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 DECEMBER 31, 2008





OR





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








GREENE
COUNTY BANCORP, INC.





(Exact
Name of Registrant 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





Indicate
by check mark 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
February 12, 2009, the registrant had 4,305,670 shares of common stock issued at
$ 0.10 par value, and 4,103,120 shares were outstanding.





GREENE
      COUNTY BANCORP, INC.INDEXPART
      I.
            FINANCIAL
      INFORMATIONPageItem
      1.
            Financial
      Statements (unaudited)*   Consolidated
      Statements of Financial Condition
            3*   Consolidated
      Statements of Income
            4-5*   Consolidated
      Statements of Comprehensive Income
            6*   Consolidated
      Statements of Changes in Shareholders’ Equity
            7*   Consolidated
      Statements of Cash Flows
            8*   Notes
      to Consolidated Financial Statements
            9-15Item
      2.
            Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operation
            16-29Item
      3.
            Quantitative
      and Qualitative Disclosures About Market Risk
            29Item
      4T.
            Controls
      and Procedures
            29PART
      II.
            OTHER
      INFORMATIONItem
      1.
            Legal
      Proceedings
            30Item
      1A.
            Risk
      Factors
            30Item
      2.
            Unregistered
      Sales of Equity Securities and Use of Proceeds
            30Item
      3.
            Defaults
      Upon Senior Securities
            30Item
      4.
            Submission
      of Matters to a Vote of Security Holders
            30Item
      5.
            Other
      Information
            31Item
      6.
            Exhibits
            31Signatures
            32Exhibit
      31.1 302 Certification of Chief Executive Officer
            33Exhibit
      31.2 302 Certification of Chief Financial Officer
            34Exhibit
      32.1 906 Statement of Chief Executive Officer
            35Exhibit
      32.2 906 Statement of Chief Financial Officer
            36








Greene County Bancorp, Inc.


Consolidated
Statements of Financial Condition


As
of December 31, 2008 and June 30, 2008


(Unaudited)


(In
thousands, except share and per share amounts)





ASSETS
            
            December 31, 2008
            
            
            June 30, 2008Cash
      and due from banks
            
            $
            9,785
            
            
            $
            7,297Federal
      funds sold
            
            
            591
            
            
            
            1,365Total
      cash and cash equivalents
            
            
            10,376
            
            
            
            8,662Long
      term certificate of deposit
            
            
            1,000
            
            
            
            1,000Securities
      available for sale, at fair value
            
            
            108,251
            
            
            
            96,692Securities
      held to maturity, at amortized cost
            
            
            38,824
            
            
            
            15,457Federal
      Home Loan Bank stock, at cost
            
            
            1,341
            
            
            
            1,386Loans
            
            
            264,063
            
            
            
            240,146Allowance
      for loan losses
            
            
            (2,208
            )
            
            
            (1,888
            )Unearned
      origination fees and costs, net
            
            
            316
            
            
            
            182Net
      loans receivable
            
            
            262,171
            
            
            
            238,440Premises
      and equipment
            
            
            15,778
            
            
            
            15,108Accrued
      interest receivable
            
            
            2,507
            
            
            
            2,139Prepaid
      expenses and other assets
            
            
            614
            
            
            
            724Other
      real estate owned
            
            
            100
            
            
            
            ---Total
      assets
            
            $
            440,962
            
            
            $
            379,608LIABILITIES
      AND SHAREHOLDERS’ EQUITYNoninterest
      bearing deposits
            
            $
            36,494
            
            
            $
            41,798Interest
      bearing deposits
            
            
            344,907
            
            
            
            279,633Total
      deposits
            
            
            381,401
            
            
            
            321,431Borrowings
      from FHLB, short term
            
            
            ---
            
            
            
            1,000Borrowings
      from FHLB, long term
            
            
            19,000
            
            
            
            19,000Accrued
      expenses and other liabilities
            
            
            2,508
            
            
            
            1,910Total
      liabilities
            
            
            402,909
            
            
            
            343,341SHAREHOLDERS’
      EQUITYPreferred
      stock,Authorized
      1,000,000 shares; none issued
            
            
            ---
            
            
            
            ---Common
      stock, par value $.10 per share;Authorized:12,000,000
      sharesIssued:
      4,305,670 sharesOutstanding:  4,103,120
      shares at December 31, 2008and
      4,095,528 shares at June 30, 2008;
            
            
            431
            
            
            
            431Additional
      paid-in capital
            
            
            10,376
            
            
            
            10,267Retained
      earnings
            
            
            28,413
            
            
            
            27,183Accumulated
      other comprehensive income (loss)
            
            
            362
            
            
            
            (9
            )Treasury
      stock, at cost 202,550 shares at December 31,2008,
      and 210,142 shares at June 30, 2008
            
            
            (1,529
            )
            
            
            (1,586
            )Unearned
      ESOP shares, at cost
            
            
            ---
            
            
            
            (19
            )Total
      shareholders’ equity
            
            
            38,053
            
            
            
            36,267Total
      liabilities and shareholders’ equity
            
            $
            440,962
            
            
            $
            379,608See
      notes to consolidated financial statements.








Greene County Bancorp, Inc.


Consolidated
Statements of Income


For
the Six Months Ended December 31, 2008 and 2007


(Unaudited)


(In
thousands, except share and per share amounts)


2008
            
            
            2007Interest
      income:Loans
            
            
            $
            7,989
            
            
            $
            7,214Investment
      securities – taxable
            
            
            
            799
            
            
            
            504Mortgage-backed
      securities
            
            
            
            1,865
            
            
            
            868Tax
      exempt securities
            
            
            
            455
            
            
            
            539Interest
      bearing deposits and federal funds sold
            
            
            
            30
            
            
            
            256Total
      interest income
            
            
            
            11,138
            
            
            
            9,381Interest
      expense:Interest
      on deposits
            
            
            
            3,100
            
            
            
            3,726Interest
      on borrowings
            
            
            
            342
            
            
            
            93Total
      interest expense
            
            
            
            3,442
            
            
            
            3,819Net
      interest income
            
            
            
            7,696
            
            
            
            5,562Provision
      for loan losses
            
            
            
            613
            
            
            
            278Net
      interest income after provision for loan losses
            
            
            
            7,083
            
            
            
            5,284Noninterest
      income:Service
      charges on deposit accounts
            
            
            
            1,562
            
            
            
            1,327Debit
      card fees
            
            
            
            452
            
            
            
            387Investment
      services
            
            
            
            134
            
            
            
            187E-commerce
      fees
            
            
            
            130
            
            
            
            129Net
      loss on sale of available-for-sale securities
            
            
            
            (12
            )
            
            
            ---Write
      down for impairment of available-for-sale security
            
            
            
            (221
            )
            
            
            ---Other
      operating income
            
            
            
            184
            
            
            
            226Total
      noninterest income
            
            
            
            2,229
            
            
            
            2,256Noninterest
      expense:Salaries
      and employee benefits
            
            
            
            3,735
            
            
            
            3,108Occupancy
      expense
            
            
            
