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ESP Espey Manufacturing & Electronics

Document and Entity Information

Document and Entity Information - shares9 Months Ended
Mar. 31, 2018May 10, 2018
Document And Entity Information [Abstract]
Entity Registrant NameESPEY MFG & ELECTRONICS CORP
Entity Central Index Key33533
Document Type10-Q
Document Period End DateMar. 31,
2018
Amendment Flagfalse
Current Fiscal Year End Date--06-30
Entity Filer CategorySmaller Reporting Company
Document Fiscal Period FocusQ3
Document Fiscal Year Focus2018
Entity Common Stock, Shares Outstanding2,383,723

Balance Sheets

Balance Sheets - USD ($)Mar. 31, 2018Jun. 30, 2017
ASSETS:
Cash and cash equivalents $ 6,906,752 $ 10,058,163
Investment securities11,402,394 9,426,968
Trade accounts receivable, net of allowance of $3,0003,595,441 3,399,613
Income tax receivable148,102 120,179
Inventories:
Raw materials1,419,002 1,303,259
Work-in-process978,550 512,014
Costs related to contracts in process, net of advance payments of $577,714 and $1,366,504 at March 31, 2018 and June 30, 2017, respectively7,903,603 7,863,538
Total inventories10,301,155 9,678,811
Deferred tax assets 317,559
Prepaid expenses and other current assets776,447 227,306
Total current assets33,130,291 33,228,599
Property, plant and equipment, net2,579,043 2,265,096
Deferred tax assets78,489
Total assets35,787,823 35,493,695
LIABILITIES AND STOCKHOLDERS' EQUITY:
Accounts payable1,499,895 2,250,115
Accrued expenses:
Salaries and wages391,213 172,045
Vacation724,662 656,199
ESOP payable245,752
Other163,418 250,283
Payroll and other taxes withheld58,429 46,939
Total current liabilities3,083,369 3,375,581
Deferred tax liabilities 220,571
Total liabilities3,083,369 3,596,152
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 March 31, 2018 and June 30, 2017. Outstanding 2,375,923 and 2,371,321 as of March 31, 2018 and June 30, 2017, respectively (includes 33,125 and 45,000 Unearned ESOP shares, respectively)1,009,958 1,009,958
Capital in excess of par value17,861,046 17,650,335
Accumulated other comprehensive loss(6,592)(3,599)
Retained earnings22,301,533 21,670,196
Total stockholders equity before ESOP41,165,945 40,326,890
Less: Unearned ESOP shares(650,248)(650,248)
Cost of 653,951 and 658,553 shares of common stock in treasury as of March 31, 2018 and June 30, 2017, respectively(7,811,243)(7,779,099)
Total stockholders' equity32,704,454 31,897,543
Total liabilities and stockholders' equity $ 35,787,823 $ 35,493,695

Balance Sheets (Parenthetical)

Balance Sheets (Parenthetical) - USD ($)Mar. 31, 2018Jun. 30, 2017
Statement of Financial Position [Abstract]
Trade accounts receivable, allowance $ 3,000 $ 3,000
Advance payments of costs related to contracts in process $ 577,714 $ 1,366,504
Common stock, par value $ 0.3333 $ 0.3333
Common stock, shares authorized10,000,000 10,000,000
Common stock, shares issued3,029,874 3,029,874
Common stock, shares outstanding2,375,923 2,371,321
Unearned ESOP, shares33,125 45,000
Treasury stock, shares653,951 658,553

