(4)	Securities

Securities at December 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	$	5,534	$	15	$	18	$	5,531
State and political subdivisions		80,163		275		-		80,438
Mortgage-backed securities-residential		2,926		11		78		2,859
Mortgage-backed securities-multi-family		16,650		111		106		16,655
Corporate debt securities		1,766		-		57		1,709
Total securities available-for-sale		107,039		412		259		107,192
Securities held-to-maturity:
U.S. government sponsored enterprises		9,248		-		166		9,082
State and political subdivisions		142,854		3,194		422		145,626
Mortgage-backed securities-residential		5,256		43		1		5,298
Mortgage-backed securities-multi-family		116,810		173		1,394		115,589
Corporate debt securities		1,471		-		28		1,443
Other securities		1,300		11		5		1,306
Total securities held-to-maturity		276,939		3,421		2,016		278,344
Total securities	$	383,978	$	3,833	$	2,275	$	385,536

Securities at June 30, 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	$	5,543	$	18	$	30	$	5,531
State and political subdivisions		92,052		204		1		92,255
Mortgage-backed securities-residential		3,332		13		98		3,247
Mortgage-backed securities-multi-family		18,249		64		244		18,069
Corporate debt securities		1,771		-		67		1,704
Total securities available-for-sale		120,947		299		440		120,806
Securities held-to-maturity:
U.S. government sponsored enterprises		9,245		-		278		8,967
State and political subdivisions		136,335		3,091		532		138,894
Mortgage-backed securities-residential		6,472		72		7		6,537
Mortgage-backed securities-multi-family		118,780		123		2,845		116,058
Corporate debt securities		1,466		11		9		1,468
Other securities		2,252		16		15		2,253
Total securities held-to-maturity		274,550		3,313		3,686		274,177
Total securities	$	395,497	$	3,612	$	4,126	$	394,983

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 December 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 December 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	$	-	$	-		-	$	982	$	18		1	$	982	$	18		1
State and political subdivisions		-		-		-		-		-		-		-		-		-
Mortgage-backed securities-residential		1,023		65		2		1,171		13		2		2,194		78		4
Mortgage-backed securities-multi-family		1,733		8		1		6,338		98		3		8,071		106		4
Corporate debt securities		-		-		-		1,709		57		6		1,709		57		6
Total securities available-for-sale		2,756		73		3		10,200		186		12		12,956		259		15
Securities held-to-maturity:
U.S. government sponsored enterprises		-		-		-		9,082		166		2		9,082		166		2
State and political subdivisions		23,876		268		139		14,115		154		105		37,991		422		244
Mortgage-backed securities-residential		1,193		1		3		-		-		-		1,193		1		3
Mortgage-backed securities-multi-family		55,470		765		25		26,105		629		18		81,575		1,394		43
Corporate debt securities		1,444		28		2		-		-		-		1,444		28		2
Other securities		-		-		-		897		5		1		897		5		1
Total securities held-to-maturity		81,983		1,062		169		50,199		954		126		132,182		2,016		295
Total securities	$	84,739	$	1,135		172	$	60,399	$	1,140		138	$	145,138	$	2,275		310

	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	$	969	$	30		1	$	-	$	-		-	$	969	$	30		1
State and political subdivisions		2,094		1		4		-		-		-		2,094		1		4
Mortgage-backed securities-residential		2,420		98		3		-		-		-		2,420		98		3
Mortgage-backed securities-multi-family		9,177		244		7		-		-		-		9,177		244		7
Corporate debt securities		1,450		65		6		254		2		1		1,704		67		7
Total securities available-for-sale		16,110		438		21		254		2		1		16,364		440		22
Securities held-to-maturity:
U.S. government sponsored enterprises		7,018		227		1		1,949		51		1		8,967		278		2
State and political subdivisions		34,743		434		167		4,352		98		34		39,095		532		201
Mortgage-backed securities-residential		1,403		7		3		-		-		-		1,403		7		3
Mortgage-backed securities-multi-family		94,927		2,586		45		6,398		259		3		101,325		2,845		48
Corporate debt securities		457		9		1		-		-		-		457		9		1
Other securities		892		14		1		75		1		1		967		15		2
Total securities held-to-maturity		139,440		3,277		218		12,774		409		39		152,214		3,686		257
Total securities	$	155,550	$	3,715		239	$	13,028	$	411		40	$	168,578	$	4,126		279

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. 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, 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.

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

The estimated fair values of debt securities at December 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	$	80,415	$	80,689
After one year through five years		4,534		4,549
After five years through ten years		2,514		2,440
After ten years		-		-
Total available-for-sale debt securities		87,463		87,678
Mortgage-backed securities		19,576		19,514
Total available-for-sale securities		107,039		107,192

Held-to-maturity debt securities
Within one year		27,070		27,217
After one year through five years		64,118		64,954
After five years through ten years		45,826		46,465
After ten years		17,859		18,821
Total held-to-maturity debt securities		154,873		157,457
Mortgage-backed securities		122,066		120,887
Total held-to-maturity securities		276,939		278,344
Total debt securities	$	383,978	$	385,536

At December 31, 2018 and June 30, 2018, respectively, securities with an aggregate fair value of $374.7 million and $383.0 million were pledged as collateral for deposits in excess of FDIC insurance limits for various municipalities placing deposits with Greene County Commercial Bank. At December 31, 2018 and June 30, 2018, securities with an aggregate fair value of $1.7 million 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, 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 six months ended December 31, 2018 or 2017.