Employee Benefit Plans

12 Months Ended

Dec. 31, 2013

Employee Benefit Plans [Abstract]

Employee Benefit Plans

Note 18 – Employee Benefit Plans

Defined Benefit Plan

The Company previosly maintained a non-contributory defined benefit pension plan which covered substantially all employees who were 21 years of age or older and who had at least one year of service.  The Company froze its pension plan to new participants and converted its pension plan to a cash balance plan effective December 31, 2009.  Each year existing participants will receive, with some adjustments, income based on the yield of the 10 year U.S. Treasury Note in December of the preceding year.

Information pertaining to the activity in the plan is as follows:

(in thousands)	As of and for the Years Ended December 31,
	2013			2012			2011
Change in Benefit Obligation:
Projected benefit obligation at beginning of year	$	10,931		$	9,769		$	9,279
Service cost		-			-			111
Interest cost		288			389			403
Actuarial (gain) loss		(201	)		1,289			725
Benefits paid		(2,022	)		(516	)		(749	)
Projected benefit obligation at end of year		8,996			10,931			9,769
Change in Plan Assets:
Fair value of plan assets at beginning of year		11,689			11,144			11,674
Actual return on plan assets		1,203			1,061			219
Benefits paid		(2,022	)		(516	)		(749	)
Fair value of plan assets at end of year		10,870			11,689			11,144
Funded Status at End of Year	$	1,874		$	758		$	1,375
Amounts Recognized in the Consolidated Balance Sheets
Other assets	$	1,874		$	758		$	1,375
Amounts Recognized in Accumulated Other Comprehensive Loss
Net actuarial loss	$	1,628		$	3,389		$	3,080
Deferred income tax asset		(570	)		(1,186	)		(1,078	)
Amount recognized	$	1,058		$	2,203		$	2,002
	As of and for the Years Ended December 31,
		2013			2012			2011
Components of Net Periodic Benefit Cost
Service cost	$	-		$	-		$	111
Interest cost		288			389			403
Expected return on plan assets		(513	)		(541	)		(525	)
Recognized net loss due to settlement		594			128			-
Recognized net actuarial loss		275			332			160
Net periodic benefit cost	$	644		$	308		$	149

Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive (Income) Loss
Net actuarial (gain) loss	$	(1,761	)	$	309	$	871
Amortization of prior service cost		-			-		-
Total recognized in other comprehensive (income) loss	$	(1,761	)	$	309	$	871
Total Recognized in Net Periodic Benefit Cost and Other Comprehensive  (Income) Loss	$	(1,117	)	$	617	$	1,020

	As of and for the Years Ended December 31,
	2013		2012		2011
Weighted-Average Assumptions at End of Year
Discount rate used for net periodic pension cost		3.00%		3.75%		4.75%
Discount rate used for disclosure		4.00%		3.00%		3.75%
Expected return on plan assets		5.00%		5.00%		5.00%
Rate of compensation increase		N/A		N/A		N/A

       The accumulated benefit obligation as of December 31, 2013, 2012, and 2011 was $8,996,000, $10,931,000, and $9,769,000, respectively.  The rate of compensation increase is no longer applicable since the defined benefit plan was converted to a cash balance plan.

The plan sponsor selected the expected long-term rate-of-return-on-assets assumption in consultation with their investment advisors and actuary.  This rate was intended to reflect the average rate of earnings expected to be earned on the funds invested or to be invested to provide plan benefits.  Historical performance is reviewed, especially with respect to real rates of return (net of inflation), for the major asset classes held or anticipated to be held by the trust, and for the trust itself.  Undue weight is not given to recent experience that may not continue over the measurement period, with higher significance placed on current forecasts of future long-term economic conditions.

Because assets are held in a qualified trust, anticipated returns are not reduced for taxes.  Further, solely for this purpose, the plan is assumed to continue in force and not terminate during the period in which assets are invested.  However, consideration is given to the potential impact of current and future investment policy, cash flow into and out of the trust, and expenses (both investment and non-investment) typically paid from plan assets (to the extent such expenses are not explicitly estimated within periodic cost).

Below is a description of the plan's assets.  The plan's weighted-average asset allocations by asset category are as follows:

Asset Category	December 31,
	2013		2012
Fixed Income		33.3%		33.5%
Equity		13.5%		15.1%
Mutual Funds		49.8%		49.8%
Cash and Accrued Income		3.4%		1.6%
Total		100.0%		100.0%

The investment policy and strategy for plan assets can best be described as a growth and income strategy.  Diversification is accomplished by limiting the holding of any one equity issuer to no more than 5% of total equities.  Exchange traded funds are used to provide diversified exposure to the small capitalization and international equity markets.  All fixed income investments are rated as investment grade, with the majority of these assets invested in corporate issues.  The assets are managed by the Company's Trust and Investment Services Division.  No derivatives are used to manage the assets.  Equity securities do not include holdings in the Company.

The fair value of the Company's pension plan assets at December 31, 2013 and 2012, by asset category are as follows (in thousands):

			Fair Value Measurements at December 31, 2013 Using
	Balance as of December 31,		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
Asset Category	2013		Level 1		Level 2		Level 3
Cash	$	369	$	369	$	-	$	-
Fixed income securities
Government sponsored entities		1,159		-		1,159		-
Municipal bonds and notes		119		-		119		-
Corporate bonds and notes		2,339		-		2,339		-
Mutual funds		5,415		-		5,415		-
Equity securities
U.S. companies		1,454		1,454		-		-
Foreign companies		15		15		-		-
	$	10,870	$	1,838	$	9,032	$	-

			Fair Value Measurements at December 31, 2012 Using
	Balance as of December 31,		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
Asset Category	2012		Level 1		Level 2		Level 3
Cash	$	188	$	188	$	-	$	-
Fixed income securities
Government sponsored entities		904		-		904		-
Municipal bonds and notes		61		-		61
Corporate bonds and notes		2,944		-		2,944		-
Mutual funds		5,826		-		5,826		-
Equity securities								-
U.S. companies		1,721		1,721		-		-
Foreign companies		45		45		-		-
	$	11,689	$	1,954	$	9,735	$	-

Projected benefit payments for the years 2014 to 2023 are as follows (in thousands):

Year	Amount
2014		3,005
2015		202
2016		280
2017		326
2018		480
2019-2023		3,473

401(k) Plan

The Company maintains a 401(k) plan that covers substantially all full-time employees of the Company. The Company matches a portion of the contribution made by employee participants after at least one year of service. The Company contributed $542,000, $568,000, and $469,000 to the 401(k) plan in 2013, 2012, and 2011, respectively. These amounts are included in employee benefits expense for the respective years.

Deferred Compensation Arrangements

The Company maintains deferred compensation agreements with certain current and former employees providing for annual payments to each ranging from $25,000 to $50,000 per year for ten years upon their retirement.  The liabilities under these agreements are being accrued over the officers' remaining periods of employment so that, on the date of their retirement, the then-present value of the annual payments would have been accrued.  The expense for these agreements was $13,000, $15,000, and $17,000 for the years 2013, 2012, and 2011, respectively.

Profit Sharing and Incentive Arrangements

The Company maintains a cash profit sharing plan for full-time employees based on the Company's performance and a cash incentive compensation plan for officers based on the Company's performance and individual officer goals.  The total amount charged to salary expense for these plans was $890,000, $1,086,000, and $367,000 for the years 2013, 2012, and 2011, respectively.