Subsequent Events

On January 6, 2020, the Company’s Board of Directors authorized the repurchase of up to five percent (5%) of the Company’s outstanding common stock, or approximately 513,000 shares beginning no earlier than January 27, 2020 and ending no later than July 27, 2020. The Company will purchase the shares from time to time in the open market or through privately negotiated depending on market conditions and other corporate considerations.

On January 10, 2020, the Company entered into new post-employment benefit agreements with certain key officers to provide supplemental retirement benefits. Under the terms of the agreement, total annuities of $2.4 million were purchased. These annuities will be reported as held-to-maturity investments on the Company’s balance sheet. In addition, a rider endorsement is attached to the annuity policy which provides continued benefit payments for the life of the annuitant. The annual cost of the rider will be offset against the annuity balance. Post-retirement benefits will be paid out of the annuity until the balance is exhausted. At that time, the rider endorsement continues payments for the life of the annuitant.

During the remaining service period of each officer covered by these agreements, a benefit liability will accrue and a compensation expense will be recognized. A deferred tax asset will also be recognized at 21% of the compensation expense. As post-retirement benefits are paid from the annuity, the benefit liability will amortize until it is fully depleted when the policy rider is activated. The deferred compensation recognized in the deferred tax asset will be recognized as a tax benefit during the post-retirement payment period.

On February 14, 2020, the Company announced that its Board of Directors has declared a quarterly cash dividend of $0.10 per share on the Company’s outstanding common stock, an increase of $0.01 per share from its previous quarterly payout. The payout results in an annualized dividend yield of approximately 2.63% based on the stock price as of February 13, 2020. The cash dividend will be payable on March 27, 2020, to shareholders of record on March 13, 2020.

On March 2, 2020, the Bank entered into three $15.0 million cash flow hedges wherein the Bank will pay a fixed rate and receive a floating rate based on one month LIBOR (or an alternative substitute if LIBOR becomes unavailable in the future.) Specific terms are as follows:



Notional amount		Fixed rate		Term
$	15,000,000	0.911	%	6 years
15,000,000		0.937		7 years
15,000,000		0.984		8 years