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Employee benefit plans
 3 Months Ended
Mar. 31, 2024
Employee benefit plans  
Employee benefit plans

8. Employee benefit plans:

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The Company provides an Employee Stock Ownership Plan (“ESOP”) and a Retirement Profit Sharing Plan. The Company also maintains Supplemental Executive Retirement Plans (“SERPs”) and an Employees’ Pension Plan, which is currently frozen.

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For the three months ended March 31, salaries and employee benefits expense includes approximately $326 thousand in 2024 and $478 thousand in 2023 relating to the employee benefit plans.

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(Dollars in thousands)

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Pension Benefits

 

Three Months Ended March 31,

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2024

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2023

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Net periodic pension benefit:

    

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Interest cost

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$

158

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$

164

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Expected return on plan assets

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(320)

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(293)

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Amortization of unrecognized net gain

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49

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50

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Net periodic pension benefit

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$

(113)

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$

(79)

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In May 2017, the Company’s stockholders approved the 2017 equity incentive plan (“2017 Plan”). In May 2023, the Company’s stockholders approved the 2023 equity incentive plan (“2023 Plan”). Under the 2017 Plan and 2023 Plan the Compensation Committee of the Board of Directors has the authority to, among other things:

 

●Select the persons to be granted awards under the Plan.

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●Determine the type, size and term of awards.

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●Determine whether such performance objectives and conditions have been met.

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●Accelerate the vesting or exercisability of an award.

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Persons eligible to receive awards under the 2017 Plan and 2023 Plan include directors, officers, employees, consultants and other service providers of the Company and its subsidiaries.

 

As of March 31, 2024, 66,298 shares of the Company’s common stock were available for grants as awards pursuant to the 2023 Plan. While the 2017 Plan will remain in effect in accordance with its terms to govern outstanding awards under that plan, the Company intends to make future grants under the 2023 Plan.   If any outstanding awards are forfeited by the holder or canceled by the Company, the underlying shares would be available for regrant to others under the 2023 Plan.

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The 2017 Plan and 2023 Plan authorize grants of stock options, stock appreciation rights, cash awards, performance awards, restricted stock and restricted stock units.

 

For the three months ended March 31, 2024, the Company granted 32,138 awards of restricted stock units, which consisted of 23,423 performance based and 8,715 time based awards, under the 2023 Plan. For the three months ended March 31, 2023, the Company granted no awards of restricted stock under the 2017 Plan.

 

The non-performance restricted stock grants made in 2024, 2023 and 2022 vest equally over three years. The performance-based restricted stock units vest over three fiscal years and include conditions based on the Company’s three year cumulative diluted earnings per share and three-year average return on tangible common that determines the number of restricted stock units that may vest.

 

The Company expenses the fair value of all-share based compensation over the requisite service period commencing at grant date.  The fair value of restricted stock is expensed on a straight-line basis. Compensation is recognized over the vesting period and adjusted based on the performance criteria.  The Company classifies share-based compensation for employees within “salaries and employee benefits expense” on the consolidated statements of income and comprehensive income.

 

The Company recognized net compensation costs of $186 thousand for the three months ended March 31, 2024 for awards granted under the 2017 Plan and recognized compensation expense of $93 thousand for the three months ended March 31, 2024 for the awards granted under the 2023 Plan. As of March 31, 2024, the Company had $2.1 million of unrecognized compensation expense associated with restricted stock awards.  The remaining cost is expected to be recognized over a weighted average vesting period of under 2.2 years.