, three non-performing manufactured home loans for $368,000, four non-performing automobile loans for $40,000, five non-performing student loans for $59,000, five non-performing recreational vehicle loans for $275,000, and two non-performing other consumer loans for $35,000. At December 31, 2022, the Bank had 37 non-performing one- to four-family residential mortgage loans for $2.6 million, two non-performing nonresidential loans for $416,000, four non-performing commercial business loans for $587,000, eight home equity loans and lines of credit for $172,000, three non-performing manufactured home loans for $368,000, two non-performing automobile loans for $21,000, six non-performing student loans for $68,000, and two non-performing recreational vehicle loans for $135,000. The Bank had $152,000 in real estate owned at March 31, 2023 and $12,000 in real estate owned at December 31, 2022.

The allowance for credit losses represents management’s estimate of losses inherent in the loan portfolio as of the date of the consolidated statement of financial condition. The allowance for credit losses was $2.7 million at March 31, 2023 and $2.5 million at December 31, 2022. The Company reported an increase in the ratio of the allowance for

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For the Nine Months Ended September 30,

2020

2019

Average

Average

Balance

Balance

Outstanding

Interest

Yield/ Rate

Outstanding

Interest

Yield/ Rate

Interest-earning assets:

Loans

$
274,561

$
9,183

4.46
%

$
246,386

$
8,716

4.72
%
Securities

33,626

760

3.01

23,196

549

3.16

Interest earning deposits

7,221

11

0.20

3,348

42

1.67

Other

2,263

103

6.07

2,117

93

5.86

Total interest-earning assets

317,671

10,057

4.22

275,047

9,400

4.56

Non-interest-earning assets

41,346

40,967

Total assets

$
359,017

$
316,014

Interest-bearing liabilities:

Demand deposits

$
75,355

$
33

0.06
%

$
64,985

$
34

0.07
%
Money market accounts

24,842

78

0.42

23,590

163

0.92

Savings accounts

93,531

330

0.47

88,676

407

0.61

Certificates of deposit

100,664

1,359

1.80

81,240

1,227

2.01

Total interest-bearing deposits

294,392

1,800

0.82

258,491

1,831

0.94

Borrowings

32,173

508

2.11

26,795

452

2.25

Total interest-bearing liabilities

326,565

2,308

0.94

285,286

2,283

1.07

Other non-interest bearing liabilities

3,493

3,204

Total liabilities

330,058

288,490

Equity

28,959

27,524

Total liabilities and equity

$
359,017

$
316,014

Net interest income

$
7,749

$
7,117

Interest rate spread

3.28
%

3.49
%

Net interest-earning assets

$
(8,894)

$
(10,239)

Net interest margin

3.25
%

3.45
%

Average interest-earning assets to average

to interest-bearing liabilities

97.28
%

96.41
%

credit losses to gross loans to 0.90% at March 31, 2023 as compared to 0.86% at December 31, 2022. Management performs a quarterly evaluation of the allowance for credit losses based on quantitative and qualitative factors and has determined that the current level of the allowance for credit losses is adequate to absorb the losses in the loan portfolio as of March 31, 2023.

The Company had no loans which were deemed to be impaired at December 31, 2022.

Management has identified potential credit problems which may result in the borrowers not being able to comply with the current loan repayment terms and which may result in it being included in future impaired loan reporting. Management has identified potential problem loans totaling $9.8 million as of March 31, 2023 as compared to $11.0 million at December 31, 2022. These loans have been internally classified as special mention or substandard, yet are not currently considered impaired. The decrease of $1.2 million was primarily driven by a decrease in residential mortgage loans classified as substandard as a result of loan upgrades and loan payoffs. Based on current information available at March 31, 2023, these loans were re-evaluated for their range of potential losses and reclassified accordingly.

Liquidity and Capital Resources.Liquidity is the ability to meet financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. The Bank’s primary sources of funds are deposits, principal and interest payments on loans and securities, proceeds from the sale of loans, and proceeds from the sale or maturities of securities. In addition, the Bank may borrow from the FHLB. At ~~September 30, 2020,~~March 31, 2023, the Bank had ~~$30.0~~$10.3 million outstanding in advances from the ~~FHLB.~~FHLB and had the ability to borrow approximately $58.3 million based on our collateral capacity. At ~~September 30, 2020,~~March 31, 2023, the Bank ~~also~~ had an $8additional $15.5 million ~~line~~in lines of credit available with ~~a correspondent bank.~~ ~~Under the terms of the~~ agreement, up to $4 million advanced is unsecured for terms of fourteen days or less. Any amount advanced over $4 million, or if the advance were extended for a term greater than fourteen days, would be secured by the delivery of collateral. The secured advance is limited to 80% of government agency sponsored mortgage-backed securities or 90% of United States Government Treasuries delivered. Noother financial institutions and as such no advances received can exceed 50% of the Bank’s capital. At ~~September 30, 2020~~March 31, 2023 and December 31, ~~2019,~~2022, there were no outstanding advances on these lines.

On March 12, 2023, in response to liquidity concerns in the banking system, the Federal Deposit Insurance Corporation, Federal Reserve Board, and U.S. Department of Treasury, collaboratively approved certain actions with a stated intention to reduce stress across the financial system, support financial stability, and minimize any impact on businesses, households, taxpayers, and the broader economy. Among other actions, the Federal Reserve Board has created a new Bank Term Funding Program (“BTFP”) to make additional funding available to eligible depository institutions to help ensure institutions can meet the needs of their depositors. Eligible institutions may obtain liquidity against a wide range of collateral. BTFP advances can be requested through at least March 11, 2024. The Company has not requested funding through the BTFP as of March 31, 2023, but has an established relationship with the Federal Reserve to take advantage of this ~~line.~~program.

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. Our most liquid assets are cash and equity and available-for-sale investments. The levels of these assets are dependent on our operating, financing, lending, and investing activities during any given period.

~~Table of Contents~~

Our cash flows are comprised of three primary classifications: cash flows from operating activities, investing activities, and financing activities. Net cash used in operating activities was ~~$24,000 and$343,000~~$377,000 for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2023 and ~~2019, respectively.~~$596,000 for the three months ended March 31, 2022. Net cash used in investing activities, which consists primarily of disbursements for loan originations and the purchase of securities, offset by principal collections on loans and proceeds from the sale of and maturing securities, was $4.6 million for the three months ended March 31, 2023 and net cash ~~used in~~provided by investing activities was ~~$20.3 million and $5.5~~$2.2 million for the ~~nine~~three months ended ~~September 30, 2020~~ ~~and 2019, respectively.~~March 31, 2022. Net cash provided by financing activities, consisting primarily of the activity in deposit accounts and FHLB advances, was ~~$19.1 million and $4.8~~$3.0 million for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2023 and ~~2019, respectively.~~$1.1 million for the three months ended March 31, 2022.

