Employee Benefit Plans

12 Months Ended

Dec. 31, 2011

Employee Benefit Plans [Abstract]

Employee Benefit Plans

12. EMPLOYEE BENEFIT PLANS

Multi-employer Pension Plan

Prior to April 1, 2008, the Company participated in the Pentegra Defined Benefit Plan for Financial Institutions (the "Pentegra Plan"), a noncontributory multi-employer pension plan covering all qualified employees.  The Company chose to freeze its defined benefit pension plan effective April 1, 2008.  The trustees of the Financial Institutions Retirement Fund administer the Pentegra Plan, employer identification number 13-5645888 and plan number 333.  The Pentegra Plan operates as a multi-employer plan for accounting purposes and as a multiple-employer plan under the Employee Retirement Income Security Act of 1974 and the internal Revenue Code.  There are no collective bargaining agreements in place that require contributions to the Pentegra Plan.

The Pentegra Plan is a single plan under Internal Revenue Code Section 413(c) and, as a result, all of the assets stand behind all of the liabilities.  Accordingly, under the Pentegra Plan contributions made by a participating employer may be used to provide benefits to participants of other participating employers.  There is no separate valuation of the Pentegra Plan benefits or segregation of the Pentegra Plan assets specifically for the Company, because the Pentegra Plan is a multi-employer plan and separate actuarial valuations are not made with respect to each employer.  The funded status of the Pentegra Plan, market value of plan assets divided by funding target, as of July 1, 2011 and 2010 was 84.4% and 86.7%, respectively.

 The Company had expenses of $881,000 and $527,000 for the years ended December 2011 and 2010, respectively.  Company cash contributions to the Pentegra Plan for these same periods were $159,000 and $657,000, respectively.  Total contributions made to the Pentegra Plans were $203.6 million and $133.9 million for the plan years ended June 30, 2010 and 2009, respectively.  The Company's contributions to the Pentegra Plan were not more than 5% of the total contributions to the plan.

Supplemental Retirement Plan

The Company has entered into supplemental retirement agreements for certain officers (the "Plan").  These agreements are unfunded. However, the Company has entered into life insurance contracts to offset the expense of these agreements.  Benefits under these arrangements are generally paid over a 15 year period.  The Company uses a December 31 measurement date for the plan.  The following table sets forth the Plan's funded status at December 31, 2011 and 2010, and the amount recognized in the Company's consolidated statements of income for the years ended December 31, 2011 and2010 as well as the projected benefit cost for 2012:  (dollars in thousands)

	Dec 2011			Dec 2010
Economic assumptions:
Discount rate		4.8	%		5.3	%
Salary rate		4.0	%		4.0	%
Components of net periodic pension expense:
Interest cost on projected benefit obligation	$	214		$	216
Service cost		112			103
Prior service cost		62			54
Net Periodic Benefit Cost	$	388		$	373

A reconciliation of the prior and ending balances of the Benefit Obligation for 2011 and 2010 is as follows: (dollars in thousands)

	Dec 2011			Dec 2010
Benefit obligation at beginning of year	$	4,212		$	4,057
Interest cost		214			216
Service cost		112			103
Actuarial loss		315			47
Benefits paid during year		(293	)		(211	)
Benefit Obligation at End of Year (unfunded status)	$	4,560		$	4,212

The liability recognized in the balance sheet at December 31, 2011 and 2010 was $4.6 million and $4.2 million, respectively.

Amounts recognized in accumulated other comprehensive income not yet recognized as a component of net periodic benefit cost consist of: (dollars in thousands)

Pension benefits	Dec 2011		Dec 2010
Net loss, net of tax of ($300) and ($174)	$	458	$	265
Prior service cost, net of tax of ($95) and ($116)		144		177
Total	$	602	$	442

Other changes in plan assets and benefit obligations recognized in other comprehensive income are as follows for the years ended December 31, 2011 and 2010: (dollars in thousands)

	Dec 2011			Dec 2010
Net loss, net of tax of $127 and $19	$	193		$	29
Amortization of prior service cost, net of tax of $21 and $21		(32	)		(33	)
Total recognized in other comprehensive income	$	161		$	(4	)
Total recognized in net periodic benefit cost and other comprehensive income, net of tax of ($272) and ($145)	$	415		$	221

The estimated net loss and prior service cost for the Plan that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year are $41,000 and $54,000, respectively.  As of December 31, 2011 and 2010, the projected benefit obligation was $4.6 million and $4.2 million, respectively.

Prior service cost is amortized over the estimated remaining employee service lives of approximately eight years.  The Company expects to make no contributions to the plan in 2012.  The Bank anticipates paying benefits over the next five years and in the aggregate for the five years thereafter as follows:  2012 - $246,000, 2013 - $272,000, 2014 - $272,000, 2015 - $273,000, 2016 - $292,000 and  2017 through 2021 - $2,150,000.

401(k) Plan

The Company has an employee thrift plan established for substantially all full-time employees.  Effective January 1, 2008, the Company increased the maximum 401(k) match to 50% of an employee's 401(k) contribution, up to a maximum contribution of 3.0% of an individual's total eligible salary.  Previously the maximum contribution was 1.5% of an individual's total eligible salary.  The Company contributed $250,000 and $246,000 during the years ended December 31, 2011 and 2010, respectively, to this plan.