STOCKHOLDERS’ EQUITY

Common Stock. There is no established public trading market for the Company’s common stock. Various trusts, which were established by and are administered by and for the benefit of the Company’s Chairman of the Board and members of his immediate family (including Mr. Michael Dierberg, Vice Chairman of the Company, and Ms. Ellen Dierberg Milne, Director of the Company), own all of the voting stock of the Company other than the Class C Preferred Stock and Class D Preferred Stock that have limited voting rights, as described below.

Preferred Stock. The Company has four classes of preferred stock outstanding. The Class A Convertible Adjustable Rate Preferred Stock (Class A Preferred Stock) is convertible into shares of common stock at a rate based on the ratio of the par value of the preferred stock to the current market value of the common stock at the date of conversion, to be determined by independent appraisal at the time of conversion. Shares of Class A Preferred Stock may be redeemed by the Company at any time at 105.0% of par value. The Class B Non-Convertible Adjustable Rate Preferred Stock (Class B Preferred Stock) may not be redeemed or converted. The holders of the Class A and Class B Preferred Stock have full voting rights. Dividends on the Class A and Class B Preferred Stock are adjustable quarterly based on the highest of the Treasury Bill Rate or the Ten Year Constant Maturity Rate for the two-week period immediately preceding the beginning of the quarter. This rate shall not be less than 6.0% nor more than 12.0% on the Class A Preferred Stock, or less than 7.0% nor more than 15.0% on the Class B Preferred Stock. Effective August 10, 2009, the Company suspended the declaration of dividends on its Class A and Class B Preferred Stock.

On December 31, 2008, the Company issued 295,400 shares of Class C Fixed Rate Cumulative Perpetual Preferred Stock (Class C Preferred Stock) and 14,770 shares of Class D Fixed Rate Cumulative Perpetual Preferred Stock (Class D Preferred Stock) to the United States Department of the Treasury (U.S. Treasury) in conjunction with the U.S. Treasury’s Troubled Asset Relief Program’s Capital Purchase Program (CPP). The Class C Preferred Stock has a par value of $1.00 per share and a liquidation preference of $1,000 per share. The holders of the Class C Preferred Stock have no voting rights except in certain limited circumstances. The Class C Preferred Stock carried an annual dividend rate equal to 5% for the first five years, payable quarterly in arrears beginning February 15, 2009. The annual dividend rate increased to 9% per annum on February 15, 2014. The Class D Preferred Stock has a par value of $1.00 per share and a liquidation preference of $1,000 per share. The holders of the Class D Preferred Stock have no voting rights except in certain limited circumstances. The Class D Preferred Stock carries an annual dividend rate equal to 9%, payable quarterly in arrears beginning February 15, 2009. The Class C Preferred Stock and the Class D Preferred Stock qualify as Tier 1 capital. Effective February 17, 2009, the Class C Preferred Stock and the Class D Preferred Stock may be redeemed at any time without penalty and without the need to raise new capital, subject to consultation with the Company’s primary regulatory agency. The Class D Preferred Stock may not be redeemed until all of the outstanding shares of the Class C Preferred Stock have been redeemed. In addition, prior to the U.S. Treasury's sale of the Class C Preferred Stock and Class D Preferred Stock (as further described below), the U.S. Treasury had certain supervisory and oversight duties and responsibilities under the CPP and, pursuant to the terms of the agreement governing the issuance of the Class C Preferred Stock and the Class D Preferred Stock to the U.S. Treasury (Purchase Agreement), the U.S. Treasury was empowered to unilaterally amend any provision of the Purchase Agreement with the Company to the extent required to comply with any changes in applicable federal statutes. As a result of the Company’s deferral of dividends to the U.S. Treasury for an aggregate of six quarters, the U.S. Treasury had the right to elect two directors to the Company’s Board. On July 13, 2011, the U.S. Treasury elected two members to the Company’s Board of Directors. In addition to the right to elect two directors to the Company’s Board of Directors, the holders of the Class C Preferred Stock and Class D Preferred Stock have limited voting rights, except as required by law or to the extent such rights are waived. For as long as shares of the Class C Preferred Stock or Class D Preferred Stock are outstanding, in addition to any other vote or consent of the shareholders required by law or the Company’s articles of incorporation, the vote or consent of holders of at least 66 2/3% of the shares of the Class C Preferred Stock or Class D Preferred Stock outstanding is required for any authorization or issuance of shares ranking senior to the Class C Preferred Stock or Class D Preferred Stock, respectively; any amendments to the rights of the Class C Preferred Stock or Class D Preferred Stock that adversely affect the rights, privileges or voting power of the Class C Preferred Stock or Class D Preferred Stock, respectively; or initiation and completion of any merger, share exchange or similar transaction unless the shares of Class C Preferred Stock or Class D Preferred Stock, respectively, remain outstanding, or, if the Company is not the surviving entity in such transaction, are converted into or exchanged for preferred securities of the surviving entity that have the same rights, preferences, privileges and voting power of the Class C Preferred Stock and Class D Preferred Stock.

