Pension and Retirement Plans

12 Months Ended

Dec. 31, 2021

Retirement Benefits [Abstract]

Pension and Retirement Plans

14.PENSION AND RETIREMENT PLANS

The Company has a noncontributory, defined benefit pension plan (“Pension Plan”) covering substantially all employees hired before May 2, 2011. The Company also provides supplemental retirement benefits to certain current and former executive officers of the Company under the terms of Supplemental Executive Retirement Agreements (“Supplemental Retirement Plan”). The Company also offers postretirement health care benefits for current and future retirees of the Bank. Certain employees receive a fixed monthly benefit at age 65 toward the purchase of postretirement medical coverage. The benefit received is based on the employee’s years of active service. Effective November 7, 2019, the postretirement health care plan was frozen for employees hired after that date. The Company uses a December 31st measurement date each year to determine the benefit obligations for these plans.

Projected benefit obligations and funded status were as follows:

	Pension Plan						Supplemental Retirement Plan
	2021			2020			2021			2020
	(dollars in thousands)
Change in projected benefit obligation
Obligation at beginning of year	$	50,117		$	45,401		$	10,505		$	9,622
Service cost		—			—			400			355
Interest cost		1,211			1,438			223			283
Actuarial (gain) loss		(1,838	)		4,827			(451	)		840
Benefits paid		(1,615	)		(1,549	)		(602	)		(595	)
Obligation at end of year		47,875			50,117			10,075			10,505
Change in plan assets
Fair value at beginning of year		55,802			50,131			—			—
Actual return on plan assets		6,451			7,220			—			—
Employer contribution		—			—			602			595
Benefits paid		(1,615	)		(1,549	)		(602	)		(595	)
Fair value at end of year		60,638			55,802			—			—
Funded status at end of year	$	12,763		$	5,685		$	(10,075	)	$	(10,505	)

The funded status of the Company’s Pension Plan is included within other assets and the funded status of the Company’s Supplemental Retirement Plan is included within other liabilities on the Company’s consolidated balance sheets at December 31, 2021 and 2020.

	Pension Plan				Supplemental Retirement Plan
	2021		2020		2021		2020
	(dollars in thousands)
Accumulated benefit obligation	$	47,875	$	50,117	$	9,472	$	9,909

Amounts recognized in accumulated other comprehensive income (loss) consisted of:

	Pension Plan						Supplemental Retirement Plan
	2021			2020			2021		2020
	(dollars in thousands)
Net actuarial (gain) loss	$	(206	)	$	4,517		$	1,468	$	1,959
Prior service credit		—			(3	)		—		—
Total	$	(206	)	$	4,514		$	1,468	$	1,959

The components of net periodic benefit cost and amounts recognized in other comprehensive income (loss) were as follows:

	Pension Plan						Supplemental Retirement Plan
	2021			2020			2021			2020
	(dollars in thousands)
Net periodic benefit cost
Service cost	$	—		$	—		$	400		$	355
Interest cost		1,211			1,438			223			283
Expected return on assets		(3,566	)		(3,201	)		—			—
Amortization of prior service credit		(3	)		(4	)		—			—
Amortization of net actuarial loss		—			—			40			8
Net periodic benefit cost		(2,358	)		(1,767	)		663			646
Amounts recognized in other comprehensive income (loss)
Net actuarial loss/(gain)		(4,723	)		807			(451	)		840
Amortization of prior service credit		3			4			—			—
Amortization of net actuarial loss		—			—			(40	)		(8	)
Total recognized in other comprehensive income (loss)		(4,720	)		811			(491	)		832
Total recognized in net periodic benefit cost and other    comprehensive income (loss)	$	(7,078	)	$	(956	)	$	172		$	1,478

Weighted-average assumptions used to determine projected benefit obligations are as follows:

	Pension Plan						Supplemental Retirement Plan
	2021			2020			2021			2020
Discount rate		2.79	%		2.45	%		2.63	%		2.21	%
Rate of compensation increase	N/A			N/A				4.00	%		4.00	%

