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Junior Subordinated Interest Deferrable Debentures | 9 Months Ended
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Sep. 30, 2014
Junior Subordinated Interest Deferrable Debentures |
Junior Subordinated Interest Deferrable Debentures | Note 8 — Junior Subordinated Interest Deferrable Debentures The Company has formed seven statutory business trusts under the laws of the State of Delaware, for the purpose of issuing trust preferred securities. The seven statutory business trusts formed by the Company (the “Trusts”) have each issued Capital and Common Securities and invested the proceeds thereof in an equivalent amount of junior subordinated debentures (the “Debentures”) issued by the Company. As of September 30, 2014 and December 31, 2013, the principal amount of debentures outstanding totaled $180,416,000 and $190,726,000, respectively. On February 11, 2014, the Company bought back the capital securities of IB Capital Trust VII from the holder of the securities for a price that reflected an approximate six percent discount from the redemption price of the securities and thereby retired the $10,310,000 of related Junior Subordinated Deferrable Interest Debentures related to IB Capital Trust VII. The Debentures are subordinated and junior in right of payment to all present and future senior indebtedness (as defined in the respective indentures) of the Company, and are pari passu with one another. The interest rate payable on, and the payment terms of the Debentures are the same as the distribution rate and payment terms of the respective issues of Capital and Common Securities issued by the Trusts. The Company has fully and unconditionally guaranteed the obligations of each of the Trusts with respect to the Capital and Common Securities. The Company has the right, unless an Event of Default (as defined in the Indentures) has occurred and is continuing, to defer payment of interest on the Debentures for up to twenty consecutive quarterly periods on Trusts VI, VIII, IX, X, XI and XII. If interest payments on any of the Debentures are deferred, distributions on both the Capital and Common Securities related to that Debenture would also be deferred. The redemption prior to maturity of any of the Debentures may require the prior approval of the Federal Reserve and/or other regulatory bodies. In February 2014, the Company redeemed all of the outstanding Capital and Common Securities issued by Trust VII. For financial reporting purposes, the Trusts are treated as investments of the Company and not consolidated in the consolidated financial statements. Although the Capital Securities issued by each of the Trusts are not included as a component of shareholders’ equity on the consolidated statement of condition, the Capital Securities are treated as capital for regulatory purposes. Specifically, under applicable regulatory guidelines, the Capital Securities issued by the Trusts qualify as Tier 1 capital up to a maximum of 25% of Tier 1 capital on an aggregate basis. Any amount that exceeds the 25% threshold would qualify as Tier 2 capital. At September 30, 2014 and December 31, 2013, the total $180,416,000 and $190,726,000, respectively, of the Capital Securities outstanding qualified as Tier 1 capital. The following table illustrates key information about each of the Capital and Common Securities and their interest rate at September 30, 2014:
|  | Junior Subordinated Deferrable Interest Debentures |  | Repricing Frequency |  | Interest Rate |  | Interest Rate Index |  | Maturity Date |  | Optional Redemption Date(1) |
(In Thousands) |  |  |  |  |  |  |  |  |
Trust VI |  | $ | 25,774 |  | Quarterly |  | 3.68 | % | LIBOR + 3.45 |  | November 2032 |  | February 2008 |
Trust VIII |  | 25,774 |  | Quarterly |  | 3.28 | % | LIBOR + 3.05 |  | October 2033 |  | October 2008 |
Trust IX |  | 41,238 |  | Quarterly |  | 1.85 | % | LIBOR + 1.62 |  | October 2036 |  | October 2011 |
Trust X |  | 34,021 |  | Quarterly |  | 1.89 | % | LIBOR + 1.65 |  | February 2037 |  | February 2012 |
Trust XI |  | 32,990 |  | Quarterly |  | 1.85 | % | LIBOR + 1.62 |  | July 2037 |  | July 2012 |
Trust XII |  | 20,619 |  | Quarterly |  | 1.68 | % | LIBOR + 1.45 |  | September 2037 |  | September 2012 |
|  | $ | 180,416 |  |  |  |  |  |  |  |  |  |  |
| (1) |  | The Capital Securities may be redeemed in whole or in part on any interest payment date after the Optional Redemption Date.

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- Definition The entire disclosure for borrowings under subordinated debt agreements that qualify as available in computing net capital under SEC's uniform net capital rule, including restrictive covenants, collateral, interest rates and due dates, amounts due by date and amount owed in total. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 470 -Section 45 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6479118&loc=d3e64650-112822 + Details
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