Employee Benefit Plans

401(k) Plan

The Bank has a defined contribution plan available to substantially all employees who have completed three months of service. Employees may contribute up to IRS-determined limits and the Bank may provide a match to 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 2014, 2013, and 2012. The expense related to the 401(k) plan was $454,000, $414,000, and $363,000 in 2014, 2013, and 2012, respectively.

Deferred Compensation and Supplemental Retirement Plan

The Bank also provides unfunded, non-qualified deferred compensation payable over two years, as well as unfunded 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 post-retirement 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 plans was $722,000 in 2014, $309,000 in 2013, and $289,000 in 2012. As of December 31, 2014 and 2013, the accrued liability of these plans was $2,999,000 and $2,333,000, respectively, and is recorded in other liabilities.

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 Bank also provides health insurance for retired directors. The other plan provides life insurance coverage to certain retired employees. 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 defined benefit post-retirement plans (other than a multiemployer 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 (loss) of a business entity.

The following table sets forth the accumulated postretirement benefit obligation and funded status:



At December 31,	2014			2013			2012
Change in benefit obligations
Benefit obligation at beginning of year:	$	1,479,000		$	1,954,000		$	1,848,000
Service cost	—			21,000			16,000
Interest cost	71,000			86,000			107,000
Benefits paid	(100,000		)	(107,000		)	(103,000		)
Actuarial (gain) loss	478,000			(475,000		)	86,000
Benefit obligation at end of year:	$	1,928,000		$	1,479,000		$	1,954,000
Funded status
Benefit obligation at end of year	$	(1,928,000	)	$	(1,479,000	)	$	(1,954,000	)
Unamortized (gain) loss	192,000			(289,000		)	186,000
Unrecognized transition obligation	—			—			5,000
Accrued benefit cost	$	(1,736,000	)	$	(1,768,000	)	$	(1,763,000	)
Weighted average discount rate as of December 31	4.25		%	5.00		%	4.50		%

The following table sets forth the net periodic pension cost:



For the years ended December 31,	2014			2013			2012
Components of net periodic benefit cost
Service cost	$	—		$	21,000		$	16,000
Interest cost	71,000			86,000			107,000
Amortization of unrecognized transition obligation	—			5,000			29,000
Amortization of gain	(12,000		)	—			—
Other settlement expense	10,000			—			—
Net periodic benefit cost	$	69,000		$	112,000		$	152,000
Weighted average discount rate for net periodic cost	5.00		%	4.50		%	6.50		%

The measurement date for benefit obligations was as of year-end for all years presented. The estimated amount of benefits to be paid in 2015 is $120,000. For years ending 2016 through 2019, the estimated amount of benefits to be paid is $121,000, $122,000, $123,000 and $123,000 respectively, and the total estimated amount of benefits to be paid for years ended 2020 through 2024 is $590,000. Plan expense for 2015 is estimated to be $80,000.

In accordance with FASB ASC Topic 715, "Compensation – Retirement Benefits", amounts not yet reflected in net periodic benefit cost and included in accumulated other comprehensive income (loss) are as follows:



At December 31,	2014			2013			Portion to Be Recognized in Income in 2015
Unamortized net actuarial gain (loss)	$	(192,000	)	$	289,000		$	—
Deferred tax benefit (expense) at 35%	67,000			(101,000		)	—
Net unrecognized post-retirement benefits included in accumulated other comprehensive income (loss)	$	(125,000	)	$	188,000		$	—