NEW INDEPENDENT BANCSHARES, INC. AND SUBSIDIARY Notes to the Consolidated Financial Statements
NOTE 14.
BENEFIT PLANS
The Bank sponsors an employee stock ownership plan( ESOP), as described in Section 4975( e)( 7) of the Internal Revenue Code and Section 407( d)( 6) of ERISA, and a stock bonus plan, qualified under Section 401( a) of the Code with a cash or deferred arrangement qualified under Sections 401( a) and 401( k) of the Code, covering substantially all of its full and part-time employees. Participants may elect to defer up to seventy-five percent of their compensation as reported for income tax purposes, subject to Internal Revenue Service limitations. The Bank matches fifty percent of the first six percent of employee contributions. The plan also allows the Bank to make discretionary contributions. The Bank makes annual contributions to the ESOP and 401( k) based on Bank performance. The expense was $ 265,407 in 2025 and $ 251,074 in 2024.
The allocated ESOP shares were 40,509 at December 31, 2025 and 2024. All shares of Company stock acquired by the plan are subject to a repurchase agreement at the time of distribution to participants. The holder of the shares is required to sell the shares back to the ESOP at fair market value. The market value of the shares held by the ESOP at December 31, 2025, was $ 8,998,264.
The Bank sponsors a profit-sharing / bonus plan that covers all employees, with a satisfactory performance evaluation, and directors of the New Washington State Bank, who are employed on January 1 and December 31 of the plan year. The amount of the bonus is determined annually by the Board of Directors. The Directors approved bonuses for 2025 and 2024 of $ 450,000 and $ 360,000, respectively, which has been included in salaries and employee benefits.
As part of the acquisition of State Bank of Medora during 2025, the Bank maintained the supplemental executive retirement plan( SERP), the director deferred compensation agreements, and the employee death and disability benefits, that were in place before the merger.
The SERP covers one executive officer. Under the plan the Bank agrees to pay retirement benefits for a period of 15 years, which are actuarially determined based on estimated compensation of the executive at the time of retirement. The Bank has recorded a liability of $ 247,786 as of December 31, 2025, and recognized expenses of $ 2,365 since the date of merger.
The deferred compensation agreements, whereby certain Medora directors, in lieu of receiving fees, the directors or their beneficiaries will be paid benefits for a period of ten years following the director ' s retirement or death. The amount of the accrued liability as of December 31, 2025, was $ 564,504. No expense was recognized since the date of merger.
The employee death and disability benefits agreement allows for the beneficiary of the employee to be paid benefits for a certain period of time after death of the employee. The Bank accrues a liability based upon the present value of the estimated payments due and the estimated life expectancy of the employee. The amount of the accrued liability as of December 31, 2025, was $ 539,353 and no expense was recognized since the date of merger.
50 | 2025 NWSB Annual Report