CENTENNIAL BANK HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(1) Organization
Centennial Bank Holdings, Inc. is a financial holding company and a bank holding company registered under the Bank Holding Company Act of 1956, as amended.
Our principal business is to serve as a holding company for our wholly-owned subsidiaries. As of December 31, 2007 and 2006, those subsidiaries were Guaranty Bank and Trust Company and
Centennial Bank of the West, which we sometimes refer to as Guaranty Bank and CBW, respectively. On January 1, 2008, the Company completed the previously announced merger of CBW into Guaranty
Bank.
At
December 31, 2005, those subsidiaries were Guaranty Bank, CBW, and Collegiate Peaks Bank, which was held for sale as of December 31, 2005 and sold on November 1,
2006, and First MainStreet Insurance, Ltd, which was sold on March 1, 2006.
On
April 14, 2005, First National Bank of Strasburg was merged into Guaranty Bank. The acquisitions, as well as our acquisitions in 2005 (see Note 3), were recorded using
the purchase method of accounting in accordance with SFAS No. 141,
Business Combinations
and SFAS No. 142,
Goodwill and Other Intangible Assets
.
Reference
to "Banks" means Guaranty Bank and CBW. Reference to "Bank" means Guaranty Bank after the merger of CBW and Guaranty Bank. Reference to "we" or "Company" means the Company on a
consolidated basis with the Banks, Collegiate Peaks Bank and First MainStreet Insurance, as applicable. Reference to "Centennial" or to the holding company, we are referring to the parent company on a
standalone basis.
(2) Summary of Significant Accounting Policies
The Bank is a full-service community bank offering an array of banking products and services to the communities it serves along the Front Range of
Colorado, including accepting time and demand deposits and originating commercial loans (including energy loans), real estate loans, Small Business Administration guaranteed loans and consumer loans.
The Bank also provides trust services, including personal trust administration, estate settlement, investment management accounts and self-directed IRAs. Substantially all loans are
secured by specific items of collateral including business assets, consumer assets, and commercial and residential real estate. Commercial loans are expected to be repaid from cash flow from
operations of businesses. There are no significant concentrations of loans to any one industry or customer. However, the customers' ability to repay their
loans is dependent on the real estate and general economic conditions of the area, among other factors.
All
significant intercompany transactions and balances are eliminated in consolidation.
In
connection with the sale of First MainStreet Insurance on March 1, 2006, the Company revised its 2005 statement of income to segregate the First MainStreet Insurance results of
operations as of and for the year ended December 31, 2005 as discontinued operations. The financial position and results of operations of Collegiate Peaks Bank have been segregated as
discontinued operations since December 31, 2004. Collegiate Peaks Bank was sold as of November 1, 2006.
The
accounting and reporting policies of the Company conform with generally accepted accounting principles in the United States of America.
70
CENTENNIAL BANK HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(2) Summary of Significant Accounting Policies (Continued)
The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities as of the dates of the consolidated balance sheet and income and expense for the periods presented. Actual results could
differ significantly from those estimates. Material estimates that are particularly susceptible to significant changes include the assessment for impairment of certain investment securities, the
allowance for loan losses, deferred tax assets and liabilities, impairment of goodwill and other intangible assets, stock compensation expense and other real estate owned. Assumptions and factors used
in the estimates are evaluated on an annual basis or whenever events or changes in circumstance indicate that the previous assumptions and factors have changed. The result of the analysis could result
in adjustments to the estimates.
Cash and cash equivalents on the Company's consolidated balance sheets include cash, balances due from banks and federal funds sold that have an original maturity
of three months or less. The Company's statements of cash flows include cash activity of the Company's wholly owned subsidiary, Collegiate Peaks, which was classified as held for sale from its
acquisition on December 31, 2004 through its sale on November 1, 2006. Net cash flows are reported for customer loan and deposit transactions, interest bearing deposits in other
financial institutions, borrowings, federal funds purchased and repurchase agreements and acquisitions and sales of subsidiaries.
We determine the classification of securities at the time of purchase. If we have the positive intent and the ability at the time of purchase to hold securities
until maturity, they are classified as held-to-maturity. Investment securities held-to-maturity are carried at amortized cost. Securities to be held for
indefinite periods of time, but not necessarily to be held-to-maturity or on a long-term basis, are classified as available-for-sale and
carried at fair value with unrealized gains or losses reported as a separate component of stockholders' equity in accumulated other comprehensive income (loss), net of applicable income taxes.
Purchase premiums and discounts are recognized in interest income using the interest method over the terms of the securities. Gains and losses on the sale of securities are recorded on the trade date
and are determined using the specific identification method. If a decline in the fair value of a security below its amortized cost is judged by management to be other than temporary, the cost basis of
the security is written down to fair value and the amount of the write-down is included in operations. In estimating other-than-temporary losses, management
considers: the length of time and extent that fair value has been less than cost, the financial condition and near term prospects of the issuer, and the Company's ability and intent to hold the
security for a period sufficient to allow for any anticipated recovery in fair value.
Loans held for sale are carried at the lower of aggregate cost, net of discounts or premiums and a valuation allowance, or estimated fair market value. Estimated
fair market value is determined using forward commitments to sell loans to permanent investors, or current market rates for loans of similar quality and type. Net unrealized losses, if any, are
recognized in a valuation allowance by charges to
71
CENTENNIAL BANK HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(2) Summary of Significant Accounting Policies (Continued)
earnings.
Statement of Financial Accounting Standards (SFAS) No. 91,
Accounting for Nonrefundable Fees and Costs Associated with Originating or Acquiring Loans and
Initial Direct Costs of Leases
, requires discounts or premiums on loans held for sale be deferred until the related loan is sold. Loans held for sale consist of certain
classified loans and are generally secured by real estate. Loans held for sale are sold with servicing rights released.
Loans
are considered sold when the Company surrenders control over the transferred assets to the purchaser, with standard representations and warranties. At such time, the loan is
removed from the loan portfolio and a gain or loss is recorded on the sale. Gains and losses on loan sales are determined based on the difference between the cost basis of the assets sold, the
estimated fair value of any assets or liabilities that are newly created as a result of the transaction, and the proceeds from the sale. Losses related to asset quality are recorded against the
allowance for valuation losses at the time the loss is probable and quantifiable.
The Company extends real estate, commercial, agricultural and consumer loans to customers. A substantial portion of the loan portfolio is represented by real
estate and commercial loans throughout the Front Range of Colorado. The ability of the Company's borrowers to honor their contracts is dependent upon the real estate and general economic conditions of
Colorado, among other factors.
Loans
that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off are reported at their outstanding unpaid principal balances,
adjusted for charge-offs, the allowance for loan losses, and any deferred fees or costs on originated loans. Loans acquired in business combinations that have evidence of credit
deterioration are recorded at the present value of expected amounts of principal and interest to be received, i.e., fair value. After acquisition, incurred losses are recognized in the
allowance for loan losses.
Interest
income is accrued on the unpaid principal balance. Loan origination fees, net of direct origination costs, are deferred and recognized as an adjustment of the related loan yield
using the interest method without anticipating prepayments.
The
accrual of interest on loans is discontinued at the time the loan is 90 days delinquent unless the credit is well secured and in process of collection. In all cases, loans are
placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful.
All
interest accrued but not collected for loans that are placed on nonaccrual or charged off is reversed against interest income. The interest on nonaccrual loans is accounted for on
the cash-basis method, until qualifying for a return to the accrual basis of accounting. Loans are returned to accrual status when all the principal and interest amounts contractually due
are brought current and future payments are reasonably assured.
The allowance for loan losses is a valuation allowance for probable incurred loan losses. The allowance for loan losses is reported as a reduction of outstanding
loan balances.
The
allowance for loan losses is evaluated on a regular basis by management and is based upon management's periodic review of the collectibility of the loans in light of historical
experience, the
72
CENTENNIAL BANK HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(2) Summary of Significant Accounting Policies (Continued)
nature
and volume of the loan portfolio, adverse situations that may affect borrowers' ability to repay, estimated value of any underlying collateral and prevailing economic conditions. This
evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. An allowance for loan losses is maintained at a level
deemed appropriate by management to adequately provide for known and inherent risks in the loan portfolio and other extensions of credit
Loans
that are deemed to be uncollectible are charged off and deducted from the allowance. Allocations of the allowance may be made for specific loans, but the entire allowance is
available for any loan that, in management's judgment should be charged off. The provision for loan losses and recoveries on loans previously charged off are added to the allowance.
The
allowance consists of specific and general components. The specific component relates to loans that are individually classified as impaired. The general component covers all other
loans and is based on historical loss experience adjusted for current factors. A loan is considered impaired when, based on current information and events, it is probable that the Company will be
unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include
payment status and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not
classified as impaired.
Management
determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances
surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower's prior payment record, and the amount of the shortfall in relation to the principal
and interest owed. The required allowance for impaired loans is measured on a loan-by-loan basis for commercial, real estate and agricultural loans by either the present value
of expected future cash flows discounted at the loan's effective interest rate, the loan's obtainable market price, or the fair value of the collateral if the loan is collateral dependent. Groups of
smaller balance homogenous loans are collectively evaluated for impairment.
The
Company also maintains an allowance for unfunded commitments for probable incurred losses with respect to unfunded commitments. The provision for unfunded commitments is reported as
a component of other general and administrative expense and the allowance for unfunded commitments is reported as part of interest payable and other liabilities.
