Note 3. Securities

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, 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. As of June 30, 2021, 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.

Securities at June 30, 2021 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	$	13,079	$	36	$	212	$	12,903
U.S. treasury securities		19,672		165		1		19,836
State and political subdivisions		200,436		220		-		200,656
Mortgage-backed securities-residential		34,861		287		167		34,981
Mortgage-backed securities-multi-family		119,359		1,042		994		119,407
Corporate debt securities		3,008		129		30		3,107
Total securities available-for-sale		390,415		1,879		1,404		390,890
Securities held-to-maturity:
U.S. treasury securities		10,938		28		2		10,964
State and political subdivisions		341,364		17,184		303		358,245
Mortgage-backed securities-residential		28,450		584		90		28,944
Mortgage-backed securities-multi-family		100,330		4,635		12		104,953
Corporate debt securities		9,892		111		65		9,938
Other securities		5,940		58		-		5,998
Total securities held-to-maturity		496,914		22,600		472		519,042
Total securities	$	887,329	$	24,479	$	1,876	$	909,932

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

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 June 30, 2021.

	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	$	6,787	$	212		2	$	-	$	-		-	$	6,787	$	212		2
U.S. treasury securities		1,970		1		1		-		-		-		1,970		1		1
Mortgage-backed securities-residential		19,071		167		4		-		-		-		19,071		167		4
Mortgage-backed securities-multi-family		59,176		933		21		2,469		61		1		61,645		994		22
Corporate debt securities		970		30		1		-		-		-		970		30		1
Total securities available-for-sale		87,974		1,343		29		2,469		61		1		90,443		1,404		30
Securities held-to-maturity:
U.S. treasury securities		1,991		2		1		-		-		-		1,991		2		1
State and political subdivisions		42,751		303		76		-		-		-		42,751		303		76
Mortgage-backed securities-residential		12,839		90		2		-		-		-		12,839		90		2
Mortgage-backed securities-multi-family		3,890		12		3		-		-		-		3,890		12		3
Corporate debt securities		2,506		36		2		471		29		1		2,977		65		3
Total securities held-to-maturity		63,977		443		84		471		29		1		64,448		472		85
Total securities	$	151,951	$	1,786		113	$	2,940	$	90		2	$	154,891	$	1,876		115

	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

Management evaluated these securities considering the factors as outlined in Note 1 of these consolidated financial statements, and based on this evaluation, the Company does not consider these investments to be other-than-temporarily impaired at June 30, 2021. 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 year ended June 30, 2021 or 2020. During the years ended June 30, 2021 and 2020, there were no sales of securities and no gains or losses were recognized. There were no other-than-temporary impairment losses recognized during the years ended June 30, 2021 and 2020.

The estimated fair values of debt securities at June 30, 2021, 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	$	200,332	$	200,547
After one year through five years		5,676		5,800
After five years through ten years		28,687		28,671
After ten years		1,500		1,484
Total available-for-sale debt securities		236,195		236,502
Mortgage-backed and asset-backed securities		154,220		154,388
Total available-for-sale securities		390,415		390,890

Held-to-maturity debt securities
Within one year		43,549		44,346
After one year through five years		116,982		121,829
After five years through ten years		93,191		98,778
After ten years		114,412		120,192
Total held-to-maturity debt securities		368,134		385,145
Mortgage-backed securities		128,780		133,897
Total held-to-maturity securities		496,914		519,042
Total securities	$	887,329	$	909,932

As of June 30, 2021 and 2020, respectively, securities with an aggregate fair value of $892.1 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. As of June 30, 2021 and 2020, securities with an aggregate fair value of $3.9 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 years ended June 30, 2021 or 2020.