Pension Plan

3 Months Ended

Mar. 31, 2013

Compensation And Retirement Disclosure [Abstract]

Pension Plan

Note 10. Pension Plan

The Bank has a non-contributory defined benefit plan (“qualified plan”) covering most of its employees. Effective July 1, 2011, the Bank closed the qualified plan to new employees hired on or after such date. The Plan continues to operate and accrue normal benefits for existing participants. In conjunction with the eligibility change for the qualified plan, the Bank amended its 401(k) plan to increase the Bank’s matching percentage of employee contributions for non-pension participants, within certain statutory limits.

The qualified plan benefits are based upon years of credited service and the employee’s highest average compensation as defined. It is the Bank’s funding policy to contribute annually an amount that can be deducted for federal income tax purposes. Additionally, the Bank has a supplemental non-qualified, non-funded retirement plan (“non-qualified plan”) which is designed to supplement the pension plan for key officers.

The following table sets forth the components of net periodic pension expense related to the qualified and non-qualified plans for the three months ended March 31, 2013 and 2012:

	Three Months Ended March 31,
	2013			2012
	(in thousands)
Service cost	$	1,987		$	1,964
Interest cost		1,657			1,598
Expected return on plan assets		(2,559	)		(2,233	)
Amortization of prior service cost		202			177
Amortization of actuarial loss		794			582
Total net periodic pension expense		2,081			2,088
Other changes in plan assets and benefit obligations recognized in other comprehensive income:
Amortization of prior service cost		(202	)		(177	)
Amortization of actuarial loss		(794	)		(582	)
		(996	)		(759	)
Total amount recognized in net periodic benefit cost and other comprehensive income (before tax)	$	1,085		$	1,329

The fair value of qualified plan assets increased approximately $9.8 million or 7.1 percent to $148.7 million at March 31, 2013 from $138.9 million at December 31, 2012. Valley made a $25.0 million discretionary contribution to the qualified plan during April 2013. Valley does not expect to make additional contributions to the qualified plan for the remainder of 2013.