Employee Benefit Plans

The Company provides a contributory trusteed 401(k) deferred compensation and profit sharing plan, which covers substantially all employees. The Company agrees to match certain employee contributions under the 401(k) portion of the plan, while profit sharing contributions are discretionary and are subject to determination by the Board of Directors. Company contributions were $926, $882, and $777 for 2014, 2013, and 2012, respectively.

The Company self-insures employee health benefits. Stop loss insurance covers annual losses exceeding $125 per covered family. Management’s policy is to establish a reserve for claims not submitted by a charge to earnings based on prior experience. Charges to earnings were $2,066, $2,599, and $1,799 for 2014, 2013, and 2012, respectively.

The Company maintains deferred compensation plans for the benefit of certain directors and officers. Under the plans, the Company agrees in return for the directors and officers deferring the receipt of a portion of their current compensation, to pay a retirement benefit computed as the amount of the compensation deferred plus accrued interest at a variable rate. Accrued benefits payable totaled $1,699 and $1,857 at December 31, 2014 and 2013. Deferred compensation expense was $172, $173, and $170 for 2014, 2013, and 2012, respectively. In conjunction with the plans, the Company purchased life insurance on certain directors and officers.

The Company entered into early retirement agreements with certain officers of the Company. Accrued benefits payable as a result of the agreements totaled $254 and $337 at December 31, 2014 and 2013, respectively. Expense associated with these agreements totaled $77, $166, and $0 during 2014, 2013, and 2012, respectively. The benefits under the agreements will be paid through 2017.

The Company acquired through previous bank mergers a noncontributory defined benefit pension plan with benefits based on years of service and compensation prior to retirement. The benefits under the plan were suspended in 1998. This defined benefit plan was terminated in 2013 with all benefits of the plan distributed to the plan’s participants prior to December 31, 2013. The costs to terminate the defined benefit plan totaled $378 in 2013.

Accumulated plan benefit information for the Company’s plan as of December 31, 2014 and 2013 was as follows:



Changes in Benefit Obligation:	2014		2013
Obligation at Beginning of Year	$	—	$	837
Interest Cost	—		25
Benefits Paid	—		(33		)
Lump Sum Benefits Paid	—		(809		)
Actuarial (Gain) Loss	—		(62		)
Effect of Settlement/Curtailment	—		42
Obligation at End of Year	$	—	$	—

Changes in Plan Assets:
Fair Value at Beginning of Year	—		399
Actual Return on Plan Assets	—		—
Employer Contributions	—		443
Periodic Benefits Paid	—		(33		)
Lump Sum Benefits Paid	—		(809		)
Fair Value at End of Year	$	—	$	—

Funded Status:
Funded Status at End of Year	$	—	$	—

Amounts recognized in accumulated other comprehensive income at December 31 consist of:
	2014		2013
Net Loss (Gain)	$	—	$	—
Prior Service Cost	—		—
	$	—	$	—

The accumulated benefit obligation was $0 and $0 at year-end 2014 and 2013, respectively.

Components of Net Periodic Benefit Cost and Other Amounts Recognized in Other Comprehensive Income (Loss)



	2014		2013			2012
Interest Cost	$	—	$	25		$	27
Expected Return on Assets	—		(1		)	(1		)
Amortization of Prior Service Cost	—		1			1
Recognition of Net Loss	—		46			30
Net Periodic Benefit Cost	$	—	$	71		$	57

Net Loss (Gain) During the Period	—		(19		)	110
Amortization of Unrecognized Loss	—		(341		)	(30		)
Amortization of Prior Service Cost	—		(13		)	(1		)
Total Recognized in Other Comprehensive Income (Loss)	—		(373		)	79

Total Recognized in Net Periodic Benefit Cost and Other Comprehensive Income (Loss)	$	—	$	(302	)	$	136

The estimated net loss, prior service costs, and net transition obligation (asset) for the defined benefit pension plan that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year will be $0 as the defined benefit pension plan terminated in 2013.

Assumptions

Weighted-average assumptions used to determine benefit obligations at year-end:



	2014	2013	2012
Discount Rate	N/A	N/A	3.25	%
Rate of Compensation Increase ⁽¹⁾	N/A	N/A	N/A

Weighted-average assumptions used to determine net periodic pension cost:



	2014	2013		2012
Discount Rate	N/A	3.25	%	3.75	%
Expected Return on Plan Assets	N/A	0.25	%	0.25	%
Rate of Compensation Increase ⁽¹⁾	N/A	N/A		N/A


⁽¹⁾	Benefits under the plan were suspended in 1998; therefore, the weighted-average rate of increase in future compensation levels was not applicable for all years presented.

The expected return on plan assets was determined based upon rates that are expected to be available for future reinvestment of earnings and maturing investments along with consideration given to the current mix of plan assets.

Postretirement Medical and Life Benefit Plan

The Company has an unfunded postretirement benefit plan covering substantially all of its employees. The medical plan is contributory with the participants’ contributions adjusted annually; the life insurance plans are noncontributory.



Changes in Accumulated Postretirement Benefit Obligations:	2014			2013
Obligation at the Beginning of Year	$	671		$	691
Unrecognized Loss (Gain)	46			(33		)

Components of Net Periodic Postretirement Benefit Cost
Service Cost	41			40
Interest Cost	28			23

Net Expected Benefit Payments	(40		)	(50		)
Obligation at End of Year	$	746		$	671



Components of Postretirement Benefit Expense:	2014		2013			2012
Service Cost	$	41	$	40		$	35
Interest Cost	28		23			24
Amortization of Unrecognized Net (Gain) Loss	—		4			—
Net Postretirement Benefit Expense	69		67			59

Net Gain (Loss) During Period Recognized in Other Comprehensive Income (Loss)	46		(37		)	42

Total Recognized in Net Postretirement Benefit Expense and Other Comprehensive Income	$	115	$	30		$	101



Assumptions Used to Determine Net Periodic Cost and Benefit Obligations:	2014		2013		2012
Discount Rate	3.62	%	4.31	%	3.41	%



Assumed Health Care Cost Trend Rates at Year-end:	2014		2013
Health Care Cost Trend Rate Assumed for Next Year	8.00	%	8.00	%
Rate that the Cost Trend Rate Gradually Declines to	5.00	%	5.00	%
Year that the Rate Reaches the Rate it is Assumed to Remain at	2020		2019

Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. A one-percentage-point change in assumed health care cost trend rates would have the following effects as of December 31, 2014:



	One-Percentage-Point Increase		One-Percentage-Point Decrease
Effect on Total of Service and Interest Cost	$	6	$	(5	)
Effect on Postretirement Benefit Obligation	$	45	$	(41	)

Contributions

The Company expects to contribute $54 to its postretirement medical and life insurance plan in 2015.

Estimated Future Benefits

The following postretirement benefit payments, which reflect expected future service, are expected to be paid:



2015	$	54
2016	51
2017	57
2018	59
2019	69
2020-2024	375