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Espey Manufacturing & Electronics (ESP)

Document and Entity Information

Document and Entity Information - shares6 Months Ended
Dec. 31, 2016Feb. 09, 2017
Document And Entity Information [Abstract]
Entity Registrant NameESPEY MFG & ELECTRONICS CORP
Entity Central Index Key33533
Document Type10-Q
Document Period End DateDec. 31,
2016
Amendment Flagfalse
Current Fiscal Year End Date--06-30
Entity Filer CategorySmaller Reporting Company
Document Fiscal Period FocusQ2
Document Fiscal Year Focus2017
Entity Common Stock, Shares Outstanding2,371,321

Balance Sheets

Balance Sheets - USD ($)Dec. 31, 2016Jun. 30, 2016
ASSETS:
Cash and cash equivalents $ 8,857,278 $ 10,031,644
Investment securities8,966,041 5,580,059
Trade accounts receivable, net of allowance of $3,0003,752,842 4,957,464
Income tax receivable316,228 329,298
Inventories:
Raw materials1,382,990 1,418,862
Work-in-process642,876 504,674
Costs related to contracts in process, net of advance payments of $32,831 and $18,313 at December 31, 2016 and June 30, 2016, respectively7,316,683 8,810,145
Total inventories9,342,549 10,733,681
Deferred tax assets217,764 252,558
Prepaid expenses and other current assets87,513 219,688
Total current assets31,540,215 32,104,392
Property, plant and equipment, net2,355,109 2,348,525
Total assets33,895,324 34,452,917
LIABILITIES AND STOCKHOLDERS' EQUITY:
Accounts payable436,135 552,787
Accrued expenses:
Salaries and wages179,971 357,910
Vacation683,551 704,761
ESOP payable186,043
Other102,179 196,631
Payroll and other taxes withheld52,865 49,353
Total current liabilities1,640,744 1,861,442
Deferred tax liabilities202,248 203,237
Total liabilities1,842,992 2,064,679
Commitments and contingencies (see Note 5)
Common stock, par value $.33-1/3 per share Authorized 10,000,000 shares; Issued 3,029,874 shares as of December 31, 2016 and June 30, 2016. Outstanding 2,370,521 and 2,364,684 as of December 31, 2016 and June 30, 2016, respectively (includes 53,334 and 61,667 Unearned ESOP shares, respectively)1,009,958 1,009,958
Capital in excess of par value17,388,596 17,253,072
Accumulated other comprehensive loss(2,664)(1,408)
Retained earnings22,333,224 22,820,938
Total stockholders equity before ESOP40,729,114 41,082,560
Less: Unearned ESOP shares(891,083)(891,083)
Cost of 659,353 and 665,190 shares of common stock in treasury as of December 31, 2016 and June 30, 2016, respectively(7,785,699)(7,803,239)
Total stockholders' equity32,052,332 32,388,238
Total liabilities and stockholders' equity $ 33,895,324 $ 34,452,917

Balance Sheets (Parenthetical)

Balance Sheets (Parenthetical) - USD ($)Dec. 31, 2016Jun. 30, 2016
Statement of Financial Position [Abstract]
Trade accounts receivable, allowance $ 3,000 $ 3,000
Advance payments of costs related to contracts in process $ 32,831 $ 18,313
Common stock, par value $ 0.33 $ 0.33
Common stock, shares authorized10,000,000 10,000,000
Common stock, shares issued3,029,874 3,029,874
Common stock, shares outstanding2,370,521 2,364,684
Unearned ESOP, shares53,334 61,667
Treasury stock, shares659,353 665,190

Statements of Comprehensive Inc

Statements of Comprehensive Income - USD ($)3 Months Ended6 Months Ended
Dec. 31, 2016Dec. 31, 2015Dec. 31, 2016Dec. 31, 2015
Income Statement [Abstract]
Net sales $ 5,667,624 $ 7,242,020 $ 11,736,308 $ 13,521,456
Cost of sales4,587,479 5,653,977 9,312,416 9,965,093
Gross profit1,080,145 1,588,043 2,423,892 3,556,363
Selling, general and administrative expenses750,381 754,958 1,523,047 1,504,608
Operating income329,764 833,085 900,845 2,051,755
Other income
Interest income11,454 10,610 23,475 18,063
Other7,201 26,563 14,203 44,551
Total other income18,655 37,173 37,678 62,614
Income before provision for income taxes348,419 870,258 938,523 2,114,369
Provision for income taxes104,340 255,831 273,619 621,412
Net income244,079 614,427 664,904 1,492,957
Other comprehensive income, net of tax:
Unrealized (loss) gain on investment securities(570)(905)(1,256)874
Total comprehensive income $ 243,509 $ 613,522 $ 663,648 $ 1,493,831
Net income per share:
Basic $ 0.11 $ 0.27 $ 0.29 $ 0.65
Diluted $ 0.11 $ 0.27 $ 0.29 $ 0.65
Weighted average number of shares outstanding:
Basic2,308,588 2,276,401 2,305,825 2,280,262
Diluted2,323,604 2,294,020 2,321,295 2,298,913
Dividends per share: $ 0.25 $ 0.25 $ 0.50 $ 0.50

