**U.S.
      SECURITIES AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**


**-----------------------------------**





**FORM
      10-QSB**





[x]
      QUARTERLY REPORT UNDER SECTION 13 OF 15(d) OF THE SECURITIES AND EXCHANGE ACT
      OF
      1934





**FOR
      THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2006**





OR





[
      ]
      TRANSITION REPORT PURSUANT TO SECTION 13 OF 15(d) OF THE SECURITIES EXCHANGE
      ACT








**GREENE
      COUNTY BANCORP, INC.**





(Exact
      name of small business issuer as specified in its charter)





**Commission
      file number** **0-25165**











United
      States        14-1809721


(State
      or
      other jurisdiction of incorporation or organization)  (I.R.S.
      Employer Identification Number)








302
      Main Street, Catskill, New York  12414


(Address
      of principal executive office)  (Zip
      code)








Registrant's
      telephone number, including area code: (518) 943-2600





Check
      whether the registrant: (1) has filed all reports required to be filed by
      Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
      12 months (or for such shorter period that the registrant was required to file
      such reports) and (2) has been subject to such filing requirements for the
      past
      90 days.





Yes: X   No:





Indicate
      by check mark whether the registrant is a shell Company (as defined in Rule
      12b-2 of the Exchange Act.





Yes:    No: X








As
      of
      November 10, 2006, the registrant had 4,146,026 shares of common stock
      outstanding at $ .10 par value.





Transitional
      Small Business Disclosure


Format:
      Yes:    No: X








**GREENE
                COUNTY BANCORP, INC.**INDEXPART
                I.
            FINANCIAL
                INFORMATIONPageItem
                1.
            Financial
                Statements*
                Consolidated Statements of Financial Condition
            
            3*
                Consolidated Statements of Income
            
            4*
                Consolidated Statements of Comprehensive Income
            
            5*
                Consolidated Statements of Changes in Shareholders’ Equity
            
            6*
                Consolidated Statements of Cash Flows
            
            7*
                Notes to Consolidated Financial Statements
            
            8-12Item
                2.
            Management’s
                Discussion and Analysis of Financial Condition and Results of
                Operation
            
            12-24Item
                3.
            Controls
                and Procedures
            
            24PART
                II.
            OTHER
                INFORMATIONItem
                1.
            Legal
                Proceedings
            
            25Item
                2.
            Changes
                in Securities and Use of Proceeds
            
            25Item
                3.
            Defaults
                Upon Senior Securities
            
            25Item
                4.
            Submission
                of Matters to a Vote of Security Holders
            
            25Item
                5.
            Other
                Information
            
            25Item
                6.
            Exhibits
            
            25Signatures
            
            26-30Exhibit
                31.1 302 Certification of Chief Executive Officer
              Exhibit
                31.2 302 Certification of Chief Financial Officer
              Exhibit
                32.1 906 Statement of Chief Executive Officer
              Exhibit
                32.2 906 Statement of Chief Financial Officer
            
            27
              28
              29
              30








































**Greene
      County Bancorp, Inc.**


**Consolidated
      Statements of Financial Condition**


**As
      of September 30, 2006 (unaudited) and June 30, 2006**


*(Dollars
      in thousands, except share and per share amounts)*





*ASSETS*
            
            
            September
                30, 2006
            
            
            June
                30, 2006Cash
                and due from banks
            
            $
            9,783
            
            $
            12,218Federal
                funds sold
            
            
            2,925
            
            
            3,634Total
                cash and cash equivalents
            
            
            12,708
            
            
            15,852Securities
                available for sale, at fair value
            
            
            85,336
            
            
            87,267Federal
                Home Loan Bank stock, at cost
            
            
            643
            
            
            643Loans
            
            
            197,733
            
            
            191,429Less:
                Allowance for loan losses
            
            
            (1,325
            )
            
            (1,314
            )Unearned
                origination fees and costs, net
            
            
            (2
            )
            
            (22
            )Net
                loans receivable
            
            
            196,406
            
            
            190,093Premises
                and equipment
            
            
            11,984
            
            
            10,805Accrued
                interest receivable
            
            
            1,748
            
            
            1,736Prepaid
                expenses and other assets
            
            
            772
            
            
            1,169Total
                assets
            
            $
            309,597
            
            $
            307,565*LIABILITIES
                AND SHAREHOLDERS’ EQUITY*Noninterest
                bearing deposits
            
            $
            41,662
            
            $
            41,503Interest
                bearing deposits
            
            
            227,797
            
            
            226,747Total
                deposits
            
            
            269,459
            
            
            268,250Borrowings
                from FHLB
            
            
            5,000
            
            
            5,000Accrued
                expenses and other liabilities
            
            
            708
            
            
            734Total
                liabilities
            
            
            275,167
            
            
            273,984Shareholders’
                equity:Preferred
                stock,Authorized
                1,000,000 shares; none issued
            
            
            ---
            
            
            ---Common
                stock, par value $.10 per share;Authorized:12,000,000
                sharesIssued:
                4,305,670 sharesOutstanding:
                4,146,026 shares at September 30, 2006and
                4,145,246 shares at June 30, 2006;
            
            
            431
            
            
            431Additional
                paid-in capital
            
            
            10,336
            
            
            10,300Retained
                earnings
            
            
            24,918
            
            
            24,588Accumulated
                other comprehensive income
            
            
            (285
            )
            
            (747
            )Treasury
                stock, at cost 159,644 shares at September 30,2006,
                and 160,424 shares at June 30, 2006
            
            
            (855
            )
            
            (860
            )Unearned
                ESOP shares, at cost
            
            
            (115
            )
            
            (131
            )Total
                shareholders’ equity
            
            
            34,430
            
            
            33,581Total
                liabilities and shareholders’ equity
            
            $
            309,597
            
            $
            307,565


*See
      notes to consolidated financial statements.*








**Greene
      County Bancorp, Inc.**


**Consolidated
      Statements of Income**


**For
      the Three Months Ended September 30, 2006 and 2005**


**(Unaudited)**


*(In
                thousands, except share and per share amounts)*
            
            
            2006
            
            
            2005Interest
                income:Loans
            
            $
            3,179
            
            $
            2,682Investment
                securities - taxable
            
            
            161
            
            
            144Mortgage-backed
                securities
            
            
            360
            
            
            458Tax
                exempt securities
            
            
            269
            
            
            232Interest
                bearing deposits and federal funds sold
            
            
            102
            
            
            120Total
                interest income
            
            
            4,071
            
            
            3,636Interest
                expense:Interest
                on deposits
            
            
            1,376
            
            
            817Interest
                on borrowings
            
            
            46
            
            
            89Total
                interest expense
            
            
            1,422
            
            
            906Net
                interest income
            
            
            2,649
            
            
            2,730Provision
                for loan losses
            
            
            45
            
            
            30Net
                interest income after provision for loan losses
            
            
            2,604
            
            
            2,700Noninterest
                income:Service
                charges on deposit accounts
            
            
            471
            
            
            463Debit
                Card Fees
            
            
            139
            
            
            113Other
                operating income
            
            
            281
            
            
            226Total
                noninterest income
            
            
            891
            
            
            802Noninterest
                expense:Salaries
                and employee benefits
            
            
            1,378
            
            
            1,461Occupancy
                expense
            
            
            157
            
            
            136Equipment
                and furniture expense
            
            
            196
            
            
            184Service
                and data processing fees
            
            
            217
            
            
            282Office
                supplies
            
            
            28
            
            
            29Other
            
            
            457
            
            
            473Total
                noninterest expense
            
            
            2,433
            
            
            2,565Income
                before provision for income taxes
            
            
            1,062
            
            
            937Provision
                for income taxes
            
            
            308
            
            
            281Net
                income
            
            $
            754
            
            $
            656Basic
                EPS
            
            $
            0.18
            
            $
            0.16Basic
                shares outstanding
            
            
            4,117,643
            
            
            4,089,291Diluted
                EPS
            
            $
            0.18
            
            $
            0.16Diluted
                average shares outstanding
            
            
            4,187,925
            
            
            4,176,192Dividends
                per share
            
            $
            0.23
            
            $
            0.22


*See
      notes to consolidated financial statements*











**Greene
      County Bancorp, Inc.**


**Consolidated
      Statements of Comprehensive Income**


**For
      the Three Months Ended September 30, 2006 and 2005**


**(Unaudited)**











*(In
                thousands)*
            
            
            **2006**
            
            
            **2005**Net
                income
            
            $
            754
            
            $
            656Other
                comprehensive (loss) income:Unrealized
                holding gain (loss) arising during the three monthsended
                September 30, 2006 and 2005, net of incometax
                (expense) benefit of $(295) and $92, respectively.
            
            
            462
            
            
            (145
            )Comprehensive
                income
            
            $
            1,216
            
            $
            511


*See
      notes to consolidated financial statements*














**Greene
      County Bancorp, Inc.**


**Consolidated
      Statements of Changes in Shareholders’ Equity**


**For
      the Three Months Ended September 30, 2006 and 2005**


**(Unaudited)**





AccumulatedAdditional
            
            Other
            
            Unearned
            TotalCapital
            Paid
                - In
            Retained
            Comprehensive
            Treasury
            ESOP
            Shareholders’*(In
                thousands)*
            Stock
            Capital
            Earnings
            Income
                (Loss)
            Stock
            Shares
            EquityBalance
                atJune
                30, 2005
            $431
            $10,129
            $23,168
            $163
            ($942)
            ($196)
            $32,753ESOP
                shares earned
            
            51
            
            
            
            17
            68Options
                exercised
            
            (3)
            
            
            12
            
            9Dividends
                declared
            
            
            (402)
            
            
            
            (402)Net
                income
            
            
            656
            
            
            
            656Unrealized
                loss on securities, net
            
            
            
            (145)
            
            
            (145)Balance
                atSeptember
                30, 2005
            $431
            $10,177
            $23,422
            $18
            $(930)
            $(179)
            $32,939


Balance
      at


June
                30, 2006
            $431
            $10,300
            $24,588
            ($747)
            ($860)
            ($131)
            $33,581ESOP
                shares earned
            
            37
            
            
            
            16
            53Options
                exercised
            
            (1)
            
            
            5
            
            4Dividends
                declared
            
            
            (424)
            
            
            
            (424)Net
                income
            
            
            754
            
            
            
            754Unrealized
                gain on securities, net
            
            
            
            462
            
            
            462Balance
                atSeptember
                30, 2006
            $431
            $10,336
            $24,918
            ($285)
            ($855)
            ($115)
            $34,430





*See
      notes to consolidated financial statements.*





**Greene
      County Bancorp, Inc.**


**Consolidated
      Statements of Cash Flows**


**For
      the Three Months Ended September 30, 2006 and 2005**


**(Unaudited)**





*(In
                thousands)*
            
            
            2006
            
            
            2005Cash
                flows from operating activities:Net
                Income
            
            $
            754
            
            $
            656Adjustments
                to reconcile net income to cash provided by operating
                activities:Depreciation
            
            
            224
            
            
            190Net
                amortization of premiums and discounts
            
            
            255
            
            
            431Provision
                for loan losses
            
            
            45
            
            
            30ESOP
                and other stock-based compensation earned
            
            
            53
            
            
            68Net
                increase in accrued income taxes
            
            
            220
            
            
            281Net
                (increase) decrease in accrued interest receivable
            
            
            (12
            )
            
            49Net
                decrease in prepaid and other assets
            
            
            102
            
            
            175Net
                (decrease) in other liabilities
            
            
            (246
            )
            
            (582
            )Net
                cash provided by operating activities
            
            
            1,395
            
            
            1,298Cash
                flows from investing activities:Proceeds
                from maturities and calls of securities
            
            
            1,812
            
            
            4,494Purchases
                of securities and other investments
            
            
            (3,034
            )
            
            (2,236
            )Principal
                payments on securities
            
            
            3,655
            
            
            4,359Net
                increase in loans receivable
            
            
            (6,358
            )
            
            (4,223
            )Proceeds
                from sale of premises and equipment
            
            
            ---
            
            
            2Purchases
                of premises and equipment
            
            
            (1,403
            )
            
            (573
            )Net
                cash (used in) provided by investing activities
            
            
            (5,328
            )
            
            1,823Cash
                flows from financing activities:Dividends
                paid
            
            
            (424
            )
            
            (402
            )Proceeds
                from exercise of stock options
            
            
            4
            
            
            9Net
                increase (decrease) in deposits
            
            
            1,209
            
            
            (3,541
            )Net
                cash provided by (used in) financing activities
            
            
            789
            
            
            (3,934
            )Net
                decrease in cash and cash equivalents
            
            
            (3,144
            )
            
            (813
            )Cash
                and cash equivalents at beginning of period
            
            
            15,852
            
            
            19,931Cash
                and cash equivalents at end of period
            
            $
            12,708
            
            $
            19,118




*See
                notes to consolidated financial statements.*








**Greene
      County Bancorp, Inc.**


**Notes
      to Consolidated Financial Statements**


**As
      of and for the Three Months Ended September 30, 2006 and
      2005**








**(1)**  **Basis
      of Presentation**





The
      accompanying consolidated balance sheet information as of June 30, 2006 was
      derived from the audited consolidated financial statements of Greene County
      Bancorp, Inc. (the “Company”) and its wholly owned subsidiary, The Bank of
      Greene County (the “Bank”) and the Bank’s wholly owned subsidiary, Greene County
      Commercial Bank. The consolidated financial statements at and for the three
      months ended September 30, 2006 and 2005 are unaudited.





The
      financial statements have been prepared in accordance with accounting principles
      generally accepted in the United States of America (GAAP) for interim financial
      information and with the instructions to Form 10-QSB and Article 10 of
      Regulation S-X. Accordingly, they do not include all of the information and
      footnotes required by GAAP for complete financial statements. To the extent
      that
      information and footnotes required by GAAP for complete financial statements
      are
      contained in or are consistent with the audited financial statements
      incorporated by reference to Greene County Bancorp, Inc.’s Annual Report on Form
      10-KSB for the year ended June 30, 2006, such information and footnotes have
      not
      been duplicated herein. In the opinion of management, all adjustments
      (consisting of only normal recurring items) necessary for a fair presentation
      of
      the financial position and results of operations and cash flows at and for
      the
      periods presented have been included. Amounts in the prior year’s consolidated
      financial statements have been reclassified whenever necessary to conform to
      the
      current year’s presentation. These reclassifications had no effect on net income
      or retained earnings as previously reported. All material inter-company accounts
      and transactions have been eliminated in the consolidation. The results of
      operations and other data for the three months ended September 30, 2006 are
      not
      necessarily indicative of results that may be expected for the entire fiscal
      year ending June 30, 2007.





CRITICAL
      ACCOUNTING POLICY





Greene
      County Bancorp, Inc.’s critical accounting policy relates to the allowance for
      loan losses. It is based on management’s estimation of an amount that is
      intended to absorb losses in the existing portfolio. The allowance for loan
      losses is established through a provision for losses based on management’s
      evaluation of the risk inherent in the loan portfolio, the composition of the
      portfolio, specific impaired loans and current economic conditions. Such
      evaluation, which includes a review of all loans for which full collectibility
      may not be reasonably assured, considers among other matters, the estimated
      net
      realizable value or the fair value of the underlying collateral, economic
      conditions, historical loan loss experience, management’s estimate of probable
      credit losses and other factors that warrant recognition in providing for the
      allowance of loan losses. However, this evaluation involves a high degree of
      complexity and requires management to make subjective judgments that often
      require assumptions or estimates about highly uncertain matters. This critical
      accounting policy and its application are periodically reviewed with the Audit
      Committee and the Board of Directors.




**(2)**  **Nature
      of Operations**





Greene
      County Bancorp, Inc.’s primary business is the ownership and operation of its
      subsidiaries. The Bank of Greene County has seven full-service offices and
      an
      operations center located in its market area consisting of Greene County,
      Columbia County and southern Albany County, New York. The Bank of Greene County
      is primarily engaged in the business of attracting deposits from the general
      public in The Bank of Greene County’s market area, and investing such deposits,
      together with other sources of funds, in loans and investment securities. Greene
      County Commercial Bank’s primary business is to attract deposits from and
      provide banking services to local municipalities.




**(3)**  **Use
      of Estimates**





The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States of America requires management to make
      estimates and assumptions that affect the reported amounts of assets and
      liabilities and disclosure of contingent assets and liabilities at the date
      of
      the financial statements and the reported amounts of revenues and expenses
      during the reporting period. Actual results could differ from those estimates.
      Material estimates that are particularly susceptible to significant change
      in
      the near term relate to the determination of the allowance for loan losses
      and
      the assessment of other-than-temporary security impairment.





While
      management uses available information to recognize losses on loans, future
      additions to the allowance for loan losses (the “Allowance”) may be necessary
      based on changes in economic conditions, asset quality or other factors. In
      addition, various regulatory authorities, as an integral part of their
      examination process, periodically review our Allowance. Such authorities may
      require us to recognize additions to the Allowance based on their judgments
      of
      information available to them at the time of their examination.





Greene
      County Bancorp, Inc. makes an assessment to determine whether there have been
      any events or economic circumstances to indicate that a security on which there
      is an unrealized loss is impaired on an other-than-temporary basis. The Company
      considers many factors including the severity and duration of the impairment;
      the intent and ability of the Company to hold the security for a period of
      time
      sufficient for a recovery in value; recent events specific to the issuer or
      industry; and for debt securities, external credit ratings and recent
      downgrades. Securities on which there is an unrealized loss that is deemed
      to be
      other-than-temporary are written down to fair value with the write-down recorded
      as a realized loss.




**(4)**  **Earnings
      Per Share**





Basic
      earnings per share (“EPS”) is computed by dividing net income by the weighted
      average number of common shares outstanding during the period. Shares of
      restricted stock are not considered outstanding for the calculation of basic
      earnings per share until they become fully vested. Diluted earnings per share
      is
      computed in a manner similar to that of basic earnings per share except that
      the
      weighted-average number of common shares outstanding is increased to include
      the
      number of incremental common shares that would have been outstanding under
      the
      treasury stock method if all potentially dilutive common shares (such as stock
      options and unvested restricted stock) issued became vested during the period.
      Unallocated common shares held by the ESOP are not included in the
      weighted-average number of common shares outstanding for either the basic or
      diluted earnings per share calculations.





