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Employee benefit plans
 12 Months Ended
Dec. 31, 2022
Employee benefit plans  
Employee benefit plans

16. Employee benefit plans:

The Company sponsors a separate ESOP and Retirement Profit Sharing 401(k) Plan. The Company also maintains SERPs and an employees’ pension plan, which is currently frozen.

Under the ESOP, amounts voted by the Company’s Board of Directors are paid into the ESOP and each eligible participant is credited with an amount in proportion to their annual compensation or a fixed dollar amount. All contributions to the ESOP are invested in or will be invested primarily in Company stock. Distribution of a participant’s ESOP account occurs upon retirement, death or termination in accordance with the plan provisions.

Under the Retirement Profit Sharing Plan, amounts approved by the Board of Directors have been paid into a fund and each participant was credited with an amount in proportion to their annual compensation. Upon retirement, death or termination, each participant is paid the total amount of their credits in the fund in one of a number of optional ways in accordance with the plan provisions. Eligible participants may elect deferrals of up to the maximum amounts permitted by law.

The Company contributed $0.2 million, $0.3 million and $0.4 million to the ESOP for 2022, 2021 and 2020. In addition, the Company contributed $1.3 million in 2022 and $1.2 million in both 2021 and 2020, was comprised of a safe harbor contribution of $0.7 million, $0.7 million and $0.7 million and a discretionary match of $0.6 million, $0.6 million and $0.6 million.

The Company established a SERP Plan to replace certain 401(k) plan benefits lost due to compensation limits imposed on qualified plans by federal tax law. The annual benefit is a maximum of 6 percent of the executive compensation in excess of Federal limits. The total liability associated with this plan was $161 thousand at December 31, 2022 and 2021, respectively. The expense associated with the plan was $20 thousand, $19 thousand and $9 thousand for 2022, 2021 and 2020 respectively.

 

The Company has SERPs for the benefit of certain officers. At December 31, 2022 and 2021, other liabilities include $2.8 million and $2.6 million accrued under the plans. Compensation expense includes approximately $0.4 million, $0.4 million and $0.5 million relating to these SERPs for the years ended December 31, 2022, 2021 and 2020, respectively.

Under the Employees’ Pension Plan, currently frozen, amounts computed on an actuarial basis were being paid by the Company into a trust fund. The plan provided for fixed benefits payable for life upon retirement at the age of 65, based on length of service and compensation levels as defined in the plan. As of June 22, 2008 no further benefits are being accrued in this plan. Plan assets of the trust fund are invested and administered by the Trust Department of the Company.

Information related to the Employees’ Pension Plan at December 31, 2022 and 2021 is as follows:

 

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

​

​

Pension Benefits 

 

(Dollars in thousands)

​

2022

​

2021

 

Change in benefit obligation:

    

​

​

    

​

​

​

Benefit obligation, beginning

​

$

18,066

​

$

19,113

​

Interest cost

​

 

456

​

 

419

​

Change in experience gain

​

 

26

​

 

(49)

​

Change in actuarial assumptions

​

 

(3,899)

​

 

(603)

​

Benefits paid

​

 

(857)

​

 

(814)

​

Benefit obligation, ending

​

 

13,792

​

 

18,066

​

Change in plan assets:

​

​

​

​

​

​

​

Fair value of plan assets, beginning

​

 

19,257

​

 

17,628

​

Actual return on plan assets

​

 

(2,294)

​

 

2,443

​

Employer contributions

​

 

​

​

 

​

​

Benefits paid

​

 

(857)

​

 

(814)

​

Fair value of plan assets, ending

​

 

16,106

​

 

19,257

​

Funded status at end of year

​

$

2,314

​

$

1,191

​

​

The Company utilized the mortality scale within the mortality tables from MP 2021 to re-measure its pension plan at December 31, 2022 and 2021. The change in the discount rate from 2.59 percent to 4.93 percent resulted in a decrease to the benefit obligation of $3.9 million in 2022 and a decrease of $0.6 million in 2021.

Amounts recognized in the consolidated balance sheets at December 31, 2022 and 2021 are as follows:

 

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

​

​

Pension Benefits 

​

 

(Dollars in thousands)

​

2022

​

2021

​

 

(Other Assets)/Other Liabilities

    

$

(2,314)

    

$

(1,190)

    

​

Amounts recognized in the accumulated other comprehensive income (loss) consist of:

​

​

​

​

​

​

​

​

Net actuarial gain

​

 

(5,499)

​

 

(5,868)

​

​

Deferred taxes

​

 

1,184

​

 

1,232

​

​

Net amount recognized

​

$

(4,315)

​

$

(4,636)

​

​

​

 

The accumulated benefit obligation for the defined benefit pension plan was $13.8 million and $18.1 million at December 31, 2022 and 2021, respectively.