            551
            
            
            
            458Equipment
      and furniture expense
            
            
            
            342
            
            
            
            424Service
      and data processing fees
            
            
            
            632
            
            
            
            525Computer
      supplies and support
            
            
            
            155
            
            
            
            158Advertising
      and promotion
            
            
            
            144
            
            
            
            84Other
            
            
            
            954
            
            
            
            1,097Total
      noninterest expense
            
            
            
            6,513
            
            
            
            5,854Income
      before provision for income taxes
            
            
            
            2,799
            
            
            
            1,686Provision
      for income taxes
            
            
            
            958
            
            
            
            491Net
      income
            
            
            $
            1,841
            
            
            $
            1,195Basic
      EPS
            
            
            $
            0.45
            
            
            $
            0.29Basic
      shares outstanding
            
            
            
            4,099,154
            
            
            
            4,137,088Diluted
      EPS
            
            
            $
            0.45
            
            
            $
            0.29Diluted
      average shares outstanding
            
            
            
            4,120,398
            
            
            
            4,182,920Dividends
      per share
            
            
            $
            0.34
            
            
            $
            0.39See
      notes to consolidated financial statements.





Greene County Bancorp, Inc.


Consolidated
Statements of Income


For
the Three Months Ended December 31, 2008 and 2007


(Unaudited)


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


2008
            
            
            2007Interest
      income:Loans
            
            
            $
            4,079
            
            
            $
            3,656Investment
      securities – taxable
            
            
            
            437
            
            
            
            248Mortgage-backed
      securities
            
            
            
            1,058
            
            
            
            475Tax
      exempt securities
            
            
            
            224
            
            
            
            264Interest
      bearing deposits and federal funds sold
            
            
            
            4
            
            
            
            129Total
      interest income
            
            
            
            5,802
            
            
            
            4,772Interest
      expense:Interest
      on deposits
            
            
            
            1,653
            
            
            
            1,924Interest
      on borrowings
            
            
            
            172
            
            
            
            47Total
      interest expense
            
            
            
            1,825
            
            
            
            1,971Net
      interest income
            
            
            
            3,977
            
            
            
            2,801Provision
      for loan losses
            
            
            
            418
            
            
            
            135Net
      interest income after provision for loan losses
            
            
            
            3,559
            
            
            
            2,666Noninterest
      income:Service
      charges on deposit accounts
            
            
            
            776
            
            
            
            696Debit
      card fees
            
            
            
            222
            
            
            
            204Investment
      services
            
            
            
            52
            
            
            
            95E-commerce
      fees
            
            
            
            60
            
            
            
            59Net
      loss on sale of available-for-sale securities
            
            
            
            (12
            )
            
            
            ---Other
      operating income
            
            
            
            85
            
            
            
            106Total
      noninterest income
            
            
            
            1,183
            
            
            
            1,160Noninterest
      expense:Salaries
      and employee benefits
            
            
            
            1,731
            
            
            
            1,588Occupancy
      expense
            
            
            
            284
            
            
            
            238Equipment
      and furniture expense
            
            
            
            178
            
            
            
            210Service
      and data processing fees
            
            
            
            329
            
            
            
            268Computer
      supplies and support
            
            
            
            75
            
            
            
            78Advertising
      and promotion
            
            
            
            61
            
            
            
            42Other
            
            
            
            495
            
            
            
            525Total
      noninterest expense
            
            
            
            3,153
            
            
            
            2,949Income
      before provision for income taxes
            
            
            
            1,589
            
            
            
            877Provision
      for income taxes
            
            
            
            557
            
            
            
            251Net
      income
            
            
            $
            1,032
            
            
            $
            626Basic
      EPS
            
            
            $
            0.25
            
            
            $
            0.15Basic
      shares outstanding
            
            
            
            4,102,160
            
            
            
            4,136,620Diluted
      EPS
            
            
            $
            0.25
            
            
            $
            0.15Diluted
      average shares outstanding
            
            
            
            4,121,436
            
            
            
            4,180,155Dividends
      per share
            
            
            $
            0.17
            
            
            $
            0.14See
      notes to consolidated financial statements.





Greene
County Bancorp, Inc.


Consolidated
Statements of Comprehensive Income


For
the Six Months Ended December 31, 2008 and 2007


(Unaudited)


(In
thousands)


2008
            
            
            2007Net
      income
            
            
            $
            1,841
            
            
            $
            1,195Other
      comprehensive income:Unrealized
      holding gain arising during the six monthsended
      December 31, 2008 and 2007, net of incometax
      expense of $141 and $560, respectively.
            
            
            
            226
            
            
            
            877Accretion
      of unrealized loss on securities transferred to
      held-to-maturitynet
      of income tax of $2, and $0
            
            
            
            3
            
            
            
            ---Reclassification
      adjustment for loss on sale of available-for-sale
    securitiesrealized
      in net income net of income taxes of $5, and $0,
    respectively
            
            
            
            7
            
            
            
            ---Reclassification
      adjustment for impairment write-down on available-for-salesecurities
      realized in net income net of income taxes of $86, and $0,respectively.
            
            
            
            135
            
            
            
            ---Total
      other comprehensive income
            
            
            
            371
            
            
            
            877Comprehensive
      income
            
            
            $
            2,212
            
            
            $
            2,072


Greene
County Bancorp, Inc.


Consolidated
Statements of Comprehensive Income


For
the Three Months Ended December 31, 2008 and 2007


(Unaudited)


(In
thousands)


2008
            
            
            2007Net
      income
            
            
            $
            1,032
            
            
            $
            626Other
      comprehensive income:Unrealized
      holding gain arising during the three months ended December
      31,2008
      and 2007, net of income tax expense of $323 and $269,
      respectively
            
            
            
            512
            
            
            
            422Accretion
      of unrealized loss on securities transferred to
      held-to-maturitynet
      of income tax of $2, and $0
            
            
            
            3
            
            
            
            ---Reclassification
      adjustment for loss on sale of available-for-sale
    securitiesrealized
      in net income net of income taxes of $5, and $0,
    respectively
            
            
            
            7
            
            
            
            ---Total
      other comprehensive income
            
            
            
            522
            
            
            
            422Comprehensive
      income
            
            
            $
            1,554
            
            
            $
            1,048


See
notes to consolidated financial statements.








Greene County Bancorp, Inc.


