EMPLOYEE BENEFIT PLANS

12 Months Ended

Dec. 31, 2023

Retirement Benefits [Abstract]

EMPLOYEE BENEFIT PLANS

EMPLOYEE BENEFIT PLANS

Pension Plan

The Company maintains a legacy, employer-sponsored defined benefit pension plan (the “Plan”) for which participation and benefit accruals were frozen on January 1, 2003. The Plan was assumed in connection with the Rome Bancorp acquisition in 2011. Accordingly, no employees are permitted to commence participation in the Plan and future salary increases and years of credited service are not considered when computing an employee’s benefits under the Plan. As of December 31, 2023, all minimum Employee Retirement Income Security Act (“ERISA”) funding requirements have been met.

Information regarding the pension plan is as follows:

	December 31,
(In thousands)	2023		2022
Change in projected benefit obligation:
Projected benefit obligation at beginning of year	$	3,729	$	5,328
Service Cost	59		68
Interest cost	186		141
Actuarial loss	(20)		(1,508)
Benefits paid	(250)		(263)
Settlements	(62)		(37)
Projected benefit obligation at end of year	3,642		3,729
Accumulated benefit obligation	3,642		3,729
Change in fair value of plan assets:
Fair value of plan assets at plan beginning of year	4,683		5,962
Actual return on plan assets	628		(979)
Contributions by employer	—		—
Benefits paid	(250)		(263)
Settlements	(62)		(37)
Fair value of plan assets at end of year	4,999		4,683
(Overfunded) status	$	(1,357)	$	(954)

Amounts Recognized on Consolidated Balance Sheets
Other assets	$	1,357	$	954
Other liabilities	—		—

Net periodic pension cost is comprised of the following:

	December 31,
(In thousands)	2023		2022		2021
Service Cost	$	59	$	68	$	59
Interest Cost	186		141		140
Expected return on plan assets	(295)		(376)		(410)
Amortization of unrecognized actuarial loss	6		11		103
Net periodic pension (credit)	$	(44)	$	(156)	$	(108)

Changes in plan assets and benefit obligations recognized in accumulated other comprehensive income are as follows:

	December 31,
(In thousands)	2023		2022		2021
Amortization of actuarial (loss)	$	(6)	$	(11)	$	(103)
Actuarial (gain)	(353)		(154)		(495)
Settlement charge	—		—		(58)
Total recognized in accumulated other comprehensive income	(359)		(165)		(656)
Total recognized in net periodic pension cost recognized and other comprehensive income	$	(403)	$	(321)	$	(764)

The amounts in accumulated other comprehensive income/(loss) that have not yet been recognized as components of net periodic benefit cost are a net loss of $0.1 million, $0.5 million, and $0.7 million in 2023, 2022 and 2021, respectively.

The Company did not make any cash contributions to the pension trust during 2023 and 2022. The Company does not expect to make any cash contributions in 2024. There is no gain/loss expected to be amortized from other comprehensive income into net periodic pension cost over the next fiscal year.

The principal actuarial assumptions used are as follows:

	December 31,
	2023		2022		2021
Projected benefit obligation
Discount rate	4.99	%	5.21	%	2.73	%
Net periodic pension cost
Discount rate	5.21	%	2.73	%	2.35	%
Long term rate of return on plan assets	6.50	%	6.50	%	7.00	%

The discount rate that is used in the measurement of the pension obligation is determined by comparing the expected future retirement payment cash flows of the pension plan to the Above Median FTSE Pension Discount Curve as of the measurement date. The expected long-term rate of return on Plan assets reflects long-term earnings expectations on existing Plan assets and those contributions expected to be received during the current plan year. In estimating that rate, appropriate consideration was given to historical returns earned by Plan assets in the fund and the rates of return expected to be available for reinvestment. The rates of return were adjusted to reflect current capital market assumptions and changes in investment allocations.

