Note 11 - Postretirement Medical Benefits

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Pension and Other Postretirement Benefits Disclosure [Text Block]

1

1

.

Postretirement Medical Benefits

The Company provides lifetime medical and dental benefits upon retirement for certain employees meeting the eligibility requirements as of

December 31, 1989 (

“Plan

1”

). Additional participants are

not

eligible to be included in Plan

1

unless they met the requirements on this date. During

2003,

the Company implemented an additional postretirement health insurance program (“Plan

2”

). Under Plan

2,

any employee meeting the service requirement of

20

years of full time service to the Company and is at least age

55

upon retirement is eligible to continue their health insurance coverage. Under both plans, retirees

not

yet eligible for Medicare have coverage identical to the coverage offered to active employees. Under both plans, Medicare-eligible retirees are provided with a Medicare Advantage plan. The Company pays

100%

of the cost of Plan

1.

The Company and the retirees each pay

50%

of the cost under Plan

2.

Both plans are unfunded. Employees hired on or after

January 1, 2016

are

not

eligible for benefits under Plan

2.

The following disclosures of the net periodic benefit cost components of Plan

1

and Plan

2

were measured at

January 1, 2018

and

2017.

Three months ended March 31, (In thousands)	2018		2017
Service cost	$	140	$	146
Interest cost		153		167
Curtailment gain recognized		-		(417	)
Recognized prior service cost		-		75
Net periodic benefit cost	$	293	$	(29	)

Service costs and recognized prior service costs are recorded as a component of salaries and employee benefits with the remaining portion of net periodic benefit cost recorded in other noninterest expense on the Company’s unaudited condensed consolidated statements of income. In connection with the merger of certain of its subsidiaries in

February 2017,

the Company recognized a curtailment gain of

$417

thousand and prior service costs of

$66

thousand, for a net gain of

$351

thousand at the time of curtailment. This gain is a result of revaluing its postretirement medical benefits plan liability due to a reduction in workforce during the

first

quarter of

2017.

The Company expects benefit payments of

$459

thousand for

2018,

of which

$96

thousand have been made during the

first

three

months of

2018.