Statements of Comprehensive Inc

Statements of Comprehensive Income (Unaudited) - USD ($)3 Months Ended9 Months Ended
Mar. 31, 2018Mar. 31, 2017Mar. 31, 2018Mar. 31, 2017
Income Statement [Abstract]
Net sales $ 5,663,161 $ 5,324,104 $ 24,690,689 $ 17,060,411
Cost of sales4,407,957 4,195,599 18,898,733 13,508,014
Gross profit1,255,204 1,128,505 5,791,956 3,552,397
Selling, general and administrative expenses895,129 784,589 2,756,319 2,307,636
Operating income360,075 343,916 3,035,637 1,244,761
Other income
Interest income42,684 39,911 109,561 63,385
Other13,428 7,488 31,236 21,691
Total other income56,112 47,399 140,797 85,076
Income before provision for income taxes416,187 391,315 3,176,434 1,329,837
Provision for income taxes98,423 112,142 801,035 385,761
Net income317,764 279,173 2,375,399 944,076
Other comprehensive income, net of tax:
Unrealized loss on investment securities(2,143)(247)(2,993)(1,503)
Total comprehensive income $ 315,621 $ 278,926 $ 2,372,406 $ 942,573
Net income per share:
Basic $ 0.14 $ 0.12 $ 1.02 $ 0.41
Diluted $ 0.14 $ 0.12 $ 1.02 $ 0.41
Weighted average number of shares outstanding:
Basic2,331,697 2,317,838 2,328,518 2,309,771
Diluted2,349,428 2,327,797 2,338,909 2,323,431
Dividends per share: $ 0.25 $ 0.25 $ 0.75 $ 0.75

Statements of Cash Flows (Unaud

Statements of Cash Flows (Unaudited) - USD ($)9 Months Ended
Mar. 31, 2018Mar. 31, 2017
Cash Flows from Operating Activities:
Net income $ 2,375,399 $ 944,076
Adjustments to reconcile net income to net cash provided by operating activities:
Excess tax benefits from share-based compensation (9,070)
Stock-based compensation86,675 93,293
Depreciation318,076 323,710
ESOP compensation expense279,502 320,835
Deferred income tax expense19,707 50,146
Changes in assets and liabilities:
(Increase) decrease in trade receivable, net(195,828)1,583,208
(Increase) decrease in income taxes receivable(27,923)107,615
(Increase) decrease in inventories, net(622,344)1,891,249
Increase in prepaid expenses and other current assets(549,141)(123,758)
(Decrease) increase in accounts payable(750,220)82,715
Increase (decrease) in accrued salaries and wages219,168 (258,947)
Increase in vacation accrual68,463 16,874
Decrease in ESOP payable(33,750)(46,250)
Decrease in other accrued expenses(86,865)(40,020)
Increase (decrease) in payroll and other taxes withheld11,490 (2,531)
Net cash provided by operating activities1,112,409 4,933,145
Cash Flows from Investing Activities:
Additions to property, plant and equipment(632,023)(331,686)
Purchase of investment securities(10,101,613)(7,606,900)
Proceeds from sale/maturity of investment securities8,121,986 3,974,224
Net cash used in investing activities(2,611,650)(3,964,362)
Cash Flows from Financing Activities:
Dividends on common stock(1,744,062)(1,730,031)
Purchase of treasury stock(109,694)(44,335)
Proceeds from exercise of stock options201,586 150,917
Excess tax benefits from share-based compensation 9,070
Net cash used in financing activities(1,652,170)(1,614,379)
Decrease in cash and cash equivalents(3,151,411)(645,596)
Cash and cash equivalents, beginning of period10,058,163 10,031,644
Cash and cash equivalents, end of period6,906,752 9,386,048
Supplemental Schedule of Cash Flow Information:
Income taxes paid $ 810,000 $ 228,000

Basis of Presentation

Basis of Presentation9 Months Ended
Mar. 31, 2018
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, 2017. Certain reclassifications may have been made to the prior year financial statements to conform to the current
year presentation.