We are committed to maintaining a ~~strong~~satisfactory 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. ~~We anticipate that we will have sufficient funds to meet our current funding commitments. In light~~

Table of the current historically low interest rate environment, in October 2020 we allowed a significant amount of municipal deposits to roll off at maturity without bidding for these ongoing deposit relationships. We funded the outflow of these deposits, in part, through the sale of municipal securities.Contents

~~Seneca-Cayuga Bancorp is, and~~ Generations Bancorp ~~as its successor will be,~~is a separate corporate entity from Generations Bank and it must provide for its own liquidity to pay any dividends to its stockholders, to repurchase any shares of its common stock, and for other corporate purposes. ~~Seneca-Cayuga~~Generations Bancorp’s primary source of liquidity is any dividend payments it may receive from Generations Bank. Generations Bank paid ~~no dividends~~a dividend of $1.0 million to ~~Seneca-Cayuga~~Generations Bancorp during the ~~nine~~three months ended ~~September 30, 2020 or~~March 31, 2023. Generations Bank paid a dividend of $1.3 million to Generations Bancorp for the year ended December 31, ~~2019.~~2022. At ~~September 30, 2020, Seneca-Cayuga~~March 31, 2023, Generations Bancorp (on an unconsolidated, stand-alone basis) had ~~liquid assets~~cash and investment securities totaling ~~$14,000.~~$2.7 million.

On September 10, 2020, based on its supervisory profile, the Bank was notified by the Office of the Comptroller of the Currency that it established individual minimum capital ratios for the Bank. Specifically, effective September 10, 2020, the Bank is required to maintain a leverage ratio of 8.0%At March 31, 2023 and ~~a total capital ratio of 12.0%. At September 30, 2020, the~~December 31, 2022, Generations Bank exceeded all of its regulatory capital requirements with a Tier 1 leverage capital level of $31.6 million, or 8.54% of adjusted total assets, which is above the well-capitalized required level of $16.7 million, or 5.0%; total risk-based capital of $33.7 million, or 13.26% of risk-weighted assets, which is above the well-capitalized required level of $26.7 million, or 10.5% of risk-weighted assets; and common equity tier 1 risk based capital of $27.1 million, or 11.56%, of risk-weighted assets, which is above the well-capitalized required level of $17.8 million, or 7.0%. At September 30, 2020, the Bank’s leverage ratio was 8.54% and its total capital ratio was 13.26% as indicated above. At December 31, 2019, the Bank exceeded all of its regulatory capital requirements with a Tier 1 leverage capital level of $29.6 million, or 8.37% of adjusted total assets, which is above the well-capitalized required level of $15.9 million, or 4.5%; and total risk-based capital of $31.2 million, or 12.82% of risk-weighted assets, which is above the well-capitalized required level of $25.6 million, or 10.5% of risk-weighted assets. Accordingly, the Bank was categorized as well ~~capitalized at September 30, 2020, and December 31, 2019.~~capitalized. See Note 9 to the interim condensed consolidated financial statements. Management is ~~not aware~~unaware of any conditions or events since the most recent notification that would change ~~the Bank’s~~our category.

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable, as the Registrant is a smaller reporting company.

~~Item~~
ITEM 4.Controls and Procedures
An evaluation was performed under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) promulgated under the Securities and Exchange Act of 1934, as amended) as of ~~September 30, 2020.~~March 31, 2023. Based on that evaluation, the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, concluded that the Registrant’s disclosure controls and procedures were effective.

~~Table of Contents~~

During the quarter ended ~~September 30, 2020,~~March 31, 2023, there have been no changes in the Company’s internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION
~~Item~~ITEM 1.Legal Proceedings
We are subject to various legal actions arising in the normal course of business. In the opinion of management, the resolution of these legal actions is not expected to have a material adverse effect on ~~the~~ our financial condition or results of operations.

~~Item~~ITEM 1A.Risk Factor
Not applicable, as the Registrant is a smaller reporting company.

Table of Contents

ITEM 2.~~UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS~~Unregistered Sales of Equity Securities and Use of Proceeds
The following table provides certain information with regard to shares repurchased by the Company in the first quarter of 2023.

Total

Number of

Shares

Maximum

Purchased as

Number of

Part of

Shares that

Total

Publicly

May Yet Be

Number of

Average

Announced

Purchased under the

Shares

Price Paid

Plans or

Plans or
Period

Purchased

per Share

Programs

Programs
January 1 - January 31, 2023

5,819

$
10.98

5,819

1,777
February 1 - February 28, 2023

689

$
10.90

689

1,088
March 1 - March 31, 2023

1,088

$
10.75

1,088

—
Total

7,596

$
10.94

7,596

The Company’s Board of Directors authorized its first stock repurchase program on March 28, 2022 to acquire up to 83,300 shares, or 3.4 %, of the Company’s then outstanding common stock. On July 25, 2022, the Board of Directors authorized a second stock repurchase program to acquire up to 87,000 shares, or approximately 3.6%, of the Company’s outstanding common stock at the conclusion of the first stock repurchase program. As of August 11, 2022, all 83,300 shares from the Company’s first repurchase program had been repurchased. As of March 31, 2023, all 87,000 shares from the Company’s second repurchase program had been repurchased. All of the repurchases were made pursuant to a publicly announced plan and were made from time to time depending on market conditions and other factors, and were conducted through open market or private transactions, through block trades, and pursuant to any trading plan that may have been adopted in accordance with Rule 10b5-1 of the Securities and Exchange Commission.

~~(a)~~
~~There were no sales of unregistered securities during the period covered by this Report.~~

~~(b)~~
~~Not applicable.~~

~~(c)~~
~~There were no issuer repurchases of securities during the period covered by this Report.~~

ITEM 3.~~DEFAULTS UPON SENIOR SECURITIES~~Defaults Upon Senior Securities
None.

ITEM 4.~~MINE SAFETY DISCLOSURES~~Mine Safety Disclosures
None.