Assets acquired through, or in lieu of, loan foreclosure are held for sale and are initially recorded at the lower of cost basis or fair value at the date of
foreclosure, less estimated costs of disposition. Prior to foreclosure, the value of the underlying loan is written down to the fair value of the assets to be acquired by a charge to the allowance for
loan losses, if necessary. Subsequent to foreclosure, any reduction in fair value is charged directly to the other real estate owned and foreclosed assets. Operating revenues and expenses of such
assets and reductions in the fair value of the assets are included in noninterest expense. Gains and losses on their disposition are included in noninterest income.
73
CENTENNIAL BANK HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(2) Summary of Significant Accounting Policies (Continued)
Land is carried at cost. Buildings, equipment and software are carried at cost, less accumulated depreciation and amortization computed on the
straight-line method over the useful lives of the assets. Leasehold improvements are depreciated over the shorter of their estimated useful life or the lease term. Buildings and leasehold
improvements carry an estimated useful life of five to forty years and equipment and software carry an estimated useful life of one to fifteen years. Repairs and maintenance are charged to noninterest
expense as incurred.
The Bank is a member of the Federal Home Loan Bank (FHLB) system. Members are required to own a certain amount of stock based on the level of borrowings and other
factors, and may invest in additional amounts. The Bank also owns Federal Reserve Bank (FRB) stock and Banker's Bank of the West (BBOW) stock. FHLB, FRB and BBOW stock is carried at cost, classified
as a restricted security, and periodically reviewed for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income.
Goodwill represents the excess of cost over the fair value of the net assets of businesses acquired. Goodwill and intangible assets acquired in a purchase
business combination and determined to have an indefinite useful life are not amortized, but instead tested for impairment at least annually. The Company has selected October 31 as the date to
perform the annual impairment test. Intangible assets with definite useful lives are amortized over their estimated useful lives to their estimated residual values. Goodwill is our only intangible
asset with an indefinite life. The annual impairment analysis of goodwill includes identification of reporting units, the determination of the carrying value of each reporting unit, including the
existing goodwill and intangible assets, and estimating the fair value of each reporting unit. We have identified one significant reporting unit—banking operations. We determined the fair
value of our reporting unit and compared it to its carrying amount. If the carrying amount of a reporting unit exceeds its fair value, we are required to perform a second step to the impairment test.
Our
annual impairment analysis as of October 31, 2007, indicated that the step two analysis was necessary. Step two requires that the implied fair value of the reporting unit
goodwill be compared to the carrying amount of that goodwill. If the carrying amount of the reporting unit goodwill exceeds the
implied fair value of that goodwill, an impairment loss shall be recognized in an amount equal to that excess. The implied fair value of goodwill is determined in the same manner that goodwill
recognized in a business combination is determined. That is, the fair value of the reporting unit is allocated to all of the individual assets and liabilities of the reporting unit, including any
unrecognized identifiable intangible assets, as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit is the price paid to acquire the reporting
unit. The allocation process is only performed for purposes of testing goodwill for impairment, as the other assets and liabilities are not written up or written down, nor is any additional
unrecognized identifiable intangible asset recorded as a part of this process. After step two, it was determined that the implied value of goodwill was less than the carrying cost, and the Company
reduced the carrying cost of goodwill with a charge to earnings.
74
CENTENNIAL BANK HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(2) Summary of Significant Accounting Policies (Continued)
Step
one of our annual impairment analysis performed in 2006 and 2005 indicated that there was no impairment in our goodwill, as the fair value of the reporting unit exceeded the
carrying cost.
Core
deposit intangible assets, which we refer to as CDI, and other definite-lived intangible assets are recognized apart from goodwill at the time of acquisition based on valuations
performed. In preparing such valuations, variables such as deposit servicing costs, attrition rates, and market discount rates are considered. CDI assets are amortized over their useful lives, which
we have estimated to range from 7 years to 15 years. The other definite-lived intangible assets are amortized over their useful lives that range from 1 year to 3 years.
Long-lived assets, such as premises and equipment, and definite-lived intangible assets subject to amortization, are reviewed for impairment whenever
events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying value
of the asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying value of an asset exceeds its estimated undiscounted future cash flows, an
impairment charge is recognized by the amount by which the carrying value of the asset exceeds the fair value of the asset, less costs to sell.
Assets
to be disposed of are separately presented in the balance sheet and reported at the lower of the carrying value or fair value less costs to sell, and are no longer depreciated.
The assets and liabilities of a disposal group classified as held for sale are presented separately in the appropriate asset and liability
sections of the consolidated balance sheet. The gain or loss from a disposal group are recorded as discontinued operations on the statement of income.
The Company has life insurance policies on certain key executives. At December 31, 2007 and 2006, the carrying value of the company-owned life insurance
polices was $13,230,000 and $12,749,000 million, respectively, which is included in other assets on the Consolidated Balance Sheets. In September 2006, the FASB Emerging Issues Task Force
finalized Issue No. 06-5,
Accounting for Purchases of Life Insurance—Determining the Amount that Could be Realized in Accordance with FASB
Technical Bulletin No. 85-4 (Accounting for Purchases of Life Insurance Insurance)
("EITF 06-5"). Upon adoption of
EITF 06-5, Company owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value
adjusted for other charges or other amounts due that are probable at settlement. Prior to adoption of EITF 06-5, the Company recorded owned life insurance at its cash surrender
value.
EITF 06-5
requires that a policy owner consider contractual terms of a life insurance policy in determining the amount that could be realized under the insurance
contract. It also requires that if the contract provides for a greater surrender value if all individual policies in a group are surrendered at the same time, that the surrender value be determined
based on the assumption that policies will be surrendered on an individual basis. Lastly, EITF 06-5 requires disclosure when there are contractual restrictions on the Company's
ability to surrender a policy. The adoption of EITF 06-5 on January 1, 2007, had no impact on the Company's financial condition, results of operations or cash flows.
75
CENTENNIAL BANK HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(2) Summary of Significant Accounting Policies (Continued)
The Company's Amended and Restated 2005 Stock Incentive Plan ("Plan") provides for up to 2,500,000 grants of stock options, stock awards, stock units awards,
performance stock awards, stock appreciation rights, and other equity-based awards to key employees, nonemployee directors, consultants and prospective employees. As of December 31, 2007, the
Company has only granted stock awards. The Company accounts for the equity-based compensation using the provisions of Statement of Financial Accounting Standards ("SFAS") No. 123R,
Share-Based Payment
. The Company recognizes
expense for services received in a share-based payment transaction as services are received. That cost is recognized on a straight-line basis over the period during which an employee or
director provides service in exchange for the award. The Company has issued stock awards that vest based on service periods from one to four years, and performance conditions. The maximum contractual
term for the performance-based share awards is December 31, 2012. In 2006, the Company added service vesting conditions to certain performance-based share awards (but not with respect to awards
held by executive officers). There was no incremental cost associated with this change in vesting conditions. The compensation cost of employee and director services received in exchange for stock
awards is based on the grant-date fair value of the award (as determined by quoted market prices). The stock compensation expense recognized reflects estimated forfeitures, adjusted as
necessary based on actual forfeitures.
Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and
liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax
bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the
enactment date.
The
Company adopted FASB Interpretation 48,
Accounting for Uncertainty in Income Taxes
("FIN 48"), as of January 1, 2007. A
tax position is recognized as a benefit only if it is "more likely than not" that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount
recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the "more likely than not" test, no tax benefit is
recorded. The adoption of FIN 48 on January 1, 2007, had no effect on the Company's consolidated financial statements.
The
Company recognizes interest related to income tax matters as interest expense and penalties related to income tax matter as other noninterest expense.
76
CENTENNIAL BANK HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(2) Summary of Significant Accounting Policies (Continued)
The Company operates as one segment. The operating information used by the Company's chief executive officer for purposes of assessing performance and making
operating decisions about the Company is the consolidated financial statements presented in this report. For the years ended 2007 and 2006, the Company had two active operating subsidiaries,
Centennial Bank of the West and Guaranty Bank and Trust Company. For the year ended 2005, the Company had three active operating subsidiaries, Centennial Bank of the West, Guaranty Bank and Trust
Company and First MainStreet Insurance, and one operating subsidiary that was held for sale, Collegiate Peaks Bank. The Company applies the provisions of SFAS No. 131,
Disclosures about Segments of an Enterprise and
Related Information
, in determining its reportable segments and related disclosures. The Company has
determined that banking is its one reportable business segment. The Company's nonbanking subsidiary, which was sold in 2006, did not meet the 10% threshold for disclosure as an operating segment under
SFAS No. 131.
Basic earnings (loss) per share represents income (loss) available to common stockholders divided by the weighted average number of common shares outstanding
during the period. Diluted earnings (loss) per share reflects additional common shares that would have been outstanding if potential dilutive common shares had been issued. In accordance with SFAS
No. 128 (As Amended),
Earnings per Share
, the Company's obligation to issue shares of stock to participants in its deferred compensation plan has
been treated as outstanding shares of stock in the basic earnings per share calculation. Dilutive common shares that may be issued by the Company relate to unvested common share grants subject to a
service condition for the years ended December 31, 2007, 2006 and 2005. Earnings (loss) per common share have been computed based on the following:
|
|
Year Ended December 31,
|
|
|
2007
|
|
2006
|
|
2005
|
|
Average common shares outstanding
|
|
53,109,307
|
|
57,539,986
|
|
54,222,327
|
|
Effect of dilutive unvested stock grants(1)
|
|
—
|
|
96,369
|
|
72,756
|
|
|
|
|
|
|
|
|
|
Average shares outstanding and calculated diluted earnings per common share
|
|
53,109,307
|
|
57,636,355
|
|
54,295,083
|
|
|
|
|
|
|
|
|
-
(1)
-
Impact
of unvested stock grants is antidilutive in 2007 due to the net loss for the year.