Statements of Cash Flows

Statements of Cash Flows - USD ($)6 Months Ended
Dec. 31, 2016Dec. 31, 2015
Cash Flows from Operating Activities:
Net income $ 664,904 $ 1,492,957
Adjustments to reconcile net income to net cash provided by operating activities:
Excess tax benefits from share-based compensation(8,066)(15,021)
Stock-based compensation53,048 52,249
Depreciation216,628 218,021
ESOP compensation expense216,876 224,175
Loss on disposal of assets 147
Deferred income tax expense34,481 31,600
Changes in assets and liabilities:
Decrease in trade receivable, net1,204,622 2,656,012
Decrease (increase) income taxes receivable21,136 (207,551)
Decrease (increase) in inventories, net1,391,132 (121,508)
Decrease in prepaid expenses and other current assets132,175 100,561
Decrease in accounts payable(116,652)(371,694)
Decrease in accrued salaries and wages(177,939)(89,507)
Decrease in vacation accrual(21,210)(43,308)
Decrease in ESOP payable(30,833)(59,375)
Decrease in other accrued expenses(94,452)(100,541)
Increase in payroll and other taxes withheld3,512 38,595
Increase in income taxes payable 12,305
Net cash provided by operating activities3,489,362 3,818,117
Cash Flows from Investing Activities:
Additions to property, plant and equipment(223,211)(82,341)
Purchase of investment securities(6,232,932)(2,347,595)
Proceeds from sale/maturity of investment securities2,845,017 1,282,686
Net cash used in investing activities(3,611,126)(1,147,250)
Cash Flows from Financing Activities:
Dividends on common stock(1,152,618)(1,710,215)
Purchase of treasury stock(44,335)(355,418)
Proceeds from exercise of stock options136,285 67,558
Excess tax benefits from share-based compensation8,066 15,021
Net cash used in financing activities(1,052,602)(1,983,054)
(Decrease) increase in cash and cash equivalents(1,174,366)687,813
Cash and cash equivalents, beginning of period10,031,644 8,859,405
Cash and cash equivalents, end of period8,857,278 9,547,218
Supplemental Schedule of Cash Flow Information:
Income taxes paid $ 218,000 $ 786,000

Basis of Presentation

Basis of Presentation6 Months Ended
Dec. 31, 2016
Basis of Presentation [Abstract]
Basis of PresentationNote 1. Basis of Presentation In the opinion of management the accompanying
unaudited financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary for a fair presentation
of the results for such periods. The results for any interim period are not necessarily indicative of the results to be expected
for the full fiscal year. Certain information and footnote disclosures normally included in financial statements prepared in accordance
with United States generally accepted accounting principles have been condensed or omitted. The preparation of these financial
statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses,
and related disclosure of assets and liabilities. On an ongoing basis, we evaluate our estimates and judgments, including those
related to revenue recognition, inventories, income taxes, and stock-based compensation. Management bases its estimates on historical
experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates under different assumptions or conditions. These financial statements should be
read in conjunction with the Company's most recent audited financial statements included in its report on Form 10-K for the year
ended June 30, 2016. Certain reclassifications may have been made to the prior year financial statements to conform to the current
year presentation.