ITEM 5.~~OTHER INFORMATION~~Other Information
None.

Table of Contents

ITEM 6.~~EXHIBITS~~Exhibits
Exhibit Index
Exhibit Number

Description
10.1

Employment Agreement by and between Generations Bank and Anthony G. Cutrona

31.1

Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2

Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32

Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS

Inline XBRL Instance Document

101.SCH

Inline XBRL Taxonomy Extension Schema Document

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

104

Cover Page Interactive Data File – the cover page XBRL tags are embedded within the Inline XBRL document (included in Exhibit 101)

Table of Contents

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

GENERATIONS BANCORP NY, INC.

Date: ~~December 23, 2020~~May 8, 2023

/s/ Menzo D. Case

Menzo D. Case

Chief Executive Officer

Date: ~~December 23, 2020~~May 8, 2023

/s/ ~~Menzo D. Case~~Angela M. Krezmer

~~Menzo D. Case~~Angela M. Krezmer

Chief Financial Officer


	At March 31,		At December 31,
(In thousands, except share data)	2023		2022
	(Unaudited)
ASSETS:
Cash and due from banks	$	4,021	$	3,955
Interest earning deposits		2,020		4,049
Total cash and cash equivalents		6,041		8,004
Interest-earning time deposits in banks		680		—
Investment securities available-for-sale, at fair value		33,208		33,050
Investment securities held-to-maturity (fair value 2023-$1,309, 2022-$1,301)		1,552		1,587
Equity investment securities, at fair value		315		307
Federal Home Loan Bank stock, at cost		990		1,740
Loans		311,024		306,377
Less: Allowance for credit losses		(2,653)		(2,497)
Loans receivable, net		308,371		303,880
Premises and equipment, net		14,757		14,863
Bank-owned life insurance		7,379		7,351
Pension plan asset		11,240		10,697
Foreclosed real estate & repossessed assets		152		12
Goodwill		792		792
Intangible assets, net		702		718
Accrued interest receivable		1,319		1,304
Other assets		1,704		1,988
Total assets	$	389,202	$	386,293

LIABILITIES AND SHAREHOLDERS' EQUITY:
Deposits:
Noninterest-bearing	$	52,518	$	54,609
Interest-bearing		284,515		263,069
Total deposits		337,033		317,678
Short-term borrowings		1,940		16,200
Long-term borrowings		8,357		10,334
Advances from borrowers for taxes and insurance		1,825		2,653
Other liabilities		2,526		2,100
Total liabilities		351,681		348,965
Shareholders' equity:
Preferred stock, par value $0.01; 1,000,000 shares authorized; none issued		—		—
Common stock, par value $0.01; 14,000,000 shares authorized in 2023 and 2022; 2,341,152 and 2,348,748 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively		23		24
Additional paid in capital		22,983		23,002
Retained earnings		22,353		22,512
Accumulated other comprehensive loss		(6,107)		(6,467)
Stock held in rabbi trust		(698)		(698)
Unearned ESOP shares, at cost		(1,033)		(1,045)
Total shareholders' equity		37,521		37,328
Total liabilities and shareholders' equity	$	389,202	$	386,293


	September 30,		December 31,
(In thousands, except share data)	2020		2019
	(unaudited)
ASSETS:
Cash and due from banks	$	3,750	$	6,685
Interest earning deposits		8,498		6,763
Total cash and cash equivalents		12,248		13,448
Investment securities available-for-sale, at fair value		23,132		30,627
Investment securities held-to-maturity (fair value 2020-$1,653, 2019-$2,110)		1,616		2,078
Equity investment securities, at fair value		594		2,579
Federal Home Loan Bank stock, at cost		2,120		2,267
Loans		292,863		261,280
Less: Allowance for loan losses		2,116		1,660
Loans receivable, net		290,747		259,620
Premises and equipment, net		16,946		17,588
Bank-owned life insurance		6,997		6,893
Pension plan asset		8,440		7,605
Foreclosed real estate & repossessed assets		8		70
Goodwill		792		792
Intangible assets, net		864		913
Accrued interest receivable		1,426		1,215
Other assets		1,760		1,854
Total assets	$	367,690	$	347,549

LIABILITIES AND SHAREHOLDERS' EQUITY:
Deposits:
Noninterest-bearing	$	51,865	$	38,098
Interest-bearing		251,503		245,240
Total deposits		303,368		283,338
Long-term borrowings		30,064		31,448
Subordinated debt		1,235		735
Advances from borrowers for taxes and insurance		1,337		2,712
Other liabilities		1,908		1,085
Total liabilities		337,912		319,318
Shareholders' equity:
Preferred stock, par value $0.01; 1,000,000 shares authorized; none issued		—		—
Common stock, par value $0.01; 9,000,000 shares authorized; 2,551,940 shares issued in 2020 and 2019; 2,463,507 and 2,467,507 shares outstanding in 2020 and 2019		26		26
Additional paid in capital		11,956		11,962
Retained earnings		19,918		18,571
Accumulated other comprehensive loss		(1,170)		(1,662)
Treasury stock, at cost; 88,433 and 84,433 shares in 2020 and 2019		(615)		(573)
Stock held in rabbi trust		(290)		—
Unearned ESOP shares, at cost		(47)		(93)
Total shareholders' equity		29,778		28,231
Total liabilities and shareholders' equity	$	367,690	$	347,549


	Three Months				Nine Months
	Ended September 30,				Ended September 30,
(In thousands, except per share data)	2020		2019		2020		2019

