(4)	Securities

Securities at March 31, 2015 consisted of the following:

(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Securities available for sale:
U.S. government sponsored enterprises	$	7,615	$	288	$	-	$	7,903
State and political subdivisions		24,824		14		-		24,838
Mortgage-backed securities-residential		8,186		191		14		8,363
Mortgage-backed securities-multi-family		25,593		586		42		26,137
Asset-backed securities		13		-		1		12
Corporate debt securities		4,548		277		6		4,819
Total debt securities		70,779		1,356		63		72,072
Equity securities		62		73		-		135
Total securities available for sale		70,841		1,429		63		72,207
Securities held to maturity:
U.S. government sponsored enterprises		2,000		-		30		1,970
State and political subdivisions		94,237		747		57		94,927
Mortgage-backed securities-residential		19,133		944		-		20,077
Mortgage-backed securities-multi-family		61,760		1,132		439		62,453
Other securities		843		-		4		839
Total securities held to maturity		177,973		2,823		530		180,266
Total securities	$	248,814	$	4,252	$	593	$	252,473

Securities at June 30, 2014 consisted of the following:

(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Securities available for sale:
U.S. government sponsored enterprises	$	10,648	$	250	$	-	$	10,898
State and political subdivisions		1,324		23		-		1,347
Mortgage-backed securities-residential		9,345		213		13		9,545
Mortgage-backed securities-multi-family		29,268		89		339		29,018
Asset-backed securities		15		-		2		13
Corporate debt securities		4,811		375		16		5,170
Total debt securities		55,411		950		370		55,991
Equity securities		62		98		-		160
Total securities available for sale		55,473		1,048		370		56,151
Securities held to maturity:
U.S. government sponsored enterprises		2,000		-		102		1,898
State and political subdivisions		91,634		787		204		92,217
Mortgage-backed securities-residential		22,785		1,150		-		23,935
Mortgage-backed securities-multi-family		64,605		759		2,381		62,983
Other securities		922		1		24		899
Total securities held to maturity		181,946		2,697		2,711		181,932
Total securities	$	237,419	$	3,745	$	3,081	$	238,083

Greene County Bancorp, Inc.’s current policies generally limit securities investments to U.S. Government and securities of government sponsored enterprises, federal funds sold, municipal bonds, corporate debt obligations and certain mutual funds. In addition, the Company’s policies permit investments in mortgage-backed securities, including securities issued and guaranteed by Fannie Mae, Freddie Mac, and GNMA, and collateralized mortgage obligations. The Company’s investments in mortgage-backed securities include pass-through securities and collateralized mortgage obligations issued and guaranteed by Fannie Mae, Freddie Mac, and GNMA. As of March 31, 2015 and June 30, 2014, no private-label mortgage-backed securities or collateralized mortgage obligations were held in the securities portfolio. The Company’s investments in state and political subdivisions securities generally are municipal obligations that are general obligations supported by the general taxing authority of the issuer, and in some cases are insured. The obligations issued by school districts are supported by state aid. Primarily, these investments are issued by municipalities within New York State.

The following table shows fair value and gross unrealized losses, aggregated by security category and length of time that individual securities have been in a continuous unrealized loss position, at March 31, 2015.

	Less Than 12 Months						More Than 12 Months						Total
(In thousands, except number of securities)	Fair Value		Unrealized Losses		Number of Securities		Fair Value		Unrealized Losses		Number of Securities		Fair Value		Unrealized Losses		Number of Securities
Securities available for sale:
Mortgage-backed securities-residential	$	1,684	$	14		1	$	-	$	-			$	1,684	$	14		1
Mortgage-backed securities-multi-family		2,803		42		2		-		-		-		2,803		42		2
Asset-backed securities		-		-		-		12		1		1		12		1		1
Corporate debt securities		772		6		2		-		-		-		772		6		2
Total securities available for sale		5,259		62		5		12		1		1		5,271		63		6
Securities held to maturity:
U.S. government sponsored enterprises		1,970		30		1		-		-		-		1,970		30		1
State and political subdivisions		4,792		56		23		79		1		1		4,871		57		24
Mortgage-backed securities-multi-family		29,198		368		7		6,044		71		2		35,242		439		9
Other securities		400		2		2		150		2		2		550		4		4
Total securities held to maturity		36,360		456		33		6,273		74		5		42,633		530		38
Total securities	$	41,619	$	518		38	$	6,285	$	75		6	$	47,904	$	593		44

	Less Than 12 Months						More Than 12 Months						Total
(In thousands, except number of securities)	Fair Value		Unrealized Losses		Number of S ecurities		Fair Value		Unrealized Losses		Number of Securities		Fair Value		Unrealized Losses		Number of Securities
Securities available for sale:
Mortgage-backed securities-residential	$	4,302	$	13		2	$	-	$	-		-	$	4,302	$	13		2
Mortgage-backed securities-multi-family		4,448		5		3		19,404		334		7		23,852		339		10
Asset-backed securities		-		-		-		13		2		1		13		2		1
Corporate debt securities		767		16		2		-		-		-		767		16		2
Total securities available for sale		9,517		34		7		19,417		336		8		28,934		370		15
Securities held to maturity:
U.S. government sponsored enterprises		1,898		102		1		-		-		-		1,898		102		1
State and political subdivisions		6,693		175		34		1,815		29		11		8,508		204		45
Mortgage-backed securities-multi-family		26,522		1,617		7		15,440		764		6		41,962		2,381		13
Other securities		130		2		2		401		22		2		531		24		4
Total securities held to maturity		35,243		1,896		44		17,656		815		19		52,899		2,711		63
Total securities	$	44,760	$	1,930		51	$	37,073	$	1,151		27	$	81,833	$	3,081		78