Investment Securities and Fair

Investment Securities and Fair Value of Financial Instruments6 Months Ended
Dec. 31, 2016
Investments, Debt and Equity Securities [Abstract]
Investment Securities and Fair Value of Financial InstrumentsNote 2. Investment
Securities and Fair Value of Financial Investments ASC 820 establishes a fair value hierarchy
which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair
value. The standard describes three levels of inputs that may be used to measure fair value:
§ Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that
the entity has the ability to access as of the measurement date.
§ Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for
similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated
by observable market data.
§ Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions
about the assumptions that market participants would use in pricing an asset or liability. The carrying amounts of financial instruments,
including cash and cash equivalents, short term investment securities, accounts receivable, accounts payable and accrued expenses,
approximated fair value as of December 31, 2016 and June 30, 2016 because of the immediate or short-term maturity of these financial
instruments. Investment securities at December 31,
2016 and June 30, 2016 consist of certificates of deposit and municipal bonds which are classified as available-for-sale securities
and have been determined to be level 1 assets. The cost, gross unrealized gains, gross unrealized losses and fair value of available-for-sale
securities by major security type at December 31, 2016 and June 30, 2016 are as follows:
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
December 31, 2016
Certificates of deposit $ 8,889,000 $ — $ — $ 8,889,000
Municipal bonds 77,508 — (467 ) 77,041
Total investment securities $ 8,966,508 $ — $ (467 ) $ 8,966,041
June 30, 2016
Certificates of deposit $ 4,871,000 $ — $ — $ 4,871,000
Municipal bonds 707,593 1,466 — 709,059
Total investment securities $ 5,578,593 $ 1,466 $ — $ 5,580,059 The portfolio is diversified and highly
liquid and primarily consists of investment grade fixed income instruments. At December 31, 2016, the Company did not have any
investments in individual securities that have been in a continuous loss position considered to be other than temporary. As of December 31, 2016 and June 30,
2016, the contractual maturities of available-for-sale securities were as follows:
Years to Maturity
Less than One to
One Year Five Years Total
December 31, 2016
Available-for-sale $ 8,644,000 $ 322,041 $ 8,966,041
June 30, 2016
Available-for-sale $ 4,811,511 $ 768,548 $ 5,580,059

Net Income per Share

Net Income per Share6 Months Ended
Dec. 31, 2016
Net Income per Share [Abstract]
Net Income per ShareNote 3. Net Income per Share Basic net income per share excludes dilution
and is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding
for the period. Diluted net income per share reflects the potential dilution that could occur if securities or other contracts
to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared
in the income of the Company. The computation of weighted-average common shares outstanding, assuming dilution, excluded options
to purchase 107,700 and 68,550 shares of our common stock for the three and six months ended December 31, 2016 and 2015, respectively,
as the effect of including them would be anti-dilutive. As Unearned ESOP shares are released or committed-to-be-released the shares
become outstanding for earnings-per-share computations.

