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. Prior to July 1, 2015, the Company did not contribute to the 401(k) Plan. Effective July 1, 2015, the Company initiated a discretionary matching contribution equal to 50% of participant’s elective deferrals each quarter, up to 4% of eligible compensation. The Company recorded $150,000 of salaries & benefits expense attributable to the 401(k) Plan matching contribution during the three and nine months ended September 30, 2015. The Company did not incur any material expenses attributable to the 401(k) Plan during 2014.

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 $0 and $366,000 were made during the three months ended September 30, 2015 and 2014, respectively. Contributions to the plan totaling $1,506,000 and $927,000 were made during the nine months ended September 30, 2015 and 2014, respectively. Expenses related to the Company’s ESOP, are included in benefits and other compensation costs under salaries and benefits expense, and were $603,000 and $382,000 for the three months ended September 30, 2015 and 2014, respectively, and $1,783,000 and $1,142,000 for the nine months ended September 30, 2015 and 2014, respectively. 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 certain directors and key executives, which allow certain 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 $6,661,000 and $7,408,000 at September 30, 2015 and December 31, 2014, respectively. Earnings credits on deferred balances totaling $126,000 and $124,000 during the three months ended September 30, 2015 and 2014, respectively, are included in noninterest expense. Earnings credits on deferred balances totaling $412,000 and $415,000 during the nine months ended September 30, 2015 and 2014, respectively, are included in noninterest expense.

Supplemental Retirement Plans

The Company has supplemental retirement plans for current and former 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 (but is not required) to use the cash values of these policies to pay the retirement obligations. The following table sets forth the net periodic benefit cost recognized for the plans:


(in thousands)	Three months ended September 30,					Nine months ended September 30,
	2015			2014		2015			2014
Net pension cost included the following components:
Service cost-benefits earned during the period	$	256		$	163	$	767		$	489
Interest cost on projected benefit obligation		239			174		718			522
Amortization of net obligation at transition		—			—		1			1
Amortization of prior service cost		(14	)		35		(43	)		104
Recognized net actuarial loss		206			4		618			12

Net periodic pension cost	$	687		$	376	$	2,061		$	1,128


Company contributions to pension plans	$	270		$	125	$	945		$	444
Pension plan payouts to participants	$	270		$	125	$	945		$	444

For the year ending December 31, 2015, the Company expects to contribute and pay out as benefits $1,214,000 to participants under the plans.