Employee Benefits

12 Months Ended

Jun. 30, 2025

Employee Benefits

Employee Benefits

NOTE 9: Employee Benefits

401(k) Retirement Plan. The Bank has a 401(k) retirement plan that covers substantially all eligible employees. The Bank makes “safe harbor” matching contributions of up to 4% of eligible compensation, depending upon the percentage of eligible pay deferred into the plan by the employee. Additional profit-sharing contributions of 5% of eligible salary have been accrued for the plan year ended June 30, 2025, which the board of directors authorizes based on management recommendations and financial performance for fiscal 2025. Total 401(k) expense for fiscal 2025, 2024, and 2023, was $2.4 million, $2.8 million, and $2.4 million, respectively. At June 30, 2025 and 2024, 401(k) plan participants held approximately 418,000 and 412,000 shares, respectively, of the Company’s stock in the plan. Employee deferrals and safe harbor contributions are fully vested. Profit-sharing or other contributions vest over a period of five years.

2008 Equity Incentive Plan. The Company adopted an Equity Incentive Plan (the EIP) in 2008, reserving for award 132,000 shares (split-adjusted). EIP shares were available for award to directors, officers, and employees of the Company and its affiliates by a committee of outside directors. The committee held the power to set vesting requirements for each award under the EIP. At the 2017 annual meeting, shareholders approved the 2017 Omnibus Incentive Plan, which provided that no further awards would be made under the EIP. From fiscal 2012 through fiscal

2017, the Company awarded 122,803 shares, and no awards were made under the plan since fiscal 2017. All EIP awards were in the form of either restricted stock vesting at the rate of 20% of such shares per year, or performance-based restricted stock vesting at up to of 20% of such shares per year, contingent on the achievement of specified profitability targets over a three-year period. Compensation expense, in the amount of the fair market value of the common stock at the date of grant, is recognized pro-rata over the five years during which the shares vest. At June 30, 2025, no awards remained outstanding, and there was no unvested compensation expense related to the EIP.

2003 Stock Option Plan. The Company adopted a stock option plan in October 2003 (the 2003 Plan). Under the plan, the Company granted options to purchase 242,000 shares (split-adjusted) to employees and directors, of which, options to purchase 197,000 shares (split-adjusted) have been exercised, and options to purchase 45,000 shares (split-adjusted) have been forfeited. Under the 2003 Plan, exercised options may be issued from either authorized but unissued shares, or treasury shares. At the 2017 annual meeting, shareholders approved the 2017 Omnibus Incentive Plan, which provided that no further awards would be made under the 2003 Plan.

As of June 30, 2025, no options remained outstanding and there was no remaining unrecognized compensation expense related to unvested stock options under the 2003 Plan. No options to purchase shares were vested in fiscal 2025, 2024, or 2023. There were no shares exercised in fiscal 2025, 10,000 shares were exercised in fiscal 2024, and none were exercised in fiscal 2023.

2017 Omnibus Incentive Plan. The Company adopted an equity-based incentive plan in October 2017 (the 2017 Plan). Under the 2017 plan, the Company reserved for issuance 500,000 shares of common stock for awards to employees and directors, against which full value awards (stock-based awards other than stock options and stock appreciation rights) are to be counted on a 2.5-for-1 basis. The 2017 Plan authorized awards to be made to employees, officers, and directors by a committee of outside directors. The committee held the power to set vesting requirements for each award under the 2017 Plan. Under the 2017 Plan, stock awards and shares issued pursuant to exercised options may be issued from either authorized but unissued shares, or treasury shares.

Under the 2017 Plan, as of June 30, 2025, options to purchase 161,500 shares have been granted to employees and directors, of which 6,000 options have been exercised, 15,000 have been forfeited, and 140,500 remain outstanding. As of June 30, 2025, there was $1.0 million in remaining unrecognized compensation expense related to unvested stock options under the 2017 Plan, which will be recognized over the remaining weighted average vesting period. The aggregate intrinsic value of in-the-money stock options outstanding under the 2017 Plan at June 30, 2025, was $1.5 million, and 6,900 options were exercisable and out-of-the-money at June 30, 2025, with a strike price in excess of the market price. The intrinsic value of options vested in fiscal 2025, 2024, and 2023 was $218,000, $126,000, and $42,000, respectively. 

Under the 2017 Plan, full value awards totaling 0, 26,600, and 28,650 shares, respectively, were issued to employees and directors in fiscal 2025, 2024, and 2023. All full value awards were in the form of either:

● restricted stock vesting at the rate of one-fifth of such shares per year,

● performance-based restricted stock vesting at up to 20% of such shares per year, contingent on the achievement of specified profitability targets over a trailing three-year period,

● restricted stock vesting at the rate of one-third of such shares per year, or

● restricted stock vesting after a three-year service requirement.

