NOTE 13. EMPLOYEE BENEFIT PLANS

401(k) Plan

The Company offers a 401(k) Plan to employees. Employees may contribute a percentage of their compensation subject to certain limits based on federal tax laws. The Company makes 401(k) Plan matching contributions equal to 100% of the first 5% of an employee’s compensation contributed to the 401(k) Plan. For the three and six months ended June 30, 2026, expense attributable to the 401(k) Plan amounted to $268 thousand and $709 thousand, respectively. For the three and six months ended June 30, 2025, expense attributable to the 401(k) Plan amounted to $257 thousand and $732 thousand, respectively.

Director and Executive Retirement Plans

The Company has adopted retirement benefit plans for the benefit of all members of the Board of Trustees of the Company and certain senior executives. Benefits are being accrued over the directors’ and executives’ required service periods. At June 30, 2026 and December 31, 2025, the Company has accrued $9.4 million and $8.9 million, respectively, related to these plans. For the three and six months ended June 30, 2026, expenses related to these plans amounted to $239 thousand and $464 thousand, respectively. For the three and six months ended June 30, 2025, expenses related to these plans amounted to $258 thousand and $810 thousand, respectively.

Incentive Compensation Plan

The Company has an Employee Bonus and Management Incentive Compensation Plan (the “Bonus Plan”) in which employees are eligible to participate. The Bonus Plan provides for awards based on a combination of Company and individual performance objectives being met subject to the approval of the Board of Directors. For the three and six months ended June 30, 2026, the amount charged to expense under the Bonus Plan amounted to $1.5 million and $2.7 million, respectively. For the three and six months ended June 30, 2025, expenses related to the Bonus Plan amounted to $853 thousand and $1.7 million, respectively.

Employee Stock Ownership Plan

As part of the Initial Public Offering ("IPO") completed on July 31, 2025, the Bank established a tax-qualified Employee Stock Ownership Plan ("ESOP") to provide eligible employees the opportunity to own Company shares retroactively with an effective date of January 1, 2025. The ESOP borrowed $16.1 million from the Company to purchase 1,606,100 common shares in the IPO. The loan is payable in annual installments over 20 years. As the loan is repaid to the Company, shares are released and allocated proportionally to eligible participants on the basis of each participant’s proportional share of compensation relative to the compensation of all participants. The unallocated ESOP shares are pledged as collateral on the loan.

The Company accounts for its ESOP in accordance with FASB Accounting Standards Codification ("ASC") 718-40, Compensation – Stock Compensation. Under this guidance, unreleased shares are deducted from stockholders’ equity as unearned ESOP shares in the accompanying consolidated balance sheets.

The Company recognizes compensation expense equal to the fair value of the ESOP shares during the periods in which they are committed to be released. To the extent that the fair value of the Company’s ESOP shares differs from the cost of such shares, the difference will be credited or debited to stockholders' equity. As the loan is internally leveraged, the loan receivable from the ESOP to the Company is not reported as an asset nor is the debt of the ESOP shown as a liability on the Company’s consolidated balance sheets.

For the three and six months ended June 30, 2026, the expenses related to the ESOP plan amounted to $371 thousand and $730 thousand, respectively. The following table presents share information held by the ESOP: