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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): September 21, 2006
INTERVEST BANCSHARES CORPORATION
(Exact Name of Registrant as Specified in Charter)
Delaware 000-23377 13-3699013
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification Number)
One Rockefeller Plaza, Suite 400 New York, New York 10020-2002
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number Including Area Code: (212) 218-2800
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Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act (17 CFR 240.14d- 2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under
the Exchange Act (17 CFR 240.13e-4(c))
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SECTION 1 - REGISTRANT'S BUSINESS AND OPERATIONS
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
See the information set forth in Item 2.03 below, which is incorporated into
this item 1.01 by reference.
SECTION 2 - FINANCIAL INFORMATION
ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER
AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT
On September 21, 2006, a newly established wholly owned business trust of
Intervest Bancshares Corporation (the "Company") - Intervest Statutory Trust V
(the "Trust") - sold trust preferred securities due December 15, 2036 in the
aggregate principal amount of $10,310,000 (the "Capital Securities") through FTN
Financial Capital Markets (a division of First Tennessee Bank National
Association) and Keefe, Bruyette and Woods, Inc. The Capital Securities were
sold to institutional investors in a private transaction, pursuant to an
applicable exemption from registration under the Securities Act of 1933. The net
proceeds from the sale were reinvested into the Company in exchange for
$10,310,000 of the Company's Junior Subordinated Debentures due December 15,
2036 (the "Junior Subordinated Debentures"). The Company's Junior Subordinated
Debentures were issued on September 21, 2006 to the Trust pursuant to an
indenture between the Company and Wilmington Trust Company, as debenture
trustee. Issuance costs associated with this transaction amounted to
approximately $10,000. The Trust was formed with a capital contribution of
$310,000 from the Company and for the sole purpose of issuing and administering
the Capital Securities. The proceeds from the issuance of the Capital Securities
together with the capital contribution for each Trust were used to acquire the
Company's Junior Subordinated Debentures that are due concurrently with the
Capital Securities. The Capital Securities net of the Company's capital
contributions totaling $10,000,000, qualify as regulatory capital.
The Trust was established pursuant to an Amended and Restated Declaration of
Trust among the Company, Wilmington Trust Company, as trustee, and Lowell S.
Dansker, Stephen Helman and John J. Arvonio, as administrators. Messrs. Dansker,
Helman and Arvonio serve as executive officers of the Company.
The sole assets of the Trust, the obligor on the Capital Securities, are the
Company's Junior Subordinated Debentures. In addition, the Company has
irrevocably and unconditionally guaranteed, pursuant to a guarantee agreement
dated September 21, 2006 delivered by the Company to Wilmington Trust Company,
as trustee for the benefit of the holders of the Capital Securities, the payment
of distributions on, payments on any redemptions of, and any liquidation
distribution with respect to the Capital Securities.
Interest on the Junior Subordinated Debentures is payable quarterly in arrears
on March 15, June 15, September 15 and December 15 of each year based on a fixed
rate of 6.83% per annum for the first five years, and thereafter at the rate of
1.65% over 3-month LIBOR until maturity. The distribution rate and the payment
dates on the Capital Securities coincide with the interest rate and the payment
dates on the Junior Subordinated Debentures.
The Capital Securities are subject to mandatory redemption (i) in whole, but not
in part, upon repayment of the Junior Subordinated Debentures at stated maturity
or, at the option of the Company, their earlier redemption in whole upon the
occurrence of certain changes in the tax treatment or capital treatment of the
Capital Securities, or a change in the law such that the Trust would be
considered an investment company, and (ii) in whole or in part at any time on or
after September 15, 2011 contemporaneously with the optional redemption by the
Company of the Junior Subordinated Debentures in whole or in part.
Interest payments on the Junior Subordinated Debentures (and the corresponding
distributions on the Capital Securities) may be deferred at any time and from
time to time during the term of the Junior Subordinated Debentures at the
election of the Company for up to 20 consecutive quarterly periods (5 years).
There is no limitation on the number of extension periods the Company may elect;
provided, however, no deferral period may extend beyond the maturity date of the
Junior Subordinated Debentures. During an interest deferral period, interest
will continue to accrue on the Junior Subordinated Debentures, and interest on
such accrued interest will accrue at
an annual rate equal to the interest rate in effect for such deferral period,
compounded quarterly from the date such interest would have been payable were it
not deferred. At the end of the deferral period, the Company will be obligated
to pay all interest then accrued and unpaid on the Junior Subordinated
Debentures. The indebtedness evidenced by the Junior Subordinated Debentures is
subordinate and junior in right of payment to the Company's senior indebtedness.
The trustee under the Indenture or the holders of at least 25% of the aggregate
principal amount of the Junior Subordinated Debentures outstanding may declare
the entire principal of the Junior Subordinated Debentures and the interest
accrued thereon, if any, to be due and payable immediately if: (a) the Company
defaults in the payment of any interest upon any Junior Subordinated Debentures
following the nonpayment of any such interest for twenty or more consecutive
quarters; (b) a court enters a decree or order for relief in respect of the
Company in an involuntary case under any applicable bankruptcy, insolvency,
reorganization or other similar law, or appointing a receiver, liquidator,
trustee or similar official of the Company or for any substantial part of its
property, or ordering the winding-up or liquidation of its affairs and such
decree or order remains unstayed and in effect for a period of 90 consecutive
days; or (c) the Company commences a voluntary case under any applicable
bankruptcy, insolvency, reorganization or other similar law, shall consent to
the entry of an order for relief in an involuntary case under any such law, or
shall consent to the appointment of or taking possession by a receiver,
liquidator, trustee, custodian or other similar official of the Company or of
any substantial part of its property, or makes any general assignment for the
benefit of creditors, or fails generally to pay its debts as they become due. If
certain other events specified in the Indenture occur and are continuing with
respect to the Junior Subordinated Debentures, then either the trustee under the
Indenture or the holders of at least 25% of the aggregate principal amount of
the Junior Subordinated Debentures may proceed to remedy the default or breach
by judicial proceeding.
A copy of the press release issued by the Company announcing the sale of the
Capital Securities is attached hereto as Exhibit 99.1 and incorporated herein by
reference.
SECTION 9 - FINANCIAL STATEMENTS AND EXHIBITS
ITEM 9.01 Financial Statements and Exhibits
(c) Exhibits
Exhibit No. Description
99.1 Press Release dated September 21, 2006
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
INTERVEST BANCSHARES CORPORATION
Date: September 21, 2006 By: /s/ Lowell S. Dansker
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LOWELL S. DANSKER,
CHAIRMAN, PRESIDENT &
CHIEF EXECUTIVE OFFICER
(Principal Executive Officer)
INDEX TO EXHIBITS
Exhibit No. Description
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99.1 Press Release dated September 21, 2006