EMPLOYEE RETIREMENT PLANS

12 Months Ended

Dec. 31, 2025

EMPLOYEE RETIREMENT PLANS

EMPLOYEE RETIREMENT PLANS

11. EMPLOYEE RETIREMENT PLANS

We have a defined benefit pension plan which was frozen effective December 31, 2016. No benefits have been accrued under the plan subsequent to that date. We also have an unfunded supplemental pension plan for key executives.  Retirement benefits are provided based on employees’ years of credited service and average earnings or stated amounts for years of service.  Normal retirement age is 65 with provisions for earlier retirement. The plan also has provisions for disability and death benefits.  

Our funding policy for the defined benefit pension plan is to make contributions to the plan such that all employees’ benefits will be fully provided by the time they retire.  Plan assets are stated at fair value and consist primarily of equity securities and fixed income securities, mainly U.S. government and corporate obligations.

We follow ASC 715, Compensation – Retirement Benefits, which requires employers to recognize the funded status of defined benefit pension and other postretirement benefit plans as an asset or liability in their statements of financial position and to recognize changes in the funded status in the year in which the changes occur as a component of comprehensive income.  In addition, ASC 715 requires employers to measure the funded status of their plans as of the date of their year-end statements of financial position.  ASC 715 also requires additional disclosures regarding amounts included in accumulated other comprehensive loss.

Our pension plan’s weighted average asset allocation at December 31, 2025 and 2024, by asset category, was as follows:

	Plan Assets at December 31,
	2025		2024
Asset Category:
Equity Securities	57	%	59	%
Fixed Income Securities	36	%	31	%
Other	7	%	10	%
Total	100	%	100	%

We have a Retirement Plan Committee, consisting of our Chief Executive Officer, Chief Operating Officer and Chief Financial Officer, to manage the operations and administration of all benefit plans and related trusts. The committee has an investment policy for the pension plan assets that establishes target asset allocation ranges for the above listed asset classes as follows: equity securities: 20% - 100%; fixed income securities: 20% - 80%; and other, principally cash: 0% - 20%. On a semi-annual basis, the committee reviews progress towards achieving the pension plan’s performance objectives.

To develop the expected long-term rate of return on assets assumption, we considered the historical returns and the future expectations for returns for each asset class, as well as the target asset allocation of the pension portfolio.  This resulted in the selection of 6.75% as the long-term rate of return on assets assumptions for both 2025 and 2024.

The following discount rates were used to determine the funded status of the pension plans as of December 31, 2025 and 2024:

	Defined Benefit Pension Plan				Supplemental Pension Plan
	2025		2024		2025		2024
Discount rate for determining funded status	5.45	%	5.65	%	5.41	%	5.65	%

The following is a reconciliation of the change in benefit obligation and plan assets of both the defined benefit pension plan and the unfunded supplemental pension plan for the years ended December 31, 2025 and 2024:

	Defined Benefit Pension Plan				Supplemental Pension Plan
	2025		2024		2025		2024
	(Dollars in thousands)
Change in projected benefit obligation
Projected benefit obligation, beginning of year	$	38,493	$	40,411	$	10,940	$	11,609
Service cost		196		427		—		—
Interest cost		1,905		1,995		572		561
Actuarial (gain) loss		(831)		(1,592)		168		(885)
Benefits paid		(2,765)		(2,748)		(346)		(345)
Projected benefit obligation, end of year	$	36,998	$	38,493	$	11,334	$	10,940
Change in plan assets
Fair value of plan assets, beginning of year	$	39,017	$	38,041	$	—	$	—
Actual return on plan assets		4,199		4,151		—		—
Administrative expenses		(196)		(427)		—		—
Contributions		—		—		346		345
Benefits paid		(2,765)		(2,748)		(346)		(345)
Fair value of plan assets, end of year	$	40,255	$	39,017	$	—	$	—
Funded status of plan	$	3,257	$	524	$	(11,334)	$	(10,940)
Amounts recognized in the consolidated balance sheets consist of:
Other assets	$	3,257	$	—	$	—	$	—
Accrued liabilities - other		—		—		(547)		(528)
Long-term pension liability		—		524		(10,787)		(10,412)
Net amount recognized	$	3,257	$	524	$	(11,334)	$	(10,940)
Amounts recognized in accumulated other comprehensive loss consist of:
Accumulated loss, net of income tax benefit of $1,381, $2,012, $223, and $179, respectively	$	3,931	$	5,729	$	634	$	510
Prior service cost, net of income tax benefit of $0, $0, $3 and $8, respectively		—		—		9		24
Net amount recognized	$	3,931	$	5,729	$	643	$	534