Accounting principles require that recognized revenue, expenses, gains and losses be included in net income. Although certain changes in assets and liabilities,
such as unrealized gains and losses on available-for-sale securities, are reported as a separate component of the equity section of the balance sheet, such items, along with
net income (loss), are components of comprehensive income (loss).
77
CENTENNIAL BANK HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(2) Summary of Significant Accounting Policies (Continued)
Following
are the components of other accumulated comprehensive income (loss) and related tax effects for the periods indicated:
|
|
Year Ended December 31,
|
|
|
|
2007
|
|
2006
|
|
2005
|
|
|
|
(Amounts in thousands)
|
|
|
Net income (loss)
|
|
$
|
(138,092
|
)
|
$
|
24,418
|
|
$
|
14,682
|
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in net unrealized gains (losses), net
|
|
|
(3,684
|
)
|
|
1,384
|
|
|
173
|
|
|
|
Less: Reclassification adjustments for losses included in income
|
|
|
—
|
|
|
4
|
|
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
Net unrealized holding gains (losses)
|
|
|
(3,684
|
)
|
|
1,388
|
|
|
180
|
|
|
|
|
Income tax benefit (loss)
|
|
|
1,403
|
|
|
(672
|
)
|
|
(65
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss)
|
|
|
(2,281
|
)
|
|
716
|
|
|
115
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income (loss)
|
|
$
|
(140,373
|
)
|
$
|
25,134
|
|
$
|
14,797
|
|
|
|
|
|
|
|
|
|
|
The
balance of accumulated other comprehensive income (loss) was ($1,472,000) at December 31, 2007, $809,000 at December 31, 2006 and $93,000 at December 31, 2005.
The entire balance of other comprehensive income (loss) at December 31, 2007, 2006 and 2005 was due to unrealized gains (losses) on securities available for sale.
The Company has Deferred Compensation Plans (the "Plans") that allow directors and certain key employees to voluntarily defer compensation. Compensation expense
is recorded for the deferred compensation and a related liability is recognized. Participants may elect designated investment options for the notional investment of their deferred compensation. The
recorded obligations are adjusted for deemed income or loss related to the investments selected. Participants in the 2005 Deferred Compensation Plan (2005 Plan) are given the opportunity to elect to
have all or a portion of their deferred compensation earn a rate of return equal to the total return on the Company's common stock. The 2005 Plan does not provide for diversification of a
participant's assets allocated to Company common stock and assets allocated to Company common stock can only be settled with a fixed number of shares of stock. In accordance with Emerging Issues Task
Force Issue 97-14,
Accounting for Deferred Compensation Arrangements Where Amounts Earned Are Held in a Rabbi Trust and Invested,
the
deferred compensation obligation associated with Company common stock is classified as a component of stockholders' equity and the related shares are treated as shares to be issued and are included in
total shares outstanding. At December 31, 2007 and 2006, there were 60,507 and 77,539 shares, respectively, to be issued included in total shares outstanding. Subsequent changes in the fair
value of the common stock are not reflected in operations or stockholders' equity of the Company. Actual Company common stock held by the Company for the satisfaction of obligations of the 2005 Plan
is classified as treasury stock. The Company held 60,502 and 77,366 shares of Company common stock for deferred compensation plan obligations at December 31, 2007 and 2006, respectively, which
are recorded as treasury stock.
78
CENTENNIAL BANK HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(2) Summary of Significant Accounting Policies (Continued)
Cash on hand or on deposit with the Federal Reserve Bank was required to meet regulatory reserve and clearing requirements. The clearing requirement was $500,000
at December 31, 2007 and 2006. At December 31, 2007 and 2006, there was no reserve requirement. These balances do not earn interest.
Banking regulations require maintaining certain capital levels and may limit the dividends paid by the Bank to the holding company or by the holding company to
stockholders.
Fair value of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in a separate note. Fair value
estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular
items. Changes in assumptions or in market conditions could significantly affect the estimates.
Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of a loss is
probable and an amount or range of loss can be reasonably estimated. Loss contingencies at December 31, 2007 and 2006 are more fully disclosed in note 16 to the consolidated financial
statements.
Adoption of New Accounting Standards:
In February 2006, the FASB issued Statement of Financial
Accounting Standards No. 155,
Accounting for Certain Hybrid Financial Instruments
(SFAS No. 155), which permits fair value remeasurement
for hybrid financial instruments that contain an embedded derivative that otherwise would require bifurcation. Additionally, SFAS No. 155 clarifies the accounting guidance for beneficial
interests in securitizations. Under SFAS No. 155, all beneficial interests in a securitization will require an assessment in accordance with SFAS No. 133 to determine if an embedded
derivative exists within the instrument. In January 2007, the FASB issued Derivatives Implementation
Group Issue B40,
Application of Paragraph 13(b) to Securitized Interests in Prepayable Financial Assets
(DIG Issue B40). DIG Issue B40 provides
an exemption from the embedded derivative test of paragraph 13(b) of SFAS No. 133 for instruments that would otherwise require bifurcation if the test is met solely because of a
prepayment feature included within the securitized interest and prepayment is not controlled by the security holder. SFAS No. 155 and DIG Issue B40 are effective for fiscal years beginning
after September 15, 2006. The adoption of SFAS No. 155 and DIG Issue B40 did not have a material impact on the Company's consolidated financial position, results of operations or cash
flows.
Effect of Newly Issued But Not Yet Effective Accounting Standards:
In September 2006, the FASB issued
Statement No. 157,
Fair Value Measurements
. This Statement defines fair value, establishes a framework for measuring fair value and expands
disclosures about fair value measurements. This
79
CENTENNIAL BANK HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(2) Summary of Significant Accounting Policies (Continued)
Statement
establishes a fair value hierarchy about the assumptions used to measure fair value and clarifies assumptions about risk and the effect of a restriction on the sale or use of an asset. The
standard is effective for fiscal years beginning after November 15, 2007. The impact of adoption in 2008 did not have a material impact on the Company's consolidated financial position or
results of operations.
In
February 2007, the FASB issued Statement No. 159,
The Fair Value Option for Financial Assets and Financial Liabilities
. The
standard provides companies with an option to report selected financial assets and liabilities at fair value and establishes presentation and disclosure requirements designed to facilitate comparisons
between companies that choose different measurement attributes for similar types of assets and liabilities. The new standard is effective for the Company on January 1, 2008. The Company did not
elect the fair value option for any financial assets or financial liabilities as of January 1, 2008.
In
September 2006, the FASB Emerging Issues Task Force finalized Issue No. 06-4,
Accounting for Deferred Compensation and Postretirement
Benefit Aspects of Endorsement Split-Dollar Life Insurance Arrangements
. This issue requires that a liability be recorded during the service period when a split-dollar life
insurance agreement continues after participants' employment or retirement. The required accrued liability will be based on either the post-employment benefit cost for the continuing life
insurance or based on the future death benefit depending on the contractual terms of the underlying agreement. This issue is effective for fiscal years beginning after December 15, 2007. Upon
adoption of this issue on January 1, 2008, the Company will record a cumulative effect adjustment to reduce beginning retained earnings as of January 1, 2008 by $71,000. The adjustment
will increase other liabilities by $114,000 (pre-tax) and reduced the deferred tax liability by $43,000.
On
November 5, 2007, the SEC issued Staff Accounting Bulletin No. 109,
Written Loan Commitments Recorded at Fair Value through
Earnings
("SAB 109"). Previously, SAB 105,
Application of Accounting Principles to Loan Commitments
, stated that
in measuring the fair value of a derivative loan commitment, a company should not incorporate the expected net future cash flows related to the associated servicing of the loan. SAB 109
supersedes SAB 105 and indicates that the expected net future cash flows related to the associated servicing of the loan should be included in measuring fair value for
all written loan commitments that are accounted for at fair value through earnings. SAB 105 also indicated that internally-developed intangible assets should not be recorded as part of the fair
value of a derivative loan commitment, and SAB 109 retains that view. SAB 109 is effective for derivative loan commitments issued or modified in fiscal quarters beginning after
December 15, 2007. The impact of adoption in 2008 did not have a material impact on the Company's consolidated financial position or results of operations.
In
December 2007, the FASB issued Statement No. 141R,
Business Combinations (Revised)
("SFAS 141R"). SFAS 141R
replaces the current standard on business combinations and will significantly change the accounting for and reporting of business combinations in consolidated financial statements. This statement
requires an entity to measure the business acquired at fair value and to recognize goodwill attributable to any noncontrolling interests (previously referred to as minority interests) rather than just
the portion attributable to the acquirer. The statement will also result in fewer exceptions to the principle of measuring assets acquired and liabilities assumed in a business combination at fair
value. In addition, the statement will result in payments to third parties for consulting, legal, audit, and similar services associated with an acquisition to be recognized as expenses
80
CENTENNIAL BANK HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(2) Summary of Significant Accounting Policies (Continued)
when
incurred rather than capitalized as part of the business combination. SFAS 141R is effective for fiscal years beginning on or after December 15, 2008.
Certain reclassifications of prior year balances have been made to conform to the current year presentation. These reclassifications had no impact on the
Company's consolidated financial position, results of operations or net change in cash and cash equivalents.
