STOCK-BASED COMPENSATION

6 Months Ended

Dec. 31, 2024

Share-Based Payment Arrangement [Abstract]

STOCK-BASED COMPENSATION

12.STOCK-BASED COMPENSATION

Under the CFSB Bancorp, Inc. 2023 Equity Incentive Plan (the "2023 Equity Plan"), the Company may grant options, restricted stock, restricted stock units or performance awards to its directors, officers, and employees. Both incentive stock options and nonqualified stock options may be granted under the 2023 Equity Plan with 319,560 shares reserved for options. Any options forfeited because vesting requirements are not met or because they have expired will become available for re-issuance under the 2023 Equity Plan. The exercise price of each option equals the market price of the Company's stock on the date of the grant and the maximum term of each option is 10 years. The total number of shares reserved for restricted stock is 127,824. Options and awards generally vest ratably over three to five years. The fair value of shares awarded is based on the market price at the date of grant and amortized as compensation expense with a corresponding increase to additional paid-in capital over the required service period. Reductions in compensation expense associated with forfeited options are estimated at the date of grant, and this estimated forfeiture rate is adjusted based on actual forfeiture experience.

Stock Options

The fair value of each option grant is estimated on the date of the grant using the Black-Scholes option-pricing model with the following assumptions:

•Volatility is based on peer group volatility because the Company does not have a sufficient trading history.

•Expected life represents the period of time that the options are expected to be outstanding, taking into account the contractual term, and the vesting period.

•Expected dividend yield is based on the Company's history and expectations of dividend payouts.

•The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for a period equivalent to the expected life of the option.

There were no grants of options to purchase shares of common stock during the three and six months ended December 31, 2024 or 2023.

A summary of stock option activity for the six months ended December 31, 2024 is presented in the table below:

	Outstanding								Nonvested
	Stock Option Grants		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value		Stock Option Grants		Weighted Average Grant Date Fair Value
Balance at July 1, 2024		273,000	$	8.33		8.70	$	-		218,400	$	3.17
Granted		-		-		-		-
Exercised		-		-		-		-
Forfeited		-		-		-		-
Vested		-		-		-		-
Balance at December 31, 2024		273,000	$	8.33		8.20	$	-		218,400	$	3.17
Exercisable at December 31, 2024		54,600	$	-		-	$	-		-	$	-
Unrecognized compensation cost	$	553,000
Weighted average remaining recognition period (years)		3.20

For the three months ended December 31, 2024 and 2023, stock-based compensation expense applicable to stock options was $43,000 and $43,000, respectively. For the six months ended December 31, 2024 and 2023, stock-based compensation expense applicable to stock options was $86,000 and $86,000, respectively. There were no tax benefits related to stock-based compensation expense applicable to stock options for the three and six months ended December 31, 2024 or 2023.

Restricted Stock

Shares issued may be either authorized but unissued shares or reacquired shares held by the Company. Any shares forfeited because vesting requirements are not met will become available for reissuance under the 2023 Equity Plan. The fair market value of shares awarded, based on the market price at the date of the grant, is amortized over the applicable vesting period. Restricted stock awarded to date has been at no cost to the awardee. The following table presents activity in restricted stock awards under the 2023 Equity Plan for the six months ended December 31, 2024.

	Restricted Stock Awards		Weighted Average Grant Price
Non-vested restricted stock awards at July 1, 2024		88,800	$	8.35
Granted		-		-
Vested		-		-
Forfeited		-		-
Non-vested restricted stock awards at December 31, 2024		88,800	$	8.35
Unrecognized compensation cost	$	592,000
Weighted average remaining recognition period (years)		3.20

For the three months ended December 31, 2024 and 2023, stock-based compensation applicable to restricted stock was $47,000 and $46,000, respectively. For the six months ended December 31, 2024 and 2023, stock-based compensation applicable to restricted stock was $94,000 and $93,000, respectively. There were no tax benefits related to stock-based compensation expense applicable to restricted stock for the three and six months ended December 31, 2024 or 2023.