Benefit Plans

12 Months Ended

Dec. 31, 2023

Retirement Benefits [Abstract]

Benefit Plans

Benefit Plans

401(k) plan

The Company has a 401(k) plan covering substantially all employees providing they meet eligibility requirements. The Company matches 50% of the first 6% contributed by the participants to the 401(k) plan. The Company’s contributions in 2023, 2022 and 2021 totaled $2.2 million, $2.2 million and $1.6 million, respectively.

Supplemental Executive Retirement Plans

In 2003, the Company entered into a non-qualified Supplemental Executive Retirement Plan (“SERP”) agreement with its former Chief Executive Officer ("CEO") that provides annual retirement benefits of $150,000 a year for 15 years when the former CEO reached the age of 65 . The former CEO retired and was receiving annual retirement benefits pursuant to the plan until 2023 when he received his final payments. In 2008, the Company entered into a SERP agreement with its current CEO that provides annual retirement benefits of $150,000 for 15 years when the CEO reaches the age of 65. Also in 2008, the Company entered into a SERP with a former Regional President that provides annual retirement benefits of $90,000 a year for ten years upon his reaching the age of 65 . In 2016, the Company entered into a SERP with a former Regional President that provides $84,500 a year for 15 years upon his reaching the age of 66 . Both former Regional Presidents are receiving the annual retirement benefits pursuant to the plans.

Somerset Hills Bank, acquired by the Company in 2013, entered into a SERP with its former CEO and its Chief Financial Officer ("CFO") which entitles them to a benefit of $48,000 and $24,000, respectively, per year for 15 years after the earlier of retirement or death. The former CEO and the beneficiary of the CFO are currently being paid out under the plan.

The Company intends to fund its obligations under the deferred compensation arrangements with the increase in cash surrender value of bank owned life insurance policies. In 2023, the Company recorded compensation expense of $104,000; in 2022, the Company recorded a benefit of $262,000, and in 2021, the Company recorded compensation expense of $163,000 for these plans. The accrued liability for these plans was $3.0 million and $3.2 million for the years ended December 31, 2023 and 2022, respectively.

Deferred Compensation Agreement

In 2015, the Company entered into a Deferred Compensation Agreement with its CEO where it would contribute $16,500 monthly into a deferral account which would earn interest at an annual rate of the Company’s prior year return on equity, provided that the Company’s return on equity remained in a range of 0% to 15%. The Company has agreed to make such contributions each month that the CEO is actively employed from February 2015 through December 31, 2022. The expense incurred in 2023, 2022 and 2021 was $241,000, $450,000 and $331,000, respectively, and the accrued liability at December 31, 2023 and 2022 was $2.6 million and $2.4 million, respectively. Following the CEO’s retirement date, he shall be paid out in 180 consecutive monthly installments.

Elective Deferral Plan

In 2015, the Company established an Elective Deferral Plan for eligible executives in which the executive may elect to contribute a portion of their base salaries and bonuses to a deferral account that will earn an interest rate of 75% of the Company’s prior year return on equity provided that the return on equity remains in the range of 0% to 15%. The Company recorded an expense of $372,000, $346,000 and $183,000 in 2023, 2022 and 2021, respectively, and had a liability recorded of $5.4 million and $4.5 million at December 31, 2023 and 2022, respectively.

Directors Retirement Plan

The Company maintains an Amended and Restated Directors' Deferred Compensation Plan, which applies to directors appointed to the Company's Board of Directors prior to January 1, 2009. The non-qualified, defined benefit plan provides participants, who after completing five years of service, may retire and receive benefit payments ranging from $5,000 through $17,500 per annum, depending upon years of credited service, for a period of ten years. The plan is unfunded and holds no assets.

At December 31, 2023 and 2022, the directors' deferred compensation plan had a recorded liability of $618,000 and $627,000, respectively. The was no balance recognized in accumulated other comprehensive income for pension items at December 31, 2023 or 2022.

The net periodic plan cost included the following components.

	Years Ended December 31,
(in thousands)	2023		2022		2021
Service cost	$	—	$	—	$	22
Interest cost	—		—		16
	$	—	$	—	$	38

A discount rate of 4.70%, 4.91% and 2.49% was assumed in the plan valuation for 2023, 2022 and 2021, respectively. As the benefit amount is not dependent upon compensation levels, a rate of increase in compensation assumption was not utilized in the plan valuation. The Company expects its contribution to the directors' retirement plan to be $29,000 in 2024.

The benefits expected to be paid in each of the next five years and in aggregate for the five years thereafter are as follows:

(in thousands)
2024	$	38
2025	37
2026	27
2027	55
2028	33
2029-2033	215