U.S.
SECURITIES AND EXCHANGE COMMISSION


Washington,
D.C. 20549


-----------------------------------





FORM
10-Q





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





FOR
THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2008





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 number0-25165








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 large accelerated filer, an
accelerated filer, a non-accelerated filer, or a small reporting
company.  See the definitions of “large accelerated filer”,
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.





Large
accelerated
filer   _____                                                                           Accelerated
filer _____


Non-accelerated
filer     _____                                                                           Smaller
reporting company   __X___





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 13, 2008, the registrant had 4,103,120 shares of common stock
outstanding at $ .10 par value.








GREENE
      COUNTY BANCORP, INC.INDEXPART
      I.
              FINANCIAL
      INFORMATIONPageItem
      1.
              Financial
      Statements (unaudited)*   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
              
              8-13Item
      2.
              Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operation
              
              14-25Item
      3.
              Quantitative
      and Qualitative Disclosures About Market Risk
              
              26Item
      4T.
              Controls
      and Procedures
              
              26PART
      II.
              OTHER
      INFORMATIONItem
      1.
              Legal
      Proceedings
              
              27Item
      1A.
              Risk
      Factors
              
              27Item
      2.
              Unregistered
      Sales of Equity Securities and Use of Proceeds
              
              27Item
      3.
              Defaults
      Upon Senior Securities
              
              27Item
      4.
              Submission
      of Matters to a Vote of Security Holders
              
              27Item
      5.
              Other
      Information
              
              27Item
      6.
              Exhibits
              
              27Signatures
              
              28Exhibit
      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
              
              29
                30
                31
                32



































Greene
County Bancorp, Inc.


Consolidated Statements of Financial Condition


As
of September 30, 2008 and June 30, 2008


(Unaudited)


(In
thousands, except share and per share amounts)





ASSETS
                
                September 30, 2008
                
                
                June 30, 2008Cash
      and due from banks
                
                $
                9,453
                
                
                $
                7,297Federal
      funds sold
                
                
                1,244
                
                
                
                1,365Total
      cash and cash equivalents
                
                
                10,697
                
                
                
                8,662Long
      term certificate of deposit
                
                
                1,000
                
                
                
                1,000Securities
      available for sale, at fair value
                
                
                138,157
                
                
                
                96,692Securities
      held to maturity, at amortized cost
                
                
                15,429
                
                
                
                15,457Federal
      Home Loan Bank stock, at cost
                
                
                1,678
                
                
                
                1,386Loans
                
                
                254,551
                
                
                
                240,146Less:
      Allowance for loan losses
                
                
                (1,984
                )
                
                
                (1,888
                )Unearned
      origination fees and costs, net
                
                
                274
                
                
                
                182Net
      loans receivable
                
                
                252,841
                
                
                
                238,440Premises
      and equipment
                
                
                15,269
                
                
                
                15,108Accrued
      interest receivable
                
                
                2,517
                
                
                
                2,139Prepaid
      expenses and other assets
                
                
                981
                
                
                
                724Total
      assets
                
                $
                438,569
                
                
                $
                379,608LIABILITIES
      AND SHAREHOLDERS’ EQUITYNon-interest
      bearing deposits
                
                $
                39,501
                
                
                $
                41,798Interest
      bearing deposits
                
                
                334,056
                
                
                
                279,633Total
      deposits
                
                
                373,557
                
                
                
                321,431Borrowings
      from FHLB, short-term
                
                
                7,500
                
                
                
                1,000Borrowings
      from FHLB, long-term
                
                
                19,000
                
                
                
                19,000Accrued
      expenses and other liabilities
                
                
                1,806
                
                
                
                1,910Total
      liabilities
                
                
                401,863
                
                
                
                343,341Shareholders’
      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:
      4,100,928 shares at September 30, 2008and
      4,095,528 shares at June 30, 2008;
                
                
                431
                
                
                
                431Additional
      paid-in capital
                
                
                10,303
                
                
                
                10,267Retained
      earnings
                
                
                27,687
                
                
                
                27,183Accumulated
      other comprehensive loss
                
                
                (160
                )
                
                
                (9
                )Treasury
      stock, at cost, 204,742 shares at September 30,2008,
      and 210,142 shares at June 30, 2008
                
                
                (1,545
                )
                
                
                (1,586
                )Unearned
      ESOP shares, at cost
                
                
                (10
                )
                
                
                (19
                )Total
      shareholders’ equity
                
                
                36,706
                
                
                
                36,267Total
      liabilities and shareholders’ equity
                
                $
                438,569
                
                
                $
                379,608


See
notes to consolidated financial statements.








Greene
County Bancorp, Inc.


Consolidated Statements of Income


For
the Three Months Ended September 30, 2008 and 2007


(Unaudited)


(In thousands, except share and per
share amounts)


2008
                
                
                2007Interest
      income:Loans
                
                $
                3,910
                
                
                $
                3,558Investment
      securities – taxable
                
                
                362
                
                
                
                256Mortgage-backed
      securities
                
                
                807
                
                
                
                393Tax
      exempt securities
                
                
                231
                
                
                
                275Interest
      bearing deposits and federal funds sold
                
                
                26
                
                
                
                127Total
      interest income
                
                
                5,336
                
                
                
                4,609Interest
      expense:Interest
      on deposits
                
                
                1,447
                
                
                
                1,802Interest
      on borrowings
                
                
                170
                
                
                
                46Total
      interest expense
                
                
                1,617
                
                
                
                1,848Net
      interest income
                
                
                3,719
                
                
                
                2,761Provision
      for loan losses
                
                
                195
                
                
                
                143Net
      interest income after provision for loan losses
                
                
                3,524
                
                
                
                2,618Non-interest
      income:Service
      charges on deposit accounts
                
                
                786
                
                
                
                631Debit
      card fees
                
                
                230
                
                
                
                183Investment
      services
                
                
                82
                
                
                
                92E-commerce
      fees
                
                
                70
                
                
                
                70Write-down
      of impairment of available-for-sale security
                
                
                (221
                )
                
                
                ---Other
      operating income
                
                
                99
                
                
                
                120Total
      non-interest income
                
                
                1,046
                
                
                
                1,096Non-interest
      expense:Salaries
      and employee benefits
                
                
                2,004
                
                
                
                1,520Occupancy
      expense
                
                
                267
                
                
                
                220Equipment
      and furniture expense
                
                
                164
                
                
                
                214Service
      and data processing fees
                
                
                303
                
                
                
                257Computer
      software, supplies and support
                
                
                80
                
                
                
                80Advertising
      and promotion
                
                
                83
                
                
                
                80Other
                
                
                459
                
                
                
                534Total
      non-interest expense
                
                
                3,360
                
                
                
                2,905Income
      before provision for income taxes
                
                
                1,210
                
                
                
                809Provision
      for income taxes
                
                
                401
                
                
                
                240Net
      income
                
                $
                809
                
                
                $
                569Basic
      EPS
                
                $
                0.20
                
                
                $
                0.14Basic
      average shares outstanding
                
                
                4,096,149
                
                
                
                4,137,556Diluted
      EPS
                
                $
                0.20
                
                
                $
                0.14Diluted
      average shares outstanding
                
                
                4,119,313
                
                
                
                4,184,289Dividends
      per share
                
                $
                0.17
                
                
                $
                0.25


See
notes to consolidated financial statements.











Greene
County Bancorp, Inc.


Consolidated Statements of Comprehensive Income


For
the Three Months Ended September 30, 2008 and 2007


(Unaudited)


(In
thousands)








2008
                
                
                2007Net
      income
                
                $
                809
                
                
                $
                569Other
      comprehensive (loss) income:Unrealized
      holding (losses) gains on available for sale securities,
      arisingduring
      the three months ended September 30, 2008 and 2007,net
      of income taxes of ($182) and $290, respectively.
                