When the fair value of a held to maturity or available for sale security is less than its amortized cost basis, an assessment is made as to whether other-than-temporary impairment (“OTTI”) is present. The Company considers numerous factors when determining whether a potential OTTI exists and the period over which the debt security is expected to recover. The principal factors considered are (1) the length of time and the extent to which the fair value has been less than the amortized cost basis, (2) the financial condition of the issuer (and guarantor, if any) and adverse conditions specifically related to the security, industry or geographic area, (3) failure of the issuer of the security to make scheduled interest or principal payments, (4) any changes to the rating of the security by a rating agency, and (5) the presence of credit enhancements, if any, including the guarantee of the federal government or any of its agencies.

For debt securities, OTTI is considered to have occurred if (1) the Company intends to sell the security, (2) it is more likely than not the Company will be required to sell the security before recovery of its amortized cost basis, or (3) if the present value of expected cash flows is not sufficient to recover the entire amortized cost basis. In determining the present value of expected cash flows, the Company discounts the expected cash flows at the effective interest rate implicit in the security at the date of acquisition. In estimating cash flows expected to be collected, the Company uses available information with respect to security prepayment speeds, default rates and severity. In determining whether OTTI has occurred for equity securities, the Company considers the applicable factors described above and the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.

For debt securities, credit-related OTTI is recognized in income while noncredit related OTTI on securities not expected to be sold is recognized in other comprehensive income (“OCI”). Credit-related OTTI is measured as the difference between the present value of an impaired security’s expected cash flows and its amortized cost basis. Noncredit-related OTTI is measured as the difference between the fair value of the security and its amortized cost less any credit-related losses recognized. For securities classified as held to maturity, the amount of OTTI recognized in OCI is accreted to the credit-adjusted expected cash flow amounts of the securities over future periods. For equity securities, the entire amount of OTTI is recognized in income. Management evaluated securities considering the factors as outlined above, and based on this evaluation the Company does not consider these investments to be other-than-temporarily impaired at March 31, 2015. Management believes that the reasons for the decline in fair value are due to interest rates and widening credit spreads at the end of the quarter.

During the nine and three months ended March 31, 2015 and 2014, there were no sales of securities and no gains or losses were recognized. There was no other-than-temporary impairment loss recognized during the nine and three months ended March 31, 2015 and 2014.

The estimated fair values of debt securities at March 31, 2015, by contractual maturity are shown below. Expected maturities may differ from contractual maturities, because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

(In thousands)

Available for sale debt securities	Amortized Cost		Fair Value
Within one year	$	27,200	$	27,236
After one year through five years		7,191		7,576
After five years through ten years		2,596		2,748
After ten years		-		-
Total available for sale debt securities		36,987		37,560
Mortgage-backed and asset-backed securities		33,792		34,512
Equity securities		62		135
Total available for sale securities		70,841		72,207

Held to maturity debt securities
Within one year		24,659		24,680
After one year through five years		45,129		45,515
After five years through ten years		19,164		19,364
After ten years		8,128		8,177
Total held to maturity debt securities		97,080		97,736
Mortgage-backed		80,893		82,530
Total held to maturity securities		177,973		180,266
Total securities	$	248,814	$	252,473

As of March 31, 2015 and June 30, 2014, respectively, securities with an aggregate fair value of $219.5 million and $210.0 million were pledged as collateral for deposits in excess of FDIC insurance limits for various municipalities placing deposits with Greene County Commercial Bank. As of March 31, 2015 and June 30, 2014, securities with an aggregate fair value of $4.8 million and $5.2 million, respectively, were pledged as collateral for potential borrowings at the Federal Reserve Bank discount window. Greene County Bancorp, Inc. did not participate in any securities lending programs during the nine and three months ended March 31, 2015 or 2014.

Federal Home Loan Bank Stock

Federal law requires a member institution of the Federal Home Loan Bank (“FHLB”) system to hold stock of its district FHLB according to a predetermined formula. This stock is restricted in that it can only be sold to the FHLB or to another member institution, and all sales of FHLB stock must be at par. As a result of these restrictions, FHLB stock is carried at cost. FHLB stock is held as a long-term investment and its value is determined based on the ultimate recoverability of the par value. Impairment of this investment is evaluated quarterly and is a matter of judgment that reflects management’s view of the FHLB’s long-term performance, which includes factors such as the following: its operating performance; the severity and duration of declines in the fair value of its net assets related to its capital stock amount; its commitment to make payments required by law or regulation and the level of such payments in relation to its operating performance; the impact of legislative and regulatory changes on the FHLB, and accordingly, on the members of the FHLB; and its liquidity and funding position. After evaluating these considerations, Greene County Bancorp, Inc. concluded that the par value of its investment in FHLB stock will be recovered and, therefore, no other-than-temporary impairment charge was recorded during the nine and three months ended March 31, 2015 or 2014.