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Pension Plan
 12 Months Ended
Dec. 31, 2023
Retirement Benefits [Abstract]  
Pension Plan
Note 11 – Pension Plan

We participate in a trusteed pension plan known as the Allegheny Group Retirement Plan. Benefits are based on years of service and the employee’s compensation. Accruals under the plan were frozen as of May 31, 2014. Freezing the plan resulted in a remeasurement of the pension obligations and plan assets as of the freeze date. The pension obligation was remeasured using the discount rate based on the Citigroup Above Median Pension Discount Curve in effect on May 31, 2014 of 4.5%.

In June 2017, we approved a Supplemental Executive Retirement Plan (the “SERP”), pursuant to which the Chief Executive Officer of Potomac Mortgage Group ("PMG") is entitled to receive certain supplemental nonqualified retirement benefits. The SERP took effect on December 31, 2017. As the executive completed three years of continuous employment with PMG prior to retirement date (which shall be no earlier than the date he attains age 55) he will, upon retirement, be entitled to receive $1.8 million payable in 180 equal consecutive monthly installments of $10 thousand. The liability is calculated by discounting the anticipated future cash flows at 4.0%. The liability accrued for this obligation was $1.4 million and $1.3 million at December 31, 2023 and 2022, respectively. Service costs were not material for any periods covered by this report. In February 2024, the SERP was terminated. Within the agreement, there is a one year provision for payment delay, as such the $1.8 million obligation is scheduled to be paid in February 2025.

Net periodic pension income was $0.1 million in 2023. Net periodic pension expense was $0.3 million and $0.3 million in 2022 and 2021 respectively.
Information pertaining to the activity in our defined benefit plan, using the latest available actuarial valuations with a measurement date of December 31, 2023 and 2022 is as follows:
(Dollars in thousands)20232022
Change in benefit obligation
     Benefit obligation at beginning of year$8,829 $12,230 
     Interest cost450 341 
     Actuarial loss97 160 
     Assumption changes251 (3,584)
     Benefits paid(341)(318)
     Benefit obligation at end of year$9,286 $8,829 
Change in plan assets:
     Fair value of plan assets at beginning of year$9,283 $11,591 
     Actual return gain (loss) on plan assets 1,064 (1,990)
     Benefits paid(341)(318)
     Fair value of plan assets at end of year$10,006 $9,283 
Funded status$720 $454 
Unrecognized net actuarial loss3,943 4,120 
Prepaid pension cost recognized$4,663 $4,574 
Accumulated benefit obligation$9,286 $8,829 

At December 31, 2023, 2022 and 2021, the weighted-average assumptions used to determine the benefit obligation are as follows:
202320222021
Discount rate5.01 %5.23 %2.83 %
Rate of compensation increasen/an/an/a

The components of net periodic pension cost (income) are as follows:
(Dollars in thousands)202320222021
Interest cost$450 $341 $313 
Expected return on plan assets(655)(669)(689)
Amortization of net actuarial loss117 429 507 
Net periodic pension cost (income)$(88)$101 $131 

For the years December 31, 2023, 2022 and 2021, the weighted-average assumptions used to determine net periodic pension cost (income) are as follows:
202320222021
Discount rate5.01 %5.23 %2.83 %
Expected long-term rate of return on plan assets5.75 %6.00 %6.75 %
Rate of compensation increasen/an/an/a

Our pension plan asset allocations at December 31, 2023 and 2022 are as follows:
20232022
Plan Assets
     Cash5 %7 %
     Fixed income30 %28 %
     Alternative investments12 %13 %
     Domestic equities31 %26 %
     Foreign equities21 %22 %
     Real estate investment trusts1 %4 %
     Total100 %100 %
The following table sets forth by level within the fair value hierarchy, as defined in Note 19 – Fair Value Measurements, the Pension Plan’s assets at fair value as of December 31, 2023:
(Dollars in thousands)Level ILevel IILevel IIITotal
Assets:
     Cash$500 $— $— $500 
     Fixed income3,002 — — 3,002 
     Alternative investments— — 1,201 1,201 
     Domestic equities3,102 — — 3,102 
     Foreign equities2,101 — — 2,101 
Total$8,705 $— $1,201 $9,906 
Investments reported at net asset value1
100 
Total assets at fair value$10,006 
1 Investments reported at net asset value include real estate investment trusts.

The following table sets forth by level, within the fair value hierarchy, as defined in Note 19 – Fair Value Measurements, the Pension Plan’s assets at fair value as of December 31, 2022:
(Dollars in thousands)Level ILevel IILevel IIITotal
Assets:
     Cash$650 $— $— $650 
     Fixed income2,599 — — 2,599 
     Alternative investments— — 1,207 1,207 
     Domestic equities2,414 — — 2,414 
     Foreign equities2,042 — — 2,042 
Total$7,705 $— $1,207 $8,912 
Investments reported at net asset value1
371 
Total assets at fair value$9,283 
1 Investments reported at net asset value include real estate investment trusts.

Investment in government securities, short-term investments, domestic equities and foreign equities are valued at the closing price reported on the active market on which the individual securities are traded. Alternative investments are valued at quoted prices, which are available but traded less frequently, and items that are fair valued using other financial instruments, the parameters of which can be directly observed. Real estate investment trusts are valued at the net asset value of the trust at the reporting date. The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while this plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

The following table includes our best estimate of the plan contribution for next fiscal year and the benefits expected to be paid in each of the next five fiscal years and in the aggregate for the five fiscal years thereafter:
(Dollars in thousands)Cash Flow
Contributions for the period of January 1, 2024 through December 31, 2024$— 
Estimated future benefit payments reflecting expected future service 
2024$433 
2025$466 
2026$554 
2027$560 
2028$575 
2029 through 2033$2,884