Employee Benefits

12 Months Ended

Jun. 30, 2026

Employee Benefits

Employee Benefits

NOTE 9: Employee Benefits

401(k) Retirement Plan. The Bank has a 401(k) retirement plan that covers substantially all eligible employees. The Bank makes “safe harbor” matching contributions of up to 4% of eligible compensation, depending upon the percentage of eligible pay deferred into the plan by the employee. Additional profit-sharing contributions of 5% of eligible salary have been accrued for the plan year ended June 30, 2026, which the board of directors authorizes based on management recommendations and financial performance for fiscal 2026. Total 401(k) expense for fiscal 2026, 2025, and 2024, was $3.3 million, $2.4 million, and $2.8 million, respectively. At June 30, 2026 and 2025, 401(k) plan participants held approximately 424,000 and 418,000 shares, respectively, of the Company’s stock in the plan. Employee deferrals and safe harbor contributions are fully vested. Profit-sharing or other contributions vest over a period of five years.

2003 Stock Option Plan. The Company adopted a stock option plan in October 2003 (the 2003 Plan). Under the plan, the Company granted options to purchase 242,000 shares (split-adjusted) to employees and directors, of which, options to purchase 197,000 shares (split-adjusted) have been exercised, and options to purchase 45,000 shares (split-adjusted) have been forfeited. Under the 2003 Plan, exercised options may be issued from either authorized but unissued shares, or treasury shares. At the 2017 annual meeting, shareholders approved the 2017 Omnibus Incentive Plan, which provided that no further awards would be made under the 2003 Plan.

As of June 30, 2026, no options remained outstanding and there was no remaining unrecognized compensation expense related to unvested stock options under the 2003 Plan. No options to purchase shares were vested in fiscal 2026, 2025, or 2024. There were no shares exercised in fiscal 2026 or fiscal 2025, and 10,000 shares were exercised in fiscal 2024.

2017 Omnibus Incentive Plan. The Company adopted an equity-based incentive plan in October 2017 (the 2017 Plan). Under the 2017 Plan, the Company reserved for issuance 500,000 shares of common stock for awards to employees and directors, against which full value awards (stock-based awards other than stock options and stock appreciation rights) are to be counted on a 2.5-for-1 basis. The 2017 Plan authorized awards to be made to employees, officers, and directors by a committee of outside directors. The committee held the power to set vesting requirements for each award under the 2017 Plan. Under the 2017 Plan, stock awards and shares issued pursuant to exercised options may be issued from either authorized but unissued shares, or treasury shares.

Under the 2017 Plan, as of June 30, 2026, options to purchase 161,500 shares had been granted to employees and directors, of which 18,200 options had been exercised, 18,300 had been forfeited, and 125,000 remained outstanding. As of June 30, 2026, there was $435,000 in remaining unrecognized compensation expense related to unvested stock options under the 2017 Plan, which will be recognized over the remaining weighted average vesting period. The aggregate intrinsic value of in-the-money stock options outstanding under the 2017 Plan at June 30, 2026, was $4.3 million, and there were no options exercisable that were out-of-the-money at June 30, 2026, with a strike price in excess of the market price. The intrinsic value of options vested in fiscal 2026, 2025, and 2024 was $592,000, $218,000, and $126,000, respectively.

Under the 2017 Plan, full value awards totaling 26,600 were issued to employees and directors in fiscal 2024, and none in fiscal 2025 or fiscal 2026. All full value awards were in the form of either:

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restricted stock vesting at the rate of one-fifth of such shares per year,

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performance-based restricted stock vesting at up to 20% of such shares per year, contingent on the achievement of specified profitability targets over a trailing three-year period,

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restricted stock vesting at the rate of one-third of such shares per year, or

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restricted stock vesting after a three-year service requirement.

During fiscal 2026, 2025, and 2024, full value awards of 15,403, 29,523, and 16,624 shares were vested, respectively. Compensation expense, in the amount of the fair market value of the common stock at the date of grant, is recognized pro-rata over the vesting period. Compensation expense for full value awards under the 2017 Plan for fiscal 2026, 2025, and 2024 was $536,000, $845,000, and $903,000, respectively. At June 30, 2026, unvested compensation expense related to full value awards under the 2017 Plan was approximately $833,000.

