Supplemental Compensation Plans

12 Months Ended

Dec. 31, 2023

Supplemental Compensation Plans [Abstract]

Supplemental Compensation Plans

(17) Supplemental Compensation Plans

EXECUTIVE RETIREMENT PLAN

Pension Benefit Plans

The Company and the Bank maintain an unfunded non-contributory defined benefit pension plan (“Salary Continuation Plan”) and related split dollar plan for a select group of highly compensated employees. The Salary Continuation Plan provides defined annual benefit levels between $50 and $100 depending on responsibilities at the Bank. The retirement benefits are paid for 10 years following retirement at age 65. Reduced retirement benefits are available after age 55 and 10 years of service. There are currently two active and two retired participants in the Salary Continuation Plan.

Eligibility to participate in the Salary Continuation Plan is limited to a select group of management or highly compensated employees of the Bank that are designated by the Board.

Additionally, the Company and the Bank adopted a supplemental executive retirement plan (“SERP”) in 2006. The SERP is intended to integrate the various forms of retirement payments offered to executives. There are currently two active and two retired participants in the SERP.

The SERP benefit is calculated using 3-year average salary plus 7-year average bonus (average compensation). For each year of service, the benefit formula credits 2% to 2.5% of average compensation up to a cumulative maximum of 50%. Therefore, for an executive serving 20 to 25 years, the target benefit is 50% of average compensation.

The target benefit is reduced for other forms of retirement income provided by the Bank. Reductions are made for 50% of the social security benefit expected at age 65 and for the accumulated value of contributions the Bank makes to the executive’s profit sharing plan. For purposes of this reduction, contributions to the profit sharing plan are accumulated each year at a 3-year average of the yields on 10-year Treasury securities. Retirement benefits are paid monthly for 120 months, plus 6 months for each full year of service over 10 years, up to a maximum of 180 months.

Reduced benefits are payable for retirement prior to age 65. Should retirement occur prior to age 65, the benefit determined by the formula described above is reduced 5% for each year payments commence prior to age 65. Therefore, the new SERP benefit is reduced 50% for retirement at age 55. No benefit is payable for voluntary terminations prior to age 55.

The following table sets forth the status of the Salary Continuation Plan and SERP as of December 31, 2023 and December 31, 2022:

	2023			2022
Change in benefit obligation
Benefit obligation at beginning of year	$	5,339		$	6,581
Service cost		158			278
Interest cost		263			175
Plan gain		(336	)		(1,423	)
Benefits paid		(445	)		(272	)
Benefit obligation at end of year	$	4,979		$	5,339
Change in plan assets
Employer contribution	$	445		$	272
Benefits paid		(445	)		(272	)
Fair value of plan assets at end of year	$	—		$	—
Reconciliation of funded status
Funded status	$	(4,979	)	$	(5,339	)
Unrecognized net plan loss		69			406
Unrecognized prior service cost		31			32
Net amount recognized	$	(4,879	)	$	(4,901	)
Amounts recognized in the consolidated balance sheets consist of:
Accrued benefit liability	$	(4,979	)	$	(5,339	)
Accumulated other comprehensive loss		100			438
Net amount recognized	$	(4,879	)	$	(4,901	)

The Company expects to recognize approximately $2 of the unrecognized net actuarial loss and prior service cost as a component of net periodic benefit cost in 2024.

	For the Year ended December 31,
	2023			2022
Components of net periodic benefit cost
Service cost	$	158		$	278
Interest cost		263			175
Amortization of prior service cost		2			2
Recognized actuarial loss		—			130
Net periodic benefit cost		423			585
Additional Information
Minimum benefit obligation at year end	$	4,979		$	5,339
Decrease in minimum liability included in other comprehensive loss	$	(338	)	$	(1,555	)

Assumptions used to determine benefit obligations at December 31	2023			2022
Discount rate used to determine net periodic benefit cost for years ended December 31		5.00	%		2.60	%
Discount rate used to determine benefit obligations at December 31		5.30	%		5.00	%
Future salary increases		5.60	%		5.75	%

Plan Assets

The Bank informally funds the liabilities of the Salary Continuation Plan through life insurance purchased on the lives of plan participants. This informal funding does not meet the definition of “plan assets” under pension accounting standards. Therefore, assets held for this purpose are not disclosed as part of the Salary Continuation Plan.

Cash Flows

Contributions and Estimated Benefit Payments

For unfunded plans, contributions to the Salary Continuation Plan are the benefit payments made to participants. The Bank paid $445 in benefit payments during fiscal 2023. The following benefit payments, which reflect expected future service, are expected to be paid in future fiscal years:

Year ending December 31,	Pension Benefits
2024	$	479
2025		518
2026		346
2027		296
2028		296
2029-2033		1,480

Disclosure of settlements and curtailments:

There were no events during fiscal 2023 that would constitute a curtailment or settlement.

DIRECTORS’ RETIREMENT PLAN

On July 19, 2001, the Company and the Bank approved an unfunded non-contributory defined benefit pension plan (“Directors’ Retirement Plan”) and related split dollar plan for the directors of the Bank.  The Directors’ Retirement Plan provides a retirement benefit equal to $1 per year of service as a director, up to a maximum benefit amount of $15.  The retirement benefit is payable for ten years following retirement at age 65.  Reduced retirement benefits are available after age 55 and ten years of service.