Weighted
                Average NumberNet
                Income
            
            
            Of
                Shares Outstanding
            
            
            Earnings
                per shareThree
                months endedSeptember
                30, 2006
            
            $
            754,000Basic
            
            
            
            
            
            4,117,643
            
            $
            0.18Effect
                of dilutive stock options
              and
                unearned restricted stock
            
            
            
            
            
            70,282
            
            
            (0.00
            )Diluted
            
            
            
            
            
            4,187,925
            
            $
            0.18Three
                months endedSeptember
                30, 2005
            
            $
            656,000Basic
            
            
            
            
            
            4,089,291
            
            $
            0.16Effect
                of dilutive stock options
              and
                unearned restricted stock
            
            
            
            
            
            86,901
            
            
            (0.00
            )Diluted
            
            
            
            
            
            4,176,192
            
            $
            0.16











**(5)**  **Dividends**





On
      July
      18, 2006, the Board of Directors declared a semi-annual cash dividend of $0.23
      per share of Greene County Bancorp, Inc.’s common stock. The dividend reflects
      an annual cash dividend rate of $0.46 per share, which is equal to the prior
      semi-annual dividend paid in March 2006. The dividend was payable to
      stockholders of record as of August 15, 2006, and paid on September 1, 2006.
      It
      should be noted that Greene County Bancorp, Inc.’s mutual holding company
      continued to waive receipt of dividends on the 2,304,632 shares of Company
      common stock it owns for the current period.








**(6)**  **Impact
      of Inflation and Changing Prices**





The
      consolidated financial statements of Greene County Bancorp, Inc. and notes
      thereto, presented elsewhere herein, have been prepared in accordance with
      U.S.
      generally accepted accounting principles, which require the measurement of
      financial position and operating results in terms of historical dollars without
      considering the change in the relative purchasing power of money over time
      and
      due to inflation. The impact of inflation is reflected in the increased cost
      of
      Greene County Bancorp, Inc.’s operations. Unlike most industrial companies,
      nearly all the assets and liabilities of Greene County Bancorp, Inc. are
      monetary. As a result, interest rates have a greater impact on Greene County
      Bancorp, Inc.’s performance than do the effects of general levels of inflation.
      Interest rates do not necessarily move in the same direction or to the same
      extent as the price of goods and services.





**(7)      
      Impact of Recent Accounting Pronouncements**





In
      February 2006, the Financial Accounting Standards Board (“FASB”) issued
      Statement of Financial Accounting Standards (“SFAS”) No. 155, “Accounting for
      Certain Hybrid Financial Instruments.”  SFAS No. 155 amends SFAS Nos. 133
      and 140, and improves the financial reporting of certain hybrid financial
      instruments by requiring more consistent accounting that eliminates exemptions
      and provides a means to simplify the accounting for these instruments. 
Specifically, SFAS No. 155 allows financial instruments that have embedded
      derivatives to be accounted for as a whole (eliminating the need to bifurcate
      the derivative from its host) if the holder elects to account for the whole
      instrument on a fair value basis.  SFAS No. 155 is effective for all
      financial instruments acquired or issued after the beginning of an entity's
      first fiscal year that begins after September 15, 2006.  The Company is
      required to adopt the provisions of SFAS No. 155, as applicable, beginning
      on
      July 1, 2007.  The Company does not believe the adoption of SFAS No. 155
      will have any impact on the Company's financial position or results of
      operations.





In
      March 2006, the FASB issued SFAS No. 156, “Accounting for Servicing of
      Financial Assets — An Amendment of FASB Statement No. 140.”
SFAS No. 156 requires that all separately recognized servicing assets and
      servicing liabilities be initially measured at fair value, if practicable,
      and
      permits, but does not require, the subsequent measurement of servicing assets
      and servicing liabilities at fair value. SFAS No. 156 is effective as of
      the beginning of an entity’s first fiscal year that begins after
      September 15, 2006, which for the Company will be July 1, 2007. The Company
      does not believe that the adoption of SFAS No. 156 will have any effect on
      its consolidated financial position or results of operations.





In
      July
      2006, the FASB issued FASB Interpretation No. 48, “Accounting for Uncertainty in
      Income Taxes—an interpretation of FASB Statement No. 109” (FIN 48),
      which clarifies the accounting for uncertainty in tax positions. This
      Interpretation requires that companies recognize in their financial statements
      the impact of a tax position only if the Company has determined, based on the
      technical merits of the tax position, that the tax position would more likely
      than not be sustained upon an examination by the appropriate taxing authority.
      The provisions of FIN 48 are effective for fiscal years beginning after December
      15, 2006, with the cumulative effect of the change in accounting principle
      recorded as an adjustment to opening retained earnings. The Company does not
      believe that the adoption of FIN 48 will have a significant effect on its
      consolidated financial position or results of operations.







In
      September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”, which
      defines fair value, establishes a framework for measuring fair value under
      GAAP,
      and expands disclosures about fair value measurements. SFAS No. 157 applies
      to other accounting pronouncements that require or permit fair value
      measurements. The new guidance is effective for financial statements issued
      for
      fiscal years beginning after November 15, 2007, and for interim periods
      within those fiscal years. We are currently evaluating the potential impact,
      if
      any, of the adoption of SFAS No. 157 on our consolidated financial
      position, results of operations and cash flows.





On
      September 29, 2006, the FASB issued SFAS No. 158, “Employers’
Accounting for Defined Benefit Pension and Other Postretirement Plans”, which
      amends SFAS 87 and SFAS 106 to require recognition of the overfunded or
      underfunded status of pension and other postretirement benefit plans on the
      balance sheet. Under SFAS 158, gains and losses, prior service costs and
      credits, and any remaining transition amounts under SFAS 87 and SFAS 106 that
      have not yet been recognized through net periodic benefit cost will be
      recognized in accumulated other comprehensive income, net of tax effects, until
      they are amortized as a component of net periodic cost. The measurement date
—
the date at which the benefit obligation and plan assets are measured — is
      required to be the company’s fiscal year end. SFAS 158 is effective for
      publicly-held companies for fiscal years ending after December 15, 2006,
      except for the measurement date provisions, which are effective for fiscal
      years
      ending after December 15, 2008. We
      are
      currently evaluating the potential impact, if any, of the adoption of SFAS
      No. 158 on our consolidated financial position, results of operations and
      cash flows.





**(8)      
      Stock-Based Compensation**





At
      September 30, 2006, Greene County Bancorp, Inc. had two stock-based compensation
      plans, which are described more fully in Note 9 of the financial statements
      and
      notes thereto for the year ended June 30, 2006. Through June 30, 2006, the
      Company accounted for stock-based compensation in accordance with SFAS No.
      123, *Accounting
      for Stock-Based Compensation* ,
      which
      required the measurement of the fair value of stock options or warrants granted
      to employees to be included in the statement of operations or, alternatively,
      disclosed in the notes to consolidated financial statements.  The Company
      elected to account for stock-based compensation of employees under the intrinsic
      value method of Accounting Principles Board (APB) Opinion No. 25, *Accounting
      for Stock Issued to Employees* ,
      and
      related Interpretations and has elected the disclosure-only alternative under
      SFAS No. 123.  Accordingly no stock-based compensation cost was reflected
      in net income, as all options granted under the plans had an exercise price
      equal to the market value of the underlying common stock on the date of grant.
      The Company adopted SFAS 123(R), “Share-Based Payments” effective July 1, 2006.
      SFAS No. 123 (R) requires compensation costs related to share-based payment
      transactions to be recognized in the financial statements over the period that
      the employees provide service in exchange for the award. Public companies were
      required to adopt the standard using a modified prospective method and they
      were
      given the option to elect to restate prior periods using the modified
      retrospective method. Under the modified prospective method, companies are
      required to record compensation cost for new and modified awards over the
      related vesting period of such awards prospectively and record compensation
      cost
      prospectively for the unvested portion, at the date of adoption of previously
      issued and outstanding awards over the remaining vesting period of such awards.
      Greene County Bancorp, Inc. chose the modified prospective method. However,
      since all outstanding options vested prior to March 31, 2006, there is no
      stock-based compensation expense to be recorded in the current period and,
      therefore, no effect on net income or earnings per share; consequently, no
      table
      illustrating the impact of share-based compensation on earnings for the quarter
      ended September 30, 2006 is included.








A
      summary
      of the Company’s stock option activity and related information for its option
      plans for the three months ended September 30, 2006, is as follows:





Outstanding
              Options
            Wtd.
                Avg.
              Exercise
                Price
            Wtd.
                Avg. Rem.
              Contractual
                Term
            Aggregate
              Intrinsic
                ValueOutstanding
                at 6/30/2006
            100,084
            $4.38Granted
            ---
            ---Exercised
            780
            $3.94Forfeited
                or Cancelled
            ---
            ---Outstanding
                at 9/30/2006
            99,304
            $4.39
            3.7
            $955,000Exercisable
                at 9/30/2006
            99,304
            $4.39
            3.7
            $955,000







The
      total
      intrinsic value of the options exercised during the three months ended September
      30, 2006, was approximately $8,000. There were no stock options granted during
      the three months ended September 30, 2006 and 2005. The Company had no
      non-vested options outstanding at or during the quarter ended September 30,
      2006.





