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How GOVB rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

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words, now 19,146

New in FY2025

The Bank currently conducts business through its four full-service branch offices and one loan production office located in Jefferson and St.
GS&L Municipal Bank’s purpose is to attract deposits from local municipalities and, at September 30, 2025, GS&L Municipal Bank had $20.0 million in deposits.
Market Area We are headquartered in Gouverneur, New York and currently operate four full-service branch offices and one loan production office located in Jefferson and St.
Nearly 15,000 military service members and approximately 3,700 civilian personnel (including government contractors) work at Fort Drum, with an estimated 16,000 family members living on post or in the local area.
In addition, more than 14,000 military retirees reside in the areas surrounding Fort Drum.
Our one- to four-family residential loans totaled $109.7 million, or 82.6% of our total loan portfolio, at September 30, 2025.
In recent years, borrowers have favored fixed-rate loans due to historically low interest rates.
However, as interest rates have fluctuated over the past fiscal year, we have seen increased activity in adjustable-rate mortgages, as borrowers seek to benefit from lower initial rates compared to fixed-rate loans.
We do not make conventional loans with loan-to-value ratios exceeding 100% and generally limit loan-to-value ratios on our conventional loans to 80%.
Our largest one- to four-family residential loan at September 30, 2025 was an owner-occupied one- to four-family residential loan for $630,000 secured by a single-family residence located in Chaumont, New York, $601,000 of which is outstanding.
At September 30, 2025, our commercial real estate loan portfolio totaled $10.8 million, or 8.1% of our total loan portfolio.
Our largest commercial real estate and multi-family residential real estate loan at September 30, 2025 had an outstanding balance of $487,000.
This loan is secured by a grocery store, equipment and second position on the owner’s mortgage of their primary residence located in Cape Vincent, New York and is performing in accordance with its terms.
Our residential construction loans totaled $3.3 million, or 2.5% of our total loan portfolio, at September 30, 2025.
At September 30, 2025, our largest outstanding residential construction loan was for $356,000, with $354,000 disbursed and outstanding, and was made to finance the construction of a residence located in Harrisville, New York.
Our commercial construction loans totaled $0.1 million, or 0.1% of our total loan portfolio, at September 30, 2025.
At September 30, 2025, our largest outstanding commercial construction loan was for $217,000, with $140,000 disbursed and outstanding, and was made to finance the construction of a multi-family dwelling located in Richville, New York.
At September 30, 2025, our largest outstanding land loan was for $109,000, and was secured by land located in Three Mile Bay, New York.
At September 30, 2025, such loans totaled $2.1 million, or 1.6% of our total loan portfolio.
At September 30, 2025, such loans totaled $2.4 million, or 1.8% of our total loan portfolio.
At September 30, 2025, such loans totaled $4.4 million, or 3.3% of our total loan portfolio.
We sold $289,000 of loans during the year ended September 30, 2025 and $356,000 of loans during the year ended September 30, 2024.
As of September 30, 2025, we had one outstanding sold commercial loan participation for $187,000 and for which we are the lead lender.
At September 30, 2025, our regulatory lending maximum was $4.8 million.
At September 30, 2025, our investment portfolio consisted primarily of municipal securities with maturities of five to more than ten years, mortgage-backed securities issued by Fannie Mae, Freddie Mac or Ginnie Mae with stated final maturities of 30 years or less, and U.S.
Interest Rate Swap and Hedging Activities We previously used derivative instruments as a risk management tool, entering into interest rate swap agreements whereby we paid a fixed rate and received a variable rate on a notional amount.
As of September 30, 2024, the notional amount of the swap agreements was $3.0 million.
However, as of September 30, 2025, we no longer have any outstanding interest rate swap agreements, as our last swap matured in November 2024.
These arrangements were entered into to hedge the cost of certain funding sources and to increase the interest rate sensitivity of certain assets.
Financial derivatives were recorded at fair value as other assets or liabilities.
For a fair value hedge, changes in the fair value of the derivative instrument and changes in the fair value of the hedged asset or liability were recognized in current year earnings, and gains or losses are the result of the swaps market value fluctuations with long-term bond rates and projected short-term rates.
There were approximately $7.0 million of Federal Home Loan Bank advances outstanding at September 30, 2025.
At September 30, 2025, we had the ability to borrow an additional $54.9 million from the Federal Home Loan Bank of New York.
Additionally, at September 30, 2025, we had a line of credit with the Federal Reserve Discount Window totaling $5.0 million and a second line of credit with Atlantic Community Banker’s Bank totaling $4.0 million.
At September 30, 2025, there were no outstanding balances under any of these additional credit facilities.
At September 30, 2025, both the Bank and GS&L Municipal Bank exceeded the fully phased in regulatory requirement for the capital conservation buffer.
As of September 30, 2025, the Bank had not elected the community bank leverage ratio alternative reporting framework.
As of September 30, 2025, both the Bank and GS&L Municipal Bank were a “well capitalized” institution under the Federal Deposit Insurance Corporation regulations.
At September 30, 2025, the Bank satisfied the QTL test.
Sarbanes-Oxley Act of 2002 The Sarbanes-Oxley Act of 2002 is intended to improve corporate responsibility, to provide for enhanced penalties for accounting and auditing improprieties at publicly traded companies and to protect investors by improving the accuracy and reliability of corporate disclosures pursuant to the securities laws.

