STOCK-BASED COMPENSATION

12 Months Ended

Jun. 30, 2022

Share-Based Payment Arrangement [Abstract]

The Company has an equity incentive plan, the 2014 Plan, which provides for the granting of non-qualified and incentive stock options, restricted stock and restricted stock units, stock appreciation rights and other awards to employees, directors and consultants. The Plan is designed to encourage selected employees and directors to improve operations and increase profits, and to accept or continue employment or association with the Company through participation in the growth in the value of the common stock. The Plan requires that option exercise prices be not less than fair market value per share of common stock on the option grant date for incentive and non-qualified options. The options issued under the Plans generally vest in between three and five years. Option expiration dates are established by the Plans’ administrator but may not be later than ten years after the date of the grant.

2014 Plan. In October 2021, the Company’s Board of Directors and stockholders, respectively, approved the 2014 Plan, as amended and restated. The number of shares authorized for issuance pursuant to awards under the 2014 Plan is 5,680,000, less restricted stock unit awards granted, plus any restricted stock units that become available upon the forfeiture, expiration, cancellation or settlement in cash awards outstanding under the 2014 Plan. At June 30, 2022, 1,883,720 shares of common stock remained available for issuance pursuant to grant awards under the 2014 Plan.

Effective July 1, 2017 the Company entered into an employment agreement with its Chief Executive Officer (the “Agreement”) that authorizes an award of restricted stock units (the “RSU award”). The RSU award is an equity-based award and carries a service condition and a market condition that incorporates a measurement of the Company’s total stock return to shareholders in comparison to the total stock return of the ABA Nasdaq Community Bank Index. The accounting grant date of the RSU award is July 1, 2017 and expensing of the RSU award began on this date at the fair value measurement amount as determined by the Company’s valuation process. The Company utilized a Monte Carlo simulation to estimate the value of path-dependent options and determined the fair value using an expected return based on the 5-year US Treasury constant maturity rate, an equity volatility based on 6-month and 1-year historical daily trading history, market capitalization, and stock price for the RSU award. On July 1, 2017, the estimated fair value of the RSU award was $20.5 million, which vests in five tranches over a total period of nine years. As of June 30, 2022, unrecognized stock compensation expense to be expensed over the remaining four years is $2.5 million.

Effective January 1, 2022 the “Agreement” for the RSU award automatically renewed for one additional fiscal year (the “Renewed RSU Award”) through June 2023. The accounting grant date of the Renewed RSU Award is January 1, 2022 and the charge related to the Renewed RSU Award was recorded over the period beginning on the grant date at fair value of the grant. The Company utilized a Monte Carlo simulation with key inputs of an expected return on the average of the 1 and 2 year US Treasury constant maturity rate, an equity volatility based on 1.5 year historical daily trading history, market capitalization, and stock price for the Renewed RSU Award. The estimated fair value of the Renewed RSU Award was $8.8 million, which vests over a total period of five years. Unrecognized compensation expense to be expensed over the remaining five years related to the Renewed RSU award is $7.6 million at June 30, 2022 and is included in the table below. The actual award will be determined by the actual performance of Company’s total stock return in comparison to the total stock return of the ABA Nasdaq Community Bank Index in the respective periods.

At June 30, 2022 unrecognized compensation expense related to non-vested awards aggregated to $38.1 million and is expected to be recognized in future periods as follows:


(Dollars in thousands)	Stock Award Compensation Expense
For the fiscal year ending June 30:
2023	$	18,300
2024	13,081
2025	5,313
2026	989
2027	400

Total	$	38,083

The following table presents the status and changes in restricted stock units for the periods indicated:


	Restricted Stock Units	Weighted-Average Grant-Date Fair Value












Non-vested balance at June 30, 2021	1,220,470	$	30.18
Granted	1,021,428	48.12
Vested	(745,584)
Forfeitures	(145,551)
Non-vested balance at June 30, 2022	1,350,763	$	41.16

The total fair value of shares vested during the year ended June 30, 2022 was $33.3 million. The weighted-average contractual term for restricted stock units as of June 30, 2022 was 1.3 years. The Company provides an employer matching contribution of stock to the Company’s 401(k) plan, based on an employee’s designated deferral of their eligible compensation. The contribution made during the year ended June 30, 2022, was 44,817 shares with a fair market value of $2.5 million.