(3) Acquisitions
On October 1, 2005, the Company issued 9,517,727 shares of common stock, valued at $99,432,000, to acquire 100% of the stock of First MainStreet
Financial, Ltd. ("FMS"). The value of the shares issued
was determined based on Company equity transactions in proximity to the negotiations to purchase FMS and the signing of the related definitive purchase agreement. On November 1, 2005, the
Company purchased the stock of Foothills Bank. These acquisitions were recorded using the purchase method of accounting, and accordingly, their operating results have been included in the consolidated
financial statements from their respective acquisition dates. For these acquisitions, the Company allocated the purchase price based on the estimated fair values of the tangible and intangible assets
and liabilities acquired.
(4) Securities
The amortized cost and estimated fair value of securities are as follows:
|
|
Amortized cost
|
|
Gross
unrealized
gains
|
|
Gross
unrealized
losses
|
|
Fair value
|
|
|
(Amounts in thousands)
|
|
|
December 31, 2007
|
|
Securities available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Government agencies and sponsored entities
|
|
$
|
10,453
|
|
$
|
13
|
|
$
|
(10
|
)
|
$
|
10,456
|
|
|
State and municipal
|
|
|
79,164
|
|
|
607
|
|
|
(2,895
|
)
|
|
76,876
|
|
|
Mortgage backed
|
|
|
30,132
|
|
|
108
|
|
|
(202
|
)
|
|
30,038
|
|
|
Marketable equity
|
|
|
1,047
|
|
|
—
|
|
|
—
|
|
|
1,047
|
|
|
Other securities
|
|
|
547
|
|
|
—
|
|
|
—
|
|
|
547
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities available-for-sale
|
|
$
|
121,343
|
|
$
|
728
|
|
$
|
(3,107
|
)
|
$
|
118,964
|
|
|
|
|
|
|
|
|
|
|
Securities held-to-maturity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage-backed
|
|
$
|
14,889
|
|
$
|
93
|
|
$
|
(66
|
)
|
$
|
14,916
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2006
|
|
Securities available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Government agencies and sponsored entities
|
|
$
|
2,426
|
|
$
|
—
|
|
$
|
(18
|
)
|
$
|
2,408
|
|
|
State and municipal
|
|
|
113,649
|
|
|
1,998
|
|
|
(76
|
)
|
|
115,571
|
|
|
Mortgage backed
|
|
|
39,039
|
|
|
38
|
|
|
(637
|
)
|
|
38,440
|
|
|
Marketable equity
|
|
|
841
|
|
|
—
|
|
|
—
|
|
|
841
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities available-for-sale
|
|
$
|
155,955
|
|
$
|
2,036
|
|
$
|
(731
|
)
|
$
|
157,260
|
|
|
|
|
|
|
|
|
|
|
|
Securities held-to-maturity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage-backed
|
|
$
|
11,217
|
|
$
|
38
|
|
$
|
(98
|
)
|
$
|
11,157
|
|
|
|
|
|
|
|
|
|
|
81
CENTENNIAL BANK HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(4) Securities (Continued)
At year-end 2007 and 2006, there were no holdings of investment securities of any one issuer, other than the U.S. Government and its
agencies, in an amount greater than 10% of stockholders' equity.
The
amortized cost and estimated fair value of available for sale debt securities by contractual maturity at December 31, 2007 are shown below. Expected maturities will differ
from contractual maturities because borrowers may have the rights to prepay obligations with or without prepayment penalties.
|
|
Available for sale (AFS)
|
|
|
Amortized cost
|
|
Fair value
|
|
|
(Amounts in thousands)
|
|
Debt securities available for sale:
|
|
|
|
|
|
|
|
|
|
Due in one year or less
|
|
$
|
12,792
|
|
$
|
12,795
|
|
|
|
Due after one year through five years
|
|
|
22,930
|
|
|
23,095
|
|
|
|
Due after five years through ten years
|
|
|
6,736
|
|
|
6,852
|
|
|
|
Due after ten years
|
|
|
47,159
|
|
|
44,590
|
|
|
|
|
|
|
|
|
|
|
Total AFS excluding MBS, marketable equity and other securities
|
|
|
89,617
|
|
|
87,332
|
|
|
Mortgage-backed securities, marketable equity and other securities
|
|
|
31,726
|
|
|
31,632
|
|
|
|
|
|
|
|
|
|
|
Total available for sale
|
|
$
|
121,343
|
|
$
|
118,964
|
|
|
|
|
|
|
|
|
Held to maturity
|
|
|
Amortized cost
|
|
Fair value
|
|
|
(Amounts in thousands)
|
|
Securities held to maturity:
|
|
|
|
|
|
|
|
|
Mortgage-backed securities
|
|
$
|
14,889
|
|
$
|
14,916
|
|
|
|
|
|
|
The
following table presents the fair value and the unrealized loss on securities that were temporarily impaired as of December 31, 2007:
|
|
Less than 12 months
|
|
12 months or more
|
|
Total
|
|
|
|
Fair
value
|
|
Unrealized
losses
|
|
Fair
value
|
|
Unrealized
losses
|
|
Fair
value
|
|
Unrealized
losses
|
|
|
|
(Amounts in thousands)
|
|
|
Description of securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. government agencies
|
|
$
|
7,981
|
|
$
|
(10
|
)
|
$
|
—
|
|
$
|
—
|
|
$
|
7,981
|
|
$
|
(10
|
)
|
|
|
State and municipal
|
|
|
4,456
|
|
|
(22
|
)
|
|
37,081
|
|
|
(2,873
|
)
|
|
41,537
|
|
|
(2,895
|
)
|
|
|
Mortgage-backed
|
|
|
1,528
|
|
|
(2
|
)
|
|
20,667
|
|
|
(266
|
)
|
|
22,195
|
|
|
(268
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total temporarily impaired
|
|
$
|
13,965
|
|
$
|
(34
|
)
|
$
|
57,748
|
|
$
|
(3,139
|
)
|
$
|
71,713
|
|
$
|
(3,173
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All
individual securities that have been in a continuous unrealized loss position for 12 months or longer at December 31, 2007 have fluctuated in value since their purchase
dates as a result of changes in market interest rates. These securities include securities issued by U.S. government agencies and government-sponsored entities that have an AAA credit rating as
determined by various rating agencies or state and municipal bonds that have either been rated as investment grade or higher by various
82
CENTENNIAL BANK HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(4) Securities (Continued)
rating
agencies or have been subject to an annual internal review process by management. We concluded that the continuous unrealized loss positions on these securities is a result of the level of
market interest rates and not a result of the underlying issuers' ability to repay. In addition, we have the ability and intent to hold these securities until their fair value recovers to their cost.
Accordingly, we have not recognized the temporary impairment in our consolidated statements of income.
The
following table presents the fair value and the unrealized loss on securities that were temporarily impaired as of December 31, 2006:
|
|
Less than 12 months
|
|
12 months or more
|
|
Total
|
|
|
|
Fair
value
|
|
Unrealized
losses
|
|
Fair
value
|
|
Unrealized
losses
|
|
Fair
value
|
|
Unrealized
losses
|
|
|
|
(Amounts in thousands)
|
|
|
Description of securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. government agencies
|
|
$
|
—
|
|
$
|
—
|
|
$
|
2,408
|
|
$
|
(18
|
)
|
$
|
2,408
|
|
$
|
(18
|
)
|
|
|
State and municipal
|
|
|
6,746
|
|
|
(15
|
)
|
|
9,527
|
|
|
(61
|
)
|
|
16,273
|
|
|
(76
|
)
|
|
|
Mortgage-backed
|
|
|
1,195
|
|
|
(17
|
)
|
|
36,623
|
|
|
(718
|
)
|
|
37,818
|
|
|
(735
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total temporarily impaired
|
|
$
|
7,941
|
|
$
|
(32
|
)
|
$
|
48,558
|
|
$
|
(797
|
)
|
$
|
56,499
|
|
$
|
(829
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
of available for sale securities were as follows:
|
|
Year Ended December 31,
|
|
|
|
2007
|
|
2006
|
|
2005
|
|
|
|
(Amounts in thousands)
|
|
|
Proceeds
|
|
$
|
1,440
|
|
$
|
181
|
|
$
|
38,833
|
|
Gross Gains
|
|
|
1
|
|
|
—
|
|
|
14
|
|
|
Gross Losses
|
|
|
(1
|
)
|
|
(4
|
)
|
|
(21
|
)
|
The
tax benefit recorded related to these net realized losses on sale of securities was not material during 2007, 2006 and 2005, respectively.
Investment
securities with carrying values of $90,613,000 and $105,387,000 were pledged at December 31, 2007 and 2006, respectively, as collateral for public deposits and for
other purposes as required or permitted by law.