For
      the
      purposes of pro forma disclosures, the estimated fair value of stock options
      is
      amortized to expense over their assumed vesting periods. The following table
      illustrates the effect on net income and earnings per share if the Company
      had
      applied the fair value recognition provisions of SFAS No. 123 to all
      stock-related compensation prior to July 1, 2006. The fair value of each option
      grant has been estimated using the Black-Scholes option-pricing
      model.





Three
                Months Ended
              September
                30,2005*(In
                thousands, except per share amounts)*Net
                income, as reported
            
            $
            656Add:
                Stock related compensation expense included inreported
                net income, net of income tax
            
            
            ---Deduct:
                Stock related compensation expense determinedunder
                the fair value method, net of income taxes
            
            
            1Pro
                forma net income
            
            $
            655Earnings
                per share:Basic,
                as reported
            
            $
            0.16Basic,
                pro forma
            
            $
            0.16Diluted,
                as reported
            
            $
            0.16Diluted,
                pro forma
            
            $
            0.16








**Item
      2. Management’s Discussion and
      Analysis of Financial Condition and Results of Operation**





**Overview
      of the Company’s Activities and Risks**





Greene
      County Bancorp, Inc.’s results of operations depend primarily on its net
      interest income, which is the difference between the income earned on Greene
      County Bancorp, Inc.’s loan and securities portfolios and its cost of funds,
      consisting of the interest paid on deposits and borrowings. Results of
      operations are also affected by Greene County Bancorp, Inc.’s provision for loan
      losses, gains and losses from sales of securities, noninterest income and
      noninterest expense. Noninterest income consists primarily of fees and service
      charges. Greene County Bancorp, Inc.’s noninterest expense consists principally
      of compensation and employee benefits, occupancy, equipment and data processing,
      and other operating expenses. Results of operations are also significantly
      affected by general economic and competitive conditions, changes in interest
      rates, as well as government policies and actions of regulatory authorities.
      Additionally, future changes in applicable law, regulations or government
      policies may materially affect Greene County Bancorp, Inc.





To
      operate successfully, the Company must manage various types of risk, including
      but not limited to, market or interest rate risk, credit risk, transaction
      risk,
      liquidity risk, security risk, strategic risk, reputation risk and compliance
      risk. While all of these risks are important, the risks of greatest significance
      to the Company relate to market or interest rate risk and credit
      risk.





Market
      risk is the risk of loss from adverse changes in market prices and/or interest
      rates. Since net interest income (the difference between interest earned on
      loans and investments and interest paid on deposits and borrowings) is the
      Company’s primary source of revenue, interest rate risk is the most significant
      non-credit related market risk to which the Company is exposed. Net interest
      income is affected by changes in interest rates as well as fluctuations in
      the
      level and duration of the Company’s assets and liabilities.





Interest
      rate risk is the exposure of the Company’s net interest income to adverse
      movements in interest rates. In addition to directly impacting net interest
      income, changes in interest rates can also affect the amount of new loan
      originations, the ability of borrowers and debt issuers to repay loans and
      debt
      securities, the volume of loan repayments and refinancings, and the flow and
      mix
      of deposits.





Credit
      risk is the risk to the Company’s earnings and shareholders’ equity that results
      from customers, to whom loans have been made and to the issuers of debt
      securities in which the Company has invested, failing to repay their
      obligations. The magnitude of risk depends on the capacity and willingness
      of
      borrowers and debt issuers to repay and the sufficiency of the value of
      collateral obtained to secure the loans made or investments
      purchased.





**Special
      Note Regarding Forward Looking Statements**





This
      quarterly report contains forward-looking statements. Greene County Bancorp,
      Inc. desires to take advantage of the “safe harbor” provisions of the Private
      Securities Litigation Reform Act of 1995 and is including this statement for
      the
      express purpose of availing itself of the protections of the safe harbor with
      respect to all such forward-looking statements. These forward-looking
      statements, which are included in this Management’s Discussion and Analysis and
      elsewhere in this quarterly report, describe future plans or strategies and
      include Greene County Bancorp, Inc.’s expectations of future financial results.
      The words “believe,” “expect,” “anticipate,” “project,” and similar expressions
      identify forward-looking statements. Greene County Bancorp, Inc.’s ability to
      predict results or the effect of future plans or strategies or qualitative
      or
      quantitative changes based on market risk exposure is inherently uncertain.
      Factors that could affect actual results include but are not limited to:


(a)
            changes
                in general market interest rates,


(b)
            general
                economic conditions,


(c)
            legislative
                and regulatory changes,


(d)
            monetary
                and fiscal policies of the U.S. Treasury and the Federal Reserve,


(e)
            changes
                in the quality or composition of The Bank of Greene County’s loan
                portfolio or the consolidated investment portfolios of The Bank of
                Greene
                County and Greene County Bancorp, Inc.,


(f)
            deposit
                flows,


(g)
            competition,
                and


(h)
            demand
                for financial services in Greene County Bancorp, Inc.’s market area.





These
      factors should be considered in evaluating the forward-looking statements,
      and
      undue reliance should not be placed on such statements, since results in future
      periods may differ materially from those currently expected because of various
      risks and uncertainties.








**Comparison
      of Financial Condition as of September 30, 2006 and June 30,
      2006**





ASSETS





Total
      assets of the Company were $309.6 million at September 30, 2006 as compared
      to
      $307.6 million at June 30, 2006, an increase of $2.0 million, or 0.7%.
      Securities available for sale amounted to $85.3 million, or 27.6% of assets,
      at
      September 30, 2006 as compared to $87.3 million, or 28.4% of assets, at June
      30,
      2006, a decrease of $2.0 million or 2.3%. Principal pay-downs and maturities
      associated with securities amounted to $5.5 million between June 30, 2006 and
      September 30, 2006. These activities were partially offset by securities
      purchases of $3.0 million over the same time frame. Loans grew by $6.3 million
      between September 30, 2006 and June 30, 2006. As a result, net loans represented
      63.4% of assets at September 30, 2006 as compared to 61.8% of assets at June
      30,
      2006.





CASH
      AND
      CASH EQUIVALENTS





Total
      cash and cash equivalents decreased to $12.7 million at September 30, 2006
      as
      compared to $15.9 million at June 30, 2006, a decrease of $3.2 million or 20.1%.
      Cash, such as vault cash and balances with correspondent banks, decreased
      approximately $2.4 million between September 30, 2006 and June 30, 2006. Federal
      funds sold decreased to $2.9 million at September 30, 2006 as compared to $3.6
      million at June 30, 2006, a decrease of $709,000 or 19.5%. The level of cash
      and
      cash equivalents is a function of the daily account clearing needs and deposit
      levels as well as activities associated with securities transactions and loan
      funding. All of these items can cause cash levels to fluctuate significantly
      on
      a daily basis.





SECURITIES
      AVAILABLE FOR SALE





Securities
      decreased $2.0 million or 2.3% to $85.3 million at September 30, 2006 as
      compared to $87.3 million at June 30, 2006. The decline in the securities
      portfolio was used to help fund loan growth and was the result of principal
      pay-downs that amounted to $3.7 million, of which $3.2 million were
      mortgage-backed securities, and maturities that amounted to $1.8 million, of
      which $1.3 million were state and political subdivision securities and $0.5
      million were corporate securities. Purchases of $3.0 million, primarily tax-free
      securities, partially offset the principal pay-downs and maturities between
      September 30, 2006 and June 30, 2006. Additionally, during the quarter ended
      September 30, 2006, unrealized losses on these available for sale securities
      declined $757,000. Greene County Bancorp, Inc. holds 36.6% of the securities
      portfolio at September 30, 2006 in state and political subdivision securities
      to
      take advantage of tax savings and to promote Greene County Bancorp, Inc.’s
      participation in the communities in which it operates.