Components of net periodic pension income and other amounts recognized in other comprehensive loss are as follows:

 

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Pension Benefits

 

(Dollars in thousands)

​

2022

​

2021

​

2020

 

Net periodic pension income:

    

​

​

    

​

​

    

​

​

​

Interest cost

​

$

456

​

$

419

​

$

544

​

Expected return on plan assets

​

 

(1,407)

​

 

(1,288)

​

 

(1,236)

​

Amortization of unrecognized net loss

​

 

198

​

 

301

​

 

218

​

Net periodic pension income:

​

 

(753)

​

 

(568)

​

​

(474)

​

Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss):

​

​

​

​

​

​

​

​

​

​

Net loss (gain)

​

 

456

​

 

419

​

 

544

​

Deferred tax

​

 

(96)

​

 

(88)

​

 

(114)

​

Total recognized in other comprehensive income (loss)

​

 

360

​

 

331

​

 

430

​

Total recognized in net period pension cost and other comprehensive income (loss)

​

$

(393)

​

$

(237)

​

$

(44)

​

​

Weighted-average assumptions used to determine benefit obligations and related expenses were as follows:

 

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

​

​

Pension Benefits

​

 

​

​

2022

​

2021

​

2020

​

 

Discount rate:

    

​

​

​

    

​

    

​

Obligation

 

4.93

%

2.59

%  

2.25

%  

​

Expense

 

2.59

​

2.25

​

3.25

​

​

Expected long-term return on plan assets

 

7.50

%

7.50

%  

7.50

%  

​

​

 

The expected long-term return on plan assets was determined using average historical returns of the Company’s plan assets.

The Company’s pension plan weighted-average asset allocations at December 31, 2022 and 2021, by asset category are as follows:

 

​

​

​

​

​

​

​

​

    

2022

    

2021

 

Asset Category:

​

​

​

​

​

Cash and cash equivalents

 

4.7

%

4.8

%

Equity securities

 

60.3

​

67.4

​

Corporate bonds

 

19.5

​

19.6

​

U.S. government securities

 

15.5

​

8.2

​

​

 

100.0

%  

100.0

%

​

Fair value measurement of pension plan assets at December 31, 2022 and 2021 is as follows:  

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

December 31, 2022

 

​

    

​

​

    

Quoted Prices in

    

​

​

    

​

​

 

​

​

​

​

Active Markets

​

Significant

​

Significant

 

​

​

​

​

for Identical

​

Observable

​

Observable

 

​

​

​

​

Assets

​

Inputs

​

Inputs

 

(Dollars in thousands)

​

Total 

​

(Level 1) 

​

(Level 2) 

​

(Level 3) 

 

Cash and cash equivalents

​

$

759

​

$

759

​

$

​

 

$

​

​

Equity securities:

​

​

​

​

​

​

​

​

​

​

​

​

​

U.S. large cap

​

 

7,365

​

​

7,365

​

​

​

​

​

​

​

International

​

 

2,338

​

​

2,338

​

​

​

​

​

​

​

Fixed income securities:

​

​

​

​

​

​

​

​

​

​

​

​

​

U.S. Treasuries

​

 

511

​

​

​

​

​

511

​

​

​

​

U.S. government agencies

​

 

1,991

​

​

​

​

​

1,991

​

​

​

​

Corporate bonds

​

 

3,142

​

​

​

​

​

3,142

​

​

​

​

Total

​

$

16,106

​

$

10,462

​

$

5,644

​

$

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

​

December 31, 2021

​

​

    

​

​

    

Quoted Prices in

    

​

​

    

​

​

 

​

​

​

​

​

Active Markets

​

Significant

​

Significant

 

​

​

​

​

​

for Identical

​

Observable

​

Observable

 

​

​

​

​

​

Assets

​

Inputs

​

Inputs

 

(Dollars in thousands)

​

Total 

​

(Level 1) 

​

(Level 2) 

​

(Level 3) 

 

Cash and cash equivalents

​

$

918

​

$

918

​

$

​

​

$

​

​

Equity securities:

​

​

​

​

​

​

​

​

​

​

​

​

​

U.S. large cap

​

 

11,940

​

 

11,940

​

​

​

​

​

​

​

International

​

 

1,039

​

 

1,039

​

​

​

​

​

​

​

Fixed income securities:

​

​

​

​

​

​

​

​

​

​

​

​

​

U.S. Treasuries

​

 

214

​

​

​

​

​

214

​

​

​

​

U.S. government agencies

​

 

1,371

​

​

​

​

 

1,371

​

​

​

​

Corporate bonds

​

 

3,775

​

​

​

​

 

3,775

​

​

​

​

Total

​

$

19,257

​

$

13,897

​

$

5,360

​

$

​

​

​

The Company investment policies and strategies with respect to the pension plan include: (i) the Trust and Investment Division’s equity philosophy is large-cap core with a value bias (we invest in individual high-grade common stocks that are selected from our approved list); (ii) diversification is maintained by having no more than 20 percent in any industry sector and no individual equity representing more than 10 percent of the portfolio; and (iii) the fixed income style is conservative but also responsive to the various needs of our individual clients. Fixed income securities consist of U.S. government agencies or corporate bonds rated “A” or better. The Company targets the following allocation percentages: (i) cash equivalents 10 percent; (ii) fixed income 40 percent; and (iii) equities 50 percent.

There is no Company stock included in equity securities at December 31, 2022 or 2021. The Company has not determined the amount of the expected contribution to the Employees’ Pension Plan for 2023.

The following benefit payments are expected to be paid in the next five years and in the aggregate for the five years thereafter:

 

​

​

​

​

​

​

(Dollars in thousands)

    

Pension Benefits

 

2023

​

$

907

​

2024

​

 

955

​

2025

​

 

987

​

2026

​

 

1,009

​

2027

​

 

1,016

​

Thereafter

​

​

4,959

​

​