Retirement Plans and Other Postretirement Benefits

12 Months Ended

Dec. 31, 2020

Retirement Benefits [Abstract]

Retirement Plans and Other Postretirement Benefits

Retirement Plans and Other Postretirement Benefits

Information with respect to the Retirement Plans and Other Postretirement Benefits follows:

	Retirement Plans				Other Postretirement Benefits
(Dollars in thousands)	2020		2019		2020		2019
Change in benefit obligation:
Benefit obligation at beginning of year	$	53,685	$	46,868	$	3,069	$	2,283
Service cost	477		436		109		67
Interest cost	1,692		1,905		96		94
Actuarial loss	6,423		7,104		377		731
Benefits paid	(2,846)		(2,628)		(111)		(106)
Benefit obligation at end of year	$	59,431	$	53,685	$	3,540	$	3,069
Change in plan assets:
Fair value of plan assets at beginning of year	$	51,607	$	45,379	$	—	$	—
Actual return on plan assets	6,306		8,696		—		—
Benefits paid	(2,846)		(2,628)		(111)		(106)
Corrective payment	140		—		—		—
Employer contribution and non-qualified benefit payments	159		160		111		106
Fair value of plan assets at end of year	$	55,366	$	51,607	$	—	$	—
Funded status	(4,065)		(2,078)		(3,540)		(3,069)
Unrecognized net actuarial loss	24,526		22,433		989		638
Net amount recognized	$	20,461	$	20,355	$	(2,551)	$	(2,431)

Information for the pension plan with an accumulated benefit obligation in excess of the fair value of plan assets at December 31, 2020 is shown below. Information for December 31, 2019 is shown for comparative purposes.

	At December 31,
(Dollars in thousands)	2020		2019
Projected benefit obligation	$	57,116	$	51,443
Accumulated benefit obligation	55,642		48,629
Fair value of plan assets	55,366		51,607

Components of net periodic benefit cost were as follows: 

	Retirement Plans						Other Postretirement Benefits
(Dollars in thousands)	2020		2019		2018		2020		2019		2018
Service cost	$	477	$	436	$	560	$	109	$	67	$	88
Interest cost	1,692		1,905		1,760		96		94		92
Expected loss on plan assets	(3,291)		(3,061)		(3,287)		—		—		—
Amortization of net actuarial loss	1,176		1,176		1,120		26		—		4
Accretion of prior service cost	—		(181)		(283)		—		—		—
Net periodic benefit cost (income)	$	54	$	275	$	(130)	$	231	$	161	$	184

The components of net periodic benefit cost other than the service cost component are included in other noninterest expense in the consolidated statement of income.

(Dollars in thousands)	Retirement Plans		Other Postretirement Benefits
Expected amortization expense for 2021:
Amortization of net actuarial loss	$	1,270	$	46
Accretion of prior service cost	—		—

During 2021, the Corporation expects to contribute approximately $156 thousand to the Retirement Plans and approximately $94 thousand to Other Postretirement Benefits.

The following benefits payments, which reflect expected future service, as appropriate, are expected to be paid:

(Dollars in thousands)	Retirement Plans		Other Postretirement Benefits
For the fiscal year ending:
2021	$	2,956	$	94
2022	2,985		96
2023	3,049		102
2024	3,063		107
2025	3,050		109
Years 2026-2030	15,336		703
Total	$	30,439	$	1,211

Weighted-average assumptions used to determine benefit obligations at December 31, 2020 and 2019 were as follows:

	Retirement Plans				Other Postretirement Benefits
	2020		2019		2020		2019
Assumed discount rate	2.4	%	3.2	%	2.4	%	3.2	%
Assumed salary increase rate	3%-6%		3% - 6%		—		—

The benefit obligation for all plans at December 31, 2020 was based on the Pri-2012 White Collar Dataset Mortality Table with scale MP-2020 fully generational published by the Society of Actuaries. The discount rate is based on matching the Plan's projected cash flows to the spot rates in FTSE Pension Above Median Double-A Curve as of the disclosure date. The assumed salary increase considers available service years from the valuation date through the participant's normal retirement date.

Weighted-average assumptions used to determine net periodic costs for the years ended December 31, 2020 and 2019 were as follows:

	Retirement Plans				Other Postretirement Benefits
	2020		2019		2020		2019
Assumed discount rate	3.2	%	4.2	%	3.2	%	4.2	%
Assumed long-term rate of investment return	6.5	%	7.0	%	—		—
Assumed salary increase rate	3%-6%		3% - 6%		—		—

The net periodic costs for the years ended December 31, 2020 and 2019 was based on the Pri-2012 White Collar Mortality Table projected to 2029 using scale MP-2019 published by the Society of Actuaries. The discount rate was based on matching the Plan's projected cash flows to the spot rates in FTSE Pension Above Median Double-A Curve as of the disclosure date. Historical investment returns is the basis used to determine the overall expected long-term rate of return on assets. The assumed salary increase considers available service years from the valuation date through the participant's normal retirement date.

The Corporation's pension plan asset allocation at December 31, 2020 and 2019, by asset category was as follows:

	Percentage of Plan Assets at December 31,
	2020		2019
Asset Category:
Equity securities	60	%	61	%
Debt securities	37		38
Other	3		1
Total	100	%	100	%

Plan assets include marketable equity securities, corporate and government debt securities, and certificates of deposit. The investment strategy is to keep a 60% equity to 40% fixed income mix to achieve the overall expected long-term rate of return of 6.5%. Equity securities do not include any common stock of the Corporation.

The major categories of assets in the Corporation's pension plan at year-end are presented in the following table. Assets are segregated by the level of the valuation inputs within the fair value hierarchy described in Note 18, "Fair Value Disclosures."

	Fair Value Measurements at December 31,
(Dollars in thousands)	2020		2019
Level 1:
Mutual funds	$	37,602	$	34,332
Short-term investments	1,984		1,068
Level 2:
U.S. government obligations	5,721		6,167
Corporate bonds	6,204		6,540
Certificates of deposit	3,855		3,500
Level 3:
Total fair value of plan assets	$	55,366	$	51,607

The Corporation sponsors a 401(k) deferred salary savings plan, which is a qualified defined contribution plan, and which covers all employees of the Corporation and its subsidiaries, and provides that the Corporation makes matching contributions as defined by the plan. Expense recorded by the Corporation for the 401(k) deferred salary savings plan for the years ended December 31, 2020, 2019 and 2018 was $1.8 million, $1.5 million, and $1.4 million, respectively.    

The Corporation sponsors a Supplemental Non-Qualified Pension Plan (SNQPP), which was established in 1981 prior to the existence of the 401(k) deferred salary savings plan, employee stock purchase plan and long-term incentive plans and therefore is not offered to new participants. All current participants are now retired. Expense recorded by the Corporation for the SNQPP for the years ended December 31, 2020, 2019 and 2018 was $224 thousand, $134 thousand and $215 thousand, respectively.