BANK OWNED LIFE INSURANCE AND ANNUITIES

12 Months Ended

Dec. 31, 2023

BANK OWNED LIFE INSURANCE AND ANNUITIES

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 $14.8 million and $15.2 million at December 31, 2023 and 2022, respectively. As annuitants retire, the deferred annuities may be converted to payout annuities to create payment streams that match certain post-retirement liabilities. The cash surrender value on the BOLI and annuities decreased by $356,000 in 2023 with the net change resulting from proceeds from death benefits received, premium payments and earnings recorded as non-interest income. The net decrease in cash surrender value on the BOLI and annuities was $1.7 million  in 2022. 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 2023 and 2022 are shown below:

(Dollars in thousands)	Life		Deferred
	Insurance		Annuities		Total
Balance as of January 1, 2022	$	16,261	$	591	$	16,852
Earnings		198		21		219
Premiums on existing policies		8		12		20
Annuity payments received		10		—		10
Death Benefits received		(1,847)		(57)		(1,904)
Balance as of December 31, 2022		14,630		567		15,197
Earnings		204		18		222
Premiums on existing policies		19		12		31
Annuity payments received		—		—		—
Death Benefits received		(460)		(149)		(609)
Balance as of December 31, 2023	$	14,393	$	448	$	14,841