	(unaudited)				(unaudited)
Interest and dividend income:
Loans, including fees	$	3,149	$	2,892	$	9,183	$	8,716
Debt and equity securities:
Taxable		11		35		64		79
Tax-exempt		199		165		696		470
Interest earning deposits		1		8		11		42
Other		32		33		103		93
Total interest income		3,392		3,133		10,057		9,400
Interest expense:
Deposits		561		609		1,800		1,831
Short-term borrowings		2		23		2		24
Long-term borrowings		144		126		457		384
Subordinated debt		20		15		49		44
Total interest expense		727		773		2,308		2,283
Net interest income		2,665		2,360		7,749		7,117
Provision for loan losses		150		90		330		270
Net interest income after provision for loan losses		2,515		2,270		7,419		6,847
Noninterest income:
Banking fees and service charges		370		424		1,099		1,191
Mortgage banking income, net		11		16		36		69
Insurance commissions		180		194		586		631
Investment services commissions		2		44		86		213
Earnings on bank-owned life insurance		37		34		104		97
Unrealized gains (losses) on equity securities		2		62		(176)		273
Net gain on sale of securities		509		237		509		264
Other charges, commissions & fees		34		21		431		29
Total noninterest income		1,145		1,032		2,675		2,767
Noninterest expense:
Compensation and benefits		1,290		1,438		4,048		4,558
Occupancy and equipment		522		564		1,573		1,694
Service charges		503		548		1,453		1,582
Regulatory assessments		79		23		213		162
Professional and other services		135		126		401		316
Advertising		108		100		325		300
Other expenses		360		330		935		918
Total noninterest expenses		2,997		3,129		8,948		9,530
Income before income taxes		663		173		1,146		84
Expense (Benefit) for income taxes		23		—		(201)		—
Net income		640		173		1,347		84
Net income available to common shareholders	$	640	$	173	$	1,347	$	84
Earnings per common share	$	0.26	$	0.07	$	0.55	$	0.04


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2020		2019		2020		2019

	(unaudited)				(unaudited)
Net income	$	640	$	173	$	1,347	$	84
Other comprehensive income (loss), before tax:
Unrealized gains on securities available-for-sale:
Unrealized holding gains arising during the period		157		428		1,003		884
Reclassification adjustment for net gains included in net income		(480)		(237)		(480)		(264)
Net unrealized gains on securities available-for-sale		(323)		191		523		620
Defined benefit pension plan:
Reclassification of amortization of net losses recognized in net pension expense		33		47		100		143
Net change in defined benefit pension plan asset		33		47		100		143
Other comprehensive income (loss), before tax		(290)		238		623		763
Tax effect		61		(50)		(131)		(167)
Other comprehensive income (loss), net of tax		(229)		188		492		596
Total comprehensive income	$	411	$	361	$	1,839	$	680


							Accumulated						Stock
Three Months Ended			Additional				Other				Unearned		Held by
Ended September 30,	Common		Paid in		Retained		Comprehensive		Treasury		ESOP		Rabbi
(In thousands, except share data)	Stock		Capital		Earnings		Loss		Stock		Shares		Trust		Total
Balance, June 30, 2020	$	26	$	11,958	$	19,278	$	(941)	$	(615)	$	(62)	$	(290)	$	29,354
Net income		—		—		640		—		—		—		—		640
Other comprehensive loss		—		—		—		(229)		—		—		—		(229)
ESOP shares committed to be released (6,221 shares)		—		(2)		—		—		—		15		—		13
Balance, September 30, 2020	$	26	$	11,956	$	19,918	$	(1,170)	$	(615)	$	(47)	$	(290)	$	29,778

Three Months Ended
Ended September 30 2019
Balance, June 30, 2019	$	26	$	11,960	$	18,395	$	(2,003)	$	(570)	$	(124)	$	—	$	27,684
Net income		—		—		173		—		—		—		—		173
Other comprehensive income		—		—		—		188		—		—		—		188
Repurchase of common stock		—		—		—		—		(2)		—		—		(2)
ESOP shares committed to be released (6,221 shares)		—		1		—		—		—		15		—		16
Balance, September 30, 2019	$	26	$	11,961	$	18,568	$	(1,815)	$	(572)	$	(109)	$	—	$	28,059


							Accumulated						Stock
Nine Months Ended			Additional				Other				Unearned		Held by
Ended September 30,	Common		Paid in		Retained		Comprehensive		Treasury		ESOP		Rabbi
(In thousands, except share data)	Stock		Capital		Earnings		Loss		Stock		Shares		Trust		Total
Balance, January 1, 2020	$	26	$	11,962	$	18,571	$	(1,662)	2	(573)	$	(93)	$	—	$	28,231
Net income		—		—		1,347		—		—		—		—		1,347
Other comprehensive income		—		—		—		492		—		—		—		492
Purchase of common stock for SERPs		—		—		—		—		—		—		(290)		(290)
Repurchase of common stock		—		—		—		—		(42)		—		—		(42)
ESOP shares committed to be released (6,221 shares)		—		(6)		—		—		—		46		—		40
Balance, September 30, 2020		26	$	11,956	$	19,918	$	(1,170)	$	(615)	$	(47)	$	(290)	$	29,778

Nine Months Ended
Ended September 30,
Balance, January 1, 2019	$	26	$	11,958	$	18,484	$	(2,411)	$	(532)	$	(156)	$	—	$	27,369
Net loss		—		—		84		—		—		—		—		84
Other comprehensive income		—		—		—		596		—		—		—		596
Repurchase of common stock		—		—		—		—		(40)		—		—		(40)
ESOP shares committed to be released (6,221 shares)		—		3		—		—		—		47		—		50
Balance, September 30, 2019	$	26	$	11,961	$	18,568	$	(1,815)	$	(572)	$	(109)	$	—	$	28,059


	Unrealized				Accumulated		Unrealized				Accumulated
	(Losses) Gains		Defined		Other		(Losses) Gains		Defined		Other
Three Months Ended September 30,	on Securities		Benefit		Comprehensive
Three Months Ended March 31,							on Securities		Benefit		Comprehensive
(In thousands)	Available-for-Sale		Pension Plan		Income (Loss)		Available-for-Sale		Pension Plan		Loss

	(unaudited)
Balance, June 30, 2020	$	1,326	$	(2,267)	$	(941)
Balance, December 31, 2022							$	(3,905)	$	(2,562)	$	(6,467)
Other comprehensive gain before reclassifications		124		—		124		328		—		328
Amounts reclassified from AOCI to the income statement		(379)		26		(353)
Net current-period other comprehensive income (loss)		(255)		26		(229)
Balance, September 30, 2020	$	1,071	$	(2,241)	$	(1,170)
Amounts reclassified from AOCI to the statements of (loss) income								—		32		32
Net current-period other comprehensive income								328		32		360
Balance, March 31, 2023							$	(3,577)	$	(2,530)	$	(6,107)

Balance, June 30, 2019	$	595	$	(2,598)	$	(2,003)
Other comprehensive gain before reclassifications		360		—		360
Amounts reclassified from AOCI to the income statement		(209)		37		(172)
Net current-period other comprehensive income		151		37		188
Balance, September 30, 2019	$	746	$	(2,561)	$	(1,815)