                
                (286
                )
                
                
                455Reclassification
      adjustment for impairment write-down on securitiesavailable
      for sale realized in net income net of income taxes of $86, and
      $0,respectively.
                
                
                135
                
                
                
                ---Other
      comprehensive (loss) income
                
                
                (151
                )
                
                
                455Comprehensive
      income
                
                $
                658
                
                
                $
                1,024


See
notes to consolidated financial statements.














Greene
County Bancorp, Inc.


Consolidated Statements of Changes in Shareholders’
Equity


For
the Three Months Ended September 30, 2008 and 2007


(Unaudited)


(In
thousands)








AccumulatedAdditional
                
                
                
                
                
                Other
                
                
                
                
                
                Unearned
                
                
                TotalCommon
                
                
                Paid
      – In
                
                
                Retained
                
                
                Comprehensive
                
                
                Treasury
                
                
                ESOP
                
                
                Shareholders’Stock
                
                
                Capital
                
                
                Earnings
                
                
                Income
      (Loss)
                
                
                Stock
                
                
                Shares
                
                
                EquityBalance
      atJune
      30, 2007
                
                $
                431
                
                
                $
                10,319
                
                
                $
                25,962
                
                
                $
                (400
                )
                
                $
                (828
                )
                
                $
                (69
                )
                
                $
                35,415ESOP
      shares earned
                
                
                
                
                
                
                28
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                15
                
                
                
                43Options
      exercised
                
                
                
                
                
                
                (1
                )
                
                
                
                
                
                
                
                
                
                
                3
                
                
                
                
                
                
                
                2Shares
      repurchased
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (4
                )
                
                
                
                
                
                
                (4
                )Dividends
      declared
                
                
                
                
                
                
                
                
                
                
                (462
                )
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (462
                )Net
      income
                
                
                
                
                
                
                
                
                
                
                569
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                569Adoption
      of FIN 48
                
                
                
                
                
                
                
                
                
                
                (218
                )
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (218
                )Unrealized
      gain on securities, net
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                455
                
                
                
                
                
                
                
                
                
                
                
                455Balance
      atSeptember
      30, 2007
                
                $
                431
                
                
                $
                10,346
                
                
                $
                25,851
                
                
                $
                55
                
                
                $
                (829
                )
                
                $
                (54
                )
                
                $
                35,800


Balance
at


June
      30, 2008
                
                $
                431
                
                
                $
                10,267
                
                
                $
                27,183
                
                
                $
                (9
                )
                
                $
                (1,586
                )
                
                $
                (19
                )
                
                $
                36,267ESOP
      shares earned
                
                
                
                
                
                
                18
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                9
                
                
                
                27Options
      exercised
                
                
                
                
                
                
                (19
                )
                
                
                
                
                
                
                
                
                
                
                41
                
                
                
                
                
                
                
                22Stock
      options earned
                
                
                
                
                
                
                37
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                37Dividends
      declared
                
                
                
                
                
                
                
                
                
                
                (305
                )
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (305
                )Net
      income
                
                
                
                
                
                
                
                
                
                
                809
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                809Unrealized
      loss on securities, net
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (151
                )
                
                
                
                
                
                
                
                
                
                
                (151
                )Balance
      atSeptember
      30, 2008
                
                $
                431
                
                
                $
                10,303
                
                
                $
                27,687
                
                
                $
                (160
                )
                
                $
                (1,545
                )
                
                $
                (10
                )
                
                $
                36,706





See
notes to consolidated financial statements.





Greene
County Bancorp, Inc.


Consolidated Statements of Cash Flows


For
the Three Months Ended September 30, 2008 and 2007


(Unaudited)





(In
      thousands)
                
                2008
                
                
                2007Cash
      flows from operating activities:Net
      Income
                
                $
                809
                
                
                $
                569Adjustments
      to reconcile net income to net cash provided by operating
      activities:Depreciation
                
                
                220
                
                
                
                258Net
      amortization of premiums and discounts
                
                
                24
                
                
                
                80Net
      amortization of deferred loan costs and fees
                
                
                32
                
                
                
                17Provision
      for loan losses
                
                
                195
                
                
                
                143ESOP
      shares earned
                
                
                27
                
                
                
                43Stock
      option compensation expense
                
                
                37
                
                
                
                ---Write-down
      of impairment of available-for-sale security
                
                
                221
                
                
                
                ---Net
      (decrease) increase in accrued income taxes
                
                
                (99
                )
                
                
                179Net
      (increase) decrease in accrued interest receivable
                
                
                (378
                )
                
                
                96Net
      decrease (increase) in prepaid and other assets
                
                
                19
                
                
                
                (26
                )Net
      decrease in other liabilities
                
                
                (185
                )
                
                
                (257
                )Net
      cash provided by operating activities
                
                
                922
                
                
                
                1,102Cash
      flows from investing activities:Securities
      available-for-sale:Proceeds
      from maturities and payments of securities
                
                
                2,004
                
                
                
                4,362Purchases
      of securities
                
                
                (46,242
                )
                
                
                (2,224
                )Principal
      payments on securities
                
                
                2,281
                
                
                
                ---Securities
      held-to-maturity:Proceeds
      from maturities and payments of securities
                
                
                235
                
                
                
                ---Purchases
      of securities
                
                
                (872
                )
                
                
                ---Principal
      payments on securities
                
                
                665
                
                
                
                ---Net
      (purchase) redemption of Federal Home Loan Bank Stock
                
                
                (292
                )
                
                
                2,532Net
      increase in loans receivable
                
                
                (14,628
                )
                
                
                (10,986
                )Proceeds
      from sale of premises and equipment
                
                
                ---
                
                
                
                1Purchases
      of premises and equipment
                
                
                (381
                )
                
                
                (695
                )Net
      cash used in investing activities
                
                
                (57,230
                )
                
                
                (7,010
                )Cash
      flows from financing activities:Net
      increase in short-term FHLB advances
                
                
                6,500
                
                
                
                ---Dividends
      paid
                
                
                (305
                )
                
                
                (462
                )Proceeds
      from exercise of stock options
                
                
                22
                
                
                
                2Purchase
      of treasury stock
                
                
                ---
                
                
                
                (4
                )Net
      increase in deposits
                
                
                52,126
                
                
                
                12,885Net
      cash provided by financing activities
                
                
                58,343
                
                
                
                12,421Net
      increase in cash and cash equivalents
                
                
                2,035
                
                
                
                6,513Cash
      and cash equivalents at beginning of period
                
                
                8,662
                
                
                
                14,026Cash
      and cash equivalents at end of period
                
                $
                10,697
                
                
                $
                20,539





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, 2008 and 2007








(1)  Basis
of Presentation





The
accompanying consolidated statement of financial condition  as of June
30, 2008 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, 2008 and 2007 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-Q and Article 8 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, 2008, 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, 2008 are not necessarily indicative of results that may be
expected for the entire fiscal year ending June 30, 2009.





CRITICAL
ACCOUNTING POLICIES





Greene
County Bancorp, Inc.’s most critical accounting policies relates to the
allowance for loan losses and potential impairment of investment
securities.





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.





Statement
of Financial Accounting Standards (“SFAS”) No. 115, “Accounting for Certain
Investments in Debt and Equity Securities,” and Staff Accounting Bulletin 59,
“Noncurrent Marketable Equity Securities,” require companies to perform periodic
reviews of individual securities in their investment portfolios to determine
whether a decline in the value of a security is other than
temporary.  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.




