Related Parties

The Company’s Chief Executive Officer, its Executive Chairman, and its former Vice Chairman are directors of Tower Properties Company (Tower) and, together with members of their immediate families, beneficially own approximately 67% of the outstanding stock of Tower. At December 31, 2018, Tower owned 201,901 shares of Company stock. Tower is primarily engaged in the business of owning, developing, leasing and managing real property.

Payments from the Company and its affiliates to Tower are summarized below. These payments, with the exception of dividend payments, relate to property management services, including construction oversight, on three Company-owned office buildings and related parking garages in downtown Kansas City.



(In thousands)	2018		2017		2016
Leasing agent fees	$	133	$	32	$	101
Operation of parking garages	95		82		184
Building management fees	1,935		1,954		1,832
Property construction management fees	136		146		147
Dividends paid on Company stock held by Tower	181		232		221
Total	$	2,480	$	2,446	$	2,485

Tower has a $13.5 million line of credit with the Bank which is subject to normal credit terms and has a variable interest rate. The line of credit is collateralized by Company stock and based on collateral value had a maximum borrowing amount of approximately $9.1 million at December 31, 2018. There were no borrowings under this line during 2018, and there was no balance outstanding at December 31, 2018. The maximum borrowings during 2017 were $5.2 million, and there were no borrowings during 2016. There was no balance outstanding at December 31, 2017 or 2016. Interest paid on these borrowings during the last three years was not significant. Letters of credit may be collateralized under this line of credit; however, there were no letters of credit outstanding during 2018, 2017 or 2016, and thus, no fees were received during these periods. From time to time, the Bank extends additional credit to Tower for construction and development projects. No construction loans were outstanding during 2018, 2017 and 2016.

Tower leases office space in the Kansas City bank headquarters building owned by the Company. Rent paid to the Company totaled $74 thousand in 2018, $74 thousand in 2017, and $72 thousand in 2016, at $16.69, $15.75 and $15.67 per square foot, respectively.

Directors of the Company and their beneficial interests have deposit accounts with the Bank and may be provided with cash management and other banking services, including loans, in the ordinary course of business. Such loans were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other unrelated persons and did not involve more than the normal risk of collectability.

As discussed in Note 20 on Commitments, Contingencies and Guarantees, the Company regularly purchases various state tax credits arising from third-party property redevelopment and resells the credits to third parties. During 2018, the Company sold state tax credits to its Executive Chairman, its former Vice Chairman, and its Chief Executive Officer in the amount of $831 thousand, $759 thousand, and $119 thousand, respectively, for personal tax planning. During 2017, the Company sold state tax credits to its Executive Chairman, its former Vice Chairman, and its Chief Executive Officer in the amount of $694 thousand, $598 thousand, and $67 thousand, respectively. During 2016, the Company sold state tax credits to its Executive Chairman, his father (a former Chief Executive Officer), its former Vice Chairman, and its Chief Executive Officer in the amount of $549 thousand, $191 thousand, $244 thousand, and $72 thousand, respectively. The terms of the sales and the amounts paid were the same as the terms and amounts paid for similar tax credits by persons not related to the Company.