	Unrealized				Accumulated
	(Losses) Gains		Defined		Other
Nine Months Ended September 30,	on Securities		Benefit		Comprehensive
(In thousands)	Available-for-Sale		Pension Plan		Income (Loss)

	(unaudited)
Balance, January 1, 2020	$	658	$	(2,320)	$	(1,662)
Other comprehensive gain before reclassifications		792		—		792
Amounts reclassified from AOCI to the income statement		(379)		79		(300)
Net current-period other comprehensive income		413		79		492
Balance, September 30, 2020	$	1,071	$	(2,241)	$	(1,170)

Balance, January 1, 2019	$	262	$	(2,673)	$	(2,411)
Other comprehensive gain before reclassifications		693		—		693
Amounts reclassified from AOCI to the income statement		(209)		112		(97)
Net current-period other comprehensive income		484		112		596
Balance, September 30, 2019	$	746	$	(2,561)	$	(1,815)
Balance, December 31, 2021							$	215	$	(1,181)	$	(966)
Other comprehensive loss before reclassifications								(1,774)		—		(1,774)
Net current-period other comprehensive loss								(1,774)		—		(1,774)
Balance, March 31, 2022							$	(1,559)	$	(1,181)	$	(2,740)


	September 30, 2020 (unaudited)								At March 31, 2023
			Gross		Gross						Gross		Gross
	Amortized		Unrealized		Unrealized		Fair		Amortized		Unrealized		Unrealized		Fair
(in thousands)	Cost		Gains		Losses		Value		Cost		Gains		Losses		Value
Securities available-for-sale:
Residential mortgage-backed - US agency and GSEs	$	41	$	2	$	(1)	$	42
Residential mortgage-backed - US agency and Government Sponsored Enterprise ("GSE")									$	24	$	—	$	(1)	$	23
Corporate bonds										20,789		21		(2,931)		17,879
State and political subdivisions		21,735		1,355		—		23,090		16,922		4		(1,620)		15,306
Total securities available-for-sale	$	21,776	$	1,357	$	(1)	$	23,132	$	37,735	$	25	$	(4,552)	$	33,208

Securities held-to-maturity:
Structured certificates of deposit									$	650	$	—	$	(215)	$	435
Residential mortgage-backed - US agency and GSEs	$	1,616	$	41	$	(4)	$	1,653		902		1		(29)		874
Total securities held-to-maturity	$	1,616	$	41	$	(4)	$	1,653	$	1,552	$	1	$	(244)	$	1,309

Equity securities:
Large cap equity mutual fund	$	33					$	33	$	40					$	40
Other mutual funds		561						561		275						275
Total of equity securities	$	594					$	594	$	315					$	315


	At March 31, 2023
	12 Months or Less				More than 12 Months				Total
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(in thousands)	Value		Losses		Value		Losses		Value		Losses
Securities available-for-sale:
Residential mortgage-backed - US agency and GSEs	$	—	$	—	$	18	$	(1)	$	18	$	(1)
Corporate bonds		5,778		(278)		11,041		(2,653)		16,819		(2,931)
State and political subdivisions		8,640		(725)		5,794		(895)		14,434		(1,620)
Total securities available-for-sale	$	14,418	$	(1,003)	$	16,853	$	(3,549)	$	31,271	$	(4,552)
Securities held-to-maturity:
Structured certificates of deposit	$	435	$	(215)	$	—	$	—	$	435	$	(215)
Residential mortgage-backed - US agency and GSEs		607		(21)		196		(8)		803		(29)
Total securities held-to-maturity	$	1,042	$	(236)	$	196	$	(8)	$	1,238	$	(244)


	September 30, 2020 (unaudited)								At March 31, 2023
	Securities				Securities				Securities				Securities
	Available-for-Sale				Held-to-Maturity				Available-for-Sale				Held-to-Maturity
		Amortized	Estimated		Amortized		Estimated		Amortized		Estimated		Amortized		Estimated
(in thousands)	Cost		Fair Value		Cost		Fair Value		Cost		Fair Value		Cost		Fair Value
Due in one year or less	$	974	$	974	$	—	$	—	$	1,265	$	1,261	$	—	$	—
Due over one year through five years		534		560		—		—		3,149		3,043		—		—
Due over five through ten years		4,629		4,934		—		—		4,339		3,721		—		—
Due after ten years		15,598		16,622		—		—		28,958		25,160		—		—
		21,735		23,090		—		—		37,711		33,185		—		—
Structured certificates of deposit										—		—		650		435
Residential mortgage-backed securities		41		42		1,616		1,653		24		23		902		874
Total	$	21,776	$	23,132	$	1,616	$	1,653	$	37,735	$	33,208	$	1,552	$	1,309


September 30, 2020 (unaudited)
											At March 31, 2023
			Special										Special
(In thousands)	Pass		Mention		Substandard		Doubtful		Total		Pass		Mention		Substandard		Doubtful		Total
Originated Loans
Originated Loans:
Residential mortgages:
One- to four-family	$	111,445	$	1,793	$	2,607	$	—	$	115,845	$	132,450	$	1,364	$	1,578	$	—	$	135,392
Construction		—		—		—		—		—		209		—		—		—		209
		111,445		1,793		2,607		—		115,845		132,659		1,364		1,578		—		135,601
Commercial loans:
Real estate - nonresidential		20,289		1,708		3,337		—		25,334		12,458		1,677		695		—		14,830
Multi-family		5,158		—		—		—		5,158		849		—		—		—		849
Construction		92		—		—		—		92
Commercial business		24,213		476		2,325		—		27,014		8,355		2,465		651		—		11,471
		49,752		2,184		5,662		—		57,598		21,662		4,142		1,346		—		27,150
Consumer:
Home equity and junior liens		10,007		20		39		—		10,066		10,669		18		94		—		10,781
Manufactured homes		37,646		240		186		—		38,072		51,433		25		368		—		51,826
Automobile		21,933		28		43		—		22,004		24,468		50		39		—		24,557
Student		2,267		—		—		—		2,267		1,681		—		59		—		1,740
Recreational vehicle		13,547		—		—		—		13,547		25,613		67		275		—		25,955
Other consumer		4,029		15		29		—		4,073		7,352		53		27		—		7,432
		89,429		303		297		—		90,029		121,216		213		862		—		122,291
Total originated loans	$	250,626	$	4,280	$	8,566	$	—	$	263,472	$	275,537	$	5,719	$	3,786	$	—	$	285,042


