The Company maintains the First Seacoast Bank Employee Stock Ownership Plan (“ESOP”) to provide eligible employees of the Company the opportunity to own Company stock. The ESOP is a tax-qualified retirement plan for the benefit of Company 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 through 2047 is 15,354. The Company uses the principal and interest method to determine the release of shares amount.

The ESOP funded its purchase of 423,715 shares through a loan from the Company equal to 100% of the aggregate purchase price of the common stock. The ESOP trustee is repaying the loan principally through the Bank’s contributions to the ESOP over the remaining loan term that matures on December 31, 2047. At September 30, 2024 and December 31, 2023, the remaining principal balance on the ESOP debt was $4.2 million.

Under applicable accounting requirements, the Company records compensation expense for the ESOP equal to fair market value of shares when they are committed to be released from the suspense account to participants’ accounts under the plan. Total compensation expense recognized in connection with the ESOP for the three months ended September 30, 2024 and 2023 was $35,000 and $29,000, respectively, and $103,000 and $99,000 for the nine months ended September 30, 2024 and 2023, respectively. At September 30, 2024 and December 31, 2023, total unearned compensation for the ESOP was $3.9 million and $4.0 million, respectively.

The fair value of unallocated shares was approximately $3.2 million and $2.8 million at September 30, 2024 and December 31, 2023, respectively.

Effective May 27, 2021, the Company adopted the First Seacoast Bancorp 2021 Equity Incentive Plan (the “2021 Plan”). The Company’s stockholders approved the 2021 plan on that date. The 2021 Plan provides for the granting of incentive and non-statutory stock options to purchase shares of common stock and the granting of shares of restricted stock awards and restricted stock units.

The 2021 Plan authorizes the issuance or delivery to participants of up to 348,801 converted shares of common stock (adjusted for the second step conversion transaction). Of this number, the maximum number of shares of common stock that may be issued pursuant to the exercise of stock options is 249,144 shares (adjusted for the second step conversion transaction) and the maximum number of shares of common stock that may be issued as restricted stock awards or restricted stock units is 99,657 shares (adjusted for the second step conversion transaction). The exercise price of stock options may not be less than the fair market value on the date the stock option is granted. Further, stock options may not be granted with a term that is longer than 10 years.

On May 25, 2023, 249,144 incentive and non-statutory stock options to purchase shares of common stock were granted to directors for their services on the board of directors and certain members of management. The Company estimates the grant date fair value of each option using the Black-Scholes option pricing model. The use of the Black-Scholes option pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent with the expected life of the option, risk-free interest rates and expected dividend yields of the common stock. Since it was determined that the Company lacked sufficient historical closing stock prices, the expected volatility assumption was based upon a combination of actual historical volatility combined with the historical volatility developed for comparable companies. Also, since the Company lacked the appropriate historical data, the expected term of the option was calculated using the simplified method. Forfeitures are required to be estimated at the time of grant and revised, if

necessary, in subsequent periods if actual forfeitures differ from those estimates. The estimated grant date fair value of each option is expensed as employee benefits expense ratably over the vesting period. The expense recognized for this equity incentive plan was $62,000 and $67,000 for the three months ended September 30, 2024 and 2023, respectively, which provided a tax benefit of $16,000 and $18,000, respectively. The expense recognized for this equity incentive plan was $187,000 and $88,000 for the nine months ended September 30, 2024 and 2023, respectively, which provided a tax benefit of $50,000 and $24,000, respectively. At September 30, 2024 and December 31, 2023, total unrecognized compensation expense for this equity incentive plan was $411,000 and $598,000, respectively, with a 1.6 and 2.4 year weighted average future recognition period, respectively.

A summary of non-vested stock options outstanding as of September 30, 2024 and December 31, 2023 and changes during the periods then ended is presented below:


	Three Months Ended September 30, 2024
	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in Years)		Aggregate Intrinsic Value
Stock options:								(In Thousands)
Non-vested at beginning of period		166,096		$	8.06		8.9	$	234
Granted		—			—		—		—
Vested		—			—		—		—
Forfeited		—			—		—		—
Non-vested at end of period		166,096		$	8.06		8.7	$	252

	Nine Months Ended September 30, 2024
	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in Years)		Aggregate Intrinsic Value
Stock options:								(In Thousands)
Non-vested at beginning of period		249,144		$	8.06		9.4	$	—
Granted		—			—		—		—
Vested		(83,048	)		8.06		—		—
Forfeited		—			—		—		—
Non-vested at end of period		166,096		$	8.06		8.7	$	252

	Year Ended December 31, 2023
	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in Years)		Aggregate Intrinsic Value
Stock options:								(In Thousands)
Non-vested at beginning of period		—		$	—		—	$	—
Granted		249,144			8.06		9.4		—
Vested		—			—		—		—
Forfeited		—			—		—		—
Non-vested at end of period		249,144		$	8.06		9.4	$	—

Date of grant	5/25/2023
Options granted		249,144
Exercise price	$	8.06
Vesting period(1)	3 years
Expiration date	5/25/2033
Expected volatility		27.8	%
Expected term	6.5 years
Expected dividend yield		0	%
Expected forfeiture rate		0	%
Risk free interest rate		3.9	%
Fair value per option	$	3.00
(1) Vesting is ratably and the period begins on the date of the grant.

On June 1, 2023, 2,478 restricted stock awards were granted to a certain member of management at $7.99 per share. The total fair value related to the June 1, 2023 grant was $20,000. These restricted stock awards time-vest 50% as of November 18, 2023 and 50% as of November 18, 2024 and have been fair valued as of the date of grant. On November 18, 2021, 98,850 restricted stock awards were granted to directors and certain members of management at $11.95 per share (adjusted for the second step conversion transaction). The total fair value related to the November 18, 2021 grant was $1.2 million. These restricted stock awards time-vest over a three year period and have been fair valued as of the date of grant. The holders of restricted stock

awards participate fully in the rewards of stock ownership of the Company, including voting rights when granted and dividend rights when vested.

A summary of non-vested restricted shares outstanding as of September 30, 2024 and December 31, 2023 and changes during the periods then ended is presented below:


	Three and Nine Months Ended September 30, 2024
	Number of Shares			Weighted Average Grant Value
Restricted stock:
Non-vested at beginning of period		33,629		$	11.80
Granted		—			—
Vested		—			—
Forfeited		—			—
Non-vested at end of period		33,629		$	11.80

	Year Ended December 31, 2023
Restricted stock:
Non-vested at beginning of year		64,785		$	11.95
Granted		2,478			7.99
Vested		(33,634	)		11.80
Forfeited		—			—
Non-vested at end of year		33,629		$	11.80

The expense recognized for this equity incentive plan was $102,000 for the three months ended September 30, 2024 and 2023, and $306,000 and $298,000, for the nine months ended September 30, 2024 and 2023, respectively, which provided a tax benefit of $27,000 for each of the three months ended September 30, 2024 and 2023, and $81,000 and $80,000 for the nine months ended September 30, 2024 and 2023, respectively. At September 30, 2024 and December 31, 2023, total unrecognized compensation expense for this equity incentive plan was $44,000 and $350,000, respectively, with a 0.1 and 0.9 year weighted average future recognition period, respectively.