Employee Benefit Plans

12 Months Ended

Dec. 31, 2011

Compensation and Retirement Disclosure [Abstract]

Compensation and Employee Benefit Plans [Text Block]

15. Employee Benefit Plans

Defined Benefit Plan

The Corporation provides pension benefits for eligible employees through a defined benefit pension plan. Substantially all employees participate in the retirement plan on a non-contributing basis, and are fully vested after three years of service. Effective January 1, 2009, the plan was closed to new participants. The Corporation uses December 31 as the measurement date for its plan. Information pertaining to changes in obligations and funded status of the defined benefit pension plan for the years ended December 31 is as follows:

(Dollar amounts in thousands)	2011			2010
Change in plan assets:
Fair value of plan assets at beginning of year	$	4,497		$	3,987
Actual return on plan assets		192			313
Employer contribution		419			425
Benefits paid		(216	)		(228	)
Fair value of plan assets at end of year		4,892			4,497
Change in benefit obligation:
Benefit obligation at beginning of year		5,855			5,131
Service cost		295			292
Interest cost		327			316
Actuarial loss		—			146
Effect of change in assumptions		749			198
Benefits paid		(216	)		(228	)
Benefit obligation at end of year		7,010			5,855
Funded status (plan assets less benefit obligation)	$	(2,118	)	$	(1,358	)
Amounts recognized in accumulated other comprehensive loss, net of tax, consists of:
Accumulated net actuarial loss	$	1,620		$	1,058
Accumulated prior service benefit		(97	)		(118	)
Amount recognized, end of year	$	1,523		$	940

The following table presents the Corporation’s pension plan assets measured and recorded at estimated fair value on a recurring basis and their level within the estimated fair value hierarchy as described in Note 17:

(Dollar amounts in thousands) Description	Total		(Level 1) Quoted Prices in Active Markets for Identical Assets		(Level 2) Significant Other Observable Inputs		(Level 3) Significant Unobservable Inputs
December 31, 2011:
Cash and cash equivalents	$	454	$	454	$	—	$	—
Fixed income		2,471		—		2,471		—
Equity mutual funds – domestic		1,758		1,758		—		—
Equity mutual funds – international		209		209		—		—
	$	4,892	$	2,421	$	2,471	$	—
December 31, 2010:
Cash and cash equivalents	$	513	$	513	$	—	$	—
Fixed income		1,967		—		1,967		—
Equity mutual funds – domestic		1,825		1,825		—		—
Equity mutual funds – international		192		192		—		—
	$	4,497	$	2,530	$	1,967	$	—

There were no significant transfers between Level 1 and Level 2 during 2011.

Amounts recognized in the balance sheet as of December 31 consist of:

	Pension Benefits
(Dollar amounts in thousands)	2011			2010
Prepaid benefit cost	$	190		$	67
Accumulated other comprehensive loss		(2,308	)		(1,425	)
Net amount recognized	$	(2,118	)	$	(1,358	)

The accumulated benefit obligation for the defined benefit pension plan was $7.0 million and $5.9 million at December 31, 2011 and 2010, respectively.

The components of the periodic pension costs for the years ended December 31 are as follows:

(Dollar amounts in thousands)	2011			2010
Service cost	$	295		$	292
Interest cost		327			316
Expected return on plan assets		(357	)		(317	)
Amortization of prior service cost and actuarial expense		30			28
Net periodic pension cost		295			319
Amortization of prior service cost		31			28
Amortization of net loss		852			292
Total recognized in other comprehensive (income) loss		883			320
Total recognized in net periodic benefit cost and other comprehensive income	$	1,178		$	639

The estimated net loss and prior service costs 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 is $82,000 as of December 31, 2011.

Weighted-average actuarial assumptions for the years ended December 31 include the following:

	2011			2010
Discount rate for net periodic benefit cost		5.70	%		6.00	%
Discount rate for benefit obligations		4.70	%		5.70	%
Rate of increase in future compensation levels		3.50	%		3.50	%
Expected rate of return on plan assets		7.75	%		7.75	%

The Corporation’s pension plan asset allocation at December 31, 2011 and 2010, target allocation for 2012, and expected long-term rate of return by asset category are as follows:

	Target Allocation 2012			Percentage of Plan Assets at Year End						Weighted-Average Expected Long-Term Rate of Return 2011
Asset Category				2011			2010
Equity Securities		40	%		40	%		42	%		5.5	%
Debt Securities		50	%		51	%		47	%		1.8	%
Other		10	%		9	%		11	%		0.5	%
		100	%		100	%		100	%		7.75	%

Investment Strategy

The intent of the Plan is to provide a range of investment options for building a diversified asset allocation strategy that will provide the highest likelihood of meeting the aggregate actuarial projections. In selecting the options and asset allocation strategy, the Corporation has determined that the benefits of reduced portfolio risk are best received through diversification. The following asset classes or investment categories are utilized to meet the Plan’s objectives: Small company stock, International stock, Mid-cap stock, Large company stock, Diversified bond, Money Market/Stable Value and Cash. The Plan does not prohibit any certain investments.

The Corporation expects to contribute approximately $375,000 to its pension plan in 2012.

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

(Dollar amounts in thousands) For year ended December 31,	Pension Benefits
2012	$	225
2013		226
2014		211
2015		214
2016		253
2017 – 2021		1,553
Thereafter		4,328
Benefit Obligation	$	7,010

Certain accounting guidance requires an employer to recognize the funded status of its defined benefit pension plan as a net asset or liability in its consolidated balance sheet with an offsetting amount in accumulated other comprehensive income, and to recognize changes in that funded status in the year in which changes occur through comprehensive income. As of December 31, 2011, the Corporation’s liability under this guidance was $2.3 million and the charge to accumulated other comprehensive income was $1.5 million, net of taxes. Additionally, the guidance requires an employer to measure the funded status of its defined benefit pension plan as of the date of its year-end financial statements. The Corporation measures the funded status at December 31.

Defined Contribution Plan

The Corporation maintains a defined contribution 401(k) Plan. Employees are eligible to participate by providing tax-deferred contributions up to 20% of qualified compensation. Employee contributions are vested at all times. The Corporation provides a matching contribution of up to 4% of the participant’s salary. Matching contributions were $176,000 for 2011 and 2010.

Supplemental Executive Retirement Plan

During 2003, the Corporation established a Supplemental Executive Retirement Plan (SERP) to provide certain additional retirement benefits to participating executive officers. The SERP was adopted in order to provide benefits to such executives whose benefits are reduced under the Corporation’s tax-qualified benefit plans pursuant to limitations under the Internal Revenue Code. The SERP is subject to certain vesting provisions and provides that the executives shall receive a supplemental retirement benefit if the executive’s employment is terminated after reaching the normal retirement age of 65. As of December 31, 2011 and 2010, the Corporation’s SERP liability was $627,000 and $503,000, respectively. For the years ended December 31, 2011 and 2010, the Corporation recognized expense of $124,000 and $86,000, respectively, related to the SERP.