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Trust Preferred Securities
12 Months Ended
Dec. 31, 2014
Trust Preferred Securities/Preferred Stock [Abstract]  
Trust Preferred Securities

Note 14: Trust Preferred Securities

 

On September 15, 2005, RST II, a wholly-owned subsidiary of the Company, closed a pooled private offering of 10,000 Capital Securities with a liquidation amount of $1,000 per security. The proceeds of the offering were loaned to the Company in exchange for junior subordinated debentures with terms similar to the Capital Securities. The sole assets of RST II are the junior subordinated debentures of the Company and payments thereunder. The junior subordinated debentures and the back-up obligations, in the aggregate, constitute a full and unconditional guarantee by the Company of the obligations of RST II under the Capital Securities. Distributions on the Capital Securities are payable quarterly at an interest rate that changes quarterly and is based on the 3-month LIBOR plus 180 basis points and are included in interest expense in the consolidated financial statements. At December 31, 2014 and 2013, the interest rate was 2.06% and 2.08% respectively. These securities are considered Tier 1 capital (with certain limitations applicable) under current regulatory guidelines. As of December 31, 2014 and 2013, the outstanding principal balance of the Capital Securities was $10,000,000.

 

On September 7, 2000, RST I, a wholly-owned subsidiary of the Company, closed a pooled private offering of 10,000 Capital Securities with a liquidation amount of $1,000 per security. The proceeds of the offering were loaned to the Company in exchange for junior subordinated debentures with terms similar to the Capital Securities. These securities were considered Tier 1 capital (with certain limitations applicable) under current regulatory guidelines. As of December 31, 2013, the outstanding principal balance of the Capital Securities was $10,000,000. On September 7, 2014, the Company redeemed all of the junior subordinate debentures underlying these trust preferred securities prior to their scheduled maturity date of September 7, 2030. As part of the redemption, the Company incurred total prepayment penalties of approximately $0.43 million ($0.28 million after tax), which were realized in the third quarter of 2014 and are reflected in the Company’s consolidated financial statements. The prepayment penalties were realized within other operating expense ($0.33 million) and interest expense ($0.10 million).