During fiscal 2025, 2024, and 2023, full value awards of 29,523, 16,624, and 15,140 shares were vested, respectively. Compensation expense, in the amount of the fair market value of the common stock at the date of grant, is recognized pro-rata over the vesting period. Compensation expense for full value awards under the 2017 Plan for fiscal 2025, 2024, and 2023 was $845,000, $903,000, and $833,000, respectively. At June 30, 2025, unvested compensation expense related to full value awards under the 2017 Plan was approximately $1.6 million.

2024 Omnibus Incentive Plan. The Company adopted an equity-based incentive plan in October 2024 (the 2024 Plan). Under the 2024 Plan, the Company reserved for issuance 650,000 shares of common stock for awards to employees and directors, against which full value awards (stock-based awards other than stock options and stock

appreciation rights) are to be counted on a 2.5-for-1 basis. The 2024 Plan authorized awards to be made to employees, officers, and directors by a committee of outside directors. The committee held the power to set vesting requirements for each award under the 2024 Plan. Under the 2024 Plan, stock awards and shares issued pursuant to exercised options may be issued from either authorized but unissued shares, or treasury shares.

Under the 2024 Plan, as of June 30, 2025, options to purchase 12,000 shares have been granted to employees and directors, of which none have been exercised or forfeited, and 12,000 remain outstanding. As of June 30, 2025, there was $298,000 in remaining unrecognized compensation expense related to unvested stock options under the 2024 Plan, which will be recognized over the remaining weighted average vesting period. The aggregate intrinsic value of in-the-money stock options outstanding under the 2024 Plan at June 30, 2025, was $0, and no options were exercisable and out-of-the-money at June 30, 2025, with a strike price in excess of the market price.

Under the 2024 Plan, full value awards totaling 22,800 shares were issued to employees and directors in fiscal 2025. Compensation expense for full value awards under the 2024 Plan for fiscal 2025 was $115,000. At June 30, 2025, unvested compensation expense related to full value awards under the 2024 Plan was approximately $1.3 million. All full value awards were in the form of either:

● restricted stock vesting at the rate of one-fifth of such shares per year,

● performance-based restricted stock vesting at up to 20% of such shares per year, contingent on the achievement of specified profitability targets over a trailing three-year period.

Changes in options outstanding under the 2003 Plan, the 2017 Plan, and the 2024 Plan were as follows:

	2025			2024			2023
	Weighted			Weighted			Weighted
	Average			Average			Average
	Price		Number	Price		Number	Price		Number
Outstanding at beginning of year	$	34.43	140,500	$	39.63	148,000	$	36.56	104,000
Granted		60.42	12,000		40.74	23,500		38.58	44,000
Exercised		—	—		24.49	(16,000)		—	—
Forfeited		—	—		42.35	(15,000)		—	—
Outstanding at year-end	$	42.76	152,500	$	34.43	140,500	$	39.63	148,000
Options exercisable at year-end	$	39.51	88,500	$	38.44	65,800	$	33.89	63,700

The following is a summary of the assumptions used in the Black-Scholes pricing model in determining the fair values of options granted during fiscal years 2025, 2024, and 2023:

	2025			2024			2023
Assumptions:
Expected dividend yield		1.52	%		2.06	%		1.79	%
Expected volatility		36.53	%		34.89	%		29.67	%
Risk-free interest rate		4.55	%		4.12	%		3.79	%
Weighted-average expected life (years)		10.00			10.00			10.00
Weighted-average fair value of options granted during the year	$	27.06		$	15.88		$	16.68

The table below summarizes information about stock options outstanding under the 2017 Plan, and the 2024 Plan at June 30, 2025:

Weighted	Options Outstanding			Options Exercisable
Average		Weighted			Weighted
Remaining		Average			Average
Contractual	Number	Exercise		Number	Exercise
Life	Outstanding	Price		Exercisable	Price
31 mo.	11,500		37.31	11,500		37.31
42 mo.	15,500		34.35	15,500		34.35
56 mo.	15,500		37.40	15,500		37.40
67 mo.	23,000		34.91	18,400		34.91
79 mo.	11,500		53.82	6,900		53.82
85 mo.	7,500		46.59	3,000		46.59
92 mo.	32,500		46.94	13,000		46.94
99 mo.	3,500		40.28	700		40.28
103 mo.	20,000		40.82	4,000		40.82
116 mo.	12,000		60.42	—		60.42