Weighted-average assumptions used to determine net periodic benefit cost are as follows:

	Pension Plan						Supplemental Retirement Plan
	2021			2020			2021			2020
Discount rate		2.45	%		3.22	%		2.21	%		3.04	%
Expected long-term return on plan assets		6.50	%		6.50	%	N/A			N/A
Rate of compensation increase	N/A			N/A				4.00	%		4.00	%

To develop the expected long-term rate of return on assets assumption for the Pension Plan, the Company considered the historical returns and the future expectations for returns for each asset class, as well as target asset allocations of the pension portfolio.

The Company maintains an Investment Policy for its Pension Plan. The objective of this policy is to seek a balance between capital appreciation, current income, and preservation of capital, with a longer-term weighting towards equities because of the extended time horizon of the Pension Plan.

The Investment Policy guidelines suggest that the target asset allocation percentages are from 30% to 60% in domestic large cap equities, from 5% to 20% in domestic small/mid cap equities, from 0% to 20% in international equities, and from 20% to 60% in cash and fixed income.

The Company’s Pension Plan weighted-average asset allocations by asset category were as follows:

	December 31,
	2021			2020
Equity securities		68	%		42	%
Debt securities		29			46
Other		—			9
Cash and equivalents		3			3
Total		100	%		100	%

The three broad levels of fair values used to measure the Pension Plan assets are as follows:

•Level 1 – Quoted prices for identical assets in active markets.

•Level 2 – Quoted prices for similar assets in active markets; quoted prices for identical or similar assets in inactive markets; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.

•Level 3 – Valuations derived from techniques in which one or more significant inputs or significant value drivers are unobservable in the markets and which reflect the Company’s market assumptions.

The following table summarizes the various categories of the Pension Plan’s assets:

	Fair Value as of December 31, 2021
	Level 1		Level 2		Level 3		Total
	(dollars in thousands)
Asset category
Cash and cash equivalents	$	1,689	$	—	$	—	$	1,689
Fixed income		—		13,338		—		13,338
Equity securities
Common stock
Large cap core		16,940		—		—		16,940
Small cap core		2,359		—		—		2,359
Mutual funds
Domestic equity		10,413		—		—		10,413
International		6,579		—		—		6,579
Domestic fixed income		9,320		—		—		9,320
Total	$	47,300	$	13,338	$	—	$	60,638

	Fair Value as of December 31, 2020
	Level 1		Level 2		Level 3		Total
	(dollars in thousands)
Asset category
Cash and cash equivalents	$	1,527	$	—	$	—	$	1,527
Fixed income		—		14,402		—		14,402
Equity securities
Common stock
Large cap core		12,604		—		—		12,604
Small cap core		1,767		—		—		1,767
Mutual funds
Domestic equity		9,306		—		—		9,306
International		4,868		—		—		4,868
Domestic fixed income		11,328		—		—		11,328
Total	$	41,400	$	14,402	$	—	$	55,802

There were no transfers between fair value levels during the years ended December 31, 2021 and 2020.

The Company offers postretirement health care benefits for current and future retirees of the Bank. Employees receive a fixed monthly benefit at age 65 toward the purchase of postretirement medical coverage. The benefit received is based on the employee’s years of active service. The Company uses a December 31 measurement date each year to determine the benefit obligation for this plan. On November 7, 2019, the Company announced its decision to freeze the accrual of benefits to new hires within the plan.

Projected benefit obligations and funded status were as follows:

	Postretirement Healthcare Plan
	2021			2020
	(dollars in thousands)
Change in projected benefit obligation
Obligation at beginning of year	$	761		$	689
Service cost		31			30
Interest cost		18			21
Actuarial (gain) loss		(62	)		51
Benefits paid		(19	)		(30	)
Obligation at end of year		729			761
Change in plan assets
Fair value at beginning of year		—			—
Employer contribution		19			30
Benefits paid		(19	)		(30	)
Fair value at end of year		—			—
Funded status at end of year	$	(729	)	$	(761	)

The funded status of the Company’s Postretirement Healthcare Plan is included within other liabilities on the Company’s consolidated balance sheets at December 31, 2021 and 2020.

