NOTE 12 - PENSION PLAN BENEFITS

12 Months Ended

Dec. 31, 2012

Pension and Other Postretirement Benefits Disclosure [Text Block]

12. RETIREMENT AND DEFERRED COMPENSATION PLANS

Substantially all employees with at least one year of service participate in a Company-sponsored employee stock ownership plan (ESOP). The Company made discretionary contributions to the ESOP of $80,000, for the year ended December 31, 2012 and $40,000 for the years ended December 31, 2011 and 2010, respectively. At December 31, 2012 and 2011, the ESOP owned approximately 47,445 and 43,061, respectively, shares of the Company's common stock.

The Company maintains a 401(k) plan covering employees who have completed 1,000 hours of service during a 12-month period and are age 21 or older. Voluntary employee contributions are partially matched by the Company. The Company made contributions to the plan of $172,000 and $69,000 for the years ended December 31, 2012 and 2011. The Company did not make a contribution to the plan in 2010.

The Company has a nonqualified executive deferred compensation plan for key executives and directors. Under this plan, participants voluntarily elect to defer a portion of their salary, bonus or fees and the Company is required to credit these deferrals with interest. The Company’s deferred compensation obligation of $1,697,000 and $1,653,000 as of December 31, 2012 and 2011, respectively, is included in accrued interest payable and other liabilities. The interest cost for this plan was $132,000, $141,000 and $150,000 for the years ended December 31, 2012, 2011 and 2010, respectively.

The Company has a supplemental retirement plan for key executives, certain retired key executives and directors. These plans are nonqualified defined benefit plans and are unsecured and unfunded. The Company has purchased insurance on the lives of the participants and holds policies with cash surrender values of $36,045,000 and $34,972,000 at December 31, 2012 and 2011, respectively. The related accrued pension obligation of $9,443,000 and $7,397,000 as of December 31, 2012 and 2011, respectively, is included in accrued interest payable and other liabilities.

The following tables set forth the status of the nonqualified supplemental retirement defined benefit pension plans at or for the year ended December 31 (in thousands):

	Pension Benefits
	2012			2011
Change in projected benefit obligation (PBO)
Benefit obligation at the beginning of the year	$	7,397		$	5,910
Service cost		602			549
Interest cost		334			333
Benefit payments		(250	)		(250	)
Actuarial loss		1,360			306
Plan amendments		—			549
Projected benefit obligation at end of year	$	9,443		$	7,397
Accumulated benefit obligation at end of year	$	7,031		$	5,621
Change in plan assets:
Employer contributions	$	250		$	250
Benefit payments		(250	)		(250	)
Fair value of plan assets at end of year	$	—		$	—
Funded status	$	(9,443	)	$	(7,397	)
Amounts recognized in statements of financial position
Current liability		(278	)		(250	)
Noncurrent liability		(9,165	)		(7,147	)
Net amount recognized	$	(9,443	)	$	(7,397	)
Amounts recognized in accumulated other comprehensive income
Prior service cost		403			502
Net loss		2,342			1,022
Net amount recognized	$	2,745		$	1,524
Total amount recognized		(6,698	)		(5,873	)

Assumptions used to determine benefit obligations as of the end of fiscal year
Measurement Date	12/31/2012		12/31/2011		12/31/2010
Discount rate	4.00	%	4.60	%	5.25	%
Expected return on assets	N/A		N/A		N/A
Rate of compensation increase	8.00	%	8.00	%	8.00	%

Components of net periodic benefits cost	2012		2011		2010
Service cost	$	602	$	549	$	—
Interest cost		334		333		340
Amortization of prior service cost		98		98		31
Amortization of actuarial loss		40		10		16
Net periodic benefit cost	$	1,074	$	990	$	387
Other comprehensive loss	$	1,222	$	748	$	(28	)
Amounts included in accumulated other comprehensive income expected to be recognized during the next fiscal year
Prior service cost	$	98	$	98	$	31
Actuarial loss	$	195	$	39	$	16

Assumptions used in computing net periodic benefit cost
Measurement Date	12/31/2012		12/31/2011		12/31/2010
Discount rate	4.00	%	4.60	%	5.25	%
Expected return on assets	N/A		N/A		N/A
Rate of compensation increase	8.00	%	8.00	%	8.00	%

Effective October 1, 2009, the Company entered into an agreement to “freeze” the vested benefits under the North Valley Bancorp Salary Continuation Plan (amended and restated effective January 1, 2007) with each active officer currently participating in the Plan. Each agreement provided that vested accrued benefits under the Plan would remain fixed at the amount determined as of September 30, 2009 until such time as the Board of Directors might elect to recommence accruals. On July 28, 2011, the Board of Directors determined that Plan accruals should recommence, with retroactive effect to September 30, 2009. As a result, the Company has entered into agreements with the officers whose Plan benefits have been “frozen” since 2009. Estimated costs expected to be accrued in 2013 are $1,348,000. The following table presents the benefits expected to be paid under the plan in the periods indicated (in thousands):

Year	Pension Benefits
2013	$	284
2014		300
2015		346
2016		2,405
2017		376
2018 - 2021		6,759