Note 14 - Deferred Compensation Plans

12 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Deferred Compensation Plans Disclosure [Text Block]

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14

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DEFERRED COMPENSATION PLANS

The Bank has a deferred compensation plan whereby certain officers will be provided specific amounts of income for a period of

fifteen

years following normal retirement. The benefits under the agreements are fully vested and will be paid in varying amounts through

2022.

As part of the acquisition of Peoples in

December 2015,

the Bank assumed a non-qualified deferred compensation plan for

three

key employees of Peoples, which provides for specific amounts of income for a period of

ten

years following retirement. The benefits under the Peoples plan are fully vested and, assuming normal retirement, will be paid in varying amounts through

2026.

The Bank is the owner and beneficiary of insurance policies on the lives of these officers which

may

provide funds for a portion of the required payments. The agreements also provide for payment of benefits in the event of disability, early retirement and termination of employment or death. The Bank accrues the present value of the benefits under these plans so the amounts required will be provided at the normal retirement dates and thereafter. The balance of the accrued benefit for the plans was

$296,000

and

$332,000

at

December 31, 2018

and

2017,

respectively. Deferred compensation expense for the Bank’s deferred compensation plans for employees was

$17,000,

$19,000

and

$21,000

for the years ended

December 31, 2018,

2017

and

2016,

respectively.

The Bank also has a directors' deferred compensation plan whereby a director defers into a retirement account a portion of his/her monthly director fees for a specified period to provide a specified amount of income for a period of

fifteen

years following normal retirement. Assuming normal retirement, the benefits under the plan will be paid in varying amounts through

2036.

The agreements also provide for payment of benefits in the event of disability, early retirement and termination of service or death. The Bank accrues the interest cost on the deferred obligation so the amounts required will be provided at the normal retirement dates and thereafter. The balance of the accrued benefit for the director plan was

$153,000

and

$157,000

at

December 31, 2018

and

2017,

respectively. Deferred compensation expense for the director plan was

$18,000

for the year ended

December 31, 2018

and

$19,000

for each of the years ended

December 31,

2017and

2016.