Consolidated
Statements of Changes in Shareholders’ Equity


For
the Six Months Ended December 31, 2008 and 2007


(Unaudited)


(Dollars
in thousands)








AccumulatedAdditional
            
            Other
            
            Unearned
            TotalCapital
            Paid
      – In
            Retained
            Comprehensive
            Treasury
            ESOP
            Shareholders’Stock
            Capital
            Earnings
            Income
            Stock
            Shares
            Equity(loss)Balance
      atJune
      30, 2007
            $431
            $10,319
            $25,962
            ($400)
            ($828)
            ($69)
            $35,415ESOP
      shares earned
            
            55
            
            
            
            30
            85Options
      exercised
            
            (9)
            
            
            31
            
            22Tax
      effect, Options
            
            3
            
            
            
            
            3Shares
      repurchased
            
            
            
            
            (153)
            
            (153)Dividends
      declared
            
            
            (720)
            
            
            
            (720)Net
      income
            
            
            1,195
            
            
            
            1,195Adoption
      of FIN 48
            
            
            (218)
            
            
            
            (218)Unrealized
      gain on securities,  net
            
            
            
            877
            
            
            877Balance
      atDecember
      31, 2007
            $431
            $10,368
            $26,219
            $477
            ($950)
            ($39)
            $36,506Balance
      atJune
      30, 2008
            $431
            $10,267
            $27,183
            ($9)
            ($1,586)
            ($19)
            $36,267ESOP
      shares earned
            
            43
            
            
            
            19
            62Options
      exercised
            
            (27)
            
            
            57
            
            30Stock
      options earned
            
            93
            
            
            
            
            93Dividends
      declared
            
            
            (611)
            
            
            
            (611)Net
      income
            
            
            1,841
            
            
            
            1,841Unrealized
      gain on securities,  net
            
            
            
            371
            
            
            371Balance
      atDecember
      31, 2008
            $431
            $10,376
            $28,413
            $362
            ($1,529)
            --
            $38,053





See
notes to consolidated financial statements.





Greene County Bancorp, Inc.


Consolidated
Statements of Cash Flows


For
the Six Months Ended December 31, 2008 and 2007


(Unaudited)


(In
thousands)


2008
            
            
            2007Cash
      flows from operating activities:Net
      Income
            
            
            $
            1,841
            
            
            $
            1,195Adjustments
      to reconcile net income to cash provided by operating
      activities:Depreciation
            
            
            
            437
            
            
            
            509Net
      amortization of premiums and discounts
            
            
            
            112
            
            
            
            139Net
      amortization of deferred loan costs and fees
            
            
            
            65
            
            
            
            31Provision
      for loan losses
            
            
            
            613
            
            
            
            278ESOP
      compensation earned
            
            
            
            62
            
            
            
            85Stock
      option compensation
            
            
            
            93
            
            
            
            ---Write-down
      of impairment of available-for-sale securities
            
            
            
            221
            
            
            
            ---Net
      loss on sale of available-for-sale securities
            
            
            
            12
            
            
            
            ---Net
      increase (decrease) in accrued income taxes
            
            
            
            223
            
            
            
            (122
            )Net
      increase in accrued interest receivable
            
            
            
            (368
            )
            
            
            (34
            )Net
      decrease in prepaid and other assets
            
            
            
            68
            
            
            
            104Net
      increase (decrease) in other liabilities
            
            
            
            183
            
            
            
            (126
            )Net
      cash provided by operating activities
            
            
            
            3,562
            
            
            
            2,059Cash
      flows from investing activities:Available for sale
      securities:Proceeds
      from maturities and calls of securities
            
            
            
            5,844
            
            
            
            5,652Proceeds
      from sale of securities
            
            
            
            4,587
            
            
            
            ---Purchases
      of securities
            
            
            
            (50,436
            )
            
            
            (18,055
            )Principal
      payments on securities
            
            
            
            5,291
            
            
            
            5,731Held to maturity
      securities:Proceeds
      from maturities and calls of securities
            
            
            
            1,558
            
            
            
            130Purchases
      of securities and other investments
            
            
            
            (3,846
            )
            
            
            ---Principal
      payments on securities
            
            
            
            2,336
            
            
            
            20Net
      redemption (purchase) of Federal Home Loan Bank Stock
            
            
            
            45
            
            
            
            (180
            )Net
      increase in loans receivable
            
            
            
            (24,509
            )
            
            
            (15,491
            )Purchases
      of premises and equipment
            
            
            
            (1,107
            )
            
            
            (1,025
            )Net
      cash used in investing activities
            
            
            
            (60,237
            )
            
            
            (23,218
            )Cash
      flows from financing activities:Net
      decrease in short-term FHLB advances
            
            
            
            (1,000
            )
            
            
            ---Proceeds
      of long-term FHLB borrowings
            
            
            
            ---
            
            
            
            4,000Dividends
      paid
            
            
            
            (611
            )
            
            
            (720
            )Proceeds
      from exercise of stock options
            
            
            
            30
            
            
            
            22Purchase
      of treasury stock
            
            
            
            ---
            
            
            
            (153
            )Net
      increase in deposits
            
            
            
            59,970
            
            
            
            13,015Net
      cash provided by financing activities
            
            
            
            58,389
            
            
            
            16,164Net
      increase (decrease) in cash and cash equivalents
            
            
            
            1,714
            
            
            
            (4,995
            )Cash
      and cash equivalents at beginning of period
            
            
            
            8,662
            
            
            
            14,026Cash
      and cash equivalents at end of period
            
            
            $
            10,376
            
            
            $
            9,031





Non-cash
      investing activities:Foreclosed
      loans transferred to other real estate owned
            $100
            
            $---Reclassification
      of available-for-sale securities to held-to-maturity
      securities
            23,754
            
            16,535See
      notes to consolidated financial statements.





Greene County Bancorp, Inc.


Notes
to Consolidated Financial Statements


As
of and for the Six Months and Three Months Ended December 31, 2008 and
2007








(1)  Basis
of Presentation





The
accompanying consolidated balance sheet information 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 and six months ended December 31, 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 and six
month periods ended December 31, 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 policy relates to the allowance
for loan losses.  It is based on management’s estimation of an amount
that is intended to absorb losses in the existing portfolio.  The
allowance for loan losses is established through a provision for losses based on
management’s evaluation of the risk inherent in the loan portfolio, the
composition of the portfolio, specific impaired loans and current economic
conditions.  Such evaluation, which includes a review of all loans for
which full collectibility may not be reasonably assured, considers among other
matters, the estimated net realizable value or the fair value of the underlying
collateral, economic conditions, historical loan loss experience, management’s
estimate of probable credit losses and other factors that warrant recognition in
providing for the allowance of loan losses.  However, this evaluation
involves a high degree of complexity and requires management to make subjective
judgments that often require assumptions or estimates about highly uncertain
matters.  This critical accounting policy and its application are
periodically reviewed with the Audit Committee and the Board of
Directors.





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 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 eleven 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)
            December
      31, 2008
            (Level
      1)
            (Level
      2)
            (Level
      3)Assets:Securities
      available-for-sale
            $108,251
            $56,725
            $51,526
            $---





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.





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 December 31, 2008, loans subject to
nonrecurring fair value measurement had a gross carrying amount of $248,000 and
a fair value of $168,000 with an associated valuation allowance
of $80,000.  These loans were classified as a Level 3
valuation.  Changes in fair value for the quarter and six months ended
December 31, 2008 was a decrease of $22,000 and $1,000, respectively, primarily
the result of a charge-off.




