Annual report pursuant to Section 13 and 15(d)

EMPLOYEE BENEFIT PLANS

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EMPLOYEE BENEFIT PLANS
 12 Months Ended
Dec. 31, 2013
Compensation and Retirement Disclosure [Abstract]  
EMPLOYEE BENEFIT PLANS

Note 11

EMPLOYEE BENEFIT PLANS

 

Pension Plan

 

The Company sponsors a noncontributory pension plan covering substantially all of its associates.  Benefits under this plan generally are based on the associate's total years of service and average of the five highest years of compensation during the ten years immediately preceding their departure.  The Company’s general funding policy is to contribute amounts sufficient to meet minimum funding requirements as set by law and to ensure deductibility for federal income tax purposes.

 

The following table details on a consolidated basis the changes in benefit obligation, changes in plan assets, the funded status of the plan, components of pension expense, amounts recognized in the Company's consolidated statements of financial condition, and major assumptions used to determine these amounts.

 

(Dollars in Thousands)     2013       2012       2011  
Change in Projected Benefit Obligation:                        
Benefit Obligation at Beginning of Year   $ 134,950     $ 116,173     $ 97,393  
Service Cost     6,999       6,397       6,027  
Interest Cost     5,566       5,587       5,243  
Actuarial (Gain)Loss     (18,965 )     14,156       9,430  
Benefits Paid     (12,946 )     (7,138 )     (1,846 )
Expenses Paid     (319 )     (225 )     (245 )
Plan Amendment     —         —         171  
Projected Benefit Obligation at End of Year   $ 115,285     $ 134,950     $ 116,173  
                         
Change in Plan Assets:                        
Fair Value of Plan Assets at Beginning of Year   $ 94,164     $ 87,844     $ 84,658  
Actual Return on Plan Assets     17,943       8,683       277  
Employer Contributions     5,000       5,000       5,000  
Benefits Paid     (12,946 )     (7,138 )     (1,846 )
Expenses Paid     (319 )     (225 )     (245 )
Fair Value of Plan Assets at End of Year   $ 103,842     $ 94,164     $ 87,844  
                         
Funded Status of Plan and Accrued Liability Recognized at End of Year:                        
Other Liabilities   $ 11,442     $ 40,786     $ 28,330  
                         
Accumulated Benefit Obligation at End of Year   $ 98,796     $ 110,985     $ 94,121  
                         
Components of Net Periodic Benefit Costs:                        
Service Cost   $ 6,999     $ 6,397     $ 6,027  
Interest Cost     5,566       5,587       5,243  
Expected Return on Plan Assets     (7,371 )     (6,793 )     (6,555 )
Amortization of Prior Service Costs     317       359       462  
Net Loss Amortization     4,316       3,390       2,223  
Net Periodic Benefit Cost   $ 9,827     $ 8,940     $ 7,400  
Weighted-Average Assumptions Used to Determine Benefit Obligation:                        
Discount Rate     5.00 %     4.25 %     5.00 %
Rate of Compensation Increase     3.25 %     3.75 %     4.00 %
Measurement Date     12/31/13       12/31/12       12/31/11  
Weighted-Average Assumptions Used to Determine Benefit Cost:                        
Discount Rate     4.25 %     5.00 %     5.55 %
Expected Return on Plan Assets     8.00 %     8.00 %     8.00 %
Rate of Compensation Increase     3.75 %     4.00 %     4.25 %
                         
Amortization Amounts from Accumulated Other Comprehensive Income:                        
Net Actuarial (Gain) Loss   $ (33,850 )   $ 8,875     $ 13,690  
Prior Service Cost     (317 )     (359 )     (496 )
Deferred Tax Expense (Benefit)     13,180       (3,285 )     (5,090 )
Other Comprehensive (Gain) Loss, net of tax   $ (20,987 )   $ 5,231     $ 8,104  
                         
Amounts Recognized in Accumulated Other Comprehensive Income:                        
Net Actuarial Losses   $ 13,947     $ 47,800     $ 38,924  
Prior Service Cost     1,383       1,700       2,060  
Deferred Tax Benefit     (5,914 )     (19,097 )     (15,812 )
Accumulated Other Comprehensive Loss, net of tax   $ 9,416     $ 30,403     $ 25,172  

 

The Company expects to recognize $1.3 million of the net actuarial loss and $0.3 million of the prior service cost reflected in accumulated other comprehensive income at December 31, 2013 as a component of net periodic benefit cost during 2014.

