11.    BENEFIT PLANS

Section 401(k) Plan

The Company sponsors a contributory defined contribution Section 401(k) plan covering substantially all employees who have completed one year of service, have worked 1,000 hours and have attained age twenty-one. The plan permits employees to make pretax contributions which are matched by the Company up to four percent of the employee's compensation. The Company's contributions were $280 thousand and $174 thousand for the years ended December 31, 2025 and 2024, respectively. Contributions made by the Company vest immediately.

The Company has a profit-sharing employer contribution component to the 401(k) Plan. The profit-sharing employer contribution is made at the discretion of management and the Board of Directors based upon current year earnings. The Company's contributions were $14 thousand and $177 thousand for the years ended December 31, 2025 and 2024, respectively. Contributions made by the Company vest ratably beginning after the second year of service and are fully vested after an employee completes six years of service.

Employee Stock Ownership Plan

The Company sponsors an Employee Stock Ownership Plan (ESOP) covering substantially all employees who have completed one year of service, have worked 1,000 hours and have attained age twenty-one. Contributions to the plan are permitted based upon management’s discretion. The Company's contributions were $488 thousand and $131 thousand in 2025 and 2024, respectively. Contributions made by the Company vest ratably beginning after the second year of service and are fully vested after an employee completes six years of service. The number of shares held by the plan were 161,126 at  December 31, 2025 and 75,080 at  December 31, 2024. All shares are allocated to participants.

In the event a terminated plan participant desires to sell his or her shares of the Company stock, or for certain employees who elect to diversify their account balances, the Company may be required to purchase the shares from the participant at their fair value. To the extent that shares of common stock held by the ESOP are not readily traded, a sponsor must reflect the maximum cash obligation related to those securities outside of stockholders’ equity.

As of  December 31, 2025 and December 31, 2024, the shares held by the ESOP, fair value and maximum cash obligation were as follows:

Deferred Directors' Compensation

The Company maintains deferred compensation plans with directors through which the payments of the directors' fees are deferred. The future liability of these agreements, which is payable in ten annual installments, was financed through the purchase of life insurance contracts.

The present value of the future liability of the plans at  December 31, 2025 and  December 31, 2024 was $912 thousand and $890 thousand, respectively, and is included in "Other Liabilities" in the consolidated balance sheets. The related expenses amounted to $81 thousand and $89 thousand for December 31, 2025 and  December 31, 2024, respectively.

Supplemental Retirement Plans

The Company has an unfunded, non-qualified supplemental executive retirement plan (SERP) for certain key executives. The SERP is designed to provide certain executives, upon attaining age 65, with projected annual distributions. The liability of the SERP at December 31, 2025 and  December 31, 2024 was $1.64 million and $1.52 million, respectively, and is included in "Other Liabilities" in the consolidated balance sheets. The related expense amounted to $172 thousand and $90 thousand for the periods ended  December 31, 2025 and  December 31, 2024, respectively. The Company offsets the cost of these plans through the purchase of bank-owned life insurance as noted below.

Bank Owned Life Insurance

The Company invests in bank owned life insurance (BOLI) as a source of funding for employee and director benefit expenses. BOLI involves the purchasing of life insurance by the Company on a chosen group of officers and directors. The Company is the owner and beneficiary of the policies. This life insurance investment is carried at the cash surrender value of the underlying policies. Income from the increase in the cash surrender value of the policies is included with noninterest income on the Consolidated Statements of Income. The policies can be liquidated, if necessary, with tax costs associated. However, the Company intends to hold these policies and accordingly, the Company has not provided for deferred income taxes on the earnings from the increase in cash surrender value.

The Company recognizes a liability for postretirement benefits provided through an endorsed split-dollar life insurance arrangement. The liability for post-retirement benefits under these arrangements was $1.43 million and $843 thousand at  December 31, 2025 and  December 31, 2024, respectively, and is included in "Other Liabilities" on the Consolidated Balance Sheets. Expense in the years ended  December 31, 2025 and 2024 was $76 thousand and $5 thousand, respectively.

The Company holds bank-owned life insurance (BOLI) with a cash value of $28.23 million and $12.97 million at  December 31, 2025 and  December 31, 2024, respectively. Bank owned life insurance of $14.85 million was acquired with the merger of NUBC for the year ended December 31, 2025. No additional split-dollar life insurance policies were added during the year ended  December 31, 2024. The Plan provides that the Company and the officers and directors share in the rights to the death benefits of bank owned split-dollar life insurance policies (the "BOLI Policies") and provides for additional compensation to the officers and directors, equal to any income tax consequences related to the Supplemental Plan until retirement. The amount of the BOLI Policies has been calculated so that the projected increases in their cash surrender value will substantially offset the Company's expense related to the Supplemental Retirement Plans. In addition, the BOLI Policies are intended to provide the directors with $100,000 of supplemental life insurance and the executive officers with supplemental life insurance equal to three times salary. Neither the insurance company nor the Company has guaranteed any minimum cash value.