(4)	Securities

Securities at December 31, 2016 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	$	4,576	$	170	$	-	$	4,746
State and political subdivisions		54,297		-		-		54,297
Mortgage-backed securities-residential		5,641		75		54		5,662
Mortgage-backed securities-multi-family		17,727		383		101		18,009
Asset-backed securities		4		-		-		4
Corporate debt securities		2,771		66		3		2,834
Total debt securities		85,016		694		158		85,552
Equity securities		62		96		-		158
Total securities available-for-sale		85,078		790		158		85,710
Securities held-to-maturity:
U.S. government sponsored enterprises		4,000		-		55		3,945
State and political subdivisions		108,775		2,045		431		110,389
Mortgage-backed securities-residential		11,505		330		2		11,833
Mortgage-backed securities-multi-family		83,648		752		1,071		83,329
Corporate debt securities		1,000		-		-		1,000
Other securities		2,055		-		17		2,038
Total securities held-to-maturity		210,983		3,127		1,576		212,534
Total securities	$	296,061	$	3,917	$	1,734	$	298,244

Securities at June 30, 2016 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	$	4,587	$	304	$	-	$	4,891
State and political subdivisions		60,491		8		-		60,499
Mortgage-backed securities-residential		6,360		185		5		6,540
Mortgage-backed securities-multi-family		22,594		1,285		-		23,879
Asset-backed securities		5		-		-		5
Corporate debt securities		4,028		129		-		4,157
Total debt securities		98,065		1,911		5		99,971
Equity securities		62		90		-		152
Total securities available-for-sale		98,127		2,001		5		100,123
Securities held-to-maturity:
U.S. government sponsored enterprises		2,000		32		-		2,032
State and political subdivisions		99,040		5,003		3		104,040
Mortgage-backed securities-residential		13,543		606		-		14,149
Mortgage-backed securities-multi-family		87,204		3,471		4		90,671
Corporate debt securities		1,000		-		-		1,000
Other securities		2,148		18		-		2,166
Total securities held-to-maturity		204,935		9,130		7		214,058
Total securities	$	303,062	$	11,131	$	12	$	314,181

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 issued by these entities. As of December 31, 2016, all mortgage-backed securities including collateralized mortgage obligations were securities of government sponsored enterprises, 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 December 31, 2016.

	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:
State and political subdivisions	$	793	$	-		1	$	-	$	-		-	$	793	$	-		1
Mortgage-backed securities-residential		1,240		46		1		876		8		1		2,116		54		2
Mortgage-backed securities-multi-family		5,668		101		3		-		-		-		5,668		101		3
Corporate debt securities		263		3		2		-		-		-		263		3		2
Total securities available for sale		7,964		150		7		880		8		1		8,844		158		8
Securities held to maturity:
U.S. government sponsored enterprises		1,945		55		1		-		-		-		1,945		55		1
State and political subdivisions		26,934		429		133		103		2		1		27,037		431		134
Mortgage-backed securities-residential		1,884		2		1		-		-		-		1,884		2		1
Mortgage-backed securities-multi-family		55,346		1,071		24		-		-		-		55,346		1,071		24
Other securities		962		16		1		74		1		1		1,036		17		2
Total securities held to maturity		87,071		1,573		160		177		3		2		87,248		1,576		162
Total securities	$	95,035	$	1,723		167	$	1,057	$	11		3	$	96,092	$	1,734		170

	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	$	924	$	5		1	$	-	$	-		-	$	924	$	5		1
Total securities available-for-sale		924		5		1		-		-		-		924		5		1
Securities held-to-maturity:
State and political subdivisions		272		2		1		175		1		2		447		3		3
Mortgage-backed securities-multi-family		499		4		4		-		-		-		499		4		4
Total securities held-to-maturity		771		6		5		175		1		2		946		7		7
Total securities	$	1,695	$	11		6	$	175	$	1		2	$	1,870	$	12		8

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 December 31, 2016. 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.

There were no transfers of securities available-for-sale to held-to-maturity during the three and six months ended December 31, 2016 or 2015. During the three and six months ended December 31, 2016 and 2015, there were no sales of securities and no gains or losses were recognized. There was no other-than-temporary impairment loss recognized during the three and six months ended December 31, 2016 and 2015.

The estimated fair values of debt securities at December 31, 2016, 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	$	55,006	$	55,055
After one year through five years		6,638		6,822
After five years through ten years		-		-
After ten years		-		-
Total available-for-sale debt securities		61,644		61,877
Mortgage-backed and asset-backed securities		23,372		23,675
Equity securities		62		158
Total available-for-sale securities		85,078		85,710

Held-to-maturity debt securities
Within one year		15,632		15,754
After one year through five years		56,769		57,364
After five years through ten years		32,225		32,621
After ten years		11,204		11,633
Total held-to-maturity debt securities		115,830		117,372
Mortgage-backed		95,153		95,162
Total held-to-maturity securities		210,983		212,534
Total securities	$	296,061	$	298,244

As of December 31, 2016 and June 30, 2016, respectively, securities with an aggregate fair value of $279.7 million and $291.6 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 December 31, 2016 and June 30, 2016, securities with an aggregate fair value of $2.8 million and $4.2 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 three and six months ended December 31, 2016 or 2015.

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 three and six months ended December 31, 2016 or 2015.