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Defined Benefit Pension Plan
 12 Months Ended
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, 2024December 31, 2023
Changes in benefit obligation:
Benefit obligation at beginning of year$31,500 $30,225 
Service cost445 469 
Interest cost1,456 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, 2024December 31, 2023December 31, 2022
Discount rate5.49 %4.80 %5.00 %
Rate of compensation increase3.00 3.00 3.00 
Components of net periodic benefit cost and other amounts recognized in other comprehensive income (in thousands):
December 31, 2024December 31, 2023December 31, 2022
Components of net periodic pension cost:
Service cost$445 $469 $786 
Interest cost1,456 1,471 1,141 
Expected return on plan assets(1,115)(879)(1,539)
Amortization of prior service costs— — — 
Amortization of net loss400 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 $1,708 
For the years ended December 31, 2024, December 31, 2023, and December 31, 2022, the assumptions used to determine net periodic pension cost were as follows:
December 31, 2024December 31, 2023December 31, 2022
Discount rate5.49 %4.80 %5.00 %
Expected long-term rate of return on plan assets4.00 3.75 3.75 
Annual salary increase3.00 3.00 3.00 
The expected long-term return on plan assets assumption was developed as a weighted average rate based on the target asset allocation of the plan and the long-term capital market assumptions. The overall return for each asset class was developed by combining a long-term inflation component and the associated expected real rates. The development of the capital market assumptions utilized a variety of methodologies, including, but not limited to, historical analysis, stock valuation models, such as dividend discount models, and earnings yield models, expected economic growth outlook, and market yields analysis.
The Company’s pension plan asset allocations at December 31, 2024, and December 31, 2023, were as follows:
December 31, 2024December 31, 2023
Equity securities9.9 %9.6 %
Debt securities & cash equivalents
90.1 %90.4 %
Total100.0 %100.0 %
As of December 31, 2024, and December 31, 2023, the fair value of plan assets was as follows (in thousands):
December 31, 2024
Fair Value Measurements Using
Level 1Level 2Level 3Assets at Fair Value
Cash and cash equivalents$— $— $— $— 
Equity securities— 3,040 — 3,040 
Debt securities— 27,574 — 27,574 
Total pension assets$— $30,614 $— $30,614 
December 31, 2023
Fair Value Measurements Using
Level 1Level 2Level 3Assets 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 
20261,523 
20271,523 
20281,629 
20291,673 
Following 5 years9,478 
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.