Related party transactions

12 Months Ended

Dec. 31, 2016

Note (25)—Related party transactions:

(A) Loans:

The Bank has made and expects to continue to make loans to the directors and executive officers of the Company and their affiliates in the ordinary course of business. In management’s opinion, these transactions with directors and executive officers were made on substantially the same terms as those prevailing at the time for comparable transactions with other unaffiliated persons and did not involve more than the normal risk.

An analysis of loans to executive officers, the shareholder of the Company, and directors of the Bank and their affiliates follows:

Loans outstanding at January 1, 2016	$	31,195
New loans and advances		1,933
Repayments		(5,758	)
Loans outstanding at December 31, 2016	$	27,370

Unfunded commitments to certain executive officers and directors and their associates totaled $6,838 and $4,128 at December 31, 2016 and 2015, respectively.

(B) Deposits:

The Bank held deposits from related parties totaling $150,373 and $68,612 as of December 31, 2016 and 2015, respectively.

The Bank leases various office spaces from entities related to the majority shareholder under varying terms. The Company had $158 and $180 in unamortized leasehold improvements related to these leases at December 31, 2016 and 2015, respectively. These improvements are being amortized over a term not to exceed the length of the lease. Lease expense for these properties totaled $522, $503 and $502 for the years ended December 31, 2016, 2015 and 2014, respectively.

(D) Consulting services:

The Bank paid $306 for the year ended December 31, 2015 and 2014 in management consulting services to an entity owned 100% by the shareholder. The agreement was terminated effective January 1, 2016.

(E) Subordinated debt:

On February 12, 1996, the Company borrowed $775 from the shareholder through a term subordinated note. On August 26, 1999, the Company borrowed $3,300 from the shareholder through a term subordinated note. On June 30, 2006, the Company borrowed $6,000 from the shareholder through a term subordinated note. The total of $10,075 was repaid with cash proceeds from the sale of common stock in the initial public offering, as discussed in Note 1. The Company paid interest payments related to these subordinated debentures to the shareholder amounting to approximately $230, $211 and $237 for the year ended December 31, 2016 and 2015 and 2014, respectively.

(F) Investment securities transactions:

The Company holds an investment in a fund that was issued by an entity owned by one of its directors. The balance in the investment was $1,145 and $1,472 as of December 31, 2016 and 2015, respectively. The Company received capital distributions of $327 and $0 during the year ended December 31, 2016 and 2015, respectively.

(G) Aviation time sharing agreement:

Effective May 24, 2016, the Company entered an aviation time sharing agreement with an entity owned by the majority shareholder. This replaces the previous agreement dated December 21, 2012. During the year ended December 31, 2016 and 2015, the Company made payments of $313 and $57, respectively, under these agreements.