The accumulated benefit obligations of the defined benefit pension plan and supplemental pension plan were equal to the respective plans’ projected benefit obligations, as shown in the above table, at December 31, 2025 and 2024.

Assumptions used in determining pension expense for the years ended December 31, 2025 and 2024 were:

	Defined Benefit Pension Plan				Supplemental Pension Plan
	2025		2024		2025		2024
Discount rate for projected benefit obligation	5.65	%	5.15	%	5.65	%	5.16	%
Discount rate for determining interest cost	5.34	%	5.08	%	5.39	%	5.08	%
Long-term rate of return on plan assets	6.75	%	6.75	%	—		—

The components of pension expense for the years ended December 31, 2025 and 2024, were:

	2025		2024
	(Dollars in thousands)
Service cost	$	196	$	427
Interest cost		2,477		2,556
Expected return on plan assets		(2,530)		(2,437)
Net amortization and deferral		148		416
Pension expense	$	291	$	962

The components of pension expense other than the service cost component were included in “other expense, net” in the Consolidated Statements of Earnings.

It is our intention to satisfy the minimum funding requirements and maintain at least an 80% funding percentage in our defined benefit retirement plan in future years.  At this time, we expect that any cash contributions necessary to satisfy these requirements in 2026 would not be material.

Projected benefit payments for the plans at December 31, 2025, were estimated as follows:

	Defined Benefit		Supplemental
	Pension Plan		Pension Plan
	(Dollars in thousands)
2026	$	2,922	$	548
2027	$	3,004	$	646
2028	$	3,037	$	897
2029	$	2,991	$	923
2030	$	2,994	$	965
2031 - 2035	$	13,584	$	4,714

The following table summarizes the fair value of pension plan assets at December 31, 2025, by asset category within the fair value hierarchy (for further level information, see Note 3):

	December 31, 2025
	Quoted Prices		Significant		Significant
	in Active Markets		Observable Inputs		Unobservable Inputs
	Level 1		Level 2		Level 3		Total
	(Dollars in thousands)
Common stocks	$	16,270	$	-	$	-	$	16,270
Preferred stocks		204		-		-		204
Exchange traded funds		6,619		-		-		6,619
Corporate obligations		-		3,517		-		3,517
Pooled fixed income funds		10,298		-		-		10,298
U.S. government securities		-		588		-		588
Cash and cash equivalents		2,725		-		-		2,725
Total	$	36,116	$	4,105	$	-	$	40,221
Other assets (1)								34
Total							$	40,255

(1) ^{This category represents trust receivables that are not leveled.}

The following table summarizes the fair value of pension plan assets at December 31, 2024, by asset category within the fair value hierarchy (for further level information, see Note 3):

	December 31, 2024
	Quoted Prices		Significant		Significant
	in Active Markets		Observable Inputs		Unobservable Inputs
	Level 1		Level 2		Level 3		Total
	(Dollars in thousands)
Common stocks	$	16,838	$	—	$	—	$	16,838
Preferred stocks		205		—		—		205
Exchange traded funds		5,883		—		—		5,883
Corporate obligations		—		3,875		—		3,875
Pooled fixed income funds		7,610		—		—		7,610
U.S. government securities		—		663		—		663
Cash and cash equivalents		3,943		—		—		3,943
Total	$	34,479	$	4,538	$	—	$	39,017

We also have a defined contribution plan covering substantially all employees. We contributed $1.1 million to this plan in both 2025 and 2024.