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Defined Benefit Pension Plan | 12 Months Ended
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Dec. 31, 2024
Retirement Benefits [Abstract] |
Defined Benefit Pension Plan | Defined Benefit Pension Plan The Company provides pension benefits for eligible employees through a defined benefit pension plan. Employees hired prior to June 1, 2005 participate in the retirement plan on a non-contributing basis and were fully vested after five years of service. The following tables set forth the Plan’s status and related disclosures (in thousands):
| December 31, 2024 |  | December 31, 2023
Changes in benefit obligation: |  |  |
Benefit obligation at beginning of year | $ | 31,500 |  |  | $ | 30,225 |
Service cost | 445 |  |  | 469 |
Interest cost | 1,456 |  |  | 1,471 |
Actuarial (gain) loss | (3,040) |  |  | 775 |
Distributions | (1,761) |  |  | (1,440) |
Benefit obligation at end of year | $ | 28,600 |  |  | $ | 31,500 |
Change in plan assets: |  |  |
Fair value of plan assets at beginning of year | $ | 33,181 |  |  | $ | 31,968 |
Adjustment to beginning of year fair value | — |  |  | — |
Actual return on plan assets | (806) |  |  | 2,653 |
Employer contribution | — |  |  | — |
Distributions | (1,761) |  |  | (1,440) |
Fair value of plan assets at end of year | $ | 30,614 |  |  | $ | 33,181 |
Funded status recognized as accrued pension cost | $ | 2,014 |  |  | $ | 1,681 |
Amounts recognized in accumulated other comprehensive (income) loss: |  |  |
Net loss | $ | 5,755 |  |  | $ | 7,273 |
Deferred income tax benefit | (1,179) |  |  | (1,527) |
Total amount recognized | $ | 4,576 |  |  | $ | 5,746 |
Accumulated benefit obligation | $ | 26,930 |  |  | $ | 29,372 |
At December 31, 2024, December 31, 2023, and December 31, 2022, the assumptions used to determine the pension benefit obligation were as follows:
| December 31, 2024 |  | December 31, 2023 |  | December 31, 2022
Discount rate | 5.49 | % |  | 4.80 | % |  | 5.00 | %
Rate of compensation increase | 3.00 |  |  | 3.00 |  |  | 3.00 |
Components of net periodic benefit cost and other amounts recognized in other comprehensive income (in thousands):
| December 31, 2024 |  | December 31, 2023 |  | December 31, 2022
Components of net periodic pension cost: |  |  |  |  |
Service cost | $ | 445 |  |  | $ | 469 |  |  | $ | 786 |
Interest cost | 1,456 |  |  | 1,471 |  |  | 1,141 |
Expected return on plan assets | (1,115) |  |  | (879) |  |  | (1,539) |
Amortization of prior service costs | — |  |  | — |  |  | — |
Amortization of net loss | 400 |  |  | 630 |  |  | 309 |
Net periodic pension costs | $ | 1,186 |  |  | $ | 1,691 |  |  | $ | 697 |
Other changes recognized in other comprehensive (income) loss |  |  |  |  |
Net loss | $ | (1,118) |  |  | $ | (998) |  |  | $ | 1,589 |
Amortization of net loss | (400) |  |  | (630) |  |  | (309) |
Deferred tax expense (benefit) | 349 |  |  | 342 |  |  | (269) |
Total recognized in accumulated other comprehensive (income) loss | $ | (1,169) |  |  | $ | (1,286) |  |  | $ | 1,011 |
Total recognized in net periodic pension costs and other comprehensive loss | $ | 17 |  |  | $ | 405 |  |  | $ | 1,708 |
For the years ended December 31, 2024, December 31, 2023, and December 31, 2022, the assumptions used to determine net periodic pension cost were as follows:
| December 31, 2024 |  | December 31, 2023 |  | December 31, 2022
Discount rate | 5.49 | % |  | 4.80 | % |  | 5.00 | %
Expected long-term rate of return on plan assets | 4.00 |  |  | 3.75 |  |  | 3.75 |
Annual salary increase | 3.00 |  |  | 3.00 |  |  | 3.00 |
The expected long-term return on plan assets assumption was developed as a weighted average rate based on the target asset allocation of the plan and the long-term capital market assumptions. The overall return for each asset class was developed by combining a long-term inflation component and the associated expected real rates. The development of the capital market assumptions utilized a variety of methodologies, including, but not limited to, historical analysis, stock valuation models, such as dividend discount models, and earnings yield models, expected economic growth outlook, and market yields analysis. The Company’s pension plan asset allocations at December 31, 2024, and December 31, 2023, were as follows:
