(4)	Securities

Securities at December 31, 2019 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	$	4,511	$	19	$	-	$	4,530
State and political subdivisions		147,915		417		-		148,332
Mortgage-backed securities-residential		10,283		50		17		10,316
Mortgage-backed securities-multi-family		25,174		182		74		25,282
Corporate debt securities		4,511		62		34		4,539
Total securities available-for-sale		192,394		730		125		192,999
Securities held-to-maturity:
U.S. government sponsored enterprises		2,000		-		3		1,997
State and political subdivisions		174,165		8,883		159		182,889
Mortgage-backed securities-residential		11,302		153		1		11,454
Mortgage-backed securities-multi-family		137,193		3,093		119		140,167
Corporate debt securities		1,993		21		8		2,006
Other securities		5,336		47		-		5,383
Total securities held-to-maturity		331,989		12,197		290		343,896
Total securities	$	524,383	$	12,927	$	415	$	536,895

Securities at June 30, 2019 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	$	5,522	$	31	$	-	$	5,553
State and political subdivisions		95,782		788		-		96,570
Mortgage-backed securities-residential		2,634		31		20		2,645
Mortgage-backed securities-multi-family		16,151		259		-		16,410
Corporate debt securities		1,513		37		-		1,550
Total securities available-for-sale		121,602		1,146		20		122,728
Securities held-to-maturity:
U.S. government sponsored enterprises		9,249		1		14		9,236
State and political subdivisions		152,358		6,212		23		158,547
Mortgage-backed securities-residential		4,570		97		-		4,667
Mortgage-backed securities-multi-family		134,970		3,122		17		138,075
Corporate debt securities		1,478		18		25		1,471
Other securities		1,583		34		-		1,617
Total securities held-to-maturity		304,208		9,484		79		313,613
Total securities	$	425,810	$	10,630	$	99	$	436,341

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, 2019, 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 Company’s current securities investment strategy utilizes a risk management approach of diversified investing among three categories: short-, intermediate- and long-term. The emphasis of this approach is to increase overall investment securities yields while managing interest rate risk. The Company will only invest in high quality securities as determined by management’s analysis at the time of purchase. The Company generally does not engage in any derivative or hedging transactions, such as interest rate swaps or caps.

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, 2019.

	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	$	3,026	$	2		1	$	726	$	15		1	$	3,752	$	17		2
Mortgage-backed securities-multi-family		8,137		74		4		-		-		-		8,137		74		4
Corporate debt securities		1,966		34		2		-		-		-		1,966		34		2
Total securities available-for-sale		13,129		110		7		726		15		1		13,855		125		8
Securities held-to-maturity:
U.S. government sponsored enterprises		-		-		-		1,997		3		1		1,997		3		1
State and political subdivisions		13,475		155		86		1,117		4		14		14,592		159		100
Mortgage-backed securities-residential		1,094		1		1		-		-		-		1,094		1		1
Mortgage-backed securities-multi-family		12,938		119		7		-		-		-		12,938		119		7
Corporate debt securities		-		-		-		475		8		1		475		8		1
Total securities held-to-maturity		27,507		275		94		3,589		15		16		31,096		290		110
Total securities	$	40,636	$	385		101	$	4,315	$	30		17	$	44,951	$	415		118

	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	$	856	$	20		1	$	-	$	-		-	$	856	$	20		1
Total securities available-for-sale		856		20		1		-		-		-		856		20		1
Securities held-to-maturity:
U.S. government sponsored enterprises		-		-		-		1,986		14		1		1,986		14		1
State and political subdivisions		3,541		17		22		2,111		6		13		5,652		23		35
Mortgage-backed securities-multi-family		1,250		6		1		3,799		11		3		5,049		17		4
Corporate debt securities		-		-		-		452		25		1		452		25		1
Total securities held-to-maturity		4,791		23		23		8,348		56		18		13,139		79		41
Total securities	$	5,647	$	43		24	$	8,348	$	56		18	$	13,995	$	99		42

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, 2019. 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, 2019 or 2018. During the three and six months ended December 31, 2019 and 2018, 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, 2019 and 2018.

The estimated fair values of debt securities at December 31, 2019, 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	$	151,934	$	152,370
After one year through five years		1,001		1,019
After five years through ten years		2,002		2,046
After ten years		2,000		1,966
Total available-for-sale debt securities		156,937		157,401
Mortgage-backed securities		35,457		35,598
Total available-for-sale securities		192,394		192,999

Held-to-maturity debt securities
Within one year		31,439		31,793
After one year through five years		81,615		83,961
After five years through ten years		47,539		50,463
After ten years		22,901		26,058
Total held-to-maturity debt securities		183,494		192,275
Mortgage-backed securities		148,495		151,621
Total held-to-maturity securities		331,989		343,896
Total debt securities	$	524,383	$	536,895

At December 31, 2019 and June 30, 2019, respectively, debt securities with an aggregate fair value of $524.2 million and $425.7 million were pledged as collateral for deposits in excess of FDIC insurance limits for various municipalities placing deposits with Greene County Commercial Bank. At December 31, 2019 and June 30, 2019, debt securities with an aggregate fair value of $4.5 million and $1.5 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 or six months ended December 31, 2019 or 2018.

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, 2019 or 2018.