NOTE 14, Pension Plan and 401(k) Plan

PENSION PLAN

The Company provides pension benefits for eligible participants through a non-contributory defined-benefit pension plan. The plan was frozen effective September 30, 2006; therefore no additional participants have been or will be added to the plan since such date.

On November 23, 2016 the Company's Board of Directors voted to terminate the pension plan, effective January 31, 2017. The Company anticipates completing the transfer of all liabilities and administrative responsibilities under the Plan by the end of the fourth quarter of 2017.

Information pertaining to the activity in the plan, using a measurement date of December 31, is as follows:

	Years ended December 31,
	2016			2015
	(in thousands)
Change in benefit obligation
Benefit obligation at beginning of year	$	7,039		$	7,104
Service cost		0			0
Interest cost		279			260
Benefits paid		(461	)		(294	)
Actuarial (gain) loss		205			(31	)
Benefit obligation at end of year	$	7,062		$	7,039

Change in plan assets
Fair value of plan assets at beginning of year	$	5,691		$	5,268
Actual return on plan assets		269			(283	)
Employer contribution		0			1,000
Benefits paid		(461	)		(294	)
Fair value of plan assets at end of year	$	5,499		$	5,691

Funded Status at end of year	$	(1,563	)	$	(1,348	)

	December 31,
	2016			2015
	(in thousands)
Amounts recognized in the consolidated balance sheets
Accrued pension liability	$	(1,563	)	$	(1,348	)

Amounts recognized in other comprehensive income (loss)
Loss	$	3,741		$	3,918
Deferred taxes		(1,272	)		(1,332	)
Net loss	$	2,469		$	2,586
Accumulated benefit obligation	$	7,062		$	7,039

Assumptions used to determine the benefit obligations at December 31,	2016		2015
Discount rate		3.86%		4.03%

	During the years ending December 31,
Weighted-average assumptions used to determine net periodic pension cost	2016		2015
Discount rate		4.03%		3.73%
Expected long-term rate of return on plan assets		7.00%		7.00%

	Years ended December 31,
	2016			2015
Components of net periodic pension cost	(in thousands)
Interest cost	$	279		$	260
Expected return on plan assets		(391	)		(376	)
Amortization of unrecognized loss		504			390
Net periodic pension cost	$	392		$	274

Components of other amounts recognized in other comprehensive income (loss)
Net actuarial (gain) loss	$	327		$	627
Settlement loss		0			0
Amortization of actuarial loss		(504	)		(390	)
Total recognized in other comprehensive income (loss)	$	(177	)	$	237

Total recognized in net periodic benefit cost and other comprehensive income (loss)	$	215		$	511

The estimated net loss for the pension plan that will be amortized from accumulated other comprehensive loss into net periodic benefit cost over the next year is $490 thousand.

The overall expected long-term rate of return on plan assets was determined based on the current asset allocation and the related volatility of those investments.

The Company's overall investment strategy is growth with income. The emphasis of the objective is on both capital appreciation and income. The portfolio contains a blend of securities expected to grow in value over the long term and those expected to produce income. Moderate market value volatility is expected.

The pension plan invests primarily in large and mid-cap equities and government and corporate bonds, with the following target allocations: equities 55 percent, fixed income 40 percent and cash 5 percent. The pension plan has small investments in precious metals and emerging markets equity mutual funds, each of which represents less than 1 percent of the total account value.

Fair value is discussed in detail in Note 16. The fair value of the Company's pension plan assets by asset category are as follows:

Assets at Fair Value as of December 31, 2016
Asset Category	Level 1		Level 2		Level 3		Total
	(in thousands)
Money market funds	$	2,839	$	0	$	0	$	2,839
Mutual funds		0		0		0		0
Common stock		1,129		0		0		1,129
Corporate bonds		0		1,472		0		1,472
Partnerships		0		59		0		59
Total assets at fair value	$	3,968	$	1,531	$	0	$	5,499

Assets at Fair Value as of December 31, 2015
Asset Category	Level 1		Level 2		Level 3		Total
	(in thousands)
Money market funds	$	654	$	0	$	0	$	654
Mutual funds		74		0		0		74
Common stock		2,766		0		0		2,766
Corporate bonds		0		2,133		0		2,133
Partnerships		0		64		0		64
Total assets at fair value	$	$3,494	$	$2,197	$	$0	$	$5,691

The Company made no contributions to the pension plan in 2016, and contributed $1.0 million in 2015. Management has not determined at this time the amount, if any, it will contribute to the plan for the year ending December 31, 2017.

Estimated future benefit payments, which reflect expected future service, as appropriate, are as follows (in thousands):

2017	$	256
2018		273
2019		288
2020		348
2021		351
Thereafter		2,106
Total	$	3,622

401(K) PLAN

The Company has a 401(k) Plan in which substantially all employees are eligible to participate. Employees may contribute to the plan subject to certain limits based on federal tax laws. The Company makes matching contributions equal to 100 percent of the first 4 percent of an employee's compensation contributed to the plan. Matching contributions vest to the employee immediately. The Company may make profit sharing contributions to the plan as determined by the Board of Directors. Profit sharing contributions vest to the employee over a six-year period. For the years ended December 31, 2016 and 2015, expense attributable to the plan amounted to $523 thousand and $519 thousand, respectively.