Investment Securities

Investment Securities9 Months Ended
Mar. 31, 2018
Investments, Debt and Equity Securities [Abstract]
Investment SecuritiesNote 2. Investment Securities 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 March 31, 2018 and June 30, 2017 because of the immediate or short-term maturity of these financial
instruments. Investment securities at March 31, 2018
and June 30, 2017 consist of certificates of deposit and government 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 March 31, 2018 and June 30, 2017 are as follows:
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
March 31, 2018
Certificates of deposit $ 10,439,000 $ — $ — $ 10,439,000
Municipal bonds 968,749 603 (5,958 ) 963,394
Total investment securities $ 11,407,749 $ 603 $ (5,958 ) $ 11,402,394
June 30, 2017
Certificates of deposit $ 8,557,000 $ — $ — $ 8,557,000
Municipal bonds 871,872 258 (2,162 ) 869,968
Total investment securities $ 9,428,872 $ 258 $ (2,162 ) $ 9,426,968 The portfolio is diversified and highly
liquid and primarily consists of investment grade fixed income instruments. At March 31, 2018, 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 March 31, 2018 and June 30, 2017,
the remaining contractual maturities of available-for-sale securities were as follows:
Years to Maturity
Less than One to
One Year Five Years Total
March 31, 2018
Available-for-sale $ 10,528,099 $ 874,295 $ 11,402,394
June 30, 2017
Available-for-sale $ 8,829,542 $ 597,426 $ 9,426,968

Net Income per Share

Net Income per Share9 Months Ended
Mar. 31, 2018
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 103,600 and 152,150 shares of our common stock for the three and nine months ended March 31, 2018 and 2017, 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 Compensation9 Months Ended
Mar. 31, 2018
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 March 31, 2018 and 2017 was $36,205 and
$40,245, respectively, before income taxes. The related total deferred tax benefits were approximately $2,034 and $3,769 for the
same periods. Total stock-based compensation expense recognized in the statements of comprehensive income for the nine-month periods
ended March 31, 2018 and 2017, was $86,675 and $93,293, respectively, before income taxes. The related total deferred tax benefit
was approximately $4,805 and $7,893 for the same periods. As of March 31, 2018, there was approximately
$153,718 of unrecognized compensation cost related to stock option awards that is expected to be recognized as expense over the
next 2.00 years. The total deferred tax benefit related to these awards is expected to be approximately $8,738. The Company has one employee stock option plan
under which options or stock awards may be granted, the 2017 Stock Options and Restricted Stock Plan (the "2017 Plan"),
approved by the Company's shareholders at the Company's Annual Meeting on December 1, 2017. The Board of Directors may grant options
to acquire shares of common stock to employees and non-employee directors of the Company at the fair market value of the common
stock on the date of grant. The maximum aggregate number of shares of Common Stock subject to options or awards to non-employee
directors is 133,000 and the maximum aggregate number of shares of Common Stock subject to options or awards granted to non-employee
directors during any single fiscal year is the lesser of 13,300 and 33 1/3% of the total number of shares subject to options or
awards granted in such fiscal year. The maximum number of shares subject to options or awards granted to any individual employee
may not exceed 15,000 in a fiscal year. 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. Options covering 400,000 shares are authorized for issuance
under the 2017 plan, of which 51,715 have been granted as of March 31, 2018. While no further grants of options may be made under
the Company’s 2007 Stock Option and Restricted Stock Plan, as of March 31, 2018, 185,400 options were outstanding under such
plan of which 145,950 are vested and exercisable. 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 dividend yield, volatility, expected life and interest rates. The table below outlines the weighted average
assumptions that the Company used to calculate the fair value of each option award for the nine months ended March 31, 2018 and
2017.
March 31, 2018 March 31, 2017
Dividend yield 4.60% 3.85%
Company’s expected volatility 23.97% 29.70%
Risk-free interest rate 1.95% 1.84%
Expected term 4.7 yrs 4.6 yrs
Weighted average fair value per share
of options granted during the period $ 2.790 $ 4.640 The Company declares dividends quarterly and
paid cash dividends totaling $0.75 per share for the nine months ended March 31, 2018 and 2017. 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 nine months ended March 31, 2018:
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, 2017 197,800 $ 24.57 5.86
Granted 51,715 $ 21.76 9.54
Exercised (9,400 ) $ 21.45 —
Forfeited or expired (4,885 ) $ 24.44 —
Outstanding at March 31, 2018 235,230 $ 24.08 6.22 $ 528,162
Vested or expected to vest at March 31, 2018 221,814 $ 24.10 6.04 $ 494,369
Exercisable at March 31, 2018 145,950 $ 24.31 4.42 $ 303,756 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 March 31, 2018 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 March 31, 2018. 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 nine months ended March 31, 2018 and 2017 were $23,437 and $20,769, respectively. The following table summarizes changes in non-vested stock
options during the nine months ended March 31, 2018:
Number Weighted Average
of Shares Grant Date Fair
Subject to Option Value (per Option)
Non-vested at July 1, 2017 42,900 $ 4.586
Granted 51,715 $ 2.793
Vested (1,500 ) $ 4.149
Forfeited or expired (3,835 ) $ 3.731
Non-vested at March 31, 2018 89,280 $ 3.591