 

Plan Assets. The Company’s pension plan asset allocation at year-end 2013 and 2012, and the target asset allocation for 2014 are as follows:

 

    Target Allocation   Percentage of Plan
Assets at Year-End(1)
    2014   2013   2012
Equity Securities     77 %     72 %     61 %
Debt Securities     20 %     23 %     29 %
Cash and Cash Equivalents     3 %     5 %     10 %
Total     100 %     100 %     100 %

 

(1) Represents asset allocation at year-end which may differ from the average target allocation for the year due to the year-end cash contribution to the plan.

 

The Company’s pension plan assets are overseen by the CCBG Retirement Committee.  Capital City Trust Company acts as the investment manager for the plan.  The investment strategy is to maximize return on investments while minimizing risk.  The Company believes the best way to accomplish this goal is to take a conservative approach to its investment strategy by investing in high-grade equity and debt securities. The overall expected long-term rate of return on assets is a weighted-average expectation for the return on plan assets.  The Company considers historical performance data and economic/financial data to arrive at expected long-term rates of return for each asset category.

 

The major categories of assets in the Company’s pension plan as of December 31 are presented in the following table. Assets are segregated by the level of the valuation inputs within the fair value hierarchy established by ASC Topic 820 utilized to measure fair value (see Note 18 – Fair Value Measurements).

 

(Dollars in Thousands)   2013   2012
Level 1:                
   U.S. Government Treasury   $ 768     $ 2,143  
   Common Stocks     21,564       16,799  
   Mutual Funds     70,993       58,480  
   Cash and Cash Equivalents     5,571       7,819  
                 
Level 2:                
   U.S. Government Agency     4,946       8,923  
                 
       Total Fair Value of Plan Assets   $ 103,842     $ 94,164  

 

Expected Benefit Payments.  As of December 31, expected benefit payments related to the defined benefit pension plan were as follows:

 

(Dollars in Thousands)   2013
2014   $ 6,495  
2015     7,536  
2016     6,998  
2017     7,347  
2018     8,701  
2019 through 2023     44,814  
Total   $ 81,891  

 

Contributions.  The following table details the amounts contributed to the pension plan in 2013 and 2012, and the expected amount to be contributed in 2014.

 

 

 

(Dollars in Thousands)

   2013(2)   2012(2)   Expected Range
of Contribution
2014(1)
Actual Contributions   $ 5,000     $ 5,000     $5,000 - $10,000

 

(1) For 2014, the Company will have the option to make a cash contribution to the plan or utilize pre-funding balances.
(2) For the 2012 plan year, the Company made two separate $5.0 million contributions, one during the 2013 calendar year and one during the 2012 calendar year. As of December 31, 2013, no contributions were made for the 2013 plan year.

 

Supplemental Executive Retirement Plan

 

The Company has a Supplemental Executive Retirement Plan (“SERP”) covering selected executive officers.  Benefits under this plan generally are based on the same service and compensation as used for the pension plan, except the benefits are calculated without regard to the limits set by the Internal Revenue Code on compensation and benefits.  The net benefit payable from the SERP is the difference between this gross benefit and the benefit payable by the pension plan.

 

The following table details on a consolidated basis the changes in benefit obligation, the funded status of the plan, components of pension expense, amounts recognized in the Company's consolidated statements of financial condition, and major assumptions used to determine these amounts.

