Employee Benefit Plans

12 Months Ended

Dec. 31, 2012

Employee Benefit Plan [Abstract]

Employee Benefit Plans

Note 7. Employee Benefit Plans

Defined Benefit Plan

The following tables provide a reconciliation of the changes in the defined benefit plan's obligations and fair value of assets for 2010.  The defined benefit pension plan was terminated on December 31, 2009, and benefits were distributed in 2010.

(In thousands)	2010
Change in Benefit Obligations
Benefit obligation, beginning	$	6,731
Service cost		-
Interest cost		318
Actuarial (gain) loss		-
Benefits paid		(7,204	)
Decrease in obligation due to curtailment		-
Loss due to settlement		155
Prior service cost due to amendment		-
Benefit obligation, ending	$	-
Change in Plan Assets
Fair value of plan assets, beginning	$	6,452
Actual return on plan assets		(13	)
Employer contributions		765
Benefits paid		(7,204	)
Fair value of plan assets, ending	$	-
Funded status, ending	$	-

(In thousands)	2010
Amount recognized on the Balance Sheet
Other assets	$	-
Other liabilities		-
Other comprehensive income (loss)		279
Amounts Recognized in accumulated other comprehensive loss
Net loss	$	(279	)
Prior service cost		-
Net obligation at transition		-
Deferred tax benefit expense		95
Amount recognized	$	(184	)

(In thousands)	2010
Components of Net Periodic Benefit Cost
Service cost	$	-
Interest cost		318
Expected return on plan assets		(256	)
Amortization of prior service cost		-
Amortization of net obligation at transition		-
Recognized net loss due to curtailment or settlement		703
Recognized net actuarial loss		-
Net periodic benefit cost	$	765

(In thousands)	2010
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income
Net (gain)/loss	$	(279	)
Prior service cost		-
Amortization of prior service cost		-
Net obligation at transition		-
Amortization of net obligation at transition		-
Total recognized		(279	)
Less: Income tax expense (benefit)		(95	)
Net amount recognized in other comprehensive (income) loss	$	(184	)

Total Recognized in Net Periodic Benefit Costs and Other Comprehensive Loss:

2010 (In thousands)
$	486

The accumulated benefit obligation for the deferred benefit pension plan was distributed during 2010, and as a result, there was no accumulated benefit obligation at December 31, 2012 or 2011.

The assumptions used in the measurement of the Company's benefit obligations are shown in the following table:

	2010
Weighted-Average Assumptions used in computing ending obligations as of December 31
Discount rate		N/A
Expected return on plan assets		4.00	%
Rate of compensation increase		4.00	%

The assumptions used in the measurement of the Company's Net Periodic Benefit Cost are shown in the following table:

	2010
Weighted-Average Assumptions used in computing ending obligations as of December 31
Discount rate		4.75	%
Expected return on plan assets		4.00	%
Rate of compensation increase		4.00	%

Beginning in January 2008, 100% of the Company's pension plan assets were invested in cash and cash equivalents. This decision was based on recognizing the need to preserve asset value until December 31, 2009, the effective date of the termination of the defined benefit pension plan. All of the plan's assets were considered level one in the fair value hierarchy.  Prior to January 2008, the investment manager of the trust fund selected investment fund managers with demonstrated experience and expertise, and the funds with demonstrated historical performance, for the implementation of the plan's investment strategy.  The investment manager both actively and passively managed investment strategies and allocated funds across the asset classes to develop an efficient investment structure.

The Company made a $765,000 contribution to its pension plan in 2010.

On December 20, 2008, the Company's Board of Directors approved the termination of the defined benefit pension plan effective on December 31, 2009, and effective January 1, 2010 replaced the defined benefit pension plan with an enhanced 401(k) plan.  On August 16, 2010, the Company received a favorable determination letter dated August 12, 2010 from the Internal Revenue Service for the December 31, 2009 termination date. Between January 1, 2010 and December 10, 2010, the Company distributed $7,204,000 of pension benefits, of which $7,086,000 was distributed between November 30, 2010 and December 10, 2010, and represented the final distribution upon the plan's termination. On February 1, 2011, the Company filed a Post-Distribution Certification for Standard Termination with the Pension Benefit Guaranty Corporation.

Supplemental Executive Retirement Plan

The following tables provide a reconciliation of the changes in the supplemental executive retirement plan's obligations over the three-year period ending December 31, 2012, computed as of December 31, 2012, 2011 and 2010.

