Employee Benefit Plans

12 Months Ended

Dec. 31, 2012

Employee Benefit Plans [Abstract]

Employee Benefit Plans

Note 9: Employee Benefit Plans

401(k) Plan

The Company has a Retirement Accumulation Plan qualifying under IRS Code Section 401(k), in which NBI, NBB and NBFS are participating employers. Eligible participants may contribute up to 100% of their total annual compensation to the plan, subject to certain limits based on federal tax laws. Employee contributions are matched by the employer based on a percentage of an employee's total annual compensation contributed to the plan. For the years ended December 31, 2012, 2011 and 2010, the Company contributed $279, $279 and $277, respectively, to the plan.

Employee Stock Ownership Plan

The Company has a nonleveraged Employee Stock Ownership Plan (ESOP) which enables employees of NBI and its subsidiaries who have one year of service and who have attained the age of 21 prior to the plan's January 1 and July 1 enrollment dates to own NBI common stock. Contributions to the ESOP, which are not mandatory, are determined annually by the Board of Directors. Contribution expense amounted to $370, $420 and $350 in the years ended December 31, 2012, 2011 and 2010, respectively. Dividends on ESOP shares are charged to retained earnings. As of December 31, 2012, the number of shares held by the ESOP was 263,033. All shares held by the ESOP are treated as outstanding in computing the Company's basic net income per share. Upon reaching age 55 with ten years of plan participation, a vested participant has the right to diversify 50% of his or her allocated ESOP shares and NBI or the ESOP, with the agreement of the Trustee, is obligated to purchase those shares. The ESOP contains a put option which allows a withdrawing participant to require the Company or the ESOP, if the plan administrator agrees, to purchase his or her allocated shares if the shares are not readily tradable on an established market at the time of distribution.

Salary Continuation Plan

The Company has a Salary Continuation Plan for certain key officers. The plan provides the participating officers with supplemental retirement income, payable for the greater of 15 years after retirement or the officer's lifetime. The expense accrued for the plans in 2012, 2011, and 2010, based on the present value of the retirement benefits, amounted to $151, $197, and $216, respectively. The plan is unfunded. However bank-owned life insurance has been acquired on the life of the key employees in amounts sufficient to discharge the obligations of the agreement.

Defined Benefit Plan

The Company's defined benefit pension plan covers substantially all employees. The plan benefit formula is based upon the length of service of retired employees and a percentage of qualified W-2 compensation during their final years of employment. This resulted in a reduction in prior cost. Information pertaining to activity in the plan is as follows:

	December 31,
	2012			2011			2010
Change in benefit obligation
Projected benefit obligation at beginning of year	$	15,808		$	12,971		$	11,598
Service cost		468			435			400
Interest cost		738			704			687
Actuarial loss		1,554			2,001			958
Benefits paid		(514	)		(303	)		(672	)
Projected benefit obligation at end of year	$	18,054		$	15,808		$	12,971
Change in plan assets
Fair value of plan assets at beginning of year	$	13,326		$	8,156		$	7,461
Actual return on plan assets		963			432			782
Employer contribution		550			5,041			585
Benefits paid		(514	)		(303	)		(672	)
Fair value of plan assets at end of year	$	14,325		$	13,326		$	8,156
Funded status at the end of the year	$	(3,729	)	$	(2,482	)	$	(4,815	)
Amounts recognized in the Balance Sheet
Deferred tax asset	$	1,305		$	869		$	1,685
Other liabilities		(3,729	)		(2,482	)		(4,815	)
Total amounts recognized in the Balance Sheet	$	(2,424	)	$	(1,613	)	$	(3,130	)
Amounts recognized in accumulated other comprehensive (loss), net
Net (loss)	$	(8,202	)	$	(7,044	)	$	(4,957	)
Prior service cost		879			979			1,080
Deferred tax asset		2,563			2,123			1,357
Amount recognized	$	(4,760	)	$	(3,942	)	$	(2,520	)

