As part of the reorganization and stock offering, the Bank established the Colonial Federal Savings Bank Employee Stock Ownership Plan ("ESOP") to provide eligible employees of the Bank the opportunity to own Company stock. The ESOP is a tax-qualified retirement plan for the benefit of Bank employees. The ESOP funded its purchase of 255,648 shares through a loan from the Company equal to 100% of the purchase price of the common stock. The ESOP trustee will repay the loan principally through the Bank's contributions to the ESOP over the loan term of 25 years. Contributions are allocated to eligible participants on the basis of compensation, subject to federal limits. The number of shares committed to be released per year is 10,226.

At September 30, 2024, the principal balance on the ESOP loan was $2.4 million. The cost of shares issued to the ESOP, but not yet allocated to participants, is shown as a reduction of stockholders' equity. The Company records compensation expense for the ESOP equal to fair market value of shares when they are committed to be released from the suspense account to participants' accounts under the plan.


	September 30, 2024
Shares held by the ESOP include the following:
Allocated		20,452
Committed to be allocated		7,668
Unallocated		227,528
Total		255,648

The Bank participates in the Pentegra Defined Benefit Plan for Financial Institutions (the "Pentegra DB Plan"), a tax-qualified defined benefit pension plan. The Pentegra DB Plan operates as a multi-employer plan for accounting purposes and under the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code.

Pension expense under the Pentegra DB Plan amounted to $188,000 and $195,000 for three months ended September 30, 2024 and 2023, respectively. There were no contributions made to the Pentegra DB Plan during the three months ended September 30, 2024 and 2023.

The Bank has a savings plan which qualifies under Section 401(k) of the Internal Revenue Code. The plan provides for voluntary contributions by participating employees ranging from 2% to 15% of their compensation, subject to certain limitations. The Bank matches 10% of the employee’s voluntary contributions up to 3% of their compensation. Employer 401(k) plan contribution expense amounted to $5,000 and $6,000 for the three months ended September 30, 2024 and 2023, respectively.

The Bank has entered into a Supplemental Executive Retirement Plan (the “SERP”) with certain officers, which provides for payments upon attaining the retirement age noted in the SERP. The present value of these future payments is provided over the remaining terms of the officers’ employment and at September 30, 2024 and June 30, 2024, the accrued liability amounted to $958,000 and $941,000, respectively. SERP expense amounted to $16,000 for the three months ended September 30, 2024 and 2023. In connection with these SERPs, the Bank purchased life insurance policies, which had a cash surrender value of $6.1 million at September 30, 2024 and June 30, 2024.

In addition, the Bank provides death benefits for officers and directors of the Bank under the terms of Split Dollar Agreements. The Bank has purchased life insurance contracts in connection with these agreements and the cash surrender value of the policies were $4.6 million at September 30, 2024 and June 30, 2024. For the three months ended September 30, 2024 and 2023, post-retirement expense related to these obligations amounted to $11,000 and $19,000, respectively.