Commitments and Contingencies

Commitments and Contingencies9 Months Ended
Mar. 31, 2018
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 March 31, 2018 and
June 30, 2017. 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 Standards9 Months Ended
Mar. 31, 2018
Recently Issued Accounting Standards [Abstract]
Recently Issued Accounting StandardsNote 6. Recently Issued Accounting Standards 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 continuing to evaluate the impact of our pending adoption of ASU No. 2014-09, which
we do not expect to have a material impact on the Company’s financial statements upon adoption. The company expects to use
the modified retrospective method when adopting the standard 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 non-current in a classified balance sheet. The current requirement that
deferred tax assets and liabilities of a tax-paying component of an entity be offset and presented as a single amount is not affected
by this update. We adopted ASU 2015-17 during the first quarter of fiscal year 2018 on a prospective basis. Prior periods were
not retrospectively adjusted. Accordingly, for the nine-month period ended March 31, 2018 we decreased current deferred tax assets
by $268,371 and decreased noncurrent deferred tax liabilities by $189,882; the net reclassification of which increased noncurrent
deferred tax assets by $78,849. Adoption of ASU No. 2015-17 for the prior period presented would have the following impact on
the Company’s financial statements for June 30, 2017; a decrease in current assets of $317,559, a decrease in non-current
liabilities of $220,571 and an increase in non-current assets of $96,988. 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. We adopted ASU 2016-09 during the first quarter of fiscal year 2018 on a prospective basis. We have elected to follow
an accounting policy to estimate the number of awards that are expected to vest (consistent with ASU and prior GAAP). Adoption
of ASU No. 2016-09 did not have a material impact on the Company’s financial statements. In February 2018, the FASB issued ASU
No. 2018-02, “Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects
from Accumulated Other Comprehensive Income”. Under current accounting guidance, the income tax effects for changes in income
tax rates and certain other transactions are recognized in income from continuing operations resulting in income tax effects recognized
in Accumulated Other Comprehensive Income that do not reflect the current tax rate of the entity (“stranded tax effects”).
The new guidance allows the Company the option to reclassify these stranded tax effects to retained earnings that relate to the
change in the federal tax rate resulting from the passage of the Tax Cuts and Jobs Act (the “Tax Act”). This update
is effective for fiscal years beginning after December 15, 2018, including interim periods therein, and early adoption is permitted.
The Company is evaluating the impact that ASU No. 2018-02 will have on the Company's financial statements.

