Note 6 - Employee Stock Ownership Plan

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Pension and Other Postretirement Benefits Disclosure [Text Block]

NOTE

6

– EMPLOYEE STOCK OWNERSHIP PLAN

On

May 6, 2005,

the Bank adopted an employee stock ownership plan (“ESOP”) for the benefit of substantially all employees. On

July 8, 2005,

the ESOP borrowed

$763,140

from the Company and used those funds to acquire

76,314

shares of the Company’s common stock in the Company’s initial public offering at a price of

$10.00

per share. On

October 11, 2016,

the ESOP borrowed

$1,907,160

from the Company and used those funds to acquire

190,716

shares of the Company’s common stock in connection with the Company’s

second

-step conversion offering at a price of

$10.00

per share.

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

$239,000

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.

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

	March 31,			December 31,
	2019			2018
Shares allocated		127,745			123,051
Shares withdrawn from the plan		(28,278	)		(28,278	)
Unallocated shares		153,945			158,639
Total ESOP shares		253,412			253,412
Fair value of unallocated shares	$	2,042,850		$	2,114,657