Retirement Plans And Other Postretirement Benefits

12 Months Ended

Dec. 31, 2011

Retirement Plans And Other Postretirement Benefits [Abstract]

Retirement Plans And Other Postretirement Benefits

8. RETIREMENT PLANS AND OTHER POSTRETIREMENT BENEFITS

The Company has a defined contribution 401(k) plan that covers all eligible employees. The Company matches employee contributions up to certain amounts as defined in the plan. Total expense related to this plan was $504 thousand, $451 thousand and $414 thousand in 2011, 2010 and 2009, respectively.

In 2002, the Company adopted a supplemental executive retirement plan to provide benefits for members of management and directors. The liability was calculated by discounting the anticipated future cash flows for the years ended December 31, 2011 and 2010 at 5.00% and 5.50%, respectively. The liability accrued for this obligation was $2.4 million and $2.5 million at December 31, 2011 and 2010, respectively. Charges to income are based on changes in the cash value of insurance, which funds the liability. The related expense for the years ended December 31, 2011, 2010 and 2009 was $163 thousand, $343 thousand and $216 thousand, respectively.

The Company recognizes a liability for the future death benefit provided to certain employees in relation to the postretirement benefit related to split-dollar life insurance arrangements. During 2011 the Company did not have any expense associated with the postretirement benefit related to split-dollar life insurance arrangements. During 2010 and 2009, the Company expensed $80 thousand and $18 thousand, respectively. The liability amounted to $561 at both December 31, 2011 and December 31, 2010. The calculation of the liability is based on the present value of the post-retirement cost of insurance.

The Company also has a postretirement benefit plan whereby the Company pays postretirement health care benefits for certain of its retirees that have met minimum age and service requirements. The following tables provide information relating to the Company's postretirement health care benefit plan using a measurement date of December 31:

	2011			2010
	(Dollars in thousands)
Reconciliation of benefit obligation:
Net benefit obligation, January 1	$	799		$	748
Service cost		7			6
Interest cost		36			39
Actuarial (gain) loss		76			39
Benefit paid		(43	)		(33	)
Net benefit obligation, December 31	$	875		$	799
Fair value of plan assets	$	—		$	—
Funding status, net amount recognized in other liabilities and accumulated post retirement benefit obligation	$	875		$	799
	2011			2010
Change in plan assets
Fair value of plan assets at beginning of year	$	—		$	—
Employer contribution		43			33
Benefits paid		(43	)		(33	)
Fair value of plan assets at end of year	$	—		$	—
Recognized on balance sheet
Other assets (deferred tax)	$	59		$	(19	)
Other liabilities		(875	)		(762	)
Accumulated other comprehensive loss, net of tax benefit		93			(20	)
Net amount recognized	$	(723	)	$	(801	)
Recognized in accumulated other comprehensive income
Unrecognized net (loss) gain	$	(152	)	$	39
Deferred tax		59			(19	)
Net amount recognized	$	(93	)	$	20

Net periodic postretirement benefit cost for 2011, 2010 and 2009 includes the following components:

	2011		2010			2009
	(Dollars in thousands)
Service cost	$	7	$	6		$	5
Interest cost		36		39			47
Amortization of prior year service cost		—		(8	)		(8	)
Net periodic postretirement benefit cost	$	43	$	37		$	44

The following table presents assumptions relating to the plan at December 31, 2011 and 2010:

	2011			2010
Discount rate in determining benefit obligation		4.0	%		4.5	%
Annual health care cost trend rate		7.0	%		7.0	%
Ultimate medical trend rate		7.0	%		7.0	%
Medical trend rate period (in years)		4			4
Effect of 1% increase in assumed health care cost on:
Service and interest cost		14.2	%		13.6	%
Benefit obligation		13.0	%		12.5	%
Effect of 1% decrease in assumed health care cost on:
Service and interest cost		(11.8	)%		(10.6	)%
Benefit obligation		(10.9	)%		(10.5	)%

Health care cost trend rates are estimated at 7.0% for 2012-2015, 6.0% for years 2016-2020, and 5.0% for subsequent years.

In 2012, the Company expects to recognize $8 thousand of prior service costs, $35 thousand of interest costs and a deferred loss of $13 thousand.

Employer contributions for 2012 are expected to approximate $56 thousand. Benefits are expected to equal employer contributions for the next five years.