Employee Benefit Plans

9 Months Ended

Sep. 30, 2012

Employee Benefit Plans

14. Employee Benefit Plans

401(k) Plan

During the three and nine months ended September 30, 2011, the Company made matching contributions to the 401(k) plan totaling $111 thousand and $293 thousand, respectively. There have been no Company matching contributions to the 401(k) plan during the three and nine months ended September 30, 2012. Effective January 1, 2012, the Company suspended its regular ongoing matching of teammate contributions and replaced it with a discretionary contribution based on attaining an appropriate level of profitability.

Defined Benefit Pension Plan

Historically, the Company has offered a noncontributory, defined benefit pension plan (the “Pension Plan”) that covered all full-time teammates having at least 12 months of continuous service and having attained age 21. In 2007, the Company notified teammates that it would cease accruing pension benefits for teammates with regard to the Pension Plan. Although no previously accrued benefits were lost, teammates no longer accrue benefits for service subsequent to 2007.

The Company recognizes the funded status of the Pension Plan in the Consolidated Balance Sheets. Gains and losses, prior service costs and credits and any remaining transition amounts that had not yet been recognized through net periodic benefit cost since the Pension Plan was frozen are recognized in accumulated other comprehensive income, net of tax impacts, until they are amortized as a component of net periodic benefit cost.

The Company’s net accrued pension liability is included in Other liabilities in the Consolidated Balance Sheets and totaled $5.2 million and $6.1 million at September 30, 2012 and December 31, 2011, respectively.

The fair value of Pension Plan assets totaled $14.3 million and $13.7 million at September 30, 2012 and December 31, 2011, respectively.

Cost of the Pension Plan. The following table summarizes the net periodic expense components for the Pension Plan, which is included in Salaries and other personnel expense in the Consolidated Statements of Income (Loss), for the periods indicated (in thousands).

	For the three months ended September 30,						For the nine months ended September 30,
	2012			2011			2012			2011
Interest cost	$	234		$	250		$	724		$	751
Expected return on plan assets		(276	)		(296	)		(855	)		(866	)
Amortization of net actuarial loss		222			197			688			591
Net periodic pension expense	$	180		$	151		$	557		$	476

As a result of the Company’s decision to curtail the Pension Plan effective January 1, 2008, no costs relative to service costs have been necessary since that date as teammates no longer accrue benefits for services rendered.

Current and Future Expected Contributions. The Pension Protection Act of 2006 imposed a number of burdens on pension plans with an asset to liability ratio less than 80% with additional burdens imposed if the asset to liability ratio falls below 60%. Due primarily to the utilization of a lower discount rate for determining the present value of the liabilities (provided by the Internal Revenue Service based on the 24 month average of bond yields), the Company’s plan was 75% funded immediately prior to making the additional contribution and, as a result, in March 2012, the Company contributed $1.0 million to the Pension Plan. This contribution increased the Company’s asset to liability ratio to meet the 80% threshold level. During January 2012, the Company made its final employer contributions for the 2011 plan year in the amount of $94 thousand. Through September 30, 2012, the Company has made employer contributions in the amount of $326 thousand for the 2012 plan year and anticipates additional employer contributions in the amount of $326 thousand will be made for the 2012 plan year during the remainder of 2012 and first quarter 2013.

Key Man Life Insurance

The Company has fully funded life insurance policies on certain former members of executive management who are now retired from the Company. Such policies are recorded in Other assets in the Consolidated Balance Sheets at the cash surrender value less applicable surrender charges. At both September 30, 2012 and December 31, 2011, the cash surrender value of such policies totaled $1.6 million.