(5)  Earnings
Per Share





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








Net
      Income
            Weighted
      Average Number of Shares
              Outstanding
            Earnings
      Per ShareSix
      Months EndedDecember
      31, 2008:
            $1,841,000Basic
            
            4,099,154
            $0.45Effect
      of dilutive stock options
            
            21,244
            (0.00)Diluted
            
            4,120,398
            $0.45December
      31, 2007:
            $1,195,000Basic
            
            4,137,088
            $0.29Effect
      of dilutive stock options
            
            45,832
            (0.00)Diluted
            
            4,182,920
            $0.29Net
      Income
            Weighted
      Average Number of Shares
                Outstanding
            Earnings
      Per ShareThree
      Months EndedDecember
      31, 2008:
            $1,032,000Basic
            
            4,102,160
            $0.25Effect
      of dilutive stock options
            
            19,276
            (0.00)Diluted
            
            4,121,436
            $0.25December
      31, 2007:
            $626,000Basic
            
            4,136,620
            $0.15Effect
      of dilutive stock options
            
            43,535
            (0.00)Diluted
            
            4,180,155
            $0.15






(6)  Dividends





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 was
payable to stockholders of record as of November 15, 2008, and was 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
2,304,632 shares of Company stock it owns.





(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 December 31, 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 December 31, 2008.




In
January 2009, the FASB issued FSP EITF 99-20-1, “Amendments to the Impairment of
Guidance of EITF Issue No. 99-20” (FSP EITF 99-20-1). FSP EITF 99-20-1 amends
the impairment guidance in EITF Issue No. 99-20, “Recognition of Interest Income
and Impairment on Purchased Beneficial Interests and Beneficial Interests That
Continue to Be Held by a Transferor in Securitized Financial Assets”, to achieve
more consistent determination of whether an other-than-temporary impairment has
occurred. FSP EITF 99-20-1 also retains and emphasizes the objective of an
other-than-temporary impairment assessment and the related disclosure
requirements in SFAS No. 115, “Accounting for Certain Investments in Debt and
Equity Securities”, and other related guidance. FSP EITF 99-20-1 is effective
for interim and annual reporting periods ending after December 15, 2008, and
shall be applied prospectively. Retrospective application to a prior interim or
annual reporting period is not permitted. The Company is currently reviewing the
effect this new pronouncement will have on its consolidated financial
statements.






In
November 2008, the SEC released a proposed roadmap regarding the potential use
by U.S. issuers of financial statements prepared in accordance with
International Financial Reporting Standards (IFRS). IFRS is a comprehensive
series of accounting standards published by the International Accounting
Standards Board (“IASB”). Under the proposed roadmap, the Company may be
required to prepare financial statements in accordance with IFRS as early as
2014. The SEC will make a determination in 2011 regarding the mandatory adoption
of IFRS. The Company is currently assessing the impact that this potential
change would have on its consolidated financial statements, and it will continue
to monitor the development of the potential implementation of IFRS.








(9)    
 Stock-Based Compensation





At
December 31, 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 $56,000 and $93,000 in compensation costs and related income
tax benefit of $6,000 and $10,000 related to the Option Plan for the quarter and
six months ended December 31, 2008, respectively.  There was no
stock-based compensation expense recorded during the quarter or six months ended
December 31, 2007.   At December 31, 2008, there was $575,600 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 2.50 years.








A summary
of the Company’s stock option activity and related information for its option
plans for the six months ended December 31, 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
            (7,592)
            
            $3.94
            
            (5,580)
            
            $3.94Forfeited
            ---
            
            ---
            
            ---
            
            ---Outstanding
      at period end
            198,852
            
            $11.25
            
            67,084
            
            $4.60Exercisable
      at period end
            34,352
            
            $5.24
            
            67,084
            
            $4.60








The
following table presents stock options outstanding and exercisable at December
31, 2008:





Options
      Outstanding and ExercisableRange
      of Exercise Prices
            Number
      Outstanding
            Weighted
      Average Remaining Contractual Life
            Weighted
      Average Exercise Price$3.94
            25,852
            1.25
            $3.94$9.20
            8,500
            3.25
            $9.20$3.94-$9.20
            34,352
            1.75
            $5.24





The total
intrinsic value of the options exercised during the three and six months ended
December 31, 2008 was approximately $17,000 and $61,000,
respectively.  There were no stock options granted during the six
months ended December 31, 2007.  The Company had 164,500 non-vested
options outstanding at December 31, 2008 and no non-vested options outstanding
at or during the quarter ended December 31, 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 December 31, 2008,
the Company had repurchased 62,478 shares pursuant to this program at an average
cost of $12.79 per share.





(11)     
Subsequent Event





On
January 20, 2009, the Board of Directors declared a quarterly cash dividend of
$0.17 per share of Greene County Bancorp, Inc. common stock.  The
dividend reflected an annual cash dividend rate of $0.68 cents per share, which
was the unchanged from the dividend declared during the previous
quarter.  The dividend will be payable to stockholders of record as of
February 13, 2009, and will be paid on March 2, 2009.  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.





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





Overview
of the Company’s Activities and Risks





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





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





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





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





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





Special
Note Regarding Forward Looking Statements





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


(a)
            changes
      in general market interest rates,


(b)
            general
      economic conditions,


(c)
            legislative
      and regulatory changes,


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


(e)
            changes
      in the quality or composition of The Bank of Greene County’s loan
      portfolio or the consolidated investment portfolios of The Bank of Greene
      County, Greene County Commercial Bank 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 December 31, 2008 and June 30, 2008





ASSETS





Total
assets of the Company were $441.0 million at December 31, 2008 as compared to
$379.6 million at June 30, 2008, an increase of $61.4 million, or
16.2%.  Securities classified as both
available-for-sale  and held-to-maturity amounted to $147.1 million,
or 33.4% of assets, at December 31, 2008 as compared to $112.1 million, or 29.5%
of assets, at June 30, 2008, an increase of $35.0 million or
31.2%.   Securities purchases, including both available-for-sale
and held-to-maturity, totaled $54.3 million between June 30, 2008 and December
31, 2008.  These activities were partially offset by principal
pay-downs and maturities of $15.0 million and sales of $4.6 million over the
same time frame.  Loans grew by $24.0 million or 10.0% to $264.1
million at December 31, 2008 as compared to $240.1 million at June 30,
2008.





SECURITIES





Securities,
including both available-for-sale and held-to-maturity issues, increased $35.0
million or 31.2% to $147.1 million at December 31, 2008 as compared to $112.1
million at June 30, 2008.  Securities purchases totaled $54.3 million
during the six months ended December 31, 2008.  Purchases consisted of
$15.6 million of U.S. government sponsored enterprises bonds, $34.6 million of
mortgage-backed securities, and $4.1 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 $15.0 million, of which $5.2 million were mortgage-backed
securities, $4.2 million were state and political subdivision securities and
$5.5 million were U.S. government sponsored enterprises securities, and sales of
mortgage-backed securities of $4.6 million.





