(4)	Securities

Securities at September 30, 2017 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	$	4,561	$	137	$	-	$	4,698
State and political subdivisions		67,915		259		1		68,173
Mortgage-backed securities-residential		4,470		69		4		4,535
Mortgage-backed securities-multi-family		20,167		723		16		20,874
Corporate debt securities		2,262		75		2		2,335
Total debt securities		99,375		1,263		23		100,615
Equity securities		62		132		-		194
Total securities available-for-sale		99,437		1,395		23		100,809
Securities held-to-maturity:
U.S. government sponsored enterprises		6,000		-		59		5,941
State and political subdivisions		120,168		3,714		136		123,746
Mortgage-backed securities-residential		8,136		339		-		8,475
Mortgage-backed securities-multi-family		88,879		2,453		150		91,182
Corporate debt securities		1,000		-		2		998
Other securities		1,511		20		13		1,518
Total securities held-to-maturity		225,694		6,526		360		231,860
Total securities	$	325,131	$	7,921	$	383	$	332,669

Securities at June 30, 2017 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	$	4,566	$	151	$	-	$	4,717
State and political subdivisions		57,885		227		-		58,112
Mortgage-backed securities-residential		4,868		72		27		4,913
Mortgage-backed securities-multi-family		20,344		483		62		20,765
Asset-backed securities		1		-		-		1
Corporate debt securities		2,765		29		3		2,791
Total debt securities		90,429		962		92		91,299
Equity securities		62		122		-		184
Total securities available-for-sale		90,491		1,084		92		91,483
Securities held-to-maturity:
U.S. government sponsored enterprises		6,000		-		53		5,947
State and political subdivisions		115,805		3,434		95		119,144
Mortgage-backed securities-residential		10,798		274		2		11,070
Mortgage-backed securities-multi-family		88,702		1,259		199		89,762
Corporate debt securities		1,000		-		5		995
Other securities		1,525		21		12		1,534
Total securities held-to-maturity		223,830		4,988		366		228,452
Total securities	$	314,321	$	6,072	$	458	$	319,935

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. At September 30, 2017, 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 September 30, 2017.

	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	$	149	$	1		1	$	-	$	-		-	$	149	$	1		1
Mortgage-backed securities-residential		490		4		1		-		-		-		490		4		1
Mortgage-backed securities-multi-family		2,986		16		2		-		-		-		2,986		16		2
Corporate debt securities		261		1		2		499		1		1		760		2		3
Total securities available-for-sale		3,886		22		6		499		1		1		4,385		23		7
Securities held-to-maturity:
U.S. government sponsored enterprises		3,958		42		1		1,983		17		1		5,941		59		2
State and political subdivisions		10,455		81		74		2,526		55		28		12,981		136		102
Mortgage-backed securities-multi-family		13,660		125		12		1,421		25		2		15,081		150		14
Corporate debt securities		998		2		2		-		-		-		998		2		2
Other securities		595		1		2		453		12		1		1,048		13		3
Total securities held-to-maturity		29,666		251		91		6,383		109		32		36,049		360		123
Total securities	$	33,552	$	273		97	$	6,882	$	110		33	$	40,434	$	383		130

	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	$	1,164	$	27		1	$	-	$	-		-	$	1,164	$	27		1
Mortgage-backed securities-multi-family		6,488		62		4		-		-		-		6,488		62		4
Corporate debt securities		760		3		2		-		-		-		760		3		2
Total securities available for sale		8,412		92		7		-		-		-		8,412		92		7
Securities held to maturity:
U.S. government sponsored enterprises		5,947		53		2		-		-		-		5,947		53		2
State and political subdivisions		8,976		76		64		514		19		6		9,490		95		70
Mortgage-backed securities-residential		1,864		2		1		-		-		-		1,864		2		1
Mortgage-backed securities-multi-family		23,823		199		15		-		-		-		23,823		199		15
Corporate debt securities		995		5		1		-		-		-		995		5		1
Other securities		467		11		1		74		1		1		541		12		2
Total securities held to maturity		42,072		346		84		588		20		7		42,660		366		91
Total securities	$	50,484	$	438		91	$	588	$	20		7	$	51,072	$	458		98

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 before recovery of its amortized cost basis, (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 earnings while noncredit related OTTI on securities not expected to be sold is recognized in other comprehensive income/loss (“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 earnings. 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 September 30, 2017. Management believes that the reasons for the decline in fair value are due to interest rates, widening credit spreads and market illiquidity at the reporting date.

There were no transfers of securities available-for-sale to held-to-maturity during the three months ended September 30, 2017 or 2016. During the three months ended September 30, 2017 and 2016, 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 months ended September 30, 2017 and 2016.

The estimated fair values of debt securities at September 30, 2017, 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	$	69,916	$	70,248
After one year through five years		4,822		4,958
After five years through ten years		-		-
After ten years		-		-
Total available-for-sale debt securities		74,738		75,206
Mortgage-backed and asset-backed securities		24,637		25,409
Equity securities		62		194
Total available-for-sale securities		99,437		100,809

Held-to-maturity debt securities
Within one year		17,851		18,085
After one year through five years		60,032		61,409
After five years through ten years		38,678		39,787
After ten years		12,118		12,922
Total held-to-maturity debt securities		128,679		132,203
Mortgage-backed		97,015		99,657
Total held-to-maturity securities		225,694		231,860
Total securities	$	325,131	$	332,669

At September 30, 2017 and June 30, 2017, respectively, securities with an aggregate fair value of $319.1 million and $305.7 million were pledged as collateral for deposits in excess of FDIC insurance limits for various municipalities placing deposits with Greene County Commercial Bank. At September 30, 2017 and June 30, 2017, securities with an aggregate fair value of $2.3 million and $2.8 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 quarters ended September 30, 2017 or 2016.

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 months ended September 30, 2017 or 2016.