EMPLOYEE STOCK OWNERSHIP PLAN

3 Months Ended

Mar. 31, 2022

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 March 31, 2022, the principal balance on the ESOP loan is $21.8 million. There were no contributions to the ESOP during the three months ended March 31, 2022, as loan payments are made annually during the fourth quarter of each year. ESOP compensation expense during the three months ended March 31, 2022, representing the fair value of 22,818 shares committed to be released from unallocated at the end of the plan year was $322 thousand and is recognized over the service period. There was no ESOP compensation expense for the three months ended March 31, 2021.

Shares held by the ESOP were as follows:


	March 31, 2022
	(Dollars in thousands)

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

Fair value of unearned shares at March 31, 2022	$	29,682

The fair value of the unallocated shares at March 31, 2022 was computed using the closing trading price of the Company’s common stock on March 31, 2022.