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Employee and Director Benefit Programs

12 Months Ended

Dec. 31, 2023

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 2021, 2022 and 2023. The Company’s contribution pursuant to this formula was approximately $759,000, $719,000 and $709,000 for the years ended December 31, 2023, 2022 and 2021, 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 $430,000, $369,000 and $447,000 for the years ended December 31, 2023, 2022 and 2021, respectively.

The Company paid medical benefits for certain retired employees through the first quarter of 2022. The Company did not incur any postretirement medical benefits expense in 2022 and 2021 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)
		2023				2022
Benefit obligation at beginning of period		$	5,110				5,011
Service cost			363				325
Interest cost			70				63
Benefits paid			(275	)			(289	)
Benefit obligation at end of period		$	5,268				5,110

The amounts recognized in the Company’s Consolidated Balance Sheet as of December 31, 2023 and 2022 are shown in the following two tables:

(Dollars in thousands)
		2023				2022
Benefit obligation		$	5,268				5,110
Fair value of plan assets			-				-

(Dollars in thousands)
		2023				2022
Funded status		$	(5,268	)			(5,110	)
Unrecognized prior service cost/benefit			-				-
Unrecognized net actuarial loss			-				-
Net amount recognized		$	(5,268	)			(5,110	)
Unfunded accrued liability		$	(5,268	)			(5,110	)
Intangible assets			-				-
Net amount recognized		$	(5,268	)			(5,110	)

Net periodic benefit cost of the Company’s postretirement benefit plans for the years ended December 31, 2023, 2022 and 2021 consisted of the following:

(Dollars in thousands)
		2023				2022				2021
Service cost		$	363				325				359
Interest cost			70				63				70
Net periodic cost		$	433				388				429
Weighted average discount rate assumption used to determine benefit obligation			5.50	%			5.50	%			5.50	%

The Company paid postretirement plan benefits totaling $275,000, $289,000 and $288,000 during the years ended December 31, 2023, 2022 and 2021, respectively. Information about the expected benefit payments for the Company’s postretirement benefit plan is as follows:

(Dollars in thousands)
Year ending December 31,
2024		$	292
2025		$	413
2026		$	472
2027		$	501
2028		$	509
Thereafter		$	7,469

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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
-Topic 710
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//710/tableOfContent

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 712
-Name Accounting Standards Codification
-Publisher FASB
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Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 715
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//715/tableOfContent

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 718
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//718/tableOfContent

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No definition available.

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