 

(Dollars in Thousands)   2013   2012   2011
Change in Projected Benefit Obligation:                        
Benefit Obligation at Beginning of Year   $ 3,492     $ 3,030     $ 3,001  
Service Cost     —         —         —    
Interest Cost     137       140       147  
Actuarial Loss(Gain)     (1,250 )     322       (151 )
Plan Amendment     —         —         33  
Projected Benefit Obligation at End of Year   $ 2,379     $ 3,492     $ 3,030  
                         
Funded Status of Plan and Accrued Liability Recognized at End of Year:                        
Other Liabilities   $ 2,379     $ 3,492     $ 3,030  
Accumulated Benefit Obligation at End of Year   $ 2,379     $ 3,492     $ 3,030  
                         
Components of Net Periodic Benefit Costs:                        
Service Cost   $ —       $ —       $ —    
Interest Cost     137       140       147  
Amortization of Prior Service Cost     187       189       180  
Net Gain Amortization     (237 )     (369 )     (413 )
Net Periodic Benefit Cost   $ 87     $ (40 )   $ (86 )
                         
Weighted-Average Assumptions Used to Determine Benefit Obligation:                        
Discount Rate     5.00 %     4.25 %     5.00 %
Rate of Compensation Increase     3.25 %     3.75 %     4.00 %
Measurement Date     12/31/13       12/31/12       12/31/11  
                         
Weighted-Average Assumptions Used to Determine Benefit Cost:                        
Discount Rate     4.25 %     5.00 %     5.50 %
Rate of Compensation Increase     3.75 %     4.00 %     4.25 %
                         
Amortization Amounts from Accumulated Other Comprehensive Income:                        
Net Actuarial (Gain)Loss   $ (1,013 )   $ 691     $ 263  
Prior Service Cost     (187 )     (189 )     (147 )
Deferred Tax Expense (Benefit)     463       (194 )     (45 )
Other Comprehensive (Gain) Loss, net of tax   $ (737 )   $ 308     $ 71  
                         
Amounts Recognized in Accumulated Other Comprehensive Income:                        
Net Actuarial Gain   $ (1,812 )   $ (799 )   $ (1,490 )
Prior Service Cost     171       358       547  
Defined Tax Liability     633       170       364  
Accumulated Other Comprehensive Gain, net of tax   $ (1,008 )   $ (271 )   $ (579 )

 

The Company expects to recognize approximately $0.7 million of the net actuarial gain and $0.2 million of the prior service cost reflected in accumulated other comprehensive income at December 31, 2013 as a component of net periodic benefit cost during 2014.

 

Expected Benefit Payments. As of December 31, 2013, expected benefit payments related to the SERP were as follows:

 

(Dollars in Thousands)    
2014   $ 496  
2015     563  
2016     293  
2017     109  
2018     90  
2019 through 2023     82  
 Total   $ 1,633  

 

401(k) Plan

 

The Company has a 401(k) Plan which enables associates to defer a portion of their salary on a pre-tax basis.  The plan covers substantially all associates of the Company who meet minimum age requirements.  The plan is designed to enable participants to elect to have an amount from 1% to 15% of their compensation withheld in any plan year placed in the 401(k) Plan trust account. Matching contributions of 50% from the Company are made up to 6% of the participant's compensation for eligible associates.  During 2013, 2012, and 2011, the Company made matching contributions of $0.4 million for each respective year. The participant may choose to invest their contributions into twenty-seven investment options available to 401(k) participants, including the Company’s common stock.  A total of 50,000 shares of CCBG common stock have been reserved for issuance.  Shares issued to participants have historically been purchased in the open market.

 

Other Plans

 

The Company has a Dividend Reinvestment and Optional Stock Purchase Plan.  A total of 250,000 shares have been reserved for issuance.  In recent years, shares for the Dividend Reinvestment and Optional Stock Purchase Plan have been acquired in the open market and, thus, the Company did not issue any shares under this plan in 2013, 2012 and 2011.