(4)	Securities

Securities at March 31, 2020 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	$	2,506	$	16	$	-	$	2,522
State and political subdivisions		167,823		257		65		168,015
Mortgage-backed securities-residential		9,814		313		-		10,127
Mortgage-backed securities-multi-family		23,293		706		1		23,998
Corporate debt securities		4,511		80		131		4,460
Total securities available-for-sale		207,947		1,372		197		209,122
Securities held-to-maturity:
U.S. government sponsored enterprises		2,000		12		-		2,012
State and political subdivisions		191,244		8,445		274		199,415
Mortgage-backed securities-residential		41,525		897		-		42,422
Mortgage-backed securities-multi-family		140,738		7,640		8		148,370
Corporate debt securities		1,993		8		36		1,965
Other securities		5,032		40		-		5,072
Total securities held-to-maturity		382,532		17,042		318		399,256
Total securities	$	590,479	$	18,414	$	515	$	608,378

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 March 31, 2020, 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 March 31, 2020.

	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	$	23,401	$	65		7	$	-	$	-		-	$	23,401	$	65		7
Mortgage-backed securities-multi-family		1,232		1		2		-		-		-		1,232		1		2
Corporate debt securities		2,869		131		4		-		-		-		2,869		131		4
Total securities available-for-sale		27,502		197		13		-		-		-		27,502		197		13
Securities held-to-maturity:
State and political subdivisions		26,827		269		113		1,201		5		15		28,028		274		128
Mortgage-backed securities-multi-family		4,512		8		4		-		-		-		4,512		8		4
Corporate debt securities		504		3		1		452		33		1		956		36		2
Total securities held-to-maturity		31,843		280		118		1,653		38		16		33,496		318		134
Total securities	$	59,345	$	477		131	$	1,653	$	38		16	$	60,998	$	515		147

	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 March 31, 2020. 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 nine months ended March 31, 2020 or 2019. During the three and nine months ended March 31, 2020 and 2019, 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, 2020 and 2019.

The estimated fair values of debt securities at March 31, 2020, 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	$	169,715	$	169,918
After one year through five years		1,581		1,629
After five years through ten years		1,544		1,562
After ten years		2,000		1,888
Total available-for-sale debt securities		174,840		174,997
Mortgage-backed securities		33,107		34,125
Total available-for-sale securities		207,947		209,122

Held-to-maturity debt securities
Within one year		33,677		34,000
After one year through five years		92,123		94,198
After five years through ten years		51,143		53,945
After ten years		23,326		26,321
Total held-to-maturity debt securities		200,269		208,464
Mortgage-backed securities		182,263		190,792
Total held-to-maturity securities		382,532		399,256
Total debt securities	$	590,479	$	608,378

At March 31, 2020 and June 30, 2019, respectively, debt securities with an aggregate fair value of $595.9 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 March 31, 2020 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 nine months ended March 31, 2020 or 2019.

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, 2020 or 2019.