Stock Based Compensation

Stock Based Compensation6 Months Ended
Dec. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock Based CompensationNote 4. Stock Based Compensation The
Company follows ASC 718 in establishing standards for the accounting for transactions in which an entity exchanges its equity instruments
for goods or services, as well as transactions in which an entity incurs liabilities in exchange for goods or services that are
based on the fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments.
ASC 718 requires that the cost resulting from all share-based payment transactions be recognized in the financial statements based
on the fair value of the share-based payment. ASC 718 establishes fair value as the measurement objective in accounting for share-based
payment transactions with employees, except for equity instruments held by employee share ownership plans. Total stock-based compensation expense
recognized in the statements of comprehensive income for the three-month periods ended December 31, 2016 and 2015 was $29,715 and
$21,783, respectively, before income taxes. The related total deferred tax benefits were approximately $2,359 and $1,765 for the
same periods. Total stock-based compensation expense recognized in the statements of comprehensive income for the six-month periods
ended December 31, 2016 and 2015, was $53,048 and $52,249, respectively. The related total deferred tax benefit was approximately
$4,124 and $4,441 for the same periods. ASC 718 requires the tax benefits resulting from tax deductions in excess of the compensation
cost recognized for those options to be classified and reported as both an operating cash outflow and a financing cash inflow. As of December 31, 2016, there was approximately
$193,945 of unrecognized compensation cost related to stock option awards that is expected to be recognized as expense over the
next 2 years. The total deferred tax benefit related to these awards is approximately $16,896. The Company has one employee stock option
plan under which options may be granted, the 2007 Stock Option and Restricted Stock Plan (the "2007 Plan"). The Board
of Directors may grant options to acquire shares of common stock to employees of the Company at the fair market value of the common
stock on the date of grant. Generally, options granted have a two-year vesting period based on two years of continuous service
and have a ten-year contractual life. Option grants provide for accelerated vesting if there is a change in control. Shares issued
upon the exercise of options are from those held in Treasury. The 2007 Plan was approved by the Company's shareholders at the Company's
Annual Meeting on November 30, 2007 and supersedes the Company's 2000 Stock Option Plan (the "2000 Plan"). Options covering
400,000 shares are authorized for issuance under the 2007 Plan, of which 278,300 have been granted and 200,900 are outstanding
as of December 31, 2016. While no further grants of options may be made under the 2000 Plan, as of December 31, 2016, 2,200 options
remain outstanding, vested and exercisable from the 2000 Plan. ASC 718 requires the use of a valuation
model to calculate the fair value of stock-based awards. The Company has elected to use the Black-Scholes option valuation model,
which incorporates various assumptions including those for volatility, expected life and interest rates. The table below outlines the weighted
average assumptions that the Company used to calculate the fair value of the option award for the six months ended December 31,
2016 and 2015, respectively.
December 31, 2016 December 31, 2015
Dividend yield 3.85% 3.72%
Expected stock price volatility 29.70% 28.06%
Risk-free interest rate 1.84% 1.60%
Expected option life (in years) 4.6 yrs 4.1 yrs
Weighted average fair value per share $ 4.640 $ 4.431
of options granted during the period The Company declares dividends quarterly
and paid cash dividends totaling $0.50 for the six months ended December 31, 2016 and 2015. Our Board of Directors assesses the
Company’s dividend policy periodically. There is no assurance that the Board of Directors will maintain the amount of the
regular cash dividend. Expected stock price volatility is based on the historical volatility of the Company’s stock. The
risk-free interest rate is based on the implied yield available on U.S. Treasury issues with an equivalent term approximating the
expected life of the options. The expected option life (in years) represents the estimated period of time until exercise and is
based on actual historical experience. The following table summarizes stock
option activity during the six months ended December 31, 2016:
Employee Stock Options Plan
Weighted
Number of Weighted Average
Shares Average Remaining Aggregate
Subject Exercise Contractual Intrinsic
To Options Price Term Value
Balance at July 1, 2016 170,450 $ 23.84 5.73
Granted 41,150 $ 26.25 9.93
Exercised (7,500 ) $ 18.17 —
Forfeited or expired (1,000 ) $ 26.09 —
Outstanding at December 31, 2016 203,100 $ 24.53 6.32 $ 353,212
Vested or expected to vest at December 31, 2016 190,360 $ 24.42 6.13 $ 352,610
Exercisable at December 31, 2016 117,150 $ 23.31 4.25 $ 353,212 The aggregate intrinsic value in the
table above represents the total pretax intrinsic value (the difference between the closing sale price of the Company’s common
stock as reported on the NYSE MKT on December 31, 2016 and the exercise price, multiplied by the number of in-the-money options)
that would have been received by the option holders if all option holders had exercised their options on December 31, 2016. This
amount changes based on the fair market value of the Company’s common stock. The total intrinsic values of the options exercised
during the six months ended December 31, 2016 and 2015 were $15,189 and $6,512, respectively. The following table summarizes changes in non-vested stock
options during the three months ended December 31, 2016:
Weighted Number Average Grant
of Shares Date Fair
Subject to Option Value (per Option)
Non-vested at July 1, 2016 45,800 $ 4.564
Granted 41,150 $ 4.640
Vested — —
Forfeited or expired (1,000 ) $ 4.710
Non-vested at December 31, 2016 85,950 $ 4.599

Commitments and Contingencies

Commitments and Contingencies6 Months Ended
Dec. 31, 2016
Commitments and Contingencies Disclosure [Abstract]
Commitments and ContingenciesNote 5. Commitments and Contingencies The Company at certain times enters into
standby letters of credit agreements with financial institutions primarily relating to the guarantee of future performance on certain
contracts. Contingent liabilities on outstanding standby letters of credit agreements aggregated to zero at December 31, 2016 and
2015. The Company, as a U.S. Government contractor, is subject to audits, reviews, and investigations by the U.S. Government related
to its negotiation and performance of government contracts and its accounting for such contracts. Failure to comply with applicable
U.S. Government standards by a contractor may result in suspension from eligibility for award of any new government contract and
a guilty plea or conviction may result in debarment from eligibility for awards. The government may, in certain cases, also terminate
existing contracts, recover damages, and impose other sanctions and penalties.

