14.	EMPLOYEE BENEFITS

The Company sponsors a leveraged employee stock ownership plan (“ESOP”) that covers all employees who meet minimum age and service requirements. The Company makes annual contributions to the ESOP in amounts as determined by the Board of Directors. These contributions are used to pay debt service and purchase additional shares. In past years, certain ESOP shares were pledged as collateral for debt. As the debt was repaid, shares were released from collateral and allocated to active employees, based on the proportion of debt service paid in the year. The most recent borrowing transaction occurred on February 5, 2009, when the ESOP borrowed $300,000 payable to MidSouth Bank, N.A. A total of 25,000 shares at $9.89 per share and 5,828 shares at $9.05 per share were purchased with the loan proceeds on February 6, 2009 and February 19, 2009, respectively. The balance of the note was paid in full on November 10, 2011. Because the source of the loan payments are contributions received by the ESOP from the Company, the related notes receivable is shown as a reduction of stockholders’ equity. In accordance with GAAP, compensation costs relating to shares purchased are based on the fair value of shares committed to be released. The unreleased shares are not considered outstanding in the computation of earnings per common share. Dividends received on ESOP shares are allocated based on shares held for the benefit of each participant and used to purchase additional shares of stock for each participant. ESOP compensation expense consisting of cash contributions for 2013 and 2012 was approximately $720,000 and $428,000, respectively. ESOP compensation expense consisting of both cash contributions and shares committed to be released for 2011 was approximately $469,000. All shares were released for allocation by the end of 2011. The cost basis of the shares released for 2011 was $9.73 per share. There were 537,373 and 573,476 ESOP shares as of December 31, 2013 and 2012, respectively.

The Company has deferred compensation arrangements with certain officers, which will provide them with a fixed benefit after retirement. The Company recorded a liability of approximately $1.2 million at December 31, 2013 and December 31, 2012 in connection with these agreements. Deferred compensation expense recognized in 2013, 2012, and 2011 was approximately $74,000, $68,000, and $232,000, respectively.

The Company sponsors defined contribution post-retirement benefit agreements to provide death benefits for the designated beneficiaries of certain of the Company's executive officers. Under the agreements, split-dollar whole life insurance contracts were purchased on certain executive officers. The increase in the cash surrender value of the contracts, less the Bank's cost of funds, constitutes the Company's contribution to the agreements each year. In the event the insurance contracts fail to produce positive returns, the Company has no obligation to contribute to the agreements. During 2013, 2012, and 2011, the Company incurred expenses of $12,000, $39,000 and $9,000, respectively, related to the agreements.

The Company has a 401(k) retirement plan covering substantially all employees who have been employed for 90 days and meet certain other requirements. Under this plan, employees can contribute a portion of their salary within the limits provided by the Internal Revenue Code into the plan. The Company made contributions to the plan totaling $60,000, $33,000 and $31,000 in 2013, 2012 and 2011, respectively.