Note 12. Employee Benefit Plans

401(k) Plan. The Company sponsors a retirement savings plan pursuant to Section 401(k) of the Internal Revenue Code. New employees who have met the age requirement are automatically enrolled in the plan at a 5% deferral rate on the next plan Entry Date. The automatic deferral can be modified by the employee at any time. An eligible employee may contribute up to 15% of annual salary to the plan. The Company contributes an amount equal to the sum of 1) 100% of the employee's salary contributed up to 3% and 2) 50% of the employee's salary contributed between 3% and 5%. Company contributions are 100% vested immediately. The Company's matching contribution expense was $1.4 million, for each of the years ended December 31, 2015, 2014, and 2013. Although discretionary contributions by the Company are permitted by the plan, the Company did not make any such contributions in 2015, 2014 or 2013. The Company's matching and discretionary contributions are made according to the same investment elections each participant has established for their deferral contributions.

Pension Plan. Historically, the Company offered a noncontributory defined benefit retirement plan (the “Pension Plan”) that qualified under Section 401(a) of the Internal Revenue Code. The Pension Plan provided for a monthly payment, at normal retirement age of 65, equal to one-twelfth of the sum of (i) 0.75% of Final Average Annual Compensation (5 highest consecutive calendar years' earnings out of the last 10 years of employment) multiplied by the employee's years of service not in excess of 40 years, and (ii) 0.65% of Final Average Annual Compensation in excess of the average social security wage base multiplied by years of service not in excess of 35 years. Benefits were fully vested after five years of service. Effective December 31, 2012, the Company froze the Pension Plan for all participants.

The Company's contributions to the Pension Plan are based on computations by independent actuarial consultants and are intended to be deductible for income tax purposes. As discussed below, the contributions are invested to provide for benefits under the Pension Plan. The Company did not make any contributions to the Pension Plan in 2015, 2014 or 2013 .The Company does not expect to contribute to the Pension Plan in 2016.

The following table reconciles the beginning and ending balances of the Pension Plan's benefit obligation, as computed by the Company's independent actuarial consultants, and its plan assets, with the difference between the two amounts representing the funded status of the Pension Plan as of the end of the respective year.

($ in thousands)	2015			2014			2013
Change in benefit obligation
Benefit obligation at beginning of year	$	35,615			30,548			32,272
Service cost		—			—			—
Interest cost		1,364			1,461			1,284
Actuarial (gain) loss		1,236			5,320			(2,343	)
Benefits paid		(2,051	)		(1,714	)		(665	)
Curtailment gain		—			—			—
Benefit obligation at end of year		36,164			35,615			30,548
Change in plan assets
Plan assets at beginning of year		37,282			36,333			30,124
Actual return on plan assets		258			2,663			6,874
Employer contributions		—			—			—
Benefits paid		(2,051	)		(1,714	)		(665	)
Plan assets at end of year		35,489			37,282			36,333

Funded status at end of year	$	(675	)		1,667			5,785

The accumulated benefit obligation related to the Pension Plan was $36,164,000, $35,615,000,, and $30,548,000 at December 31, 2015, 2014, and 2013, respectively.

The following table presents information regarding the amounts recognized in the consolidated balance sheets at December 31, 2015 and 2014 as it relates to the Pension Plan, excluding the related deferred tax assets.

($ in thousands)	2015		2014

Other assets	$	—		1,667
Other liabilities		(675)		—
	$	(675)		1,667

The following table presents information regarding the amounts recognized in accumulated other comprehensive income (AOCI) at December 31, 2015 and 2014, as it relates to the Pension Plan.

