Supplemental Compensation Plans

12 Months Ended

Dec. 31, 2013

Supplemental Compensation Plans [Abstract]

Supplemental Compensation Plans

(9) Supplemental Compensation Plans

EXECUTIVE SALARY CONTINUATION PLAN

Pension Benefit Plans

The Company and the Bank maintain an unfunded non-contributory defined benefit pension plan (“Salary Continuation Plan”) and related split dollar plan for a select group of highly compensated employees.  The plan provides defined annual benefit levels between $50 and $125 depending on responsibilities at the Bank.  The retirement benefits are paid for 10 years following retirement at age 65.  Reduced retirement benefits are available after age 55 and 10 years of service.

Eligibility to participate in the Salary Continuation Plan is limited to a select group of management or highly compensated employees of the Bank that are designated by the Board.

Additionally, the Company and the Bank adopted a supplemental executive retirement plan (“SERP”) in 2006.  The SERP is intended to integrate the various forms of retirement payments offered to executives.  There are currently three participants in the SERP.

The SERP benefit is calculated using 3-year average salary plus 7-year average bonus (average compensation).  For each year of service the benefit formula credits 2% of average compensation (2.5% for the CEO) up to a maximum of 50%.  Therefore, for an executive serving 25 years (20 for the CEO), the target benefit is 50% of average compensation.  

The target benefit is reduced for other forms of retirement income provided by the Bank.  Reductions are made for 50% of the social security benefit expected at age 65 and for the accumulated value of contributions the Bank makes to the executive’s profit sharing plan.  For purposes of this reduction, contributions to the profit sharing plan are accumulated each year at a 3-year average of the yields on 10-year treasury securities.  Retirement benefits are paid monthly for 120 months, plus 6 months for each full year of service over 10 years, up to a maximum of 180 months.  

Reduced benefits are payable for retirement prior to age 65.  Should retirement occur prior to age 65, the benefit determined by the formula described above is reduced 5% for each year payments commence prior to age 65.  Therefore, the new SERP benefit is reduced 50% for retirement at age 55.  No benefit is payable for voluntary terminations prior to age 55.

The Bank uses a December 31 measurement date for these plans.

	For the Year Ended December 31,
	2013			2012			2011
Change in benefit obligation
Benefit obligation at beginning of year	$	3,590		$	3,132		$	2,723
Service cost		170			146			132
Interest cost		117			124			138
Plan loss		(186	)		364			315
Benefits Paid		(176	)		(176	)		(176	)
Benefit obligation at end of year		3,515			3,590			3,132
Change in plan assets
Employer Contribution		176			176			176
Benefits Paid		(176	)		(176	)		(176	)
Fair value of plan assets at end of year	$	—		$	—		$	—
Reconciliation of funded status
Funded status	$	(3,515	)	$	(3,590	)	$	(3,132	)
Unrecognized net plan loss		459			683			319
Unrecognized prior service cost		340			429			517
Net amount recognized	$	(2,716	)	$	(2,478	)	$	(2,296	)
Amounts recognized in the consolidated
balance sheets consist of:
Accrued benefit liability	$	(3,515	)	$	(3,590	)	$	(3,132	)
Accumulated other comprehensive income		799			1,112			836
Net amount recognized	$	(2,716	)	$	(2,478	)	$	(2,296	)

	For the Year Ended December 31,
	2013			2012		2011
Components of net periodic benefit cost
Service cost	$	170		$	146	$	132
Interest cost		117			124		138
Amortization of prior service cost		88			88		88
Recognized actuarial loss		38			—		—
Net periodic benefit cost		413			358		358
Additional amounts recognized		—			—		—
Total benefit cost	$	413		$	358	$	358
Additional Information
Minimum benefit obligation at year end	$	3,515		$	3,590	$	3,132
(Decrease) increase in minimum liability included  in other comprehensive income	$	(313	)	$	276	$	227

Assumptions used to determine benefit obligations at December 31	2013			2012			2011
Discount rate used to determine net periodic benefit cost for years ended December 31		3.20	%		3.90	%		5.00	%
Discount rate used to determine benefit obligations at December 31		4.30	%		3.20	%		3.90	%
Future salary increases		4.00	%		4.00	%		4.00	%

Plan Assets

The Bank informally funds the liabilities of the Salary Continuation Plan through life insurance purchased on the lives of plan participants.  This informal funding does not meet the definition of plan assets within the meaning of pension accounting standards.  Therefore, assets held for this purpose are not disclosed as part of the Salary Continuation Plan.

Cash Flows

Contributions and Estimated Benefit Payments
For unfunded plans, contributions to the Salary Continuation Plan are the benefit payments made to participants. The Bank paid $176 in benefit payments during fiscal 2013. The following benefit payments, which reflect expected future service, are expected to be paid in future fiscal years:
Year ending December 31,	Pension Benefits
2014	$	188
2015		226
2016		281
2017		272
2018		272
2019-2023		1,483

Disclosure of settlements and curtailments:

There were no events during fiscal 2013 that would constitute a curtailment or settlement.

