Note 13 - Retirement Benefit Plans

12 Months Ended

Dec. 31, 2021

Notes to Financial Statements

Retirement Benefits [Text Block]

Note 13: Retirement Benefit Plans

The Company sponsors a qualified defined contribution Deferred Profit-Sharing Plan covering substantially all of its salaried employees with one or more years of service. The costs charged to noninterest expense related to discretionary Company contributions to the Deferred Profit-Sharing Plan were $1,028 thousand in 2021, $917 thousand in 2020 and $1,000 thousand in 2019.

The Company also sponsors a qualified defined contribution Tax Deferred Savings/Retirement Plan (ESOP) covering salaried employees who become eligible to participate upon completion of a 90-day introductory period. The Tax Deferred Savings/ Retirement Plan (ESOP) allows employees to defer, on a pretax or after-tax basis, a portion of their salaries as contributions to this Plan. Participants may invest in several funds, including one fund that invests primarily in Westamerica Bancorporation common stock. The Company funds contributions to match participating employees’ contributions, subject to certain limits. The matching contributions charged to compensation expense were $972 thousand in 2021, $995 thousand in 2020 and $986 thousand in 2019.

The Company offers a continuation of group insurance coverage to eligible employees electing early retirement, for the period from the date of retirement until age 65. For eligible employees the Company pays a portion of these early retirees’ group insurance premiums. The Company also reimburses a portion of Medicare Part B premiums for all qualifying retirees over age 65 and, if eligible, their spouses. Eligibility for post-retirement medical benefits is based on age and years of service, and restricted to employees hired prior to February 1, 2006 who elect early retirement prior to January 1, 2021. The Company uses an actuarial-based accrual method of accounting for post-retirement benefits. The Company used a December 31 measurement date for determining post-retirement medical benefit calculations.

The following tables set forth the net periodic post-retirement benefit cost and the change in the benefit obligation for the year ended December 31 and the funded status of the post-retirement benefit plan as of December 31:

Net Periodic Benefit Cost

	At December 31,
	2021			2020			2019
	(In thousands)
Service benefit	$	(15	)	$	(35	)	$	(57	)
Interest cost		30			52			72
Net periodic cost	$	15		$	17		$	15

Obligation and Funded Status

	At December 31,
	2021			2020			2019
Change in benefit obligation	(In thousands)
Benefit obligation at beginning of year	$	1,654		$	1,782		$	1,913
Service benefit		(15	)		(35	)		(57	)
Interest cost		30			52			72
Benefits paid		(142	)		(145	)		(146	)
Benefit obligation at end of year	$	1,527		$	1,654		$	1,782
Accumulated post-retirement benefit obligation attributable to:
Retirees	$	1,527		$	1,654		$	1,782
Other		-			-			-
Total	$	1,527		$	1,654		$	1,782
Fair value of plan assets		-			-			-
Accumulated post-retirement benefit obligation in excess of plan assets	$	1,527		$	1,654		$	1,782

Additional Information

Assumptions

	At December 31,
	2021			2020			2019
Weighted-average assumptions used to determine benefit obligations
Discount rate		2.46	%		1.80	%		2.90	%
Weighted-average assumptions used to determine net periodic benefit cost
Discount rate		1.80	%		2.90	%		3.76	%

The above discount rate is based on the expected return of a portfolio of Corporate Aa debt, the term of which approximates the term of the benefit obligations. The Company reserves the right to terminate or alter post-employment health benefits. Post-retirement medical benefits are currently fixed amounts without provision for future increases; as a result, the assumed annual average rate of inflation used to measure the expected cost of benefits covered by this program is zero percent for 2022 and beyond.

	Estimated future benefit payments
	(In thousands)
2022	$	143
2023		143
2024		142
2025		142
2026		135
Years 2027-2031		534