NOTE 8 – Employee Stock Ownership Plan

The Company maintains a leveraged employee stock ownership plan (“ESOP”) that covers substantially all employees. The ESOP was established in conjunction with the Company’s initial stock offering completed in October 2017 and operates on a plan year ending December 31. The loan to fund the acquisition of stock by the ESOP was made by the Company. Additional shares were purchased by the ESOP in conjunction with the stock offering completed in January 2020, which was also financed by a loan from the Bank. The Bank makes annual contributions to the ESOP equal to the ESOP’s debt service. The ESOP shares initially were pledged as collateral for this debt. As the debt is repaid, shares are released from collateral and allocated to active participants, based on the proportion of debt service paid in the year. Because the debt is intercompany, it is eliminated in consolidation for presentation in these financial statements. The shares pledged as collateral are reported as unearned ESOP shares in the balance sheet.

As shares are committed to be released from collateral and allocated to active participants, the Company reports compensation expense equal to the current market price of the shares and the shares will become outstanding for earnings-per-shares (EPS) computations. During the periods ended March 31, 2020 and 2019, 7,647 and 3,801 shares were committed to be released, respectively. During the three months ended March 31, 2020 the average fair value per share of stock was $10.15 resulting in total ESOP compensation expense of $61 for the three months ended March 31, 2020. During the three months ended March 31, 2019 the average fair value per share of stock was $10.66 resulting in total ESOP compensation expense of $35 for the three months ended March 31, 2019. The ESOP shares as of March 31, 2020 and December 31, 2019 were as follows:


	March 31, 2020		December 31, 2019
Shares allocated to active participants		32,406		15,907
Shares committed to be released and allocated to participants		7,647		12,960
Total unallocated shares		604,100		230,343
Total ESOP shares		644,153		259,210
Fair value of unallocated shares (based on $7.89 and $11.55 share price at March 31, 2020 and December 31, 2019, respectively)	$	4,766	$	2,660