The Company’s overall investment strategy with respect to the Plan’s assets is primarily for preservation of capital and to provide regular dividend and interest payments. The Plan’s targeted asset allocation is 65% equity securities via investment in the Long-Term Growth - Equity Portfolio ("LTGE"), 34% intermediate-term investment grade bonds via investment in the Long-Term Growth - Fixed-Income Portfolio ("LTGFI"), and 1% in cash equivalents portfolio (for liquidity). Equity securities include investments in a diverse mix of equity funds to gain exposure in the US and international markets. The fixed income portion of the Plan assets is a diversified portfolio that primarily invests in intermediate-term bond funds. The overall rate of return is based on the historical performance of the assets applied against the Plan’s target allocation, and is adjusted for the long-term inflation rate.

The fair values for investment securities are determined by quoted prices in active markets, if available (Level 1). For securities where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2). For securities where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3).

The fair value of the Plan’s assets by category within the fair value hierarchy are as follows at December 31, 2023 and December 31, 2022. During 2023, the Plan's equity mutual funds and fixed income mutual funds were transferred to Level 1 from Level 2 because they are actively traded and quoted prices were available. The Plan did not hold any assets classified as Level 3.

	December 31, 2023
Asset Category (In thousands)	Total		Level 1		Level 2
Equity Mutual Funds:
Large-Cap	$	1,357	$	1,357	$	—
Mid-Cap	364		364		—
Small-Cap	386		386		—
International	828		828		—
Fixed Income Mutual Funds:
Intermediate Duration	1,674		1,674		—
Equity Common/Collective Trusts:
Large-Cap	336		—		336
Cash Equivalents - money market	54		54		—
Total	$	4,999	$	4,663	$	336

	December 31, 2022
Asset Category (In thousands)	Total		Level 1		Level 2
Equity Mutual Funds:
Large-Cap	$	1,441	$	—	$	1,441
Mid-Cap	383		—		383
Small-Cap	318		—		318
International	814		—		814
Fixed Income - US Core	1,167		—		1,167
Intermediate Duration	396		—		396
Cash Equivalents - money market	164		72		92
Total	$	4,683	$	72	$	4,611

Estimated benefit payments under the pension plans over the next 10 years at December 31, 2023 are as follows:

Year	Payments (In thousands)
2024	277
2025	271
2026	264
2027	258
2028 - 2033	1,551

Multi-Employer Pension Plan

As a result of the Company's acquisition of SI Financial Group, Inc. (“SIFI”), the Company participates in the Pentegra Defined Benefit Plan for Financial Institutions (the “DB Plan”), a tax-qualified defined benefit pension plan. The DB Plan operates as a multiple-employer plan under ERISA and the Internal Revenue Code, and as a multi-employer plan for accounting purposes. The DB Plan was frozen effective September 6, 2013. The Company made contributions of $136 thousand in 2023. As of July 1, 2023, the DB Plan held assets with a market value of $4.1 million and liabilities with a market value of $5.4 million. The funded status (market value of plan assets divided by funding target) of the DB Plan, was 80% as of July 1, 2023, as required by federal and state regulations. Market value of the DB Plan's assets reflects contributions received through June 30, 2023. There are no collective bargaining agreements in place that require contributions to the DB Plan by the Company. The DB Plan is a single plan under the Internal Revenue Code and, as a result, all of the assets stand behind all of the liabilities. Accordingly, contributions made by a participating employer may be used to provide benefits to participants of other participating employers.

Postretirement Benefits

The Company maintains an unfunded postretirement medical plan assumed in connection with the Rome Bancorp acquisition in 2011. The postretirement plan has been modified so that participation is closed to those employees who did not meet the retirement eligibility requirements by March 31, 2011. The Company contributes partially to medical benefits and life insurance coverage for retirees. Such retirees and their surviving spouses are responsible for the remainder of the medical benefits, including increases in premiums levels, between the total premium and the Company’s contribution.

The Company also has an executive long-term care (“LTC”) postretirement benefit plan which started August 1, 2014. The LTC plan reimburses executives for certain costs in the event of a future chronic illness. Funding of the plan comes from Company paid insurance policies or direct payments. At the plan’s inception, a $558 thousand benefit obligation was recorded against equity representing the prior service cost of plan participants.

