Note 10 - Retirement Plans

12 Months Ended

Dec. 31, 2012

Retirement Plan [Member]

Pension and Other Postretirement Benefits Disclosure [Text Block]

10.  Retirement Plans

The Company maintains a salary savings plan that covers substantially all of its employees. The Company matches voluntary tax deferred employee contributions at 50% of eligible deferrals up to a maximum of 6% of the participants’ compensation. The Company may, at the discretion of its Board, contribute an additional amount based upon a percentage of covered employees’ salaries. The Company did not make a discretionary contribution during 2012, 2011, or 2010. Discretionary contributions are allocated among participants in the ratio that each participant’s compensation bears to all participants’ compensation. Eligible employees are presented with various investment alternatives related to the salary savings plan. Those alternatives include various stock and bond mutual funds ranging from traditional growth funds to more stable income funds as well as an option to invest in bank certificates of deposits. Company shares are not an available investment alternative in the salary savings plan. The total retirement plan expense for 2012, 2011, and 2010 was $485 thousand, $470 thousand, and $514 thousand, respectively.

In connection with the acquisition of Citizens Northern, the Company acquired nonqualified supplemental retirement plans for certain key employees. Benefits provided under these plans are unfunded, and payments to plan participants are made by the Company.

The following schedules set forth a reconciliation of the changes in the supplemental retirement plans’ benefit obligation and funded status for the years ended December 31, 2012 and 2011.

(In thousands)	2012			2011
Change in Benefit Obligation
Obligation at beginning of year	$	706		$	646
Service cost		26			22
Interest cost		29			32
Actuarial loss		8			33
Benefit payments		(28	)		(27	)
Obligation at end of year	$	741		$	706

The following table provides disclosure of the net periodic benefit cost as of December 31 for the years indicated.

(In thousands)	2012			2011
Service cost	$	26		$	22
Interest cost		29			32
Recognized net actuarial loss		8			2
Net periodic benefit cost	$	63		$	56
Major assumptions:
Discount rate used to determine net period benefit cost		4.39	%		5.55	%
Discount rate used to determine benefit obligation at year end		4.03			4.39

The following table presents estimated future benefit payments in the period indicated.

(In thousands)	Supplemental Retirement Plan
2013	$	28
2014		28
2015		28
2016		28
2017		28
2018-2022		326
Total	$	466

Amounts recognized in accumulated other comprehensive income as of December 31, 2012 and 2011 are as follows:

(In thousands)	2012		2011
Unrecognized net actuarial loss	$	157	$	157
Total	$	157	$	157

The estimated cost that will be amortized from accumulated other comprehensive income into net periodic cost over the next fiscal year is as follows:

(In thousands)	Supplemental Retirement Plan
Unrecognized net actuarial loss	$	12
Total	$	12

Postretirement Medical Benefits [Member]

Pension and Other Postretirement Benefits Disclosure [Text Block]

12.  Postretirement Medical Benefits

Prior to 2003, the Company provided lifetime medical and dental benefits upon retirement for certain employees meeting the eligibility requirements as of December 31, 1989 (Plan 1). During 2003, the Company implemented an additional postretirement health insurance program (Plan 2). Under Plan 2, any employee meeting the service requirement of 20 years of full time service to the Company and is at least age 55 years of age upon retirement is eligible to continue their health insurance coverage. Under both plans, retirees not yet eligible for Medicare have coverage identical to the coverage offered to active employees. Under both plans, Medicare-eligible retirees are provided with a Medicare Advantage plan. The Company pays 100% of the cost of Plan 1. The Company and the retirees each pay 50% of the cost under Plan 2. Both plans are unfunded.

The following schedules set forth a reconciliation of the changes to the benefit obligation and funded status of the plans for the years ended December 31, 2012 and 2011.

(In thousands)	2012			2011
Change in Benefit Obligation
Obligation at beginning of year	$	14,294		$	11,760
Service cost		617			432
Interest cost		608			605
Actuarial loss		674			1,750
Participant contributions		85			86
Benefit payments		(343	)		(339	)
Obligation at end of year	$	15,935		$	14,294

The following table provides disclosure of the net periodic benefit cost as of December 31 for the years indicated.

(In thousands)	2012			2011
Service cost	$	617		$	432
Interest cost		608			605
Amortization of transition obligation		102			102
Recognized prior service cost		257			257
Amortization of net actuarial loss		56			-
Net periodic benefit cost	$	1,640		$	1,396
Major assumptions:
Discount rate used to determine net periodic benefit cost		4.39	%		5.55	%
Discount rate used to determine benefit obligation as of year end		4.03			4.39
Retiree participation rate (Plan 1)		100.00			100.00
Retiree participation rate (Plan 2)		72.00			72.00

Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. For measurement purposes, the rate of increase in pre-Medicare medical care claims costs was 8% and 7% for 2013 and 2014, respectively, then grading down by .5% annually to 5% for 2018 and thereafter. For dental claims cost, it was 5% for 2013 and thereafter. A 1% change in the assumed health care cost trend rates would have the following incremental effects:

(In thousands)	1% Increase		1% Decrease
Effect on total of service and interest cost components of net periodic postretirement health care benefit cost	$	329	$	(249	)
Effect on accumulated postretirement benefit obligation		3,374		(2,632	)

The following table presents estimated future benefit payments in the period indicated.

(In thousands)	Postretirement Medical Benefits
2013	$	349
2014		384
2015		402
2016		428
2017		478
2018-2022		3,045
Total	$	5,086

Amounts recognized in accumulated other comprehensive income as of December 31, 2012 and 2011 are as follows:

(In thousands)	2012		2011
Unrecognized net actuarial loss	$	3,087	$	2,469
Unrecognized transition obligation		-		101
Unrecognized prior service cost		639		896
Total	$	3,726	$	3,466

The estimated costs that will be amortized from accumulated other comprehensive income into net periodic cost over the next fiscal year are as follows:

(In thousands)	Postretirement Medical Benefits
Unrecognized prior service cost	$	257
Total	$	257