Recently Issued Accounting Stan

Recently Issued Accounting Standards6 Months Ended
Dec. 31, 2016
Recently Issued Accounting Standards [Abstract]
Recently Issued Accounting StandardsNote 6. Recently Issued Accounting Standards In July 2015, the Financial Accounting
Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-11, “Inventory (Topic
330): Simplifying the Measurement of Inventory.” ASU No. 2015-11 requires inventory measured using any method other than
last-in, first out or the retail inventory method to be subsequently measured at the lower of cost and net realizable value, rather
than at the lower of cost or market. Net realizable value is defined as the estimated selling price, less the estimated costs to
complete, dispose, and transport such inventory. ASU No. 2015-11 will be effective for fiscal years and interim periods beginning
after December 15, 2016. ASU No. 2015-11 is required to be applied prospectively and early adoption is permitted. The Company’s
adoption of ASU No. 2015-11 is not expected to have a material impact on the Company’s financial position or results of operations. In May 2014, the FASB issued ASU No.
2014-09, “Revenue from Contracts with Customers, ” In subsequent periods, the FASB issued
additional ASUs intended to clarify specific aspects related to the interpretation and implementation of ASU No. 2014-09. In March
2016, the FASB issued ASU No. 2016-08, “Revenue from Contracts with Customers – Principal versus Agent Considerations
(Reporting Revenue Gross versus Net)” to provide guidance on principal versus agent considerations by an entity as discussed
in ASU No. 2014-09. ASU No. 2016-08 provides criteria to be assessed by an entity when determining whether it is the principal
or agent in relation to the goods or services which the company is contractually obligated to provide to the customer. Among these
considerations are; identifying the unit of account at which the entity should assess whether it is a principal or an agent,
identifying the nature of the good or service provided to the customer; applying the control principle to certain types of
transactions; and, interaction of the control principle with the indicators provided to assist in the principle versus agent
evaluation. In April 2016, the FASB issued ASU No. 2016-10, “Revenue from Contracts with Customers – (Topic 606): Identifying
Performance Obligations and Licensing” to provide implementation guidance related to the necessary judgements required in
identifying performance obligations of a contract and guidance related to recognition of licensing revenues. In May 2016, the FASB
issued ASU No. 2016-12, “Revenue from Contracts with Customers – (Topic 606): Narrow-Scope Improvements and Practical
Expedients” to provide guidance related to the implementation of ASU No. 2014-09 in the following areas; assessing collectability
for contracts that do not meet Step 1 of revenue recognition, presentation of sales taxes, noncash consideration, contract modifications
at transition, and completed contracts at transition. These standards are effective for annual
periods beginning after December 15, 2017, and interim periods therein, using either of the following transition methods: (i) a
full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect
certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU No. 2014-09
recognized at the date of adoption (which includes additional footnote disclosures). Early adoption is permitted for annual periods
beginning after December 15, 2016 and interim periods therein. We are currently evaluating the impact of our pending adoption of
ASU No. 2014-09 on our financial statements and have not yet determined the method by which we will adopt the standard in fiscal
2019 beginning July 1, 2018. In November 2015, the FASB issued ASU
No. 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes”. The guidance requires the
classification of deferred tax assets and liabilities as noncurrent in a classified balance sheet. The current requirement that
deferred tax assets and liabilities of a taxpaying component of an entity be offset and presented as a single amount is not affected
by this update. ASU No. 2015-17 will be effective for annual periods beginning after December 15, 2016, and interim periods within
those annual periods. ASU No. 2015-17 may be applied prospectively or retrospectively, and early adoption is permitted. Adoption
of ASU No. 2015-17 would have the following impact on the Company’s financial statements at December 31, 2016; a decrease
in current assets of $217,764, a decrease in noncurrent liabilities of $202,248 and an increase in noncurrent assets of $15,516. In January 2016, the FASB issued ASU
No. 2016-01, “Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and
Financial Liabilities”. The amendments in this Update address certain aspects of recognition, measurement, presentation and
disclosure of financial instruments (primarily equity securities) in order to enhance the reporting model for financial instruments
to provide users of financial statements with more decision-useful information. ASU No. 2016-01 will be effective for annual periods
beginning after December 15, 2017, and interim periods within those annual periods. The Company is evaluating the impact that ASU
No. 2016-01 will have on the Company's financial statements. In March 2016, the FASB issued ASU No.
2016-09, “Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting”.
The areas for simplification in this update involve several aspects of the accounting for share-based payment transactions, including
the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash
flows. Additionally, this ASU allows an entity to make an accounting policy election to either estimate the number of awards that
are expected to vest (current GAAP) or account for forfeitures as they occur. ASU No. 2016-09 will be effective for annual periods
beginning after December 15, 2016, and interim periods within those annual periods. ASU No. 2016-09 may be applied prospectively
or retrospectively, and early adoption is permitted. The Company is evaluating the impact that ASU No. 2016-09 will have on the
Company's financial statements.