DIRECTORS’ RETIREMENT PLAN

Pension Benefit Plans

On July 19, 2001, the Company and the Bank approved an unfunded non-contributory defined benefit pension plan (“Directors’ Retirement Plan”) and related split dollar plan for the directors of the Bank.  The plan provides a retirement benefit equal to $1 per year of service as a director, up to a maximum benefit amount of $15.  The retirement benefit is payable for 10 years following retirement at age 65.  Reduced retirement benefits are available after age 55 and 10 years of service.  

The Bank uses a December 31 measurement date for the Directors’ Retirement Plan.

	For the Year Ended December 31,
	2013			2012			2011
Change in benefit obligation
Benefit obligation at beginning of year	$	743		$	701		$	597
Service cost		25			24			23
Interest cost		24			27			30
Plan loss (gain)		(62	)		(1	)		66
Benefits paid		(15	)		(8	)		(15	)
Benefit obligation at end of year	$	715		$	743		$	701
Change in plan assets
Employer contribution	$	15		$	8		$	15
Benefits paid		(15	)		(8	)		(15	)
Fair value of plan assets at end of year	$	—		$	—		$	—
Reconciliation of funded status
Funded status	$	(715	)	$	(743	)	$	(701	)
Unrecognized net plan loss		(75	)		(12	)		(11	)
Net amount recognized	$	(790	)	$	(755	)	$	(712	)
Amounts recognized in the statement of financial position consist of:
Accrued benefit liability	$	(715	)	$	(743	)	$	(701	)
Accumulated other comprehensive income		(75	)		(12	)		(11	)
Net amount recognized	$	(790	)	$	(755	)	$	(712	)

	For the Year Ended December 31,
	2013			2012			2011
Components of net periodic benefit cost
Service cost	$	25		$	24		$	23
Interest cost		24			27			30
Recognized actuarial (gain)loss		—			—			(3	)
Net periodic benefit cost		49			51			50
Additional amounts recognized		—			—			—
Total benefit cost	$	49		$	51		$	50
Additional Information
Minimum benefit obligation at year end	$	715		$	743		$	701
(Decrease) increase in minimum liability included in other comprehensive loss	$	(63	)	$	(1	)	$	68

Assumptions used to determine benefit obligations at December 31	2013			2012			2011
Discount rate used to determine net periodic benefit cost for years ended December 31		3.20	%		3.80	%		4.90	%
Discount rate used to determine benefit obligations at December 31		4.10	%		3.20	%		3.80	%

Plan Assets

The Bank informally funds the liabilities of the Directors’ Retirement Plan through life insurance purchased on the lives of plan participants.  This informal funding does not meet the definition of plan assets within the meaning of pension accounting standards.  Therefore, assets held for this purpose are not disclosed as part of the Directors’ Retirement Plan.

Cash Flows

Contributions and Estimated Benefit Payments
For unfunded plans, contributions to the Directors’ Retirement Plan are the benefit payments made to participants. The Bank paid $15 in benefit payments during fiscal 2013. The following benefit payments, which reflect expected future service, are expected to be paid in future fiscal years:
Year ending December 31,	Pension Benefits
2014	$	15
2015		16
2016		30
2017		44
2018		55
2019-2023		346

Disclosure of settlements and curtailments:

There were no events during fiscal 2013 that would constitute a curtailment or settlement.

EXECUTIVE ELECTIVE DEFERRED COMPENSATION PLAN — 2001 EXECUTIVE DEFERRAL PLAN

On July 19, 2001, the Bank approved a revised Executive Elective Deferred Compensation Plan, (“2001 Executive Deferral Plan”) for certain officers to provide them the ability to make elective deferrals of compensation due to tax law limitations on benefit levels under qualified plans.  Deferred amounts earn interest at an annual rate determined by the Bank’s Board.  The plan is a non-qualified plan funded with Bank owned life insurance policies taken on the lives of the participating officers.  During the year ended December 31, 2001, the Bank purchased insurance making a single-premium payment aggregating $1,125, which is reported in other assets on the Consolidated Balance Sheets.  The Bank is the beneficiary and owner of the policies.  The cash surrender value of the related insurance policies as of December 31, 2013 and 2012 totaled $2,225 and $2,164, respectively.  The increase in accrued liability for the 2001 Executive Deferral Plan during the years ended December 31, 2013 and 2012 totaled $35 and $45, respectively.  The expenses for the 2001 Executive Deferral Plan for the years ended December 31, 2013, 2012, and 2011 totaled $35, $45, and $56, respectively.

DIRECTOR ELECTIVE DEFERRED FEE PLAN — 2001 DIRECTOR DEFERRAL PLAN

On July 19, 2001, the Bank approved a Director Elective Deferred Fee Plan (“2001 Director Deferral Plan”) for directors to provide them the ability to make elective deferrals of fees.  Deferred amounts earn interest at an annual rate determined by the Bank’s Board.  The plan is a non-qualified plan funded with Bank owned life insurance policies taken on the lives of the participating directors.  The Bank is the beneficiary and owner of the policies.  The cash surrender value of the related insurance policies as of December 31, 2013 and 2012 totaled $120 and $116, respectively.  The increase in accrued liability for the 2001 Director Deferral Plan during the years ended December 31, 2013 and 2012 totaled $1 and $1, respectively.  The expenses for the 2001 Director Deferral Plan for the years ended December 31, 2013, 2012, and 2011 totaled $1, $1, and $1, respectively.