Generations Bancorp NY (GBNY) 10-Q 2024 Q2 Quarterly report

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 June 30, 2024

OR

☐ 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 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 York 13148

(Address of principal executive offices)

(Zip Code)

(315) 568-5855

(Registrant’s telephone number, including area code)

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

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 every Interactive Data File required to be submitted 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 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  ☒.

2,241,801 shares of the Registrant’s common stock, par value $0.01 per share, were issued and outstanding as of August 8, 2024.

Index

	Page
PART I. FINANCIAL INFORMATION	1
Item 1. Condensed Consolidated Financial Statements	1
Condensed Consolidated Statements of Financial Condition –June 30, 2024 (Unaudited) and December 31, 2023	1
Condensed Consolidated Statements of Operations – Three-month and Six-month Periods Ended June 30, 2024 and 2023 (Unaudited)	2
Condensed Consolidated Statements of Comprehensive Loss – Three-month and Six-month Periods Ended June 30, 2024 and 2023 (Unaudited)	3
Condensed Consolidated Statements of Changes in Shareholders’ Equity – Three-month and Six-month Periods Ended June 30, 2024 and 2023 (Unaudited)	4
Condensed Consolidated Statements of Cash Flows –Six-month Periods Ended June 30, 2024 and 2023 (Unaudited)	5
Notes to Condensed Consolidated Financial Statements (Unaudited)	6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	38
Item 3. Quantitative and Qualitative Disclosures About Market Risk	49
Item 4. Controls and Procedures	49
PART II. OTHER INFORMATION	49
Item 1. Legal Proceedings	49
Item 1A. Risk Factors	49
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	49
Item 3. Defaults Upon Senior Securities	49
Item 4. Mine Safety Disclosures	49
Item 5. Other Information	50
Item 6. Exhibits	51
Signatures	52

PART I. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

Generations Bancorp NY, Inc.

Condensed Consolidated Statements of Financial Condition

	At June 30,		At December 31,
(In thousands, except share data)	2024		2023
	(Unaudited)
ASSETS:
Cash and due from banks	$	4,243	$	3,991
Interest earning deposits		5,590		10,534
Total cash and cash equivalents		9,833		14,525
Interest-earning time deposits in banks		3,156		4,362
Investment securities available-for-sale, at fair value		26,009		31,302
Investment securities held-to-maturity (fair value 2024-$1,192, 2023-$1,226)		1,409		1,454
Equity investment securities, at fair value		406		361
Federal Home Loan Bank stock, at cost		1,506		1,588
Loans		325,332		336,455
Less: Allowance for credit losses		(3,177)		(2,973)
Loans receivable, net		322,155		333,482
Premises and equipment, net		13,758		14,195
Bank-owned life insurance		5,996		5,938
Pension plan asset		13,516		13,027
Foreclosed real estate		—		118
Intangible assets, net		621		654
Accrued interest receivable		1,775		1,611
Other assets		1,615		1,879
Total assets	$	401,755	$	424,496
LIABILITIES AND SHAREHOLDERS' EQUITY:
Deposits:
Noninterest-bearing	$	49,136	$	51,528
Interest-bearing		289,686		306,078
Total deposits		338,822		357,606
Long-term borrowings		21,316		23,577
Advances from borrowers for taxes and insurance		3,443		2,931
Other liabilities		2,628		2,684
Total liabilities		366,209		386,798
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 2024 and 2023; 2,241,801 and 2,235,889 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively		22		22
Additional paid in capital		22,374		22,289
Retained earnings		19,614		21,000
Accumulated other comprehensive loss		(5,131)		(4,257)
Stock held in rabbi trust		(357)		(357)
Unearned ESOP shares, at cost		(976)		(999)
Total shareholders' equity		35,546		37,698
Total liabilities and shareholders' equity	$	401,755	$	424,496

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

1

Generations Bancorp NY, Inc.

Condensed Consolidated Statements of Operations (Unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands, except per share data)	2024		2023		2024		2023
Interest and dividend income:
Loans, including fees	$	3,959	$	3,455	$	7,950	$	6,803
Debt and equity securities:
Taxable		174		240		393		479
Tax-exempt		112		99		226		200
Interest-earning deposits		71		36		182		81
Other		42		26		82		65
Total interest income		4,358		3,856		8,833		7,628
Interest expense:
Deposits		2,218		1,405		4,518		2,527
Short-term borrowings		50		180		103		268
Long-term borrowings		220		32		446		70
Total interest expense		2,488		1,617		5,067		2,865
Net interest income		1,870		2,239		3,766		4,763
Provision for loan losses		377		165		602		330
Provision for unfunded commitments		—		—		—		—
Provision for available-for-sale securities		—		—		—		—
Total provision for credit losses		377		165		602		330
Net interest income after provision for credit losses		1,493		2,074		3,164		4,433
Noninterest income:
Banking fees and service charges		371		364		691		728
Mortgage banking income, net		6		7		13		15
Insurance commissions		1		24		1		153
Earnings on bank-owned life insurance		29		28		57		56
Change in fair value on equity securities		17		26		41		34
Net gain on sale of securities		—		—		10		—
Net gain on sale of Generations Agency		—		312		—		312
Other charges, commissions & fees		38		27		90		66
Total noninterest income		462		788		903		1,364
Noninterest expense:
Compensation and benefits		1,076		1,338		2,174		2,746
Occupancy and equipment		511		502		995		1,015
Service charges		498		416		1,016		923
Regulatory assessments		119		103		210		167
Professional and other services		341		232		528		423
Advertising		85		107		170		214
Other expenses		426		376		789		713
Total noninterest expenses		3,056		3,074		5,882		6,201
Loss before income tax benefit		(1,101)		(212)		(1,815)		(404)
Income tax benefit		(260)		(46)		(429)		(86)
Net loss	$	(841)	$	(166)	$	(1,386)	$	(318)
Net loss available to common shareholders	$	(841)	$	(166)	$	(1,386)	$	(318)
Basic and diluted losses per common share	$	(0.39)	$	(0.07)	$	(0.65)	$	(0.14)

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

2

Generations Bancorp NY, Inc.

Condensed Consolidated Statements of Comprehensive (Loss) Income (Unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2024		2023		2024		2023
Net loss	$	(841)	$	(166)	$	(1,386)	$	(318)
Other comprehensive (loss) income, before tax:
Unrealized (losses) gains on securities available-for-sale:
Unrealized holding (losses) gains arising during the period		(314)		(173)		(455)		242
Reclassification adjustment for net gains included in net income		—		—		10		—
Net unrealized (losses) gains on securities available-for-sale		(314)		(173)		(445)		242
Defined benefit pension plan:
Reclassification of amortization of net losses recognized in net pension expense		—		41		—		81
Net change in defined benefit pension plan asset		—		41		—		81
Other comprehensive (loss) income, before tax		(314)		(132)		(445)		323
Tax effect		260		(27)		429		68
Other comprehensive (loss) income, net of tax		(574)		(105)		(874)		255
Total comprehensive loss	$	(1,415)	$	(271)	$	(2,260)	$	(63)

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

3

Generations Bancorp NY, Inc.

Condensed Consolidated Statements of Changes in Shareholders’ Equity (Unaudited)

							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, March 31, 2024	$	22	$	22,330	$	20,455	$	(4,557)	$	(357)	$	(988)	$	36,905
Net loss		—		—		(841)		—		—		—		(841)
Other comprehensive loss		—		—		—		(574)		—		—		(574)
Stock-based compensation		—		44		—		—		—		—		44
ESOP shares committed to be released		—		—		—		—		—		12		12
Balance, June 30, 2024	$	22	$	22,374	$	19,614	$	(5,131)	$	(357)	$	(976)	$	35,546
Balance, March 31, 2023	$	23	$	22,983	$	22,353	$	(6,107)	$	(698)	$	(1,033)	$	37,521
Net loss		—		—		(166)		—		—		—		(166)
Other comprehensive loss		—		—		—		(105)		—		—		(105)
Effect of stock repurchase plan		—		(373)		27		—		—		—		(346)
Stock-based compensation		—		54		—		—		—		—		54
Purchase of common stock for Directors Retirement Plan		—		—		—		—		(10)		—		(10)
Purchase of common stock for SERPs		—		—		—		—		(31)		—		(31)
ESOP shares committed to be released		—		(2)		—		—		—		11		9
Balance, June 30, 2023	$	23	$	22,662	$	22,214	$	(6,212)	$	(739)	$	(1,022)	$	36,926
							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, 2023	$	22	$	22,289	$	21,000	$	(4,257)	$	(357)	$	(999)	$	37,698
Net loss		—		—		(1,386)		—		—		—		(1,386)
Other comprehensive loss		—		—		—		(874)		—		—		(874)
Stock-based compensation		—		84		—		—		—		—		84
ESOP shares committed to be released		—		1		—		—		—		23		24
Balance, June 30, 2024	$	22	$	22,374	$	19,614	$	(5,131)	$	(357)	$	(976)	$	35,546
Balance, December 31, 2022	$	24	$	23,002	$	22,512	$	(6,467)	$	(698)	$	(1,045)	$	37,328
Net loss		—		—		(318)		—		—		—		(318)
Other comprehensive income		—		—		—		255		—		—		255
Effect of stock repurchase plan		(1)		(446)		20		—		—		—		(427)
Stock-based compensation		—		107		—		—		—		—		107
Purchase of common stock for Directors Retirement Plan		—		—		—		—		(10)		—		(10)
Purchase of common stock for SERPs		—		—		—		—		(31)		—		(31)
ESOP shares committed to be released		—		(1)		—		—		—		23		22
Balance, June 30, 2023	$	23	$	22,662	$	22,214	$	(6,212)	$	(739)	$	(1,022)	$	36,926

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

4

Generations Bancorp NY, Inc.

