EMPLOYEE BENEFIT PLANS (Tables)

12 Months Ended

Dec. 31, 2012

The following table sets forth the obligation and funded status as of December 31 (in thousands):

	2012			2011
Change in benefit obligation
Benefit obligation at beginning of year	$	8,387		$	7,637
Service cost		330			328
Interest cost		344			402
Actuarial gain		1,207			425
Benefits paid		(251	)		(405	)
Benefit obligation at end of year		10,017			8,387
Change in plan assets
Fair value of plan assets at beginning of year		7,472			7,337
Actual return on plan assets		790			35
Employer contribution		750			505
Benefits paid		(251	)		(405	)
Fair value of plan assets at end of year		8,761			7,472

Funded status	$	(1,256	)	$	(915	)

Amounts not yet recognized as a component of net periodic pension cost (in thousands)

Amounts recognized in accumulated other
comprehensive loss consists of:
Net loss	$	3,375		$	2,570
Prior service cost		(357	)		(400	)
Total	$	3,018		$	2,170

Accumulated benefit obligations in excess of plan assets

The accumulated benefit obligation for the defined benefit pension plan was $10,017,000 and $8,387,000 at December 31, 2012 and 2011, respectively. Information where the accumulated benefit obligation is in excess of plan assets at December 31, 2012 is as follows (in thousands):

	2012
Projected benefit obligation	$	10,017
Accumulated benefit obligation		10,017
Fair value of plan assets		8,761

Components of net periodic benefit costs

The components of net periodic benefit costs for the periods ending December 31 are as follows (in thousands):

	2012			2011			2010
Service cost	$	330		$	328		$	303
Interest cost		344			402			399
Expected return on plan assets		(565	)		(595	)		(523	)
Net amortization and deferral		135			46			44
Net periodic benefit cost	$	244		$	181		$	223

Weighted-average assumptions used to determine benefit obligations and net periodic benefit cost

The weighted-average assumptions used to determine benefit obligations at December 31:

	2012			2011
Discount rate		3.30	%		4.00	%
Rate of compensation increase		3.00	%		3.00	%

The weighted-average assumptions used to determine net periodic benefit cost for the year ended December 31:

	2012			2011			2010
Discount rate		4.00	%		5.25	%		5.75	%
Expected long-term return on plan assets		7.50	%		8.00	%		8.00	%
Rate of compensation increase		3.00	%		3.00	%		3.25	%

Fair value of plan assets

The long-term rate of return on plan assets gives consideration to returns currently being earned on plan assets as well as future rates expected to be earned. The investment objective is to maximize total return consistent with the interests of the participants and beneficiaries, and prudent investment management. The allocation of the pension plan assets is determined on the basis of sound economic principles and is continually reviewed in light of changes in market conditions. Asset allocation favors equity securities, with a target allocation of 50-70%. The target allocation for debt securities is 30-50%. At December 31, 2012, the pension plan had a sufficient cash and money market position in order to re-allocate the equity portfolio for diversification purposes and reduce risk in the total portfolio. The following table sets forth by level, within the fair value hierarchy as defined in footnote 17, the Plan's assets at fair value as of December 31, 2012 and 2011 (in thousands):

2012	Level 1		Level II		Level III		Total		Allocation
Assets
Cash and cash equivalents	$	525	$	-	$	-	$	525		6.0	%
Equity Securities
U.S. Companies		3,121		-		-		3,121		35.6	%
Mutual Funds and ETF's (a)		3,058		-		-		3,058		34.9	%
Corporate Bonds		-		1,149		-		1,149		13.1	%
U.S. Agency Securities		-		908		-		908		10.4	%
Total	$	6,704	$	2,057	$	-	$	8,761		100.0	%

2011	Level 1		Level II		Level III		Total		Allocation
Assets
Cash and cash equivalents	$	208	$	-	$	-	$	208		2.8	%
Equity Securities
U.S. Companies		2,958		-		-		2,958		39.6	%
Mutual Funds and ETF's (a)		1,797		-		-		1,797		24.0	%
Corporate Bonds		-		1,273		-		1,273		17.0	%
U.S. Agency Securities		-		1,086		-		1,086		14.5	%
Certificate of deposit		150		-		-		150		2.1	%
Total	$	5,113	$	2,359	$	-	$	7,472		100.0	%

(a)

This category comprises mutual funds investing in domestic large-cap, mid-caps, small caps, international large cap, emerging markets and commodities.

Expected future benefit payments

The Bank expects to contribute $500,000 to its pension plan in 2013. Expected future benefit payments that the Bank estimates from its pension plan are as follows (in thousands):

2013	$	326
2014		636
2015		306
2016		570
2017		516
2018 - 2022		4,037

Schedule of vesting, awarding and forfeiting of restricted shares

The following table details the vesting, awarding and forfeiting of restricted shares during 2012 and 2011:

	2012					2011
				Weighted					Weighted
				Average					Average
	Shares			Market Price		Shares			Market Price
Outstanding, beginning of year		9,921		$	29.37		11,241		$	22.79
Granted		4,132			37.68		4,268			37.16
Vested		(5,407	)		25.92		(5,588	)		22.08
Outstanding, end of year		8,646		$	35.51		9,921		$	29.37