Incentive Plans

12 Months Ended

Jun. 30, 2019

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Note 12: Incentive Plans

As of June 30, 2019, the Corporation had three share-based compensation plans, which are described below. These plans are the 2013 Equity Incentive Plan (“2013 Plan”), the 2010 Equity Incentive Plan (“2010 Plan”) and the 2006 Equity Incentive Plan (“2006 Plan”). For the years ended June 30, 2019 and 2018, the compensation cost for these plans was $869,000 and $1.1 million, respectively.

Equity Incentive Plans. The Corporation established and the shareholders approved the 2013 Plan, the 2010 Plan and the 2006 Plan (collectively, the “Plans”) for directors, advisory directors, directors emeriti, officers and employees of the Corporation and its subsidiary. The 2013 Plan authorizes 300,000 stock options and 300,000 shares of restricted stock. The 2013 Plan also provides that no person may be granted more than 60,000 stock options or 45,000 shares of restricted stock in any one year. The 2010 Plan authorizes 586,250 stock options and 288,750 shares of restricted stock. The 2010 Plan also provides that no person may be granted more than 117,250 stock options or 43,312 shares of restricted stock in any one year. The 2006 Plan authorized 365,000 stock options and 185,000 shares of restricted stock. No new awards can be granted from the 2006 Plan.

Equity Incentive Plans - Stock Options. Under the Plans, options may not be granted at a price less than the fair market value at the date of the grant. Options typically vest over a five-year or shorter period as long as the director, advisory director, director emeritus, officer or employee remains in service to the Corporation. The options are exercisable after vesting for up to the remaining term of the original grant. The maximum term of the options granted is 10 years.

The fair value of each option grant is estimated using the Black-Scholes option valuation model with the following assumptions as of the grant date for the periods indicated. The expected volatility is based on implied volatility from historical common stock closing prices for the prior 84 months. The expected dividend yield is based on the most recent quarterly dividend on an annualized basis. The expected term is based on the historical experience of all fully vested stock option grants and is reviewed annually. The risk-free interest rate is based on the U.S. Treasury note rate with a term similar to the underlying stock option on the particular grant date.

	Fiscal 2019		Fiscal 2018
Expected volatility	16.5	%	—	%
Weighted-average volatility	16.5	%	—	%
Expected dividend yield	2.8	%	—	%
Expected term (in years)	7.5		—
Risk-free interest rate	2.1	%	—	%

In fiscal 2019, there were 90,000 options granted under the Plans, while 48,250 options were exercised and no options were forfeited. In fiscal 2018, there were no options granted under the Plans, while 83,750 options were exercised and 2,500 options were forfeited.

As of June 30, 2019 and 2018, there were 57,500 and 147,500 options, respectively, available for future grants under the Plans.

The following tables summarize the stock option activity in the Plans during the years ended June 30, 2019 and 2018:

Options	Shares		Weighted- Average Exercise Price	Weighted- Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value ($000)
Outstanding at June 30, 2017	615,250		$12.14
Granted	—		$—
Exercised	(83,750	)	$8.08
Forfeited	(2,500	)	$14.59
Outstanding at June 30, 2018	529,000		$12.77	5.27	$	3,353
Vested and expected to vest at June 30, 2018	490,850		$12.57	5.17	$	3,204
Exercisable at June 30, 2018	338,250		$11.36	4.55	$	2,612

Outstanding at June 30, 2018	529,000		$12.77
Granted	90,000		$20.19
Exercised	(48,250	)	$11.45
Forfeited	—		$—
Outstanding at June 30, 2019	570,750		$14.05	5.21	$	3,960
Vested and expected to vest at June 30, 2019	550,150		$13.82	5.05	$	3,942
Exercisable at June 30, 2019	467,750		$12.72	4.25	$	3,870

As of June 30, 2019 and 2018, there was $292,000 and $409,000 of unrecognized compensation expense, respectively, related to unvested share-based compensation arrangements with respect to stock options issued under the Plans. The expense is expected to be recognized over a weighted-average period of 3.4 years and 10 months, respectively. The forfeiture rate during both fiscal 2019 and 2018 was 20 percent, and was calculated by using the historical forfeiture experience of all fully vested stock option grants which is reviewed annually.

Equity Incentive Plans – Restricted Stock. The Corporation used 300,000 shares, 288,750 shares and 185,000 shares of its treasury stock to fund awards of restricted stock under the 2013 Plan, the 2010 Plan and the 2006 Plan, respectively. Awarded shares typically vest over a five-year or shorter period as long as the director, advisory director, director emeriti, officer or employee remains in service to the Corporation. Once vested, a recipient of restricted stock will have all rights of a shareholder, including the power to vote and the right to receive dividends. The Corporation recognizes compensation expense for the restricted stock awards based on the fair value of the shares at the award date.

In fiscal 2019, 224,500 shares of restricted stock were awarded under the Plans with 50% vesting after two years of service and 50% vesting after four years of service, while 89,500 shares were vested and distributed and no shares were forfeited. In fiscal 2018, no shares of restricted stock were awarded under the Plans, while 10,500 shares were vested and distributed and 2,000 shares were forfeited. As of June 30, 2019 and 2018, there were 43,250 and 267,750 shares available for future awards under the Plans, respectively. No new awards can be granted from the 2006 Plan.

The following table summarizes the restricted stock activity for the years ended June 30, 2019 and 2018:

Unvested Shares	Shares		Weighted-Average Award Date Fair Value
Unvested at June 30, 2017	111,000		$14.16
Awarded	—		$—
Vested	(10,500	)	$15.37
Forfeited	(2,000	)	$13.30
Unvested at June 30, 2018	98,500		$14.35
Expected to vest at June 30, 2018	78,800		$14.35

Unvested at June 30, 2018	98,500		$14.35
Awarded	224,500		$18.57
Vested	(89,500	)	$13.97
Forfeited	—		$—
Unvested at June 30, 2019	233,500		$18.55
Expected to vest at June 30, 2019	186,800		$18.55

As of June 30, 2019 and 2018, the unrecognized compensation expense was $4.2 million and $409,000, respectively, related to unvested share-based compensation arrangements with respect to restricted stock issued under the Plans, and reported as a reduction to stockholders’ equity. This expense is expected to be recognized over a weighted-average period of 3.9 years and 10 months, respectively. Similar to stock options, a forfeiture rate of 20 percent has been applied to the restricted stock compensation expense calculations in fiscal 2019 and 2018. For the fiscal years ended June 30, 2019 and 2018, the fair value of shares vested and distributed was $1.6 million and $194,000, respectively.