(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 ten 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)  Fair
Value Measurements and Fair Value of Financial Instruments







SFAS 157,
“Fair Value Measurement”, established a fair value hierarchy that prioritized
the inputs to valuation techniques used to measure fair value. The hierarchy
gives the highest priority to unadjusted quoted prices in active markets for
identical assets or liabilities (level 1 measurements) and the lowest priority
to unobservable inputs (level 3 measurements). The three levels of the fair
value hierarchy under SFAS 157 are as follows:




Level 1:
Unadjusted quoted prices in active markets that are accessible at the
measurement date for identical, unrestricted assets or liabilities.




Level 2:
Quoted prices in markets that are not active, or inputs that are observable
either directly or indirectly, for substantially the full term of the asset or
liability.




Level 3:
Prices or valuation techniques that require inputs that are both significant to
the fair value measurement and unobservable (i.e., supported with little or no
market activity).




An asset
or liability’s level within the fair value hierarchy is based on the lowest
level of input that is significant to the fair value measurement.












For
assets measured at fair value on a recurring basis, the fair value measurements
by level within the fair value hierarchy used are as follows:




Fair Value Measurements UsingQuoted
      Prices
                  Significant
                  SignificantIn
      Active Markets
                  Other
      Observable
                  UnobservableFor
      Identical Assets
                  Inputs
                  Inputs(In
      thousands)
                  September
      30, 2008
                  (Level
      1)
                  (Level
      2)
                  (Level
      3)Assets:Securities
      available-for-sale
                  $138,157
                  $78,428
                  59,729
                  ---





Certain
investments that are actively traded and have quoted market prices have been
classified as Level 1 valuations.  Other available-for-sale investment
securities have been valued by reference to prices for similar securities or
through model-based techniques in which all significant inputs are observable
and, therefore, such valuations have been classified as Level 2. For many other
securities where there is limited trading activity or less observable valuation
inputs, the Company has classified such valuations as Level 3.





In
addition to disclosures of the fair value of assets on a recurring basis, SFAS
157 requires disclosures for assets and liabilities measured at fair value on a
nonrecurring basis, such as impaired assets, in the period in which a
re-measurement at fair value is performed.     Loans
are generally not recorded at fair value on a recurring basis. Periodically, the
Company records nonrecurring adjustments to the carrying value of loans based on
fair value measurements for partial charge-offs of the uncollectible portions of
those loans. Nonrecurring adjustments also include certain impairment amounts
for collateral-dependent loans calculated in accordance with SFAS No. 114,
“Accounting by Creditors for Impairment of a Loan,” when establishing the
allowance for credit losses. Such amounts are generally based on the fair value
of the underlying collateral supporting the loan and, as a result, the carrying
value of the loan less the calculated valuation amount does not necessarily
represent the fair value of the loan. Real estate collateral is typically valued
using independent appraisals or other indications of value based on recent
comparable sales of similar properties or assumptions generally observable in
the marketplace and the related nonrecurring fair value measurement adjustments
have generally been classified as Level 2. Estimates of fair value used for
other collateral supporting commercial loans generally are based on assumptions
not observable in the marketplace and therefore such valuations have been
classified as Level 3.  At September 30, 2008 and June 30, 2008, loans
subject to nonrecurring fair value measurement had a gross carrying amount of
$334,000 and $249,000, respectively, with an associated valuation allowance
of $144,000 and $80,000, respectively, for a fair value of $190,000 and
$169,000, respectively.  These loans were classified as a Level 3
valuation.




(5)  Earnings
Per Share (“EPS”)





Basic
earnings per share is computed by dividing net income by the weighted average
number of common shares outstanding during the period.  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) issued became vested during the
period.  The 164,500 options granted during the quarter ended
September 30, 2008 (see note 9) were anti-dilutive in the current
quarter.  There were no anti-dilutive securities or contracts
outstanding during the quarter ended September 30, 2007.  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, 2008
                
                
                $
                809,000Basic
                
                
                
                
                
                
                
                4,096,149
                
                
                $
                0.20Effect
      of dilutive stock options
                
                
                
                
                
                
                
                23,164
                
                
                
                (0.00
                )Diluted
                
                
                
                
                
                
                
                4,119,313
                
                
                $
                0.20Three
      months endedSeptember
      30, 2007
                
                
                $
                569,000Basic
                
                
                
                
                
                
                
                4,137,556
                
                
                $
                0.14Effect
      of dilutive stock options
                
                
                
                
                
                
                
                46,733
                
                
                
                (0.00
                )Diluted
                
                
                
                
                
                
                
                4,184,289
                
                
                $
                0.14





(6)
            Dividends





On July
17, 2008, the Board of Directors declared a quarterly cash dividend of $0.17 per
share of Greene County Bancorp, Inc.’s common stock.  The dividend
reflects an annual cash dividend rate of $0.68 per share, which represents a
6.3% increase from the previous quarter’s annual dividend rate paid of $0.64 in
June 2008.  The dividend was payable to stockholders of record as of
August 15, 2008, and paid on September 1, 2008.  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.





(7) 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
generally accepted accounting principles in the United States of America, 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.





(8) Impact of Recent
Accounting Pronouncements





In
February 2008, the FASB issued FASB Staff Position (FSP) 157-2, “Effective Date
of FASB Statement No. 157,” that permits a one-year deferral in applying
the measurement provisions of Statement No. 157 to non-financial assets and
non-financial liabilities (non-financial items) that are not recognized or
disclosed at fair value in an entity’s financial statements on a recurring basis
(at least annually). Therefore, if the change in fair value of a non-financial
item is not required to be recognized or disclosed in the financial statements
on an annual basis or more frequently, the effective date of application of
Statement 157 to that item is deferred until fiscal years beginning after
November 15, 2008 and interim periods within those fiscal years. The
Company is currently evaluating the impact, if any, that the adoption of FSP
157-2 will have on the Company’s consolidated financial statements.





In
December 2007, the FASB issued statement No. 141 (R) “Business Combinations”.
This Statement establishes principles and requirements for how the acquirer of a
business recognizes and measures in its financial statements the identifiable
assets acquired, the liabilities assumed, and any noncontrolling interest in the
acquiree. The Statement also provides guidance for recognizing and measuring the
goodwill acquired in the business combination and determines what information to
disclose to enable users of the financial statements to evaluate the nature and
financial effects of the business combination. The guidance will become
effective as of the beginning of a company’s fiscal year beginning after
December 15, 2008. The new guidance will impact the Company’s accounting for
business combinations completed beginning July 1, 2009.





In
December 2007, the FASB issued statement No. 160 “Noncontrolling Interests in
Consolidated Financial Statements—an amendment of ARB No. 51”. This Statement
establishes accounting and reporting standards for the noncontrolling interest
in a subsidiary and for the deconsolidation of a subsidiary. The guidance will
become effective as of the beginning of a company’s fiscal year beginning after
December 15, 2008. The Company believes that this new pronouncement will not
have a material impact on the Company’s consolidated financial
statements.





In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles.”  This Statement identifies the sources of
accounting principles and the framework for selecting the principles used in the
preparation of financial statements.  This Statement is effective 60
days following the SEC’s approval of the Public Company Accounting Oversight
Board amendments to AU Section 411, “The Meaning of Present Fairly in Conformity
with Generally Accepted Accounting Principles.”  The Company believes
that this new pronouncement will not have a material impact on the Company’s
consolidated financial statements.





In June
2008, the FASB issued FASB Staff Position (FSP) EITF 03-6-1, “Determining
Whether Instruments Granted in Share-Based Payment Transactions Are
Participating Securities.”  This FSP clarifies that all outstanding
unvested share-based payment awards that contain rights to nonforfeitable
dividends participate in undistributed earnings with common
shareholders.  Awards of this nature are considered participating
securities and the two-class method of computing basic and diluted earnings per
share must be applied.  This FSP is effective for fiscal years
beginning after December 15, 2008.  The Company is currently
evaluating the potential impact the new pronouncement will have on its
consolidated financial statements.





