XML 55 R16.htm IDEA: XBRL DOCUMENT v2.4.0.6
Employee Benefit Plans
 6 Months Ended
Jun. 30, 2012
Employee Benefit Plans [Abstract]  
Employee Benefit Plans
Note 8 - Employee Benefit Plans

401(k) Plan
The Bank has a defined contribution plan available to substantially all employees who have completed 3 months of service. Employees may contribute up to $17,000 of their compensation if under age 50 and $22,500 if age 50 or over, and the Bank may match employee contributions not to exceed 3.0% of compensation depending on contribution level. Subject to a vote of the Board of Directors, the Bank may also make a profit-sharing contribution to the Plan. Such contribution equaled 2.0% of each eligible employee's compensation in 2011. The amount for 2012 has not been
established. The expense related to the 401(k) plan was $186,000 and $205,000 for the six months ended June 30, 2012 and 2011, respectively.

Supplemental Retirement Benefits
The Bank also provides unfunded, non-qualified supplemental retirement benefits for certain officers, payable in installments over 20 years upon retirement or death. The agreements consist of individual contracts with differing characteristics that, when taken together, do not constitute a postretirement plan. The costs for these benefits are recognized over the service periods of the participating officers in accordance with FASB ASC Topic 712 "Compensation - Nonretirement Postemployment Benefits". The expense of these supplemental retirement benefits was $145,000 and $153,000 for the six months ended June 30, 2012 and 2011, respectively. As of June 30, 2012, the associated accrued liability included in other liabilities in the balance sheet was $1,964,000 compared to $1,847,000 and $1,721,000 at December 31, 2011 and June 30, 2011, respectively.

Post-Retirement Benefit Plans
The Bank sponsors two post-retirement benefit plans. One plan currently provides a subsidy for health insurance premiums to certain retired employees and a future subsidy for seven active employees who were age 50 and over in 1996. These subsidies are based on years of service and range between $40 and $1,200 per month per person. The other plan provides life insurance coverage to certain retired employees and health insurance for retired directors. None of these plans are pre-funded. The Company utilizes FASB ASC Topic 712 "Compensation - Nonretirement Postemployment Benefits" to recognize the overfunded or underfunded status of a defined benefit postretirement plan as an asset or liability in its balance sheet and to recognize changes in the funded status in the year in which the changes occur through comprehensive income.
     The following table sets forth the accumulated postretirement benefit obligation and funded status:

 
 
At or for the six months ended June 30,
 
 
  
2012
   
2011
 
Change in benefit obligation
        
Benefit obligation at beginning of year
 
$
1,848,000
  
$
1,796,000
 
Service cost
  
34,000
   
8,000
 
Interest cost
  
56,000
   
58,000
 
Benefits paid
  
(68,000
)
  
(78,000
)
Benefit obligation at end of period
  
1,870,000
   
1,784,000
 
Funded status
        
Benefit obligation at end of period
  
(1,870,000
)
  
(1,784,000
)
Accrued benefit cost at end of period
 
$
(1,870,000
)
 
$
(1,784,000
)

The following table sets forth the net periodic pension cost:

 
 
For six months ended
June 30,
  
For quarters ended June 30,
 
 
  
2012
   
2011
   
2012
   
2011
 
Components of net periodic benefit cost
                
Service cost
 
$
34,000
  
$
8,000
  
$
17,000
  
$
4,000
 
Interest cost
  
56,000
   
58,000
   
28,000
   
29,000
 
Amortization of unrecognized transition obligation
  
14,000
   
14,000
   
7,000
   
7,000
 
Amortization of accumulated losses
  
6,000
   
10,000
   
3,000
   
5,000
 
Net periodic benefit cost
 
$
110,000
  
$
90,000
  
$
55,000
  
$
45,000
 

Amounts not yet reflected in net periodic benefit cost and included in accumulated other comprehensive income are as follows:

 
 
June 30,
2012
  
December 31,
2011
  
June 30,
2011
 
Unamortized net actuarial loss
 
$
(100,000
)
 
$
(100,000
)
 
$
(49,000
)
Unrecognized transition obligation
  
(20,000
)
  
(34,000
)
  
(49,000
)
 
  
(120,000
)
  
(134,000
)
  
(98,000
)
Deferred tax benefit at 35%
  
43,000
   
47,000
   
35,000
 
Net unrecognized postretirement benefits included in accumulated other comprehensive income (loss)
 
$
(77,000
)
 
$
(87,000
)
 
$
(63,000
)

The following table summarizes activity in the unrealized gain or loss on postretirement benefits included in other comprehensive income for the six months and quarters ended June 30, 2012 and 2011.

 
 For six months ended
June 30,
 For the quarters ended
June 30,
 
2012
2011
2012
2011
Unrecognized transition obligation at beginning of period
(87,000)
(73,000)
(82,000)
(68,000)
Amortization of unrecognized transition obligation
14,000
14,000
7,000
7,000
Related deferred taxes
(4,000)
(4,000)
(2,000)
(2,000)
Unrecognized transition obligation at end of period
(77,000)
(63,000)
(77,000)
(63,000)

A weighted average discount rate of 7.0% was used in determining the accumulated benefit obligation and the net periodic benefit cost. The assumed health care cost trend rate is 7.0%. The measurement date for benefit obligations was as of year-end for prior years presented. The expected benefit payments for the third quarter of 2012 are $34,000

and the expected benefit payments for all of 2012 are $136,000. Plan expense for 2012 is estimated to be $190,000. A 1% change in trend assumptions would create an approximate change in the same direction of $100,000 in the accumulated benefit obligation, $7,000 in the interest cost and $1,000 in the service cost.