Employee Stock Ownership Plan

9 Months Ended

Sep. 30, 2022

Employee Stock Ownership Plan

Employee Stock Ownership Plan

NOTE 8 – Employee Stock Ownership Plan

The Company maintains a leveraged employee stock ownership plan (“ESOP”) that covers substantially all employees. The Bank makes annual contributions to the ESOP equal to the ESOP’s debt service. The ESOP shares initially were pledged as collateral for this debt. As the debt is repaid, shares are released from collateral and allocated to active participants, based on the proportion of debt service paid in the year. Because the debt is intercompany, it is eliminated in consolidation for presentation in these financial statements. The shares pledged as collateral are reported as unearned ESOP shares in the balance sheet.

As shares are committed to be released from collateral and allocated to active participants, the Company reports compensation expense equal to the current market price of the shares and the shares will become outstanding for earnings-per-shares (EPS) computations. During the nine months ended September 30, 2022 and 2021, 22,941 and 22,941 shares were committed to be released, respectively. During the nine months ended September 30, 2022 the average fair value per share of stock was $12.19 resulting in total ESOP compensation expense of $277 for the nine months ended September 30, 2022. During the nine months ended September 30, 2021 the average fair value per share

of stock was $11.20 resulting in total ESOP compensation expense of $257 for the nine months ended September 30, 2021.

The ESOP shares as of September 30, 2022 and December 31, 2021 were as follows:

	September 30, 2022		December 31, 2021
Shares allocated to active participants		92,889		62,305
Shares committed to be released and allocated to participants		22,941		30,584
Shares distributed		(4,414)		—
Total unallocated shares		527,568		550,509
Total ESOP shares		638,984		643,398
Fair value of unallocated shares (based on $11.90 and $11.80 share price at September 30, 2022 and December 31, 2021, respectively)	$	6,278	$	6,496