(In thousands)	2012			2011			2010
Change in Benefit Obligations
Projected benefit obligation, beginning	$	1,218		$	1,315		$	1,411
Service cost		92			106			118
Interest cost		55			72			85
Actuarial (gain) loss		272			(275	)		257
Benefits paid		-			-			-
Prior service cost due to amendment		-			-			(556	)
Benefit obligation, ending	$	1,637		$	1,218		$	1,315
Fair value of plan assets, ending	$	-		$	-		$	-
Funded status at December 31,	$	(1,637	)	$	(1,218	)	$	(1,315	)

(In thousands)		2012			2011			2010
Amount recognized on the Balance Sheet
Other assets, deferred income tax benefit	$	24		$	123		$	30
Other liabilities		1,637			1,218			1,315
Other comprehensive income (loss)		47			239			58
Amounts Recognized in accumulated other comprehensive loss
Net gain (loss)	$	(53	)	$	(345	)	$	(71	)
Prior service cost		(18	)		(17	)		(17	)
Net obligation at transition		-			-			-
Deferred tax benefit (expense)		24			123			30
Amount recognized	$	(47	)	$	(239	)	$	(58	)
Funded Status
Benefit obligation	$	(1,637	)	$	(1,218	)	$	(1,315	)
Fair value of assets		-			-			-
Unrecognized net actuarial (gain)/loss		-			-			-
Unrecognized net obligation at transition		-			-			-
Unrecognized prior service cost		-			-			-
(Accrued)/prepaid benefit cost included in other liabilities	$	(1,637	)	$	(1,218	)	$	(1,315	)

(In thousands)	2012			2011		2010
Components of Net Periodic Benefit Cost
Service cost	$	92		$	106	$	118
Interest cost		55			72		85
Expected return on plan assets		-			-		-
Amortization of prior service cost		1			1		47
Amortization of net obligation at transition		-			-		-
Recognized net actuarial loss (gain)		(20	)		-		(15	)
Net periodic benefit cost	$	128		$	179	$	235

(In thousands)	2012			2011			2010
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income
Net (gain)/loss	$	292		$	(274)		$	272
Prior service cost		-			-			(556	)
Amortization of prior service cost		(1	)		(1	)		(47	)
Net obligation at transition		-			-			-
Amortization of net obligation a transition		-			-			-
Total recognized		291			(275	)		(331	)
Less: Income tax effect		99			(93	)		(113	)
Net amount recognized in other comprehensive (income) loss	$	192		$	(182	)	$	(218	)

Total Recognized in Net Periodic Benefit Costs and Other Comprehensive (Income) Loss before Income Tax

2012		2011			2010
(In thousands)
$	419	$	(96	)	$	(96	)

The assumptions used in the measurement of the Company's benefit obligations are shown in the following table.

	2012			2011			2010
Weighted-Average Assumptions used in computing ending obligations as of December 31
Discount rate used for net periodic benefit cost		4.50	%		5.50	%		6.00	%
Discount rate used for disclosures		4.00	%		4.50	%		5.50	%
Expected return on plan assets		N/A			N/A			N/A
Rate of compensation increase		3.25	%		4.00	%		4.00	%

Estimated future benefit payments which reflect expected future service, as appropriate, are as follows.

Payment Dates	Amount
For the 12 months ended:	(In thousands)
December 31, 2013	$	1
December 31, 2014		3
December 31, 2015		23
December 31, 2016		77
December 31, 2017		90
Thereafter		720

401(k) Plan

The Company has a defined contribution retirement plan under Internal Revenue Code of 1986 ("Code") Section 401(k) covering employees who have completed 3 months of service and who are at least 18 years of age.  Under the plan, a participant may contribute an amount up to 100% of their covered compensation for the year, not to exceed the dollar limit set by law (Code Section 402(g)).  The Company will make, an annual matching contribution, equal to 100% on the first 1% of compensation deferred and 50% on the next 5% of compensation deferred for a maximum match of 3.5% of compensation. Beginning in 2010, the Company began making an additional safe harbor contribution equal to 6% of compensation to all eligible participants.   The Company's 401(k) expenses for the years ended December 31, 2012, 2011 and 2010 were $719,000, $654,000 and $662,000, respectively.

Deferred Compensation Plan

The Company also maintains a Director Deferred Compensation Plan ("Deferred Compensation Plan"). This plan provides that any non-employee director of the Company or the Bank may elect to defer receipt of all or any portion of his or her compensation as a director. A participating director may elect to have amounts deferred under the Deferred Compensation Plan held in a deferred cash account, which is credited on a quarterly basis with interest equal to the highest rate offered by the Bank at the end of the preceding quarter. Alternatively, a participant may elect to have a deferred stock account in which deferred amounts are treated as if invested in the Company's common stock at the fair market value on the date of deferral. The value of a stock account will increase and decrease based upon the fair market value of an equivalent number of shares of common stock. In addition, the deferred amounts deemed invested in common stock will be credited with dividends on an equivalent number of shares. Amounts considered invested in the Company's common stock are paid, at the election of the director, either in cash or in whole shares of the common stock and cash in lieu of fractional shares. Directors may elect to receive amounts contributed to their respective accounts in one or up to five installments.

The Company has a nonqualified deferred compensation program for a former key employee's retirement, in which the contribution expense is solely funded by the Company.  The retirement benefit to be provided is variable based upon the performance of underlying life insurance policy assets.  Deferred compensation expense amounted to $33,000, $18,000 and $6,000 for the years ended December 31, 2012, 2011 and 2010, respectively. Concurrent with the establishment of the deferred compensation plan, the Company purchased life insurance policies on this employee with the Company named as owner and beneficiary.  These life insurance policies are intended to be utilized as a source of funding the deferred compensation program.  The Company has recorded in other assets $1,180,000,  $1,146,000 and $1,112,000  representing cash surrender value of these policies for the years ended December 31, 2012, 2011 and 2010, respectively.