Condensed Consolidated Statements of Cash Flows (Unaudited)

	Six Months Ended June 30,
(In thousands)	2024		2023
OPERATING ACTIVITIES
Net loss	$	(1,386)	$	(318)
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses		602		330
Deferred income tax benefit		(93)		(127)
Realized gains on sales of:
Available-for-sale investment securities		(10)		—
Change in fair value on equity securities		(41)		(34)
Dividend reinvestment in equity securities		(4)		—
Write-down of other real estate owned to fair value		20		—
Depreciation		463		474
Amortization of intangible asset		33		32
Amortization of fair value adjustment to purchased loan portfolio		(34)		(34)
ESOP expense		24		22
Stock-based compensation		84		107
Amortization of deferred loan costs		1,115		1,039
Earnings on bank-owned life insurance		(57)		(56)
Change in pension plan assets		(489)		(643)
Extinguishment of goodwill		—		792
Net amortization of premiums and discounts on investment securities		29		39
Net change in accrued interest receivable		(164)		(27)
Net change in other assets and liabilities		389		1,058
Net cash provided by operating activities		481		2,654
INVESTING ACTIVITIES
Purchase of investment securities available-for-sale		—		(879)
Net change in interest-earning time deposits in banks		1,206		(2,260)
Net proceeds from the redemption of Federal Home Loan Bank stock		82		301
Proceeds from maturities and principal reductions of:
Available-for-sale investment securities		3,691		3,055
Held-to-maturity investment securities		44		69
Proceeds from sale of:
Available-for-sale investment securities		1,133		—
Real estate and repossessed assets acquired		100		112
Premises and equipment		—		15
Net change in loans		9,642		(13,290)
Purchase of premises and equipment		(26)		(168)
Net cash provided by (used in) investing activities		15,872		(13,045)
FINANCING ACTIVITIES
Net change in demand deposits, savings accounts, and money market accounts		(2,497)		(20,619)
Net change in time deposits		(16,287)		35,588
Net change in short-term borrowings		—		(6,956)
Payments on long-term borrowings		(2,261)		(2,889)
Proceeds from long-term borrowings		—		3,000
Purchase of common stock for directors retirement plan		—		(10)
Purchase of common stock of SERP		—		(31)
Effect of stock repurchase plan		—		(427)
Net cash (used in) provided by financing activities		(21,045)		7,656
Net change in cash and cash equivalents		(4,692)		(2,735)
Cash and cash equivalents at beginning of period		14,525		8,004
Cash and cash equivalents at end of period	$	9,833	$	5,269
Supplemental Cash Flows Information
Cash paid during the period for:
Interest	$	5,210	$	2,701
Transfer of loans to foreclosed real estate and repossessed assets		2		371

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

5

Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. Nature of Operations

Generations Bancorp NY, Inc. (the “Company” or “Generations Bancorp”) is a Maryland corporation that was organized in August 2020 as part of the Seneca-Cayuga Bancorp, Inc. (“Seneca-Cayuga”) conversion from the mutual holding company structure to a fully public stock holding company structure.  Prior to the conversion, Generations Bank (the “Bank”) was the wholly owned subsidiary of Seneca-Cayuga and The Seneca Falls Savings Bank, MHC (“MHC”) 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 stock offering, (which included 109,450 shares issued to the ESOP) representing the ownership interest of the 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 MHC) of Seneca-Cayuga was 0.9980 as applied in the 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.  

In connection with the conversion, liquidation accounts were established by the Company and the Bank in an aggregate amount equal to (i) the MHC’s ownership interest in the shareholders’ equity of Seneca-Cayuga as of the date of the latest statement of financial condition included in the Company’s definitive prospectus, plus (ii) the value of the net assets of the MHC as of the date of the MHC’s latest statement of financial condition before the consummation of the Conversion (excluding the MHC’s ownership interest in Seneca-Cayuga). Each eligible account holder and supplemental eligible account holder is entitled to a proportionate share of the liquidation accounts in the event of a liquidation of (i) the Company or the Bank or (ii) the Bank, and only in such events. This share will be reduced if the eligible account holder’s or supplemental account holder’s deposit balance falls below the amounts on the date of record and will cease to exist if the account is closed. The liquidation account will never be increased despite any increase after conversion in the related deposit balance. The Bank may not pay a dividend on its capital stock if the effect thereof would cause retained earnings to be reduced below the liquidation account amount or regulatory capital requirements.

The Bank is a federal savings bank headquartered in Seneca Falls, New York.  We were organized in 1870 and have operated continuously since that time in the northern Finger Lakes Region of New York State which is located in the central to northwestern portion of New York State.

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 New York State municipal law and is a wholly owned subsidiary of the Bank.

The Bank maintains its executive offices and main retail location in Seneca Falls, New York, with retail offices in Auburn, Farmington, Geneva, Medina, Phelps, Union Springs, and 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.

Interim Financial Statements

The interim condensed consolidated financial statements as of June 30, 2024, and for the three and six months ended June 30, 2024 and 2023, 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 six months ended June 30, 2024 are not

6

Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

necessarily indicative of the results to be achieved for the remainder of the year ending December 31, 2024, or any other period.

Certain prior period data presented in the consolidated financial statements has been reclassified to conform 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, 2023 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. Reference is made to the accounting policies of the Company described in the Notes to Financial Statements contained in the Annual Report on Form 10-K for the year ended December 31, 2023.

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, 2023 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, 2023.

7

Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

2. Accumulated Other Comprehensive Loss

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

	Unrealized				Accumulated
	Losses		Defined		Other
Three Months Ended June 30,	on Securities		Benefit		Comprehensive
(In thousands)	Available-for-Sale		Pension Plan		Loss
Balance, March 31, 2024	$	(3,103)	$	(1,454)	$	(4,557)
Other comprehensive loss before reclassifications		(574)		—		(574)
Net current-period other comprehensive loss		(574)		—		(574)
Balance, June 30, 2024	$	(3,677)	$	(1,454)	$	(5,131)
Balance, March 31, 2023	$	(3,577)	$	(2,530)	$	(6,107)
Other comprehensive loss before reclassifications		(137)		—		(137)
Amounts reclassified from AOCI to the statements of operations, net of tax		—		32		32
Net current-period other comprehensive loss		(137)		32		(105)
Balance, June 30, 2023	$	(3,714)	$	(2,498)	$	(6,212)
	Unrealized				Accumulated
	(Losses) Gains		Defined		Other
Six Months Ended June 30,	on Securities		Benefit		Comprehensive
(In thousands)	Available-for-Sale		Pension Plan		Loss
Balance, December 31, 2023	$	(2,803)	$	(1,454)	$	(4,257)
Other comprehensive loss before reclassifications		(882)		—		(882)
Amounts reclassified from AOCI to the statements of operations, net of tax		8		—		8
Net current-period other comprehensive loss		(874)		—		(874)
Balance, June 30, 2024	$	(3,677)	$	(1,454)	$	(5,131)
Balance, December 31, 2022	$	(3,905)	$	(2,562)	$	(6,467)
Other comprehensive income before reclassifications		191		—		191
Amounts reclassified from AOCI to the statements of operations, net of tax		—		64		64
Net current-period other comprehensive income		191		64		255
Balance, June 30, 2023	$	(3,714)	$	(2,498)	$	(6,212)

8

Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The following table presents the amounts reclassified out of each component of accumulated other comprehensive loss:

	Three months ended June 30,				Six months ended June 30,				Affected Line Item in the
(In thousands)	2024		2023		2024		2023		Statements of Operations
Available-for-sale securities:
Realized gain on sale of securities	$	—	$	—	$	10	$	—	Net gain on sale of securities
Tax effect		—		—		(2)		—	Income tax benefit
	$	—	$	—	$	8	$	—	Net loss
Defined benefit pension plan:
Retirement plan net losses recognized in net periodic pension cost	$	—	$	41	$	—	$	81	Compensation and benefits
Tax effect		—		(9)		—		(17)	Income tax benefit
	$	—	$	32	$	—	$	64	Net loss

9

Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

3. Earnings (Losses) Per Common Share

Basic earnings (losses) per common share is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding during the period. Diluted earnings (losses) per share is calculated in a manner similar to that of basic earnings (losses) 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 no impact on earnings (losses) per share as the stock options were considered anti-dilutive for the three and six months ended June 30, 2024. 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 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 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 at the conclusion of the first stock repurchase program. On May 31, 2023, the Board of Directors authorized a third stock repurchase program to acquire up to $1.0 million, or approximately 91,000 shares, or approximately 4.0% of the Company’s outstanding common stock, based on the current trading price of the common stock. At this time, the Company does not expect to repurchase any more shares under the third stock repurchase program. On March 25, 2024, the Board of Directors of the Company approved stock option grants to the Chief Executive Officer and restricted stock grants to select members of management. An aggregate of 14,780 stock options were granted to the Chief Executive Officer and 5,912 shares of restricted stock were granted to management during the period ended March 31, 2024.  The grants 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 2029. 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.

The following tables set forth the calculation of basic and diluted earnings per share.

	Three Months Ended June 30,
(In thousands, except per share data)	2024		2023
Net loss available to common stockholders	$	(841)	$	(166)
Weighted-average common shares outstanding		2,145		2,238
Losses per common share - basic and diluted	$	(0.39)	$	(0.07)
	Six Months Ended June 30,
(In thousands, except per share data)	2024		2023
Net loss available to common stockholders	$	(1,386)	$	(318)
Weighted-average common shares outstanding		2,141		2,239
Losses per common share - basic and diluted	$	(0.65)	$	(0.14)

10

Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

4.Securities

Investments in securities available-for-sale, held-to-maturity, and equity are summarized as follows:

	At June 30, 2024
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
(in thousands)	Cost		Gains		Losses		Value
Securities available-for-sale:
Residential mortgage-backed - US agency and Government Sponsored Enterprise ("GSE")	$	20	$	—	$	—	$	20
Corporate bonds		12,960		61		(2,137)		10,884
State and political subdivisions		17,022		75		(1,992)		15,105
Total securities available-for-sale	$	30,002	$	136	$	(4,129)	$	26,009
Securities held-to-maturity:
Structured certificates of deposit	$	650	$	—	$	(192)	$	458
Residential mortgage-backed - US agency and GSEs		759		—		(25)		734
Total securities held-to-maturity	$	1,409	$	—	$	(217)	$	1,192
Equity securities:
Large cap equity mutual fund	$	54					$	54
Other mutual funds		352						352
Total of equity securities	$	406					$	406

11

Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

	At December 31, 2023
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
(in thousands)	Cost		Gains		Losses		Value
Securities available-for-sale:
Residential mortgage-backed - US agency and GSEs	$	20	$	—	$	—	$	20
Corporate bonds		17,242		85		(2,280)		15,047
State and political subdivisions		17,588		112		(1,465)		16,235
Total securities available-for-sale	$	34,850	$	197	$	(3,745)	$	31,302
Securities held-to-maturity:
Structured certificates of deposit	$	650	$	—	$	(208)	$	442
Residential mortgage-backed - US agency and GSEs		804		1		(21)		784
Total securities held-to-maturity	$	1,454	$	1	$	(229)	$	1,226
Equity securities:
Large cap equity mutual fund	$	45					$	45
Other mutual funds		316						316
Total of equity securities	$	361					$	361

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 June 30, 2024
	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 (1)	$	16	$	—	$	—	$	—	$	16	$	—
Corporate bonds (1)		81		—		9,614		(2,137)		9,695		(2,137)
State and political subdivisions (1)		57		—		13,666		(1,992)		13,723		(1,992)
Total securities available-for-sale	$	154	$	—	$	23,280	$	(4,129)	$	23,434	$	(4,129)
(1) Aggregate unrealized loss position less than $500

	At December 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	$	—	$	—	$	—	$	—	$	—	$	—
Corporate bonds		2,367		(14)		10,642		(2,266)		13,009		(2,280)
State and political subdivisions		1,427		(11)		13,336		(1,454)		14,763		(1,465)
Total securities available-for-sale	$	3,794	$	(25)	$	23,978	$	(3,720)	$	27,772	$	(3,745)

12

Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The Company conducts a formal review of investment securities on a quarterly basis for the presence of credit-related and non-credit-related losses. Management assesses whether 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. Unrealized losses on corporate bonds have not been recognized into income because the issuer(s) bonds are of investment quality, management does not intend to sell and it is likely that management will not be required to sell the securities prior to their anticipated recovery, and the decline in fair value is 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 to recover as the bond(s) approach maturity.

