NOTE 13. DEFERRED COMPENSATION PLANS

The Company and the Bank have entered into separate deferred compensation arrangements and supplemental executive retirement plans with certain executive officers and directors. The plans call for certain amounts payable at retirement, death or disability. The estimated present value of the deferred compensation is being accrued over the expected service period. The Company and the Bank have purchased life insurance policies which they intend to use to fund these liabilities. The cash surrender value of the life insurance was $64.3 million and $58.9 million at December 31, 2015 and 2014, respectively. Accrued deferred compensation of $991,000 and $655,000 at December 31, 2015 and 2014, respectively, is included in other liabilities. Accrued supplemental executive retirement plan liabilities of $2,443,000 and $1,594,000 at December 31, 2015 and 2014, respectively, is included in other liabilities. Aggregate compensation expense under the plans was $849,000, $743,000 and $601,000 per year for 2015, 2014 and 2013, respectively, which is included in salaries and employee benefits.