As part of the stock offering, the Bank established the Colonial Federal Savings Bank Employee Stock Ownership Plan 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 September 30, 2022, the principal balance on the ESOP loan was $2.6 million.


	September 30, 2022
Shares held by the ESOP include the following:
Committed to be allocated		7,668
Unallocated		247,980
Total		255,648

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 operates as a multi-employer plan for accounting purposes and under the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code.

Pension expense under the Pentegra DB Plan amounted to $195,000 for each of the three months ended September 30, 2022 and 2021. There were no contributions made to the Pentegra DB Plan during the three months ended September 30, 2022 and 2021.

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 2% to 15% 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) contribution expense amounted to $5,600 and $11,000 for the three months ended September 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 September 30, 2022 and June 30, 2022, the accrued liability amounted to $830,000 and $814,000, respectively. SERP expense amounted to $16,000 for each of the three months ended September 30, 2022 and 2021. In connection with these SERPs, the Bank purchased life insurance policies, which had a cash surrender value of $5,775,000 and $5,733,000 at September 30, 2022 and June 30, 2022, 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 September 30, 2022 and June 30, 2022 amounted to $4,432,000 and $4,411,000, respectively. For the three months ended September 30, 2022 and 2021, post-retirement expense related to these obligations amounted to $29,000 and $16,000, respectively.