EMPLOYEE STOCK OWNERSHIP PLAN

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

The Company maintains an ESOP, a tax-qualified plan for the benefit of all Company employees designed to invest primarily in the Company’s common stock. The ESOP provides employees with the opportunity to receive a funded retirement benefit from the Bank, based primarily on the value of the Company’s common stock.

The ESOP borrowed funds from the Company to purchase 2,281,800 shares of stock at $10 per share. The loan is secured by the shares purchased, which are held in a suspense account for allocation among participants. Shares are released for allocation to participants as loan payments are made. Loan payments are principally funded by discretionary cash contributions by the Bank, as well as dividends paid to the ESOP on unallocated shares. When loan payments are made, ESOP shares are allocated to participants at the end of the plan year (December 31) based on relative compensation, subject to federal tax law limits. Participants receive the shares at the end of employment. Dividends on allocated shares increase participants accounts.

At December 31, 2021, the remaining principal balance on the ESOP loan is $21.8 million. Contributions to the ESOP during the year ended December 31, 2021 totaled $981 thousand. ESOP compensation expense, representing the fair value of shares allocated during the year, was $1.3 million for the year ended December 31, 2021, and is recognized over the service period. There was no ESOP compensation expense for the year ended December 31, 2020.

Shares held by the ESOP were as follows:


	December 31, 2021
	(Dollars in thousands)

Shares allocated to participants	91,272
Unallocated shares	2,190,528
Total ESOP shares	2,281,800

Fair value of unallocated shares at December 31, 2021	$	32,047

The fair value of the unallocated shares at December 31, 2021 was computed using the closing trading price of the Company’s common stock on December 31, 2021.