Accrued/Prepaid benefit Cost, net
Benefit obligation	$	(18,054	)	$	(15,808	)	$	(12,971	)
Fair value of assets		14,325			13,326			8,156
Unrecognized net actuarial loss		8,202			7,044			4,957
Unrecognized prior service cost		(879	)		(979	)		(1,080	)
Deferred tax asset (liability)		(1,258	)		(1,254	)		328
(Accrued)/Prepaid benefit cost included in other liabilities	$	2,336		$	2,329		$	(610	)
Components of net periodic benefit cost
Service cost	$	468		$	435		$	400
Interest cost		738			704			687
Expected return on plan assets		(1,075	)		(810	)		(607	)
Amortization of prior service cost		(101	)		(101	)		(101	)
Amortization of net obligation at transition		---			---			(11	)
Recognized net actuarial loss		508			292			246
Net periodic benefit cost	$	538		$	520		$	614
Other changes in plan assets and benefit obligations recognized in other comprehensive loss
Net loss	$	1,157		$	2,087		$	536
Amortization of prior service cost		101			101			101
Amortization of net obligation at transition		---			---			11
Deferred income tax (benefit)		(440	)		(766	)		(227	)
Total recognized	$	818		$	1,422		$	421
Total recognized in net periodic benefit cost and other comprehensive loss, net of income tax (benefit)	$	1,797		$	2,708		$	1,035
Weighted average assumptions at end of the year
Discount rate used for net periodic pension cost		4.50	%		5.50	%		6.00	%
Discount rate used for disclosure		3.75	%		4.50	%		5.50	%
Expected return on plan assets		8.00	%		8.00	%		8.00	%
Rate of compensation increase		3.00	%		3.00	%		4.00	%

Long Term Rate of Return

The Company, as plan sponsor, selects the expected long-term rate-of-return-on-assets assumption in consultation with its investment advisors and actuary. This rate is 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, which may not continue over the measurement period, but higher significance is 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, and solely for this purpose, the plan is assumed to continue in force and not terminate during the period during 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).

The Company, as plan sponsor, has adopted a Pension Administrative Committee Policy (the Policy) for monitoring the investment management of its qualified plans. The Policy includes a statement of general investment principles and a listing of specific investment guidelines, to which the committee may make documented exceptions. The guidelines state that, unless otherwise indicated, all investments that are permitted under the Prudent Investor Rule shall be permissible investments for the defined benefit pension plan. All plan assets are to be invested in marketable securities. Certain investments are prohibited, including commodities and future contracts, private placements, repurchase agreements, options and derivatives. The Policy establishes quality standards for fixed income investments and mutual funds included in the pension plan trust. The Policy also outlines diversification standards.

The preferred target allocation for the assets of the defined benefit pension plan is 65% in equity securities and 35% in fixed income securities. Equity securities include investments in large-cap and mid-cap companies primarily located in the United States, although a small number of international large-cap companies are included. There are also investments in mutual funds holding the equities of large-cap and mid-cap U.S. companies. Fixed income securities include U.S. government agency securities and corporate bonds from companies representing diversified industries. There are no investments in hedge funds, private equity funds or real estate.

Fair value measurements of the pension plan's assets at December 31, 2012 follow:

		Fair Value Measurements at December 31, 2012
Asset Category		Total	Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Cash	$	462	$	462	$	---	$	---
Equity securities:
U. S. companies		6,470		6,470		---		---
International companies		112		112		---		---
Equities mutual funds (1)		1,411		1,411		---		---
U. S. government agencies and corporations		366		---		366		---
State and political subdivisions		435		---		435		---
Corporate bonds – investment grade (2)		4,956		---		4,956		---
Corporate bonds – below investment grade (3)		113		---		113		---
Total pension plan assets	$	14,325	$	8,455	$	5,870	$	---

(1) This category comprises actively managed equity funds invested in large-cap and mid-cap U.S. companies.

(2) This category represents investment grade bonds of U.S. issuers from diverse industries.

(3) This category represents bonds from U.S. issuers from diverse industries that were purchased at investment grade, but which have fallen below investment grade.

		Fair Value Measurements at December 31, 2011
Asset Category		Total	Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Cash	$	2,802	$	2,802	$	---	$	---
Equity securities:
U. S. companies		4,793		4,793		---		---
International companies		183		183		---		---
Equities mutual funds (1)		1,228		1,228		---		---
U. S. government agencies and corporations		510		---		510		---
State and political subdivisions		418		---		418		---
Corporate bonds – investment grade (2)		3,207		---		3,207		---
Corporate bonds – below investment grade (3)		185		---		185		---
Total pension plan assets	$	13,326	$	9,006	$	4,320	$	---

(1) This category comprises actively managed equity funds invested in large-cap and mid-cap U.S. companies.

(2) This category represents investment grade bonds of U.S. issuers from diverse industries.

(3) This category represents bonds from U.S. issuers from diverse industries that were purchased at investment grade, but which have fallen below investment grade.

The Company's required minimum pension contribution for 2013 has not yet been determined.

Estimated future benefit payments, which reflect expected future service, as appropriate, are as follows:

2013	$	3,438
2014	$	934
2015	$	609
2016	$	1,272
2017	$	1,562
2018 - 2022	$	3,784