The following table sets forth the status of the Directors’ Retirement Plan as of December 31, 2023 and December 31, 2022:

	2023			2022
Change in benefit obligation
Benefit obligation at beginning of year	$	560		$	710
Service cost		—			—
Interest cost		24			14
Plan gain		(100	)		(94	)
Benefits paid		(60	)		(70	)
Benefit obligation at end of year	$	424		$	560
Change in plan assets
Employer contribution	$	60		$	70
Benefits paid		(60	)		(70	)
Fair value of plan assets at end of year	$	—		$	—
Reconciliation of funded status
Funded status	$	(424	)	$	(560	)
Unrecognized net plan gain		(172	)		(76	)
Net amount recognized	$	(596	)	$	(636	)
Amounts recognized in the statement of financial position consist of:
Accrued benefit liability	$	(424	)	$	(560	)
Accumulated other comprehensive gain		(172	)		(76	)
Net amount recognized	$	(596	)	$	(636	)

	For the Year Ended December 31,
	2023			2022
Components of net periodic benefit cost
Service cost	$	—		$	—
Interest cost		24			14
Recognized actuarial gain		(4	)		—
Net periodic benefit cost		20			14
Additional Information
Minimum benefit obligation at year end	$	424		$	560
Decrease in minimum liability included in other comprehensive loss	$	(96	)	$	(94	)

Assumptions used to determine benefit obligations at December 31	2023			2022
Discount rate used to determine net periodic benefit cost for years ended December 31		4.60	%		2.10	%
Discount rate used to determine benefit obligations at December 31		5.00	%		4.60	%

Plan Assets

The Bank informally funds the liabilities of the Directors’ Retirement Plan through life insurance purchased on the lives of plan participants. This informal funding does not meet the definition of “plan assets” under pension accounting standards. Therefore, assets held for this purpose are not disclosed as part of the Directors’ Retirement Plan.

Cash Flows

Contributions and Estimated Benefit Payments

For unfunded plans, contributions to the Directors’ Retirement Plan are the benefit payments made to participants. The Bank paid $60 in benefit payments during fiscal year 2023. The following benefit payments, which reflect expected future service, are expected to be paid in future fiscal years:

Year ending December 31,	Pension Benefits
2024	$	45
2025		50
2026		45
2027		31
2028		20
2029-2033		219

Disclosure of settlements and curtailments:

There were no events during fiscal year 2023 that would constitute a curtailment or settlement.

EXECUTIVE ELECTIVE DEFERRED COMPENSATION PLAN — 2001 EXECUTIVE DEFERRAL PLAN

On July 19, 2001, the Bank approved a revised Executive Elective Deferred Compensation Plan (“2001 Executive Deferral Plan”) for certain officers to provide them the ability to make elective deferrals of compensation due to tax law limitations on benefit levels under qualified plans. Deferred amounts earn interest at an annual rate determined by the Bank’s Board. The 2001 Executive Deferral Plan is a non-qualified plan funded with bank owned life insurance policies taken on the lives of the participating officers. During the year ended December 31, 2001, the Bank purchased insurance making a single-premium payment aggregating $1,125, which is reported in other assets on the Consolidated Balance Sheets. The Bank is the beneficiary and owner of the policies. The cash surrender value of the related insurance policies as of December 31, 2023 and 2022 totaled $2,892 and $2,820, respectively. The net decrease in accrued liability for the 2001 Executive Deferral Plan totaled $58 and $28 for the years ended December 31, 2023 and 2022, respectively. The net decrease was due to payments totaling $65 and $35 for the years ended December 31, 2023 and 2022, respectively, which was partially offset by interest accrued totaling $7 during each of the years ended December 31, 2023 and 2022. Interest expense for the 2001 Executive Deferral Plan totaled $7 for each of the years ended December 31, 2023 and 2022.

DIRECTOR ELECTIVE DEFERRED FEE PLAN — 2001 DIRECTOR DEFERRAL PLAN

On July 19, 2001, the Bank approved a Director Elective Deferred Fee Plan (“2001 Director Deferral Plan”) for directors to provide them the ability to make elective deferrals of director’s fees. Deferred amounts earn interest at an annual rate determined by the Bank’s Board. The 2001 Director Deferral Plan is a non-qualified plan funded with bank owned life insurance policies taken on the lives of the participating directors. The Bank is the beneficiary and owner of the policies. The cash surrender value of the related insurance policies as of December 31, 2023 and 2022 totaled $162 and $157, respectively. The net decrease in accrued liability for the 2001 Director Deferral Plan totaled $4 for each of the years ended December 31, 2023 and 2022. The net decrease was due to payments totaling $5 for each of the years ended December 31, 2023 and 2022, which was partially offset by interest accrued totaling $1 for each of the years ended December 31, 2023 and 2022. Interest expense for the 2001 Director Deferral Plan totaled $1 for each of the years ended December 31, 2023 and 2022.