Employee Stock Ownership Plan

Employee Stock Ownership Plan6 Months Ended
Dec. 31, 2016
Employee Stock Ownership Plan [Abstract]
Employee Stock Ownership PlanNote 7. Employee Stock Ownership Plan The Company sponsors
a leveraged employee stock ownership plan (the "ESOP") that covers all non-union employees who work 1,000 or more hours
per year and are employed on June 30. The Company makes annual contributions to the ESOP equal to the ESOP's debt service less
dividends on unallocated shares received by the ESOP. All dividends on unallocated shares received by the ESOP are used to pay
debt service. Dividends on allocated ESOP shares are recorded as a reduction of retained earnings. As the debt is repaid, shares
are released and allocated to active employees, based on the proportion of debt service paid in the year. The Company accounts
for its ESOP in accordance with FASB ASC 718-40. Accordingly, the shares purchased by the ESOP are reported as Unearned ESOP shares
in the statement of financial position. As shares are released or committed-to-be-released, the Company reports compensation expense
equal to the current average market price of the shares, and the shares become outstanding for earnings-per-share (EPS) computations.
ESOP compensation expense was $108,167 and $111,081 for the three-month periods ended December 31, 2016 and 2015, respectively.
ESOP compensation expense was $216,876 and $224,175 for the six-month periods ended December 31, 2016 and 2015, respectively. The ESOP shares as
of December 31, 2016 and 2015 were as follows:
December 31, 2016 December 31, 2015
Allocated shares 439,432 423,568
Committed-to-be-released shares 8,333 8,750
Unreleased shares 53,334 70,417
Total shares held by the ESOP 501,099 502,735
Fair value of unreleased shares $ 1,389,884 $ 1,813,238 During the three and six months ended
December 31, 2016 the Company repurchased 1,663 shares previously held in the ESOP for $44,335. During the three and six months
ended December 31, 2015 the company repurchased 14,303 shares previously held in the ESOP for $355,418.

Investment Securities and Fai13

Investment Securities and Fair Value of Financial Instruments (Tables)6 Months Ended
Dec. 31, 2016
Investments, Debt and Equity Securities [Abstract]
Schedule of Available-for-Sale SecuritiesThe cost, gross unrealized gains, gross unrealized losses and fair value of available-for-sale
securities by major security type at December 31, 2016 and June 30, 2016 are as follows:
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
December 31, 2016
Certificates of deposit $ 8,889,000 $ — $ — $ 8,889,000
Municipal bonds 77,508 — (467 ) 77,041
Total investment securities $ 8,966,508 $ — $ (467 ) $ 8,966,041
June 30, 2016
Certificates of deposit $ 4,871,000 $ — $ — $ 4,871,000
Municipal bonds 707,593 1,466 — 709,059
Total investment securities $ 5,578,593 $ 1,466 $ — $ 5,580,059
Schedule of Contractual MaturitiesAs of December 31, 2016 and June 30,
2016, the contractual maturities of available-for-sale securities were as follows:
Years to Maturity
Less than One to
One Year Five Years Total
December 31, 2016
Available-for-sale $ 8,644,000 $ 322,041 $ 8,966,041
June 30, 2016
Available-for-sale $ 4,811,511 $ 768,548 $ 5,580,059