Employee Stock Ownership Plan

Employee Stock Ownership Plan9 Months Ended
Mar. 31, 2018
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 $100,464 and $103,959 for the three-month periods ended March 31, 2018 and 2017, respectively. ESOP
compensation expense was $279,502 and $320,835 for the nine-month periods ended March 31, 2018 and 2017, respectively. The ESOP shares as
of March 31, 2018 and 2017 were as follows:
March 31, 2018 March 31, 2017
Allocated shares 443,198 439,432
Committed-to-be-released shares 11,875 12,500
Unreleased shares 33,125 49,167
Total shares held by the ESOP 488,198 501,099
Fair value of unreleased shares $ 867,875 $ 1,130,841 During the three and nine months ended
March 31, 2018 the Company repurchased 0 and 4,798 shares previously held in the ESOP for $0 and $109,694. During the three and
nine months ended March 31, 2017 the Company repurchased 0 and 1,663 shares previously held in the ESOP for $0 and $44,335. The ESOP allows for eligible participants to take whole share distributions from the plan on specific dates in
accordance with the provision of the plan. Share distributions from the ESOP during the three and nine months ended March 31,
2018 totaled 0 and 8,103 shares, respectively. During the three and nine month period ended March 31, 2017 the ESOP did not
distribute any shares from the plan.

Investment Securities (Tables)

Investment Securities (Tables)9 Months Ended
Mar. 31, 2018
Investments, Debt and Equity Securities [Abstract]
Schedule of Available-for-Sale SecuritiesInvestment securities at March 31, 2018
and June 30, 2017 consist of certificates of deposit and government 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 March 31, 2018 and June 30, 2017 are as follows:
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
March 31, 2018
Certificates of deposit $ 10,439,000 $ — $ — $ 10,439,000
Municipal bonds 968,749 603 (5,958 ) 963,394
Total investment securities $ 11,407,749 $ 603 $ (5,958 ) $ 11,402,394
June 30, 2017
Certificates of deposit $ 8,557,000 $ — $ — $ 8,557,000
Municipal bonds 871,872 258 (2,162 ) 869,968
Total investment securities $ 9,428,872 $ 258 $ (2,162 ) $ 9,426,968
Schedule of Contractual MaturitiesAs of March 31, 2018 and June 30, 2017,
the remaining contractual maturities of available-for-sale securities were as follows:
Years to Maturity
Less than One to
One Year Five Years Total
March 31, 2018
Available-for-sale $ 10,528,099 $ 874,295 $ 11,402,394
June 30, 2017
Available-for-sale $ 8,829,542 $ 597,426 $ 9,426,968

Stock Based Compensation (Table

Stock Based Compensation (Tables)9 Months Ended
Mar. 31, 2018
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 each option award for the nine months ended March 31, 2018 and
2017.
March 31, 2018 March 31, 2017
Dividend yield 4.60% 3.85%
Company’s expected volatility 23.97% 29.70%
Risk-free interest rate 1.95% 1.84%
Expected term 4.7 yrs 4.6 yrs
Weighted average fair value per share
of options granted during the period $ 2.790 $ 4.640
Schedule of Stock Option ActivityThe following table summarizes stock
option activity during the nine months ended March 31, 2018:
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, 2017 197,800 $ 24.57 5.86
Granted 51,715 $ 21.76 9.54
Exercised (9,400 ) $ 21.45 —
Forfeited or expired (4,885 ) $ 24.44 —
Outstanding at March 31, 2018 235,230 $ 24.08 6.22 $ 528,162
Vested or expected to vest at March 31, 2018 221,814 $ 24.10 6.04 $ 494,369
Exercisable at March 31, 2018 145,950 $ 24.31 4.42 $ 303,756
Schedule of Changes in Non-Vested Stock OptionsThe following table summarizes changes in non-vested stock
options during the nine months ended March 31, 2018:
Number Weighted Average
of Shares Grant Date Fair
Subject to Option Value (per Option)
Non-vested at July 1, 2017 42,900 $ 4.586
Granted 51,715 $ 2.793
Vested (1,500 ) $ 4.149
Forfeited or expired (3,835 ) $ 3.731
Non-vested at March 31, 2018 89,280 $ 3.591

