XML 35 R21.htm IDEA: XBRL DOCUMENT v3.25.0.1
Employee Stock Ownership Plan
 12 Months Ended
Dec. 31, 2024
Retirement Benefits [Abstract]  
Employee Stock Ownership Plan Employee Stock Ownership Plan
The Bank maintains an ESOP which all full-time employees are eligible to participate in after they attain age 21 and complete one year of service during which they work at least 1000 hours. ESOP shares are allocated among participants on the basis of compensation earned during the year. Employees are fully vested in their ESOP account after the completion of five years of credited service or completely, if service was terminated due to death, retirement, disability or change in control of the Company. ESOP participants are entitled to receive distributions from the ESOP account only upon termination of service, which includes retirement and death, except that a participant may elect to have dividends distributed as a cash payment on a quarterly basis.
Over the years, the ESOP has borrowed from the Company to purchase shares of common stock. During 2024, the ESOP had one outstanding loan agreement with the Bank (“the 2018 loan”), while during 2023 the ESOP had two outstanding loan agreements with the Bank (“the 2018 loan” and “the 2021 loan”).
The 2018 loan originally allowed the ESOP to borrow an additional $8.4 million from the Company at a fixed interest rate of 3.25%, which matures on December 31, 2026, to purchase 292,592 shares of common stock. The 2021 loan originally allowed the ESOP to borrow an additional $3.2 million from the Company at a fixed interest rate of 0.22% to purchase 145,693 shares of common stock, which matured on December 31, 2023.
Both loans are to be repaid from contributions by the Bank to the ESOP trustee. The Bank is required to make contributions to the ESOP in amounts at least equal to the principal and interest requirement of the debt.
The Bank’s obligation to make such contributions is reduced to the extent of any dividends paid by the Company on unallocated shares and any investment earnings realized on such dividends. As of December 31, 2024 and 2023, contributions to the ESOP, which were used to fund principal and interest payments on the ESOP loans, totaled $1.5 million and $2.7 million, respectively. During 2024 and 2023, $158,000 and $254,000, respectively, of dividends paid on unallocated ESOP shares were used for debt service. At December 31, 2024 and 2023, the loan had an outstanding balance of $2.9 million and $4.2 million, respectively, and the ESOP had unallocated shares of 131,672 and 197,588, respectively. At December 31, 2024, the unallocated shares had a fair value of $2.4 million. The unamortized balance of the ESOP is shown as unallocated common stock held by the ESOP and is reflected as a reduction of stockholders’ equity.
For the year ended December 31, 2024 and 2023, the Bank recorded compensation expense related to the ESOP of $1.1 million and $2.1 million, respectively, which included $124,000 and $341,000 related to a decrease in compensation to reflect the decrease in the average fair value of shares committed to be released and allocated shares below the Bank’s cost. For the year ended December 31, 2022, the Bank recorded compensation expense related to the ESOP of $2.5 million, which included $82,000 of additional compensation expense to reflect the increase in the average fair value of shares committed to be released and allocated shares in excess of the Bank’s cost. As of December 31, 2024, 2,885,479 shares had been allocated to participants and 65,916 shares were committed to be released for services rendered in 2024.