In
October 2008, the FASB issued FSP SFAS No. 157-3,“Determining the Fair Value
of a Financial Asset When The Market for That Asset Is Not
Active”  (FSP 157-3), to clarify the application of the
provisions of SFAS 157 in an inactive market and how an entity would
determine fair value in an inactive market.  FSP 157-3 is
effective immediately and applies to our September 30, 2008 financial
statements.  The application of the provisions of FSP 157-3 did
not have an impact on our results of operations or financial condition as of and
for the periods ended September 30, 2008.





(9)  Stock-Based
Compensation





At
September 30, 2008, Greene County Bancorp, Inc. had three stock-based
compensation plans, two of which are described more fully in Note 9 of the
consolidated financial statements and notes thereto for the year ended June 30,
2008.  A new stock-based compensation plan (the “Option Plan”) was
approved by shareholders on July 29, 2008 which allows the Company to issue up
to 180,000 options and stock appreciation rights.  On August 19, 2008,
the Board of Directors granted 164,500 options and stock appreciation rights (in
tandem) to buy stock under the Option Plan at an exercise price of $12.50, the
fair value of the stock on that date.  These options have a 10-year
term and vest over a minimum of a three year period which is contingent upon
meeting specific earnings performance goals. The fair value of each share option
grant under the Option Plan was estimated on the date of grant to be $4.06 using
the Black-Scholes option pricing model and assumes that performance goals will
be achieved.   If such goals are not met, no compensation cost
will be recognized and any recognized compensation cost will be
reversed.   The assumptions used in the Black-Scholes option
pricing model as of the grant date were as follows:





Weighted
      average risk-free interest rate
              3.23%Weighted
      average expected term
              6.5
      yearsWeighted
      average expected volatility
              59.57%Weighted
      average expected dividend
              6.72%





The
Company recognized $37,000 in compensation costs and related income tax benefit
of $4,000 related to the Option Plan for the quarter ended September 30,
2008.  There was no stock-based compensation expense recorded during
the quarter ended September 30, 2007.   At September 30, 2008,
there was $631,400 of total unrecognized compensation cost related to non-vested
share-based compensation arrangements granted.  That cost is expected
to be recognized over a weighted-average period of 2.75 years.





A summary
of the Company’s stock option activity and related information for its option
plans for the three months ended September 30, 2008 and 2007 is as
follows:





2008
                
                
                2007Weighted
      Average
                
                
                
                
                
                Weighted
      AverageExercise
                
                
                
                
                
                ExercisePrice
                
                
                
                
                
                PriceShares
                
                
                Per
      Share
                
                
                Shares
                
                
                Per
      ShareOutstanding
      at beginning of year
                
                
                41,944
                
                
                $
                5.00
                
                
                
                72,664
                
                
                $
                4.55Options
      granted
                
                
                164,500
                
                
                $
                12.50
                
                
                
                ---
                
                
                
                ---Exercised
                
                
                (5,400
                )
                
                $
                3.94
                
                
                
                (500
                )
                
                $
                3.94Forfeited
                
                
                ---
                
                
                
                ---
                
                
                
                ---
                
                
                
                ---Outstanding
      at period end
                
                
                201,044
                
                
                $
                11.17
                
                
                
                72,164
                
                
                $
                4.56Exercisable
      at period end
                
                
                36,544
                
                
                $
                5.16
                
                
                
                72,164
                
                
                $
                4.56








The
following table presents stock options outstanding and exercisable at September
30, 2008:





Options
      Outstanding and ExercisableRange
      of Exercise Prices
                
                
                Number
      Outstanding
                
                
                Weighted
      Average Remaining Contractual Life
                
                
                Weighted
      Average Exercise Price$
                3.94
                
                
                
                28,044
                
                
                
                1.50
                
                
                $
                3.94$
                9.20
                
                
                
                8,500
                
                
                
                3.40
                
                
                $
                9.20$
                3.94-$9.20
                
                
                
                36,544
                
                
                
                1.94
                
                
                $
                5.16





The total
intrinsic value of the options exercised during the three months ended September
30, 2008 and 2007, was approximately $52,000 and $4,000,
respectively.  There were no stock options granted during the three
months ended September 30, 2007.  The Company had 164,500 non-vested
options outstanding at September 30, 2008 and no non-vested options outstanding
at or during the quarter ended September 30, 2007.




(10)   Stock
Repurchase Program





On August
22, 2007, the Board of Directors authorized a stock repurchase program pursuant
to which the Company intends to repurchase up to 5% of its outstanding shares
(excluding shares held by Greene County Bancorp, MHC, the Company’s mutual
holding company), or up to 92,346 shares.  As of September 30, 2008,
the Company had repurchased 62,478 shares at an average cost of $12.79 per
share.





(11)  Subsequent
events





On
October 22, 2008, the Board of Directors declared a quarterly dividend of $0.17
per share on Greene County Bancorp, Inc.’s common stock.  The dividend
reflects an annual cash dividend rate of $0.68 per share, which was the same as
the dividend declared during the previous quarter.  The dividend will
be payable to stockholders of record as of November 15, 2008, and will be paid
on December 1, 2008.  It should be noted that Greene County Bancorp,
Inc.’s mutual holding company continues to waive receipt of dividends on the
shares it owns.





The
Company intends to apply to participate in the U.S. Treasury’s Capital Purchase
Program (CPP), a part of the Emergency Economic Stabilization Act of
2008.  That application is due to the Office of Thrift Supervision by
November 14, 2008.  The Company would be eligible to receive
investment funds ranging between approximately $2.3 million and $6.7
million  from the U.S. Treasury.  While the Company and the
Bank are both well-capitalized, participation in the program might enhance the
Company’s flexibility in meeting future capital needs that may
arise.  The Company has not made a final determination as to
participation in the program.








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, including unemployment rates and real estate
      values,


(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, 2008 and June 30, 2008





ASSETS





Total
assets of the Company were $438.6 million at September 30, 2008 as compared to
$379.6 million at June 30, 2008, an increase of $59.0 million, or
15.5%.  Securities available for sale amounted to $138.2 million, or
31.5% of assets, at September 30, 2008 as compared to $96.7 million, or 25.5% of
assets, at June 30, 2008, an increase of $41.5 million or
42.9%.   Securities purchases, including both available-for-sale
and held-to-maturity issues, totaled $47.1 million between June 30, 2008 and
September 30, 2008.  These activities were partially offset by
principal pay-downs and maturities of $5.2 million over the same time
frame.  Loans grew by $14.4 million or 6.0% to $254.6 million at
September 30, 2008 as compared to $240.1 million at June 30, 2008.





CASH AND
CASH EQUIVALENTS





Total
cash and cash equivalents increased to $10.7 million at September 30, 2008 as
compared to $8.7 million at June 30, 2008, an increase of $2.0 million or
23.0%.  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





Securities,
including both available-for-sale and held-to-maturity issues, increased $41.5
million or 37.0% to $153.6 million at September 30, 2008 as compared to $112.1
million at June 30, 2008.  Securities purchases totaled $47.1 million
during the quarter ended September 30, 2008.  Purchases consisted of
$15.6 million of U.S. government agency bonds, $30.4 million of mortgage-backed
securities, and $1.1 million of state and political subdivision securities.
These purchases were funded through deposit growth, primarily from local
municipalities. The deposits with municipalities require the Company to pledge
securities as collateral for any uninsured balances.  This increase
was partially offset by principal pay-downs and maturities that amounted to $5.2
million, of which $2.3 million were mortgage-backed securities, $900,000 were
state and political subdivision securities and $2.0 million were U.S. government
agency securities. Additionally, during the quarter ended September 30, 2008,
unrealized net losses on available for sale securities increased
$247,000.  Greene County Bancorp, Inc. holds 17.2% of the securities
portfolio at September 30, 2008 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.     Mortgage-backed securities and
asset-backed securities held within the portfolio do not contain sub-prime loans
and are not exposed to the credit risk associated with such
lending.