There are 96 bond issues held by the Company that have an unrealized loss as of June 30, 2024.  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 six bonds issued by corporate entities that have an aggregate loss of $1.8 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 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 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 June 30, 2024 the amortized cost of debt securities held-to-maturity totaled $1.4 million. Structured certificates of deposit totaled $650,000 and are fully insured by the Federal Deposit Insurance Corporation as no one security exceeds the $250,000 insurance limit. Residential mortgage-backed securities totaled $759,000 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 June 30, 2024, 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.

	At June 30, 2024
	Securities				Securities
	Available-for-Sale				Held-to-Maturity
	Amortized		Estimated		Amortized		Estimated
(in thousands)	Cost		Fair Value		Cost		Fair Value
Due in one year or less	$	435	$	422	$	—	$	—
Due over one year through five years		3,863		3,573		—		—
Due over five through ten years		5,311		4,103		—		—
Due after ten years		20,373		17,891		—		—
		29,982		25,989		—		—
Structured certificates of deposit		—		—		650		458
Residential mortgage-backed securities		20		20		759		734
Total	$	30,002	$	26,009	$	1,409	$	1,192

There were no gross realized gains or losses on sales and redemptions of available-for-sale securities for the three months ended June 30, 2024.  There were $10,000 in gross realized gains and no losses on sales and redemptions of

13

Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

available-for-sale securities for the six months ended June 30, 2024.  There were no gross realized gains or losses on sales and redemptions of available-for-sale securities for the three and six months ended June 30, 2023. 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 $12.5 million and $12.0 million were pledged to collateralize certain deposit arrangements at June 30, 2024 and December 31, 2023, respectively.

5.Loans Receivable

Major classifications of loans are as follows:

	At June 30,		At December 31,
(In thousands)	2024		2023
Residential mortgages:
One- to four-family	$	169,502	$	168,387
		169,502		168,387
Commercial loans:
Real estate - nonresidential		13,864		14,437
Multi-family		777		832
Commercial business		14,902		18,821
		29,543		34,090
Consumer:
Home equity and junior liens		15,096		13,632
Manufactured homes		46,209		48,681
Automobile		19,459		22,424
Student		1,441		1,569
Recreational vehicle		21,403		22,915
Other consumer		8,897		9,555
		112,505		118,776
Total Loans		311,550		321,253
Net deferred loan costs		13,897		15,351
Fair value credit and yield adjustment		(115)		(149)
Less allowance for loan losses		(3,177)		(2,973)
Loans receivable, net	$	322,155	$	333,482

The Company originates residential mortgage, commercial, and consumer loans to customers, principally located in the Finger Lakes Region of New York State and extending north to Orleans 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 a Connecticut based company. In 2019, the Company also began to purchase modular home loans originated throughout the United States, 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. In 2022, the Company began to purchase one- to four-family, owner-occupied residential real estate loans from a third-party originator. These loans are serviced by the Company and primarily located in Cayuga, Ontario, Orleans, and Seneca counties.

14

Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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. 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 credit loss. Loans not classified are rated as pass.

The following table presents the classes of the loan portfolio summarized by the credit quality indicator:

	At June 30, 2024
			Special
(In thousands)	Pass		Mention		Substandard		Doubtful		Total
Residential mortgages:
One- to four-family	$	166,231	$	1,265	$	2,006	$	—	$	169,502
		166,231		1,265		2,006		—		169,502
Commercial loans:
Real estate - nonresidential		11,974		1,610		280		—		13,864
Multi-family		777		—		—		—		777
Commercial business		14,004		521		377		—		14,902
		26,755		2,131		657		—		29,543
Consumer:
Home equity and junior liens		14,911		98		87		—		15,096
Manufactured homes		45,708		233		268		—		46,209
Automobile		19,341		49		69		—		19,459
Student		1,409		5		27		—		1,441
Recreational vehicle		20,704		333		366		—		21,403
Other consumer		8,844		53		—		—		8,897
		110,917		771		817		—		112,505
Total loans	$	303,903	$	4,167	$	3,480	$	—	$	311,550

15

Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

	At December 31, 2023
			Special
(In thousands)	Pass		Mention		Substandard		Doubtful		Total
Residential mortgages:
One- to four-family	$	164,940	$	1,169	$	2,278	$	—	$	168,387
		164,940		1,169		2,278		—		168,387
Commercial loans:
Real estate - nonresidential		12,505		1,633		299		—		14,437
Multi-family		832		—		—		—		832
Commercial business		16,016		615		2,190		—		18,821
		29,353		2,248		2,489		—		34,090
Consumer:
Home equity and junior liens		13,486		61		85		—		13,632
Manufactured homes		48,286		72		323		—		48,681
Automobile		22,216		88		120		—		22,424
Student		1,543		—		26		—		1,569
Recreational vehicle		21,974		650		291		—		22,915
Other consumer		9,428		56		71		—		9,555
		116,933		927		916		—		118,776
Total loans	$	311,226	$	4,344	$	5,683	$	—	$	321,253

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.

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 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.    

16

Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

An age analysis of past due loans, segregated by class of loans, as are as follows:

	At June 30, 2024
					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
Residential mortgage loans:
One- to four-family	$	5,134	$	1,356	$	2,006	$	8,496	$	161,006	$	169,502
		5,134		1,356		2,006		8,496		161,006		169,502
Commercial loans:
Real estate - nonresidential		81		—		18		99		13,765		13,864
Multi-family		380		—		—		380		397		777
Commercial business		59		—		—		59		14,843		14,902
		520		—		18		538		29,005		29,543
Consumer loans:
Home equity and junior liens		195		94		87		376		14,720		15,096
Manufactured homes		737		233		268		1,238		44,971		46,209
Automobile		198		49		70		317		19,142		19,459
Student		—		5		27		32		1,409		1,441
Recreational vehicle		594		333		366		1,293		20,110		21,403
Other consumer		211		53		—		264		8,633		8,897
		1,935		767		818		3,520		108,985		112,505
Total loans	$	7,589	$	2,123	$	2,842	$	12,554	$	298,996	$	311,550

	At December 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
Residential mortgage loans:
One- to four-family	$	5,397	$	1,491	$	2,277	$	9,165	$	159,222	$	168,387
		5,397		1,491		2,277		9,165		159,222		168,387
Commercial loans:
Real estate - nonresidential		—		—		29		29		14,408		14,437
Multi-family		384		—		—		384		448		832
Commercial business		388		73		41		502		18,319		18,821
		772		73		70		915		33,175		34,090
Consumer loans:
Home equity and junior liens		336		77		85		498		13,134		13,632
Manufactured homes		609		72		323		1,004		47,677		48,681
Automobile		246		88		120		454		21,970		22,424
Student		4		—		25		29		1,540		1,569
Recreational vehicle		913		650		291		1,854		21,061		22,915
Other consumer		154		56		71		281		9,274		9,555
		2,262		943		915		4,120		114,656		118,776
Total loans	$	8,431	$	2,507	$	3,262	$	14,200	$	307,053	$	321,253

There were no loans past due more than ninety days and still accruing interest at June 30, 2024 and December 31, 2023. Income recognized on a cash basis was not materially different than interest income recognized on an accrual basis for the periods.

17

Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The following tables provide loans on non-accrual status. Non-accrual loans may have an allowance for credit losses or a negative allowance for credit losses from expected recoveries of amounts previously written off. Non-accrual loans may not have an allowance for credit losses if the loss expectations are zero given a solid collateral value.

	At June 30, 2024				At December 31,2023
			Non-accrual loans				Non-accrual loans
			with no allowance				with no allowance
(In thousands)	Non-accrual loan		for credit losses		Non-accrual loan		for credit losses
Residential mortgage loans:
One- to four-family	$	2,006	$	1,894	$	2,277	$	2,277
Commercial loans:
Real estate - nonresidential		18		18		29		29
Commercial business		298		298		397		356
Consumer loans:
Home equity and junior liens		87		87		85		85
Manufactured homes		268		268		323		323
Automobile		70		70		120		120
Student		27		27		25		25
Recreational vehicle		366		366		291		291
Other consumer		—		—		71		71
	$	3,140	$	3,028	$	3,618	$	3,577

The following table summarizes interest income recognized on non-accrual loans:

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2024		2023		2024		2023
Residential mortgage loans:
One- to four-family	$	11	$	4	$	23	$	31
Commercial loans:
Commercial business		—		—		—		1
Consumer loans:
Home equity and junior liens		—		1		1		2
Automobile		1		1		2		2
Recreational vehicle		3		4		8		6
		15		10		34		42

18

Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Loan Modifications

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 modified with financial difficulty during the three and six months ended June 30, 2024 and 2023.

