Bank-Owned
Life Insurance (“BOLI”)
The
Company owns insurance on the lives of a certain group of key
employees. The policies were purchased to help offset the
increase in the costs of various fringe benefit plans
including healthcare. The cash surrender value of these
policies is included as an asset on the Consolidated Balance
Sheet and any increases in the cash surrender value are
recorded as noninterest income on the Consolidated Statement
of Income. In the event of the death of an insured individual
under these policies, the Company would receive a death
benefit, which would be recorded as noninterest
income.
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