(5) Bank Stocks
The Company, through its subsidiary banks, is a member of both the Federal Reserve Bank of Kansas City and the Federal Home Loan Bank of Topeka, and is required
to maintain an investment in the capital stock of each. The Federal Reserve, Federal Home Loan Bank and other bank stock are
83
CENTENNIAL BANK HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(5) Bank Stocks (Continued)
restricted
in that they can only be redeemed by the issuer at par value. The Company's investment at December 31 was as follows:
|
|
2007
|
|
2006
|
|
|
(Amounts in thousands)
|
|
Federal Reserve Bank of Kansas City
|
|
$
|
18,395
|
|
$
|
18,362
|
|
Federal Home Loan Bank of Topeka
|
|
|
13,307
|
|
|
12,722
|
|
Other bank stocks securities
|
|
|
762
|
|
|
761
|
|
|
|
|
|
|
|
Totals
|
|
$
|
32,464
|
|
$
|
31,845
|
|
|
|
|
|
|
(6) Loans
A summary of the balances of loans at December 31 follows:
|
|
2007
|
|
2006
|
|
|
|
(Amounts in thousands)
|
|
|
Loans on real estate:
|
|
|
|
|
|
|
|
|
|
Residential and commercial mortgage
|
|
$
|
713,478
|
|
$
|
686,056
|
|
|
|
Construction
|
|
|
235,236
|
|
|
427,465
|
|
|
|
Equity lines of credit
|
|
|
48,624
|
|
|
56,468
|
|
|
Commercial loans
|
|
|
679,717
|
|
|
647,915
|
|
|
Agricultural loans
|
|
|
39,506
|
|
|
51,338
|
|
|
Lease financing
|
|
|
4,732
|
|
|
6,704
|
|
|
Installment loans to individuals
|
|
|
40,835
|
|
|
50,222
|
|
|
Overdrafts
|
|
|
1,329
|
|
|
4,319
|
|
|
SBA and other
|
|
|
21,592
|
|
|
21,121
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,785,049
|
|
$
|
1,951,608
|
|
Less:
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses
|
|
|
(25,711
|
)
|
|
(27,899
|
)
|
|
|
Unearned discount
|
|
|
(3,402
|
)
|
|
(4,121
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net Loans
|
|
$
|
1,755,936
|
|
$
|
1,919,588
|
|
|
|
|
|
|
|
|
84
CENTENNIAL BANK HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(6) Loans (Continued)
Activity
in the allowance for loan losses is as follows:
|
|
Year Ended December 31,
|
|
|
|
2007
|
|
2006
|
|
2005
|
|
|
|
(Amounts in thousands)
|
|
|
Balance, beginning of period
|
|
$
|
27,899
|
|
$
|
27,475
|
|
$
|
25,022
|
|
|
|
Provision for loan losses(1)
|
|
|
24,666
|
|
|
4,597
|
|
|
3,400
|
|
|
|
Loans charged off
|
|
|
(28,973
|
)
|
|
(5,927
|
)
|
|
(5,541
|
)
|
|
|
Recoveries on loans previously charged-off
|
|
|
2,119
|
|
|
1,754
|
|
|
1,457
|
|
|
|
Allowance from acquired bank (note 3)
|
|
|
—
|
|
|
—
|
|
|
3,855
|
|
|
|
Unfunded commitment allowance(2)
|
|
|
—
|
|
|
—
|
|
|
(718
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Balance, end of period
|
|
$
|
25,711
|
|
$
|
27,899
|
|
$
|
27,475
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
The
provision for loan losses noted in the consolidated statements of income (loss) for the year ended December 31, 2006, includes a provision for loan losses of $4,597,000 and
a recovery on the reserve for unfunded commitments of $307,000 presented below.
-
(2)
-
The
reserve for unfunded loan commitments was reclassified from the allowance for loan losses to other liabilities at December 31, 2005.
A
summary of transactions in the reserve for unfunded commitments for the periods indicated is as follows:
|
|
Year Ended December 31,
|
|
|
2007
|
|
2006
|
|
2005
|
|
|
(Amounts in thousands)
|
|
Balance, beginning of period
|
|
$
|
411
|
|
$
|
718
|
|
$
|
—
|
|
|
Provision (credit) for losses on unfunded commitments
|
|
|
111
|
|
|
(307
|
)
|
|
—
|
|
|
Allowance for loan losses(1)
|
|
|
|
|
|
|
|
|
718
|
|
|
|
|
|
|
|
|
|
Balance, end of period
|
|
$
|
522
|
|
$
|
411
|
|
$
|
718
|
|
|
|
|
|
|
|
|
-
(1)
-
The
reserve for unfunded loan commitments was reclassified from the allowance for loan losses to other liabilities at December 31, 2005.
The
following is a summary of information pertaining to impaired loans at December 31:
|
|
2007
|
|
2006
|
|
|
(Amounts in thousands)
|
|
Impaired loans with a valuations allowance
|
|
$
|
16,663
|
|
$
|
23,616
|
|
Impaired loans without a valuations allowance
|
|
|
6,665
|
|
|
15,217
|
|
|
|
|
|
|
|
|
Total impaired loans
|
|
$
|
23,328
|
|
$
|
38,833
|
|
|
|
|
|
|
|
Valuation allowance related to impaired loans
|
|
$
|
4,283
|
|
$
|
8,028
|
|
|
|
|
|
|
85
CENTENNIAL BANK HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(6) Loans (Continued)
The following is a summary of nonaccrual loans and loans past due 90 days still on accrual status:
|
|
2007
|
|
2006
|
|
|
(Amounts in thousands)
|
|
Nonaccrual loans
|
|
$
|
19,309
|
|
$
|
32,852
|
|
Loans past due over 90 days still on accrual
|
|
$
|
527
|
|
$
|
3
|
The
following is a summary of interest recognized and cash-basis interest earned on impaired loans:
|
|
Year Ended December 31,
|
|
|
2007
|
|
2006
|
|
2005
|
|
|
(Amounts in thousands)
|
|
Average of individually impaired loans during year
|
|
$
|
35,160
|
|
$
|
42,660
|
|
$
|
38,425
|
|
Interest income recognized during impairment
|
|
$
|
1,410
|
|
$
|
350
|
|
$
|
1,487
|
|
Cash-basis interest income recognized
|
|
$
|
1,146
|
|
$
|
315
|
|
$
|
1,268
|
The
gross interest income that would have been recorded in the period that ended if the nonaccrual loans had been current in accordance with their original terms and had been outstanding
throughout the period or since origination, if held for part of the period for December 31, 2007 and 2006 was $2,446,000 and $3,284,000, respectively.
(7) Premises and Equipment
A summary of the cost and accumulated depreciation and amortization of premises and equipment at December 31 is as follows:
|
|
2007
|
|
2006
|
|
|
|
(Amounts in thousands)
|
|
|
Land
|
|
$
|
13,693
|
|
$
|
14,154
|
|
|
Buildings
|
|
|
48,023
|
|
|
48,160
|
|
|
Leasehold improvements
|
|
|
7,023
|
|
|
6,952
|
|
|
Equipment
|
|
|
15,833
|
|
|
16,426
|
|
|
Software
|
|
|
450
|
|
|
450
|
|
|
Leasehold interest in land
|
|
|
684
|
|
|
684
|
|
|
Construction in progress
|
|
|
309
|
|
|
6
|
|
|
|
|
|
|
|
|
|
|
Subtotal
|
|
$
|
86,015
|
|
$
|
86,832
|
|
|
Accumulated depreciation and amortization
|
|
|
(16,034
|
)
|
|
(12,666
|
)
|
|
|
|
|
|
|
|
|
|
Total premises and equipment
|
|
$
|
69,981
|
|
$
|
74,166
|
|
|
|
|
|
|
|
|
Depreciation
expense for the years ended December 31, 2007, 2006 and 2005 was $4,248,000, $4,545,000 and $3,579,000, respectively. Such amounts are classified in occupancy and
furniture and equipment expense.
The
construction in progress at December 31, 2007, represents signage and software costs. The signage was placed in service in February 2008.
86
CENTENNIAL BANK HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(7) Premises and Equipment (Continued)
Operating Leases:
Pursuant to the terms of non-cancelable lease agreements in effect at December 31, 2007
pertaining to banking premises, future minimum rent commitments under various operating leases are as follows (amounts in thousands):
|
2008
|
|
$
|
3,322
|
|
2009
|
|
|
2,957
|
|
2010
|
|
|
3,018
|
|
2011
|
|
|
2,931
|
|
2012
|
|
|
2,338
|
|
Thereafter
|
|
|
6,969
|
|
|
|
|
|
|
Total future minimum rent commitments
|
|
$
|
21,535
|
|
|
|
|
Certain
leases contain options to extend the lease terms for five to fifteen years. The cost of such rentals is not included in the above rental commitments. Rent expense for the years
ended December 31, 2007, 2006 and 2005 was $3,391,000, $3,280,000 and $3,192,000, respectively.
(8) Goodwill
Changes in the carrying amount of the Company's goodwill for the years ended December 31, 2007 and 2006 were as follows (amounts in thousands):
|
Balance as of December 31, 2005
|
|
$
|
392,507
|
|
|
|
Adjustment to goodwill
|
|
|
1,089
|
|
|
|
Sale of First Main Street Insurance
|
|
|
(638
|
)
|
|
|
|
|
|
|
Balance as of December 31, 2006
|
|
|
392,958
|
|
|
|
Impairment
|
|
|
(142,210
|
)
|
|
|
|
|
|
|
Balance as of December 31, 2007
|
|
$
|
250,748
|
|
|
|
|
|
|
Goodwill
for the Company's single reporting unit is tested annually for impairment. On the October 31, 2006, testing date it was determined that the fair value of the reporting
unit exceeded the carrying value of the reporting unit. For the October 31, 2007, testing date it was determined that the carrying value of the reporting unit was lower than the fair value of
the reporting unit. The lower value in 2007 is attributable to lower market valuations for banking institutions in the latter part of 2007, the weakening of the credit market in the second half of
2007 and the decline in real estate values, particularly in Northern Colorado. The method for estimating the value of the reporting unit included a weighted average of the discounted cash flows method
and the guideline change of control transactions method. The amount of the 2007 goodwill impairment was $142,210,000.
In
2006, the Company adjusted its deferred income tax liabilities related to acquisitions within the prior twelve months, resulting in an adjustment to goodwill of $1,089,000.