The following tables present an analysis of collateral-dependent loans of the Company as of June 30, 2024 and December 31, 2023:

	At June 30, 2024
	Residential		Business				Commercial				Total
(In thousands)	properties		assets		Land		property		Other		Loans
One- to four-family	$	1,594	$	—	$	—	$	—	$	—	$	1,594
Real estate - nonresidential		18		—		—		—		—		18
Commercial business		—		298		—		—		—		298
Home equity and junior liens		87		—		—		—		—		87
Total loans	$	1,699	$	298	$	—	$	—	$	—	$	1,997

	At December 31, 2023
	Residential		Business				Commercial				Total
(In thousands)	properties		assets		Land		property		Other		Loans
One- to four-family	$	1,977	$	—	$	—	$	—	$	—	$	1,977
Real estate - nonresidential		29		—		—		—		—		29
Commercial business		—		414		—		—		—		414
Home equity and junior liens		85		—		—		—		—		85
Total loans	$	2,091	$	414	$	—	$	—	$	—	$	2,505

19

Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The following tables present the loans to customers as of June 30, 2024 and December 31, 2023 based on year of origination within each credit quality indicator:

	At June 30, 2024
		2024		2023		2022		2021		2020		Prior			Total
Residential mortgage loans:
4 Internal grade	$	7,663	$	38,981	$	39,684	$	9,244	$	10,606	$	60,053		$	166,231
5 Internal grade		—		—		235		135		—		895			1,265
6 Internal grade		—		175		136		117		41		1,537			2,006
	$	7,663	$	39,156	$	40,055	$	9,496	$	10,647	$	62,485		$	169,502
Commercial loans:
2 Internal grade	$	—	$	—	$	—	$	—	$	—	$	—	���	$	—
3 Internal grade		—		637		35		577		205		4,520			5,974
4 Internal grade		—		5,757		3,657		549		185		10,633			20,781
5 Internal grade		—		—		—		—		—		2,131			2,131
6 Internal grade		—		—		—		—		—		657			657
	$	—	$	6,394	$	3,692	$	1,126	$	390	$	17,941		$	29,543
Consumer loans:
4 Internal grade	$	1,951	$	15,510	$	22,115	$	24,085	$	30,053	$	17,203		$	110,917
5 Internal grade		—		23		184		211		159		194			771
6 Internal grade		—		—		81		336		287		113			817
	$	1,951	$	15,533	$	22,380	$	24,632	$	30,499	$	17,510		$	112,505

	At December 31, 2023
		2023		2022		2021		2020		2019		Prior		Total
Residential mortgage loans:
4 Internal grade	$	39,312	$	41,364	$	10,185	$	11,309	$	11,008	$	51,762	$	164,940
5 Internal grade		—		—		27		—		—		1,142		1,169
6 Internal grade		—		132		—		41		763		1,342		2,278
	$	39,312	$	41,496	$	10,212	$	11,350	$	11,771	$	54,246	$	168,387
Commercial loans:
2 Internal grade	$	—	$	—	$	—	$	—	$	—	$	360	$	360
3 Internal grade		1,615		155		594		242		459		4,212		7,277
4 Internal grade		6,496		3,461		657		193		409		10,500		21,716
5 Internal grade		—		—		—		—		2,028		220		2,248
6 Internal grade		—		—		—		—		41		2,448		2,489
	$	8,111	$	3,616	$	1,251	$	435	$	2,937	$	17,740	$	34,090
Consumer loans:
4 Internal grade	$	16,103	$	24,083	$	25,866	$	31,711	$	8,668	$	10,502	$	116,933
5 Internal grade		—		104		474		227		17		105		927
6 Internal grade		—		83		406		295		54		78		916
	$	16,103	$	24,270	$	26,746	$	32,233	$	8,739	$	10,685	$	118,776

20

Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The following tables present the gross write-offs and recoveries based on year of origination for the six months ended June 30, 2024 and 2023:

	June 30, 2024
		2024		2023		2022		2021		2020		Prior		Total
Residential mortgage loans:
Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	(3)	$	(3)
Current period recoveries		—		—		—		—		—		2		2
Current period net (write-offs) recoveries	$	—	$	—	$	—	$	—	$	—	$	(1)	$	(1)
Commercial loans:
Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	(34)	$	(34)
Current period recoveries		—		—		—		—		—		25		25
Current period net (write-offs) recoveries	$	—	$	—	$	—	$	—	$	—	$	(9)	$	(9)
Consumer loans:
Current period gross write-offs	$	—	$	(23)	$	(79)	$	(222)	$	(112)	$	(24)	$	(460)
Current period recoveries		—		—		19		16		21		16		72
Current period net (write-offs) recoveries	$	—	$	(23)	$	(60)	$	(206)	$	(91)	$	(8)	$	(388)

	June 30, 2023
		2023		2022		2021		2020		2019		Prior		Total
Residential mortgage loans:
Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	(100)	$	(100)
Current period recoveries		—		—		—		—		—		3		3
Current period net (write-offs) recoveries	$	—	$	—	$	—	$	—	$	—	$	(97)	$	(97)
Commercial loans:
Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Current period recoveries		—		—		—		—		—		51		51
Current period net (write-offs) recoveries	$	—	$	—	$	—	$	—	$	—	$	51	$	51
Consumer loans:
Current period gross write-offs	$	—	$	—	$	(1)	$	(1)	$	—	$	(20)	$	(22)
Current period recoveries		—		—		—		—		—		12		12
Current period net (write-offs) recoveries	$	—	$	—	$	(1)	$	(1)	$	—	$	(8)	$	(10)

21

Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

6.Allowance for Credit Loss

The following tables summarize the activity related to the allowance for credit losses for the three and six months ended June 30, 2024 and 2023:

	Three Months Ended June 30, 2024
			Credit
			Loss		Write-offs
			Expense		During		Recoveries
	Beginning		for the		the		During		Ending
(In thousands)	Balance		Period		Period		the Period		Balance
Residential mortgage loans:
One- to four-family	$	1,178	$	22	$	—	$	1	$	1,201
Commercial loans:
Real estate - nonresidential		480		19		—		—		499
Commercial business		190		(55)		—		25		160
Consumer loans:
Home equity and junior liens		107		9		—		—		116
Automobile		261		8		(68)		17		218
Student		12		(2)		—		1		11
Recreational vehicle		421		382		(247)		6		562
Other consumer		401		(6)		(3)		18		410
	$	3,050	$	377	$	(318)	$	68	$	3,177

	Three Months Ended June 30, 2023
			Credit
			Loss		Write-offs
			Expense		During		Recoveries
	Beginning		for the		the		During		Ending
(In thousands)	Balance		Period		Period		the Period		Balance
Residential mortgage loans:
One- to four-family	$	943	$	220	$	(100)	$	2	$	1,065
Construction		1		(1)		—		—		—
Commercial loans:
Real estate - nonresidential		600		(63)		—		—		537
Commercial business		279		(30)		—		49		298
Consumer loans:
Home equity and junior liens		70		8		(2)		—		76
Automobile		259		(9)		—		4		254
Student		15		(1)		—		1		15
Recreational vehicle		134		16		—		—		150
Other consumer		352		25		(1)		—		376
	$	2,653	$	165	$	(103)	$	56	$	2,771

22

Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

	Six Months Ended June 30, 2024
			Credit
			Loss		Write-offs
			Expense		During		Recoveries
	Beginning		for the		the		During		Ending
(In thousands)	Balance		Period		Period		the Period		Balance
Residential mortgage loans:
One- to four-family	$	1,184	$	18	$	(3)	$	2	$	1,201
Commercial loans:
Real estate - nonresidential		495		4		—		—		499
Commercial business		206		(37)		(34)		25		160
Consumer loans:
Home equity and junior liens		102		13		—		1		116
Automobile		242		17		(83)		42		218
Student		12		(4)		—		3		11
Recreational vehicle		369		506		(319)		6		562
Other consumer		363		85		(58)		20		410
	$	2,973	$	602	$	(497)	$	99	$	3,177

	Six Months Ended June 30, 2023
			Additional
			Allowance
			Recognized		Credit
			Due to		Loss		Write-offs
			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	$	115	$	260	$	(100)	$	3	$	1,065
Construction		2		—		(2)		—		—		—
Commercial loans:
Real estate - nonresidential		319		325		(107)		—		—		537
Multi-family		4		(4)		—		—		—		—
Commercial business		248		92		(93)		—		51		298
Consumer loans:
Home equity and junior liens		65		(9)		33		(13)		—		76
Manufactured homes		110		(110)		—		—		—		—
Automobile		135		106		4		—		9		254
Student		55		(38)		3		(7)		2		15
Recreational vehicle		646		(646)		150		—		—		150
Other consumer		126		169		82		(2)		1		376
	$	2,497	$	—	$	330	$	(122)	$	66	$	2,771

At June 30, 2024 and December 31, 2023 there was a $6,000 liability recorded for unfunded loan commitments.

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

23

Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

risks such as declines in the local economy creating higher rates of unemployment. Those conditions may also lead to 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’ net periodic pension benefit:

Generations Bank Plan:	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2024		2023		2024		2023
Net periodic expenses recognized in income:
Service cost	$	41	$	60	$	83	$	120
Interest cost		121		117		241		235
Expected return on plan assets		(345)		(306)		(690)		(613)
Amortization of net losses		—		41		—		81
Net periodic pension benefit	$	(183)	$	(88)	$	(366)	$	(177)

Medina Savings and Loan Plan:	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2024		2023		2024		2023
Net periodic expenses recognized in income:
Service cost	$	4	$	3	$	8	$	6
Interest cost		33		33		66		67
Expected return on plan assets		(98)		(89)		(197)		(179)
Net periodic pension benefit	$	(61)	$	(53)	$	(123)	$	(106)

On July 3, 2024, the Board of Directors approved a hard freeze of the Plans.  On July 8, 2024, the Company informed employees of its decision to freeze benefit accruals under the Plans.  The Plans were frozen as of July 31, 2024.  Compensation earned by employees up to July 31, 2024 is used for purposes of calculating benefits under the Plans, however, there are no further benefit accruals after this date.  The net periodic pension income for the year ended December 31, 2024, increased from $978,000 to  $1.1 million which represents an increase of $133,000 for the year ended December 31, 2024, due to the Plans freeze .

24

Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

8. Stock-Based Compensation

A summary of the Company’s stock option activity and related information for its option plans for the three and six months ended June 30, 2024 and 2023 is as follows:

	Three Months Ended June 30, 2024
			Weighted Average
			Exercise Price Per
	Options		Share
Outstanding at beginning of quarter	147,757	$	11.45
Grants	—		—
Exercised	—		—
Outstanding at quarter end	147,757	$	11.45
Exercisable at quarter end	75,355	$	11.61
	Three Months Ended June 30, 2023
			Weighted Average
			Exercise Price Per
	Options		Share
Outstanding at beginning of quarter	132,977	$	11.61
Grants	—		—
Exercised	—		—
Outstanding at quarter end	132,977	$	11.61
Exercisable at quarter end	26,595	$	11.61

	Six Months Ended June 30, 2024
			Weighted Average
			Exercise Price Per
	Options		Share
Outstanding at beginning of year	132,977	$	11.61
Grants	14,780		10.00
Exercised	—		—
Outstanding at June 30, 2024	147,757	$	11.45
Exercisable at June 30, 2024	75,355	$	11.61
	Six Months Ended June 30, 2023
			Weighted Average
			Exercise Price Per
	Options		Share
Outstanding at beginning of year	132,977	$	11.61
Grants	—		—
Exercised	—		—
Outstanding at June 30, 2023	132,977	$	11.61
Exercisable at June 30, 2023	26,595	$	11.61

25

Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

An aggregate of 14,780 stock options were granted to the Chief Executive Officer during the six months ended June 30, 2024. The grants 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.  

The compensation expense of the awards is based on the fair value of the instruments on the date of grant using the Black Scholes model.  The Company recorded compensation expense in the amount of $19,000 and $36,000 for the three and six months ended June 30, 2024, respectively.  The Company recorded compensation expense in the amount of $23,000 and $45,000 for the three and six months ended June 30, 2023, respectively.

