Bank Owned Life Insurance and Annuities

12 Months Ended

Dec. 31, 2020

Bank Owned Life Insurance and Annuities [Abstract]

Bank Owned Life Insurance and Annuities

7. BANK OWNED LIFE INSURANCE AND ANNUITIES

The Company holds bank-owned life insurance (“BOLI”) and deferred annuities with a combined cash value of $16,568,000 and $16,266,000 at December 31, 2020 and 2019, respectively. As annuitants retire, the deferred annuities may be converted to payout annuities to create payment streams that match certain post-retirement liabilities. The net increase in cash surrender value on the BOLI and annuities was $302,000 and $328,000 in 2020 and 2019, respectively; the net change resulting from premium payments and earnings recorded as non-interest income. The contracts are owned by the Bank in various insurance companies. The crediting rate on the policies varies annually based on the insurance companies’ investment portfolio returns in their general fund and market conditions. Changes in cash value of BOLI and annuities in 2020 and 2019 are shown below:

(Dollars in thousands)	Life		Deferred
	Insurance		Annuities		Total
Balance as of January 1, 2019	$	15,445	$	493	$	15,938
Earnings		270		19		289
Premiums on existing policies		26		13		39
Balance as of December 31, 2019		15,741		525		16,266
Earnings		243		20		263
Premiums on existing policies		26		13		39
Balance as of December 31, 2020	$	16,010	$	558	$	16,568