Subsequent Event

3 Months Ended

Mar. 31, 2017

Subsequent Event

Subsequent Event

NOTE (12) – Subsequent Event

On April 12, 2017, the Bank entered into a Mutual General Release Agreement (“Release Agreement”) with its former executive, Paul Hudson.  As part of the Release Agreement, the Salary Continuation Agreement entered into with Mr. Hudson on October 6, 2006 was terminated.  The amount accrued under this agreement was $1.2 million as of the date of termination.  As consideration for the Release Agreement, the Bank agreed to pay Mr. Hudson an amount of $500 thousand ratably over a period of four years.  Therefore, the Bank has no obligation to pay any future benefits to Mr. Hudson or any of his beneficiaries under the terms of the Salary Continuation Agreement.  The signing of the Release Agreement and the termination of the Salary Continuation Agreement are expected to increase second quarter net earnings by approximately $420 thousand, net of taxes.