Stock Based Compensation (Table

Stock Based Compensation (Tables)6 Months Ended
Dec. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Schedule of Fair Value AssumptionsThe table below outlines the weighted
average assumptions that the Company used to calculate the fair value of the option award for the six months ended December 31,
2016 and 2015, respectively.
December 31, 2016 December 31, 2015
Dividend yield 3.85% 3.72%
Expected stock price volatility 29.70% 28.06%
Risk-free interest rate 1.84% 1.60%
Expected option life (in years) 4.6 yrs 4.1 yrs
Weighted average fair value per share $ 4.640 $ 4.431
of options granted during the period
Schedule of Stock Option ActivityThe following table summarizes stock
option activity during the six months ended December 31, 2016:
Employee Stock Options Plan
Weighted
Number of Weighted Average
Shares Average Remaining Aggregate
Subject Exercise Contractual Intrinsic
To Options Price Term Value
Balance at July 1, 2016 170,450 $ 23.84 5.73
Granted 41,150 $ 26.25 9.93
Exercised (7,500 ) $ 18.17 —
Forfeited or expired (1,000 ) $ 26.09 —
Outstanding at December 31, 2016 203,100 $ 24.53 6.32 $ 353,212
Vested or expected to vest at December 31, 2016 190,360 $ 24.42 6.13 $ 352,610
Exercisable at December 31, 2016 117,150 $ 23.31 4.25 $ 353,212
Schedule of Changes in Non-Vested Stock OptionsThe following table summarizes changes in non-vested stock
options during the three months ended December 31, 2016:
Weighted Number Average Grant
of Shares Date Fair
Subject to Option Value (per Option)
Non-vested at July 1, 2016 45,800 $ 4.564
Granted 41,150 $ 4.640
Vested — —
Forfeited or expired (1,000 ) $ 4.710
Non-vested at December 31, 2016 85,950 $ 4.599

Employee Stock Ownership Plan (

Employee Stock Ownership Plan (Tables)6 Months Ended
Dec. 31, 2016
Employee Stock Ownership Plan [Abstract]
Schedule of ESOP sharesThe ESOP shares as
of December 31, 2016 and 2015 were as follows:
December 31, 2016 December 31, 2015
Allocated shares 439,432 423,568
Committed-to-be-released shares 8,333 8,750
Unreleased shares 53,334 70,417
Total shares held by the ESOP 501,099 502,735
Fair value of unreleased shares $ 1,389,884 $ 1,813,238

Investment Securities and Fai16

Investment Securities and Fair Value of Financial Instruments (Schedule of Available-for-Sale Securities) (Details) - USD ($)Dec. 31, 2016Jun. 30, 2016
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost $ 8,966,508 $ 5,578,593
Gross Unrealized Gains 1,466
Gross Unrealized Losses(467)
Fair Value8,966,041 5,580,059
Certificates of Deposit [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost8,889,000 4,871,000
Gross Unrealized Gains
Gross Unrealized Losses
Fair Value8,889,000 4,871,000
Municipal Bonds [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost77,508 707,593
Gross Unrealized Gains 1,466
Gross Unrealized Losses(467)
Fair Value $ 77,041 $ 709,059

Investment Securities and Fai17

Investment Securities and Fair Value of Financial Instruments (Schedule of Contractual Maturities) (Details) - USD ($)Dec. 31, 2016Jun. 30, 2016
Contractual maturities of available-for-sale securities
Less than One Year $ 8,644,000 $ 4,811,511
One to Five Years322,041 768,548
Fair Value $ 8,966,041 $ 5,580,059

Net Income per Share (Details)

Net Income per Share (Details) - shares3 Months Ended6 Months Ended
Dec. 31, 2016Dec. 31, 2015Dec. 31, 2016Dec. 31, 2015
Net Income per Share [Abstract]
Anti-dilutive securities107,700 107,500 68,550 68,550

Stock Based Compensation (Narra

Stock Based Compensation (Narrative) (Details) - USD ($)3 Months Ended6 Months Ended109 Months Ended
Dec. 31, 2016Dec. 31, 2015Dec. 31, 2016Dec. 31, 2015Dec. 31, 2016Jun. 30, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock based compensation expense $ 29,715 $ 21,783 $ 53,048 $ 52,249
Deferred tax benefit related to stock based compensation2,359 $ 1,765 4,124 $ 4,441
Unrecognized compensation costs193,945 $ 193,945 $ 193,945
Period in which compensation cost will be recognized2 years
Deferred tax benefit related to unrecognized compensation costs $ 16,896 $ 16,896 $ 16,896
Granted41,150
Outstanding203,100 203,100 203,100 170,450
Cash divided paid $ 0.50 $ 0.50
Aggregate intrinsic value of options exercised $ 15,189 $ 6,512
Stock Option Plans [Member] | 2007 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period2 years
Expiration period10 years
Authorized shares under plan400,000 400,000 400,000
Granted278,300
Outstanding200,900 200,900 200,900
Stock Option Plans [Member] | 2000 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding2,200 2,200 2,200