During
the quarter ended December 31, 2008, $23.8 million of securities
available-for-sale were transferred to held-to-maturity and included primarily
mortgage-backed securities.  These securities were transferred at fair
value which reflected a net unrealized loss of $338,000.  This
unrealized loss is being accreted to other comprehensive income over the
remaining average lives of these securities.  Additionally, during the
six months ended December 31, 2008, unrealized net gains on securities increased
$605,000.  Greene County Bancorp, Inc. holds 17.9% of the securities
portfolio at December 31, 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 atDecember
      31, 2008
            
            
            June
      30, 2008(Dollars
      in thousands)
            
            Balance
            
            
            Percentage
              of
      portfolio
            
            
            Balance
            
            
            Percentage
              of
      portfolioSecurities
      available-for-sale:U.S.
      government sponsored enterprises
            
            $
            26,494
            
            
            
            18.0
            %
            
            $
            16,146
            
            
            
            14.4
            %State
      and political subdivisions
            
            
            10,907
            
            
            
            7.4
            
            
            
            10,850
            
            
            
            9.7Mortgage-backed
      securities
            
            
            62,667
            
            
            
            42.6
            
            
            
            60,782
            
            
            
            54.2Asset-backed
      securities
            
            
            48
            
            
            
            0.1
            
            
            
            49
            
            
            
            0.1Corporate
      debt securities
            
            
            8,107
            
            
            
            5.5
            
            
            
            8,486
            
            
            
            7.5Total
      debt securities
            
            
            108,223
            
            
            
            73.6
            
            
            
            96,313
            
            
            
            85.9Equity
      securities and other
            
            
            28
            
            
            
            0.0
            
            
            
            379
            
            
            
            0.3Total
      available-for-sale securities
            
            
            108,251
            
            
            
            73.60
            
            
            
            96,692
            
            
            
            86.2Securities
      held-to-maturity:State
      and political subdivisions
            
            
            15,410
            
            
            
            10.5
            
            
            
            15,457
            
            
            
            13.8Mortgage-backed
      securities
            
            
            23,077
            
            
            
            15.7
            
            
            
            ---
            
            
            
            ---Other
            
            
            337
            
            
            
            0.2
            
            
            
            ---
            
            
            
            ---Total
      held-to-maturity securities
            
            
            38,824
            
            
            
            26.4
            
            
            
            15,457
            
            
            
            13.8Total
      securities
            
            $
            147,075
            
            
            
            100.0
            %
            
            $
            112,149
            
            
            
            100.0
            %




LOANS





Net loans
receivable increased to $262.2 million at December 31, 2008 from $238.4 million
at June 30, 2008, an increase of $23.8 million, or 10.0%.  The loan
growth experienced during the six months primarily consisted of $13.0 million in
residential mortgages, $6.6 million in commercial real estate loans, $1.0
million in construction and land loans, $2.2 million in home equity loans and
$1.4 million in commercial 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 December 31, 2008, declines in home values have
been modest in the Company’s market area.





(Dollars
      in  thousands)At
              December
      31, 2008
            
            
            Percentage
              of
      portfolio
            
            
            At
              June
      30, 2008
            
            
            Percentage
              of
      portfolioReal
      estate mortgagesResidential
            
            $
            171,156
            
            
            
            64.8
            %
            
            $
            158,193
            
            
            
            65.9
            %Construction
      and land
            
            
            13,256
            
            
            
            5.0
            
            
            
            12,295
            
            
            
            5.1Commercial
            
            
            36,993
            
            
            
            14.0
            
            
            
            30,365
            
            
            
            12.6Multifamily
            
            
            1,019
            
            
            
            0.4
            
            
            
            1,094
            
            
            
            0.5Home
      equity loans
            
            
            26,199
            
            
            
            9.9
            
            
            
            23,957
            
            
            
            10.0Commercial
      loans
            
            
            11,112
            
            
            
            4.2
            
            
            
            9,669
            
            
            
            4.0Installment
      loans
            
            
            3,889
            
            
            
            1.5
            
            
            
            4,172
            
            
            
            1.7Passbook
      loans
            
            
            439
            
            
            
            0.2
            
            
            
            401
            
            
            
            0.2Total
      loans
            
            $
            264,063
            
            
            
            100.0
            %
            
            $
            240,146
            
            
            
            100.0
            %Deferred
      fees and costs
            
            
            316
            
            
            
            
            
            
            
            182Less:
      Allowance for loan losses
            
            
            (2,208
            )
            
            
            
            
            
            
            (1,888
            )Net
      loans receivable
            
            $
            262,171
            
            
            
            
            
            
            $
            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
loss.  In addition, various regulatory agencies, as an integral part
of their examination process, periodically review The Bank of Greene County’s
allowance for loan losses.  Such agencies may require The Bank of
Greene County to recognize additions to the allowance based on their judgment
about information available to them at the time of their
examination.  The allowance for loan losses is increased by a
provision for loan losses (which results in a charge to expense) and recoveries
of loans previously charged off and is reduced by net
charge-offs.  The level of the provision for the six months ended
December 31, 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)
            
            Six
      months endedDecember
      31, 2008
            
            
            December
      31, 2007Balance
      at the beginning of the period
            
            $
            1,888
            
            
            $
            1,486Charge-offs:Residential
      mortgage
            
            
            65
            
            
            
            ---Commercial
      loan
            
            
            85
            
            
            
            15Installment
      loans to individuals
            
            
            49
            
            
            
            16Overdraft
      protection
            
            
            139
            
            
            
            115Total
      loans charged off
            
            
            338
            
            
            
            146Recoveries:Residential
      mortgage
            
            
            1
            
            
            
            ---Home
      equity loans
            
            
            ---
            
            
            
            27Installment
      loans to individuals
            
            
            18
            
            
            
            19Overdraft
      protection
            
            
            26
            
            
            
            30Total
      recoveries
            
            
            45
            
            
            
            76Net
      charge-offs
            
            
            293
            
            
            
            70Provisions
      charged to operations
            
            
            613
            
            
            
            278Balance
      at the end of the period
            
            $
            2,208
            
            
            $
            1,694Ratio
      of net charge-offs to average loans outstanding,
annualized
            
            
            0.23
            %
            
            
            0.06
            %Ratio
      of net charge-offs to nonperforming assets, annualized
            
            
            31.97
            %
            
            
            7.93
            %Allowance
      for loan loss to nonperforming loans
            
            
            127.41
            %
            
            
            95.92
            %Allowance
      for loan loss to total loans receivable
            
            
            0.84
            %
            
            
            0.76
            %








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 90 days or more at December 31, 2008 or June 30, 2008.