*(Dollars
                in thousands)*
            
            
            Fair
                value at
              Sept.
                30, 2006
            
            
            Percentage
              of
                portfolio
            
            
            Fair
                value at
              June
                30, 2006
            
            
            Percentage
              of
                portfolioU.S.
                government agencies
            
            $
            11,410
            
            
            13.4
            %
            $
            10,990
            
            
            12.6
            %State
                and political subdivisions
            
            
            31,255
            
            
            36.6
            
            
            29,939
            
            
            34.3Mortgage-backed
                securities
            
            
            42,327
            
            
            49.6
            
            
            45,490
            
            
            52.1Asset-backed
                securities
            
            
            88
            
            
            0.1
            
            
            93
            
            
            0.1Corporate
                debt securities
            
            
            ---
            
            
            ---
            
            
            501
            
            
            0.6Total
                debt securities
            
            
            85,080
            
            
            99.7
            
            
            87,013
            
            
            99.7Equity
                securities and other
            
            
            256
            
            
            0.3
            
            
            254
            
            
            0.3Total
                available-for-sale securities
            
            $
            85,336
            
            
            100.0
            %
            $
            87,267
            
            
            100.0
            %








LOANS





Net
      loans
      receivable increased to $196.4 million at September 30, 2006 from $190.1 million
      at June 30, 2006, an increase of $6.3 million, or 3.3%. The loan growth
      experienced during the quarter primarily consisted of $3.7 million in
      residential mortgages, $1.8 million in commercial real estate mortgages, and
      $778,000 in home equity loans. The continued low interest rate environment
      and
      strong customer satisfaction from personal service continued to enhance loan
      growth. Recent interest rate hikes by the Federal Open Market Committee have
      yet
      to significantly affect long term interest rates. If long term rates begin
      to
      rise, the Company anticipates some slow down in new loan demand as well as
      refinancing activities. It appears consumers continue to use the equity in
      their
      homes to fund financing needs for some activities, where in the past an
      installment loan may have been the choice. The low financing options from auto
      makers continued to cut into the Bank’s automobile loan generation.








*(Dollars
                in thousands)*
            
            
            At
              Sept.
                30, 2006
            
            
            Percentage
              of
                portfolio
            
            
            At
              June
                30, 2006
            
            
            Percentage
              of
                portfolioReal
                estate mortgagesResidential
            
            $
            143,992
            
            
            72.8
            %
            $
            140,253
            
            
            73.3
            %Commercial
            
            
            25,131
            
            
            12.7
            
            
            23,284
            
            
            12.2Home
                equity loans
            
            
            17,264
            
            
            8.8
            
            
            16,486
            
            
            8.6Commercial
                loans
            
            
            6,719
            
            
            3.4
            
            
            7,390
            
            
            3.8Installment
                loans
            
            
            3,995
            
            
            2.0
            
            
            3,384
            
            
            1.8Passbook
                loans
            
            
            632
            
            
            0.3
            
            
            632
            
            
            0.3Total
                loans
            
            $
            197,733
            
            
            100.0
            %
            $
            191,429
            
            
            100.0
            %Less:
                Allowance for loan losses
            
            
            (1,325
            )
            
            
            
            
            (1,314
            )Unearned
                origination fees and costs, net
            
            
            (2
            )
            
            
            
            
            (22
            )Net
                loans receivable
            
            $
            196,406
            
            
            
            
            $
            190,093











ALLOWANCE
      FOR LOAN LOSSES





The
      allowance for loan losses is established through a provision for loan losses
      based on management’s evaluation of the risk inherent in the loan portfolio, the
      composition of the loan portfolio, specific impaired loans and current economic
      conditions. Such evaluation, which includes a review of all loans on which
      full
      collectibility may not be reasonably assured, considers among other matters,
      the
      estimated net realizable value or the fair value of the underlying collateral,
      economic conditions, historical loan loss experience and other factors that
      warrant recognition in providing for an allowance for loan loss. In addition,
      various regulatory agencies, as an integral part of their examination process,
      periodically review The Bank of Greene County’s allowance for loan losses. Such
      agencies may require The Bank of Greene County to recognize additions to the
      allowance based on their judgment about information available to them at the
      time of their examination. The allowance for loan losses is increased by a
      provision for loan losses (which results in a charge to expense) and recoveries
      of loans previously charged off and is reduced by net charge-offs. The level
      of
      the provision for the quarter ended September 30, 2006, was driven by the
      continued good asset quality. Any future increase in the allowance for loan
      losses or loan charge-offs could have a material adverse effect on Greene County
      Bancorp, Inc.’s results of operations and financial condition.





Analysis
      of allowance for loan losses activity





*(Dollars
                in thousands)*
            
            
            Quarter
                ended
            
            
            Quarter
                endedSeptember
                30, 2006
            
            
            September
                30, 2005Balance
                at the beginning of the period
            
            $
            1,314
            
            $
            1,236Charge-offs:Commercial
                Loans
            
            
            7
            
            
            ---Installment
                loans to individuals
            
            
            14
            
            
            16Overdraft
                protection
            
            
            34
            
            
            15Total
                loans charged off
            
            
            55
            
            
            31Recoveries:Installment
                loans to individuals
            
            
            12
            
            
            4Overdraft
                protection
            
            
            9
            
            
            10Total
                recoveries
            
            
            21
            
            
            14Net
                charge-offs
            
            
            34
            
            
            17Provisions
                charged to operations
            
            
            45
            
            
            30Balance
                at the end of the period
            
            $
            1,325
            
            $
            1,249Ratio
                of net charge-offs to average loans outstanding
            
            
            0.02
            %
            
            0.01
            %Ratio
                of net charge-offs to nonperforming assets
            
            
            69.39
            %
            
            5.26
            %Allowance
                for loan losses to nonperforming loans
            
            
            2,704.08
            %
            
            386.69
            %Allowance
                for loan losses to total loans receivable
            
            
            0.67
            %
            
            0.74
            %








Nonaccrual
      Loans and Nonperforming Assets





Loans
      are
      reviewed on a regular basis. Management determines that a loan is impaired
      or
      nonperforming when it is probable at least a portion of the loan will not be
      collected in accordance with its contractual terms due to an irreversible
      deterioration in the financial condition of the borrower or the value of the
      underlying collateral. When a loan is determined to be impaired, the measurement
      of the loan impairment is based on the present value of estimated future cash
      flows, except that all collateral-dependent loans are measured for impairment
      based on the fair value of the collateral. Management places loans on nonaccrual
      status once the loans have become 90 days or more delinquent. Nonaccrual is
      defined as a loan in which collectibility is questionable and therefore interest
      on the loan will no longer be recognized on an accrual basis. A loan does not
      have to be 90 days delinquent in order to be classified as nonperforming. Other
      real estate owned is considered nonperforming. The Bank of Greene County had
      no
      accruing loans delinquent more than 90 days at September 30, 2006 or June 30,
      2006.





Analysis
      of Nonaccrual Loans and Nonperforming Assets





*(Dollars
                in thousands)*
            
            
            At
                September 30, 2006
            
            
            At
                June 30, 2006Nonaccruing
                loans:Real
                estate mortgage loansResidential
                mortgages loans (one- to four-family)
            
            $
            1
            
            $
            3Multi-family
                mortgage loans
            
            
            31
            
            
            ---Commercial
                mortgage loans
            
            
            ---
            
            
            ---Home
                equity
            
            
            ---
            
            
            ---Commercial
                loans
            
            
            ---
            
            
            ---Installment
                loans to individuals
            
            
            17
            
            
            4Total
                nonaccruing loans
            
            
            49
            
            
            7Foreclosed
                real estate
            
            
            ---
            
            
            ---Total
                nonperforming assets
            
            $
            49
            
            $
            7Total
                nonperforming assets
              as
                a percentage of total assets
            
            
            0.02
            %
            
            0.00
            %Total
                nonperforming loans to total loans
            
            
            0.03
            %
            
            0.00
            %





During
      the quarter ended September 30, 2006, gross interest income of $1,900 would
      have
      been recorded on nonaccrual loans under their original terms if the loans had
      been current throughout the period. No interest income was recorded on
      nonaccrual loans.





DEPOSITS





Total
      deposits increased to $269.5 million at September 30, 2006 from $268.3 million
      at June 30, 2006, an increase of $1.2 million, or 0.4%. The net growth in
      deposits was primarily due to an $8.5 million increase in municipal deposits
      at
      Greene County Commercial Bank. This increase was offset by a decrease in
      deposits at The Bank of Greene County, partially due to the payment of various
      escrow taxes for customers in the last few days of September 2006. Deposit
      escrow accounts are included in the savings deposit category, which declined
      $7.6 million in total. Certificates of deposit balances increased $1.9 million
      between June 30, 2006 and September 30, 2006. The Company continues to try
      to
      encourage customers to open noninterest bearing deposit accounts through various
      marketing strategies, including free gifts.





*(Dollars
                in thousands)*
            
            
            At
              Sept.
                30, 2006
            
            
            Percentage
              Of
                portfolio
            
            
            At
              June
                30, 2006
            
            
            Percentage
              Of
                portfolioNoninterest
                bearing deposits
            
            $
            41,662
            
            
            15.4
            %
            $
            41,503
            
            
            15.5
            %Certificates
                of deposit
            
            
            63,286
            
            
            23.5
            
            
            61,370
            
            
            22.9Savings
                deposits
            
            
            80,166
            
            
            29.8
            
            
            87,776
            
            
            32.7Money
                market deposits
            
            
            42,460
            
            
            15.8
            
            
            45,348
            
            
            16.9NOW
                deposits
            
            
            41,885
            
            
            15.5
            
            
            32,253
            
            
            12.0Total
                deposits
            
            $
            269,459
            
            
            100.0
            %
            $
            268,250
            
            
            100.0
            %





BORROWINGS





At
      September 30, 2006, The Bank of Greene County had the following
      borrowings:





Amount
            Rate
            Maturity
                Date$5,000,000
            3.64%
                - convertible
            10/24/2013







The
      $5.0
      million borrowing, which carried a 3.64% interest rate at September 30, 2006,
      is
      convertible by FHLB under certain market interest rate scenarios, including
      three-month LIBOR at or above 7.5%. FHLB has the option to convert existing
      advances into replacement advances for the same or lesser principal amount
      based
      on the then current market rates. If the Bank chooses not to replace the
      funding, the Bank must repay this convertible advance, including any accrued
      interest, on the interest payment date.