($ in thousands)	2015			2014

Net gain (loss)	$	(5,682	)		(1,857	)
Prior service cost		—			—
Amount recognized in AOCI before tax effect		(5,682	)		(1,857	)
Tax (expense) benefit		2,216			724
Net amount recognized as increase (decrease) to AOCI	$	(3,466	)		(1,133	)

The following table reconciles the beginning and ending balances of accumulated other comprehensive income (AOCI) at December 31, 2015 and 2014, as it relates to the Pension Plan:

($ in thousands)	2015			2014

Accumulated other comprehensive loss at beginning of fiscal year	$	(1,133	)		2,183
Net gain (loss) arising during period		(3,825	)		(5,436	)
Prior service cost		—			—
Transition Obligation		—			—
Amortization of unrecognized actuarial loss		—			—
Amortization of prior service cost and transition obligation		—			—
Tax (expense) benefit of changes during the year, net		1,492			2,120
Accumulated other comprehensive gain (loss) at end of fiscal year	$	(3,466	)		(1,133	)

The following table reconciles the beginning and ending balances of the prepaid pension cost related to the Pension Plan:

($ in thousands)	2015		2014

Prepaid pension cost as of beginning of fiscal year	$	3,524		2,206
Net periodic pension income (cost) for fiscal year		1,483		1,318
Actual employer contributions		—		—
Prepaid pension asset as of end of fiscal year	$	5,007		3,524

Net pension (income) cost for the Pension Plan included the following components for the years ended December 31, 2015, 2014, and 2013:

($ in thousands)	2015			2014			2013

Service cost – benefits earned during the period	$	—			—			—
Interest cost on projected benefit obligation		1,364			1,461			1,284
Expected return on plan assets		(2,847	)		(2,779	)		(2,307	)
Net amortization and deferral		—			—			49
Net periodic pension (income) cost	$	(1,483	)		(1,318	)		(974	)

The following table is an estimate of the benefits that will be paid in accordance with the Pension Plan during the indicated time periods:

($ in thousands)	Estimated benefit payments
Year ending December 31, 2016	$	1,307
Year ending December 31, 2017		1,392
Year ending December 31, 2018		1,545
Year ending December 31, 2019		1,678
Year ending December 31, 2020		1,737
Years ending December 31, 2021-2025		9,647

For each of the years ended December 31, 2015, 2014, and 2013, the Company used an expected long-term rate-of-return-on-assets assumption of 7.75%. The Company arrived at this rate based primarily on a third-party investment consulting firm's historical analysis of investment returns, which indicated that the mix of the Pension Plan's assets (generally 75% equities and 25% fixed income) can be expected to return approximately 7.75% on a long term basis.

Funds in the Pension Plan are invested in a mix of investment types in accordance with the Pension Plan's investment policy, which is intended to provide an average annual rate of return of 7% to 10%, while maintaining proper diversification. Except for Company stock, all of the Pension Plan's assets are invested in an unaffiliated bank money market account or mutual funds. The investment policy of the Pension Plan does not permit the use of derivatives, except to the extent that derivatives are used by any of the mutual funds invested in by the Pension Plan. The following table presents the targeted mix of the Pension Plan's assets as of December 31, 2015, as set out by the Plan's investment policy:

Investment type	Targeted % of Total Assets	Acceptable Range % of Total Assets

Fixed income investments
Cash/money market account	2%	1%-5%
US government bond fund	10%	10%-20%
US corporate bond fund	10%	5%-15%
US corporate high yield bond fund	5%	0%-10%
Equity investments
Large cap value fund	40%	30%-50%
Mid cap equity fund	10%	5%-15%
Small cap growth fund	8%	5%-15%
Foreign equity fund	10%	5%-15%
Company stock	5%	0%-10%

The Pension Plan's investment strategy contains certain investment objectives and risks for each permitted investment category. To ensure that risk and return characteristics are consistently followed, the Pension Plan's investments are reviewed at least semi-annually and rebalanced within the acceptable range. Performance measurement of the investments employs the use of certain investment category and peer group benchmarks. The investment category benchmarks as of December 31, 2015 are as follows:

Investment Category	Investment Category Benchmark	Range of Acceptable Deviation from Investment Category Benchmark