An aggregate of 5,912 shares of restricted stock were granted to select members of management during the six months ended June 30, 2024. 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 $25,000 and $48,000 for the three and six months ended June 30, 2024, respectively.  The Company recorded compensation expense in the amount of $31,000 and $62,000 for the three and six months ended June 30, 2023, respectively.

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 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).

Under applicable regulation, the Bank must hold a 2.50% capital conservation buffer above the adequately capitalized risk-based capital ratios.  The net unrealized gain or loss on available-for-sale securities is not included in computing regulatory capital. Management believes as of June 30, 2024 and December 31, 2023, the Bank meets all capital adequacy requirements to which it is subject.

26

Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The Bank’s actual capital amounts and ratios are as follows:

									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 June 30, 2024:
Common Equity Tier 1 Capital	$	37,913	13.02	%	$	13,104	4.50	%	$	18,927	6.50	%
Total Capital (to Risk-Weighted Assets)	$	41,096	14.11	%	$	23,295	8.00	%	$	29,119	10.00	%
Tier 1 Capital (to Risk-Weighted Assets)	$	37,913	13.02	%	$	17,472	6.00	%	$	23,295	8.00	%
Tier 1 Capital (to Total Adjusted Assets)	$	37,913	9.42	%	$	16,098	4.00	%	$	20,123	5.00	%
As of December 31, 2023:
Common Equity Tier 1 Capital	$	39,288	12.83	%	$	13,781	4.50	%	$	19,907	6.50	%
Total Capital (to Risk-Weighted Assets)	$	42,267	13.80	%	$	24,500	8.00	%	$	30,626	10.00	%
Tier 1 Capital (to Risk-Weighted Assets)	$	39,288	12.83	%	$	18,375	6.00	%	$	24,500	8.00	%
Tier 1 Capital (to Total Adjusted Assets)	$	39,288	9.37	%	$	16,775	4.00	%	$	20,969	5.00	%

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 June 30, 2024 and December 31, 2023, Generations Bank exceeded all regulatory required minimum capital ratios and met the regulatory definition of a “well-capitalized” institution, i.e. Tier 1 Capital (to Total Adjusted Asset) exceeding 5.00%, a common equity Tier 1 capital ratio exceeding 6.50%, a Tier 1 risk-based capital ratio exceeding 8.00%, and a total risk-based capital ratio exceeding 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.

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 June 30, 2024.

Financial instruments whose contract amounts represent credit risk consist of the following:

	At June 30,		At December 31,
(In thousands)	2024		2023
Commitments to grant loans	$	356	$	987
Unfunded commitments under lines of credit		13,836		14,375

27

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 June 30, 2024 with fixed interest rates amounted to approximately $11.0 million. Loan commitments, including unused lines of credit and standby letters of credit, outstanding at June 30, 2024 with variable interest rates amounted to approximately $3.2 million. Loan commitments, including unused lines of credit and standby letters of credit, outstanding at December 31, 2023 with fixed interest rates amounted to approximately $11.5 million. Loan commitments, including unused lines of credit and standby letters of credit, outstanding at December 31, 2023 with variable interest rates amounted to approximately $3.8 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. For the three and six months ended June 30, 2024 and 2023, the Company did not record a provision for credit losses for unfunded commitments.

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

The Bank has 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 (“MPF Program”), inclusive of USDA loans, to date. The principal outstanding balance on loans sold under the MPF Program is $6.7 million at June 30, 2024. The Bank continues to service loans sold under the MPF Program.

Under the terms of the MPF Program, there is limited recourse 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

28

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 $707,000 at June 30, 2024. 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 was $96,000 at June 30, 2024. In addition, many of the loans sold under the MPF Program have primary mortgage insurance, which reduces the Bank’s overall exposure.

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.

The following table presents revenues subject to Topic 606:

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2024		2023		2024		2023
Service charges on deposit accounts	$	140	$	141	$	251	$	275
Debit card interchange and surcharge income		174		188		346		371
Insurance commissions		1		24		1		153
Net gain on sale of Generations Agency		—		312		—		312
Loan servicing fees		52		29		86		74
	$	367	$	694	$	684	$	1,185

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 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 end of the month in which maintenance occurs. Overdraft fees are recognized at the point in time that the overdraft occurs. Service charges on 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 who 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. Revenue included in banking fees and service charges on the consolidated statements of operations that was not related to contracts was $4,000 for the three months ended June 30, 2024 and 2023 and $7,000 for the six months ended June 30, 2024 and 2023, respectively.

Insurance commissions: 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 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

29

Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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.  The Agency’s book of business was purchased by Northwoods on June 1, 2023.

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.

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 June 30, 2024 and December 31, 2023.

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

30

Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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 June 30, 2024 and December 31, 2023.

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

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

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.

State and political subdivisions: The significant unobservable inputs used in the fair value measurement of the Company’s state and political subdivisions 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”) 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.

Collateral-dependent and individually evaluated loans: Individually evaluated loans are those loans in which the Company has measured credit loss generally based on the fair value of the loan’s collateral. Fair value is generally determined based upon independent 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 individual credit losses.

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.

31

Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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.

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 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.

The following table presents a comparison of the carrying amount and estimated fair value of the Company’s financial instruments:

	At June 30, 2024
	Carrying								Fair
(In thousands)	Amount		Level 1		Level 2		Level 3		Value
Financial assets:
Cash and cash equivalents	$	9,833	$	9,833	$	—	$	—	$	9,833
Interest-earning time deposits in banks		3,156		—		3,156		—		3,156
Securities available-for-sale		26,009		—		24,742		1,267		26,009
Securities held-to-maturity		1,409		—		1,192		—		1,192
Equity securities		406		406		—		—		406
Loans receivable, net		322,155		—		—		293,648		293,648
FHLB stock		1,506		—		1,506		—		1,506
Accrued interest receivable		1,775		1,775		—		—		1,775
Financial liabilities:
Deposits	$	338,822	$	86,607	$	—	$	244,593	$	331,200
Long-term borrowings		21,316		—		21,049		—		21,049
Accrued interest payable		496		496		—		—		496

	At December 31, 2023
	Carrying								Fair
(In thousands)	Amount		Level 1		Level 2		Level 3		Value
Financial assets:
Cash and cash equivalents	$	14,525	$	14,525	$	—	$	—	$	14,525
Interest-bearing time deposits in banks		4,362		—		4,362		—		4,362
Securities available-for-sale		31,302		—		29,827		1,475		31,302
Securities held-to-maturity		1,454		—		1,226		—		1,226
Equity securities		361		361		—		—		361
Loans receivable, net		333,482		—		—		304,655		304,655
FHLB stock		1,588		—		1,588		—		1,588
Accrued interest receivable		1,611		1,611		—		—		1,611
Financial liabilities:
Deposits	$	357,606	$	86,637	$	—	$	263,760	$	350,397
Long-term borrowings		23,577		—		23,411		—		23,411
Accrued interest payable		638		638		—		—		638

32

Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The following tables summarize assets measured at fair value on a recurring basis, segregated by the level of valuation inputs within the hierarchy utilized to measure fair value:

	At June 30, 2024
							Total Fair
(In thousands)	Level 1		Level 2		Level 3		Value
Securities available-for-sale:
Debt investment securities:
Residential mortgage-backed - US agency and GSEs	$	—	$	20	$	—	$	20
Corporate bonds		—		10,884		—		10,884
State and political subdivisions		—		13,838		1,267		15,105
Equity investment securities:
Large cap equity mutual fund		54		—		—		54
Other mutual funds		352		—		—		352
Total investment securities	$	406	$	24,742	$	1,267	$	26,415

	At December 31, 2023
							Total Fair
(In thousands)	Level 1		Level 2		Level 3		Value
Securities available-for-sale:
Debt investment securities:
Residential mortgage-backed - US agency and GSEs	$	—	$	20	$	—	$	20
Corporate bonds		—		15,047		—		15,047
State and political subdivisions		—		14,760		1,475		16,235
Equity investment securities:
Large cap equity mutual fund		45		—		—		45
Other mutual funds		316		—		—		316
Total investment securities	$	361	$	29,827	$	1,475	$	31,663

The changes in Level 3 assets measured at estimated fair value on a recurring basis during the periods noted:

	Investment
(In thousands)	Securities
Balance - December 31, 2023	$	1,475
Total gains realized/unrealized:
Included in other comprehensive loss		(9)
Principal payments/maturities		(199)
Balance - June 30, 2024	$	1,267

	Investment
(In thousands)	Securities
Balance - December 31, 2022	$	1,715
Total gains realized/unrealized:
Included in other comprehensive income		130
Principal payments/maturities		(298)
Balance - June 30, 2023	$	1,547

33

Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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 segregated by the level of valuation inputs within the hierarchy utilized to measure fair value:

	At June 30, 2024
							Total Fair
(In thousands)	Level 1		Level 2		Level 3		Value
Collateral-dependent loans	$	—	$	—	$	92	$	92
Foreclosed real estate & repossessed assets		—		—		—		—

	At December 31, 2023
							Total Fair
(In thousands)	Level 1		Level 2		Level 3		Value
Collateral-dependent loans	$	—	$	—	$	36	$	36
Foreclosed real estate & repossessed assets		—		—		118		118

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

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-
State and political subdivisions	Scheduled principal	Cost to Sell	0%
	and interest payments
	Carrying value		100%

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.

34

Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The following table presents quantitative information about Level 3 fair value measurements for assets measured at fair value on a nonrecurring basis at June 30, 2024 and December 31, 2023:

	Quantitative Information about Level 3 Fair Value Measurements
	Valuation	Unobservable	Range
	Techniques	Input	(Weighted Avg.)
Collateral-dependent loans -	Appraisal of collateral	Appraisal Adjustments	5%  - 35%  (20)%
One-to four-family residential		Costs to Sell	5%  - 15% (10)%
Collateral-dependent loans -	Appraisal of collateral	Appraisal Adjustments	5%  - 35%  (25)%
Commercial business		Changes in property condition	10%  - 20% (15)%
		Costs to Sell	5%  - 15% (10)%
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)%

Collateral-dependent loans: Collateral-dependent loans carried at fair value have been partially charged-off or receive specific allocations of the allowance for credit losses. The Company evaluates and values collateral-dependent impaired loans at the time the loan 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 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 management’s subjective discount on 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. 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. Impaired loans are evaluated on a quarterly basis for additional impairment and adjusted accordingly.

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.

13.Segment Information

The Company had three primary business segments, its community banking franchise, its insurance agency, and a limited-purpose commercial bank until the sale of the insurance agency’s book of business on June 1, 2023. As of June 30, 2024 the Company has two primary business segments, its community banking franchise and a limited-purpose commercial bank.

35

Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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. Expenses include personnel and branch-network support charges.