Stock-based Compensation (Sched

Stock-based Compensation (Schedule of weighted average assumptions for option awards) (Details) - $ / shares12 Months Ended
Dec. 31, 2016Dec. 31, 2015
Weighted Average Assumptions
Dividend yield3.85%3.72%
Expected stock price volatility29.70%28.06%
Risk-free interest rate1.84%1.60%
Expected option life (in years)4 years 7 months 6 days4 years 1 month 6 days
Weighted average fair value per share of options granted during the period $ 4.640 $ 4.431

Stock Based Compensation (Sched

Stock Based Compensation (Schedule of Stock Option Activity) (Details)6 Months Ended12 Months Ended
Dec. 31, 2016USD ($)$ / sharessharesJun. 30, 2016$ / sharesshares
Number of Shares Subject To Options
Balance at July 1, 2016 | shares170,450
Granted | shares41,150
Exercised | shares(7,500)
Forfeited or expired | shares(1,000)
Outstanding at December 31, 2016 | shares203,100 170,450
Vested or expected to vest at December 31, 2016 | shares190,360
Exercisable at December 31, 2016 | shares117,150
Weighted Average Exercise Price
Balance at July 1, 2016 | $ / shares $ 23.84
Granted | $ / shares26.25
Exercised | $ / shares18.17
Forfeited or expired | $ / shares26.09
Outstanding at December 31, 2016 | $ / shares24.53 $ 23.84
Vested or expected to vest at December 31, 2016 | $ / shares24.42
Exercisable at December 31, 2016 | $ / shares $ 23.31
Weighted Average Remaining Contractual Term
Outstanding6 years 3 months 26 days5 years 8 months 23 days
Granted9 years 11 months 5 days
Vested or expected to vest at December 31, 20166 years 1 month 17 days
Exercisable at December 31, 20164 years 3 months
Aggregate Intrinsic Value
Outstanding at December 31, 2016 | $ $ 353,212
Vested or expected to vest at December 31, 2016 | $352,610
Exercisable at December 31, 2016 | $ $ 353,212

Stock Based Compensation (Sch22

Stock Based Compensation (Schedule of Changes in Non-Vested Stock Options) (Details)6 Months Ended
Dec. 31, 2016$ / sharesshares
Weighted Number of Shares Subject to Option
Non-vested at July 1, 2016 | shares45,800
Granted | shares41,150
Vested | shares
Forfeited or expired | shares(1,000)
Non-vested at December 31, 2016 | shares85,950
Average Grant Date Fair Value
Non-vested at July 1, 2016 | $ / shares $ 4.564
Granted | $ / shares4.640
Vested | $ / shares
Forfeited or expired | $ / shares4.710
Non-vested at December 31, 2016 | $ / shares $ 4.599

Commitments and Contingencies (

Commitments and Contingencies (Details) - USD ($)Dec. 31, 2016Dec. 31, 2015
Standby Letters of Credit [Member]
Contingent liabilities $ 0 $ 0

Recently Issued Accounting St24

Recently Issued Accounting Standards (Details) - Adjustments for New Accounting Pronouncement [Member]6 Months Ended
Dec. 31, 2016USD ($)
Item Effected [Line Items]
Change in current assets $ 217,764
Change in noncurrent liabilities202,248
Change in noncurrent assets $ 15,516

Employee Stock Ownership Plan25

Employee Stock Ownership Plan (Narrative) (Details)3 Months Ended6 Months Ended
Dec. 31, 2016USD ($)sharesDec. 31, 2015USD ($)sharesDec. 31, 2016USD ($)hsharesDec. 31, 2015USD ($)shares
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items]
ESOP compensation expense $ 108,167 $ 111,081 $ 216,876 $ 224,175
Employee Stock Ownership Plan [Member]
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items]
Number of hours worked per year to quality for the plan | h1,000
Shares repurchased | shares1,663 14,303 1,663 14,303
Value of shares repurchased $ 44,335 $ 355,418 $ 44,335 $ 355,418

Employee Stock Ownership Plan26

Employee Stock Ownership Plan (Schedule of ESOP shares) (Details) - USD ($)Dec. 31, 2016Dec. 31, 2015
Employee Stock Ownership Plan [Abstract]
Allocated shares439,432 423,568
Committed-to-be-released shares8,333 8,750
Unreleased shares53,334 70,417
Total shares held by the ESOP501,099 502,735
Fair value of unreleased shares $ 1,389,884 $ 1,813,238