Note 16 - Deferred Compensation and Supplemental Executive Retirement Plans

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Compensation and Employee Benefit Plans, Other than Share-based Compensation [Text Block]

Note

16.

Deferred Compensation and Supplemental Executive Retirement Plans

Deferred compensation plans have been adopted for certain executive officers and members of the Board of Directors for future compensation upon retirement. Under plan provisions aggregate annual payments ranging from

$1,992

to

$37,200

are payable for

ten

years certain, generally beginning at age

65.

Reduced benefits apply in cases of early retirement or death prior to the benefit date, as defined. The liability accrued for compensation deferred under the plan amounts to

$209

thousand and

$258

thousand at

December 31, 2019

and

2018,

respectively. Expense charged against income and included in salary and benefits expense was

$18

thousand and

$23

thousand in

2019

and

2018,

respectively. Charges to income are based on changes in present value of future cash payments, discounted at

8

percent, consistent with prior years.

Supplemental executive retirement plans for certain executive officers were adopted in

2017.

The plans provide for annual payments ranging from

$12,875

to

$80,000,

payable in monthly installments, and continuing for the life of the executive. Reduced benefits apply in cases of early retirement. The liability accrued for this obligation was

$222

thousand and

$143

thousand at

December 31, 2019

and

2018,

respectively. Expense charged against income and included in salary and benefits expense was

$79

thousand and

$107

thousand in

2019

and

2018,

respectively, for these supplemental executive retirement plans.

Prior to the Cardinal merger, the Bank of Floyd had adopted supplemental executive plans to provide benefits for

two

former members of management. Aggregate annual payments of

$69

thousand are payable for

20

years, beginning subsequent to the executive’s last day of employment. The liability is calculated by discounting the anticipated future cash flows at

4.00%.

The liability accrued for this obligation was

$728

thousand and

$768

thousand at

December 31, 2019

and

2018,

respectively. Charges to income amounted to approximately

$29

thousand and

$32

thousand for

2019

and

2018,

respectively. These plans are unfunded, however, life insurance has been acquired in amounts sufficient to discharge the obligations of the agreements.