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Pension And Postretirement Benefit Plans
 12 Months Ended
Dec. 31, 2012
Pension And Postretirement Benefit Plans [Abstract]  
Pension And Postretirement Benefit Plans

NOTE 10. Pension and Postretirement Benefit Plans

Effective December 31, 2006, the pension plan was amended and frozen so that no further benefits will accrue under the plan and no additional employees may become participants. The pension plan was terminated effective September 30, 2011 and after receiving final approval from the Internal Revenue Service, distributions in the form of lump-sum cash payments to plan participants, rollovers and purchasing annuity contracts were completed on December 19, 2011. The Company recognized a loss of $589,000 on the distribution of the plan's assets during 2011. The loss is included in salaries and employee benefits expense on the consolidated statements of income. An additional $141,000 in expense was incurred during 2011 for the purchase of employee retirement annuities. The expense is included in outside service fees on the consolidated statements of income. There were no expenses related to the pension plan recognized during 2012.

The Company provides certain health care and life insurance benefits for six retired employees who have met certain eligibility requirements. All other employees retiring after reaching age 65 and having at least 15 years of service with the Company will be allowed to stay on the Company's group life and health insurance policies, but will be required to pay premiums. The Company's share of the estimated costs that will be paid after retirement is generally being accrued by charges to expense over the employees' active service periods to the dates they are fully eligible for benefits, except that the Company's unfunded cost that existed at January 1, 1993 is being accrued primarily in a straight-line manner that will result in its full accrual by December 31, 2013.

The following amounts that have not been recognized in the net periodic benefit cost of the postretirement benefit plan for the year ended December 31, 2012 but are included in other comprehensive income: unrecognized net actuarial gain of $44 thousand. The transition obligation included in other comprehensive income and expected to be recognized in the net periodic benefit cost of the postretirement benefit plan during 2013 is $3 thousand.

The following tables provide a reconciliation of the changes in the benefit obligations and fair value of assets for 2012, 2011, and 2010 and a statement of the funded status at December 31, 2012, 2011 and 2010 for the pension and postretirement benefit plans of the Company. The Company uses a December 31st measurement date for its plans.

 

      Pension Plan           Postretirement Benefits Plan  
    2012 2011     2010     2012     2011     2010  
              (in thousands)              
Change in Benefit Obligation:                                  
Benefit obligation, beginning $ - $ 3,684   $ 3,801   $ 150   $ 144   $ 154  
Service cost   - -     -     -     -     -  
Interest cost   - 101     189     5     6     7  
Actuarial loss (gain)   - 143     (246 )   2     6     (11 )
Benefits paid   - (4,069 )   (60 )   (7 )   (6 )   (6 )
Settlement loss   - 141     -     -     -     -  
Benefit obligation, ending $ - $ -   $ 3,684   $ 150   $ 150   $ 144  
 
Change in Plan Assets:                                  
Fair value of plan assets, beginning $   - $ 3,252   $ 2,955   $ -   $ -   $ -  
Actual return on plan assets     - 87     78     -     -     -  
Employer contributions     - 730     279     7     6     6  
Benefits paid     - (4,069 )   (60 )   (7 )   (6 )   (6 )
Fair value of plan assets, ending $   - $ -   $ 3,252   $ -   $ -   $ -  

 

      Pension Plan         Postretirement Benefits Plan  
    2012   2011   2010     2012     2011     2010  
            (in thousands)              
Funded Status:                                
Funded status $ - $ - $ (432 ) $ (150 ) $ (150 ) $ (144 )
Unrecognized net actuarial loss   - -   -     -     -     -  
Unrecognized net transition obligation   - -   -     -     -     -  
Unrecognized prior service cost   - -   -     -     -     -  
Accrued benefits $ - $ - $ (432 ) $ (150 ) $ (150 ) $ (144 )
 
Amounts Recognized in Consolidated                                
Balance Sheets:                              
Prepaid benefit cost $ - $ - $ -   $ -   $ -   $ -  
Accrued liability   - -   (432 )   (150 )   (150 )   (144 )
  $ - $ - $ (432 ) $ (150 ) $ (150 ) $ (144 )
 
Amounts Recognized in Accumulated                                
Other Comprehensive Income:                                
Net actuarial loss (gain) $ - $ - $ 434   $ (65 ) $ (76 ) $ (93 )
Net transition obligation   - -   -     -     -     -  
Deferred tax (benefit)/liability   - -   (147 )   21     25     30  
  $ - $ - $ 287   $ (44 ) $ (51 ) $ (63 )

 

The accumulated benefit obligation for the pension plan was distributed during 2011, and as a result, there was no accumulated benefit obligation at December 31, 2012 and 2011. The accumulated benefit obligation for the pension plan was $3.7 million at December 31, 2010. Due to the amendment of the pension plan, the accumulated benefit obligation and projected benefit obligation are equivalent at December 31, 2010.

 

The following tables provide the components of net periodic benefit cost of the pension plan and postretirement benefit plan for the years ended December 31, 2012, 2011, and 2010:

      Pension Plan           Postretirement Benefits Plan  
    2012   2011     2010     2012     2011     2010  
              (in thousands)              
Components of Net Periodic Benefit Cost:                                  
Service cost $ - $ -   $ -   $ -   $ -   $ -  
Interest cost   - 101     189     5     6     7  
Expected return on plan assets   - (83 )   (146 )   -     -     -  
Amortization of prior service costs   - -     -     -     -     -  
Amortization of transition obligation   - -     -     -     -     2  
Recognized net loss due to settlement   - 141     -     -     -     -  
Amortization of net actuarial loss   - 572     235     (8 )   (11 )   (9 )
Net periodic benefit cost $ - $ 731   $ 278   $ (3 ) $ (5 ) $ -  

 

The benefit obligation for the pension plan was calculated using the following assumptions; weighted average discount rate of 6.10% for 2010. Due to the amendment of the pension plan, no rate of compensation increase was assumed for 2010.

The net periodic benefit cost for the pension plan was calculated using the following assumptions; weighted average discount rate of 6.10% for 2011 and 5.00% for 2010, expected long-term return on plan assets of 5.00% for 2011 and 2010. Due to the amendment of the pension plan, no rate of compensation increase was assumed.

The benefit obligation for the postretirement benefit plan was calculated using a weighted average discount rate of 3.50% for 2012, 4.25% for 2011, and 5.00% for 2010. For measurement purposes, a 10.00% annual rate of increase in the per capita cost of covered health care benefits was assumed for 2013 and 2014, 8.00% for 2015 and 2016, and 6.00% for 2017 and thereafter. If these rates were increased by 1.00% in each year, the benefit obligation at December 31, 2012 would have increased by $6 thousand and the net periodic benefit cost for 2012 would have increased by less than $500. If these rates were decreased by 1.00% in each year, the benefit obligation at December 31, 2012 would have decreased by $5 thousand and the net periodic benefit cost for 2012 would have decreased by less than $500.

All plan assets were distributed to pension plan beneficiaries during 2011 and no future payments are expected.

Estimated future benefit payments at December 31, 2012, which reflect expected future service, as appropriate, were as follows:

    Postretirement
    Benefits
    (in thousands)
2013 $ 14
2014   15
2015   15
2016   14
2017   14
2018 - 2021   57