Benefit Plans

12 Months Ended

Jun. 30, 2012

Benefit Plans:

Benefit Plans

11.    Benefit Plans:

The Corporation has a 401(k) defined-contribution plan covering all employees meeting specific age and service requirements.  Under the plan, employees may contribute to the plan from their pretax compensation up to the limits set by the Internal Revenue Service.  The Corporation makes matching contributions up to 3% of participants’ pretax compensation.  Participants vest immediately in their own contributions with 100% vesting in the Corporation’s contributions occurring after six years of credited service.  The Corporation’s expense for the plan was approximately $563,000, $451,000 and $378,000 for the years ended June 30, 2012, 2011 and 2010, respectively.

The Corporation has a multi-year employment agreement and a post-retirement compensation agreement with one executive officer and a post-retirement compensation agreement with another executive officer, which requires payments of certain benefits upon retirement.  At June 30, 2012 and 2011, the accrued liability of the post-retirement compensation agreements was $3.9 million and $3.6 million, respectively; costs are being accrued and expensed annually.  For fiscal 2012 and 2011, the accrued expense for these liabilities was $318,000 and $235,000, respectively.  The current obligation for these post-retirement benefits was fully funded consistent with contractual requirements and actuarially determined estimates of the total future obligation.  The Corporation invests in BOLI to provide sufficient funding for these post-retirement obligations.  As of June 30, 2012 and 2011, the total outstanding cash surrender value of the BOLI was $6.3 million and $6.2 million, respectively.  For fiscal 2012, 2011 and 2010, the total non-taxable income from the BOLI was $236,000, $242,000 and $240,000, respectively.

Employee Stock Ownership Plan

A leveraged ESOP was established on June 27, 1996 for all employees who are age 21 or older and have completed one year of service with the Corporation during which they have served a minimum of 1,000 hours.  The ESOP borrowed $4.1 million from the Corporation to purchase 922,538 shares of the common stock issued in the conversion.  The loan was paid off as of March 31, 2011 and all of the shares have been allocated to the eligible participants.  Shares purchased with the loan proceeds were held in an unearned ESOP account and released on a pro-rata basis based on the distribution schedule and repayment of the ESOP loan.  The loan was principally repaid from the Corporation’s contributions to the ESOP over a period of 15 years.  Contributions to the ESOP and share releases from the unearned ESOP account were allocated among participants on the basis of compensation, as described in the plan, in the year of allocation.  As of June 30, 2012, there were no unallocated shares remaining in the ESOP.

Subsequent to the repayment of the ESOP loan described previously, the ESOP has become an unleveraged plan which recognizes compensation expense when the Bank contributes funds to the ESOP for the purchase of the Corporation’s common stock to be allocated to the ESOP participants.  Since the annual contributions are discretionary, the benefits payable under the ESOP cannot be estimated.

Benefits generally become 100% vested after six years of credited service.  Vesting accelerates upon retirement, death or disability of the participant or in the event of a change in control of the Corporation.  Forfeitures are reallocated among remaining participating employees in the same proportion as contributions.  Benefits are payable upon death, retirement, early retirement, disability or separation from service.

The net expense related to the ESOP for the years ended June 30, 2012, 2011 and 2010 was $375,000, $304,000 and $323,000, respectively.  The ESOP shares are allocated every calendar year end and the total shares allocated at December 31, 2011, 2010 and 2009 were 60,000 shares, 60,867 shares and 60,867 shares, respectively.