(9) Other Intangible Assets
Intangible assets with definite lives are amortized over their respective estimated useful lives. The Company did not acquire any definite lived intangible assets
in 2006 or 2007. The amortization expense
87
CENTENNIAL BANK HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(9) Other Intangible Assets (Continued)
represents
the estimated decline in the value of the underlying intangible assets. The Company had the following definite-lived intangible assets:
|
|
Useful life
|
|
December 31,
2007
|
|
December 31,
2006
|
|
|
|
|
|
(Amounts in thousands)
|
|
|
Non-compete employment agreements
|
|
2 years
|
|
$
|
—
|
|
$
|
3,606
|
|
|
Core deposit intangible assets
|
|
7 - 15 years
|
|
|
62,975
|
|
|
62,975
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal
|
|
|
|
|
62,975
|
|
|
66,581
|
|
|
Accumulated amortization
|
|
|
|
|
(30,042
|
)
|
|
(24,982
|
)
|
|
|
|
|
|
|
|
|
|
|
Other Intangible Assets
|
|
|
|
$
|
32,933
|
|
$
|
41,599
|
|
|
|
|
|
|
|
|
|
|
Amortization
expense for the years ended December 31, 2007, 2006 and 2005 was $8,666,000, $11,815,000, and $12,389,000, respectively. Estimated amortization expense for the next
five years, and thereafter, is as follows (amounts in thousands):
|
|
Total
|
|
Fiscal year ending:
|
|
|
|
|
2008
|
|
$
|
7,434
|
|
2009
|
|
|
6,277
|
|
2010
|
|
|
5,169
|
|
2011
|
|
|
4,091
|
|
2012
|
|
|
3,033
|
|
Thereafter
|
|
|
6,929
|
|
|
|
|
|
|
|
$
|
32,933
|
|
|
|
|
(10) Deposits
The aggregate amount of time deposits in denominations of $100,000 or more at December 31, 2007 and 2006 was $243,619,000 and $362,354,000, respectively.
At December 31, 2007, the scheduled maturities of interest-bearing time deposits for the next five years are as follows (amounts in thousands):
|
2008
|
|
$
|
431,420
|
|
2009
|
|
|
39,748
|
|
2010
|
|
|
7,100
|
|
2011
|
|
|
1,626
|
|
2012
|
|
|
205
|
|
Thereafter
|
|
|
9
|
|
|
|
|
|
|
|
$
|
480,108
|
|
|
|
|
88
CENTENNIAL BANK HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(11) Securities Sold Under Agreements to Repurchase
The following is a summary of information pertaining to securities sold under agreement to repurchase at December 31:
|
|
2007
|
|
2006
|
|
|
|
(Dollars in thousands)
|
|
|
Ending Balance
|
|
$
|
22,384
|
|
$
|
25,469
|
|
|
Weighted-average interest rate at year-end
|
|
|
3.73
|
%
|
|
4.74
|
%
|
Securities
sold under agreements to repurchase, which are classified as secured borrowings, generally mature within one to four days from the transaction date. Securities sold under
agreements to repurchase are reflected at the amount of cash received in connection with the transaction. The Company may be required to provide additional collateral based on the fair value of the
underlying security. The securities sold under agreements to repurchase are collateralized by government agency and mortgage-backed securities held by the Company.
Information
concerning securities sold under agreements to repurchase is summarized below
|
|
Year Ended December 31,
|
|
|
|
2007
|
|
2006
|
|
2005
|
|
|
|
(Dollars in thousands)
|
|
|
Average daily balance during the year
|
|
$
|
29,104
|
|
$
|
27,927
|
|
$
|
29,844
|
|
|
Average interest rate during the year
|
|
|
4.62
|
%
|
|
4.41
|
%
|
|
2.89
|
%
|
|
Maximum month-end balance during the year
|
|
$
|
40,020
|
|
$
|
36,502
|
|
$
|
33,078
|
|
89
CENTENNIAL BANK HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(12) Borrowings
A summary of borrowings is as follows:
|
|
Principal
|
|
Interest rate
|
|
Maturity date
|
|
Total committed
|
|
|
(Dollars in thousands)
|
|
|
|
|
December 31, 2007
|
|
|
|
|
|
|
|
|
|
|
|
Short-term borrowings:
|
|
|
|
|
|
|
|
|
|
|
|
|
Treasury Tax and Loans
|
|
$
|
1,199
|
|
Variable
|
|
Revolving
|
|
$
|
1,000
|
|
|
FHLB line of credit
|
|
|
—
|
|
—
|
|
Apr-08
|
|
|
316,208
|
|
|
U.S. Bank line of credit
|
|
|
15,160
|
|
5.51% (variable)
|
|
Mar-08
|
|
|
70,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total short-term borrowings
|
|
|
16,359
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term borrowings:
|
|
|
|
|
|
|
|
|
|
|
|
|
FHLB term notes (fixed rate)
|
|
|
47,356
|
|
Range: 3.25 - 6.22%
|
|
2008 - 2017
|
|
|
See below
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total borrowings
|
|
$
|
63,715
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2006
|
|
|
|
|
|
|
|
|
|
|
|
Short-term borrowings:
|
|
|
|
|
|
|
|
|
|
|
|
|
Treasury Tax and Loans
|
|
$
|
867
|
|
Variable
|
|
Revolving
|
|
$
|
1,000
|
|
|
FHLB line of credit
|
|
|
55,200
|
|
5.40 & 5.59% (variable)
|
|
Apr-07
|
|
|
300,968
|
|
|
U.S. Bank line of credit
|
|
|
2,450
|
|
6.67% (variable)
|
|
Nov-07
|
|
|
70,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total short-term borrowings
|
|
|
58,517
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term borrowings:
|
|
|
|
|
|
|
|
|
|
|
|
|
FHLB term notes (fixed rate)
|
|
|
9,115
|
|
Range: 2.52 - 6.22%
|
|
2007 - 2014
|
|
|
See below
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total borrowings
|
|
$
|
67,632
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
Company has executed a blanket pledge and security agreement with the Federal Home Loan Bank, which encompasses certain loans and securities as collateral for these borrowings. The
maximum credit allowance for future borrowings, including term notes and the line of credit, was $316,208,000 and $300,968,000 at December 31, 2007 and 2006, respectively.
The
Company's revolving credit agreement, as amended, with U.S. Bank National Association contains financial covenants, including maintaining a minimum adjusted return (excluding
goodwill impairment and intangible asset amortization) on average assets, a maximum nonperforming assets to total loans ratio and regulatory capital ratios that qualify the Company to as
well-capitalized. As of December 31, 2007, the Company was in compliance with all debt covenants, as amended. The line of credit is secured by the stock of Guaranty Bank. The
revolving credit agreement with U.S. Bank expires on March 31, 2008, and is currently in the process of being renewed with similar conditions and covenants.
90
CENTENNIAL BANK HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(12) Borrowings (Continued)
At
December 31, 2007, the scheduled maturities of borrowings are as follows (amounts in thousands):
|
2008
|
|
$
|
16,957
|
|
2009
|
|
|
2,044
|
|
2010
|
|
|
1,310
|
|
2011
|
|
|
3,035
|
|
2012
|
|
|
23
|
|
Thereafter
|
|
|
40,346
|
|
|
|
|
|
|
Total borrowings
|
|
$
|
63,715
|
|
|
|
|
(13) Income Taxes
The components of the income tax provision (benefit) are as follows:
|
|
Year ended December 31,
|
|
|
|
2007
|
|
2006
|
|
2005
|
|
|
|
(Amounts in thousands)
|
|
|
Current tax provision:
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal
|
|
$
|
3,709
|
|
$
|
16,950
|
|
$
|
10,078
|
|
|
|
State
|
|
|
943
|
|
|
2,246
|
|
|
1,307
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current tax provision
|
|
|
4,652
|
|
|
19,196
|
|
|
11,385
|
|
|
|
|
|
|
|
|
|
|
|
Deferred tax provision (benefit):
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal
|
|
|
(4,561
|
)
|
|
(6,946
|
)
|
|
(3,430
|
)
|
|
|
State
|
|
|
(276
|
)
|
|
(964
|
)
|
|
(316
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total deferred tax provision
|
|
|
(4,837
|
)
|
|
(7,910
|
)
|
|
(3,746
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total tax provision (benefit)
|
|
$
|
(185
|
)
|
$
|
11,286
|
|
$
|
7,639
|
|
|
|
|
|
|
|
|
|
|
The
total current and deferred tax provision associated with the Company's discontinued operations was $327,000 for the year ended December 31, 2006 and a $3,000 benefit for the
year ended December 31, 2005.
Income
tax expense attributable to income (loss) from continuing operations differed from the amounts computed by applying the U.S. federal statutory tax rate to pretax income (loss)
from operations as a result of the following:
|
|
Year ended December 31,
|
|
|
2007
|
|
2006
|
|
2005
|
|
Tax (benefit) at statutory federal rate
|
|
(35.0)%
|
|
35.0%
|
|
35.0%
|
|
State tax, net of federal benefit
|
|
0.1%
|
|
2.5%
|
|
3.0%
|
|
Tax exempt income
|
|
(1.6)%
|
|
(4.6)%
|
|
(4.3)%
|
|
Nondeductible merger expense
|
|
0.0%
|
|
0.0%
|
|
1.4%
|
|
Goodwill impairment
|
|
36.0%
|
|
0.0%
|
|
0.0%
|
|
Other
|
|
0.4%
|
|
0.6%
|
|
(1.6)%
|
|
|
|
|
|
|
|
|
|
|
|
(0.1)%
|
|
33.5%
|
|
33.5%
|
|
|
|
|
|
|
|
|
91
CENTENNIAL BANK HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(13) Income Taxes (Continued)
At
December 31, 2007, current taxes receivable included in other assets totaled approximately $3,250,000. At December 31, 2006, current taxes payable included in interest
payable and other liabilities totaled approximately $1,173,000. At December 31, 2005, current taxes receivable included in other assets totaled approximately $131,000. The Company's net
deferred tax liability is included in interest payable and other liabilities.
