(4)	Securities

Securities at December 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		6,999		-		48		6,951
State and political subdivisions	$	195,832	$	572	$	-	$	196,404
Mortgage-backed securities-residential		46,858		575		1		47,432
Mortgage-backed securities-multi-family		76,305		1,166		324		77,147
Corporate debt securities		4,009		167		6		4,170
Total securities available-for-sale		330,003		2,480		379		332,104
Securities held-to-maturity:
State and political subdivisions		262,005		17,245		5		279,245
Mortgage-backed securities-residential		25,484		829		3		26,310
Mortgage-backed securities-multi-family		108,697		7,011		-		115,708
Corporate debt securities		7,095		27		25		7,097
Other securities		5,488		81		-		5,569
Total securities held-to-maturity		408,769		25,193		33		433,929
Total securities	$	738,772	$	27,673	$	412	$	766,033

Securities at June 30, 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	$	502	$	2	$	-	$	504
State and political subdivisions		176,064		1,043		-		177,107
Mortgage-backed securities-residential		15,148		380		-		15,528
Mortgage-backed securities-multi-family		28,116		798		4		28,910
Corporate debt securities		4,510		163		13		4,660
Total securities available-for-sale		224,340		2,386		17		226,709
Securities held-to-maturity:
U.S. government sponsored enterprises		2,000		11		-		2,011
State and political subdivisions		210,535		14,286		3		224,818
Mortgage-backed securities-residential		38,884		1,002		15		39,871
Mortgage-backed securities-multi-family		127,582		6,680		21		134,241
Corporate debt securities		2,593		7		130		2,470
Other securities		2,063		38		-		2,101
Total securities held-to-maturity		383,657		22,024		169		405,512
Total securities	$	607,997	$	24,410	$	186	$	632,221

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 including subordinated debt of banks 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, 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 December 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:
U.S. government sponsored enterprises	$	6,951	$	48		2	$	-	$	-		-	$	6,951	$	48		2
Mortgage-backed securities-residential		1,925		1		1		-		-		-		1,925		1		1
Mortgage-backed securities-multi-family		32,916		324		10		-		-		-		32,916		324		10
Corporate debt securities		994		6		1		-		-		-		994		6		1
Total securities available-for-sale		42,786		379		14		-		-		-		42,786		379		14
Securities held-to-maturity:
State and political subdivisions		1,204		5		6		-		-		-		1,204		5		6
Mortgage-backed securities-residential		1,640		3		1		-		-		-		1,640		3		1
Corporate debt securities		1,497		3		1		473		22		1		1,970		25		2
Total securities held-to-maturity		4,341		11		8		473		22		1		4,814		33		9
Total securities	$	47,127	$	390		22	$	473	$	22		1	$	47,600	$	412		23

	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-multi-family	$	1,051	$	4		1	$	-	$	-		-	$	1,051	$	4		1
Corporate debt securities		2,487		13		3		-		-		-		2,487		13		3
Total securities available-for-sale		3,538		17		4		-		-		-		3,538		17		4
Securities held-to-maturity:
State and political subdivisions		3,336		3		12		-		-		-		3,336		3		12
Mortgage-backed securities-residential		3,604		15		2		-		-		-		3,604		15		2
Mortgage-backed securities-multi-family		3,562		21		3		-		-		-		3,562		21		3
Corporate debt securities		1,103		2		2		361		128		1		1,464		130		3
Total securities held-to-maturity		11,605		41		19		361		128		1		11,966		169		20
Total securities	$	15,143	$	58		23	$	361	$	128		1	$	15,504	$	186		24

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, 2020. Management believes that the reasons for the decline in fair value are due to interest rates, widening credit spreads partially due to COVID-19 concerns 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, 2020 or 2019. During the three and six months ended December 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 six months ended December 31, 2020 and 2019.

The estimated fair values of debt securities at December 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	$	193,109	$	193,670
After one year through five years		3,689		3,786
After five years through ten years		8,542		8,558
After ten years		1,500		1,511
Total available-for-sale debt securities		206,840		207,525
Mortgage-backed securities		123,163		124,579
Total available-for-sale securities		330,003		332,104

Held-to-maturity debt securities
Within one year		41,684		42,395
After one year through five years		102,444		107,389
After five years through ten years		69,549		75,648
After ten years		60,911		66,479
Total held-to-maturity debt securities		274,588		291,911
Mortgage-backed securities		134,181		142,018
Total held-to-maturity securities		408,769		433,929
Total debt securities	$	738,772	$	766,033

At December 31, 2020 and June 30, 2020, respectively, securities with an aggregate fair value of $719.8 million and $619.3 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, 2020 and June 30, 2020, securities with an aggregate fair value of $4.2 million and $4.7 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 December 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 six months ended December 31, 2020 or 2019.