The insurance agency segment offered insurance coverage to businesses and individuals in the Finger Lakes Region. The insurance activities consisted of those conducted through the Bank’s wholly owned subsidiary, Generations Agency. The primary revenue source was commissions. Pursuant to a Management Agreement, which became effective on April 1, 2022, personnel and office support charges were assumed by Northwoods. The Agency’s book of business was purchased by Northwoods on June 1, 2023.

The commercial 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 is a wholly owned subsidiary of the Bank. The major revenue source is net interest income. Expenses include rent and support charges for using the assets and technology of the Bank.

Information about the segments is presented in the following tables as of and for the periods as noted:

	Three Months Ended June 30,
	2024								2023
	Community				Commercial				Community				Commercial
	Banking		Insurance		Banking				Banking		Insurance		Banking
(In thousands)	Activities		Activities		Activities		Total		Activities		Activities		Activities		Total
Net interest income	$	1,779	$	—	$	91	$	1,870	$	2,220	$	—	$	19	$	2,239
Provision for loan losses		377		—		—		377		165		—		—		165
Net interest income after provision for loan losses		1,402		—		91		1,493		2,055		—		19		2,074
Total noninterest income		462		—		—		462		766		22		—		788
Compensation and benefits		(1,076)		—		—		(1,076)		(1,338)		—		—		(1,338)
Other noninterest expense		(1,959)		—		(21)		(1,980)		(1,714)		(1)		(21)		(1,736)
(Loss) Income before income tax (benefit) expense		(1,171)		—		70		(1,101)		(231)		21		(2)		(212)
Income tax (benefit) expense		(275)		—		15		(260)		(46)		—		—		(46)
Net (loss) income	$	(896)	$	—	$	55	$	(841)	$	(185)	$	21	$	(2)	$	(166)

36

Generations Bancorp NY, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

	Six Months Ended June 30,
	2024								2023
	Community				Commercial				Community				Commercial
	Banking		Insurance		Banking				Banking		Insurance		Banking
(In thousands)	Activities		Activities		Activities		Total		Activities		Activities		Activities		Total
Net interest income	$	3,581	$	—	$	185	$	3,766	$	4,685	$	—	$	78	$	4,763
Provision for loan losses		602		—		—		602		330		—		—		330
Net interest income after provision for loan losses		2,979		—		185		3,164		4,355		—		78		4,433
Total noninterest income		903		—		—		903		1,215		149		—		1,364
Compensation and benefits		(2,174)		—		—		(2,174)		(2,746)		—		—		(2,746)
Other noninterest expense		(3,666)		—		(42)		(3,708)		(3,413)		(1)		(41)		(3,455)
(Loss) Income before income tax (benefit) expense		(1,958)		—		143		(1,815)		(589)		148		37		(404)
Income tax (benefit) expense		(459)		—		30		(429)		(94)		—		8		(86)
Net (loss) income	$	(1,499)	$	—	$	113	$	(1,386)	$	(495)	$	148	$	29	$	(318)

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

	At June 30,		At December 31,
(In thousands)	2024		2023
Total assets for reportable segments	$	420,191	$	441,146
Elimination of intercompany balances		(18,436)		(16,650)
Consolidated total assets	$	401,755	$	424,496

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

14. Goodwill

There was no goodwill at June 30, 2024 and December 31, 2023 and no activity during this period. The change in the carrying amount of goodwill for the six months ended June 30, 2023 is as follows:

	Generations
(In thousands)	Agency, Inc
Balance as of December 31, 2022	$	792
Extinguishment of goodwill due to sale		(792)
Balance as of June 30, 2023	$	—

37

ITEM 2.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 six months ended June 30, 2024 and 2023 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:

● compliance with the Agreement with the Office of the Comptroller of the Currency:

● 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 in both residential and commercial real estate market conditions;

38

● demand for loans and deposits in our market area;

● our ability to implement and change our business strategies;

● 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.  

39

Recent Events

As previously reported on a Current Report on Form 8-K filed on July 22, 2024 with the SEC, Generations Bank (the “Bank”), the wholly owned subsidiary of Generations Bancorp NY, Inc., entered into a written agreement (the “Agreement”) with the Office of the Comptroller of the Currency (the “OCC”), the Bank’s primary regulator.  The Agreement provides, among other things, that the Bank and/or its Board of Directors:

● Establish a Compliance Committee to monitor and oversee the Bank’s compliance with the provisions of the Agreement, and to submit written progress reports to the Board that must be transmitted to the OCC;

● Prepare a written board oversight and corporate governance program to provide for the overall direction, oversight, and corporate governance of the Bank;

● Prepare a written strategic plan for the Bank covering at least a three-year period, and to submit evaluations of the Bank’s performance against the Strategic Plan to the Board and to the OCC;

● Develop a written liquidity risk management program for the Bank, to include, among other things, a contingency funding plan; and

● Develop a written interest rate risk management program for the Bank, to include risk management systems to identify, measure, monitor, and control interest rate risk.

Management and the Board of Directors are committed to promptly addressing the action items included in the Order. We expect that our non-interest expenses will increase as a result of remediation actions we will take in order to comply with the requirements of the Order which may adversely affect our financial performance.

Critical Accounting Policies

There are no material changes to the critical accounting policies disclosed in the Annual Report on Form 10-K for the year ended December 31, 2023.

The information for the three and six months ended June 30, 2024 and 2023 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 and six months ended June 30, 2024 are not necessarily indicative of the results to be achieved for the remainder of the year ending December 31, 2024 or any other period.

Emerging Growth Company Status

The Company qualifies as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). For as long as the Company is an emerging growth company, it may choose to take advantage of 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.

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Comparison of Financial Condition at June 30, 2024 and December 31, 2023

Total Assets. Total assets decreased $22.7 million, or 5.4%, to $401.8 million at June 30, 2024 from $424.5 million at December 31, 2023.  The decrease resulted primarily from decreases in cash and cash equivalents of $4.7 million, interest-earning time deposits in banks of $1.2 million, investment securities available-for-sale of $5.3 million, and net loans of $11.3 million.

Cash and Cash Equivalents.  Cash and cash equivalents decreased $4.7 million, or 32.3%, to $9.8 million at June 30, 2024 from $14.5 million at December 31, 2023 as a result of decreases in total deposits and long-term borrowings.

Interest-Earning Time Deposits in Banks.  Interest-earning time deposits in banks decreased $1.2 million, or 27.6%, to $3.2 million at June 30, 2024 from $4.4 million at December 31, 2023. Cash from time deposit maturities was used to decrease the reliance on wholesale funding sources.

Investment Securities Available-for-Sale.  Investment securities available-for-sale decreased $5.3 million, or 16.9%, to $26.0 million at June 30, 2024 from $31.3 million at December 31, 2023. The decrease in investment securities available-for-sale was primarily attributable to calls and principal repayments of $3.7 million, proceeds from sales of $1.1 million, and a $455,000 decrease in fair market value.

Net Loans. Net loans decreased $11.3 million, or 3.4%, to $322.2 million at June 30, 2024 from $333.5 million at December 31, 2023 as a result of loan payoffs and amortization exceeding loan originations. The decrease resulted from decreases in commercial business loans of $3.9 million, or 20.8%, automobile loans of $3.0 million, or 13.2%, manufactured home loans of $2.5 million, or 5.1%, recreational vehicle loans of $1.5 million, or 6.6%, other consumer loans of $658,000, or 6.9%, nonresidential loans of $574,000, or 4.0%, student loans of $128,000, or 8.2%, and multi-family loans of $55,000, or 6.6%, partially offset by increases in home equity loans and lines of credit of $1.5 million, or 10.7%, and one- to four-family residential real estate loans of $1.1 million, or 0.7%.

Net deferred fees decreased $1.5 million, or 9.5%, during the six months ended June 30, 2024, representing primarily fees paid for purchased loans net of amortization, which is over the estimated loan lives.

Consistent with our business strategy, we intend to continue the purchase of residential mortgage and automobile loans. During the six months ended June 30, 2024, we purchased $8.7 million of residential mortgage loans and $2.0 million of automobile loans.

Deposits.  Deposits decreased $18.8 million, or 5.3%, to $338.8 million at June 30, 2024 from $357.6 million at December 31, 2023. Interest-bearing accounts decreased $16.4 million, or 5.4%, to $289.7 million at June 30, 2024 from $306.1 million at December 31, 2023.  The largest decrease in interest-bearing deposits was in certificates of deposit which decreased $16.3 million, or 9.5%, to $155.0 million at June 30, 2024 from $171.3 million at December 31, 2023 due to a reduction in brokered time deposits of $28.1 million, or 46.9%. Money market accounts decreased $1.3 million, or 6.6%, to $17.9 million at June 30, 2024 from $19.2 million at December 31, 2023. Savings accounts decreased $1.2 million, or 1.5%, to $79.3 million at June 30, 2024 from $80.5 million at December 31, 2023. Interest-bearing checking accounts increased $2.4 million, or 6.7%, to $37.5 million at June 30, 2024 from $35.1 million at December 31, 2023. Noninterest-bearing deposits decreased $2.4 million, or 4.6%, to $49.1 million at June 30, 2024 from $51.5 million at December 31, 2023.    

Municipal deposits held at Generations Commercial Bank increased $1.2 million, or 13.2%, to $10.4 million at June 30, 2024 from $9.2 million at December 31, 2023.

Federal Home Loan Bank Advances. Long-term Federal Home Loan Bank advances decreased $2.3 million, or 9.6%, to $21.3 million at June 30, 2024 from $23.6 million at December 31, 2023 as a result of repayments.

Total Equity. Total equity decreased $2.2 million, or 5.7%, to $35.5 million at June 30, 2024 from $37.7 million at December 31, 2023.  The decrease was primarily due to a net loss of $1.4 million and an increase in accumulated

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other comprehensive loss of $874,000 as a result of a decrease in the fair market value of our investment securities available-for-sale during the six months ended June 30, 2024.

Comparison of Operating Results for the Three Months Ended June 30, 2024 and 2023

General.  Net loss for the three months ended June 30, 2024 was $841,000 as compared to net loss of $166,000 for the three months ended June 30, 2023, an increase of $675,000, or 406.6%.  The increase was due to a $369,000 decrease in net interest income, a $326,000 decrease in noninterest income, and a $212,000 increase in provision for credit losses, partially offset by a $214,000 increase in income tax benefit and an $18,000 decrease in noninterest expense.

Interest and Dividend Income.  Interest and dividend income increased $502,000, or 13.0%, to $4.4 million for the three months ended June 30, 2024 from $3.9 million for the three months ended June 30, 2023.  This increase was due to a $504,000 increase in interest on loans receivable.  The average balance of loans increased $15.1 million, or 4.9%, to $326.6 million for the three months ended June 30, 2024 from $311.5 million for the three months ended June 30, 2023.  The average yield on loans increased 41 basis points to 4.85% for the three months ended June 30, 2024 from 4.44% for the three months ended June 30, 2023, reflecting an increase in higher-yielding loans quarter over quarter as well as higher market interest rates.  