Information regarding the postretirement plans is as follows:

	December 31,
(In thousands)	2023		2022
Change in accumulated postretirement benefit obligation:
Accumulated post-retirement benefit obligation at beginning of year	$	3,215	$	4,521
Service Cost	7		12
Interest cost	166		122
Participant contributions	—		—
Actuarial loss	58		(1,396)
Benefits paid	(140)		(44)
Accumulated post-retirement benefit obligation at end of year	$	3,306	$	3,215
Change in plan assets:
Fair value of plan assets at beginning of year	$	—	$	—
Contributions by employer	140		44
Contributions by participant	—		—
Benefits paid	(140)		(44)
Fair value of plan assets at end of year	$	—	$	—

Amounts Recognized on Consolidated Balance Sheets
Other Liabilities	$	3,306	$	3,215

Net periodic post-retirement cost is comprised of the following:

	December 31,
(In thousands)	2023		2022		2021
Service cost	$	7	$	12	$	13
Interest costs	166		122		113
Amortization of net prior service credit	83		83		83
Amortization of net actuarial loss	(64)		30		55
Net periodic post-retirement costs	$	192	$	247	$	264

Changes in benefit obligations recognized in accumulated other comprehensive income are as follows:

	December 31,
(In thousands)	2023		2022		2021
Amortization of prior service credit	$	(83)	$	(83)	$	(83)
Net actuarial (gain)	(1,148)		(1,426)		(253)
Total recognized in accumulated other comprehensive income	(1,231)		(1,509)		(336)
Accrued post-retirement liability recognized	$	3,306	$	3,215	$	4,521

The amounts in accumulated other comprehensive income that have not yet been recognized as components of net periodic benefit cost are as follows:

	December 31,
(In thousands)	2023		2022		2021
Net prior service cost	$	1,075	$	1,159	$	1,242
Net actuarial (gain)/loss	(690)		(812)		615
Total recognized in accumulated other comprehensive income	$	385	$	347	$	1,857

The amount expected to be amortized from other comprehensive income/(loss) into net periodic postretirement cost over the next fiscal year is $60 thousand.

The discount rates used in the measurement of the postretirement plan obligations are determined by comparing the expected future retirement payment cash flows of the plans to the Above Median FTSE Pension Discount Curve as of the measurement date.

The assumed discount rates on a weighted-average basis were 4.98% and 5.12% as of December 31, 2023 and December 31, 2022, respectively. The Company has fixed contributions, therefore, the annual rate of increase in healthcare costs is not used in measuring the accumulated post-retirement benefit medical obligation.

For participants in the LTC plan covered by insurance policies, no increase in annual premiums is assumed based on the history of the corresponding insurance provider.

Estimated benefit payments under the post-retirement benefit plan over the next ten years at December 31, 2023 are as follows:

Year	Payments (In thousands)
2024	115
2025	112
2026	108
2027	111
2028 - 2033	1,140

401(k) Plan

The Company provides a 401(k) Plan in which most eligible employees participate. Expenses related to the plan were $3.1 million in 2023, $2.9 million in 2022, and $3.2 million in 2021.

Other Plans

The Company maintains supplemental executive retirement plans (“SERPs”) for select current and former executives. Benefits generally commence no earlier than age sixty-two and are payable either as an annuity or as a lump sum at the executive’s option. Most of these SERPs were assumed in connection with acquisitions. At year-end 2023 and 2022, the accrued liability for these SERPs was $16.7 million and $19.4 million, respectively. SERP (benefit)/expense was $(1.0) million in 2023, $2.0 million in 2022, and $2.0 million in 2021, and is recognized over the required service period.

The Company has endorsement split-dollar arrangements pertaining to certain current and former executives and directors. Under these arrangements, the Company purchased policies insuring the lives of the executives and directors, and separately entered into agreements to split the policy benefits with the individuals. There are no post-retirement benefits associated with these policies. The Company also assumed split-dollar life insurance agreements from multiple prior acquisitions. The accrued liability for these split-dollar arrangements was $7.0 million as of year-end 2023 and $7.9 million as of year-end 2022.