	Postretirement Healthcare Plan
	2021		2020
	(dollars in thousands)
Accumulated benefit obligation	$	729	$	761

Amounts recognized in accumulated other comprehensive income (loss) consisted of:

	Postretirement Healthcare Plan
	2021			2020
	(dollars in thousands)
Net actuarial (gain) loss	$	(44	)	$	18

The components of net periodic benefit cost and amounts recognized in other comprehensive income (loss) were as follows:

	Postretirement Healthcare Plan
	2021			2020
	(dollars in thousands)
Net periodic benefit cost
Service cost	$	31		$	30
Interest cost		18			21
Net periodic benefit cost		49			51
Amounts recognized in other comprehensive income (loss)
Net actuarial (gain) loss		(62	)		51
Total recognized in other comprehensive income		(62	)		51
Total recognized in net periodic benefit cost and    other comprehensive income (loss)	$	(13	)	$	102

Weighted-average assumptions used to determine the projected benefit obligation are as follows:

	Postretirement Healthcare Plan
	2021			2020
Discount rate		2.85	%		2.52	%
Rate of compensation increase	N/A			N/A

Weighted-average assumptions used to determine net periodic benefit cost are as follows:

	Postretirement Healthcare Plan
	2021			2020
Discount rate		2.52	%		3.26	%
Expected long-term return on plan assets	N/A			N/A
Rate of compensation increase	N/A			N/A

Assumed health care cost trend rates are as follows:

	Postretirement Healthcare Plan
	2021			2020
Health care cost trend rate assumed for next year		4.00	%		4.00	%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)		4.00	%		4.00	%
Year that the rate reaches the ultimate trend rate		2021			2020

Benefits expected to be paid in the next ten years are as follows:

	Pension Plan		Supplemental Retirement Plan		Postretirement Healthcare Plan		Total
	(dollars in thousands)
Year-ended December 31,
2022	$	2,008	$	615	$	34	$	2,657
2023		2,116		611		34		2,761
2024		2,206		607		34		2,847
2025		2,275		603		33		2,911
2026		2,395		599		33		3,027
2027-2031		12,443		3,479		161		16,083
Total	$	23,443	$	6,514	$	329	$	30,286

Employee Profit Sharing and 401(k) Plan

The Company maintains a Profit-Sharing Plan (“PSP”) that provides for deferral of federal and state income taxes on employee contributions allowed under Section 401(k) of federal law. The Company matches employee contributions up to 100% of the first 4% of each participant’s salary, eligible bonus, and eligible incentive. Employees are eligible to participate in the PSP on the first day of their initial date of service. Each year, the Company may also make a discretionary contribution to the PSP.

Employee Stock Ownership Plan

The Company has an Employee Stock Ownership Plan (“ESOP”) for its eligible employees. Employees are eligible to participate upon the attainment of age 21 and the completion of 12 months of service consisting of at least 1,000 hours. Purchases of the Company’s stock by the ESOP will be funded by employer contributions or reinvestment of cash dividends.

Total expenses related to the Profit Sharing and ESOP Plans for the years ended December 31, 2021, 2020, and 2019 amounted to $4.0 million, $3.6 million, and $2.8 million, respectively.

Defined Contribution SERP Plan ("DC SERP")

For executives participating in the DC SERP plan, the Company made a discretionary contribution of 10% of each executive’s base salary and bonus to his or her account under the Company’s DC SERP. Total expenses related to the Company’s DC SERP for the years ended December 31, 2021, 2020, and 2019 amounted to $201,000, $209,000, and $167,000, respectively.