Employee Benefit Plans

12 Months Ended

Dec. 31, 2021

Note 16 – Employee Benefit Plans

401(k) Plans

As of December 31, 2021, the Company was operating under two different 401(k) plans.

Broadway Federal 401(k) Plan

The Broadway Federal Bank 401(k) benefit plan allows employee contributions for substantially all employees up to 15% of their compensation, which are matched at a rate equal to 50% of the first 6% of the compensation contributed. Expense totaled $142 thousand and $146 thousand for 2021 and 2020.

City First Bank 401(k) Plan

The City First Bank 401(k) benefit plan allows employee contributions for substantially all employees us to the IRS limit, 100% of which is matched by the Bank up to 3% of each employee’s contribution. In addition, City First Bank makes a non-elective safe harbor contribution of 3% of each eligible employee’s compensation.Expense for this plan totaled $174 thousand for 2021.

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. Dividends on allocated shares increase participant accounts. Dividends on unallocated shares will be used to repay the loan. At the end of employment, participants will receive shares for their vested balance. Compensation expense related to the ESOP was $109 thousand for 2021 and $68 thousand for 2020.

Shares held by the ESOP were as follows:

	December 31, 2021		December 31, 2020
	(Dollars in thousands)
Allocated to participants		1,087,216		1,065,275
Committed to be released		10,064		10,236
Suspense shares		521,618		562,391
Total ESOP shares		1,618,898		1,637,902
Fair value of unearned shares	$	1,454	$	1,040

During 2021 and 2020, 40,945 and 41,665 of ESOP shares were released for allocation to participants, respectively. The outstanding balance of unearned ESOP shares at December 31, 2021 and 2020 were $829 thousand and $893 thousand, respectively, which are shown as Unearned ESOP shares in the equity section of the consolidated statements of financial condition.