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EMPLOYEE BENEFIT PLANS | 12 Months Ended
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Dec. 31, 2012
General Discussion of Pension and Other Postretirement Benefits [Abstract] |
Employee Benefit Plans | EMPLOYEE BENEFIT PLANS BancShares sponsors benefit plans for its qualifying employees including a noncontributory defined benefit pension plan, a 401(k) savings plan and an enhanced 401(k) savings plan. These plans are qualified under the Internal Revenue Code. BancShares also maintains agreements with certain executives that provide supplemental benefits that are paid upon death or separation from service at an agreed-upon age. Defined Benefit Pension Plan Employees who were hired prior to April 1, 2007, and who qualify under length of service and other requirements may participate in a noncontributory defined benefit pension plan (Plan). Under the Plan, benefits are based on years of service and average earnings. The policy is to fund amounts approximating the maximum amount that is deductible for federal income tax purposes. BancShares made no contributions to the plan in 2012 or 2011, and does not anticipate any contribution during 2013. Obligations and Funded Status The following table provides the change in benefit obligation and plan assets and the funded status of the plan at December 31, 2012, and 2011.
| 2012 |  | 2011
Change in Benefit Obligation |  |  |
Benefit obligation at January 1 | $ | 493,648 |  |  | $ | 431,090 |
Service cost | 14,241 |  |  | 13,265 |
Interest cost | 23,711 |  |  | 23,810 |
Actuarial loss | 64,540 |  |  | 38,946 |
Benefits paid | (15,202 | ) |  | (13,463 | )
Benefit obligation at December 31 | 580,938 |  |  | 493,648 |
Change in Plan Assets |  |  |
Fair value of plan assets at January 1 | 429,505 |  |  | 433,467 |
Actual return on plan assets | 48,702 |  |  | 9,501 |
Employer contributions | — |  |  | — |
Benefits paid | (15,202 | ) |  | (13,463 | )
Fair value of plan assets at December 31 | 463,005 |  |  | 429,505 |
Funded status at December 31 | $ | (117,933 | ) |  | $ | (64,143 | )
The amounts recognized in the consolidated balance sheets as of December 31, 2012, and 2011 consist of:
| 2012 |  | 2011
Other assets | $ | — |  |  | $ | — |
Other liabilities | (117,933 | ) |  | (64,144 | )
Net liability recognized | $ | (117,933 | ) |  | $ | (64,144 | )
Amounts recognized in accumulated other comprehensive income at December 31, 2012, and 2011 consist of:
| 2012 |  | 2011
Net loss | $ | 157,147 |  |  | $ | 123,858 |
Less prior service cost | 1,187 |  |  | 1,397 |
Accumulated other comprehensive loss, excluding income taxes | $ | 158,334 |  |  | $ | 125,255 |
Expected amortization amounts in 2013
Actuarial loss | $ | 17,006 |
Prior service cost | 210 |
Total | $ | 17,216 |
The accumulated benefit obligation for the plan at December 31, 2012, and 2011 equaled $485,641 and $412,668, respectively. The Plan uses a measurement date of December 31. The following table shows the components of periodic benefit cost related to the pension plan and changes in plan assets and benefit obligations recognized in other comprehensive income for the years ended December 31, 2012, 2011, and 2010.
| 2012 |  | 2011 |  | 2010
Service cost | $ | 14,241 |  |  | $ | 13,265 |  |  | $ | 12,191 |
Interest cost | 23,711 |  |  | 23,810 |  |  | 22,930 |
Expected return on assets | (28,478 | ) |  | (29,184 | ) |  | (29,274 | )
Amortization of prior service cost | 210 |  |  | 210 |  |  | 210 |
Amortization of net actuarial loss | 11,026 |  |  | 6,861 |  |  | 3,800 |
Total net periodic benefit cost | 20,710 |  |  | 14,962 |  |  | 9,857 |
Current year actuarial gain (loss) | 44,315 |  |  | 58,630 |  |  | 6,815 |
Amortization of actuarial gain (loss) | (11,026 | ) |  | (6,861 | ) |  | (3,800 | )
Amortization of prior service cost | (210 | ) |  | (210 | ) |  | (210 | )
Total recognized in other comprehensive income | 33,079 |  |  | 51,559 |  |  | 2,805 |
Total recognized in net periodic benefit cost and other comprehensive income | $ | 53,789 |  |  | $ | 66,521 |  |  | $ | 12,662 |
The assumptions used to determine the benefit obligations as of December 31, 2012, and 2011 are as follows:
| 2012 |  | 2011
Discount rate | 4.00 | % |  | 4.75 | %
Rate of compensation increase | 4.00 |  |  | 4.00 |
The assumptions used to determine the net periodic benefit cost for the years ended December 31, 2012, 2011, and 2010 are as follows:
| 2012 |  | 2011 |  | 2010
Discount rate | 4.75 | % |  | 5.50 | % |  | 6.00 | %
Rate of compensation increase | 4.00 |  |  | 4.50 |  |  | 4.50 |
Expected long-term return on plan assets | 7.50 |  |  | 7.75 |  |  | 8.00 |
