Employee Stock Ownership Plan

12 Months Ended

Jun. 30, 2024

Employee Stock Ownership Plan [Abstract]

Employee Stock Ownership Plan

Note 12. Employee Stock Ownership Plan

During fiscal 2009, the Company instituted an employee stock ownership plan.  The Home Federal Bank Employee Stock Ownership Plan (ESOP) enables all eligible employees of the Bank to share in the growth of the Company through the acquisition of stock.  Employees are generally eligible to participate in the ESOP after completion of one year of service and attaining the age of 21.

The ESOP purchased the statutory limit of eight percent of the shares sold in our initial public offering completed on January 18, 2005, excluding shares issued to Home Federal Mutual Holding Company of Louisiana.  This purchase was facilitated by a loan from the Company to the ESOP in the amount of $1.1 million.  The corresponding note is being repaid in 80 quarterly debt service payments of $23,000 on the last business day of each quarter, beginning March 31, 2005, at the rate of 5.25%.

As part of our second step conversion completed on December 22, 2010, the ESOP purchased six percent of the shares sold in the offering.  This purchase was facilitated by a loan from the Company to the ESOP in the amount of $1.2 million.  The corresponding note is being repaid in 80 quarterly debt service payments of $20,000 on the last business day of each quarter, beginning March 31, 2011, at the rate of 3.2%.

The loans are secured by a pledge of the ESOP shares.  The shares pledged as collateral are reported as unearned ESOP shares in the consolidated balance sheets.  The notes payable and the corresponding notes receivable have been eliminated in consolidation.

The Company may contribute to the ESOP, in the form of debt service, at the discretion of its board of directors.  Cash dividends on the Company’s unallocated stock shall be used to either repay the loan or be distributed to the participants in the ESOP.  If dividends are used to repay the loan, additional shares will be released from the suspense account and allocated to participants.  Shares are released for allocation to ESOP participants based on principal and interest payments of the note.  Compensation expense is recognized based on the number of shares allocated to ESOP participants each year and the average market price of the stock for the current year.  Released ESOP shares become outstanding for earnings per share computations.

As compensation expense is incurred, the unearned ESOP shares account is reduced based on the original cost of the stock.  The difference between the cost and the average market price of shares released for allocation is applied to additional paid-in capital.  ESOP compensation expense for the years ended June 30, 2024 and 2023, was approximately $313,000 and $403,000, respectively.

The ESOP shares as of June 30, 2024 and 2023, were as follows:

	2024		2023
Allocated and Committed to be Released
Shares, Beginning of Year		283,793		272,612
Shares Allocated and Committed to be Released
During the Year		22,046		22,046
Shares Distributed During the Year		-		(15,934	)
Shares Purchased During the Year		4,400		5,069
Unallocated and Unreleased Shares, as of Year End		81,053		103,099
Total ESOP Shares		391,292		386,892
Fair Value of Unreleased Shares (In Thousands)	$	930	$	1,448
Stock Price	$	11.47	$	14.04