NOTE 16 - PENSION PLANS

The Company has a noncontributory nonqualified defined benefit pension plan covering certain eligible employees. The Company-sponsored pension plan provides retirement benefits under pension trust agreements. The benefits are based on years of service and the employee's compensation during the highest three consecutive years during the last 10 years of employment. The Company accounts for its pension in accordance with FASB ASC Topic 715 "Compensation-Retirement Benefits" ("ASC Topic 715"). ASC Topic 715 requires the recognition of a plan's over-funded or under-funded status as an asset or liability with an offsetting adjustment to AOCI. ASC Topic 715 requires the determination of the fair values of plans assets at a company's year-end and recognition of actuarial gains and losses, prior service costs or credits, and transition assets or obligations as a component of Accumulated OCI. These amounts will be subsequently recognized as components of net periodic benefits cost. Further, actuarial gains and losses that arise in subsequent periods that are not initially recognized as a component of net periodic benefit cost will be recognized as a component of Accumulated OCI. Those amounts will subsequently be recognized as a component of net periodic benefit cost as they are amortized during future periods.

The following table sets forth the plan's funded status and amounts recognized in the Company's consolidated balance sheets:

	For the years ended December 31,
(In thousands)	2012			2011
Change in benefit obligation
Benefit obligation at beginning of year	$	14,942		$	12,526
Service cost		272			306
Interest cost		584			615
Benefits paid		(556	)		(531	)
Actuarial loss		1,655			2,026
Benefits obligation at end of year	$	16,897		$	14,942
Unrecognized prior service cost		269			359
Unrecognized actuarial loss		5,119			3,845
	$	5,388		$	4,204

The accumulated benefit obligation at December 31, 2012 and 2011 was $16.6 million and $14.1 million, respectively.

The table below reflects the assumptions used to determine the benefit obligations:

	As of December 31,
	2012			2011
Discount rate		3.25	%		4.00	%
Rate of compensation increase		4.00	%		4.00	%

The table below reflects the assumptions used to determine the net periodic pension cost:

	For the years ended December 31,
	2012			2011			2010
Discount rate		4.00	%		5.00	%		5.50	%
Rate of compensation increase		4.00	%		4.00	%		4.00	%

Net pension cost included the following components:

	For the years ended December 31,
(In thousands)	2012		2011		2010
Service cost	$	272	$	306	$	301
Interest cost		584		615		622
Amortization prior service cost		90		90		90
Amortization net actuarial loss		381		141		54
Net periodic benefit cost	$	1,327	$	1,152	$	1,067

Benefit payments to be made from the Non-qualified Pension Plan are as follows:

	As of December 31, 2012
	Non-Qualified
(In thousands)	Pension Plans
2013	$	1,043
2014		983
2015		983
2016		1,021
2017		1,021
Next five years thereafter		5,487

Benefit payments are expected to be made from insurance policies owned by the Company. The cash surrender value for these policies was approximately $3.3 million and $2.6 million as of December 31, 2012 and 2011, respectively.

Defined Contribution Plan

The Company has a capital accumulation and salary reduction plan under Section 401(k) of the Internal Revenue Code of 1986, as amended. Under the plan, all employees are eligible to contribute up to the maximum allowed by IRS regulation, with the Company matching dollar for dollar of any contribution up to 5%, which is subject to a $2,500 per employee annual limit. During 2012 and 2010, no matching contribution was made as a result of a management decision to reduce costs. During 2011 the Company partially reinstated the matching contribution and contributed $128,000 to the plan.