The Company allocated the total proceeds received under the CPP of $295.4 million to the Class C Preferred Stock and the Class D Preferred Stock based on the relative fair values of the respective classes of preferred stock at the time of issuance. The discount on the Class C Preferred Stock of $17.3 million was accreted to retained earnings on a level-yield basis over five years (through the fourth quarter of 2013). Accretion of the discount on the Class C Preferred Stock was $3.6 million for the years ended December 31, 2013 and 2012.

During the third quarter of 2013, the U.S. Treasury completed two auctions that resulted in the sale of the Company's Class C Preferred Stock and Class D Preferred Stock to unaffiliated third party investors. The Company did not receive any proceeds from the sale and the sale did not have any effect on the terms of the outstanding Class C Preferred Stock and Class D Preferred Stock, including the Company's obligation to satisfy accrued and unpaid dividends prior to the payment of any dividend or other distribution to holders of junior or parity stock (including the Company's common stock, Class A Preferred Stock and Class B Preferred Stock), and an increase in the dividend rate on the Class C Preferred Stock from 5% to 9%, commencing with the dividend payment date of February 15, 2014. Furthermore, the sale of the Class C Preferred Stock and Class D Preferred Stock did not have any effect on the Company's regulatory capital, financial condition or results of operations.

The redemption of any issue of preferred stock requires the prior approval of the Federal Reserve. In addition, the Company, under its MOU with the FRB, has agreed, among other things, to provide certain information to the FRB including, but not limited to, progress of achieving its Capital Plan and notice of plans to materially change its Capital Plan. Furthermore, the Company agreed not to declare or pay any dividends on its common or preferred stock without the prior approval of the FRB, as further described in Note 14 to the consolidated financial statements. The FRB has complete discretion to grant any such approval and therefore, it is not known whether the FRB would approve any such request.

The Company suspended the payment of cash dividends on its outstanding common stock and preferred stock beginning with the regularly scheduled quarterly dividend payments on the preferred stock that would otherwise have been made in August and September, 2009. The Company has declared and accrued $68.4 million of its regularly scheduled dividend payments on its Class C Preferred Stock and Class D Preferred Stock at December 31, 2014 and 2013, and has accrued an additional $9.4 million of cumulative dividends on such deferred dividend payments at December 31, 2014 and 2013. As such, the aggregate amount of these deferred and accrued dividend payments was $77.8 million at December 31, 2014 and 2013.

The Company ceased declaring dividends on its Class C Preferred Stock and Class D Preferred Stock during the fourth quarter of 2013. Previously, the Company had declared and accrued dividends on its Class C Preferred Stock and Class D Preferred Stock quarterly throughout the deferral period. If the Company had continued to declare and accrue dividends on its Class C Preferred Stock and Class D Preferred Stock during the fourth quarter of 2013 and the year ended December 31, 2014, the Company would have accrued an additional $4.1 million and $33.2 million, respectively, of dividend payments, and the Company's aggregate deferred and accrued dividend payments would have been $115.1 million at December 31, 2014. The Company will continue to evaluate whether declaring dividends on its Class C Preferred Stock and Class D Preferred Stock is appropriate in future periods. The Company's cessation of declaring and accruing dividends on its Class C Preferred Stock and Class D Preferred Stock did not have any effect on the terms of the outstanding Class C Preferred Stock and Class D Preferred Stock, including the Company's obligations thereunder, as previously described.

Accumulated Other Comprehensive Income (Loss). The following table summarizes changes in accumulated other comprehensive income (loss), net of tax, by component, for the years ended December 31, 2014, 2013 and 2012:



(dollars in thousands)	Investment Securities			Defined Benefit Pension Plan		Deferred Tax Asset Valuation Allowance		Total
Year Ended December 31, 2014:
Balance, beginning of period	$	10,151		(2,649	)	—		7,502
Other comprehensive income (loss) before reclassifications	4,892			(1,291	)	—		3,601
Amounts reclassified from accumulated other comprehensive income (loss)	(992		)	—		—		(992	)
Net current period other comprehensive income (loss)	3,900			(1,291	)	—		2,609
Balance, end of period	$	14,051		(3,940	)	—		10,111

Year Ended December 31, 2013:
Balance, beginning of period	$	35,186		(3,544	)	13,617		45,259
Other comprehensive income (loss) before reclassifications	(24,789		)	895		(13,617	)	(37,511	)
Amounts reclassified from accumulated other comprehensive income (loss)	(246		)	—		—		(246	)
Net current period other comprehensive income (loss)	(25,035		)	895		(13,617	)	(37,757	)
Balance, end of period	$	10,151		(2,649	)	—		7,502

Year Ended December 31, 2012:
Balance, beginning of period	$	19,437		(2,633	)	(738	)	16,066
Other comprehensive income (loss) before reclassifications	16,507			(911	)	14,355		29,951
Amounts reclassified from accumulated other comprehensive income (loss)	(758		)	—		—		(758	)
Net current period other comprehensive income (loss)	15,749			(911	)	14,355		29,193
Balance, end of period	$	35,186		(3,544	)	13,617		45,259

Other comprehensive income (loss) of $2.6 million, $(37.8) million and $29.2 million, as presented in the consolidated statements of changes in stockholders’ equity, is reflected net of income tax expense (benefit) of $1.8 million, $(6.5) million and $(6.4) million for the years ended December 31, 2014, 2013 and 2012, respectively.