Employee Stock Ownership Plan (

Employee Stock Ownership Plan (Tables)9 Months Ended
Mar. 31, 2018
Employee Stock Ownership Plan [Abstract]
Schedule of ESOP sharesThe ESOP shares as
of March 31, 2018 and 2017 were as follows:
March 31, 2018 March 31, 2017
Allocated shares 443,198 439,432
Committed-to-be-released shares 11,875 12,500
Unreleased shares 33,125 49,167
Total shares held by the ESOP 488,198 501,099
Fair value of unreleased shares $ 867,875 $ 1,130,841

Investment Securities (Schedule

Investment Securities (Schedule of Available-for-Sale Securities) (Details) - USD ($)Mar. 31, 2018Jun. 30, 2017
Debt Securities, Available-for-sale [Line Items]
Amortized Cost $ 11,407,749 $ 9,428,872
Gross Unrealized Gains603 258
Gross Unrealized Losses(5,958)(2,162)
Fair Value11,402,394 9,426,968
Certificates of Deposit [Member]
Debt Securities, Available-for-sale [Line Items]
Amortized Cost10,439,000 8,557,000
Gross Unrealized Gains
Gross Unrealized Losses
Fair Value10,439,000 8,557,000
Municipal Bonds [Member]
Debt Securities, Available-for-sale [Line Items]
Amortized Cost968,749 871,872
Gross Unrealized Gains603 258
Gross Unrealized Losses(5,958)(2,162)
Fair Value $ 963,394 $ 869,968

Investment Securities (Schedu17

Investment Securities (Schedule of Contractual Maturities) (Details) - USD ($)Mar. 31, 2018Jun. 30, 2017
Contractual maturities of available-for-sale securities
Less than One Year $ 10,528,099 $ 8,829,542
One to Five Years874,295 597,426
Fair Value $ 11,402,394 $ 9,426,968

Net Income per Share (Details)

Net Income per Share (Details) - shares3 Months Ended9 Months Ended
Mar. 31, 2018Mar. 31, 2017Mar. 31, 2018Mar. 31, 2017
Net Income per Share [Abstract]
Anti-dilutive securities103,600 152,150 103,600 152,150

Stock Based Compensation (Narra

Stock Based Compensation (Narrative) (Details) - USD ($)3 Months Ended6 Months Ended9 Months Ended
Mar. 31, 2018Mar. 31, 2017Dec. 31, 2017Mar. 31, 2018Mar. 31, 2017Jun. 30, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock based compensation expense $ 36,205 $ 40,245 $ 86,675 $ 93,293
Deferred tax benefit related to stock based compensation2,034 $ 3,769 4,805 $ 7,893
Unrecognized compensation costs153,718 $ 153,718
Period in which compensation cost will be recognized2 years
Deferred tax benefit related to unrecognized compensation costs $ 8,738 $ 8,738
Granted51,715
Outstanding235,230 235,230 197,800
Cash divided paid $ 0.75 $ 0.75
Total intrinsic values of the options exercised $ 23,437 $ 20,769
2017 Plan [Member] | Stock Option Plans [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period2 years
Expiration period10 years
Authorized shares under plan400,000
Granted51,715
2017 Plan [Member] | Non employee directors [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Authorized shares under plan133,000
Percentage of total number of shares subject to options or awards, single fiscal year33.33%
Number of shares subject to option or award, single fiscal year13,300
2017 Plan [Member] | Individual Employee [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares subject to option or award, single fiscal year15,000
2007 Plan [Member] | Stock Option Plans [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding185,400 185,400
Vested and exercisable shares145,950 145,950

Stock Based Compensation (Sched

Stock Based Compensation (Schedule of weighted average assumptions for option awards) (Details) - $ / shares9 Months Ended
Mar. 31, 2018Mar. 31, 2017
Weighted Average Assumptions
Dividend yield4.60%3.85%
Company's expected volatility23.97%29.70%
Risk-free interest rate1.95%1.84%
Expected term4 years 8 months 12 days4 years 7 months 6 days
Weighted average fair value per share of options granted during the period $ 2.790 $ 4.640

