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DEFERRED COMPENSATION PLANS
12 Months Ended
Dec. 31, 2012
DEFERRED COMPENSATION PLANS

NOTE 10. DEFERRED COMPENSATION PLANS

The Company and the Bank have entered into separate deferred compensation arrangements with certain executive officers and directors. The plans call for certain amounts payable at retirement, death or disability. The estimated present value of the deferred compensation is being accrued over the expected service period. The Company and the Bank have purchased life insurance policies which they intend to use to fund this liability. The cash surrender value of the life insurance was $15.6 million at December 31, 2012. Accrued deferred compensation of $1,037,000 and $833,000 at December 31, 2012 and 2011, respectively, is included in other liabilities. Aggregate compensation expense under the plans was $364,000 for 2012 and $95,000 per year for 2011 and 2010, which is included in salaries and employee benefits.