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 Company. 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 June 30, 2020 and 2019, 15,294 and 6,480 shares were committed to be released, respectively. During the six months ended June 30, 2020 the average fair value per share of stock was $8.80 resulting in total ESOP compensation expense of $128 for the six months ended June 30, 2020. During the six months ended June 30, 2019 the average fair value per share of stock was $10.57 resulting in total ESOP compensation expense of $69 for the six months ended June 30, 2019. The ESOP shares as of June 30, 2020 and December 31, 2019 were as follows:


	June 30, 2020		December 31, 2019
Shares allocated to active participants		33,569		15,907
Shares committed to be released and allocated to participants		15,294		12,960
Total unallocated shares		595,314		230,343
Total ESOP shares		644,177		259,210
Fair value of unallocated shares (based on $8.60 and $11.55 share price at June 30, 2020 and December 31, 2019, respectively)	$	5,120	$	2,660