Carrying
      Value atSeptember
      30, 2008
                
                
                June
      30, 2008(Dollars
      in thousands)
                
                Balance
                
                
                Percentage
                  of
      portfolio
                
                
                Balance
                
                
                Percentage
                  of
      portfolioSecurities
      available-for-sale:U.S.
      government agencies
                
                $
                29,632
                
                
                
                19.3
                %
                
                $
                16,146
                
                
                
                14.4
                %State
      and political subdivisions
                
                
                11,039
                
                
                
                7.2
                
                
                
                10,850
                
                
                
                9.7Mortgage-backed
      securities
                
                
                89,117
                
                
                
                58.0
                
                
                
                60,782
                
                
                
                54.2Asset-backed
      securities
                
                
                53
                
                
                
                0.1
                
                
                
                49
                
                
                
                0.1Corporate
      debt securities
                
                
                7,930
                
                
                
                5.1
                
                
                
                8,486
                
                
                
                7.5Total
      debt securities
                
                
                137,771
                
                
                
                89.7
                
                
                
                96,313
                
                
                
                85.9Equity
      securities and other
                
                
                386
                
                
                
                0.3
                
                
                
                379
                
                
                
                0.3Total
      available-for-sale securities
                
                
                138,157
                
                
                
                90.0
                
                
                
                96,692
                
                
                
                86.2Securities
      held-to-maturity:State
      and political subdivisions
                
                
                15,429
                
                
                
                10.0
                
                
                
                15,457
                
                
                
                13.8Total
      securities
                
                $
                153,586
                
                
                
                100.0
                %
                
                $
                112,149
                
                
                
                100.0
                %





LOANS





Net loans
receivable increased to $252.8 million at September 30, 2008 from $238.4 million
at June 30, 2008, an increase of $14.4 million, or 6.0%.  The loan
growth experienced during the quarter primarily consisted of $6.2 million in
residential mortgages, $5.1 million in commercial real estate loans, $1.6
million in construction and land loans, and $1.1 million in home equity
loans.  The continued low interest rate environment and strong
customer satisfaction from personal service continued to enhance loan
growth.    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 Bank of Greene County
continues to use a conservative underwriting policy in regard to all loan
originations, and does not engage in sub-prime lending.  It should be
noted however that the Company is subject to the effects of any downturn, and
especially, a significant decline in home values in the Company’s markets could
have a negative effect on the results of operations.  A significant
decline in home values would likely lead to a decrease in residential real
estate loans and new home equity loan originations and increased delinquencies
and defaults in both the consumer home equity loan and the residential real
estate loan portfolios and result in increased losses in these
portfolios.  As of September 30, 2008, declines in home values have
been modest in the Company’s market area.





(Dollars
      in  thousands)At
                  Sept.
      30, 2008
                
                
                Percentage
                  of
      portfolio
                
                
                At
                  June
      30, 2008
                
                
                Percentage
                  of
      portfolioReal
      estate mortgagesResidential
                
                $
                164,351
                
                
                
                64.6
                %
                
                $
                158,193
                
                
                
                65.9
                %Construction
      and land
                
                
                13,944
                
                
                
                5.5
                
                
                
                12,295
                
                
                
                5.1Commercial
                
                
                35,511
                
                
                
                13.9
                
                
                
                30,365
                
                
                
                12.6Multifamily
                
                
                1,032
                
                
                
                0.4
                
                
                
                1,094
                
                
                
                0.5Home
      equity loans
                
                
                25,075
                
                
                
                9.8
                
                
                
                23,957
                
                
                
                10.0Commercial
      loans
                
                
                10,217
                
                
                
                4.0
                
                
                
                9,669
                
                
                
                4.0Installment
      loans
                
                
                4,021
                
                
                
                1.6
                
                
                
                4,172
                
                
                
                1.7Passbook
      loans
                
                
                400
                
                
                
                0.2
                
                
                
                401
                
                
                
                0.2Total
      loans
                
                $
                254,551
                
                
                
                100.0
                %
                
                $
                240,146
                
                
                
                100.0
                %Deferred
      fees and discounts
                
                
                274
                
                
                
                
                
                
                
                182Less:
      Allowance for loan losses
                
                
                (1,984
                )
                
                
                
                
                
                
                (1,888
                )Net
      loans receivable
                
                $
                252,841
                
                
                
                
                
                
                $
                238,440








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
losses.  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 charge-offs.  The
level of the provision for the three months ended September 30, 2008, was driven
by the continued growth of the loan portfolio and recent increases in loan
delinquencies.  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)
                
                Three
      months endedSeptember
      30, 2008
                
                
                September
      30, 2007Balance
      at the beginning of the period
                
                $
                1,888
                
                
                $
                1,486Charge-offs:Residential
      mortgage
                
                
                31
                
                
                
                ---Installment
      loans to individuals
                
                
                17
                
                
                
                12Overdraft
      protection
                
                
                74
                
                
                
                69Total
      loans charged off
                
                
                122
                
                
                
                81Recoveries:Home
      equity loans
                
                
                --
                
                
                
                27Installment
      loans to individuals
                
                
                9
                
                
                
                7Overdraft
      protection
                
                
                14
                
                
                
                15Total
      recoveries
                
                
                23
                
                
                
                49Net
      charge-offs
                
                
                99
                
                
                
                32Provisions
      charged to operations
                
                
                195
                
                
                
                143Balance
      at the end of the period
                
                $
                1,984
                
                
                $
                1,597Ratio
      of annualized net charge-offs to average loans outstanding
                
                
                0.16
                %
                
                
                0.06
                %Ratio
      of annualized net charge-offs to nonperforming assets
                
                
                20.08
                %
                
                
                15.80
                %Allowance
      for loan losses to nonperforming loans
                
                
                100.61
                %
                
                
                197.16
                %Allowance
      for loan losses to total loans receivable
                
                
                0.78
                %
                
                
                0.73
                %








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.  Foreclosed real estate  is considered
nonperforming.  The Bank of Greene County had no accruing loans
delinquent more than 90 days at September 30, 2008 or June 30,
2008.





Analysis of Nonaccrual Loans
and Nonperforming Assets





(Dollars
      in thousands)
                        
                        At
      September 30, 2008
                        
                        
                        At
      June 30, 2008Nonaccruing
      loans:Real
      estate mortgage loansResidential
      mortgages loans (one- to four-family)
                        
                        $
                        1,391
                        
                        
                        $
                        1,123Construction
      and land
                        
                        
                        ---
                        
                        
                        
                        38Commercial
      mortgage loans
                        
                        
                        90
                        
                        
                        
                        91Multifamily
                        
                        
                        26
                        
                        
                        
                        26Home
      equity
                        
                        
                        331
                        
                        
                        
                        493Commercial
      loans
                        
                        
                        96
                        
                        
                        
                        142Installment
      loans to individuals
                        
                        
                        38
                        
                        
                        
                        26Total
      nonaccruing loans
                        
                        
                        1,972
                        
                        
                        
                        1,939Foreclosed
      real estate
                        
                        
                        ---
                        
                        
                        
                        ---Total
      nonperforming assets
                        
                        $
                        1,972
                        
                        
                        $
                        1,939Total
      nonperforming assets
                          as
      a percentage of total assets
                        
                        
                        0.45
                        %
                        
                        
                        0.51
                        %Total
      nonperforming loans to net total loans
                        
                        
                        0.78
                        %
                        
                        
                        0.81
                        %





The
Company identifies impaired loans and measures the impairment in accordance with
Statement of Financial Accounting Standards No. 114, “Accounting by Creditors
for Impairment of a Loan” (Statement 114), as amended.  A loan is
considered impaired when it is probable that the borrower will be unable to
repay the loan according to the original contractual terms of the loan agreement
or the loan is restructured in a troubled debt restructuring.  There
was $313,000 in impaired loans as of September 30, 2008 of which $122,000 were
nonaccrual.  The Company has allocated approximately $144,000 of the
allowance for loan losses for these loans as of September 30,
2008.  Interest income of $16,000 and $8,000 was recorded on
nonaccrual loans based on cash payments received during the quarters ended
September 30, 2008 and 2007, respectively.





