Retirement Plans

12 Months Ended

Dec. 31, 2011

Retirement Plans [Abstract]

Retirement Plans

Note 25 – Retirement Plans

401(k) Plan

The Company sponsors a 401(k) Plan whereby substantially all employees age 21 and over with 90 days of service may participate. Participants may contribute a portion of their compensation subject to certain limits based on federal tax laws. The Company does not contribute to the 401(k) Plan. The Company did not incur any material expenses attributable to the 401(k) Plan during 2011, 2010, and 2009.

Employee Stock Ownership Plan

Substantially all employees with at least one year of service are covered by a discretionary employee stock ownership plan (ESOP). Contributions are made to the plan at the discretion of the Board of Directors. Contributions to the plan totaling $1,084,000 in 2011, $1,046,000 in 2010, and $1,650,000 in 2009 are included in salary expense. Company shares owned by the ESOP are paid dividends and included in the calculation of earnings per share exactly as other common shares outstanding.

Deferred Compensation Plans

The Company has deferred compensation plans for directors and key executives, which allow directors and key executives designated by the Board of Directors of the Company to defer a portion of their compensation. The Company has purchased insurance on the lives of the participants and intends to hold these policies until death as a cost recovery of the Company’s deferred compensation obligations of $8,209,000, and $8,289,000 at December 31, 2011 and 2010, respectively. Earnings credits on deferred balances totaling $649,000 in 2011, $683,000 in 2010, and $750,000 in 2009 are included in noninterest expense.

Supplemental Retirement Plans

The Company has supplemental retirement plans for directors and key executives. These plans are non-qualified defined benefit plans and are unsecured and unfunded. The Company has purchased insurance on the lives of the participants and intends to hold these policies until death as a cost recovery of the Company’s retirement obligations. The cash values of the insurance policies purchased to fund the deferred compensation obligations and the supplemental retirement obligations were $50,403,000 and $50,541,000 at December 31, 2011 and 2010, respectively.

The Company recorded in other liabilities an additional minimum pension liability of $3,802,000 and $5,770,000 related to the supplemental retirement plans as of December 31, 2011 and 2010, respectively. These amounts represent the amount by which the projected benefit obligations for these retirement plans exceeded the fair value of plan assets plus amounts previously accrued related to the plans. The projected benefit obligation is recorded in other liabilities.

At December 31, 2011 and 2010, the additional minimum pension liability of $3,802,000 and $5,770,000 were offset by a reduction of shareholders’ equity accumulated other comprehensive loss of $2,204,000 and $3,344,000, respectively, representing the after-tax impact of the additional minimum pension liability, and the related deferred tax asset of $1,598,000 and $2,426,000, respectively. The Company expects to recognize approximately $288,000 of the net actuarial loss reported in the following table as of December 31, 2011 as a component of net periodic benefit cost during 2012.

Amounts recognized as a component of accumulated other comprehensive loss as of year-end that have not been recognized as a component of the combined net period benefit cost of the Company’s defined benefit pension plans are presented in the following table.

	December 31,
(in thousands)	2011			2010
Net actuarial loss	$	(3,515	)	$	(5,329	)
Deferred tax benefit		1,478			2,356
Amount included in accumulated other comprehensive loss, net of tax	$	2,037		$	2,973

Information pertaining to the activity in the supplemental retirement plans, using a measurement date of December 31, is as follows:

	December 31,
	2011			2010
	(in thousands)
Change in benefit obligation:
Benefit obligation at beginning of year	$	(15,643	)	$	(13,089	)
Service cost		(657	)		(524	)
Interest cost		(840	)		(764	)
Actuarial gain/(loss)		1,428			(1,999	)
Benefits paid		710			733
Benefit obligation at end of year	$	(15,002	)	$	(15,643	)
Change in plan assets:
Fair value of plan assets at beginning of year	$	—		$	—
Fair value of plan assets at end of year	$	—		$	—
Funded status	$	(15,002	)	$	(15,643	)
Unrecognized net obligation existing at January 1, 1986		15			17
Unrecognized net actuarial loss		3,516			5,329
Unrecognized prior service cost		271			424
Accumulated other comprehensive income		(3,802	)		(5,770	)
Accrued benefit cost	$	(15,002	)	$	(15,643	)
Accumulated benefit obligation	$	(11,995	)	$	(12,564	)

The following table sets forth the net periodic benefit cost recognized for the supplemental retirement plans:

	Years Ended December 31,
	2011		2010		2009
	(in thousands)
Net pension cost included the following components:
Service cost-benefits earned during the period	$	657	$	523	$	395
Interest cost on projected benefit obligation		840		764		695
Amortization of net obligation at transition		2		2		2
Amortization of prior service cost		153		153		153
Recognized net actuarial loss		386		218		99
Net periodic pension cost	$	2,038	$	1,660	$	1,344

The following table sets forth assumptions used in accounting for the plans:

	Years Ended December 31,
	2011			2010			2009
Discount rate used to calculate benefit obligation		4.65	%		5.50	%		6.00	%
Discount rate used to calculate net periodic pension cost		4.65	%		5.50	%		6.00	%
Average annual increase in executive compensation		4.00	%		4.00	%		4.00	%
Average annual increase in director compensation		2.50	%		2.50	%		2.50	%

The following table sets forth the expected benefit payments to participants and estimated contributions to be made by the Company under the supplemental retirement plans for the years indicated:

Years Ended	Expected Benefit Payments to Participants		Estimated Company Contributions
	(in thousands)
2012	$	458	$	458
2013		540		540
2014		544		544
2015		544		544
2016		534		534
2017-2021	$	4,713	$	4,713