Fixed income investments
Cash/money market account	US Treasury T-Bill Auction Index	0-50 basis points
US government bond fund	Barclays Intermediate Government Bond Index	0-200 basis points
US corporate bond fund	Barclays Aggregate Index	0-200 basis points
US corporate high yield bond fund	Barclays High Yield Index	0-200 basis points
Equity investments
Large cap value fund	Russell 1000 Index	0-300 basis points
Mid cap equity fund	Russell Mid Cap Index	0-300 basis points
Small cap growth fund	Russell 2000 Growth Index	0-300 basis points
Foreign equity fund	MSCI EAFE Index	0-300 basis points
Company stock	Russell 2000 Index	0-300 basis points

Each of the investment fund's average annualized return over a three-year period should be within the range of acceptable deviation from the benchmarked index shown above. In addition to the investment category benchmarks, the Pension Plan also utilizes certain Peer Group benchmarks, based on Morningstar percentile rankings for each investment category. Funds are generally considered to be underperformers if their category ranking is below the 75th percentile for the trailing one-year period; the 50th percentile for the trailing three-year period; and the 25th percentile for the trailing five-year period.

The Pension Plan invests in various investment securities which are exposed to various risks such as interest rate, market, and credit risks. All of these risks are monitored and managed by the Company. No significant concentration of risk exists within the plan assets at December 31, 2015.

The fair values of the Company's pension plan assets at December 31, 2015, by asset category, are as follows:

($ in thousands)
	Total Fair Value at December 31, 2015		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)

Fixed income investments
Money market funds	$	155		—		155	—
US government bond fund		3,398		3,398		—	—
US corporate bond fund		3,357		3,357		—	—
US corporate high yield bond fund		1,700		1,700		—	—

Equity investments
Large cap value fund		14,703		14,703		—	—
Small cap growth fund		2,845		2,845		—	—
Mid cap equity fund		3,541		3,541		—	—
Foreign equity fund		3,544		3,544		—	—
Company stock		2,246		2,246		—	—
Total	$	35,489		35,334		155	—

The fair values of the Company's pension plan assets at December 31, 2014, by asset category, are as follows:

($ in thousands)
	Total Fair Value at December 31, 2014		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)

Fixed income investments
Money market funds	$	447		—		447	—
US government bond fund		3,385		3,385		—	—
US corporate bond fund		3,377		3,377		—	—
US corporate high yield bond fund		1,741		1,741		—	—

Equity investments
Large cap value fund		7,669		7,669		—	—
Large cap growth fund		7,694		7,694		—	—
Small cap growth fund		3,162		3,162		—	—
Mid cap growth fund		3,983		3,983		—	—
Foreign equity fund		3,611		3,611		—	—
Company stock		2,213		2,213		—	—
Total	$	37,282		36,835		447	—

The following is a description of the valuation methodologies used for assets measured at fair value. There have been no changes in the methodologies used at December 31, 2015 and 2014.

Money market fund: Valued at net asset value (“NAV”), which can be validated with a sufficient level of observable activity (i.e. purchases and sales at NAV), and therefore, the funds were classified within Level 2 of the fair value hierarchy.

Mutual funds: Valued at the daily closing price as reported by the fund. Mutual funds held by the Plan are open-end mutual funds that are registered with the Securities and Exchange Commission and are deemed to be actively traded.

Common stock: Valued at the closing price reported on the active market on which the individual securities are traded.

Supplemental Executive Retirement Plan. Historically, the Company sponsored a Supplemental Executive Retirement Plan (the “SERP”) for the benefit of certain senior management executives of the Company. The purpose of the SERP was to provide additional monthly pension benefits to ensure that each such senior management executive would receive lifetime monthly pension benefits equal to 3% of his or her final average compensation multiplied by his or her years of service (maximum of 20 years) to the Company or its subsidiaries, subject to a maximum of 60% of his or her final average compensation. The amount of a participant's monthly SERP benefit is reduced by (i) the amount payable under the Company's qualified Pension Plan (described above), and (ii) 50% of the participant's primary social security benefit. Final average compensation means the average of the 5 highest consecutive calendar years of earnings during the last 10 years of service prior to termination of employment. The SERP is an unfunded plan. Payments are made from the general assets of the Company.Effective December 31, 2012, the Company froze the SERP to all participants.

