5. Employee Benefit Plan

9 Months Ended

Sep. 30, 2018

Employee Benefit Plan

5. Employee Benefit Plan

The Bank has a qualified noncontributory defined benefit pension plan which covers substantially all of its full-time employees hired before April 1, 2012. The benefits are primarily based on years of service and earnings. The Company uses December 31st as the measurement date for the defined benefit pension plan. The Bank does not expect to contribute to the pension plan in 2018.

On January 1, 2018 the Company adopted ASU No. 2017-07, “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.” Under the new guidance, employers are required to present the service cost component of the net periodic benefit cost in the same income statement line item (e.g., Salaries and Employee benefits) as other employee compensation costs arising from services rendered during the period. In addition, only the service cost component will be eligible for capitalization in assets. Employers will present the other components of net periodic benefit cost separately (e.g., Other Noninterest Expense) from the line item that includes the service cost.  The Company adopted ASU No. 2017-07 on January 1, 2018 and re-classified non-servicing components of net periodic pension cost from compensation expense to other noninterest expense. ASU No. 2017-07 did not have a material impact on the Company’s Consolidated Financial Statements.

 The following is a summary of net periodic pension costs for the three and nine month periods ended September 30, 2018 and 2017:

	Nine Months Ended						Three Months Ended
	September 30, 2018			September 30, 2017			September 30, 2018			September 30, 2017
Service cost	$	576		$	522		$	192		$	174
Interest cost		372			365			124			122
Expected return on plan assets		(693	)		(638	)		(231	)		(213	)
Amortization of prior service cost		(12	)		(11	)		(4	)		(4	)
Amortization of net loss		228			213			76			71
Net periodic pension cost	$	471		$	450		$	157		$	150