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12. Employee and Director Benefit Programs | 12 Months Ended
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Dec. 31, 2021
12. Employee and Director Benefit Programs |
Employee and Director Benefit Programs |
(12) | Employee and Director Benefit Programs
| The Bank has a profit sharing and 401(k) plan for the benefit of substantially all employees subject to certain minimum age and service requirements. Under the 401(k) plan, the Bank matched employee contributions to a maximum of 4.00% of annual compensation in 2019, 2020 and 2021. The Company’s contribution pursuant to this formula was approximately $709,000, $692,000and $691,000 for the years ended December 31, 2021, 2020 and 2019, respectively. Investments made available under the 401(k) plan are determined by a committee comprised of senior management. No investments in Company stock are available under the 401(k) plan. Contributions to the 401(k) plan are vested immediately.
| In December 2001, the Company initiated a retirement benefit plan to provide retirement benefits to key officers and its Board of Directors and to provide death benefits for their designated beneficiaries. Under the postretirement benefit plan, the Company purchased life insurance policies on the lives of the key officers and each director. The increase in cash surrender value of the policies constitutes the Company’s contribution to the postretirement benefit plan each year. Postretirement benefit plan participants are to be paid annual benefits for a specified number of years commencing upon retirement. Expenses incurred for benefits relating to the postretirement benefit plan were approximately $477,000, $388,000and $361,000for the years ended December 31, 2021, 2020 and 2019, respectively.
| The Company is currently paying medical benefits for certain retired employees. The Company did not incur any postretirement medical benefits expense in 2021, 2020 and 2019 due to an excess accrual balance.
| The following table sets forth the change in the accumulated benefit obligation for the Company’s two postretirement benefit plans described above:
(Dollars in thousands) |  |  |  |  |  |
|  | 2021 |  |  | 2020 |
Benefit obligation at beginning of period |  | $ | 4,870 |  |  |  | 4,700 |
Service cost |  |  | 359 |  |  |  | 323 |
Interest cost |  |  | 70 |  |  |  | 63 |
Benefits paid |  |  | (288 | ) |  |  | (216 | )
Benefit obligation at end of period |  | $ | 5,011 |  |  |  | 4,870 |
| The amounts recognized in the Company’s Consolidated Balance Sheet as of December 31, 2021 and 2020 are shown in the following two tables:
(Dollars in thousands) |  |  |  |  |  |
|  | 2021 |  |  | 2020 |
Benefit obligation |  | $ | 5,011 |  |  |  | 4,870 |
Fair value of plan assets |  |  | - |  |  |  | - |
(Dollars in thousands) |  |  |  |  |  |
|  | 2021 |  |  | 2020 |
Funded status |  | $ | (5,011 | ) |  |  | (4,870 | )
Unrecognized prior service cost/benefit |  |  | - |  |  |  | - |
Unrecognized net actuarial loss |  |  | - |  |  |  | - |
Net amount recognized |  | $ | (5,011 | ) |  |  | (4,870 | )
Unfunded accrued liability |  | $ | (5,011 | ) |  |  | (4,870 | )
Intangible assets |  |  | - |  |  |  | - |
Net amount recognized |  | $ | (5,011 | ) |  |  | (4,870 | )
| Net periodic benefit cost of the Company’s postretirement benefit plans for the years ended December 31, 2021, 2020 and 2019 consisted of the following:
(Dollars in thousands) |  |  |  |  |  |  |  |  |
|  | 2021 |  |  | 2020 |  |  | 2019 |
Service cost |  | $ | 359 |  |  |  | 323 |  |  |  | 299 |
Interest cost |  |  | 70 |  |  |  | 63 |  |  |  | 58 |
Net periodic cost |  | $ | 429 |  |  |  | 386 |  |  |  | 357 |
Weighted average discount rate assumption |  |  |  |  |  |  |  |  |  |  |  |
used to determine benefit obligation |  |  | 5.50 | % |  |  | 5.49 | % |  |  | 5.49 | %
| The Company paid benefits under the two postretirement plans totaling $288,000 and $216,000 during the years ended December 31, 2021 and 2020, respectively. Information about the expected benefit payments for the Company’s two postretirement benefit plans is as follows:
(Dollars in thousands) |  |  |
Year ending December 31, |  |  |
2022 |  | $ | 327 |
2023 |  | $ | 348 |
2024 |  | $ | 360 |
2025 |  | $ | 376 |
2026 |  | $ | 375 |
Thereafter |  | $ | 8,795 |

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- Definition The entire disclosure for an entity's employee compensation and benefit plans, including, but not limited to, postemployment and postretirement benefit plans, defined benefit pension plans, defined contribution plans, non-qualified and supplemental benefit plans, deferred compensation, share-based compensation, life insurance, severance, health care, unemployment and other benefit plans. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 712 -URI http://asc.fasb.org/topic&trid=2197446 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 710 -URI http://asc.fasb.org/topic&trid=2127225 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -URI http://asc.fasb.org/topic&trid=2235017 + Details
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