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Transactions with Related Parties
12 Months Ended
Sep. 30, 2016
Related Party Transactions [Abstract]  
Transactions with Related Parties
Transactions With Related Parties
The Company has had, and may be expected to have in the future, banking transactions in the ordinary course of business with directors, executive officers, their immediate families, and affiliated companies in which they have 10% or more beneficial ownership (commonly referred to as related parties). Total loans committed to related parties were not significant at September 30, 2016 and 2015.
Prior to the initial public offering of shares of its common stock in October 2014, the Company was an indirect wholly-owned subsidiary of NAB. NAB sold 18.4 million shares, representing 31.8% of the Company's common stock, in the initial public offering. On May 6, 2015, NAB sold 23.0 million shares of the Company's common stock, representing 39.7% of the Company's common stock, in the second stage of its planned divestment. After completion of the May 6, 2015 offering, NAB beneficially owned 28.5% of the Company's outstanding common stock. On July 31, 2015, NAB sold all of its remaining shares of the Company's common stock in a secondary public offering of 13,819,596 shares and a concurrent share repurchase transaction in which the Company acquired 2,666,518 shares from NAB to fully divest its ownership.
On July 31, 2015, in conjunction with the final sell down of the Company from NAB, the Company repaid $35.8 million of outstanding subordinated capital notes and $5.5 million of outstanding revolving lines of credit with NAB with a combination of available cash and the proceeds of a $35.0 million private placement of subordinated debt.
Interest paid to related parties for notes payable as discussed above was $0.0 million, $0.8 million and $0.9 million for the years ended September 30, 2016, 2015 and 2014, respectively.
In connection with the IPO, the Company and NAB entered into a Transitional Services Agreement which governs the continued provision of certain services to us by NAB or its affiliates for the applicable transition period. These services included acting as a counterparty to us on specified interest rate swaps consistent with past practice and providing fair value calculations related to specified loans and interest rate swaps, access to certain reporting systems and applications, certain risk, credit rating and tax oversight currently provided to us by a branch of NAB and certain insurance coverage under NAB’s group-wide insurance policies. Payments under this agreement were approximately $0.0 million, $0.2 million and $0.2 million for the years ended September 30, 2016 , 2015 and 2014, respectively. NAB agreed to continue to act as a counterparty to us on previously contracted interest rate swaps and provide fair value calculations related to specified loans and interest rate swaps consistent with past practice, and certain insurance coverage under NAB’s group-wide insurance policies until October 1, 2016.
NAB has provided the Company’s employees with restricted shares of NAB stock subsequent to meeting short- and long-term incentive goals. A payable was recorded between the Company and NAB based on the value and vesting schedule of issued shares. Final vesting of the shares occurs in December 2017. The liability included in accrued expenses on the consolidated balance sheets was $0.1 million and $0.1 million at September 30, 2016 and 2015, respectively. The expense related to the restricted shares was $0.1 million, $0.1 million and $2.1 million for the years ended September 30, 2016, 2015 and 2014, respectively, and was included within salaries and employee benefits on the consolidated statements of comprehensive income.
Prior to the initial public offering, our Chief Financial Officer and Chief Risk Officer were employees of NAB and its subsidiary, Bank of New Zealand, respectively. In connection with the IPO, the Company entered into employment agreements with our Chief Financial Officer and Chief Risk Officer, whose employment with NAB or Bank of New Zealand, as applicable, terminated. Additionally, the Company’s Chief Credit Officer was a NAB employee and the Head of Credit-Agribusiness was a Bank of New Zealand employee, both of whom were temporarily seconded to work with the Company beginning in November 2010 and December 2010, respectively, and continued through December 31, 2014. The Company has generally been responsible for paying the salary and benefits of these individuals while they were or continue to be NAB or Bank of New Zealand employees, however certain of these expenses are reimbursable by NAB. Expenses reimbursed by the Company to NAB in connection with these employees totaled $0.0 million, $0.4 million and $0.4 million for the years ended September 30, 2016, 2015 and 2014, respectively.
During fiscal year 2014, NAB apportioned to its U.S. operations, including the Company, certain costs associated with NAB’s compliance with rules implemented pursuant to authority granted under the Dodd-Frank Act. These costs were apportioned based on the aggregate amount of assets of each of NAB’s U.S. operations relative to the total assets of all of NAB’s U.S. operations. During the years ended September 30, 2016, 2015 and 2014, the Company paid NAB approximately $0.0 million, $0.2 million and $0.2 million, respectively, related to these apportioned costs.
In connection with the IPO, other than certain audit-related expenses paid by the Company, NAB has paid or will reimburse all fees and expenses the Company incurred in connection with the IPO. These expenses totaled $0.0 million, $0.9 million and $1.9 million for the years ended September 30, 2016, 2015 and 2014, respectively.
The Company’s Chief Executive Officer’s son owned a 22.5% interest in Sioux Falls Financial Services, LLC, which leases to the Company certain property in South Dakota used as an operations center. The lease agreement for this property commenced on April 1, 2011 and contains standard terms for similar lease arrangements. The interest was sold in April 2015. Payments under this lease totaled approximately $0.0 million, $0.1 million and $0.2 million for the years ended September 30, 2016, 2015 and 2014, respectively.
During the IPO, the underwriters reserved for sale at the initial public offering price up to 5% of the shares offered by this prospectus for sale to our directors, officers, employees, friends, family, customers and related persons through a reserved share program. A total of 130,880 shares were purchased in the reserved share program.