EQUITY





Shareholders’
      equity increased to $34.4 million at September 30, 2006 from $33.6 million
      at
      June 30, 2006, as net income of $754,000 was partially offset by dividends
      declared and paid of $424,000. Accumulated other comprehensive loss decreased
      by
      $462,000 to $285,000 as a result of an improvement in the fair value of the
      available-for-sale investment portfolio, net of tax. The unrealized loss in
      the
      portfolio was due solely to interest rate movements and management does not
      consider the loss to be other-than-temporary. Other changes in equity were
      the
      result of activities associated with the various stock-based compensation plans
      of the Company including the 2000 Stock Option Plan and ESOP Plan. 780 options
      were exercised during the quarter ended September 30, 2006, reducing the number
      of shares held as treasury stock to 159,644.








**Comparison
      of Operating Results for the Three Months Ended September 30, 2006 and
      2005**





**Average
      Balance Sheet**





The
      following table sets forth certain information relating to Greene County
      Bancorp, Inc. for the quarters ended September 30, 2006 and 2005. For the
      periods indicated, the total dollar amount of interest income from average
      interest earning assets and the resultant yields, as well as the interest
      expense on average interest bearing liabilities, are expressed both in dollars
      and rates. No tax equivalent adjustments were made. Average balances were based
      on daily averages for the quarters ended September 30, 2006 and 2005. Average
      loan balances include non-performing loans. The loan yields include net
      amortization of certain deferred fees and costs that are considered adjustments
      to yields.











*(Dollars
                in thousands)*
            
            
            2006
            
            
            2006
            
            
            2006
            
            
            2005
            
            
            2005
            
            
            2005Average
            
            
            Interest
            
            
            Average
            
            
            Average
            
            
            Interest
            
            
            AverageOutstanding
            
            
            Earned/
            
            
            Yield/
            
            
            Outstanding
            
            
            Earned/
            
            
            Yield/Balance
            
            
            Paid
            
            
            Rate
            
            
            Balance
            
            
            Paid
            
            
            RateInterest
                earning assets:Loans
                receivable, net1
            
            $
            193,052
            
            $
            3,179
            
            
            6.59
            %
            $
            166,598
            
            $
            2,682
            
            
            6.44
            %Securities2
            
            
            85,646
            
            
            780
            
            
            3.64
            
            
            95,232
            
            
            810
            
            
            3.40Federal
                funds
            
            
            5,479
            
            
            71
            
            
            5.18
            
            
            11,473
            
            
            99
            
            
            3.45Interest
                bearing bank balances
            
            
            2,805
            
            
            31
            
            
            4.42
            
            
            2,798
            
            
            21
            
            
            3.00FHLB
                stock
            
            
            643
            
            
            10
            
            
            6.22
            
            
            1,785
            
            
            24
            
            
            5.38Total
                interest earning assets
            
            $
            287,625
            
            $
            4,071
            
            
            5.66
            %
            $
            277,886
            
            $
            3,636
            
            
            5.23
            %Interest
                bearing liabilities:Savings
                and money market deposits
            
            $
            130,762
            
            $
            650
            
            
            1.99
            %
            $
            138,735
            
            $
            445
            
            
            1.28
            %Demand
                and NOW deposits
            
            
            75,536
            
            
            176
            
            
            0.93
            
            
            60,367
            
            
            24
            
            
            0.16Certificates
                of deposit
            
            
            61,860
            
            
            550
            
            
            3.56
            
            
            54,183
            
            
            348
            
            
            2.57Borrowings
            
            
            5,002
            
            
            46
            
            
            3.68
            
            
            7,500
            
            
            89
            
            
            4.75Total
                interest bearing liabilities
            
            $
            273,160
            
            
            1,422
            
            
            2.08
            %
            $
            260,785
            
            
            906
            
            
            1.39
            %Net
                interest income
            
            
            
            
            $
            2,649
            
            
            
            
            
            
            
            $
            2,730Net
                interest rate spread
            
            
            
            
            
            
            
            
            3.58
            %
            
            
            
            
            
            
            
            3.84
            %Net
                interest margin
            
            
            
            
            
            
            
            
            3.68
            %
            
            
            
            
            
            
            
            3.93
            %Average
                interest earning assets toaverage
                interest bearing liabilities
            
            
            
            
            
            
            
            
            105.30
            %
            
            
            
            
            
            
            
            106.56
            %







1 Calculated
      net of deferred loan fees and costs, loan discounts, loans in process and loan
      loss reserves.


2 Includes
      tax-free securities, mortgage-backed securities and asset-backed
      securities .








**Rate
      / Volume Analysis**





The
      following table presents the extent to which changes in interest rates and
      changes in the volume of interest-earning assets and interest-bearing
      liabilities have affected Greene County Bancorp, Inc.’s interest income and
      interest expense during the periods indicated. Information is provided in each
      category with respect to:


(i)
            Change
                attributable to changes in volume (changes in volume multiplied by
                prior
                rate);


(ii)
            Change
                attributable to changes in rate (changes in rate multiplied by prior
                volume); and


(iii)
            The
                net change.


The
      changes attributable to the combined impact of volume and rate have been
      allocated proportionately to the changes due to volume and the changes due
      to
      rate.





Three
                Months
              Ended
                September 30,*(In
                thousands)*
            
            2006
                versus 2005Increase/(Decrease)
            
            TotalDue
                to
            
            Increase/Interest-earning
                assets:
            
            
            Volume
            
            
            Rate
            
            
            (Decrease)Loans
                receivable, net1
            
            $
            433
            
            $
            64
            
            $
            497Investment
                securities2
            
            
            (100
            )
            
            70
            
            
            (30
            )Federal
                funds
            
            
            (65
            )
            
            37
            
            
            (28
            )Interest-bearing
                bank balances
            
            
            --
            
            
            10
            
            
            10FHLB
                stock
            
            
            (19
            )
            
            5
            
            
            (14
            )Total
                interest-earning assets
            
            
            249
            
            
            186
            
            
            435Interest-bearing
                liabilities:Savings
                deposits
            
            
            (24
            )
            
            229
            
            
            205Demand
                and NOW deposits
            
            
            8
            
            
            144
            
            
            152Certificates
                of deposit
            
            
            54
            
            
            148
            
            
            202Borrowings
            
            
            (26
            )
            
            (17
            )
            
            (43
            )Total
                interest-bearing liabilities
            
            
            12
            
            
            504
            
            
            516Net
                interest income
            
            $
            237
            
            $
            (318
            )
            $
            (81
            )







1 Calculated net of deferred loan fees, loan discounts, loans in process and
      loan
      loss reserves.


2 Includes
      tax-free securities, mortgage-backed securities and asset-backed
      securities.





GENERAL





Return
      on
      average assets and return on average equity are common methods of measuring
      operating results. Return on average assets increased to 0.98% for the quarter
      ended September 30, 2006 as compared to 0.89% for the quarter ended September
      30, 2005. Return on average equity increased to 8.90% for the quarter ended
      September 30, 2006 as compared to 8.01% for the quarter ended September 30,
      2005. The increase in return on average assets and return on average equity
      was
      primarily the result of lower noninterest expenses and higher noninterest
      income, partially offset by lower net interest income, spread and margin. Net
      income amounted to $754,000 for the quarter ended September 30, 2006 as compared
      to $656,000 for the prior year period, an increase of $98,000 or 14.9%. Average
      assets increased $12.8 million, or 4.3% to $307.6 million for the quarter ended
      September 30, 2006 as compared to $294.8 million for the quarter ended September
      30, 2005. Average equity increased $1.2 million, or 3.7%, to $33.9 million
      for
      the quarter ended September 30, 2006 as compared to $32.7 million for the
      quarter ended September 30, 2005.





INTEREST
      INCOME





Interest
      income amounted to $4.1 million for the quarter ended September 30, 2006 as
      compared to $3.6 million for the quarter ended September 30, 2005, an increase
      of $435,000 or 12.0%. The increase in loan volume complemented by an increase
      in
      the yield on such interest earning assets had the greatest impact on interest
      income when comparing the quarters ended September 30, 2006 and 2005. Average
      loan balances increased $26.5 million and the yield increased 15 basis points
      when comparing the quarters ended September 30, 2006 and 2005. Although the
      overall impact on interest income from loans was positive, it was offset by
      lower volume on securities for which average balances declined $9.6 million
      when
      comparing the quarters ended September 30, 2006 and 2005. The yield on such
      securities increased 24 basis points during this same period, partially
      offsetting the decrease in income due to the decline in balances. The short
      term
      investments such as interest bearing bank balances and federal funds sold were
      utilized to fund loan growth, and therefore, interest income from these
      investments decreased as a result of a $6.0 million decrease in average balances
      when comparing the quarters ended September 30, 2006 and 2005. Most of the
      decrease in income from short term investments was offset by a higher yield
      on
      such investments, primarily as a result of the interest rate hikes implemented
      by the Federal Open Market Committee during the last several quarters. Although
      the Federal Open Market Committee has increased short-term rates several times
      during the last several quarters, the long-term rates continue to remain
      relatively unchanged and low.