Analysis of Nonaccrual Loans
and Nonperforming Assets





(Dollars
      in thousands)
            
            At
      December 31, 2008
            
            
            At
      June 30, 2008Nonaccruing
      loans:Real
      estate mortgage loans:Residential
      mortgages loans (one- to-four family)
            
            $
            1,082
            
            
            $
            1,123Construction
      and land loans
            
            
            13
            
            
            
            38Commercial
      mortgage loans
            
            
            89
            
            
            
            91Multifamily
      mortgage loans
            
            
            26
            
            
            
            26Home
      equity
            
            
            344
            
            
            
            493Commercial
      loans
            
            
            142
            
            
            
            142Installment
      loans to individuals
            
            
            37
            
            
            
            26Total
      nonaccruing loans
            
            
            1,733
            
            
            
            1,939Foreclosed
      real estate
            
            
            100
            
            
            
            ---Total
      nonperforming assets
            
            $
            1,833
            
            
            $
            1,939Total
      nonperforming assets as a percentage of total assets
            
            
            0.42
            %
            
            
            0.51
            %Total
      nonperforming loans to total loans
            
            
            0.66
            %
            
            
            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.  Impaired loans totaled $248,000 as of December 31,
2008 of which $122,000 were nonaccrual.  The Company has allocated
approximately $80,000 of the allowance for loan losses for impaired loans as of
December 31, 2008.  Interest income of $32,000 and $46,000 was
recorded on nonaccrual loans based on cash payments received during the six
months ended December 31, 2008 and 2007, respectively.








DEPOSITS





Total
deposits increased to $381.4 million at December 31, 2008 from $321.4 million at
June 30, 2008, an increase of $60.0 million, or 18.7%.  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 $56.1 million to $102.9 million at
December 31, 2008 compared to $46.8 million at June 30, 2008. This increase was
primarily in NOW deposits.  Interest bearing checking accounts (NOW
accounts) increased $56.4 million or 70.9% to $135.9 million at December 31,
2008 as compared to $79.5 million at June 30, 2008.  Savings deposits
decreased $3.0 million or 4.1% to $69.7 million at December 31, 2008 as compared
to $72.7 million at June 30, 2008.    Money market deposits
increased $6.8 million to $44.8 million at December 31,
2008.   Certificates of deposit balances increased $5.0 million
between June 30, 2008 and December 31, 2008.  Noninterest bearing
deposits decreased $5.3 million to $36.5 million at December 31,
2008.




















(Dollars
      in  thousands)
            At
              December
      31, 2008
            Percentage
              of
      portfolio
            At
              June
      30, 2008
            Percentage
              of
      portfolioNoninterest
      bearing deposits
            $36,494
            9.6%
            $41,798
            13.0%Certificates
      of deposit
            94,454
            24.8
            89,470
            27.9Savings
      deposits
            69,722
            18.3
            72,706
            22.6Money
      market deposits
            44,816
            11.7
            37,970
            11.8NOW
      deposits
            135,915
            35.6
            79,487
            24.7Total
      deposits
            $381,401
            100.0%
            $321,431
            100.0%











BORROWINGS





At
December 31, 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
$37.7 million with the Federal Home Loan Bank.  At December 31, 2008,
there were no balances outstanding under these facilities.  Interest
rates on these lines are determined at the time of borrowing.





At
December 31, 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 28 months.  The remaining $5.0 million borrowing, which
carried a 3.64% interest rate at December 31, 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 December 31, 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 $38.1 million at December 31, 2008 from $36.3 million at
June 30, 2008, as net income of $1.8 million was partially offset by dividends
declared and paid of $611,000. Additionally, shareholders’ equity
increased  $371,000 as a result of unrealized securities gains, net of
tax.  Other changes in equity, totaling an $185,000 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 Six Months and Quarter Ended December 31, 2008 and
2007





Average
Balance Sheet





The
following table sets forth certain information relating to Greene County
Bancorp, Inc. for the six months and quarters ended December 31, 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 for the quarters
and six months ended December 31, 2008 and 2007.  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.





Six
Months Ended December 31, 2008 and 2007


(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
            $253,327
            $7,989
            6.31%
            $217,494
            $7,214
            6.63%Securities2
            137,074
            3,084
            4.50
            89,330
            1,885
            4.22Federal
      funds
            1,575
            12
            1.52
            7,147
            172
            4.81Interest
      bearing bank balances
            1,939
            18
            1.86
            3,888
            84
            4.32FHLB
      stock
            1,449
            35
            4.83
            663
            26
            7.84Total
      interest earning assets
            395,364
            11,138
            5.63%
            318,522
            9,381
            5.89%Cash
      and due from banks
            6,058
            
            
            5,508Allowance
      for loan losses
            (1,936)
            
            
            (1,564)Other
      non-interest earning assets
            17,965
            
            
            15,071Total
      assets
            $417,451
            
            
            $337,537Interest
      bearing liabilities:Savings
      and money market deposits
            $113,149
            $684
            1.21%
            $108,192
            $1,054
            1.95%NOW
      deposits
            112,879
            1,062
            1.88
            67,566
            922
            2.73Certificates
      of deposit
            91,360
            1,354
            2.96
            79,694
            1,750
            4.39Borrowings
            21,426
            342
            3.19
            5,130
            93
            3.63Total
      interest bearing liabilities
            338,814
            3,442
            2.03%
            260,582
            3,819
            2.93%Non-interest
      bearing deposits
            39,601
            
            
            40,760Other
      non-interest bearing liabilities
            2,255
            
            
            314Shareholders’
      equity
            36,781
            
            
            35,881Total
      liabilities and equity
            $417,451
            
            
            $337,537Net
      interest income
            
            $7,696
            
            
            $5,562Net
      interest rate spread
            
            
            3.60%
            
            
            2.96%Net
      interest margin
            
            
            3.89%
            
            
            3.49%Average
      interest earning assets toaverage
      interest bearing liabilities
            
            
            116.69%
            
            
            122.23%





_______________________________________________





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


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





Quarter Ended December 31,
2008 and 2007





(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
            $259,785
            $4,079
            6.28%
            $221,451
            $3,656
            6.60%Securities2
            154,228
            1,707
            4.43
            91,408
            973
            4.26Federal
      funds
            842
            1
            0.48
            8,335
            97
            4.66Interest
      bearing bank balances
            873
            3
            1.37
            3,212
            32
            3.99FHLB
      stock
            1,501
            12
            3.20
            669
            14
            8.37Total
      interest earning assets
            417,229
            5,802
            5.56%
            325,075
            4,772
            5.87%Cash
      and due from banks
            5,775
            
            
            5,298Allowance
      for loan losses
            (1,959)
            
            
            (1,619)Other
      non-interest earning assets
            18,390
            
            
            14,777Total
      assets
            $439,435
            
            
            $343,531Interest
      bearing liabilities:Savings
      and money market deposits
            $111,145
            $323
            1.16%
            $104,455
            $496
            1.90%NOW
      deposits
            136,205
            645
            1.89
            75,863
            540
            2.85Certificates
      of deposit
            92,821
            685
            2.95
            81,651
            888
            4.35Borrowings
            22,574
            172
            3.05
            5,261
            47
            3.57Total
      interest bearing liabilities
            362,745
            1,825
            2.01%
            267,230
            1,971
            2.95%Non-interest
      bearing deposits
            37,374
            
            
            39,997Other
      non-interest bearing liabilities
            2,241
            
            
            120Shareholders’
      equity
            37,075
            
            
            36,184Total
      liabilities and equity
            $439,435
            
            
            $343,531Net
      interest income
            
            $3,977
            
            
            $2,801Net
      interest rate spread
            
            
            3.55%
            
            
            2.92%Net
      interest margin
            
            
            3.81%
            
            
            3.45%Average
      interest earning assets toaverage
      interest bearing liabilities
            
            
            115.02%
            
            
            121.65%













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


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





Rate
/ Volume Analysis





The
following Rate / Volume tables present 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.





Six
      Months
              Ended
      December 31,
            Three
      Months
              Ended
      December 31,(Dollars
      in thousands)
            2008
      versus 2007
            2008
      versus 2007Increase/(Decrease)
            Total
            Increase/(Decrease)
            TotalDue
      to
            Increase/
            Due
      to
            Increase/Interest-earning
      assets:
            Volume
            Rate
            (Decrease)
            Volume
            Rate
            (Decrease)Loans
      receivable, net1
            $1,138
            ($363)
            $775
            $607
            ($184)
            $423Securities2
            1,067
            132
            1,199
            694
            40
            734Federal
      funds
            (85)
            (75)
            (160)
            (48)
            (48)
            (96)Interest-bearing
      bank balances
            (31)
            (35)
            (66)
            (15)
            (14)
            (29)FHLB
      stock
            22
            (13)
            9
            10
            (12)
            (2)Total
      interest-earning assets
            2,111
            (354)
            1,757
            1,248
            (218)
            1,030Interest-bearing
      liabilities:Savings
      deposits
            46
            (416)
            (370)
            30
            (203)
            (173)NOW
      deposits
            488
            (348)
            140
            330
            (225)
            105Certificates
      of deposit
            231
            (627)
            (396)
            110
            (313)
            (203)Borrowings
            262
            (13)
            249
            133
            (8)
            125Total
      interest-bearing liabilities
            1,027
            (1,404)
            (377)
            603
            (749)
            (146)Net
      interest income
            $1,084
            $1,050
            $2,134
            $645
            $531
            $1,176










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


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








OVERVIEW





Annualized
return on average assets and return on average equity are common methods of
measuring operating results.  Annualized return on average assets
increased to 0.88% for the six months and 0.94% for the quarter ended December
31, 2008, as compared to 0.71% for the six months and 0.73% for the quarter
ended December 31, 2007.  Annualized return on average equity
increased to 10.01% for the six months and 11.13% for the quarter ended December
31, 2008 as compared to 6.66% for the six months and 6.91% for the quarter ended
December 31, 2007.  The increase in return on average assets and
return on average equity was primarily the result of higher net interest income,
partially offset by higher noninterest expense and provision for loan
losses.   Net income amounted to $1.8 million and $1.2 million
for the six months ended December 31, 2008 and 2007, respectively, an increase
of $646,000 or 54.1% and amounted to $1.0 million and $626,000 for the quarters
ended December 31, 2008 and 2007, respectively, an increase of $406,000 or
64.9%.  Average assets amounted to $417.5 million for the six month
period ended December 31, 2008 as compared to $337.5 million for the same period
ended December 31, 2007, an increase of $80.0 million or
23.7%.  Average assets amounted to $439.4 million for the quarter
ended December 31, 2008 as compared to $343.5 million for the quarter ended
December 31, 2007, an increase of $95.9 million or 27.9%.  Average
equity amounted to $36.8 million for the six month period ended December 31,
2008 as compared to $35.9 million for the same period ended December 31, 2007,
an increase of $900,000 or 2.5%.  Average equity amounted to $37.1
million for the quarter ended December 31, 2008 as compared to $36.2 million for
the quarter ended December 31, 2007, an increase of $890,000 or
2.5%.








INTEREST
INCOME





Interest
income amounted to $11.1 million for the six months ended December 31, 2008 as
compared to $9.4 million for the six months ended December 31, 2007, an increase
of $1.7 million or 18.1%.  Interest income amounted to $5.8 million
for the quarter ended December 31, 2008 as compared to $4.8 million for the
quarter ended December 31, 2007, an increase of $1.0 million or
20.8%.  The increase in securities and loan volume had the greatest
impact on interest income when comparing the six months and quarters ended
December 31, 2008 and 2007.  Average loan balances increased $35.8
million for the six months ended December 31, 2008 as compared to December 31,
2007 while the yield decreased by 32 basis points when comparing the same
periods.  Average loan balances increased $38.3 million for the
quarter ended December 31, 2008 as compared to the quarter ended December 31,
2007 and the yield decreased by 32 basis point when comparing the same
periods.  The overall impact on interest income from securities was
positive with an increase in average balances of $47.7 million which was
complemented by a 28 basis point increase in yield when comparing the six months
ended December 31, 2008 and 2007 and a $62.8 million increase in average
balances and a 17 basis point increase in yield when comparing the quarters
ended December 31, 2008 and 2007.   The increase in yield on
securities for the quarter ended December 31, 2008 was primarily the result of
the recognition of discount accretion on securities called prior to maturity.
Average balances on short term investments such as interest bearing bank
balances and federal funds sold decreased $7.5 million and $9.8 million when
comparing the six months and quarters ended December 31, 2008 and
2007.  The sharp decrease in yield on these assets was due to the
recent reduction in short-term rates implemented by the Federal Open Market
Committee during the six month ended December 31, 2008.








INTEREST
EXPENSE





Interest
expense amounted to $3.4 million for the six months ended December 31, 2008, as
compared to $3.8 million for the six months ended December 31, 2007, a decrease
of $377,000.  Interest expense amounted to $1.8 million for the
quarter ended December 31, 2008, as compared to $2.0 million for the quarter
ended December 31, 2007, a decrease of $146,000.  Decreases in rates
on interest-bearing liabilities had the greatest impact on overall interest
expense.  Interest expense was reduced $1.4 million and $749,000 when
comparing the six months and quarters ended December 31, 2008 and 2007,
respectively, due to decreases of 90 basis points and 94 basis points,
respectively, in the average rate on interest-bearing liabilities in those same
periods.  This decrease was partially offset by a $1.0 million and
$603,000 increase in interest expense due to a $78.2 million and $95.5 million
increase in average balances when comparing the six months and quarters ended
December 31, 2008 and 2007, respectively.    The average
rate paid on NOW deposits decreased 85 basis points and 96 basis points,
respectively, when comparing the six months and quarters ended December 31, 2008
and 2007, and the average balance of such accounts grew by $45.3 million and
$60.3 million, respectively, when comparing the same periods, contributing to
the overall increase in interest expense on NOW deposit accounts.  The
average balance of certificates of deposit grew by $11.7 million and the average
rate paid decreased by 143 basis points when comparing the six months ended
December 31, 2008 and 2007.  The average balance of certificates of
deposit grew by $11.2 million and the average rate paid decreased by 140 basis
points when comparing the quarters ended December 31, 2008 and
2007.  The average balance of savings and money market deposits
increased by $5.0 million when comparing the six months ended December 31, 2008
and 2007 and increased by $6.7 million when comparing the quarters ended
December 31, 2008 and 2007. The average rate paid on savings and money markets
decreased 74 basis points when comparing both the six months and quarters ended
December 31, 2008 and 2007.   The average balance of borrowings
increased $16.3 million and $17.3 million when comparing the six months and
quarters ended December 31, 2008 and 2007.  The rate paid on these
borrowings decreased 44 basis points and 52 basis points when comparing the same
periods.