Stock Based Compensation (Sch21

Stock Based Compensation (Schedule of Stock Option Activity) (Details) - USD ($)9 Months Ended12 Months Ended
Mar. 31, 2018Jun. 30, 2017
Number of Shares Subject To Options
Balance at July 1, 2017197,800
Granted51,715
Exercised(9,400)
Forfeited or expired(4,885)
Outstanding at March 31, 2018235,230 197,800
Vested or expected to vest at March 31, 2018221,814
Exercisable at March 31, 2018145,950
Weighted Average Exercise Price
Balance at July 1, 2017 $ 24.57
Granted21.76
Exercised21.45
Forfeited or expired24.44
Outstanding at March 31, 201824.08 $ 24.57
Vested or expected to vest at March 31, 201824.10
Exercisable at March 31, 2018 $ 24.31
Weighted Average Remaining Contractual Term
Outstanding6 years 2 months 19 days5 years 10 months 10 days
Granted9 years 6 months 14 days
Vested or expected to vest at March 31, 20186 years 15 days
Exercisable at March 31, 20184 years 5 months 1 day
Aggregate Intrinsic Value
Outstanding at March 31, 2018 $ 528,162
Vested or expected to vest at March 31, 2018494,369
Exercisable at March 31, 2018 $ 303,756

Stock Based Compensation (Sch22

Stock Based Compensation (Schedule of Changes in Non-Vested Stock Options) (Details)9 Months Ended
Mar. 31, 2018$ / sharesshares
Number of Shares Subject to Option
Non-vested at July 1, 2017 | shares42,900
Granted | shares51,715
Vested | shares(1,500)
Forfeited or expired | shares(3,835)
Non-vested at March 31, 2018 | shares89,280
Weighted Average Grant Date Fair Value (per Option)
Non-vested at July 1, 2017 | $ / shares $ 4.586
Granted | $ / shares2.793
Vested | $ / shares4.149
Forfeited or expired | $ / shares3.731
Non-vested at March 31, 2018 | $ / shares $ 3.591

Commitments and Contingencies (

Commitments and Contingencies (Details) - USD ($)Mar. 31, 2018Jun. 30, 2017
Standby Letters of Credit [Member]
Contingent liabilities $ 0 $ 0

Recently Issued Accounting St24

Recently Issued Accounting Standards (Details) - USD ($)9 Months Ended12 Months Ended
Mar. 31, 2018Jun. 30, 2017
Item Effected [Line Items]
Change in current assets $ (268,371)
Change in noncurrent liabilities(189,882)
Change in noncurrent assets $ 78,849
Adjustments for New Accounting Pronouncement [Member]
Item Effected [Line Items]
Change in current assets $ 317,559
Change in noncurrent liabilities220,571
Change in noncurrent assets $ 96,988

Employee Stock Ownership Plan25

Employee Stock Ownership Plan (Narrative) (Details)3 Months Ended9 Months Ended
Mar. 31, 2018USD ($)sharesMar. 31, 2017USD ($)sharesMar. 31, 2018USD ($)hsharesMar. 31, 2017USD ($)shares
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items]
ESOP compensation expense | $ $ 100,464 $ 103,959 $ 279,502 $ 320,835
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 | shares0 0 4,798 1,663
Value of shares repurchased | $ $ 0 $ 0 $ 109,694 $ 44,335
Shares distributed | shares0 8,103

Employee Stock Ownership Plan26

Employee Stock Ownership Plan (Schedule of ESOP shares) (Details) - USD ($)Mar. 31, 2018Mar. 31, 2017
Employee Stock Ownership Plan [Abstract]
Allocated shares443,198 439,432
Committed-to-be-released shares11,875 12,500
Unreleased shares33,125 49,167
Total shares held by the ESOP488,198 501,099
Fair value of unreleased shares $ 867,875 $ 1,130,841