DEPOSITS





Total
deposits increased to $373.6 million at September 30, 2008 from $321.4 million
at June 30, 2008, an increase of $52.2 million, or 16.2%.  The Company
has recently attracted new local municipalities including school districts to
use the services of Greene County Commercial Bank, which is a limited purpose
entity for such activities.  Greene County Commercial Bank has sought
core deposits from such entities rather than more expensive time
accounts.  The level of deposits held by such public entities can be
cyclical and fluctuate significantly from quarter to quarter and are
significantly dependent and affected by tax collection periods or special
projects such as new buildings or renovations.  These types of local
municipal entities are also required to have certain forms of collateral pledged
for amounts deposited over the FDIC insurance limits.  Deposits at
Greene County Commercial Bank increased $52.9 million to $99.7 million at
September 30, 2008 compared to $46.8 million at June 30, 2008. This increase was
primarily in NOW deposits.  Interest bearing checking accounts (NOW
accounts) increased $51.6 million or 64.9% to $131.1 million at September 30,
2008 as compared to $79.5 million at June 30, 2008.  Savings deposits
decreased $5.3 million or 7.3% to $67.4 million at September 30, 2008 as
compared to $72.7 million at June 30, 2008.    Money market
deposits increased $6.3 million to $44.3 million at September 30,
2008.   Certificates of deposit balances increased $1.8 million
between June 30, 2008 and September 30, 2008.  Noninterest bearing
deposits decreased $2.3 million to $39.5 million at September 30,
2008.





(Dollars
      in thousands)At
                  Sept.
      30, 2008
                
                
                Percentage
                  Of
      portfolio
                
                
                At
                  June
      30, 2008
                
                
                Percentage
                  Of
      portfolioNoninterest
      bearing deposits
                
                $
                39,501
                
                
                
                10.6
                %
                
                $
                41,798
                
                
                
                13.0
                %Certificates
      of deposit
                
                
                91,289
                
                
                
                24.4
                
                
                
                89,470
                
                
                
                27.9Savings
      deposits
                
                
                67,430
                
                
                
                18.0
                
                
                
                72,706
                
                
                
                22.6Money
      market deposits
                
                
                44,284
                
                
                
                11.9
                
                
                
                37,970
                
                
                
                11.8NOW
      deposits
                
                
                131,053
                
                
                
                35.1
                
                
                
                79,487
                
                
                
                24.7Total
      deposits
                
                $
                373,557
                
                
                
                100.0
                %
                
                $
                321,431
                
                
                
                100.0
                %





BORROWINGS





At
September 30, 2008, The Bank of Greene County had available an Overnight Line of
Credit and a One-Month Overnight Repricing Line of Credit, each in the amount of
$31.8 million with the Federal Home Loan Bank.  At September 30, 2008,
there was a balance of $7.5 million outstanding under the Overnight Line of
Credit.  Interest rates on these lines is determined at the time of
borrowing.





At
September 30, 2008, The Bank of Greene County had term borrowings totaling $19.0
million from the FHLB, of which $14.0 million consisted of several fixed rate,
fixed term advances with a weighted average rate of 3.34% and a weighted average
maturity of 31 months.  The remaining $5.0 million borrowing, which
carried a 3.64% interest rate at September 30, 2008, is unilaterally convertible
by the FHLB under certain market interest rate scenarios, including three-month
LIBOR at or above 7.50%, into replacement advances for the same or lesser
principal amount based on the then current market rates.  If the Bank
chooses not to accept the replacement funding, the Bank must repay this
convertible advance, including any accrued interest, on the interest payment
date.





Scheduled
maturities of borrowings at September 30, 2008 were as follows:


(In
      thousands)Fiscal
      year end2010
                
                $
                4,0002011
                
                
                5,0002012
                
                
                3,0002013
                
                
                1,0002014
                
                
                6,000$
                19,000





EQUITY





Shareholders’
equity increased to $36.7 million at September 30, 2008 from $36.3 million at
June 30, 2008, as net income of $809,000 was partially offset by dividends
declared and paid of $305,000. Additionally, shareholders’ equity
decreased  $151,000 as a result of unrealized losses, net of tax in
the available-for-sale investment portfolio  Other changes in equity,
totaling an $86,000 increase, were the result of activities associated with the
various stock-based compensation plans of the Company including the 2000 and
2008 Stock Option Plans and ESOP Plan.








Comparison
of Operating Results for the Three Months Ended September 30, 2008 and
2007





Average
Balance Sheet





The
following table sets forth certain information relating to Greene County
Bancorp, Inc. for the quarters ended September 30, 2008 and 2007.  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.  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)
                
                2008
                
                
                2008
                
                
                2008
                
                
                2007
                
                
                2007
                
                
                2007Average
                
                
                Interest
                
                
                Average
                
                
                Average
                
                
                Interest
                
                
                AverageOutstanding
                
                
                Earned/
                
                
                Yield/
                
                
                Outstanding
                
                
                Earned/
                
                
                Yield/Balance
                
                
                Paid
                
                
                Rate
                
                
                Balance
                
                
                Paid
                
                
                RateInterest
      earning assets:Loans
      receivable, net1
                
                $
                246,870
                
                
                $
                3,910
                
                
                
                6.34
                %
                
                $
                213,537
                
                
                $
                3,558
                
                
                
                6.66
                %Securities2
                
                
                119,921
                
                
                
                1,377
                
                
                
                4.59
                
                
                
                87,251
                
                
                
                912
                
                
                
                4.18Federal
      funds
                
                
                2,307
                
                
                
                11
                
                
                
                1.91
                
                
                
                5,958
                
                
                
                75
                
                
                
                5.04Interest
      bearing bank balances
                
                
                3,006
                
                
                
                15
                
                
                
                2.00
                
                
                
                4,565
                
                
                
                52
                
                
                
                4.56FHLB
      stock
                
                
                1,397
                
                
                
                23
                
                
                
                6.58
                
                
                
                657
                
                
                
                12
                
                
                
                7.31Total
      interest earning assets
                
                
                373,501
                
                
                
                5,336
                
                
                
                5.71
                %
                
                
                311,968
                
                
                
                4,609
                
                
                
                5.91
                %Cash
      and due from banks
                
                
                6,340
                
                
                
                
                
                
                
                
                
                
                
                5,718Allowance
      for loan losses
                
                
                (1,912
                )
                
                
                
                
                
                
                
                
                
                
                (1,509
                )Other
      non-interest earning assets
                
                
                17,539
                
                
                
                
                
                
                
                
                
                
                
                15,766Total
      assets
                
                $
                395,468
                
                
                
                
                
                
                
                
                
                
                $
                331,943Interest
      bearing liabilities:Savings
      and money market deposits
                
                $
                115,154
                
                
                $
                360
                
                
                
                1.25
                %
                
                $
                111,929
                
                
                $
                557
                
                
                
                1.99
                %NOW
      deposits
                
                
                89,553
                
                
                
                417
                
                
                
                1.86
                
                
                
                59,270
                
                
                
                383
                
                
                
                2.58Certificates
      of deposit
                
                
                89,900
                
                
                
                670
                
                
                
                2.98
                
                
                
