XML 25 R12.htm IDEA: XBRL DOCUMENT v3.24.4
STOCK-BASED COMPENSATION AND STOCK REPURCHASE PROGRAM
 12 Months Ended
Sep. 30, 2024
Stock-Based Compensation and Stock Repurchase Program [Abstract]  
STOCK-BASED COMPENSATION AND STOCK REPURCHASE PROGRAM

NOTE C – STOCK-BASED COMPENSATION AND STOCK REPURCHASE PROGRAM

 

The Company follows FASB ASC Section 718, Compensation-Stock Compensation, which covers a wide range of share-based compensation arrangements including share options, restricted share plans, performance-based awards, share appreciation rights, and employee share purchase plans. ASC 718 requires that compensation cost relating to share-based payment transactions be recognized in financial statements. The cost is measured based on the fair value of the equity or liability instruments issued.

 

ASC 718 also requires the Company to realize as a financing cash flow rather than an operating cash flow, as previously required, the benefits of realized tax deductions in excess of previously recognized tax benefits on compensation expense. In accordance with SEC Staff Accounting Bulletin (“SAB”) No. 107, the Company classified share-based compensation for employees and outside directors within “compensation and employee benefits” in the Consolidated Statements of Income to correspond with the same line item as the cash compensation paid.

 

Stock options generally vest over a five-year service period and expire ten years from issuance. Management recognizes compensation expense for all option grants over the awards’ respective requisite service periods. The fair values of all option grants were estimated using the Black-Scholes option-pricing model. Management recognizes compensation expense for the fair values of these awards, which have graded vesting, on a straight-line basis over the requisite service period of the awards.

 

Restricted shares generally vest over a five-year service period on the anniversary of the grant date. Once vested, these awards are irrevocable. The product of the number of shares granted and the grant date market price of the Company’s common stock determine the fair value of restricted shares under the Company’s restricted stock plans. Management recognizes compensation expense for the fair value of restricted shares on a straight-line basis over the requisite service period.

 

The Company’s 2022 Equity Compensation Plan provided for grants of up to 391,000 shares to be allocated between incentive and non-qualified stock options and restricted stock awards to officers, employees and directors of the Company and Magyar Bank. At September 30, 2024, 293,200 options and 124,320 shares of restricted stock had been awarded from the plan.

 

The following is a summary of the status of the Company’s stock option activity and related information for the year ended September 30, 2024:

 

   Shares   Weighted
Average
Exercise Price		   Weighted
Average
Remaining
Contractual Life
in Years		   Aggregate
Intrinsic
Value		 
                 
Balance at September 30, 2023   293,200   $12.58    8.98   $
—
 
Granted   
—
    
—
    —    
—
 
Exercised   
—
    
—
    —    
—
 
Forfeited   
—
    
—
    —    
—
 
Expired   
—
    
—
    —    
—
 
Balance at September 30, 2024   293,200   $12.58    7.98   $
—
 
                     
Exercisable at September 30, 2024   117,280   $12.58    7.98   $
—
 

 

The following is a summary of the status and changes of the Company’s non-vested restricted shares as of September 30, 2024 and during the year then ended:

 

   Shares   Weighted
Average Grant
Date Fair Value		 
Balance at September 30, 2023   124,320   $12.63 
Granted   
—
    
—
 
Vested   (31,080)   12.63 
Forfeited   
—
    
—
 
Balance at September 30, 2024   93,240   $12.63 

 

Stock option and stock award expenses included with compensation expense were $254 thousand and $392 thousand, respectively, for the year ended September 30, 2024. Stock option and stock award expenses included with compensation expense were $259 thousand and $405 thousand, respectively, for the year ended September 30, 2023.

 

At September 30, 2024, total compensation cost not yet recognized for the Company’s unvested stock options and stock awards was $1.9 million. The Company had no other stock-based compensation plans as of September 30, 2024 except as disclosed below.

 

The Company has an Employee Stock Ownership Plan ("ESOP") for the benefit of employees who meet certain eligibility requirements. The ESOP trust purchases shares of common stock in the open market using proceeds of a loan from the Company. The loan bears a fixed interest rate of 3.25% with principal and interest payable annually in equal installments over 30 years and is secured by shares of the Company’s stock. The Bank makes cash contributions to the ESOP on an annual basis sufficient to enable the ESOP to make the required loan payments to the Company. As the debt is repaid, shares are released as collateral and allocated to qualified employees. Accordingly, the shares pledged as collateral are reported as unearned ESOP shares in the Consolidated Balance Sheets. The Company accounts for its ESOP in accordance with FASB ASC Topic 718, “Employer’s Accounting for Employee Stock Ownership Plans.” As shares are released from collateral, the Company reports compensation expense equal to the current market price of the shares, and the shares become outstanding for earnings per share computations.

 

The following table presents the components of the ESOP shares for the years ended September 30, 2024 and 2023:

 

Unreleased shares at September 30, 2022   302,373 
Shares released for allocation during the year ended September 30, 2023   (12,060)
Unreleased shares at September 30, 2023   290,313 
Shares released for allocation during the year ended September 30, 2024   (12,150)
Unreleased shares at September 30, 2024   278,163 
Total released shares   186,940 
Total ESOP shares   465,103 

 

At September 30, 2024, ESOP shares allocated to participants totaled 186,940. Unallocated ESOP shares held in suspense totaled 278,163 with an aggregate fair value of $3.4 million. The Company's contribution expense for the ESOP was $155 thousand and $122 thousand for years ended September 30, 2024 and 2023, respectively.

 

In 2022, the Company announced the authorization of a stock repurchase plan pursuant to which the Company intends to repurchase up to an additional 5% of its outstanding shares, or up to 337,146 shares, under which 296,736 shares had been repurchased at an average price of $11.92 through September 30, 2024. Under this stock repurchase program, 40,410 shares of the 337,146 shares authorized remained available for repurchase as of September 30, 2024. The Company’s intended use of the repurchased shares is for general corporate purposes. The timing of the repurchases will depend on certain factors, including but not limited to, market conditions and prices, the Company’s liquidity requirements and alternative uses of capital.