Note 6 - Employee Stock Ownership Plan

9 Months Ended

Sep. 30, 2016

Pension and Other Postretirement Benefits Disclosure [Text Block]

NOTE 6 – EMPLOYEE STOCK OWNERSHIP PLAN

On July 11, 2005, the Bank adopted an ESOP for the benefit of substantially all employees. Upon adoption of the ESOP, the ESOP borrowed $763,140 from the Ottawa Savings Bancorp and used those funds to acquire 76,314 shares of the Ottawa Savings Bancorp's stock in the initial public offering at a price of $10.00 per share. In addition, on October 11, 2016, the ESOP borrowed $1.9 million from the Company and used those funds to acquire 190,716 shares of the Company’s common stock at a price of $10.00 per share in the Company’s second-step conversion offering.

Shares purchased by the ESOP with the loan proceeds are held in a suspense account and are allocated to ESOP participants on a pro rata basis as principal and interest payments are made by the ESOP to the Company. The loan is secured by shares purchased with the loan proceeds and will be repaid by the ESOP with funds from the Company’s discretionary contributions to the ESOP and earnings on the ESOP assets. Annual principal and interest payments of approximately $77,000 are to be made by the ESOP.

As shares are released from collateral, the Company will report compensation expense equal to the current market price of the shares, and the shares will become outstanding for earnings-per-share (“EPS”) computations. Dividends on allocated ESOP shares reduce retained earnings, and dividends on unallocated ESOP shares reduce accrued interest.

A terminated participant or the beneficiary of a deceased participant who received a distribution of employer stock from the ESOP has the right to require the Company to purchase such shares at their fair market value any time within 60 days of the distribution date. If this right is not exercised, an additional 60-day exercise period is available in the year following the year in which the distribution is made and begins after a new valuation of the stock has been determined and communicated to the participant or beneficiary. At September 30, 2016, 41,283 shares at a fair value of $13.60 have been classified as mezzanine capital.

The following table reflects the status of the shares held by the ESOP:

	September 30,			December 31,
	2016			2015
Shares allocated		59,780			55,964
Shares withdrawn from the plan		(18,497	)		(18,497	)
Unallocated shares		16,534			20,350
Total ESOP shares		57,817			57,817
Fair value of unallocated shares	$	224,876		$	204,518