Interest Expense.  Total interest expense increased $871,000, or 53.9%, to $2.5 million for the three months ended June 30, 2024 from $1.6 million for the three months ended June 30, 2023.  Interest expense on total interest-bearing deposits increased $813,000, or 57.9%, to $2.2 million for the three months ended June 30, 2024 from $1.4 million for the three months ended June 30, 2023.  The increase was attributable to an increase of $20.8 million, or 15.6%, in the average balance of certificate of deposit accounts to $154.2 million for the three months ended June 30, 2024 from $133.4 million for the three months ended June 30, 2023, in addition to an increase in the average cost of 120 basis points to 4.81% for the three months ended June 30, 2024 from 3.61% for the same period in 2023. The increase in the average balance of certificate of deposit accounts of $20.8 million was driven by a $27.4 million increase in organic certificate of deposit accounts, partially offset by a $6.6 million decrease in brokered certificate of deposit accounts. Interest expense on borrowings increased $58,000, or 27.4%, to $270,000 for the three months ended June 30, 2024 from $212,000 for the three months ended June 30, 2023, as a result of an increase in average balance of borrowings by $3.9 million, or 18.4%, to $25.3 million for the three months ended June 30, 2024 from $21.4 million for the three months ended June 30, 2023. In addition, average borrowing costs increased 30 basis points to 4.26% for the three months ended June 30, 2024 from 3.96% for the three months ended June 30, 2023 due to rising interest rates.

Net Interest Income.  Net interest income decreased $369,000, or 16.5%, to $1.9 million for the three months ended June 30, 2024 from $2.2 million for the three months June 30, 2023.  Our net interest rate spread decreased 63 basis points to 1.60% for the three months ended June 30, 2024 from 2.23% for the three months ended June 30, 2023.  Our net interest margin decreased 51 basis points to 2.05% for the three months ended June 30, 2024 from 2.56% for the same period in 2023.  Net interest rate spread and net interest margin were affected primarily by the increase in the cost of our interest-bearing liabilities between the comparable periods as these liabilities repriced faster than our interest-earning assets.

Provision for Credit Losses.  Based on management’s analysis of the allowance for credit losses described in Note 6 of our interim consolidated financial statements “Allowance for Credit Losses,” we recorded a provision for credit losses of $377,000 for the three months ended June 30, 2024 as compared to a provision for credit losses of $165,000 for the three months ended June 30, 2023.  The allowance for credit losses was $3.2 million, or 1.02%, of total loans at June 30, 2024 as compared to $3.0 million, or 0.93%, of total loans at December 31, 2023. The increase in provision for credit losses for the 2024 period was primarily due to higher loss rates in the auto and recreational vehicle portfolios.

Noninterest Income.  Noninterest income decreased $326,000, or 41.4%, to $462,000 for the three months ended June 30, 2024 from $788,000 for the three months ended June 30, 2023.  The decrease was primarily due to a decrease in net gain on sale of Generations Agency due to the sale of Generations Agency’s book of business to Northwoods on June 1, 2023.

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Noninterest Expense.  Noninterest expense decreased $18,000, or 0.6%, to $3.1 million for the three months ended June 30, 2024 primarily due to a decrease in compensation and benefits, partially offset by increases in professional and other services, service charges, and other expenses. Compensation and benefits decreased $262,000, or 19.6%, to $1.1 million for the three months ended June 30, 2024 from $1.3 million for the three months ended June 30, 2023 as a result of a reduction in total employees, most notably the previous President and Chief Executive Officer along with an increase in pension expense benefit. Professional and other services increased $109,000, or 47.0%, to $341,000 for the three months ended June 30, 2024 from $232,000 for the three months ended June 30, 2023 primarily resulting from an increase in legal expenses. Service charges increased $82,000, or 19.7%, to $498,000 for the three months ended June 30, 2024 from $416,000 for the three months ended June 30, 2023 primarily due to adjustments related to discounts associated with the renewal of our core processing contract for the three months ended June 30, 2023. Other expenses increased $50,000, or 13.3%, to $426,000 for the three months ended June 30, 2024 from $376,000 for the three months ended June 30, 2023 primarily due to an increase in directors’ fees as a result of changes in the fair market value of the directors retirement plans, partially offset by a decrease in other real estate owned expense.

Income Taxes.  Income tax benefit increased $214,000, or 465.2%, to an income tax benefit of $260,000 for the three months ended June 30, 2024 as compared to an income tax benefit of $46,000 for the three months ended June 30, 2023. The effective tax rate was 23.6% for the three months ended June 30, 2024 as compared to 21.7% for the three months ended June 30, 2023. 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 a result of the net increase of permanent tax differences and state tax expense proportional to pre-tax book income, which was a loss for the three months ended June 30, 2024.

Comparison of Operating Results for the Six Months Ended June 30, 2024 and 2023

General.  Net loss for the six months ended June 30, 2024 was $1.4 million as compared to net loss of $318,000 for the six months ended June 30, 2023, an increase of $1.1 million, or 335.9%.  The increase was due to a $997,000 decrease in net interest income, a $461,000 decrease in noninterest income, and a $272,000 increase in provision for credit losses, partially offset by a $343,000 increase in income tax benefit and a $319,000 decrease in noninterest expense.

Interest and Dividend Income.  Interest and dividend income increased $1.2 million, or 15.8%, to $8.8 million for the six months ended June 30, 2024 from $7.6 million for the six months ended June 30, 2023.  This increase was primarily due to a $1.1 million increase in interest on loans receivable.  The average balance of loans increased $20.0 million, or 6.5%, to $329.3 million for the six months ended June 30, 2024 from $309.3 million for the six months ended June 30, 2023.  The average yield on loans increased 43 basis points to 4.83% for the six months ended June 30, 2024 from 4.40% for the six months ended June 30, 2023, reflecting an increase in higher-yielding loans period over period as well as higher market interest rates.  

Interest Expense.  Total interest expense increased $2.2 million, or 76.9%, to $5.1 million for the six months ended June 30, 2024 from $2.9 million for the six months ended June 30, 2023.  Interest expense on total interest-bearing deposits increased $2.0 million, or 78.8%, to $4.5 million for the six months ended June 30, 2024 from $2.5 million for the six months ended June 30, 2023.  The increase was attributable to an increase of $27.6 million, or 21.2%, in the average balance of certificate of deposit accounts to $157.8 million for the six months ended June 30, 2024 from $130.2 million for the six months ended June 30, 2023, in addition to an increase in the average cost of 145 basis points to 4.82% for the six months ended June 30, 2024 from 3.37% for the same period in 2023. The increase in the average balance of certificate of deposit accounts of $27.6 million was driven by a $31.8 million increase in organic certificate of deposit accounts, partially offset by a $4.2 million decrease in brokered certificate of deposit accounts. Interest expense on borrowings increased $211,000, or 62.4%, to $549,000 for the six months ended June 30, 2024 from $338,000 for the six months ended June 30, 2023, as a result of an increase in average balance of borrowings by $7.0 million, or 36.7%, to $26.1 million for the six months ended June 30, 2024 from $19.1 million for the six months ended June 30, 2023. In addition, average borrowing costs increased 67 basis points to 4.21% for the six months ended June 30, 2024 from 3.54% for the six months ended June 30, 2023 due to rising interest rates.

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Net Interest Income.  Net interest income decreased $997,000, or 20.9%, to $3.8 million for the six months ended June 30, 2024 from $4.8 million for the six months June 30, 2023.  Our net interest rate spread decreased 85 basis points to 1.58% for the six months ended June 30, 2024 from 2.43% for the six months ended June 30, 2023.  Our net interest margin decreased 69 basis points to 2.04% for the six months ended June 30, 2024 from 2.73% for the same period in 2023.  Net interest rate spread and net interest margin were affected primarily by the increase in the cost of our interest-bearing liabilities between the comparable periods as these liabilities repriced faster than our interest-earning assets.

Provision for Credit Losses.  Based on management’s analysis of the allowance for credit losses described in Note 6 of our interim consolidated financial statements “Allowance for Credit Losses,” we recorded a provision for credit losses of $602,000 for the six months ended June 30, 2024 as compared to a provision for credit losses of $330,000 for the six months ended June 30, 2023.  The allowance for credit losses was $3.2 million, or 1.02%, of total loans at June 30, 2024 as compared to $3.0 million, or 0.93%, of total loans at December 31, 2023. The increase in provision for credit losses for the 2024 period was primarily due to higher loss rates in the auto and recreational vehicle portfolios.

Noninterest Income.  Noninterest income decreased $461,000, or 33.8%, to $903,000 for the six months ended June 30, 2024 from $1.4 million for the six months ended June 30, 2023.  The decrease was primarily due to decreases in net gain on sale of Generations Agency and insurance commissions due to the sale of Generations Agency’s book of business to Northwoods on June 1, 2023.

Noninterest Expense.  Noninterest expense decreased $319,000, or 5.1%, to $5.9 million for the six months ended June 30, 2024 from $6.2 million for the six months ended June 30, 2023 primarily due to a decrease in compensation and benefits, partially offset by increases in professional and other services, service charges, and other expenses. Compensation and benefits decreased $572,000, or 20.8%, to $2.2 million for the six months ended June 30, 2024 from $2.7 million for the six months ended June 30, 2023 as a result of a reduction in total employees, most notably the previous President and Chief Executive Officer, along with an increase in pension expense benefit. Professional and other services increased $105,000, or 24.8%, to $528,000 for the six months ended June 30, 2024 from $423,000 for the six months ended June 30, 2023 primarily as a result of an increase in legal expenses, partially offset by a decrease in consulting fees. Service charges increased $93,000, or 10.1%, to $1.0 million for the six months ended June 30, 2024 from $923,000 for the six months ended June 30, 2023 primarily due to an increase in debit card rewards expense in addition to adjustments related to discounts associated with the renewal of our core processing contract for the three months ended June 30, 2023. Other expenses increased $76,000, or 10.7%, to $789,000 for the six months ended June 30, 2024 from $713,000 for the six months ended June 30, 2023 primarily due to an increase in directors’ fees as a result of changes in the fair market value of the directors retirement plans partially offset by a decrease in other real estate owned expense.

Income Taxes.  Income tax benefit increased $343,000, or 398.8%, to an income tax benefit of $429,000 for the six months ended June 30, 2024 as compared to an income tax benefit of $86,000 for the six months ended June 30, 2023. The effective tax rate was 23.6% for the six months ended June 30, 2024 as compared to 21.3% for the six months ended June 30, 2023. 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 period’s effective tax rate was a result of the net increase of permanent tax differences and state tax expense proportional to pre-tax book income, which was a loss for the six months ended June 30, 2024.