INTEREST
      EXPENSE





Interest
      expense amounted to $1.4 million for the quarter ended September 30, 2006 as
      compared to $906,000 for the quarter ended September 30, 2005, an increase
      of
      $516,000 or 57.0%. Interest expense on deposits increased to $1.4 million for
      the quarter ended September 30, 2006 as compared to $817,000 for the quarter
      ended September 30, 2005. Interest expense on borrowings declined $43,000 to
      $46,000 for the quarter ended September 30, 2006 as compared to $89,000 for
      the
      quarter ended September 30, 2005. Changes in rate on interest-bearing
      liabilities had the greatest impact on overall interest expense. The average
      rate paid on demand and NOW deposits increased 77 basis points when comparing
      the quarters ended September 30, 2006 and 2005, and the average balance of
      such
      accounts grew by $15.2 million, contributing to the overall increase in interest
      expense. The average balance of certificates of deposit grew by $7.7 million,
      and the average rate paid increased by 99 basis points when comparing the
      quarters ended September 30, 2006 and 2005. The average balance of savings
      and
      money market deposits fell by $8.0 million but was offset by an increased of
      71
      basis points in average rate paid on remaining balances when comparing the
      quarters ended September 30, 2006 and 2005. The level of interest paid on
      borrowings was higher when comparing the quarters ended September 30, 2006
      and
      2005 due to the average balance being $2.5 million higher. A $2.5 million
      borrowing with a rate of 6.80% was repaid on October 4, 2005 and there were
      no
      significant additional borrowings.





NET
      INTEREST INCOME





Net
      interest income remained relatively flat at $2.6 million for the quarter ended
      September 30, 2006 and $2.7 million for the quarter ended September 30, 2005.
      Net interest spread decreased 26 basis points to 3.58% as compared to 3.84%
      when
      comparing the quarters ended September 30, 2006 and 2005. Net interest margin
      decreased 25 basis points to 3.68% for the quarter ended September 30, 2006
      as
      compared to 3.93% for the quarter ended September 30, 2005. The tightening
      of
      the net interest spread and margin led to a decline in net interest income
      when
      comparing the quarters ended September 30, 2006 and 2005.





Due
      to
      the large portion of fixed rate residential mortgages in the Company’s asset
      portfolio, interest rate risk is a concern and the Company will continue to
      monitor the situation and attempt to adjust the asset and liability mix as
      much
      as possible to take advantage of the benefits and reduce the risks or potential
      negative effects of a rising rate environment. Management attempts to mitigate
      the interest rate risk through balance sheet composition. Several strategies
      are
      used to help manage interest rate risk such as maintaining a high level of
      liquid assets such as short-term federal funds sold and various investment
      securities and maintaining a high concentration of less interest-rate sensitive
      and lower-costing core deposits.








PROVISION
      FOR LOAN LOSSES





The
      provision for loan losses amounted to $45,000 for the quarter ended September
      30, 2006 and $30,000 for the quarter ended September 30, 2005. The relatively
      low level of the provisions for loan losses was largely due to the continuing
      high quality of the overall loan portfolio. At September 30, 2006, nonperforming
      assets were 0.02% of total assets, nonperforming loans were 0.03% of total
      loans, and the number and dollar amount of loans classified as nonaccrual were
      insignificant.





NONINTEREST
      INCOME





Noninterest
      income amounted to $891,000 for the quarter ended September 30, 2006 as compared
      to $802,000 for the quarter ended September 30, 2005, an increase of $89,000
      or
      11.1%. Service charges on deposit accounts increased $8,000 due to higher levels
      of insufficient funds charges. Debit card fees increased $26,000 or 23.0%
      primarily due to a higher volume of transactions. The Company continues to
      grow
      income from higher volumes of activity in E-commerce and services performed
      through Essex Corp’s “Investors MarketPlace”, an alternative investment
      resource. During the quarter ended September 30, 2006, revenue from Essex Corp’s
“Investors MarketPlace” increased approximately $41,000 over the same quarter
      the prior year primarily due to several large transactions.





NONINTEREST
      EXPENSE





Noninterest
      expense amounted to $2.43 million for the quarter ended September 30, 2006
      as
      compared to $2.57 million for the quarter ended September 30, 2005, a decrease
      of $132,000 or 5.1%. Salaries and employee benefits decreased $83,000 when
      comparing quarters ended September 30, 2006 and 2005. Retirement expense
      decreased approximately $36,000 primarily as a result of discontinuing the
      accrual of benefits under the defined benefit pension plan beginning July 1,
      2006. This decrease was partially offset by an increase in 401-k contribution
      expense of $12,000 resulting from an increase in employer match beginning July
      1, 2006. Also contributing to the decrease in salaries and employee benefits
      was
      lower overtime expenses which declined $22,000. Lastly, expenses were higher
      for
      the quarter ended September 30, 2005 as a result of the training and preparation
      for the data processing system conversion that occurred in October 2005.
      Occupancy expense increased approximately $21,000 when comparing the quarters
      ended September 30, 2006 and 2005 due to higher utility costs and increased
      depreciation expense associated with the relocated Cairo and Coxsackie branches.
      Equipment and furniture expense increased $12,000 when comparing the quarters
      ended September 30, 2006 and 2005 due to higher depreciation expense associated
      with updated computer equipment and a new loan and deposit data processing
      system implemented in October 2005. This higher depreciation was offset by
      a
      $65,000 decrease in service and data processing fees that resulted from the
      discontinuation of the outsourcing of the data processing system following
      the
      implementation of the new system.





INCOME
      TAXES





The
      provision for income taxes directly reflects the expected tax associated with
      the revenue generated for the given year and certain regulatory requirements.
      The effective tax rate was 29.0% for the quarter ended September 30, 2006,
      compared to 30.0% for the quarter ended September 30, 2005. The decline in
      effective rate was due to increased holdings of federally tax-exempt municipal
      securities in the current period.





LIQUIDITY
      AND CAPITAL RESOURCES





Market
      risk is the risk of loss in a financial instrument arising from adverse changes
      in market rates or prices such as interest rates, foreign currency exchange
      rates, commodity prices, and equity prices. Greene County Bancorp, Inc.’s most
      significant form of market risk is interest rate risk since the majority of
      Greene County Bancorp, Inc.’s assets and liabilities are sensitive to changes in
      interest rates. Greene County Bancorp, Inc.’s primary sources of funds are
      deposits and proceeds from principal and interest payments on loans,
      mortgage-backed securities and debt securities, with lines of credit available
      through the Federal Home Loan Bank as needed. While maturities and scheduled
      amortization of loans and securities are predictable sources of funds, deposit
      outflows, mortgage prepayments, and lending activities are greatly influenced
      by
      general interest rates, economic conditions and competition.





Mortgage
      loan commitments totaled $3.7 million at September 30, 2006. The unused portion
      of overdraft lines of credit and premium overdraft privilege amounted to $7.8
      million, the unused portion of home equity lines of credit amounted to $5.2
      million, and the unused portion of commercial lines of credit amounted to $4.1
      million at September 30, 2006. Greene County Bancorp, Inc. anticipates that
      it
      will have sufficient funds available to meet current loan commitments based
      on
      the level of cash and cash equivalents as well as the available for sale
      investment portfolio and borrowing capacity from FHLBNY.





During
      the current fiscal year, The Bank of Greene County expects to open two new
      branch locations, one located in Greenport, New York and the other on the West
      Side of Catskill, New York. It is expected that these branches will be open
      during the third quarter of fiscal 2007. The Bank of Greene County is also
      renovating a building in Catskill, New York to be utilized by back-office
      operations. It is expected that the Company will have sufficient cash or other
      means of liquidity to fund these projects.





The
      Bank
      of Greene County met all regulatory capital requirements at September 30, 2006
      and June 30, 2006. Consolidated shareholders’ equity represented 11.1% of total
      assets at September 30, 2006 and 10.9% of total assets of June 30,
      2006.





**Item
      3.      Controls and
      Procedures**





Under
      the
      supervision and with the participation of the Company's management,
      including its Chief Executive Officer and Chief Financial Officer, the
      Company evaluated the effectiveness of the design and operation of its
      disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e)
      under the Exchange Act) as of the end of the period covered by this report.
      Based upon that evaluation, the Chief Executive Officer and Chief Financial
      Officer concluded that, as of the end of the period covered by this
      report, the Company's disclosure controls and procedures were
      effective to ensure that information required to be disclosed in the reports
      that the Company files or submits under the Exchange Act is recorded, processed,
      summarized and reported within the time periods specified in the Securities
      and
      Exchange Commission's rules and forms and in timely altering them to material
      information relating to the Company (or its consolidated subsidiaries) required
      to be filed in its periodic SEC filings.