	September 30, 2020 (unaudited)												At March 31, 2023
					90 Days												90 Days
	30-59 Days		60-89 Days		or More		Total		Total Loans		Total Loans		30-59 Days		60-89 Days		or More		Total		Total Loans		Total Loans
(In thousands)	Past Due		Past Due		Past Due		Past Due		Current		Receivable		Past Due		Past Due		Past Due		Past Due		Current		Receivable
Originated Loans
Originated Loans:
Residential mortgage loans:
One- to four-family	$	2,359	$	1,083	$	2,307	$	5,749	$	110,096	$	115,845	$	3,062	$	—	$	1,578	$	4,640	$	130,752	$	135,392
Construction		—		—		—		—		—		—		—		—		—		—		209		209
		2,359		1,083		2,307		5,749		110,096		115,845		3,062		—		1,578		4,640		130,961		135,601
Commercial loans:
Real estate - nonresidential		561		114		912		1,587		23,747		25,334		428		—		412		840		13,990		14,830
Multi-family		—		42		—		42		5,116		5,158		391		—		—		391		458		849
Construction		—		—		—		—		92		92
Commercial business		428		208		157		793		26,221		27,014		536		—		116		652		10,819		11,471
		989		364		1,069		2,422		55,176		57,598		1,355		—		528		1,883		25,267		27,150
Consumer loans:
Home equity and junior liens		64		31		39		134		9,932		10,066		182		—		94		276		10,505		10,781
Manufactured homes		495		120		186		801		37,271		38,072		819		25		368		1,212		50,614		51,826
Automobile		147		50		43		240		21,764		22,004		368		50		40		458		24,099		24,557
Student		—		—		—		—		2,267		2,267		—		—		59		59		1,681		1,740
Recreational vehicle		—		—		29		29		13,518		13,547		537		67		275		879		25,076		25,955
Other consumer		26		15		—		41		4,032		4,073		94		53		27		174		7,258		7,432
		732		216		297		1,245		88,784		90,029		2,000		195		863		3,058		119,233		122,291
Total originated loans	$	4,080	$	1,663	$	3,673	$	9,416	$	254,056	$	263,472	$	6,417	$	195	$	2,969	$	9,581	$	275,461	$	285,042


					90 Days				��
	30-59 Days		60-89 Days		or More		Total		Total Loans		Total Loans
(In thousands)	Past Due		Past Due		Past Due		Past Due		Current		Receivable
Acquired Loans
Residential mortgage loans:
One- to four-family	$	275	$	133	$	233	$	641	$	14,584	$	15,225
Construction		—		—		—		—		—		—
		275		133		233		641		14,584		15,225
Commercial loans:
Real estate - nonresidential		—		—		—		—		1,979		1,979
Commercial business		—		—		—		—		372		372
		—		—		—		—		2,351		2,351
Consumer loans:
Home equity and junior liens		—		—		44		44		1,417		1,461
Other consumer		2		—		—		2		209		211
		2		—		44		46		1,626		1,672
Total acquired loans	$	277	$	133	$	277	$	687	$	18,561	$	19,248


	Residential		Business				Commercial				Total
(In thousands)	properties		assets		Land		property		Other		Loans
One- to four-family	$	1,520	$	—	$	—	$	—	$	—	$	1,520
Real estate - nonresidential		29		—		—		—		—		29
Total loans	$	1,549	$	—	$	—	$	—	$	—	$	1,549


	At March 31, 2023
	Average		Interest
	recorded		income
(In thousands)	investment		recognized

One- to four-family residential mortgages	$	1,704	$	5
Commercial real estate - nonresidential		698		3
Commercial business		683		3
Home equity and junior liens		128		—
	$	3,213	$	11


	September 30, 2020						At December 31, 2022
			Unpaid						Unpaid
	Recorded		Principal		Related		Recorded		principal		Related
(In thousands)	Investment		Balance		Allowance		investment		balance		allowance
	(unaudited)		(unaudited)		(unaudited)
With no related allowance recorded:
One- to four-family residential mortgages	$	1,724	$	1,754	$	—	$	2,560	$	2,641	$	—
Construction residential mortgages		—		—		—
Commercial real estate - nonresidential		354		354		—		701		801		—
Multi-family		—		—		—
Construction commercial		—		—		—
Commercial business		809		809		—		717		729		—
Home equity and junior liens		72		72		—		181		191		—
Manufactured homes		—		—		—
Automobile		—		—		—
Student		—		—		—
Other consumer		—		—		—

With an allowance recorded:
One- to four-family residential mortgages		915		915		81
Construction residential mortgages		—		—		—
Commercial real estate - nonresidential		552		552		276
Multi-family		—		—		—
Construction commercial		—		—		—
Commercial business		737		737		256
Home equity and junior liens		—		—		—
Manufactured homes		—		—		—
Automobile		45		45		11
Student		—		—		—
Other consumer		—		—		—

Total:
One- to four-family residential mortgages		2,639		2,669		81		2,560		2,641		—
Construction residential mortgages		—		—		—
Commercial real estate - nonresidential		906		906		276		701		801		—
Multi-family		—		—		—
Construction commercial		—		—		—
Commercial business		1,546		1,546		256		717		729		—
Home equity and junior liens		72		72		—		181		191		—
Manufactured homes		—		—		—
Automobile		45		45		11
Student		—		—		—
Other consumer		—		—		—
	$	5,208	$	5,238	$	624	$	4,159	$	4,362	$	—


					Interest income		Non-accrual loans
					recognized on		with no allowance
	Amortized cost of loans on				non-accrual loans		for credit losses
	non-accrual status				as of		as of
(In thousands)	January 1, 2023		March 31, 2023		March 31,2023		March 31, 2023


Residential mortgage loans:
One- to four-family	$	2,605	$	1,738	$	2	$	1,581

Commercial loans:
Real estate - nonresidential		416		412		—		412
Commercial business		587		537		—		537

Consumer loans:
Home equity and junior liens		172		128		—		129
Manufactured homes		368		368		—		368
Automobile		21		38		—		40
Student		68		59		—		59
Recreational vehicle		135		205		5		275
Other consumer		—		31		1		35
	$	4,372	$	3,516	$	8	$	3,436


	For the Three Months Ended		For the Nine months			For the Year ended
	Ended September 30,		Ended September 30		December 31,
	2020		2020		2019
	Average		Average		Average
	Recorded		Recorded		Recorded
(In thousands)	Investment (unaudited)		Investment (unaudited)		Investment

