Employee Benefits

6 Months Ended

Jun. 30, 2016

Compensation and Retirement Disclosure [Abstract]

Employee Benefits

Note 7. Employee Benefits

The Company provides pension benefits to its employees under a noncontributory, defined benefit plan which is funded on a current basis in compliance with the requirements of the Employee Retirement Income Security Act of 1974 (“ERISA”) and recognizes costs over the estimated employee service period.

The Company also has a Supplemental Executive Insurance/Retirement Plan (the “Supplemental Plan”) which is limited to certain officers and employees of the Company. The Supplemental Plan is accrued on a current basis and recognizes costs over the estimated employee service period.

Executive officers of the Company and its subsidiaries who have at least one year of service may participate in the Supplemental Plan. The Supplemental Plan is voluntary and participants are required to contribute to its cost. Life insurance policies, which are owned by the Company, are purchased covering the lives of each participant.

Effective January 1, 2016, the Company changed its estimate of the service and interest components of the net periodic benefit cost. Previously, the Company estimated the service and interest cost components utilizing a single weighted-average discount rate derived from the yield curve used to measure the benefit obligation. The new estimate utilizes a full yield curve approach in the estimation of these components by applying the specific spot rates along the yield curve used in the determination of the benefit obligation to their underlying projected cash flows. The new estimate provided a more precise measurement of service and interests costs by improving the correlation between projected benefit cash flows and their corresponding spot rates. The change does not affect the measurement of the Company’s benefit obligations and it is accounted for as a change in accounting estimate, which is applied prospectively.

Components of Net Periodic Benefit Cost (Credit) for the Three Months Ended June 30,

	Pension Benefits						Supplemental Insurance/ Retirement Plan
	2016			2015			2016		2015
	(in thousands)
Service cost	$	318		$	336		$	455	$	397
Interest		340			394			334		341
Expected return on plan assets		(694	)		(688	)		—		—
Recognized prior service cost (benefit)		(26	)		(26	)		29		29
Recognized net actuarial losses		200			204			200		149
Net periodic benefit (credit) cost	$	138		$	220		$	1,018	$	916

Components of Net Periodic Benefit Cost (Credit) for the Six Months Ended June 30,

	Pension Benefits						Supplemental Insurance/ Retirement Plan
	2016			2015			2016		2015
	(in thousands)
Service cost	$	636		$	672		$	910	$	794
Interest		680			788			668		682
Expected return on plan assets		(1,388	)		(1,376	)		—		—
Recognized prior service cost (benefit)		(52	)		(52	)		58		58
Recognized net actuarial losses		400			407			400		299
Net periodic benefit (credit) cost	$	276		$	439		$	2,036	$	1,833

Contributions

The company intends to contribute $2,075,000 to the Pension Plan in 2016. As of June 30, 2016, $1,575,000 has been contributed.