                77,737
                
                
                
                862
                
                
                
                4.43Borrowings
                
                
                20,278
                
                
                
                170
                
                
                
                3.35
                
                
                
                5,000
                
                
                
                46
                
                
                
                3.68Total
      interest bearing liabilities
                
                
                314,885
                
                
                
                1,617
                
                
                
                2.05
                %
                
                
                253,936
                
                
                
                1,848
                
                
                
                2.91
                %Non-interest
      bearing deposits
                
                
                41,828
                
                
                
                
                
                
                
                
                
                
                
                41,522Other
      non-interest bearing liabilities
                
                
                2,287
                
                
                
                
                
                
                
                
                
                
                
                927Shareholders’
      equity
                
                
                36,468
                
                
                
                
                
                
                
                
                
                
                
                35,558Total
      liabilities and equity
                
                $
                395,468
                
                
                
                
                
                
                
                
                
                
                $
                331,943Net
      interest income
                
                
                
                
                
                $
                3,719
                
                
                
                
                
                
                
                
                
                
                $
                2,761Net
      interest rate spread
                
                
                
                
                
                
                
                
                
                
                3.66
                %
                
                
                
                
                
                
                
                
                
                
                3.00
                %Net
      Earning Assets
                
                $
                58,616
                
                
                
                
                
                
                
                
                
                
                $
                58,032Net
      interest margin
                
                
                
                
                
                
                
                
                
                
                3.98
                %
                
                
                
                
                
                
                
                
                
                
                3.54
                %Average
      interest earning assets toaverage
      interest bearing liabilities
                
                
                
                
                
                
                
                
                
                
                118.62
                %
                
                
                
                
                
                
                
                
                
                
                122.85
                %








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


2Includes tax-free securities,
mortgage-backed securities,  asset-backed securities and long term
certificates of deposit.





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)
                
                2008
      versus 2007Increase/(Decrease)
                
                
                TotalDue
      to
                
                
                Increase/Interest-earning
      assets:
                
                Volume
                
                
                Rate
                
                
                (Decrease)Loans
      receivable, net1
                
                $
                530
                
                
                $
                (178
                )
                
                $
                352Investment
      securities2
                
                
                368
                
                
                
                97
                
                
                
                465Federal
      funds
                
                
                (32
                )
                
                
                (32
                )
                
                
                (64
                )Interest-bearing
      bank balances
                
                
                (14
                )
                
                
                (23
                )
                
                
                (37
                )FHLB
      stock
                
                
                12
                
                
                
                (1
                )
                
                
                11Total
      interest-earning assets
                
                
                864
                
                
                
                (137
                )
                
                
                727Interest-bearing
      liabilities:Savings
      deposits
                
                
                16
                
                
                
                (213
                )
                
                
                (197
                )NOW
      deposits
                
                
                160
                
                
                
                (126
                )
                
                
                34Certificates
      of deposit
                
                
                120
                
                
                
                (312
                )
                
                
                (192
                )Borrowings
                
                
                128
                
                
                
                (4
                )
                
                
                124Total
      interest-bearing liabilities
                
                
                424
                
                
                
                (655
                )
                
                
                (231
                )Net
      interest income
                
                $
                440
                
                
                $
                518
                
                
                $
                958








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


2 Includes
tax-free securities, mortgage-backed securities,  asset-backed
securities and long term certificates of deposit.





GENERAL





Return on
average assets and return on average equity are common methods of measuring
operating results.  Annualized return on average assets increased to
0.82% for the quarter ended September 30, 2008 as compared to 0.69% for the
quarter ended September 30, 2007.  Annualized return on average equity
increased to 8.87% for the quarter ended September 30, 2008 as compared to 6.40%
for the quarter ended September 30, 2007.  The increase in return on
average assets and return on average equity was primarily the result of
noninterest income, and higher net interest income, partially offset by higher
noninterest expense. Net income amounted to $809,000 for the quarter ended
September 30, 2008 as compared to $569,000 for the prior year period, an
increase of $240,000 or 42.2%.  Average assets increased $63.6
million, or 19.2% to $395.5 million for the quarter ended September 30, 2008 as
compared to $331.9 million for the quarter ended September 30,
2007.  Average equity increased $910,000, or 2.6%, to $36.5 million
for the quarter ended September 30, 2008 as compared to $35.6 million for the
quarter ended September 30, 2007.





INTEREST
INCOME





Interest
income amounted to $5.3 million for the quarter ended September 30, 2008 as
compared to $4.6 million for the quarter ended September 30, 2007, an increase
of $727,000 or 15.8%.  The increase in securities and loan volumes had
the greatest impact on interest income when comparing the quarters ended
September 30, 2008 and 2007.  Average loan balances increased $33.3
million while the yield on loans decreased 32 basis points when comparing the
quarters ended September 30, 2008 and 2007.   Average securities
increased $32.7 million when comparing the quarters ended September 30, 2008 and
2007. The yield on such securities increased 41 basis points during this same
period.  The average balances of federal funds sold decreased $3.7
million, and the yield decreased 313 basis points when comparing the quarters
ended September 30, 2008 and 2007, resulting in a decrease in interest
income.   The decrease in yield was due to the recent reduction
in short-term rates implemented by the Federal Open Market Committee during the
quarter ended September 30, 2008.  The decrease in income on interest
bearing bank balances was primarily due to a 256 basis point decrease in yield
and a $1.6 million decrease in average balance when comparing the quarters ended
September 30, 2008 and 2007.





INTEREST
EXPENSE





Interest
expense amounted to $1.6 million for the quarter ended September 30, 2008 as
compared to $1.8 million for the quarter ended September 30, 2007, a decrease of
$231,000 or 12.5%.  Decreases in rates on interest-bearing liabilities
contributed to the decrease in overall interest expense.  Interest
expense was reduced $655,000 due to an 86 basis point decrease in the average
rate on interest-bearing liabilities, which was partially offset by an increase
in interest expense of $424,000 due to a $60.9 million increase in the average
balance of interest-bearing liabilities.  The average rate paid on NOW
deposits decreased 72 basis points when comparing the quarters ended September
30, 2008 and 2007, and the average balance of such accounts grew by $30.3
million.  The average balance of certificates of deposit grew by $12.2
million, and the average rate paid decreased by 145 basis points when comparing
the quarters ended September 30, 2008 and 2007.  The average balance
of savings and money market deposits increased by $3.2 million and the rate paid
decreased by 74 basis points when comparing the quarters ended September 30,
2008 and 2007.  The average balance on borrowings increased $15.3
million and the rate decreased 33 basis points when comparing the quarters ended
September 30, 2008 and 2007.





NET
INTEREST INCOME





Net
interest income increased $958,000 to $3.7 million for the quarter ended
September 30, 2008 as compared to $2.8 million for the quarter ended September
30, 2008.  Net interest spread increased 66 basis points to 3.66% as
compared to 3.00% when comparing the quarters ended September 30, 2008 and
2007.  Net interest margin increased 44 basis points to 3.98% for the
quarter ended September 30, 2008 as compared to 3.54% for the quarter ended
September 30, 2007.  The increase in average balances, along with the
widening of the net interest spread and margin led to an increase in net
interest income when comparing the quarters ended September 30, 2008 and
2007.





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 $195,000 for the quarter ended September
30, 2008 and $143,000 for the quarter ended September 30, 2007.  The
increase in the level of provision was partially a result of growth in the loan
portfolio, the recent increases in the level of loan delinquencies, and an
increase in the amount of loan charge-offs.  At September 30, 2008,
nonperforming assets were 0.45% of total assets and nonperforming loans were
0.78% of total loans.   The Company has not been an originator of
“no documentation” mortgage loans and the loan portfolio does not include any
mortgage loans that the Company classifies as sub-prime.