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Gone since FY2024

The Bank currently conducts business through its five branch offices located in Jefferson and St.
GS&L Municipal Bank’s purpose is to attract deposits from local municipalities and, at September 30, 2024, GS&L Municipal Bank had $21.4 million in deposits.
Acquisition of Citizens Bank of Cape Vincent On September 16, 2022, we acquired Citizens Bank of Cape Vincent, a New York-chartered stock commercial bank headquartered in Cape Vincent, New York.
At the effective time of the merger, Citizens Bank of Cape Vincent was merged with and into the Bank and each Citizens Bank of Cape Vincent stockholder became entitled to receive $1,056.11 in cash for each share of Citizens Bank of Cape Vincent common stock that they held at the effective time of the merger.
The fair value of the assets acquired as a result of the acquisition totaled $81.9 million, loans totaled $37.0 million and deposits totaled $77.2 million.
Goodwill recorded in the acquisition was $4.2 million.
We completed the acquisition to further expand our footprint and competitive position in Jefferson County and the Lake Ontario, St.
Lawrence River communities, to offer expanded products and services to Citizens Bank of Cape Vincent’s and the Bank’s customer bases, and to enhance our operational opportunities and future earnings.
Market Area We are headquartered in Gouverneur, New York and currently operate five branch offices located in Jefferson and St.
More than 15,000 military service members and approximately 3,700 civilian personnel (including government contractors) work at Fort Drum, with an estimated 15,000 family members living on post or in the local area.
In addition, more than 3,000 military retirees reside in the areas surrounding Fort Drum.
Our one- to four-family residential loans totaled $103.6 million, or 82.4% of our total loan portfolio, at September 30, 2024.
Due to historically low interest rate levels, borrowers generally have preferred fixed-rate loans in recent years.
We do not make conventional loans with loan-to-value ratios exceeding 97% and generally limit loan-to-value ratios on our conventional loans to 80%.
Our largest one- to four-family residential loan at September 30, 2024 was an owner-occupied one- to four-family residential loan for $630,000 secured by a single-family residence located in Chaumont, New York, $614,000 of which is outstanding.
At September 30, 2024, our commercial real estate loan portfolio totaled $11.2 million, or 8.9% of our total loan portfolio.
Our largest commercial real estate and multi-family residential real estate loan at September 30, 2024 had an outstanding balance of $542,000.
This loan is secured by an automobile collision center and car wash located in Gouverneur, New York and is performing in accordance with its terms.
Our residential construction loans totaled $1.9 million, or 1.5% of our total loan portfolio, at September 30, 2024.
At September 30, 2024, our largest outstanding residential construction loan was for $360,000, all of which was disbursed and outstanding, and was made to finance the construction of a residence located in Hammond, New York.
At September 30, 2024, there were no outstanding commercial construction loans.
At September 30, 2024, our largest outstanding land loan was for $95,000, and was secured by land located in Wellesley Island, New York.
At September 30, 2024, such loans totaled $1.6 million, or 1.3% of our total loan portfolio.
At September 30, 2024, such loans totaled $1.9 million, or 1.5% of our total loan portfolio.
At September 30, 2024, such loans totaled $5.5 million, or 4.4% of our total loan portfolio.
We sold $356,000 of loans during the year ended September 30, 2024 and sold no loans during the year ended September 30, 2023.
As of September 30, 2024, we had one outstanding sold commercial loan participation for $199,000 and for which we are the lead lender.
At September 30, 2024, our regulatory lending maximum was $4.9 million.
At September 30, 2024, our investment portfolio consisted primarily of municipal securities with maturities of five to more than ten years, corporate bonds, and mortgage-backed securities issued by Fannie Mae, Freddie Mac or Ginnie Mae with stated final maturities of 30 years or less.
Interest Rate Swap and Hedging Activities We use derivative instruments as a risk management tool and have entered into several interest rate swap agreements whereby we pay a fixed rate and receive a variable rate on a notional amount.
The notional amount of the swap agreements at September 30, 2024 and September 30, 2023 was $3.0 million and $5.5 million, respectively.
We enter into these arrangements to hedge the cost of certain funding sources and to increase the interest rate sensitivity of certain assets.
Financial derivatives are recorded at fair value as other assets or liabilities.
For a fair value hedge, changes in the fair value of the derivative instrument and changes in the fair value of the hedged asset or liability are currently recognized in current year earnings, and gains are the result of the swaps market value fluctuations with long-term bond rates and projected short-term rates.
There were no Federal Home Loan Bank advances outstanding at September 30, 2024.
At September 30, 2024, we had the ability to borrow an additional $59.3 million from the Federal Home Loan Bank of New York.
Additionally, at September 30, 2024, we had a line of credit with the Federal Reserve Discount Window totaling $5.0 million and a second line of credit with Atlantic Community Banker’s Bank totaling $4.0 million.
At September 30, 2024, there were no outstanding balances under any of these additional credit facilities.
At September 30, 2024, both the Bank and GS&L Municipal Bank exceeded the fully phased in regulatory requirement for the capital conservation buffer.
As of September 30, 2024, the Bank had not elected the community bank leverage ratio alternative reporting framework.

and 32 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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