13. Benefit Plans

401(k) Plan

Effective January 1, 2012, the Company suspended its regular ongoing matching of employees (which we refer to as “teammates”) contributions to The Palmetto Bank 401(k) Retirement Plan (the “401(k) Plan”), and replaced it with a discretionary contribution based on attaining an appropriate level of profitability. No discretionary contributions were made during the three months ended March 31, 2013 or March 31, 2012.

Defined Benefit Pension Plan

Prior to 2008, the Company offered a noncontributory, defined benefit pension plan (the “Pension Plan”) that covered all full-time teammates having at least twelve months of continuous service and having attained age 21. Effective 2008, the Company ceased accruing pension benefits for teammates under the Pension Plan. Although no previously accrued benefits were lost, teammates no longer accrue benefits for service subsequent to 2007.

The Company’s net accrued pension liability is included in Other liabilities in the Consolidated Balance Sheets and totaled $4.0 million at both March 31, 2013 and December 31, 2012.

Cost of the Pension Plan. The following table summarizes the net periodic expense components for the Pension Plan, which is included in Salaries and other personnel expense in the Consolidated Statements of Income (Loss), for the periods indicated (in thousands).


	For the three months ended March 31,
	2013			2012
Interest cost	$	210		$	256
Expected return on plan assets		(283	)		(303	)
Amortization of net actuarial loss		242			244

Net periodic pension expense	$	169		$	197

As a result of the Company’s decision to curtail the Pension Plan effective December 31, 2007, no costs relative to service have been necessary since that date as teammates no longer accrue benefits for services rendered.

Defined Benefit Pension Plan Assets. The fair value of Pension Plan assets totaled $15.3 million and $14.5 million at March 31, 2013 and December 31, 2012, respectively. At March 31, 2013 and December 31, 2012, the fair value of Company common stock included in the Pension Plan was 0.3% and 0.2%, respectively, of total fair value of Pension Plan assets.

Fair Value Measurements. The following tables summarize Pension Plan assets measured at fair value at the dates indicated aggregated by the level in the fair value hierarchy within which those measurements fall (in thousands).


	March 31, 2013
	Level 1		Level 2		Level 3		Total
Defined benefit pension plan assets	$	250	$	15,024	$	—	$	15,274

	December 31, 2012
	Level 1		Level 2		Level 3		Total
Defined benefit pension plan assets	$	133	$	14,407	$	—	$	14,540

Current and Future Expected Contributions. Through December 31, 2012, the Company made additional, regularly scheduled contributions in the amount of $489 thousand for the 2012 plan year and, during January 2013, made its final contribution for the 2012 plan year in the amount of $163 thousand.

Key Man Life Insurance

The Company has fully funded life insurance policies on certain former members of executive management who are now retired from the Company. Such policies are recorded in Other assets in the Consolidated Balance Sheets at the cash surrender value less applicable surrender charges. At both March 31, 2013 and December 31, 2012, the cash surrender value of such policies totaled $1.6 million.