STOCK-BASED COMPENSATION AND STOCK REPURCHASE PROGRAM

9 Months Ended

Jun. 30, 2023

Stock-Based Compensation and Stock Repurchase Program [Abstract]

STOCK-BASED COMPENSATION AND STOCK REPURCHASE PROGRAM

NOTE E – STOCK-BASED COMPENSATION AND STOCK REPURCHASE PROGRAM

On August 25, 2022, the Company adopted the 2022 Equity Compensation Plan which provided for grants of up to 547,400 shares to be allocated between incentive and non-qualified stock options and restricted stock awards to officers, employees and directors of the Company and Magyar Bank. At June 30, 2023, 293,200 options and 155,400 shares of restricted stock had been awarded from the plan.

The following is a summary of the status of the Company’s stock option activity and related information for its option plan for the nine months ended June 30, 2023:

	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life in Years		Aggregate Intrinsic Value
Balance at September 30, 2022		293,200	$	12.58		10.0	$	—
Granted		—		—		—		—
Exercised		—		—		—		—
Forfeited		—		—		—		—
Expired		—		—		—		—
Balance at June 30, 2023		293,200	$	12.58		9.2		—
Exercisable at June 30, 2023		—	$	—		—		—

The following is a summary of the status of the Company’s non-vested restricted shares for the nine months ended June 30, 2023:

	Shares			Weighted Average Grant Date Fair Value
Balance at September 30, 2022		156,400			12.63
Granted		—			—
Vested		(1,000	)		12.70
Forfeited		—			—
Balance at June 30, 2023		155,400		$	12.63

Stock option and stock award expenses included with compensation expense were $63,000 and $98,000 for the three months ended June 30, 2023 and $195,000 and $307,000 for the nine months ended June 30, 2023, respectively. There were no stock option or stock award expenses for the nine months ended June 30, 2022. The Company had no other stock-based compensation plans as of June 30, 2023 except as disclosed below.

On December 8, 2022, the Company announced the completion of its third stock repurchase program, under which 354,891 shares had been repurchased at an average price of $12.90. The Company also announced the authorization of an additional stock repurchase plan pursuant to which the Company intends to repurchase up to an additional 5% of its outstanding shares, or up to 337,146 shares, under which 75,362 shares had been repurchased at an average price of $12.11. Under this stock repurchase program, 261,784 shares of the 337,146 shares authorized remained available for repurchase as of June 30, 2023. The Company’s intended use of the repurchased shares is for general corporate purposes. The Company held treasury stock shares totaling 429,253 at June 30, 2023. The timing of the repurchases will depend on certain factors, including but not limited to, market conditions and prices, the Company’s liquidity requirements and alternative uses of capital.

The Company has an Employee Stock Ownership Plan ("ESOP") for the benefit of employees who meet certain eligibility requirements. The ESOP trust purchases shares of common stock in the open market using proceeds of a loan from the Company. The loan is secured by shares of the Company’s stock. The Bank makes cash contributions to the ESOP on an annual basis sufficient to enable the ESOP to make the required loan payments to the Company. As the debt is repaid, shares are released as collateral and allocated to qualified employees. Accordingly, the shares pledged as collateral are reported as unearned ESOP shares in the Consolidated Balance Sheets. The Company accounts for its ESOP in accordance with FASB ASC Topic 718, “Employer’s Accounting for Employee Stock Ownership Plans.” As shares are released from collateral, the Company reports compensation expense equal to the current market price of the shares, and the shares become outstanding for earnings per share computations.

In connection with the Company’s second-step stock offering during its fiscal year ending September 30, 2021, the ESOP trustees purchased 312,800 shares of the Company’s common stock for $3.4 million, reflecting an average cost per share of $10.77. The ESOP loan bears a variable interest rate that adjusts annually to Prime Rate (7.50% on January 1, 2023) with principal and interest payable annually in equal installments over thirty years.

At June 30, 2023, ESOP shares allocated to participants totaled 22,487. Unallocated ESOP shares held in suspense totaled 290,313 at June 30, 2023 and the aggregate fair value was $3.0 million. The Company's contribution expense for the ESOP was $98,000 and $140,000 for the nine months ended June 30, 2023 and 2022, respectively.