NOTE 13 – EMPLOYEE RETIREMENT BENEFIT PLANS

Profit Sharing Plan – The Company has established a profit-sharing 401(k) type salary reduction plan (Plan) for all employees that meet the necessary eligibility requirements and participants are fully vested after six years of service. For Company matching contributions made for plan years prior to 2014, annual Company contributions were at the discretion of the Board of Directors. Effective January 1, 2014, the Company adopted a Safe Harbor matching contribution provision, whereby it agreed to match 100% of participant’s contributions up to the first 3% of salary and 50% of the next 2%, for a total maximum Company matching contribution of 4% of participant salary, as defined by the Plan. The Safe Harbor matching contribution is guaranteed.

Profit sharing plan expense was $251,000 and $151,000 for the years ended December 31, 2016 and 2015, respectively.

Employee Stock Ownership Plan – Employees participate in a leveraged ESOP. In the Conversion, the ESOP purchased 150,358 shares of stock from the Company at $10 per share. In the year ended December 31, 2015 there were no sales of shares to the ESOP and no repurchases of shares from the ESOP. In the twelve months ended December 31, 2014 and the fiscal year ended June 30, 2014, the Company sold 13,948 treasury shares to the ESOP. In the fiscal year ended June 30, 2013, the Company repurchased 1,135 ESOP shares related to terminating participants. The Company makes discretionary contributions to the ESOP and the ESOP uses funds it receives to repay the loan. When loan payments are made, ESOP shares are allocated to participants based on relative compensation. Participants may receive the shares, cash, or a combination at the end of employment.

ESOP expense was $59,000 and $50,000 for the years ended December 31, 2016 and 2015, respectively. Shares held by the ESOP at December 31, 2016 and 2015 were as follows:

	At December 31,
	2016		2015

Allocated and committed to be allocated to participants		26,956		22,897
Unallocated/unearned		181,887		35,613

Total ESOP shares		208,843		58,510

Fair value of unallocated/unearned shares	$	2,289,957	$	313,110

Shares in the above table for all periods prior to October 2016 have been restated at the second-step conversion exchange rate of 2.0473 to one.

Defined Benefit Plan – The Company contributes to a multiemployer defined benefit pension plan, the Pentegra Defined Benefit Plan for Financial Institutions (“Pentegra DB Plan”, EIN 13-5645888 and, Plan No. 333). On June 1, 2006, the Company froze the benefits available under the defined benefit pension plan. The risk of participating in the Pentegra DB Plan is different from single-employer plans in the following aspects:

Assets contributed to the Pentegra DB Plan may be used to provide benefits to employees of other participating employers.

If a participating employer stops contributing to the Pentegra DB Plan, the unfunded obligations may be borne by the remaining participating employers.

If the Company chooses to stop participating in the Pentegra DB Plan, it may be required to pay a withdrawal liability.

The Company’s cash contributions to the Pentegra DB Plan were $130,000 and $186,000 during the years ended December 31, 2016 and 2015, respectively, all of which represented less than 5% of the total plan contributions. As of July 1, 2016 (the most recent valuation report available), the unfunded pension liability was approximately $23,000 (99.46% funded). Pension plan expense (benefit) for the years ended December 31, 2016 and 2015 was $215,000 and $247,000, respectively. There are no funding improvement or rehabilitation plans pending, and no future minimum contributions required by collective-bargaining or other contractual agreements