NONINTEREST
INCOME





Noninterest
income amounted to $1.0 million for the quarter ended September 30, 2008 as
compared to $1.1 million for the quarter ended September 30, 2007, a decrease of
$50,000 or 4.6%.  One factor that affected noninterest income was the
other-than-temporary impairment associated with the bankruptcy filing of Lehman
Brothers Holdings, Inc. (“Lehman”).  The Company recorded an
other-than-temporary impairment of $221,000 ($135,000 net of tax) on a Lehman
debt security held by the Company. The majority of the $171,000 increase in the
other elements of noninterest income was from services fees on various accounts,
including debit card fees.





NONINTEREST
EXPENSE





Noninterest
expense amounted to $3.4 million for the quarter ended September 30, 2008 as
compared to $2.9 million for the quarter ended September 30, 2007, an increase
of $455,000 or 15.7%.       Salaries and
employee benefits increased $484,000 when comparing quarters ended September 30,
2008 and 2007.  The Company accrued $351,000 toward the expected
future termination of its currently frozen defined benefit plan during the
quarter ended September 30, 2008.  Additional expenses such as
compensation and depreciation due to the new Chatham branch which opened in
January 2008 also contributed to the higher noninterest expense.





INCOME
TAXES





The
provision for income taxes directly reflects the expected tax associated with
the pre-tax income generated for the given year and certain regulatory
requirements.  The effective tax rate was 33.1% for the quarter ended
September 30, 2008, compared to 29.7% for the quarter ended September 30,
2007.   The increased effective tax rate was due to a lesser
portion of pre-tax income from tax-exempt income.





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 $10.8 million at September 30, 2008.  The
unused portion of overdraft lines of credit and premium overdraft privilege
amounted to $9.6 million, the unused portion of home equity lines of credit
amounted to $8.8 million, and the unused portion of commercial lines of credit
amounted to $4.2 million at September 30, 2008.  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 a new branch
location in Ravena, New York.  It is expected that this branch will be
open during the third quarter of fiscal 2009.   It is expected
that the Company will have sufficient cash or other means of liquidity to fund
this project.





The Bank
of Greene County and Greene County Commercial Bank met all applicable regulatory
capital requirements at September 30, 2008 and June 30,
2008.  Consolidated shareholders’ equity represented 8.4% of total
assets at September 30, 2008 and 9.6% of total assets of June 30,
2008.





On
October 14, 2008, the U.S. Treasury announced that it would purchase equity
stakes in a number of banks and savings and loan associations.  Under
the Capital Purchase Program of the Troubled Assets Relief Program (“TARP”),
$250 billion of the $700 billion authorized by the Emergency Economic
Stabilization Act of 2008 will be made available by the U.S. Treasury to a
variety of U.S. financial institutions in exchange for preferred
stock.  In connection with its purchase of preferred stock, the U.S.
Treasury will receive warrants to purchase common stock with an aggregate market
price equal to 15% of the preferred investment.  Financial
institutions that take part in the TARP Capital Purchase Program will be
required to adopt the U.S. Treasury’s standards for executive compensation and
corporate governance for the period during which the U.S. Treasury holds equity
issued under the TARP Capital Purchase Program.  The U.S. Treasury
also announced that nine major financial institutions had already agreed to
participate in the TARP Capital Purchase Program, and numerous other financial
institutions have subsequently agreed to take part.





On
October 14, 2008, the FDIC announced the establishment of the Temporary
Liquidity Guarantee Program, which was designed to strengthen confidence and
encourage liquidity in the banking system by guaranteeing the (1) newly issued
senior unsecured debt and (2) non-interest-bearing transaction accounts of
participating institutions.  All eligible entities will be covered
under the program unless they opt out of one or both of these components by
December 5, 2008 (an extension from the original opt-out date of November 13,
2008).  Following that deadline, institutions that have opted out of
either or both components cannot then opt in.  Similarly, institutions
that have opted in by the December 5th
deadline may not then opt out.  The Temporary Liquidity Guarantee
Program will be in effect through December 31, 2009.





The
Company  intends to submit an application to the U.S. Treasury to
receive equity capital through the TARP Capital Purchase Program by the November
14, 2008 deadline.  As of this date, we have not applied to the FDIC
to opt in or out of the Temporary Liquidity Guarantee
Program.  However, as the details and ramifications of these and any
other plans that may be introduced are clarified, we will continue to review
them in order to determine whether or not we should participate in
them.





Item
3.   Quantitative and Qualitative Disclosures About
Market Risk





Not
applicable to smaller reporting companies.





Item
4T.  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
1A.   Risk Factors


Not
applicable to smaller reporting companies.








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


a)
            Not
      applicable


b)
            Not
      applicable


c)
            The
      following table presents a summary of the Company’s share repurchases
      during the quarter ended September 30,
2008.





Period
              Total
      Number of Shares Purchased
              Average
      Price Paid Per Share
              Total
      Number of Shares Purchased as Part of Publicly Announced Program
      (1)
              Maximum
      Number of Shares That May yet be Purchased Under the Program
      (1)July
      1 – September 30, 2008
              ---
              ---
              ---
              29,868





(1) On
August 22, 2007, the Board of Directors authorized a stock repurchase program
pursuant to which the Company intends to repurchase up to 5% of its outstanding
shares (excluding shares held by Greene County Bancorp, MHC, the Company’s
mutual holding company), or up to 92,346 shares.  As of September 30,
2008, the Company had repurchased 62,478 shares in accordance with the stock
repurchase program.





Item
3.     Defaults Upon Senior
Securities


Not
applicable





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





On July
29, 2008, the Company held a special meeting of shareholders.  At the
meeting, a proposal to adopt the Greene County Bancorp, Inc. 2008 Equity
Incentive Plan was approved.  There were no broker
non-votes.  The votes cast for and against this proposal were as
follows:





For                      Against                      Abstain





Number of
votes                                                     3,262,537
                107,463                      
16,189








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
14, 2008





By: /s/ Donald E.
Gibson











Donald E.
Gibson


President
and Chief Executive Officer

















Date:  November
14, 2008





By: /s/ Michelle
Plummer











Michelle
Plummer


Executive
Vice President, Chief Financial Officer, and Chief Operating
Officer











EXHIBIT 31.1





Certification
of Chief Executive Officer


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





I, Donald
E. Gibson, certify that:





1.
            I
      have reviewed this quarterly report on Form 10-Q 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
      registrant’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)) and internal
      control over financial reporting (as defined in Exchange Act Rules
      13a-15(f) and 15d-15(f) for the registrant 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)
designed such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles;


c)
evaluated the effectiveness of the registrant’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


d)
disclosed in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’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
      registrant’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 registrant’s internal control over financial
reporting.








Date:
November 14, 2008                                                                            /s/Donald E.
Gibson


Donald E. Gibson, 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-Q 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
      registrant’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)) and internal
      control over financial reporting (as defined in Exchange Act Rules
      13a-15(f) and 15d-15(f) for the registrant 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)
designed such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles;


c)
evaluated the effectiveness of the registrant’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


d)
disclosed in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’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
      registrant’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 registrant’s internal control over financial
reporting.





Date:
November 14,
2008                                                                           /s/Michelle
Plummer


Michelle M. Plummer,


Executive Vice President, Chief Financial Officer and Chief Operating
      Officer





EXHIBIT 32.1





Statement
of Chief Executive Officer


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











Donald E.
Gibson, 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-Q for the quarter
ended September 30, 2008 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
14, 2008                                                                           /s/Donald E.
Gibson


Donald E. Gibson, 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-Q for the quarter
ended September 30, 2008 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 14,
2008                                                                           /s/Michelle
Plummer


Michelle M. Plummer,


Executive Vice President, Chief Financial Officer and Chief Operating
      Officer