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Average Balances and Yields. The following table sets forth average balance sheets, average yield and costs, and certain other information at the dates and for the 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 $611,000 and $556,000 for the three months ended June 30, 2024 and 2023, respectively. Net deferred loan costs amortized totaled approximately $1.1 million and $1.0 million for the six months ended June 30, 2024 and 2023, respectively.

	Three Months Ended June 30,
	2024							2023
	Average							Average
	Balance							Balance
	Outstanding			Interest		Yield/ Rate		Outstanding			Interest		Yield/ Rate
Interest-earning assets:
Loans	$	326,554		$	3,959	4.85	%	$	311,457		$	3,455	4.44	%
Securities		28,355			286	4.03			33,445			339	4.05
Interest-earning deposits		7,766			71	3.66			3,456			36	4.17
Other		1,693			42	9.92			1,517			26	6.86
Total interest-earning assets		364,368			4,358	4.78			349,875			3,856	4.41
Non-interest-earning assets		40,191							41,293
Total assets	$	404,559						$	391,168
Interest-bearing liabilities:
Demand deposits	$	34,110		$	100	1.17	%	$	30,751		$	46	0.60	%
Money market accounts		18,550			82	1.77			22,189			53	0.96
Savings accounts		80,744			183	0.91			89,113			103	0.46
Certificates of deposit		154,223			1,853	4.81			133,376			1,203	3.61
Total interest-bearing deposits		287,627			2,218	3.08			275,429			1,405	2.04
Borrowings		25,346			270	4.26			21,401			212	3.96
Total interest-bearing liabilities		312,973			2,488	3.18			296,830			1,617	2.18
Other non-interest bearing liabilities		55,363							56,993
Total liabilities		368,336							353,823
Equity		36,223							37,345
Total liabilities and equity	$	404,559						$	391,168
Net interest income				$	1,870						$	2,239
Interest rate spread						1.60	%						2.23	%
Net interest-earning assets	$	51,395						$	53,045
Net interest margin						2.05	%						2.56	%
Average interest-earning assets to average
interest-bearing liabilities		116.42	%						117.87	%

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	Six Months Ended June 30,
	2024							2023
	Average							Average
	Balance							Balance
(In thousands)	Outstanding			Interest		Yield/ Rate		Outstanding			Interest		Yield/ Rate
Assets
Interest-earning assets:
Loans	$	329,297		$	7,950	4.83	%	$	309,340		$	6,803	4.40	%
Securities		29,903			619	4.14			34,124			679	3.98
Interest-earning deposits		8,482			182	4.29			4,406			81	3.68
Other		1,712			82	9.58			1,402			65	9.27
Total interest-earning assets		369,394			8,833	4.78			349,272			7,628	4.37
Non-interest-earning assets		40,186							41,153
Total assets	$	409,580						$	390,425
Liabilities and equity
Interest-bearing liabilities:
Demand deposits	$	33,189		$	190	1.15	%	$	31,875		$	71	0.45	%
Money market accounts		18,923			166	1.76			23,795			75	0.63
Savings accounts		81,040			363	0.90			90,424			189	0.42
Certificates of deposit		157,791			3,799	4.82			130,193			2,192	3.37
Total interest-bearing deposits		290,943			4,518	3.11			276,287			2,527	1.83
Borrowings		26,097			549	4.21			19,085			338	3.54
Total interest-bearing liabilities		317,040			5,067	3.20			295,372			2,865	1.94
Other non-interest bearing liabilities		55,512							57,720
Total liabilities		372,552							353,092
Equity		37,028							37,333
Total liabilities and equity	$	409,580						$	390,425
Net interest income				$	3,766						$	4,763
Interest rate spread						1.58	%						2.43	%
Net interest-earning assets	$	52,354						$	53,900
Net interest margin						2.04	%						2.73	%
Average interest-earning assets to average
interest-bearing liabilities		116.51	%						118.25	%

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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 June 30,		At December 31,
(In thousands)	2024		2023
Non-accrual loans:
Residential:
One- to four-family	$	2,006	$	2,277
Commercial:
Real estate - nonresidential		18		29
Commercial business		298		397
Consumer:
Home equity and junior liens		87		85
Manufactured homes		268		323
Automobile		70		120
Student		27		25
Recreational vehicle		366		291
Other consumer		—		71
Total non-accrual loans	$	3,140	$	3,618
Real estate owned:
Residential:
One- to four-family	$	—	$	118
Total real estate owned	$	—	$	118
Total non-performing assets	$	3,140	$	3,736
Ratios:
Total non-performing loans to total loans		1.01%		1.13%
Total non-performing loans to total assets		0.78%		0.85%
Total non-performing assets to total assets		0.78%		0.88%

Non-performing assets include non-accrual loans 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 June 30, 2024 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 $3.1 million at June 30, 2024 and $3.7 million at December 31, 2023. At June 30, 2024, we had 30 non-performing one- to four-family residential mortgage loans for $2.0 million, six non-performing recreational vehicle loans for $366,000, one non-performing commercial business loan for $298,000, three non-performing manufactured home loans for $268,000, four home equity loans and lines of credit for $87,000, four non-performing automobile loans for $70,000, four non-performing student loans for $27,000, and one non-performing nonresidential loan for $18,000. At December 31, 2023, we had 33 non-performing one- to four-family residential mortgage loans for $2.3 million, two non-performing commercial business loans for $397,000, four non-performing manufactured home loans for $323,000, four non-performing recreational vehicle loans for $291,000, six non-performing automobile loans for $120,000, three home equity loans and lines of credit for $85,000, two non-performing other consumer loans for $71,000, one non-performing nonresidential loan for $29,000, and three non-performing student loans for $25,000. We had no real estate owned properties at June 30, 2024 and two real estate owned properties for $118,000 at December 31, 2023.

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 $3.2 million at June 30, 2024 and $3.0 million at December 31, 2023. The Company reported an increase in the ratio of the allowance for credit

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losses to gross loans to 1.02% at June 30, 2024 as compared to 0.93% at December 31, 2023. 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 June 30, 2024.

Management has identified potential credit problems totaling $7.6 million as of June 30, 2024 as compared to $10.0 million at December 31, 2023 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. Loans that have been internally classified as special mention are not currently evaluated for credit losses individually. Loans that have been internally classified as substandard are currently evaluated for credit losses individually. The decrease of $2.4 million was primarily driven by a decrease in commercial business loans classified as substandard as a result of a loan payoff. Based on current information available at June 30, 2024, 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 June 30, 2024, the Bank had $21.3 million outstanding in advances from the FHLB and had the ability to borrow approximately $41.5 million based on our collateral capacity. At June 30, 2024, the Bank had an additional $20.5 million in lines of credit available with other financial institutions and as such no advances received can exceed 50% of the Bank’s capital. At June 30, 2024 and December 31, 2023, there were no outstanding advances on these lines. Brokered deposits totaled $31.8 million at June 30, 2024, giving the Bank capacity for an additional $88.5 million in brokered deposits as total brokered deposits may not exceed 30% of the Bank’s total assets.  As a result of the Agreement, the Bank’s limit for brokered deposits was reduced to 10% of the Banks’s total assets giving the Bank capacity for an additional $11.6 million at August 8, 2024.  

While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and loan prepayments are greatly influenced by general interest rates, economic conditions, and competition. 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.

Our cash flows are comprised of three primary classifications: cash flows from operating activities, investing activities, and financing activities. Net cash provided by operating activities was $481,000 for the six months ended June 30, 2024 and $2.7 million for the six months ended June 30, 2023. Net cash provided by investing activities, which consists primarily of principal collections on loans and proceeds from the sale of and maturing securities, offset by disbursements for loan originations and the purchase of securities, was $15.9 million for the six months ended June 30, 2024 and net cash used in investing activities was $13.0 million for the six months ended June 30, 2023. Net cash used in financing activities, consisting primarily of the activity in deposit accounts and FHLB advances, was $21.0 million for the six months ended June 30, 2024 and net cash provided by financing activities was $7.7 million for the six months ended June 30, 2023.

We are committed to maintaining a 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.

Generations Bancorp 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. Generations Bancorp’s primary source of liquidity is any dividend payments it may receive from Generations Bank. Generations Bank did not pay dividends to Generations Bancorp during the six months ended June 30, 2024. Generations Bank paid a dividend of $1.0 million to Generations Bancorp for the year ended December 31, 2023.  At June 30, 2024, Generations Bancorp (on an unconsolidated, stand-alone basis) had cash and investment securities totaling $2.9 million.

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At June 30, 2024 and December 31, 2023, Generations Bank exceeded all its regulatory capital requirements and was categorized as well capitalized.  See Note 9 to the interim condensed consolidated financial statements.  Management is unaware of any conditions or events since the most recent notification that would change our category.

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

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

ITEM 4. Controls and Procedures

An evaluation was performed under the supervision and with the participation of the Company’s management, including the Principal Executive Officer and the Principal 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 June 30, 2024. Based on that evaluation, the Company’s management, including the Principal Executive Officer and the Principal Financial Officer, concluded that the Registrant’s disclosure controls and procedures were effective.

During the quarter ended June 30, 2024, 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 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 our financial condition or results of operations.

ITEM 1A.Risk Factor

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

ITEM 2. Unregistered Sales of Equity Securities and, Use of Proceeds

The Company did not repurchase any shares of its common stock during the quarter ended June 30, 2024.

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. On May 31, 2023, the Board of Directors authorized a third stock repurchase program to acquire up to $1.0 million, or approximately 91,000 shares, or approximately 4.0%, of the Company’s outstanding common stock, based on the current trading price of the common stock. As of December 31, 2023, all of the shares authorized for repurchase under these programs had been repurchased.

ITEM 3.Defaults Upon Senior Securities

None.

ITEM 4.Mine Safety Disclosures

None.

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ITEM 5.Other Information

None.

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ITEM 6.Exhibits

Exhibit Index

Exhibit Number	Description
3.1	Articles of Incorporation of Generations Bancorp NY, Inc.(1)
3.2	Bylaws of Generations Bancorp NY, Inc. (2)
4.1	Form of Common Stock Certificate of Generations Bancorp NY, Inc. (1)
31	Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32	Certification of Principal Executive Officer and Principal 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)

1. Incorporated by reference to pre-effective amendment No. 1 to the Registration Statement on Form S 1 (file no. 333 248742), filed on September 11, 2020.

2. Incorporated by reference to the Company’s Current Report on Form 8-K filed on December 16, 2020.

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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:  August 9, 2024	/s/ Angela M. Krezmer
	Angela M. Krezmer
	Principal Executive Officer and Principal Financial Officer

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