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PENSION PLANS
 12 Months Ended
Dec. 31, 2022
Retirement Benefits [Abstract]  
PENSION PLANS 16. PENSION PLANS
 
Defined Benefit Retirement Plan
 
The bank had a defined benefit retirement plan that covered substantially all of its employees who were employed during the period that the plan was in effect. The plan was initially curtailed in 1986, and accordingly, plan benefits were fixed as of that date. Effective January 1, 1991, the bank reactivated its defined benefit retirement plan. As a result of the reactivation, employees for whom benefits were fixed in 1986 began to accrue additional benefits under a new formula that became effective January 1, 1991. Employees who were not participants at curtailment, but were subsequently eligible to join, became participants effective January 1, 1991. Under the reactivated plan, benefits are based upon the employees' years of service and their highest average annual salaries in a 60-consecutive-month period of service, reduced by benefits provided from the bank's terminated money purchase pension plan. The reactivation of the defined benefit retirement plan resulted in an increase of $5.9 million in the unrecognized prior service cost, which was amortized over a period of 13 years. Effective December 31, 2002, the bank curtailed its defined benefit retirement plan, and accordingly, plan benefits were fixed as of that date.

In January 2021, the Board of Directors approved termination of, and authorized Company management to commence taking action to terminate, the defined benefit retirement plan. The Company received a favorable determination letter from the IRS and no objection from the Pension Benefit Guaranty Corporation on the Form 500 standard termination notice in January 2022. The Company completed the termination and settlement of the plan in the second quarter of 2022. Upon final plan termination and settlement, the Company recognized a one-time noncash settlement expense of $4.9 million, which was recorded in other operating expense. As of December 31, 2022, the Company has no further defined benefit retirement plan liability or ongoing pension expense recognition.
The following tables set forth information pertaining to the defined benefit retirement plan:

 Year Ended December 31,
(Dollars in thousands)20222021
Change in benefit obligation:  
Benefit obligation at beginning of year$20,420 $21,919 
Interest cost212 485 
Actuarial gains(1,766)(427)
Benefits paid(5,398)(1,557)
Annuity purchase(13,468)— 
Benefit obligation at end of the year— 20,420 
Change in plan assets, at fair value:  
Fair value of plan assets at beginning of year20,785 21,153 
Actual return on plan assets(1,969)1,189 
Employer contributions50 — 
Benefits paid(5,398)(1,557)
Annuity purchase(13,468)— 
Fair value of plan assets at end of year— 20,785 
Funded status at end of year$— $365 
Amounts recognized in AOCI:  
Net actuarial losses$— $(4,699)
Benefit obligation actuarial assumptions:  
Weighted-average discount rateN/A2.4 %
 Year Ended December 31,
(Dollars in thousands)202220212020
Components of net periodic benefit cost:   
Interest cost$212 $485 $641 
Expected return on plan assets(207)(549)(920)
Amortization of net actuarial losses225 701 909 
Settlement4,884 — — 
Net periodic benefit cost$5,114 $637 $630 
Net periodic cost actuarial assumptions:   
Weighted-average discount rate2.4 %2.3 %3.1 %
Expected long-term rate of return on plan assets2.3 %2.7 %4.5 %

The long-term rate of return on plan assets reflects the weighted-average long-term rates of return for the various categories of investments held in the plan. The expected long-term rate of return is adjusted when there are fundamental changes in expected returns on the plan investments.
 
There were no plan assets remaining as of December 31, 2022. The defined benefit retirement plan assets as of December 31, 2021 consisted of debt securities and money market funds. The asset allocations by asset category were as follows:
 
 December 31, 2021
Debt securities85.9 %
Money market funds14.1 
Total100.0 %
 
In preparation of the defined benefit retirement plan termination, the plan asset allocations were adjusted to minimize market risk, which included eliminating all equity securities and adjusting the portfolio duration in 2021. There were no equity securities and no shares of the Company's common stock included in plan assets as of December 31, 2022 and 2021.
 
The fair values of the defined benefit retirement plan as of December 31, 2021 by asset category were as follows: 

(Dollars in thousands)Quoted Prices
in Active 
Markets for 
Identical
Assets
(Level 1)		Significant
Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)		Total
December 31, 2021    
Money market funds$2,938 $— $— $2,938 
Exchange traded funds10,712 — — 10,712 
Government obligations— 1,899 — 1,899 
Corporate bonds and debentures— 5,236 — 5,236 
Total$13,650 $7,135 $— $20,785 
 
With the termination of the defined benefit retirement plan in the second quarter of 2022, the Company no longer has any estimated future payments due and is no longer required by funding regulations or laws to make any contributions to our defined benefit retirement plan.
 
Supplemental Executive Retirement Plans

In 1995, 2001, 2004 and 2006, our bank established Supplemental Executive Retirement Plans ("SERP") that provide certain officers of the Company with supplemental retirement benefits. On December 31, 2002, the 1995 and 2001 SERP were curtailed. In conjunction with the merger with CB Bancshares, Inc. ("CBBI"), we assumed CBBI's SERP obligation.
The following tables set forth information pertaining to the SERP:

 Year Ended December 31,
(Dollars in thousands)20222021
Change in benefit obligation  
Benefit obligation at beginning of year$12,297 $12,740 
Interest cost301 264 
Actuarial gains(2,960)(398)
Benefits paid(418)(309)
Benefit obligation at end of year9,220 12,297 
Change in plan assets  
Fair value of plan assets at beginning of year— — 
Employer contributions418 309 
Benefits paid(418)(309)
Fair value of plan assets at end of year— — 
Funded status at end of year$(9,220)$(12,297)
Amounts recognized in AOCI 
Net transition obligation$(7)$(26)
Net actuarial losses701 (2,337)
Total amounts recognized in AOCI$694 $(2,363)
Benefit obligation actuarial assumptions  
Weighted-average discount rate5.0 %2.5 %
 Year Ended December 31,
(Dollars in thousands)202220212020
Components of net periodic benefit cost   
Interest cost$301 $264 $341 
Amortization of net actuarial (gains) losses79 335 251 
Amortization of net transition obligation18 18 18 
Amortization of prior service cost— — 14 
Net periodic benefit cost$398 $617 $624 
Net periodic cost actuarial assumptions   
Weighted-average discount rate2.7 %2.1 %3.1 %
 
The SERP holds no plan assets other than employer contributions that are paid as benefits during the year. The Company expects to contribute $0.6 million to the SERP in 2023.
Estimated future benefit payments reflecting expected future service for the SERP in each of the next five years, in the aggregate for the five years and thereafter are as follows:

(Dollars in thousands)
Year Ending December 31:
2023$573 
2024570 
2025566 
2026561 
2027556 
2028-20324,817 
Thereafter1,577 
Total$9,220