Employee Stock Option Plan (ESOP) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2026 | ||||||||||||||||||||||||||||||||||||||||||||||
| Share-Based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
| Employee Stock Option Plan (ESOP) | Note 9: Employee Stock Option Plan (ESOP) In connection with the Conversion, the Company established an Employee Stock Ownership Plan (“ESOP”) for the exclusive benefit of eligible employees. It is expected that the Bank will make annual contributions to the ESOP in amounts as defined by the ESOP loan documents. The contributions will be used to repay the ESOP loan. Certain ESOP shares are pledged as collateral for the ESOP loan. As the ESOP loan is repaid, shares are released from collateral and allocated to eligible participants, based on the proportion of loan repayments paid in the year. Shares allocated to eligible participants will become 100% vested upon completion of five years of service with the Bank, including years of service prior to the formation of the ESOP. The ESOP activity for the three months ended March 31, 2026 is as follows:
The fair value of unallocated ESOP shares totaled $879,000 and $858,000 at March 31, 2026 and December 31, 2025, respectively. In connection with the Company’s Conversion, the ESOP borrowed $622,850 from the Company for the purpose of purchasing shares of the Company’s stock. A total of 62,285 shares were purchased with the loan proceeds. Company stock purchased by the ESOP is shown as a reduction of shareholders’ equity. The ESOP loan is expected to be repaid over a period of 20 years. Payments on the ESOP loan are scheduled to be made annually on December 31st of each year. Compensation expense is recognized over the service period based on the average fair value of the shares and totaled approximately $12,000 for the three months ended March 31, 2026. There was no ESOP compensation expense for the three months ended March 31, 2025. |
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