| December 31, 2024 |  | December 31, 2023
Equity securities | 9.9 | % |  | 9.6 | %
Debt securities & cash equivalents | 90.1 | % |  | 90.4 | %
Total | 100.0 | % |  | 100.0 | %
As of December 31, 2024, and December 31, 2023, the fair value of plan assets was as follows (in thousands):
| December 31, 2024
| Fair Value Measurements Using |  |
| Level 1 |  | Level 2 |  | Level 3 |  | Assets at Fair Value
Cash and cash equivalents | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Equity securities | — |  |  | 3,040 |  |  | — |  |  | 3,040 |
Debt securities | — |  |  | 27,574 |  |  | — |  |  | 27,574 |
Total pension assets | $ | — |  |  | $ | 30,614 |  |  | $ | — |  |  | $ | 30,614 |
| December 31, 2023
| Fair Value Measurements Using |  |
| Level 1 |  | Level 2 |  | Level 3 |  | Assets at Fair Value
Cash and cash equivalents | $ | 122 |  |  | $ | — |  |  | $ | — |  |  | $ | 122 |
Equity securities | — |  |  | 3,209 |  |  | — |  |  | 3,209 |
Debt securities | — |  |  | 29,859 |  |  | — |  |  | 29,859 |
Total pension assets | $ | 122 |  |  | $ | 33,068 |  |  | $ | — |  |  | $ | 33,190 |
Assets are valued using a combination of methods including quoted prices for similar assets in active or non-active markets. The fund is sufficiently diversified to maintain a reasonable level of risk without imprudently sacrificing return. Investments are selected by officers experienced in financial matters and risk management, and implementation of approved investment strategies is monitored on a regular basis. Both actively and passively managed investment strategies are considered, and funds are allocated across asset classes to develop an efficient investment structure. It is the responsibility of the trustee to consider costs in administering the portfolio, while maintaining high quality investments. Costs include, but are not limited to, management and custodial fees, consulting fees, transaction costs, and other administrative costs which may be charged to the trust. The Company does not expect to contribute to its pension plan in 2025. Estimated future benefit payments, which reflect expected future service, as appropriate, are as follows (in thousands):
Years ending December 31, |  |
2025 |  | $ | 1,472 |
2026 |  | 1,523 |
2027 |  | 1,523 |
2028 |  | 1,629 |
2029 |  | 1,673 |
Following 5 years |  | 9,478 |
Other Post-Retirement Plans Investment and Savings Plan As of December 31, 2024, the Company maintained the 401(k) plans of both legacy Summit and Burke & Herbert. Under both of these plans, eligible employees may contribute a percentage of their compensation, and the Company matched a portion of the employee’s contribution based on the specific 401(k) plan. The contribution amounts matched by the Company depend on the 401(k) plan. The Company’s total contributions in 2024, 2023, and 2022 totaled $1.7 million, $1.0 million, and $1.0 million, respectively, which were included within pensions and other employee benefits on the Consolidated Statements of Income. Other Retirement Plans The Company has certain non-qualified Supplemental Executive Retirement Plans (“SERP”) with certain senior officers and directors, which provide participating officers with an income benefit payable at retirement age or death. Upon the Merger, the Company assumed additional SERP plans along with an acceleration of benefits as part of the Merger. Plan expenses for the years ending December 31, 2024, December 31, 2023, and December 31, 2022, amounted to $3.7 million, $522 thousand, and $290 thousand, respectively. The Company has a deferred compensation plan (2021 Deferred Compensation Plan) for current directors and senior officers. The plan is funded with director fees and salary reductions which are placed in a trust account invested by the Company. The trust investments consist of equity investments, fixed income investments, and cash. The trust account balance totaled $1.3 million and $818 thousand at December 31, 2024, and December 31, 2023, respectively. This balance is included within other assets and is directly offset within accrued interest and other liabilities on the Company’s Consolidated Balance Sheets. Amounts contributed to the trust and recorded as expense for the Company totaled $541 thousand and $341 thousand, respectively, in 2024 and 2023.

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