As part of the stock offering, the Bank established the Colonial Federal Savings Bank Employee Stock Ownership Plan ("ESOP") to provide eligible employees of the Bank the opportunity to own Company Stock. The ESOP is a tax-qualified retirement plan for the benefit of Bank employees. Contributions are allocated to eligible participants on the basis of compensation, subject to federal limits. The number of shares committed to be released per year is 10,226.

The ESOP funded its purchase of 255,648 shares through a loan from the Company equal to 100% of the purchase price of the common stock. The ESOP trustee will repay the loan principally through the Bank's contributions to the ESOP over the loan term of 25 years. At June 30, 2022, the principal balance on the ESOP loan was $2.6 million.

Total compensation expense recognized in connection with the ESOP for the year ended June 30, 2022 was $51,000.

Shares held by the ESOP include the following:


	June 30, 2022
Shares committed to be allocated		5,112
Unallocated shares		250,536
Total		255,648

The fair value of unallocated shares was approximately $2.3 million at June 30, 2022.

The Bank participates in the Pentegra Defined Benefit Plan for Financial Institutions (“The Pentegra DB Plan”), a tax-qualified defined-benefit pension plan. The Pentegra DB Plan’s Employer Identification Number is 13-5645888 and the Plan Number is 333. The Pentegra DB Plan operates as a multi-employer plan for accounting purposes and is subject to the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code. There are no collective bargaining agreements in place that require contributions to the Pentegra DB Plan.

The risks of participating in this multi-employer plan are different from a single-employer plan in the following aspects:

a. Assets contributed to the multi-employer plan by one employer may be used to provide benefits to employees of other participating employers.

b. If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers.

c. If the Bank chooses to stop participating in its multi-employer plan, the Bank may be required to pay those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability.

Pension expense under the plan for the years ended June 30, 2022 and 2021 amounted to $735,000 and $780,000, respectively.

Total contributions made to the Pentegra DB Plan, as reported on Form 5500 amounted to $248,563,000 and $253,199,000 for the plan years ended June 30, 2021 and June 30, 2020, respectively, the latest data on file. The Bank’s contributions to the Pentegra DB Plan are not more than 5% of the total contributions to the Pentegra DB Plan. Contributions of $715,000 and $755,000 were paid by the Bank during the years ended June 30, 2022 and 2021, respectively.

The funded status (market value of plan assets divided by funding target) of the Bank’s portion of the Pentegra DB Plan as of July 1, 2022 and 2021, was 120.63% and 103.72%, respectively, per the valuation reports. Market value of plan assets reflects any contributions received applied to the 2021-2022 plan year.

The Bank has a savings plan which is intended to qualify under Section 401(k) of the Internal Revenue Code. The plan provides for voluntary contributions by participating employees ranging from two percent to fifteen percent

of their compensation, subject to certain limitations. The Bank matches 10% of the employee’s voluntary contributions up to 3% of their compensation. Employer 401(k) plan contribution expense amounted to $33,000 and $41,000 for the years ended June 30, 2022 and 2021, respectively.

The Bank has entered into a Supplemental Executive Retirement Plan (the “SERP”) with certain officers, which provides for payments upon attaining the retirement age noted in the SERP. The present value of these future payments is provided over the remaining terms of the officers’ employment and at June 30, 2022 and 2021, the accrued liability amounted to $814,000 and $748,000, respectively. SERP expense for the years ended June 30, 2022 and 2021 amounted to $66,000 and $78,000, respectively. In connection with these SERPs, the Bank purchased life insurance policies, which have a cash surrender value of $5,733,000 and $4,922,000 at June 30, 2022 and 2021, respectively.

In addition, the Bank provides death benefits for officers and directors of the Bank under the terms of Split Dollar Agreements. The Bank has purchased life insurance contracts in connection with these agreements and the cash surrender value of the policies at June 30, 2022 and 2021 amounted to $4,411,000 and $4,328,000, respectively. For the years ended June 30, 2022 and 2021, post-retirement expense related to these obligations amounted to $89,000 and $63,000, respectively.