(4)	Securities

Securities at March 31, 2018 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	$	5,548	$	42	$	20	$	5,570
State and political subdivisions		87,351		114		3		87,462
Mortgage-backed securities-residential		3,810		21		94		3,737
Mortgage-backed securities-multi-family		19,055		122		247		18,930
Corporate debt securities		1,773		-		51		1,722
Total debt securities		117,537		299		415		117,421
Equity securities		62		144		-		206
Total securities available-for-sale		117,599		443		415		117,627
Securities held-to-maturity:
U.S. government sponsored enterprises		9,242		-		218		9,024
State and political subdivisions		134,697		2,807		576		136,928
Mortgage-backed securities-residential		6,938		92		4		7,026
Mortgage-backed securities-multi-family		123,204		228		1,977		121,455
Corporate debt securities		1,000		9		-		1,009
Other securities		2,351		17		11		2,357
Total securities held-to-maturity		277,432		3,153		2,786		277,799
Total securities	$	395,031	$	3,596	$	3,201	$	395,426

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 March 31, 2018, 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 March 31, 2018.

	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:
U.S. government sponsored enterprises	$	978	$	20		1	$	-	$	-		-	$	978	$	20		1
State and political subdivisions		5,656		3		10		-		-		-		5,656		3		10
Mortgage-backed securities-residential		2,636		94		4		-		-		-		2,636		94		4
Mortgage-backed securities-multi-family		9,790		247		6		-		-		-		9,790		247		6
Corporate debt securities		1,467		49		6		255		2		1		1,722		51		7
Total securities available-for-sale		20,527		413		27		255		2		1		20,782		415		28
Securities held-to-maturity:
U.S. government sponsored enterprises		7,071		171		1		1,953		47		1		9,024		218		2
State and political subdivisions		34,843		491		165		3,723		85		37		38,566		576		202
Mortgage-backed securities-residential		1,033		4		1		-		-		-		1,033		4		1
Mortgage-backed securities-multi-family		84,677		1,923		43		2,464		54		3		87,141		1,977		46
Other securities		914		11		4		-		-		-		914		11		4
Total securities held-to-maturity		128,538		2,600		214		8,140		186		41		136,678		2,786		255
Total securities	$	149,065	$	3,013		241	$	8,395	$	188		42	$	157,460	$	3,201		283

	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 March 31, 2018. 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. Also, a decline in the fair value of tax-exempt securities is due to a decrease in the maximum Federal income tax rate from 35% to 21% effective January 1, 2018, resulting in a lower yield to be realized on these securities on a fully-taxable equivalent basis.

There were no transfers of securities available-for-sale to held-to-maturity during the three and nine months ended March 31, 2018 or 2017. During the three and nine months ended March 31, 2018 and 2017, 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 nine months ended March 31, 2018 and 2017.

The estimated fair values of debt securities at March 31, 2018, 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	$	87,351	$	87,462
After one year through five years		4,808		4,847
After five years through ten years		2,513		2,445
After ten years		-		-
Total available-for-sale debt securities		94,672		94,754
Mortgage-backed and asset-backed securities		22,865		22,667
Equity securities		62		206
Total available-for-sale securities		117,599		117,627

Held-to-maturity debt securities
Within one year		22,243		22,383
After one year through five years		61,151		61,744
After five years through ten years		46,536		46,882
After ten years		17,360		18,309
Total held-to-maturity debt securities		147,290		149,318
Mortgage-backed		130,142		128,481
Total held-to-maturity securities		277,432		277,799
Total securities	$	395,031	$	395,426

At March 31, 2018 and June 30, 2017, respectively, securities with an aggregate fair value of $381.8 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 March 31, 2018 and June 30, 2017, securities with an aggregate fair value of $1.7 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 three and nine months ended March 31, 2018 or 2017.

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 nine months ended March 31, 2018 or 2017.