Employee Benefit Plans

9 Months Ended

Dec. 31, 2011

Employee Benefit Plans

Employee Benefit Plans

Note 14:Employee Benefit Plans

Pension and Other Postretirement Benefit Plans

The Company has a frozen noncontributory defined benefit pension plan covering all employees who met the eligibility requirements prior to December 31, 2003. Compensation and service accruals were frozen at the same date. The Company’s funding policy is to make the minimum annual contribution that is required by applicable regulations, plus such amounts as the Company may determine to be appropriate from time to time.

The Company expects to contribute approximately $5,000 to the plan in fiscal 2012.

The Company uses a December 31 measurement date for the plan. Information about the plan’s funded status and pension cost follows:

	Pension Benefits
	December 31, 2011			March 31, 2011
	(In thousands)
Change in benefit obligation
Beginning of year	$	1,386		$	1,272
Interest cost		58			76
Actuarial loss		315			56
Benefits paid		(15	)		(18	)
Settlements		(47	)		—
End of year		1,697			1,386
Change in fair value of plan assets
Beginning of year		1,116			1,034
Actuarial return on plan assets		(39	)		94
Employer contribution		5			6
Benefits paid		(15	)		(18	)
Settlements		(47	)		—
End of year		1,020			1,116
Funded status at end of year	$	(677	)	$	(270	)

Amounts recognized in accumulated other comprehensive income not yet recognized as components of net periodic benefit cost consist of:

		Pension Benefits
		December 31, 2011			March 31, 2011
		(In thousands)
Net loss	$	(1,026	)	$	(651	)

The estimated net loss for the defined benefit pension plan that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year is approximately $62,000.

The accumulated benefit obligation for the defined benefit pension plan was $1.7 million and $1.4 million at December 31, 2011 and March 31, 2011, respectively.

	December 31, 2011			March 31, 2011
	(In thousands)
Components of net periodic benefit cost
Interest cost	$	59		$	76
Expected return on plan assets		(49	)		(60	)
Amortization of net loss		27			35
Net periodic benefit cost	$	37		$	51

Plan assets are held by a bank-administered trust fund, which invests the plan assets in accordance with the provisions of the plan agreement. The plan agreement permits investment in mutual funds that may invest in common stocks, corporate bonds and debentures, U.S. Government securities, certain insurance contracts, real estate and other specified investments, based on certain target allocation percentages.

Asset allocation is primarily based on a strategy to provide stable earnings while still permitting the plan to recognize potentially higher returns through an investment in equity securities. The target asset allocation percentages for 2011 are as follows:

SMID-Cap stocks	30-70%
Fixed income investments	30-70%
Cash	0-15%

At December 31, 2011 and March 31, 2011, the fair value of plan assets as a percentage of the total was invested in the following:

	December 31, 2011			March 31, 2011
Equity securities		61	%		60	%
Debt securities		32			25
Cash and cash equivalents		7			15
		100	%		100	%

Benefit payments expected to be paid from the plan as of December 31, 2011 are as follows:

		(In thousands)
2012	$	37
2013		40
2014		40
2015		51
2016		58
Thereafter		451
	$	677

Significant assumptions include:

	Pension Benefits
	December 31, 2011			March 31, 2011
Weighted-average assumptions used to determine benefit obligation:
Discount rate		4.40	%		5.75	%
Rate of compensation increase (frozen)		N/A			N/A
Weighted-average assumptions used to determine benefit cost:
Discount rate		5.75	%		6.14	%
Expected return on plan assets		6.00	%		6.00	%
Rate of compensation increase (frozen)		N/A			N/A

The Company has estimated the long-term rate of return on plan assets based primarily on historical returns on plan assets, adjusted for changes in target portfolio allocations and recent changes in long-term interest rates based on publicly available information.

The fair value of the Company’s pension plan assets at December 31, 2011, by asset category are as follows:

December 31, 2011			Fair Value Measurements Using
Asset Category	Total Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
Mutual funds-Equity
Mid Cap Blend (a)	$	46	$	46	$	—	$	—
Large Cap Value (b)		32		32		—		—
Intn’l Large Cap Blend (c)		91		91		—		—
Mid Cap Blend (d)		57		57		—		—
Natural Resources  (e)		20		20		—		—
Mutual funds-Fixed Income
Short-Term Bond (f)		36		36		—		—
Cash
Cash Mgm’t Funds-Taxable		66		66		—		—
Cash Receivable		3		3		—		—
Fixed Income Securities
US Government Obligations		65		65		—		—
US Government Agencies		50		50
Corporate Obligations		216		216		—		—
Equity Securities
Common Stock		313		313		—		—
Common Stock-Foreign		25		25		—		—
Total	$	1,020	$	1,020	$	—	$	—

(a)This category seeks long-term capital appreciation by investing primarily in equity securities of mid-cap companies.