The following table reconciles the beginning and ending balances of the SERP's benefit obligation, as computed by the Company's independent actuarial consultants:

($ in thousands)	2015			2014			2013
Change in benefit obligation
Projected benefit obligation at beginning of year	$	5,216			5,292			6,813
Service cost		201			272			304
Interest cost		206			212			203
Actuarial (gain) loss		497			(265	)		(1,856	)
Benefits paid		(342	)		(295	)		(172	)
Curtailment gain		—			—			—
Projected benefit obligation at end of year		5,778			5,216			5,292
Plan assets		—			—			—
Funded status at end of year	$	(5,778	)		(5,216	)		(5,292	)

The accumulated benefit obligation related to the SERP was $5,778,000, $5,216,000, and $5,292,000 at December 31, 2015, 2014, and 2013, respectively.

The following table presents information regarding the amounts recognized in the consolidated balance sheets at December 31, 2015 and 2014 as it relates to the SERP, excluding the related deferred tax assets.

($ in thousands)	2015			2014

Other assets – prepaid pension asset (liability)	$	(6,802	)		(6,816	)
Other assets (liabilities)		1,024			1,600
	$	(5,778	)		(5,216	)

The following table presents information regarding the amounts recognized in AOCI at December 31, 2015 and 2014.

($ in thousands)	2015			2014

Net gain (loss)	$	1,024			1,600
Prior service cost		—			—
Amount recognized in AOCI before tax effect		1,024			1,600
Tax (expense) benefit		(399	)		(624	)
Net amount recognized as increase (decrease) to AOCI	$	625			976

The following table reconciles the beginning and ending balances of accumulated other comprehensive income (AOCI) at December 31, 2015 and 2014, as it relates to the SERP:

($ in thousands)	2015			2014

Accumulated other comprehensive loss at beginning of fiscal year	$	976			949
Net gain (loss) arising during period		(497	)		265
Prior service cost		—			—
Amortization of unrecognized actuarial loss		(79	)		(221	)
Amortization of prior service cost and transition obligation		—			—
Tax benefit (expense) related to changes during the year, net		225			(17	)
Accumulated other comprehensive income (loss) at end of fiscal year	$	625			976

The following table reconciles the beginning and ending balances of the prepaid pension cost related to the SERP:

($ in thousands)	2015			2014

Prepaid pension cost (liability) as of beginning of fiscal year	$	(6,816	)		(6,848	)
Net periodic pension cost for fiscal year		(328	)		(263	)
Benefits paid		342			295
Prepaid pension cost (liability) as of end of fiscal year	$	(6,802	)		(6,816	)

Net pension cost for the SERP included the following components for the years ended December 31, 2015, 2014, and 2013:

($ in thousands)	2015			2014			2013

Service cost – benefits earned during the period	$	201			272			304
Interest cost on projected benefit obligation		206			212			203
Net amortization and deferral		(79	)		(221	)		(101	)
Net periodic pension cost	$	328			263			406

The following table is an estimate of the benefits that will be paid in accordance with the SERP during the indicated time periods:

($ in thousands)	Estimated benefit payments
Year ending December 31, 2016	$	376
Year ending December 31, 2017		378
Year ending December 31, 2018		418
Year ending December 31, 2019		415
Year ending December 31, 2020		413
Years ending December 31, 2021-2025		2,095

The following assumptions were used in determining the actuarial information for the Pension Plan and the SERP for the years ended December 31, 2015, 2014, and 2013:

	2015		2014		2013
	Pension Plan	SERP	Pension Plan	SERP	Pension Plan	SERP
Discount rate used to determine net periodic pension cost	3.82%	3.82%	4.78%	4.78%	3.97%	3.97%
Discount rate used to calculate end of year liability disclosures	4.17%	4.17%	3.82%	3.82%	4.78%	4.78%
Expected long-term rate of return on assets	7.75%	n/a	7.75%	n/a	7.75%	n/a
Rate of compensation increase	n/a	n/a	n/a	n/a	n/a	n/a

The Company's discount rate policy is based on a calculation of the Company's expected pension payments, with those payments discounted using the Citigroup Pension Index yield curve.