BANK OWNED LIFE INSURANCE AND ANNUITIES

12 Months Ended

Dec. 31, 2024

BANK OWNED LIFE INSURANCE AND ANNUITIES

BANK OWNED LIFE INSURANCE AND ANNUITIES

7. BANK OWNED LIFE INSURANCE AND ANNUITIES

The Company holds bank-owned life insurance (“BOLI”) and deferred annuities with a combined cash value of $15.2 million and $14.8 million at December 31, 2024 and 2023, respectively. The contracts are owned by the Bank in various insurance companies. The crediting rate on the policies varies annually based on the insurance companies’ investment portfolio returns in their general fund and market conditions. As annuitants retire, the deferred annuities may be converted to payout annuities to create payment streams that match certain post-retirement liabilities. The cash surrender value on the BOLI and annuities increased by $373,000 in 2024 with the net change resulting from proceeds from death benefits received, premium payments, the purchase of additional insurance related to 1035 Exchanges for two active participants to take advantage of increased interest rates and earnings recorded as non-interest income. The cash surrender value on the BOLI and annuities decreased by $356,000 in 2023. Changes in cash value of BOLI and annuities in 2024 and 2023 are shown below:

(Dollars in thousands)	Life		Deferred
	Insurance		Annuities		Total
Balance as of January 1, 2023	$	14,630	$	567	$	15,197
Earnings		204		18		222
Premiums on existing policies		19		12		31
Death Benefits received		(621)		(149)		(770)
Gain from life insurance proceeds		160		1		161
Balance as of December 31, 2023		14,392		449		14,841
Earnings		219		17		236
Purchases		717		—		717
Premiums on existing policies		19		8		27
Death Benefits received		(663)		—		(663)
Gain from life insurance proceeds		56		—		56
Balance as of December 31, 2024	$	14,740	$	474	$	15,214