2024 Omnibus Incentive Plan. The Company adopted an equity-based incentive plan in October 2024 (the 2024 Plan). Under the 2024 Plan, the Company reserved for issuance 650,000 shares of common stock for awards to employees and directors, against which full value awards (stock-based awards other than stock options and stock appreciation rights) are to be counted on a 2.5-for-1 basis. The 2024 Plan authorized awards to be made to employees, officers, and directors by a committee of outside directors. The committee held the power to set vesting requirements for each award under the 2024 Plan. Under the 2024 Plan, stock awards and shares issued pursuant to exercised options may be issued from either authorized but unissued shares, or treasury shares.

Under the 2024 Plan, as of June 30, 2026, options to purchase 34,250 shares had been granted to employees and directors, of which none had been exercised or forfeited, and 34,250 remained outstanding. As of June 30, 2026, there was $411,000 in remaining unrecognized compensation expense related to unvested stock options under the 2024 Plan, which will be recognized over the remaining weighted average vesting period. The aggregate intrinsic value of in-the-money stock options outstanding under the 2024 Plan at June 30, 2026, was $626,000, and there were no options exercisable that were out-of-the-money at June 30, 2026, with a strike price in excess of the market price. The intrinsic value of options vested in fiscal 2026 was $38,000, and $0 in fiscal 2025.

Under the 2024 Plan, full value awards totaling 25,000 and 22,800 shares were issued to employees and directors in fiscal 2026 and 2025, respectively. All full value awards were in the form of either:

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restricted stock vesting at the rate of one-fifth of such shares per year,

●

performance-based restricted stock vesting at up to 20% of such shares per year, contingent on the achievement of specified profitability targets over a trailing three-year period.

During fiscal 2026, full value awards of 4,550 shares were vested, and none were vested in fiscal 2025. Compensation expense, in the amount of the fair market value of the common stock at the date of grant, is recognized pro-rata over the vesting period. Compensation expense for full value awards under the 2024 Plan for fiscal years 2026 and 2025 was $388,000 and $115,000, respectively. At June 30, 2026, unvested compensation expense related to full value awards under the 2024 Plan was approximately $2.3 million.

Changes in options outstanding under the 2003 Plan, the 2017 Plan, and the 2024 Plan were as follows:


		2026					2025					2024
		Weighted					Weighted					Weighted
		Average					Average					Average
		Price			Number		Price			Number		Price			Number
Outstanding at beginning of year		$	42.76		152,500		$	34.43		140,500		$	39.63		148,000
Granted			56.58		22,250			60.42		12,000			40.74		23,500
Exercised			37.67		(12,200)			—		—			24.49		(16,000)
Forfeited			43.78		(3,300)			—		—			42.35		(15,000)
Outstanding at year-end		$	45.06		159,250		$	42.76		152,500		$	34.43		140,500
Options exercisable at year-end		$	41.00		96,800		$	39.51		88,500		$	38.44		65,800

The following is a summary of the assumptions used in the Black-Scholes pricing model in determining the fair values of options granted during fiscal years 2026, 2025, and 2024:


		2026			2025			2024
Assumptions:
Expected dividend yield			1.79	%		1.52	%		2.06	%
Expected volatility			33.35	%		36.53	%		34.89	%
Risk-free interest rate			4.02	%		4.55	%		4.12	%
Weighted-average expected life (years)			10.00			10.00			10.00
Weighted-average fair value of options granted during the year		$	22.27		$	27.06		$	15.88

The table below summarizes information about stock options outstanding under the 2017 Plan, and the 2024 Plan at June 30, 2026:


Weighted		Options Outstanding					Options Exercisable
Average				Weighted					Weighted
Remaining				Average					Average
Contractual		Number		Exercise			Number		Exercise
Life		Outstanding		Price			Exercisable		Price
19 mo.		11,500			37.31		11,500			37.31
30 mo.		11,500			34.35		11,500			34.35
44 mo.		11,500			37.40		11,500			37.40
55 mo.		20,000			34.91		20,000			34.91
67 mo.		10,000			53.82		8,000			53.82
73 mo.		7,500			46.59		4,500			46.59
80 mo.		31,000			46.94		18,600			46.94
87 mo.		3,500			40.28		1,400			40.28
91 mo.		18,500			40.82		7,400			40.82
104 mo.		12,000			60.42		2,400			60.42
112 mo.		11,000			50.05		—			50.05
116 mo.		11,250			62.96		—			62.96