NET
INTEREST INCOME





Net
interest income increased $2.1 million to $7.7 million for the six months ended
December 31, 2008 compared to December 31, 2007 and increased $1.2 million to
$4.0 million for the quarter ended December 31, 2008 compared to December 31,
2007.     Net interest spread increased 64 basis points
to 3.60% for the six months ended December 31, 2008 from 2.96% for the six
months ended December 31, 2007, and 63 basis points to 3.55% for the quarter
ended December 31, 2008 as compared to 2.92% for the quarter ended December 31,
2007.  Net interest margin increased 40 basis points to 3.89% for the
six months ended December 31, 2008 from 3.49% for the six months ended December
31, 2007, and 36 basis points to 3.81% for the quarter ended December 31, 2008
as compared to 3.45% for the quarter ended December 31, 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 six
months and quarters ended December 31, 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 $613,000 and $278,000 for the six months
ended December 31, 2008 and 2007, respectively, an increase of
$335,000.  The provision for loan losses amounted to $418,000 and
$135,000 for the quarters ended December 31, 2008 and 2007, respectively, an
increase of $283,000.  The increase in the level of provision was
primarily a result of growth in the loan portfolio, an increase in delinquent
loans and an increase in the amount of loan charge-offs. Net charge-offs
amounted to $293,000 and $70,000 for the six months ended December 31, 2008 and
2007, respectively, an increase of $223,000.  The increase in the
level of charge-offs reflected the decline in the overall economy.  As
a result the level of allowance for loan losses to total loans receivable has
been increased to 0.84% as of December 31, 2008 as compared to 0.78% at
September 30, 2008, and 0.76% as of December 31, 2007.  Management
will continue to closely monitor asset quality and adjust the level of the
allowance for loan losses as judged necessary.  At December 31, 2008,
nonperforming assets were 0.42% of total assets and nonperforming loans were
0.66% 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 was flat when comparing the six months and quarters ended December 31,
2008 and 2007.  Noninterest income amounted to $2.2 million and $1.2
million for the six months and quarter ended December 31,
2008.    One factor that affected noninterest income for the
six months ended December 31, 2008 was the other-than-temporary impairment of
$221,000 ($135,000 net of tax) on a Lehman Brothers Holdings, Inc. debt security
held by the Company, which resulted from the bankruptcy filing of that company.
The Company also recorded a net loss on sale of investments during the quarter
ended December 31, 2008 totaling $12,000.   Excluding these
items, noninterest income increased $206,000 and $35,000 when comparing the six
months and quarters ended December 31, 2008 and 2007, respectively. The majority
of these increases in the other elements of noninterest income were from
services fees on various accounts, including debit card fees.











NONINTEREST
EXPENSE





Noninterest
expense amount to $6.5 million for the six months ended December 31, 2008 as
compared to $5.9 million for the six months ended December 30, 2007, an increase
of $659,000 or 11.3%.  Noninterest expense amounted to $3.2 million
for the quarter ended December 31, 2008 as compared to $2.9 million for the
quarter ended December 31, 2007, an increase of $204,000 or
6.9%.  Salaries and employee benefits increased $627,000 and $143,000
when comparing six months and quarters ended December 31, 2008 and 2007,
respectively.  The Company accrued $351,000 toward the expected future
termination of its currently frozen defined benefit plan during the six months
ended December 31, 2008.  Additional expenses such as compensation and
depreciation due to the opening of the new Chatham branch in January 2008, and
the staffing of the new Ravena branch in anticipation of its January 2009
opening, also contributed to the higher noninterest expense.








INCOME
TAXES





The
provision for income taxes reflected the expected tax associated with the
revenue generated for the given period and certain regulatory
requirements.  The effective tax rate was 34.2% for the six months
ended December 31, 2008, compared to 29.1% for the six months ended December 31,
2007.  The effective tax rate was 35.1% for the quarter ended December
31, 2008, compared to 28.6% for the quarter ended December 31,
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 $8.0 million at December 31, 2008.  The
unused portion of overdraft lines of credit amounted to $9.7 million, the unused
portion of home equity lines of credit amounted to $8.2 million, and the unused
portion of commercial lines of credit amounted to $3.8 million at December 31,
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 Federal Home Loan Bank of New
York.





The Bank
of Greene County and Greene County Commercial Bank met all regulatory capital
requirements at December 31, 2008 and June 30, 2008.  The Company’s
consolidated shareholders’ equity represented 8.63% of total assets at December
31, 2008 and 9.55% 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.  The Company has
submitted an application to the U.S. Treasury to receive equity capital through
the TARP Capital Purchase Program; the application is pending.  If
approved, the Company could receive proceeds from the sale of preferred stock
and warrants of up to $6.8 million.





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 has
opted in to both components of the Temporary Liquidity Guarantee
Program.








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 shares repurchased
      during the quarter ended December 31,
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)October
      1 – December 31, 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 December 31,
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
October 25, 2008, the Company held an annual meeting of
shareholders.  At the meeting, proposals to (1) elect Dennis R.
O’Grady and Martin C. Smith, to serve as directors of the Company for terms of
three years and until their respective successors have been elected, and (2)
ratify the engagement of Beard Miller Company LLP, to be the Company’s auditors
for the June 30, 2009 fiscal year were approved.  There were no broker
non-votes.  The votes cast for and against these proposals were as
follows:





Election to the Board of
Directors                                                     For                        
         Withheld





Dennis R.
O’Grady                                                                         3,684,393                                   2,240


Martin C.
Smith                                                                           
   3,684,393                                   2,240





Ratification of Appointment
of Beard Miller Company LLP


For                         
 Against                                Abstain





Number of
votes                                                                            3,684,068                           1,610                               
     955





The Board
of Directors consists of the following members:  Donald E. Gibson,
David H. Jenkins, Dennis O’Grady, Arthur Place, Charles Schaefer, Paul Slutzky
Martin C. Smith, and J. Bruce Whittaker.





Item 5.     Other
Information





(a)
            Not
      applicable





(b)
            There
      were no material changes to the procedures by which security holders may
      recommend nominees to the Company’s Board of Directors during the period
      covered by the Form 10-Q.





Item 6.     Exhibits





(a)
            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:  February
12, 2009





By: /s/ Donald E.
Gibson









Donald E.
Gibson


President
and Chief Executive Officer

















Date:  February
12, 2009





By: /s/ Michelle M.
Plummer











Michelle
M. 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:
February
12, 2009                                                                           _/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:
February 12,
2009                                                                           /s/Michelle M.
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 December 31, 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:
February
12, 2009                                                                           _/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 December 31, 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:
February 12,
2009                                                                           /s/Michelle M.
Plummer


Michelle M.
Plummer


Executive
      Vice President, Chief Financial Officer and Chief Operating
      Officer