The estimated discount rate, which represents the interest rate that could be obtained for a suitable investment used to fund the benefit obligations, is based on a yield curve developed from high-quality corporate bonds across a full maturity spectrum. The projected cash flows of the pension plan are discounted based on this yield curve, and a single discount rate is calculated to achieve the same present value. The estimated long-term rate of return on plan assets is used to calculate the value of plan assets over time. The methodology utilized to establish the estimated long-term rate of return on plan assets considers the actual return on plan assets for various time horizons since 1996 as a predictor of probable future returns. Historical returns are modified as appropriate by estimates of future market conditions that may positively or negatively affect estimated future returns. The return on plan assets for the 15-year, 10-year and 5-year periods ended December 31, 2012, equaled 6.98 percent, 8.77 percent and 5.81 percent, respectively. Based on expectations of modest returns over the next several years, the assumed rate of return for 2012 was 7.50 percent, compared to 7.75 percent in 2011. Plan Assets BancShares' primary total return objective is to achieve returns that, over the long term, will fund retirement liabilities and provide for the desired plan benefits in a manner that satisfies the fiduciary requirements of the Employee Retirement Income Security Act. The plan assets have a long-term time horizon that runs concurrent with the average life expectancy of the participants. As such, the Plan can assume a time horizon that extends well beyond a full market cycle and can assume a reasonable level of risk. It is expected, however, that both professional investment management and sufficient portfolio diversification will smooth volatility and help to generate a reasonable consistency of return. The investments are broadly diversified among economic sector, industry, quality and size in order to reduce risk and to produce incremental return. Within approved guidelines and restrictions, the investment manager has discretion over the timing and selection of individual investments. The fair values of pension plan assets at December 31, 2012, and 2011 by asset category are as follows:
Asset Category | Market Value |  | Quoted prices in Active Markets for Identical Assets (Level 1) |  | Significant Observable Inputs (Level 2) |  | Significant Nonobservable Inputs (Level 3) |  | Target Allocation |  | Actual % of Plan Assets
December 31, 2012 |  |  |  |  |  |  |  |  |  |  |
Cash and equivalents | $ | 3,088 |  |  | $ | 3,088 |  |  | $ | — |  |  | $ | — |  |  | 0 - 1% |  |  | 1 | %
Equity securities(a) |  |  |  |  |  |  |  |  | 55 - 65 % |  |  | 63 | %
Consumer discretionary | 27,314 |  |  | 27,314 |  |  | — |  |  | — |  |  |  |  |
Consumer staples | 16,294 |  |  | 16,294 |  |  | — |  |  | — |  |  |  |  |
Energy | 28,046 |  |  | 28,046 |  |  | — |  |  | — |  |  |  |  |
Information technology | 38,570 |  |  | 38,570 |  |  | — |  |  | — |  |  |  |  |
Telecommunication | 4,678 |  |  | 4,678 |  |  | — |  |  | — |  |  |  |  |
Financials | 35,921 |  |  | 35,921 |  |  | — |  |  | — |  |  |  |  |
Utilities | 6,043 |  |  | 6,043 |  |  | — |  |  | — |  |  |  |  |
Materials | 9,950 |  |  | 9,950 |  |  | — |  |  | — |  |  |  |  |
Health care | 30,661 |  |  | 30,661 |  |  | — |  |  | — |  |  |  |  |
Industrials | 23,466 |  |  | 23,466 |  |  | — |  |  | — |  |  |  |  |
Rights to purchase securities | 4,168 |  |  | 4,168 |  |  | — |  |  | — |  |  |  |  |
Mutual funds | 68,415 |  |  | 68,415 |  |  | — |  |  | — |  |  |  |  |
Debt securities(b) |  |  |  |  |  |  |  |  | 34 - 44 % |  |  | 36 | %
Bond funds | 166,391 |  |  | — |  |  | 166,391 |  |  | — |  |  |  |  |
Total pension assets | $ | 463,005 |  |  | $ | 296,614 |  |  | $ | 166,391 |  |  | $ | — |  |  | 100 | % |  | 100 | %
December 31, 2011 |  |  |  |  |  |  |  |  |  |  |
Cash and equivalents | $ | 5,002 |  |  | $ | 5,002 |  |  | $ | — |  |  | $ | — |  |  | 0 - 1% |  |  | 1 | %
Equity securities(a) |  |  |  |  |  |  |  |  | 55 - 65 % |  |  | 63 | %
Consumer discretionary | 24,003 |  |  | 24,003 |  |  | — |  |  | — |  |  |  |  |
Consumer staples | 15,257 |  |  | 15,257 |  |  | — |  |  | — |  |  |  |  |
Energy | 27,857 |  |  | 27,857 |  |  | — |  |  | — |  |  |  |  |
Information technology | 35,206 |  |  | 35,206 |  |  | — |  |  | — |  |  |  |  |
Telecommunication | 4,888 |  |  | 4,888 |  |  | — |  |  | — |  |  |  |  |
Financials | 31,185 |  |  | 31,185 |  |  | — |  |  | — |  |  |  |  |
Utilities | 6,263 |  |  | 6,263 |  |  | — |  |  | — |  |  |  |  |
Materials | 10,548 |  |  | 10,548 |  |  | — |  |  | — |  |  |  |  |
Health care | 30,195 |  |  | 30,195 |  |  | — |  |  | — |  |  |  |  |
Industrials | 21,451 |  |  | 21,451 |  |  | — |  |  | — |  |  |  |  |
Rights to purchase securities | 3,724 |  |  | 3,724 |  |  | — |  |  | — |  |  |  |  |
Mutual funds | 60,493 |  |  | 60,493 |  |  | — |  |  | — |  |  |  |  |
Debt securities(b) |  |  |  |  |  |  |  |  | 34 - 44 % |  |  | 36 | %
Bond funds | 153,433 |  |  | — |  |  | 153,432 |  |  | — |  |  |  |  |
Total pension assets | $ | 429,505 |  |  | $ | 276,072 |  |  | $ | 153,432 |  |  | $ | — |  |  | 100 | % |  | 100 | %
(a) | This category includes investments in equity securities of large, small and medium sized companies from various industries.
