JUNIATA VALLEY FINANCIAL CORP | 2013 | FY | 3


 

8.  Bank Owned Life Insurance and Annuities

 

The Company holds bank-owned life insurance (BOLI), deferred annuities and payout annuities with a combined cash value of $14,848,000 and $14,402,000 at December 31, 2013 and 2012, respectively. 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 $446,000, $333,000 and $501,000 in 2013, 2012 and 2011, respectively, from earnings recorded as non-interest income and from premium payments, net of cash payments received. 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. Changes in cash value of BOLI and annuities in 2013 and 2012 are shown below (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Life Insurance

 

 

Deferred Annuities

 

 

Payout Annuities

 

 

Total

Balance as of December 31, 2011

$

13,718 

 

$

327 

 

$

24 

 

$

14,069 

Earnings

 

409 

 

 

13 

 

 

 

 

423 

Premiums on existing policies

 

56 

 

 

14 

 

 

 -

 

 

70 

Annuity payments received

 

 -

 

 

 -

 

 

(13)

 

 

(13)

Net proceeds from life insurance claim

 

(147)

 

 

 -

 

 

 -

 

 

(147)

Balance as of December 31, 2012

 

14,036 

 

 

354 

 

 

12 

 

 

14,402 

Earnings

 

372 

 

 

13 

 

 

 

 

386 

Premiums on existing policies

 

54 

 

 

14 

 

 

 -

 

 

68 

Annuity payments received

 

 -

 

 

 -

 

 

(8)

 

 

(8)

Balance as of December 31, 2013

$

14,462 

 

$

381 

 

$

 

$

14,848 

 


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