Retirement Plans

12 Months Ended

Dec. 31, 2013

Compensation and Retirement Disclosure [Abstract]

Retirement Plans

RETIREMENT PLANS

The Company has a defined benefit retirement plan that covers the majority of employees hired prior to February 1, 2007. The benefits are based on years of service and the employee’s five-year final average salary.

Contributions are intended to provide for benefits attributable to service both to date and expected to be provided in the future. The Company funds the plan in accordance with the Employee Retirement Income Security Act of 1974, or ERISA. The following accumulated benefit information is as of December 31:

($ in thousands)	2013			2012
Change in benefit obligation - Pension
Benefit obligation at beginning of year	$	10,215		$	8,701
Service cost	359			284
Interest cost	402			375
Actuarial gain/assumption changes	(1,379		)	1,344
Benefits paid	(271		)	(489		)
Benefit obligation at end of year	$	9,326		$	10,215
Accumulated benefit obligation at end of year	$	8,427		$	9,195
Change in Plan Assets
Fair value of plan assets at beginning of year	$	6,799		$	5,722
Actual return on plan assets	1,105			706
Employer contribution	1,000			860
Benefits/expenses paid	(271		)	(489		)
Fair value of plan assets at end of year	$	8,633		$	6,799
Funded status - liability	$	(693	)	$	(3,416	)
Amounts recorded in equity
Net actuarial (gain)	$	(1,961	)	$	(4,110	)
Prior service cost	148			176
Total amount recorded	$	(1,813	)	$	(3,934	)
Amount recorded, net taxes	$	(1,088	)	$	(2,360	)

Other changes in plan assets and benefit obligations recognized in other comprehensive income for 2013 and 2012 include the following components:

($ in thousands)	2013			2012
Net (gain) loss	$	(1,867	)	$	(1,092	)
Recognition of net actuarial gain or (loss)	(282		)	218
Recognized prior service cost	28			(29		)
Total changes	$	(2,121	)	$	(903	)
Changes, net of taxes	$	(1,271	)	$	(542	)

The Company expects to recognize the following amounts as a component of net periodic pension costs during the next fiscal year ($ in thousands):

($ in thousands)
Amortization net actuarial gain or (loss)	$	61
Amortization prior service cost	$	(29	)

At December 31, 2013 and 2012 the Company has a long-term pension liability. The Company has always valued its plan assets as of December 31 each year so there were no additional transition impacts upon implementation of a year-end measurement date for plan assets as required by ASC 715 "Compensation - Retirement Benefits." For 2014, the Company is estimating that contributions to the pension plan will be approximately $800,000.

Based on actuarial estimates, it is expected that annual benefit payments from the pension trust will be as follows ($ in thousands):

2014		2015		2016		2017		2018		2019 - 2021
$	1,119	$	309	$	393	$	389	$	427	$	2,364

Plan assets consist of equity, debt and short-term money market investment funds. The plan’s current investment policy targets 65% equities, 25% debt and 10% money market funds. Equity and debt investment percentages are allowed to fluctuate plus or minus 20% around the respective targets to take advantage of market conditions. As an example, equities can fluctuate from 78% to 52% of plan assets. At December 31, 2013, the investment mix was approximately 54% equity, 30% debt, and 16% money market funds. At December 31, 2012, the investment mix was approximately 71% equity, 26% debt and 3% money market funds. Equity investments consist of a combination of individual equity securities plus value funds, growth funds, large cap funds and international stock funds. Debt investments consist of U.S. Treasury securities and investment grade corporate debt. The weighted-average discount rate and rate of increase in future compensation levels used in determining the periodic pension cost is 5.0% in 2013 and 4.0% in 2012. The expected long-term rate of return on plan assets is 7.5% in 2013 and 2012. The long-term rate of return on plan assets is based on the historical returns within the plan and expectations for future returns. See the following table for fair value hierarchy by investment type at December 31:

($ in thousands)	Fair Value Hierarchy	December 31, 2013		December 31, 2012
Pension Plan Assets:
Cash and Cash Equivalents	Level 1	$	1,336	$	231
Collective Funds	Level 2	3,851		3,449
Treasury/Corporate Notes	Level 2	1,357		1,129
Corporate Equities	Level 1	2,089		1,990
		$	8,633	$	6,799

Total pension and retirement expense was as follows for each of the years ended December 31:

($ in thousands)	2013			2012			2011
Cost components:
Service cost	$	(359	)	$	(284	)	$	(251	)
Interest cost	(402		)	(375		)	(384		)
Expected return on plan assets	542			454			446
Net amortization and deferral	(253		)	(190		)	(220		)
Total net periodic pension cost	$	(472	)	$	(395	)	$	(409	)

The Company has a Supplemental Executive Retirement Plan, or SERP, to restore to executives designated by the Compensation Committee of the Board of Directors the full benefits under the pension plan that would otherwise be restricted by certain limitations now imposed under the Internal Revenue Code. The SERP is currently unfunded. The following SERP benefit information is as of December 31:

($ in thousands)	2013			2012
Change in benefit obligation - SERP
Benefit obligation at beginning of year	$	6,507		$	5,474
Service cost	318			525
Interest cost	219			208
Actuarial gain/assumption changes	(913		)	300
Benefit obligation at end of year	$	6,131		$	6,507
Accumulated benefit obligation at end of year	$	6,099		$	6,339
Funded status - liability	$	(6,131	)	$	(6,507	)

($ in thousands)	2013		2012
Amounts recorded in stockholders’ equity
Net actuarial (gain)	$	696	$	1,671
Prior service cost	—		—
Total amount recorded	$	696	$	1,671
Amount recorded, net taxes	$	418	$	1,003

Other changes in benefit obligations recognized in other comprehensive income for 2013 and 2012 include the following components:

($ in thousands)	2013			2012
Net (gain) loss	$	(745	)	$	133
Recognition of net actuarial gain or (loss)	(229		)	(287		)
Recognized prior service cost	—			—
Total changes	$	(974	)	$	(154	)
Changes, net of taxes	$	(584	)	$	(92	)

The Company expects to recognize the following amounts as a component of net periodic pension costs during the next fiscal year ($ in thousands):

Amortization net actuarial gain or (loss) $ 23

Based on actuarial estimates, it is expected that annual SERP benefit payments will be as follows ($ in thousands):

2014		2015		2016		2017		2018		2019 - 2021
$	550	$	621	$	697	$	688	$	715	$	3,680

The weighted-average discount rate and rate of increase in future compensation levels used in determining the actuarial present value of projected benefits obligation was 4.35% and 3.5% for 2013, 3.45% and 3.5% for 2012, and 3.95% and 3.5% for 2011. Total pension and retirement expense was as follows for each of the years ended December 31:

($ in thousands)	2012		2011		2010
Cost components:
Service cost	$	318	$	525	$	(172	)
Interest cost	219		208		(215		)
Net amortization and deferral	229		287		(66		)
Total net periodic pension cost	$	766	$	1,020	$	(453	)

The Company also provides a 401(k) plan to its employees and contributed $98,000 to the plan for 2013 and $115,000 to the plan for 2012.