(b) | This category represents investment grade bonds from diverse industries.
Cash Flows BancShares anticipates making no contributions to the pension plan during 2013. Following are estimated payments to pension plan participants in the indicated periods:
| Projected Benefit Payments
2013 | $ | 16,781 |
2014 | 18,062 |
2015 | 19,679 |
2016 | 21,445 |
2017 | 23,238 |
2018-2022 | 141,253 |
401(k) Savings Plans Certain employees enrolled in the defined benefit plan are also eligible to participate in a 401(k) savings plan after 31 days of service through deferral of portions of their salary. For employees who participate in the 401(k) savings plan who also continue to accrue additional years of service under the defined benefit plan, based on the employee’s contribution, BancShares matches up to 75 percent of the employee contribution. At the end of 2007, current employees were given the option to continue to accrue additional years of service under the the defined benefit plan or to elect to join an enhanced 401(k) savings plan. Under the enhanced 401(k) savings plan, based on the employee’s contribution, BancShares matches up to 100 percent of the employee contribution. In addition to the employer match of the employee contributions, the enhanced 401(k) savings plan provides a guaranteed contribution to plan participants if they remain employed at the end of each calendar year. Employees who elected to enroll in the enhanced 401(k) savings plan discontinued the accrual of additional years of service under the defined benefit plan and became enrolled in the enhanced 401(k) savings plan effective January 1, 2008. Eligible employees hired after January 1, 2008, have the option to elect to participate in the enhanced 401(k) savings plan. BancShares made participating contributions to both 401(k) plans totaling $14,131, $13,633 and $12,307 during 2012, 2011 and 2010, respectively. Additional Benefits for Executives and Directors and Officers of Acquired Entities FCB has entered into contractual agreements with certain executives that provide payments for a period of ten years following separation from service at an agreed-upon age. These agreements also provide a death benefit in the event a participant dies before the term of the agreement ends. FCB has also assumed liability for contractual obligations to directors and officers of previously-acquired entities. The following table provides the accrued liability as of December 31, 2012, and 2011 and the changes in the accrued liability during the years then ended:
| 2012 |  | 2011
Present value of accrued liability as of January 1 | $ | 25,586 |  |  | $ | 23,027 |
Benefit expense | 462 |  |  | 1,799 |
Benefits paid | (3,241 | ) |  | (1,877 | )
Benefits forfeited | 554 |  |  | — |
Interest cost | 2,490 |  |  | 2,637 |
Present value of accrued liability as of December 31 | $ | 25,851 |  |  | $ | 25,586 |
Discount rate at December 31 | 4.00 | % |  | 4.75 | %

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- Definition The entire disclosure for pension and other postretirement benefits. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 158 -Paragraph 7, 21, 22 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name FASB Staff Position (FSP) -Number FAS106-2 -Paragraph 20, 21, 22 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Implementation Guide (Q and A) -Number FAS88 -Paragraph 63 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 106 -Paragraph 518 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -URI http://asc.fasb.org/topic&trid=2235017 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 132R -Paragraph 5, 6, 7, 8 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 132R -Paragraph 5 -Subparagraph b -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 132R -Paragraph 8 -Subparagraph m -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 87 -Paragraph 264 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher AICPA -Name Accounting Principles Board Opinion (APB) -Number 30 -Paragraph 26 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Emerging Issues Task Force (EITF) -Number 03-2 -Paragraph 8 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 132R -Paragraph 5 -Subparagraph h -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 132R -Paragraph 5 -Subparagraph a -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 132R -Paragraph 5 -Subparagraph q -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. + Details
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