Integra Bank in receivership; holding company files Chapter 7 case

By Caroline Salls

Pittsburgh, Aug. 1 - Integra Bank Corp. subsidiary Integra Bank NA was closed by the Office of the Comptroller of Currency on July 29, and the Federal Depository Insurance Corp. was appointed as the bank's receiver, according to an 8-K filed with the Securities and Exchange Commission.

Since Integra Bank Corp.'s principal asset was the capital stock of the bank and it does not expect to receive any recovery from the bank's receivership, the company filed Chapter 7 bankruptcy on July 30 with the U.S. Bankruptcy Court for the Southern District of Indiana.

Old National sale

According to an FDIC news release, the agency entered into a purchase and assumption agreement with Old National Bank of Evansville, Ind., to assume all of Integra Bank's deposits.

As a result, all Integra Bank depositors will automatically become Old National Bank depositors for the full amount of their deposits.

In addition, the FDIC said all of Integra Bank's banking offices were open for business as Old National Bank branches beginning on July 30.

Old National Bank also purchased essentially all of Integra Bank's assets under a loss-share transaction of roughly $1.2 billion of the assets.

Under the loss-share transaction, Old National Bank and the FDIC will share in the losses on the assets covered by the agreement.

Debt details

According to the 8-K, the company had six outstanding issues of junior subordinated debentures as of June 30 in the total amount of $99.1 million.

Integra said four of the six series of debentures are related to outstanding series of trust preferred securities, and the company has unconditionally guaranteed the repayment of the trust preferred securities.

The appointment of the FDIC as receiver for the bank and the company's bankruptcy filing each constitute an event of default under the indentures and guarantees related to the securities, the 8-K said.

The company's debt includes:

• $10 million of floating-rate subordinated debentures due April 24, 2013, with $10.2 million in principal and interest due as of June 30;

• $4 million of floating-rate subordinated debentures due April 7, 2014, with $4.1 million in principal and interest owed as of June 30;

• $18.6 million of Integra Capital Trust II floating-rate trust preferred securities due July 25, 2031, with $20.2 million of principal and interest owed at June 30

• $35.6 million of Integra Capital Trust III floating-rate trust preferred securities due June 26, 2033, with $37.8 million in principal and interest due at June 30

• $20.6 million of Integra Capital Trust IV floating-rate trust preferred securities due June 30, 2037, with $21.3 million of principal and interest due at June 30; and

• $10.3 million of Integra Capital Trust V floating-rate trust preferred securities due Dec. 15, 2036, with $10.7 million of principal and interest due at June 30.

According to court documents, Integra Bank Corp. has $8.2 million in assets and $106.64 million in debt.

Board changes

Several members of the company's board of directors resigned on Friday, including Robert L. Goocher, H. Ray Hoops, Thomas W. Miller, Richard M. Stivers and Daniel T. Wolfe.

Integra said Michael J. Alley is now the sole member of the board.

The board has removed all of the company's officers from their positions without cause and appointed Alley as chairman of the board and president, Michael B. Carroll as treasurer and Jeffrey L. Devine as secretary.

The company said its bylaws were amended to eliminate the requirement that the board have at least five members.

Integra Bank Corp. is represented by Baker & Daniels LLP.

Integra is an Evansville, Ind.-based bank holding company. Its Chapter 7 case number is 11-71224.

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