Outstanding letters of credit written are conditional commitments issued by the Bank to guarantee the performance of a customer to a third party. The majority of these standby letters of credit expire within the next twelve months. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The Bank requires collateral supporting these letters of credit as deemed necessary. Management believes that the proceeds through a liquidation of such collateral would be sufficient to cover the maximum potential amount of future payments required under the corresponding guarantees. The amount of the liability as of December 31, 2013 and 2012 for guarantees under standby letters of credit is not material.  The Bank provides a defined contribution 401( k) retirement plan that covers eligible employees.  The Bank’ s matching contribution is 100% of each participant’ s elective contribution up to 4%  of employee compensation. The expense of this plan included in salaries and employee benefits was 172, 000 in 2013 and $ 152, 000 in 2012.  The Bank issued stock purchase warrants in connection with its initial stock offering, giving certain organizers the right to purchase a total of 62, 500 shares of common stock at the initial offering price of $8 per share. These warrants were granted in consideration of the risks undertaken by the organizers, are exercisable in full and expired in October 2012. Warrant holders exercised 40, 936 warrants in 2012.  Under the 2002 Directors’ Compensation Plan ( the " 2002 Directors Plan "), each initial Director who is not an employee of the Bank was granted an option to purchase 1, 250 shares of common stock at the fair value on the date the option was granted. Thereafter, each additional non -  employee Director was entitled to a grant of an option to purchase 500 shares of common stock,  upon their initial election or appointment to the Board. Additionally, as annual compensation for serving on the Board, as soon as practical after each annual meeting of shareholders, each non -  employee Director was granted an option to purchase 500 shares of common stock if the Director $^{attended at least 75% }$of the meetings of the Board during the time period commencing on the date of the last annual meeting of shareholders, or on the date such Director was appointed to the Board, and ending on the date of the most recent annual meeting of shareholders. All options granted under the 2002 Directors Plan were immediately exercisable, other than the options granted to the initial non - employee Directors, one - fourth of which vested immediately and the remainder vested over a three -year period, and expire no later than ten years from the date of the grant. A Director eligible to receive options could have elected to receive in lieu of such options $5, 000 in cash. The 2002 Director’ s Plan expired October 28, 2012.  On June 21,  2012, the Board of Directors adopted the 2012 Non - Employee Directors Stock Incentive Plan ( " 2012 Directors Plan "). The 2012 Directors Plan provides for nonqualified stock options, stock appreciation rights, restricted stock and deferred stock units up to 50, 000 shares.  Each Non - Employee Director who first becomes a member of the Board after the effective date of the 2012 Directors Plan shall receive an automatic grant of a stock option to purchase 1, 000 shares of stock. During the term of the 2012 Directors Plan, the annual grants to directors attending at least 75 percent of the meetings of the Board will receive a grant of restricted stock having an aggregate fair market value of not less than $ 5, 000. An eligible Director may still elect to receive in lieu of such restricted stock $ 5, 000 in cash.  32 13. Warrants and Stock -Based Compensation Plans 12. Employee Benefit Plan