There
      has
      been no change in the Company's internal control over financial reporting in
      connection with the quarterly evaluation that occurred during the Company's
      last
      fiscal quarter that has materially affected, or is reasonably likely to
      materially affect, the Company's internal control over financial
      reporting.








**Part
      II. Other Information**




Item
      1. Legal Proceedings


Greene County Bancorp, Inc. and its subsidiaries are not engaged in any


material legal proceedings at the present time.





Item
      2. Unregistered Sales of Equity Securities and Use
      of Proceeds


Not applicable








Item
      3.Defaults Upon Senior Securities


Not applicable





Item
      4.Submission of Matters to a Vote of Security
      Holders


Not applicable





Item
      5.Other Information


Not applicable





Item
      6. Exhibits





Exhibits


31.1
      Certification of Chief Executive Officer, adopted pursuant to Rule
      13a-14(a)/15d-14(a)


31.2
      Certification of Chief Financial Officer, adopted pursuant to Rule
      13a-14(a)/15d-14(a)


32.1
      Statement of Chief Executive Officer, furnished pursuant to U.S.C. Section
      1350


32.2
      Statement of Chief Financial Officer, furnished pursuant to U.S.C. Section
      1350








**SIGNATURES**











Pursuant
      to the requirements of the Securities Exchange Act of 1934, the Registrant
      has
      duly caused this report to be signed by the undersigned thereunto duly
      authorized.








Greene
      County Bancorp, Inc.





Date:
      November 6, 2006





By:
      /s/ J. Bruce Whittaker





J.
      Bruce
      Whittaker


President
      and Chief Executive Officer

















Date:
      November 6, 2006





By:
      /s/ Michelle Plummer





Michelle
      Plummer


Chief
      Financial Officer and Treasurer











**EXHIBIT****31.1**





**Certification
      of Chief Executive Officer**


**Pursuant
      to Section 302 of the Sarbanes-Oxley Act of 2002**





I,
      J.
      Bruce Whittaker, certify that:





1.
            I
                have reviewed this quarterly report on Form 10-QSB of Greene County
                Bancorp, Inc.;





2.
            Based
                on my knowledge, this quarterly report does not contain any untrue
                statement of a material fact or omit to state a material fact necessary
                to
                make the statements made, in light of the circumstances under which
                such
                statements were made, not misleading with respect to the period covered
                by
                this report;





3.
            Based
                on my knowledge, the financial statements, and other financial information
                included in this quarterly report, fairly present in all material
                respects
                the financial condition, results of operations and cash flows of
                the small
                business issuer as of, and for, the periods presented in this report;





4.
            The
                small business issuer’s other certifying officer and I are responsible for
                establishing and maintaining disclosure controls and procedures (as
                defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small
                business issuer and have:





a)
      designed such disclosure controls and procedures, or caused such disclosure
      controls and procedures to be designed under our supervision, to ensure that
      material information relating to the small business issuer, including its
      consolidated subsidiaries, is made known to us by others within those entities,
      particularly during the period in which this report is being prepared;





b)
      evaluated the effectiveness of the small business issuer’s disclosure controls
      and procedures and presented in this report our conclusions about the
      effectiveness of the disclosure controls and procedures, as of the end of the
      period covered by this report based on such evaluation; and





c)
      d isclosed
      in this report any change in the small business issuer’s internal control over
      financial reporting that occurred during the small business issuer’s most recent
      fiscal quarter that has materially affected, or is reasonably likely to
      materially affect, the small business issuer’s internal control over financial
      reporting; and





5.
            The
                small business issuer’s other certifying officer and I have disclosed,
                based on our most recent evaluation of internal control over financial
                reporting, to the small business issuer’s auditors and the audit committee
                of the small business issuer’s board of directors:





a)
      all
      significant deficiencies and material weaknesses in the design or operation
      of
      internal control over financial reporting which are reasonably likely to
      adversely affect the small business issuer’s ability to record, process,
      summarize and report financial information; and





b)
      any
      fraud, whether or not material, that involves management or other employees
      who
      have a significant role in the small business issuer’s internal control over
      financial reporting.











Date:
      November 6,
      2006  /s/
      J.
      Bruce Whittaker


J.
      Bruce
      Whittaker


President and Chief
      Executive Officer








**EXHIBIT****31.2**








**Certification
      of Chief Financial Officer**


**Pursuant
      to Section 302 of the Sarbanes-Oxley Act of 2002**





I,
      Michelle M. Plummer, certify that:





1.
            I
                have reviewed this quarterly report on Form 10-QSB of Greene County
                Bancorp, Inc.;





2.
            Based
                on my knowledge, this quarterly report does not contain any untrue
                statement of a material fact or omit to state a material fact necessary
                to
                make the statements made, in light of the circumstances under which
                such
                statements were made, not misleading with respect to the period covered
                by
                this report;





3.
            Based
                on my knowledge, the financial statements, and other financial information
                included in this quarterly report, fairly present in all material
                respects
                the financial condition, results of operations and cash flows of
                the small
                business issuer as of, and for, the periods presented in this report;





4.
            The
                small business issuer’s other certifying officer and I are responsible for
                establishing and maintaining disclosure controls and procedures (as
                defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small
                business issuer and have:





a)
      designed such disclosure controls and procedures, or caused such disclosure
      controls and procedures to be designed under our supervision, to ensure that
      material information relating to the small business issuer, including its
      consolidated subsidiaries, is made known to us by others within those entities,
      particularly during the period in which this report is being prepared;





b)
      evaluated the effectiveness of the small business issuer’s disclosure controls
      and procedures and presented in this report our conclusions about the
      effectiveness of the disclosure controls and procedures, as of the end of the
      period covered by this report based on such evaluation; and





c)
      d isclosed
      in this report any change in the small business issuer’s internal control over
      financial reporting that occurred during the small business issuer’s most recent
      fiscal quarter that has materially affected, or is reasonably likely to
      materially affect, the small business issuer’s internal control over financial
      reporting; and





5.
            The
                small business issuer’s other certifying officer and I have disclosed,
                based on our most recent evaluation of internal control over financial
                reporting, to the small business issuer’s auditors and the audit committee
                of the small business issuer’s board of directors:





a)
      all
      significant deficiencies and material weaknesses in the design or operation
      of
      internal control over financial reporting which are reasonably likely to
      adversely affect the small business issuer’s ability to record, process,
      summarize and report financial information; and





b)
      any
      fraud, whether or not material, that involves management or other employees
      who
      have a significant role in the small business issuer’s internal control over
      financial reporting.











Date:
      November 6,
      2006  /s/
      Michelle M. Plummer


Michelle
      M. Plummer


Chief
      Financial Officer









**EXHIBIT
      32.1**





**Statement
      of Chief Executive Officer**


**Pursuant
      to Section 906 of the Sarbanes-Oxley Act of 2002**











J.
      Bruce
      Whittaker, President and Chief Executive Officer, of Greene County Bancorp,
      Inc.
      (the “Company”) certifies in his capacity as an officer of the Company that he
      has reviewed the Quarterly Report of the Company on Form 10-QSB for the quarter
      ended September 30, 2006 and that to the best of his knowledge:





1.
            the
                report fully complies with the requirements of Section 13(a) or 15(d)
                of
                the Securities Exchange Act of 1934; and





2.
            the
                information contained in the report fairly presents, in all material
                respects, the financial condition and results of operations of the
                Company
                as of the dates and for the periods covered by the
                report.





This
      statement is authorized to be attached as an exhibit to the report so that
      this
      statement will accompany the report at such time as the report is filed with
      the
      Securities and Exchange Commission pursuant to Section 906 of the Sarbanes-Oxley
      Act of 2002, 18 USC 1350. It is not intended that this statement be deemed
      to be
      filed for purposes of the Securities Exchange Act of 1934, as
      amended.








Date:
      November 6,
      2006  /s/
      J.
      Bruce Whittaker


J.
      Bruce
      Whittaker


President and Chief
      Executive Officer











**EXHIBIT
      32.2**





**Statement
      of Chief Financial Officer**


**Pursuant
      to Section 906 of the Sarbanes-Oxley Act of 2002**











Michelle
      M. Plummer, Chief Financial Officer, of Greene County Bancorp, Inc. (the
“Company”) certifies in her capacity as an officer of the Company that he or she
      has reviewed the Quarterly Report of the Company on Form 10-QSB for the quarter
      ended September 30, 2006 and that to the best of her knowledge:





1.
            the
                report fully complies with the requirements of Section 13(a) or 15(d)
                of
                the Securities Exchange Act of 1934; and





2.
            the
                information contained in the report fairly presents, in all material
                respects, the financial condition and results of operations of the
                Company
                as of the dates and for the periods covered by the
                report.








This
      statement is authorized to be attached as an exhibit to the report so that
      this
      statement will accompany the report at such time as the report is filed with
      the
      Securities and Exchange Commission pursuant to Section 906 of the Sarbanes-Oxley
      Act of 2002, 18 USC 1350. It is not intended that this statement be deemed
      to be
      filed for purposes of the Securities Exchange Act of 1934, as
      amended.








Date:
      November 6,
      2006  /s/
      Michelle M. Plummer


Michelle
      M. Plummer


Chief
      Financial Officer