(b)This category contains primarily companies which seek total return on investment, with dividend income as an important component of that return.

(c)This category seeks total return by investing in equities of large cap international companies. The focus of the category’s investments is in companies that have demonstrated the ability to grow the value of the enterprise at a higher rate than the cost of capital.

(d)This category pursues primarily mid cap companies with goals of long-term capital appreciation. It invests in a strategic combination of U.S. and foreign companies whose situs, or geographical locations, gives them a competitive advantage and the potential to outperform.

(e)This category’s objective is to reduce risk related to inflation and diversify into investments which are less correlated to U.S. stocks and Bonds.

(f)This category’s objective is to invest in high quality corporate bonds, U.S. Treasuries and government agencies to increase income without assuming a great deal of risk.

March 31, 2011			Fair Value Measurements Using
Asset Category	Total Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
Mutual funds-Equity
Mid Cap Blend (a)	$	50	$	50	$	—	$	—
Mid Cap Value (b)		32		32		—		—
Intn’l Large Cap Blend (c)		105		105		—		—
Small Cap Blend (d)		43		43		—		—
Large Cap Blend (e)		13		13		—		—
Cash
Cash Mgm’t Funds-Taxable		167		167		—		—
Accrued Income		3		3		—		—
Fixed Income Securities
US Government Obligations		65		65		—		—
Corporate Obligations		216		216		—		—
Equity Securities
Common Stock		375		375		—		—
Common Stock-Foreign		47		47		—		—
Total	$	1,116	$	1,116	$	—	$	—

(a)This category seeks long-term capital appreciation by investing primarily in equity securities of mid-cap companies.

(b)This category contains primarily mid-cap companies and seeks total return on investment, with dividend income as an important component of that return.

(c)This category seeks total return by investing in equities of large cap international companies. The focus of the category’s investments is in companies that have demonstrated the ability to grow the value of the enterprise at a higher rate than the cost of capital.

(d)This category pursues primarily small cap companies with goals of long-term capital appreciation. It invests in a strategic combination of U.S. and foreign companies whose situs, or geographical locations, gives them a competitive advantage and the potential to outperform.

(e)This category’s objective is to seek total return consisting of capital appreciation and income from large cap blend stocks.

The Company has an Employee Stock Ownership Plan (“ESOP”) covering substantially all employees of the Company. The ESOP acquired 163,265 shares of Company common stock at $10.00 per share in 2003 with funds provided by a loan from the Company. Accordingly, $1.6 million of common stock acquired by the ESOP was shown as a reduction of stockholders’ equity. Shares are released to participants proportionately as the loan is repaid. Dividends on allocated shares are recorded as dividends and charged to retained earnings. Compensation expense is recorded equal to the average fair market value of the stock during the year when contributions, which are determined annually by the Board of Directors of the Company, are made to the ESOP.

ESOP expense for the nine month period ended December 31, 2011 and the year ended March 31, 2011, was $67,000 and $93,000, respectively.

Share information for the ESOP is as follows at December 31, 2011 and March 31, 2011:

	December 31, 2011		March 31, 2011
Allocated shares		97,812		89,227
Shares released for allocation		—		2,150
Unearned shares		65,453		71,888
Total ESOP shares		163,265		163,265
Fair value of unearned shares at end of period	$	507,915	$	615,361

At December 31, 2011, the fair value of the 97,812 allocated shares held by the ESOP was approximately $759,000.

In addition to the defined benefit plan and ESOP, the Company has a 401(k) plan covering substantially all employees. The Company’s 401(k) matching percentage was 100% of the first 4% contributed by the employee and 50% of the employees’ next 2% of contributions. Expense related to the 401(k) plan totaled $112,000 and $163,000 for the fiscal periods ended December 31, 2011 and March 31, 2011, respectively.

Finally, the Company provides post-retirement benefits to certain officers of the Company under split-dollar life insurance policies. The Company accounts for the policies in accordance with ASC 715-60, which requires companies to recognize a liability and related compensation costs for endorsement split-dollar life insurance policies that provide a benefit to an employee extending to postretirement periods. The liability is recognized based on the substantive agreement with the employee. During the fiscal period ended December 31, 2011, the Company recorded income of $51,000 based on an actuarial adjustment and expense of $27,000 during the period ended March 31, 2011, for the split-dollar life postretirement insurance benefits.