Note 16 - Benefit Plans

9 Months Ended

Sep. 30, 2014

Compensation and Retirement Disclosure [Abstract]

Pension and Other Postretirement Benefits Disclosure [Text Block]

16. Benefit Plans

401(k) Plan

Employees (which the Company refers to as “teammates”) are given the opportunity to participate in The Palmetto Bank 401(k) Retirement Plan (the “401(k) Plan”) which is designed to supplement a teammate’s retirement income. Teammates are eligible to participate in the 401(k) Plan immediately when hired, and participants are able to defer a portion of their salary into the 401(k) Plan. Matching contributions, if any, are contributed to the 401(k) Plan prior to the end of each plan year.

From January 1, 2012 through June 30, 2013, the Company suspended its regular ongoing matching of teammate contributions to the 401(k) Plan. The Company reinstated its match of teammate contributions effective July 1, 2013. From July 1, 2013 through June 30, 2014, teammate contributions were matched at a rate of $0.10 per dollar up to 6% of a teammate’s eligible compensation. Effective July 1, 2014, the match of teammate contributions was increased to a rate of $0.25 per dollar up to 6% of a teammate’s eligible compensation. The Company’s matching contributions totaled $22 thousand and $13 thousand for the three months ended September 30, 2014 and 2013, respectively, and $49 thousand and $13 thousand for the nine months ended September 30, 2014 and 2013, respectively.

Under the Internal Revenue Service (“IRS”) rules related to 401(k) plans, the IRS imposes certain annual limitations on the amount of allowable contributions to the 401(k) Plan by highly compensated participants (as determined annually by applying the required IRS tests). To the extent teammates receive contribution refunds of prior salary deferrals as a result of the annual limitations, the Bank has in place a benefit equalization plan into which such teammates may contribute refunds received. The benefit equalization plan operates similar to the 401(k) Plan except that this plan is a nonqualified plan under the IRS rules, and the assets of the benefit equalization plan are subject to the general creditors of the Bank. At September 30, 2014, assets in the benefit equalization plan were $39 thousand and are included in Other assets in the Consolidated Balance Sheet. An offsetting liability of $39 thousand is reflected in Other liabilities and represents the Bank’s obligation to benefit equalization plan participants. There were no assets or liabilities associated with the benefit equalization plan at December 31, 2013.

Defined Benefit Pension Plan

Prior to 2008, the Company 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. Effective 2008, the Company ceased accruing pension benefits for participants in the Pension Plan. Although no previously accrued benefits were lost, teammates no longer accrue benefits for service subsequent to 2007.

The Company’s net accrued pension liability is included in Other liabilities in the Consolidated Balance Sheets and totaled $975 thousand and $1.3 million at September 30, 2014 and December 31, 2013, respectively.

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

	For the three months ended September 30,						For the nine months ended September 30,
	2014			2013			2014			2013
Interest cost	$	273		$	210		$	685		$	631
Expected return on plan assets		(319	)		(283	)		(806	)		(850	)
Amortization of net actuarial loss		197			243			573			728
Net periodic pension expense	$	151		$	170		$	452		$	509

As a result of the decision to curtail the Pension Plan effective December 31, 2007, no costs relative to service have been necessary since that date as teammates no longer accrue benefits for services rendered.

Pension Plan Assets. The following table summarizes the fair value of Pension Plan assets by major category at the dates indicated (in thousands).

	September 30,		December 31,
	2014		2013
Cash and cash equivalents	$	5,326	$	4,440
U.S. government and agency securities		-		549
Municipal securities		-		470
Corporate bonds		-		3,398
Mutual funds		912		3,596
Corporate stocks		1,066		3,329
Exchange traded funds		9,142		287
Foreign equities		166		694
Accrued interest receivable		1		30
Other		4		5
Total Pension Plan assets	$	16,617	$	16,798

Fair Value Measurements. The following tables summarize Pension Plan assets measured at fair value at the dates indicated aggregated by the level in the fair value hierarchy within which those measurements fall (in thousands).

	September 30,		December 31,
	2014		2013
Level 1	$	6,397	$	7,804
Level 2		10,220		8,994
Level 3		-		-
Total Pension Plan assets	$	16,617	$	16,798

There were no changes in the Pension Plan’s Level 3 assets during 2013 or during the nine months ended September 30, 2014.

Current and Future Expected Contributions. The Company contributed $400 thousand to the Pension Plan in April, July and October 2014, and expects to contribute an additional $400 thousand relative to the 2014 plan year in December 2014.