Deferred
tax assets and liabilities result from the tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the
amounts used for income tax purposes at December 31 are as follows:
|
|
2007
|
|
2006
|
|
|
|
(Amounts in thousands)
|
|
|
Deferred tax assets:
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses
|
|
$
|
9,773
|
|
$
|
10,604
|
|
|
|
Fair value adjustments on securities, loans, deposits, and subordinated debentures
|
|
|
640
|
|
|
1,015
|
|
|
|
Other assets, accruals and other real estate owned
|
|
|
2,725
|
|
|
641
|
|
|
|
Unrealized loss on securities
|
|
|
906
|
|
|
—
|
|
|
|
Intangible assets
|
|
|
714
|
|
|
865
|
|
|
|
Stock compensation and other
|
|
|
2,837
|
|
|
1,275
|
|
|
|
|
|
|
|
|
|
|
|
|
Total deferred tax assets
|
|
|
17,595
|
|
|
14,400
|
|
|
|
|
|
|
|
|
|
Deferred tax liabilities:
|
|
|
|
|
|
|
|
|
|
Premises and equipment
|
|
|
5,799
|
|
|
6,275
|
|
|
|
Fair value adjustments on core deposit intangibles and fixed rate loans
|
|
|
12,804
|
|
|
15,812
|
|
|
|
FHLB stock, prepaid assets, equity investments and other liabilities
|
|
|
2,144
|
|
|
1,208
|
|
|
|
Unrealized gain on securities
|
|
|
—
|
|
|
497
|
|
|
|
|
|
|
|
|
|
|
|
|
Total deferred tax liabilities
|
|
|
20,747
|
|
|
23,792
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred tax liability
|
|
$
|
(3,152
|
)
|
$
|
(9,392
|
)
|
|
|
|
|
|
|
|
Realization
of the Company's deferred tax assets is dependent upon the Company generating sufficient taxable income to obtain benefit from the reversal of net deductible temporary
differences. The amount of deferred tax assets considered realizable is subject to adjustment in future periods based on estimates of future taxable income. In assessing the reliability of deferred
tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is
dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Based upon the level of historical taxable income and projections for
future taxable income over the periods in which the deferred tax assets are deductible, the Company believes it is more likely than not that the Company will realize the benefits of these deductible
differences at December 31, 2007, 2006 and 2005, and therefore, no valuation allowance for deferred tax assets was recorded at December 31, 2007, 2006 and 2005.
92
CENTENNIAL BANK HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(13) Income Taxes (Continued)
At December 31, 2007, the Company had no net operating loss or tax credit carryforwards for federal or state income tax purposes.
As
of December 31, 2007, the Company did not have any unrecognized tax benefits. The Company does not expect the total amount of unrecognized tax benefits to significantly
increase or decrease in the next twelve months. The Company recognizes interest related to income tax matters as interest expense and penalties related to income tax matters as other noninterest
expense and did not have any accrued
interest and/or penalties at December 31, 2007. The Company and its subsidiaries are subject to U.S. federal income tax as well as income tax of the state of Colorado. The Company is no longer
subject to examination by taxing authorities for years before 2004.
(14) Subordinated Debentures and Trust Preferred Securities
The Company had a $41,239,000 aggregate balance of subordinated debentures outstanding with a weighted average cost of 8.97% and 9.05% at December 31, 2007
and 2006, respectively. The subordinated debentures were issued in four separate series. Each issuance has a maturity of thirty years from its date of issue. The subordinated debentures were issued to
trusts established by us, which in turn issued $40,000,000 of trust preferred securities. Generally and with certain limitations, the Company is permitted to call the debentures subsequent to the
first five or ten years, as applicable, after issue if certain conditions are met, or at any time upon the occurrence and continuation of certain changes in either the tax treatment or the capital
treatment of the trusts, the debentures or the preferred securities.
In
September 2000, a predecessor to the Company formed CenBank Statutory Trust I and completed an offering of $10.0 million, 10.6% Cumulative Trust Preferred Securities (Preferred
Securities), which are guaranteed by the Company. The Trust also issued common securities to the predecessor of the Company and used the net proceeds from the offering to purchase $10.3 million
in principal amount of 10.6% Junior Subordinated Debentures (Debentures) issued. The Company assumed the predecessor's obligations relating to such securities upon the acquisition of the predecessor.
Interest paid on the Debentures is distributed to the holders of the Preferred Securities. Distributions payable on the Preferred Securities are recorded as interest expense in the consolidated
statements of income. These Debentures are unsecured and rank junior and are subordinate in right of payment to all senior debt of the Company. The Preferred Securities are subject to mandatory
redemption upon repayment of the Debentures. The Company has the right, subject to events of default, to defer payments of interest on the Debentures at any time by extending the interest payment
period for a period not exceeding 10 consecutive semi-annual periods with respect to each deferral period, provided that no extension period may extend beyond the redemption or maturity
date of the Debentures. The Debentures mature on September 7, 2030, which may be shortened by us to not earlier than September 7, 2010, if certain conditions are met, or at any time upon
the occurrence and continuation of certain changes in either the tax treatment or the capital treatment of the Trust, the Debentures or the Preferred Securities.
In
February 2001, a predecessor to the Company formed CenBank Statutory Trust II and completed an offering of $5.0 million 10.2% Cumulative Trust Preferred Securities (Preferred
Securities), which are guaranteed by the Company. The Trust also issued common securities to the predecessor of the Company and used the net proceeds from the offering to purchase $5.2 million
in principal amount of 10.2% Junior Subordinated Debentures (Debentures) issued. The Company
93
CENTENNIAL BANK HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(14) Subordinated Debentures and Trust Preferred Securities (Continued)
assumed
the predecessor's obligations relating to such securities upon the acquisition of the predecessor. Interest paid on the Debentures is distributed to the holders of the Preferred Securities.
Terms and conditions of these Debentures are substantially similar to those as described under the CenBank Statutory Trust I. The Debentures mature on February 22, 2031, which may be shortened
by us to not earlier than February 22, 2011, if certain conditions are met, or at any time upon the occurrence and continuation of certain changes in either the tax treatment or the capital
treatment of the Trust, the Debentures or the Preferred Securities.
In
April 2004, a predecessor to the Company formed CenBank Statutory Trust III and completed an offering of $15.0 million LIBOR plus 2.65% Cumulative Trust Preferred Securities
(Preferred Securities), which are guaranteed by the Company. The Trust also issued common securities to the predecessor of the Company and used the net proceeds from the offering to purchase
$15.5 million in principal amount of floating rate Junior Subordinated Debentures (Debentures) issued. The Company assumed the predecessor's obligations relating to such securities upon the
acquisition of the predecessor. Interest paid on the Debentures is distributed to the holders of the Preferred Securities. Terms and conditions of these Debentures are substantially similar to those
as described under the CenBank Statutory Trust I. The Debentures mature on April 15, 2034, which may be shortened by us to not earlier than April 15, 2009, if certain conditions are met,
or at any time upon the occurrence and continuation of certain changes in either the tax treatment or the capital treatment of the Trust, the Debentures or the Preferred Securities.
In
June 2003, a predecessor the Company formed Guaranty Capital Trust III and completed an offering of $10.0 million LIBOR plus 3.10% Cumulative Trust Preferred Securities
(Preferred Securities), which are guaranteed by the Company. The Trust also issued common securities to the predecessor of the Company and used the net proceeds from the offering to purchase
$10.3 million in principal amount of Junior Subordinated Debt Securities issued. The Company assumed the predecessor's obligations relating to such securities upon the acquisition of the
predecessor. Interest is paid quarterly and is distributed to the holders of the Preferred Securities. The Company has the right, subject to events of default, to defer payments of interest on the
Debentures at any time by extending the interest payment period for a period not exceeding 20 consecutive quarterly periods with respect to each deferral period, provided that no extension period may
extend beyond the redemption or maturity date of the Debentures. The Debentures mature on July 7, 2033, which may be shortened by us to not earlier than July 7, 2008, if certain
conditions are met, or at any time upon the occurrence and continuation of certain changes in either the tax treatment or the capital treatment of the Trust, the Debentures or the Preferred
Securities. The Company is currently evaluating the impact of whether to call these debentures on July 7, 2008.
For
financial reporting purposes, the Trusts are treated as investments of the Company and not consolidated in the consolidated financial statements. Although the securities issued by
each of the
Trusts are not included as a component of stockholders' equity in the consolidated balance sheets, the securities are treated as capital for regulatory purposes. Specifically, under applicable
regulatory guidelines, the securities issued by the Trusts qualify as Tier 1 capital up to a maximum of 25% of Tier 1 capital on an aggregate basis. Any amount that exceeds 25% qualifies
as Tier 2 capital. At December 31, 2007 and 2006, all of such securities outstanding qualified as Tier 1 capital. The Company's investment in the common stock of each trust is
included in other assets on the Consolidated Balance Sheets.