One- to four-family residential mortgages	$	2,642	$	2,652	$	2,309
Construction residential mortgages		—		—		—
Commercial real estate - nonresidential		6,907		913		1,453
Multi-family		—		—		—
Construction commercial		—		—		—
Commercial business		1,543		1,601		1,038
Home equity and junior liens		72		73		132
Manufactured homes		—		—		—
Automobile		46		48		89
Student		—		—		—
Other consumer		—		—		1
		11,210		5,287	$	5,022


	For the Three months ended
	September 30, 2020 (unaudited)
	One- to four-		Construction		Commercial		Commercial
	family		residential		real estate		real estate		Construction		Commercial
(In thousands)	residential		mortgage		nonresidential		multi-family		commercial		business
Allowance for loan losses:
Beginning Balance	$	549	$	1	$	509	$	41	$	—	$	380
Charge-offs		—		—		(48)		—		—		—
Recoveries		—		—		—		5		—		—
Provision for loan losses		44		(1)		10		(27)		—		174
Ending balance	$	593	$	—	$	471	$	19	$	—	$	554


	For the Three Months ended
	September 30, 2020 (cont'd) (unaudited)
	Home equity		Manufactured						Recreational		Other
(In thousands)	and junior liens		Homes		Automobile		Student		Vehicle			Consumer	Unallocated		Total
Allowance for loan losses:
Beginning Balance	$	38	$	—	$	134	$	70	$	—	$	46	$	228	$	1,996
Charge-offs		—		—		(15)		—		—		—		—		(63)
Recoveries		—		—		27		2		2		(3)		—		31
Provision for loan losses		(12)		69		(13)		86		(2)		16		(194)		150
Ending balance	$	26	$	69	$	133	$	158	$	—	$	59	$	34	$	2,116


	For the Nine months ended
	September 30, 2020 (unaudited)
	One- to four-		Construction		Commercial		Commercial
	family		residential		real estate		real estate		Construction		Commercial
(In thousands)	residential		mortgage		nonresidential		multi-family		commercial		business
Allowance for loan losses:
Beginning Balance	$	375	$	2	$	421	$	17	$	—	$	527
Charge-offs		(8)		—		(48)		—		—		—
Recoveries		2		—		—		14		—		140
Provision for loan losses		224		(2)		98		(12)		—		(113)
Ending balance	$	593	$	—	$	471	$	19	$	—	$	554
Ending balance: related to loans individually evaluated for impairment	$	81	$	—	$	276	$	—	$	—	$	256
Ending balance: related to loans collectively evaluated for impairment	$	512	$	—	$	195	$	19	$	—	$	298
Loans receivable:
Ending balance	$	131,070	$	—	$	27,313	$	5,158	$	92	$	27,386
Ending balance: individually evaluated for impairment	$	2,639	$	—	$	906	$	—	$	—	$	1,546
Ending balance: collectively evaluated for impairment	$	128,431	$	—	$	26,407	$	5,158	$	92	$	25,840


	December 31, 2019 (cont'd)
	Home equity		Manufactured						Other
(In thousands)	and junior liens		Homes		Automobile		Student		Consumer		Unallocated		Total
Allowance for loan losses:
Beginning Balance	$	58	$	—	$	228	$	50	$	28	$	132	$	1,548
Charge-offs		—		—		(137)		(25)		(68)		—		(396)
Recoveries		—		—		52		1		5		—		148
Provision for loan losses		(8)		—		(1)		43		70		(110)		360
Ending balance	$	50	$	—	$	142	$	69	$	35	$	22	$	1,660
Ending balance: related to
loans individually evaluated
for impairment	$	—	$	—	$	—	$	—	$	1	$	—	$	391
Ending balance: related to
loans collectively evaluated
for impairment	$	50	$	—	$	142	$	69	$	34	$	22	$	1,269
Loans receivable:
Ending balance	$	12,003	$	23,769	$	21,083	$	2,251	$	2,348	$	—	$	256,809
Ending balance: individually
evaluated for impairment	$	131	$	—	$	81	$	—	$	1	$	—	$	7,412
Ending balance: collectively
evaluated for impairment	$	11,872	$	23,769	$	21,002	$	2,251	$	2,347	$	—	$	249,397


	Three Months Ended March 31, 2022
	One- to four-		Construction
	family		residential		Real estate				Construction		Commercial
(In thousands)	residential		mortgage		nonresidential		Multi-family		commercial		business
Allowance for loan losses:
Beginning balance	$	688	$	—	$	630	$	2	$	—	$	161
Charge-offs		(10)		—		—		—		—		—
Recoveries		15		—		—		—		—		—
Provision for loan losses		46		—		14		1		—		48
Ending balance	$	739	$	—	$	644	$	3	$	—	$	209
Ending balance: related to loans individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	12
Ending balance: related to loans collectively evaluated for impairment	$	739	$	—	$	644	$	3	$	—	$	197
Loans receivable:
Ending balance	$	111,291	$	—	$	20,857	$	452	$	—	$	12,298
Ending balance: individually evaluated for impairment	$	2,158	$	—	$	416	$	—	$	—	$	128
Ending balance: collectively evaluated for impairment	$	109,133	$	—	$	20,441	$	452	$	—	$	12,170


	Three Months Ended March 31, 2022 (cont'd)
	Home equity		Manufactured						Recreational		Other
(In thousands)	and junior liens		homes		Automobile		Student		vehicle		consumer		Unallocated		Total
Allowance for loan losses:
Beginning balance	$	39	$	102	$	107	$	64	$	—	$	48	$	—	$	1,841
Charge-offs		—		—		(40)		—		—		—		—		(50)
Recoveries		—		—		17		1		—		—		—		33
Provision (credit) for loan losses		4		14		23		(1)		—		1		—		150
Ending balance	$	43	$	116	$	107	$	64	$	—	$	49	$	—	$	1,974
Ending balance: related to loans individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	12
Ending balance: related to loans collectively evaluated for impairment	$	43	$	116	$	107	$	64	$	—	$	49	$	—	$	1,962
Loans receivable:
Ending balance	$	10,433	$	48,116	$	22,025	$	2,102	$	28,692	$	5,309	$	—	$	261,575
Ending balance: individually evaluated for impairment	$	112	$	—	$	—	$	—	$	—	$	—	$	—	$	2,814
Ending balance: collectively evaluated for impairment	$	10,321	$	48,116	$	22,025	$	2,102	$	28,692	$	5,309	$	—	$	258,761


