ESOP Plan

6 Months Ended

Jun. 30, 2021

NOTE (11) – ESOP Plan

Employees participate in an Employee Stock Option Plan (“ESOP”) after attaining certain age and service requirements. In December 2016, the ESOP purchased 1,493,679 shares of the Company’s common stock at $1.59 per share, for a total cost of $2.4 million, of which $1.2 million was funded with a loan from the Company. The loan will be repaid from the Bank’s annual discretionary contributions to the ESOP, net of dividends paid, over a period of 20 years. Shares of the Company’s common stock purchased by the ESOP are held in a suspense account until released for allocation to participants. When loan payments are made, shares are allocated to each eligible participant based on the ratio of each such participant’s compensation, as defined in the ESOP, to the total compensation of all eligible plan participants. As the unearned shares are released from the suspense account, the Company recognizes compensation expense equal to the fair value of the ESOP shares during the periods in which they become committed to be released. To the extent that the fair value of the ESOP shares released differs from the cost of such shares, the difference is charged or credited to equity as additional paid-in capital. Any dividends on allocated shares increase participant accounts. Any dividends on unallocated shares will be used to repay the loan. Participants will receive shares for their vested balance at the end of their employment. Compensation expense related to the ESOP was $25 thousand and $15 thousand for the three months ended June 30, 2021 and 2020, respectively, and $47 thousand and $32 thousand for the six months ended June 30, 2021 and 2020, respectively.

Shares held by the ESOP were as follows:

	June 30, 2021		December 31, 2020
	(Dollars in thousands)

Allocated to participants		1,051,088		1,065,275
Committed to be released		30,708		10,236
Suspense shares		541,919		562,391
Total ESOP shares		1,623,715		1,637,902
Fair value of unearned shares	$	1,458	$	1,040

At June 30, 2021, 30,708 of ESOP shares were committed to be allocated to participants during 2021. During 2021 and 2020, 41,665 and 43,321 of ESOP shares were released for allocation to participants, respectively. Unearned shares, which are reported as Unearned ESOP shares in the equity section of the consolidated statements of financial condition, were $861 thousand and $893 thousand at June 30, 2021 and December 31, 2020, respectively.