Employee Benefit Plans

12 Months Ended

Dec. 31, 2020

Compensation And Retirement Disclosure [Abstract]

Employee Benefit Plans

Note 7. Employee Benefit Plans

Supplemental Executive Retirement Plan (“SERP”)

The Company has a defined benefit SERP for certain executives, in which the contribution is solely funded by the Company. For the years ended December 31, 2020, 2019 and 2018, SERP expenses were $233,000, $270,000 and $256,000, respectively.

The following table summarizes the projected benefit obligations, plan assets, funded status and rate assumptions associated with the SERP based upon actuarial valuations, for the years ended December 31, 2020, 2019 and 2018.

(In thousands)
Changes in Benefit Obligations	2020			2019			2018
Benefit obligation, beginning	$	2,675		$	2,574		$	2,485
Service cost		155			169			171
Interest cost		77			100			84
Actuarial gain		158			(20	)		(18	)
Benefits paid		(212	)		(148	)		(148	)
Benefit obligation, ending	$	2,853		$	2,675		$	2,574
Funded status at December 31,	$	(2,853	)	$	(2,675	)	$	(2,574	)
Changes in Plan Assets
Fair value of plan assets, beginning	$	-		$	-		$	-
Employer contributions		212			148			148
Benefits paid		(212	)		(148	)		(148	)
Fair value of plan assets, ending	$	-		$	-		$	-

Amounts recognized in the Balance Sheets	2020			2019			2018
Other assets, deferred income tax benefit	$	583		$	479		$	513
Other liabilities		2,853			2,675			2,574
Accumulated other comprehensive income	33			157				140
Amounts recognized in accumulated other comprehensive income (loss)
Net gain	$	18		$	176		$	155
Prior service cost	23			22			22
Deferred tax expense		(8	)		(41	)		(37	)
Amount recognized	$	33		$	157		$	140

Components of net periodic benefit cost	2020		2019		2018
Service cost	$	155	$	169	$	171
Interest cost	77		100		84
Amortization of prior service cost		1		1		1
Net periodic benefit cost	$	233	$	270	$	256

Other changes in plan assets and benefit obligations recognized in other comprehensive income	2020			2019		2018
Net gain	$	(158	)	$	20	$	18
Amortization of prior service cost		1			1		1
Total recognized		(157	)		21		19
Less: Income tax effect		(33	)		4		4
Net amount recognized in other comprehensive income	$	(124	)	$	17	$	15

The total recognized net periodic benefit costs and other comprehensive income before income tax follows:

(In thousands)
2020		2019		2018
$	390	$	249	$	237

Weighted-average assumptions:	2020			2019			2018
Discount rate used for net periodic benefit cost		3.00	%		4.00	%		3.50	%
Discount rate used for benefit obligation		2.25	%		3.00	%		4.00	%
Rate of compensation increase for net periodic benefit cost and benefit obligation		3.25	%		3.25	%		3.25	%

Estimated future benefit payments follows:

(In thousands)
For the years ending December 31,	Amount
2021	$	203

The Company has also established supplemental retirement plans for certain additional executives. The expense for these plans was $52,000, $27,100 and $35,600 during 2020, 2019 and 2018, respectively.

401(k) Plan

The Company has a defined contribution retirement plan under Internal Revenue Code of 1986 (“Code”) Section 401(k) covering all employees who are at least 18 years of age and worked more than 20 hours per week. Under the plan, a participant may contribute an amount up to 100% of their covered compensation for the year, not to exceed the dollar limit set by law (Code Section 402(g)). The Company will make an annual matching contribution, equal to 100% on the first 6% of compensation deferred for a maximum match of 6% of compensation. The Company makes an additional safe harbor contribution equal to 3% of compensation to all eligible participants. The Company’s 401(k) expenses for the years ended December 31, 2020, 2019 and 2018 were $788,000, $747,000 and $688,000, respectively.

Deferred Compensation Plans

The Company maintains a Director Deferred Compensation Plan. This plan provides that any nonemployee director of the Company may elect to defer receipt of all or any portion of his or her compensation as a director. A participating director may elect to have amounts held in a deferred cash account, which is credited on a quarterly basis with interest equal to the highest rate offered by the Bank at the end of the preceding quarter. Alternatively, a participant may elect to have a deferred stock account in which deferred amounts are treated as if invested in the Company’s common stock at the fair market value on the date of deferral. The value of a stock account will change based upon the fair market value of an equivalent number of shares of common stock. In addition, the deferred amounts deemed invested in common stock will be credited with dividends on an equivalent number of shares. Amounts considered invested in the Company’s common stock are paid, at the election of the director, either in cash or in whole shares of the common stock and cash in lieu of fractional shares. Directors may elect to receive amounts contributed to their respective accounts in one or up to five installments. There were no directors participating in the Director Deferred Compensation Plan in 2020, 2019 and 2018.

The Company has a nonqualified deferred compensation program for a former key employee’s retirement, in which the contribution expense is solely funded by the Company. The retirement benefit to be provided is variable based upon the performance of underlying life insurance policy assets. Deferred compensation expense amounted to $28,000, $77,000 and $44,000 for the years ended December 31, 2020, 2019 and 2018, respectively. Concurrent with the establishment of the deferred compensation program, the Company purchased life insurance policies on this employee with the Company named as owner and beneficiary. These life insurance policies are intended to be utilized as a source of funding the deferred compensation program. At December 31, 2020 and 2019, the Company recorded on the consolidated balance sheets, $1.4 million in cash surrender value for these policies and $155,000 and $153,000 in accrued liabilities as of December 31, 2020 and 2019, respectively.  The Company has recorded on the consolidated statements of operations, noninterest income of $29,000, for the year ended December 31, 2020 and $28,000 for each of the years ended December 31, 2019 and 2018.