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Note 12 - Employee Benefit Plans

12 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Compensation and Employee Benefit Plans [Text Block]

Note 12. Employee Benefit Plans

Defined Benefit Plans

The Company maintains two nonqualified domestic, noncontributory defined benefit plans (the “Benefit Plans”) for key members of senior management and non-management directors. The Company’s unfunded Benefit Plans include the Supplemental Executive Retention Plan (“SERP”) and the Directors’ Supplemental Retirement Plan (“Directors’ Plan”). The SERP provides for a defined benefit, at normal retirement age, targeted at 35% of the participant’s projected final average compensation, subject to a defined maximum annual benefit. Benefits under the SERP generally become payable at age 62. The Directors’ Plan provides for a defined benefit, at normal retirement age, up to 100% of the participant’s highest consecutive three-year average compensation. Benefits under the Directors’ Plan generally become payable at age 70. The SERP was frozen near the end of 2021; the Directors' Plan was fundamentally frozen at that time as well. The following table presents the changes in the aggregate actuarial benefit obligation for the two plans combined during the periods indicated:

		*December 31,*
		*2023*				*2022*
(Amounts in thousands)
Beginning balance		$	9,488			$	11,458
Effect of curtailment			—				—
Service cost			—				—
Interest cost			451				332
Actuarial gain			(306	)			(1,718	)
Benefits paid			(583	)			(584	)
Ending balance		$	9,050			$	9,488

The following table presents the components of net periodic pension cost, the effect on the consolidated statements of income, and the assumed discount rate for the periods indicated:

		*Year Ended December 31,*
		*2023*				*2022*				*2021*			*Income Statement Location*
(Amounts in thousands)
Service cost		$	—			$	—			$	352		Salaries and employee benefits
Interest cost			451				332				315		Other expense
Effect of curtailment			—				—				289		Salaries and employee benefits
Amortization of prior service cost			—				—				124		Other expense
Amortization of losses			38				135				264		Other expense
Net periodic cost		$	489			$	467			$	1,344

Assumed discount rate			4.79	%			4.96	%			2.88	%

The following schedule presents the projected benefit payments to be paid under the Benefit Plans, by year, as of December 31, 2023:

(Amounts in thousands)
2024		$	745
2025			743
2026			822
2027			789
2028			751
2029 through 2033			3,479

Deferred Compensation Plan

The Company maintains deferred compensation agreements with certain current and former officers that provide benefit payments, over various periods, commencing at retirement or death. There were no accrued benefits, which are based on the present values of expected payments and estimated life expectancies, as of December 31, 2023 or 2022. There was no deferred compensation plan expense in 2023, 2022, or 2021.

The Company maintains a deferred compensation plan, referred to as the WRAP, and is a voluntary, non-tax qualified deferred compensation plan available to certain employees, including executive officers. Under the plan, participants may defer a portion of their base and/or annual incentive compensation. The plan is intended to mirror the Corporation's qualified KSOP, and may include discretionary match that coincides with a match made to the KSOP to the extent participants cannot otherwise receive the full match in the KSOP. The balance as of December 31, 2023 and 2022 was $8.28 million and $5.14 million, respectively.

Employee Welfare Plan

The Company provides various medical, dental, vision, life, accidental death and dismemberment, and long-term disability insurance benefits to all full-time employees who elect coverage under this program. A third-party administrator manages the health plan. Monthly employer and employee contributions are made to a tax-exempt employee benefits trust where the third-party administrator processes and pays claims. As of December 31, 2023, stop-loss insurance coverage generally limits the Company’s risk of loss to $200 thousand for individual claims and $5.88 million for aggregate claims. Health plan expenses were $4.16 million in 2023, $4.04 million in 2022, and $3.98 million in 2021.

Employee Stock Ownership and Savings Plan

The Company maintains the Employee Stock Ownership and Savings Plan (“KSOP”) that consists of a 401(k) savings feature that covers all employees that meet minimum eligibility requirements. The Company matches employee contributions at levels determined by the Board of Directors annually. These contributions are made in the first quarter following each plan year and employees must be employed on the last day of the plan year to be eligible. Matching contributions to qualified deferrals under the 401(k) savings component of the KSOP totaled $1.76 million in 2023, $1.82 million in 2022, and $1.71 million in 2021. The KSOP held 282,072 shares of the Company’s common stock as of December 31, 2023, 309,019 shares as of December 31, 2022, and 320,164 shares as of December 31, 2021.

Equity-Based Compensation Plans

The Company maintains equity-based compensation plans to promote the long-term success of the Company by encouraging officers, employees, directors, and other individuals performing services for Company to focus on critical long-range objectives. The Company’s most current equity-based compensation plans include the 2022 Omnibus Equity Compensation Plan (the “2022 Plan”), which authorized 1,000,000 shares for potential grants of Non-Qualified Stock Options, Incentive Stock Options, Performance Shares, Performance Stock Units, Restricted Stock, Restricted Stock Units, and Performance Awards. The Company’s Compensation and Retirement Committee determines the vesting period for each grant; however, awards shall have a minimum vesting/exercise schedule of at least one year, except that a shorter vesting/exercise schedule may apply to not more than 5% of the shares authorized for issuance under the 2022 Plan.

The following table presents the pre-tax compensation expense and excess tax benefit recognized in earnings for all equity-based compensation plans for the periods indicated:

		*Year Ended December 31,*
		*2023*				*2022*				*2021*
(Amounts in thousands)
Pre-tax compensation expense		$	597			$	718			$	1,282
Excess tax (benefit) expense			—				—				(633	)

Stock Options

The following table presents stock option activity and related information for the year ended December 31, 2023:

(Amounts in thousands, except share and per share data)		*Option Shares*				*Weighted Average Exercise Price Per Share*				*Weighted Average Remaining Contractual Term (Years)*				*Aggregate Intrinsic Value*

Outstanding, January 1, 2023			197,303			$	29.61
Granted			—				—
Exercised			(4,288	)			21.25
Canceled/Expired			(6,751	)			31.73
Outstanding, December 31, 2023			186,264			$	29.72				6.37			$	1,375
Exercisable, December 31, 2023			144,441			$	28.77				6.13			$	1,203

There were no options granted in 2023. There were 4,288 options exercised in 2023 and 7,575 were exercised in 2022. The intrinsic value of options exercised was $58 thousand in 2023, and $83 thousand in 2022. As of December 31, 2023, unrecognized compensation cost related to nonvested stock options totaled $80 thousand with an expected weighted average recognition period of 0.25 years. The actual compensation cost recognized might differ from this estimate due to various items, including new grants and changes in estimated forfeitures.

Restricted Stock and Stock Unit Awards

The following table presents restricted stock activity and related information for the year ended December 31, 2023:

		*Shares/Units*				*Weighted Average Grant-Date Fair Value*

Nonvested, January 1, 2023			73,605			$	30.87
Granted			69,964				26.33
Vested			(31,782	)			24.04
Canceled			(2,794	)			29.41
Nonvested, December 31, 2023			108,993			$	29.98

As of December 31, 2023, unrecognized compensation cost related to nonvested restricted stock/unit awards totaled $2.47 million with an expected weighted average recognition period of 1.91 years. The actual compensation cost recognized might differ from this estimate due to various items, including new awards granted and changes in estimated forfeitures.