	Year Ended December 31, 2022
	One- to four-		Construction
	family		residential		Real estate				Construction		Commercial
(In thousands)	residential		mortgage		nonresidential		Multi-family		commercial		business
Allowance for loan losses:
Beginning balance	$	688	$	—	$	630	$	2	$	—	$	161
Charge-offs		(37)		—		—		—		—		(14)
Recoveries		18		—		—		—		—		2
Provision (credit) for loan losses		118		2		(311)		2		—		99
Ending balance	$	787	$	2	$	319	$	4	$	—	$	248
Ending balance: related to loans individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—
Ending balance: related to loans collectively evaluated for impairment	$	787	$	2	$	319	$	4	$	—	$	248
Loans receivable:
Ending balance	$	138,001	$	387	$	16,681	$	854	$	—	$	11,677
Ending balance: individually evaluated for impairment	$	2,560	$	—	$	701	$	—	$	—	$	717
Ending balance: collectively evaluated for impairment	$	135,441	$	387	$	15,980	$	854	$	—	$	10,960


	Year Ended December 31, 2022 (cont'd)
	Home equity		Manufactured						Recreational		Other
(In thousands)	and junior liens		homes		Automobile		Student		vehicle		consumer		Unallocated		Total
Allowance for loan losses:
Beginning balance	$	39	$	102	$	107	$	64	$	—	$	48	$	—	$	1,841
Charge-offs		(10)		—		(59)		(29)		(1)		(2)		—		(152)
Recoveries		—		—		149		3		1		4		—		177
Provision (credit) for loan losses		36		8		(62)		17		646		76		—		631
Ending balance	$	65	$	110	$	135	$	55	$	646	$	126	$	—	$	2,497
Ending balance: related to loans individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Ending balance: related to loans collectively evaluated for impairment	$	65	$	110	$	135	$	55	$	646	$	126	$	—	$	2,497
Loans receivable:
Ending balance	$	11,562	$	50,989	$	24,339	$	1,803	$	26,909	$	7,172	$	—	$	290,374
Ending balance: individually evaluated for impairment	$	181	$	—	$	—	$	—	$	—	$	—	$	—	$	4,159
Ending balance: collectively evaluated for impairment	$	11,381	$	50,989	$	24,339	$	1,803	$	26,909	$	7,172	$	—	$	286,215


Generations Bank Plan:	For the Three Months Ended September				Three Months Ended March 31,
(In thousands)	2020		2019		2023		2022

Net Periodic Expenses recognized in income:	(unaudited)
Net periodic expenses recognized in income:
Service cost	$	103	$	94	$	60	$	108
Interest cost		112		119		118		102
Expected return on plan assets		(335)		(309)		(307)		(384)
Amortization of net losses		34		50		40		-
Net periodic pension benefit		(86)		(46)	$	(89)	$	(174)


	For the Nine Months Ended September
	2020		2019

Net Periodic Expenses recognized in income:	(unaudited)
Service cost		309		283
Interest cost		336		358
Expected return on plan assets		(1,004)		(929)
Amortization of net losses		101		150
Net periodic pension benefit		(258)		(138)


Medina Savings and Loan Plan:	Three Months Ended March 31,
(In thousands)	2023		2022

Net periodic expenses recognized in income:
Service cost	$	3	$	8
Interest cost		34		28
Expected return on plan assets		(90)		(115)
Net periodic pension benefit	$	(53)	$	(79)


	Three Months Ended March 31, 2023
			Weighted Average
			Exercise Price Per
	Options		Share
Outstanding at beginning of year	132,977	$	11.61
Grants	—		—
Exercised	—		—
Outstanding at quarter end	132,977	$	11.61

Exercisable at quarter end	—	$	—


									Minimum				Minimum
									To Be "Well-				For Capital
					Minimum				Capitalized"				Adequacy Plus Capital
					For Capital				Under Prompt				Conservation Buffer
	Actual				Adequacy Purposes				Corrective Provisions				Basel III Phase-In
(Dollars in thousands)	Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
As of September 30, 2020 (unaudited):
Common Equity Tier 1 Capital*	$	27,165	11.56	%	$	11,441	4.50	%	$	16,526	6.50	%	$	17,797	7.00	%
Total Capital (to Risk-Weighted Assets)	$	33,713	13.26	%	$	20,340	8.00	%	$	25,425	10.00	%	$	26,696	10.50	%
Tier 1 Capital* (to Risk-Weighted Assets)	$	27,165	12.43	%	$	15,255	6.00	%	$	20,340	8.00	%	$	21,611	8.50	%
Core Capital (to Total Adjusted Assets)	$	31,597	8.54	%	$	14,798	4.00	%	$	18,498	5.00	%	$	16,648	4.50	%
As of December 31, 2019:
Common Equity Tier 1 Capital*	$	27,343	11.23	%	$	10,962	4.50	%	$	15,834	6.50	%	$	17,052	7.00	%
Total Capital (to Risk-Weighted Assets)	$	31,219	12.82	%	$	19,488	8.00	%	$	24,359	10.00	%	$	25,577	10.50	%
Tier 1 Capital* (to Risk-Weighted Assets)	$	27,343	12.13	%	$	14,616	6.00	%	$	19,488	8.00	%	$	20,706	8.50	%
Core Capital (to Total Adjusted Assets)	$	29,559	8.37	%	$	14,118	4.00	%	$	17,648	5.00	%	$	15,883	4.50	%


	September 30, 2020 (unaudited)								At March 31, 2023
							Total Fair								Total Fair
(In thousands)	Level 1		Level 2		Level 3		Value		Level 1		Level 2		Level 3		Value
Securities available-for-sale:
Debt investment securities:
Residential mortgage-backed - US agency and GSEs	$	—	$	42	$	—	$	42	$	—	$	23	$	—	$	23
Corporate bonds										—		17,879		—		17,879
Municipal bonds		—		19,898		3,192		23,090		—		13,561		1,745		15,306
Equity investment securities:
Large cap equity mutual fund		33		—		—		33		40		—		—		40
Other mutual funds		561		—		—		561		275		—		—		275
Total investment securities	$	594	$	19,940	$	3,192	$	23,726	$	315	$	31,463	$	1,745	$	33,523