94
CENTENNIAL BANK HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(14) Subordinated Debentures and Trust Preferred Securities (Continued)
The
following table summarizes the terms of each subordinated debenture issuance at December 31, 2007 (dollars in thousands):
|
|
Date Issued
|
|
Amount
|
|
Maturity Date
|
|
Call Date
|
|
Fixed or Variable
|
|
Rate Adjuster
|
|
Current Rate
|
|
Next Rate Reset Date
|
|
CenBank Trust I
|
|
9/7/2000
|
|
$
|
10,310
|
|
9/7/2030
|
|
9/7/2010
|
|
Fixed
|
|
N/A
|
|
10.60
|
%
|
N/A
|
|
CenBank Trust II
|
|
2/22/2001
|
|
|
5,155
|
|
2/22/2031
|
|
2/22/2011
|
|
Fixed
|
|
N/A
|
|
10.20
|
%
|
N/A
|
|
CenBank Trust III
|
|
4/8/2004
|
|
|
15,464
|
|
4/15/2034
|
|
4/15/2009
|
|
Variable
|
|
LIBOR + 2.65
|
%
|
7.89
|
%
|
1/15/2008
|
|
Guaranty Capital Trust III
|
|
6/30/2003
|
|
|
10,310
|
|
7/7/2033
|
|
7/7/2008
|
|
Variable
|
|
LIBOR + 3.10
|
%
|
8.34
|
%
|
1/07/2008
|
-
*
-
Call
date represents the earliest date the Company can call the debentures.
(15) Commitments
The Company is a party to credit related financial instruments with off-balance sheet risk in the normal course of business to meet the financing
needs of its customers. These financial instruments include commitments to extend credit, stand-by letters of credit and commercial letters of credit. Such commitments involve, to varying
degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated balance sheets.
The
Company's exposure to credit loss is represented by the contractual amount of these commitments. The Company follows the same credit policies in making commitments as it does for
on-balance sheet instruments.
At
December 31, the following financial instruments were outstanding whose contract amounts represented credit risk:
|
|
2007
|
|
2006
|
|
|
(Amounts in thousands)
|
|
Commitments to extend credit
|
|
$
|
582,988
|
|
$
|
555,757
|
|
Standby letters of credit
|
|
|
33,573
|
|
|
32,382
|
|
Commercial letters of credit
|
|
|
—
|
|
|
274
|
Commitments
to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed
expiration dates or other termination clauses and may require payment of a fee. Several of the commitments may expire without being drawn upon. Therefore, the total commitment amounts do not
necessarily represent future cash requirements. Off-balance sheet risk to credit loss exists up to the face amount of these instruments, although material losses are not anticipated. The
same credit policies are used to make such commitments as are used for loans, including obtaining collateral, if necessary, at exercise of the commitment.
Commitments
to extend credit under overdraft protection agreements are commitments for possible future extensions of credit to existing deposit customers. These lines of credit are
uncollateralized and usually do not contain a specified maturity date and may not be drawn upon to the total extent to which the Company is committed.
95
CENTENNIAL BANK HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(15) Commitments (Continued)
Stand-by
letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Those letters of credit are
primarily issued to support public and private borrowing arrangements. Essentially all letters of credit issued have
expiration dates within one year. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The Company generally holds
collateral supporting those commitments if deemed necessary.
The
Company enters into commercial letters of credit on behalf of its customers who authorize a third party to draw drafts on the Company up to a stipulated amount and with specific
terms and conditions. A commercial letter of credit is a conditional commitment on the part of the Company to provide payment on drafts drawn in accordance with the terms of the commercial letter of
credit.
(16) Contingencies
On December 31, 2004, an adversary proceeding was filed against Guaranty Bank and Trust Company in the United States Bankruptcy Court for the District of
Colorado, by the trustees of the Will Hoover Company, or the Hoover Company, and William Gordon Hoover, Jr., or Hoover, seeking to avoid certain transfers that occurred over a four-year
period commencing in 1999 under the United States Bankruptcy Code. The trustees alleged that certain transfers were made by the Hoover Company and Hoover with actual fraudulent intent, that the
transfers were made for less than reasonably equivalent value and occurred at a time when the Hoover Company and Hoover were insolvent, or were rendered insolvent by the transfers, and that certain
other transfers were preferential as to other creditors, were made for less than reasonably equivalent value or were made by the Hoover Company or Hoover with actual fraudulent intent.
In
April 2007, the Company and the trustees participated in mediation. As a result of the mediation, the parties settled the case and the settlement for $820,000 was approved
subsequently by the Bankruptcy Court, of which $228,000 was recorded as expense during 2007.
On
July 22, 2005 and August 18, 2005, two separate but similar actions (
i.e.
, the Barnes action and Teper action,
respectively) were filed against Guaranty Bank and a former officer in the Denver District Court, Denver, Colorado by investors who provided funds to Hoover, the Hoover Company or related entities.
The investors allege that certain activities of Guaranty Bank and its former officer with respect to the customer relationship with Hoover, the Hoover Company and related entities aided and abetted
Hoover and the Hoover Company in securities violations and violations of the Colorado Organized Crime Control Act and amounted to a civil conspiracy, causing the investors to incur damages. The court
subsequently dismissed the entire Teper action. In August 2007, the parties settled the Barnes action. As a result of the settlement, the Company incurred a pre-tax charge of
approximately $6,500,000, net of insurance coverage. The parties subsequently executed a mutually agreeable settlement agreement and the dismissal of the action with prejudice. The settlement did not
constitute an admission of liability or responsibility on the part of Guaranty Bank or its former officer, or an admission of the truth or validity of any allegations or claims made by the Hoover
investors.
In
the ordinary course of our business, we are party to various other legal actions, which we believe are incidental to the operation of our business. Although the ultimate outcome and
amount of liability, if any, with respect to these other legal actions to which we are currently a party cannot presently be ascertained with certainty, in the opinion of management, based upon
information
96
CENTENNIAL BANK HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(16) Contingencies (Continued)
currently
available to us, any resulting liability is not likely to have a material adverse effect on the Company's consolidated financial position, results of operations or cash flows.
(17) Employee Benefit Plans
During 2005, the Company had two 401(k) Plans that were merged into one 401(k) Plan. Substantially all employees are eligible to participate in the Plan.
Employees may contribute up to 100 percent of their compensation subject to certain limits based on federal tax laws. The Company makes matching contributions equal to a specified percentage of
the employee's compensation as defined by the Plan. For years ended December 31, 2007, 2006 and 2005 expensed contributions to the Plan were $801,000, $781,000 and $731,000, respectively.
In 2005, the Company's directors and stockholders approved the 2005 Stock Incentive Plan (the "Incentive Plan"). The Company's Board of Directors may grant
stock-based compensation awards to officers, directors, key employees and consultants under the terms described in the Incentive Plan. The allowable stock-based compensation awards include the grant
of Options, Restricted Stock Awards, Restricted Stock Unit Awards, Performance Stock Awards, Stock Appreciation Rights and other Equity-Based Awards. The Incentive Plan provides that eligible
participants may be granted shares of
Company common stock that are subject to forfeiture until the grantee vests in the stock award based on the established conditions, which include service conditions and established performance
measures.
Prior
to vesting of the stock awards with a service vesting condition, each grantee shall have the rights of a stockholder with respect to voting of the granted stock. The recipient is
not entitled to dividend rights with respect to the shares of granted stock until vesting occurs. Prior to vesting of the stock awards with performance vesting conditions, each grantee shall have the
rights of a stockholder with respect to voting of the granted stock. The recipient is not entitled to dividend rights with respect to the shares of granted stock until initial vesting occurs, at which
time, the dividend rights will exist on vested and unvested shares of granted stock, subject to termination of such rights under the terms of the Incentive Plan.
Other
than the stock awards with service and performance based vesting conditions, no grants have been made under the Incentive Plan.
The
Incentive Plan authorized grants of stock-based compensation awards of up to 2,500,000 shares of authorized Company common stock, subject to adjustments provided by the Incentive
Plan. As of December 31, 2007 and 2006, there were 1,651,345 and 1,725,825 shares of unvested stock granted (net of forfeitures), with 754,644 and 741,377 shares available for grant under the
Incentive Plan, respectively. Of the 1,651,345 shares outstanding at December 31, 2007, approximately 1,208,000 shares are expected to vest.
97
CENTENNIAL BANK HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(17) Employee Benefit Plans (Continued)
A
summary of the status of unearned stock awards and the change during the year is presented in the table below:
|
|
Shares
|
|
Weighted Average Fair Value on Award Date
|
|
Unearned at December 31, 2006
|
|
1,725,825
|
|
$
|
10.67
|
|
|
Awarded
|
|
223,500
|
|
|
7.40
|
|
|
Forfeited
|
|
(236,767
|
)
|
|
10.76
|
|
|
Vested
|
|
(61,213
|
)
|
|
10.74
|
|
|
|
|
|
|
|
|
Unearned at December 31, 2007
|
|
1,651,345
|
|
|
10.21
|
|
|
|
|
|
|
|
The
Company recognized $2,871,000, $2,899,000 and $800,000 in compensation expense for services rendered for the years ended December 31, 2007, 2006 and 2005, respectively. The
total income tax benefit recognized in the income statement for share-based compensation arrangements as $1,019,000, $1,102,000 and $304,000 for the years ended December 31, 2007, 2006 and
2005, respectively. At December 31, 2007, compensation cost of $6,990,000 related to unearned awards not yet recognized is expected to be recognized over a weighted-average period of
2.3 years.
A
summary of the Company's awards for the years ended December 31, 2007 and 2006 is presented in the table below:
|
|
Year Ended December 31,
|
|
|
2007
|
|
2006
|
|
Number of shares granted
|
|
|
223,500
|
|
|
995,268
|
|
Weighted-average grant-date fair value
|
|
$
|
7.40
|
|
$
|
10.55
|
|
Number of shares that vested
|
|
|
61,213
|
|
|
32,798
|
|
Fair value of shares vested
|
|
$
|
460,584
|
|
$
|
344,432
|
|
Tax benefit realized
|
|
$
|
175,068
|
|
$
|
130,919
|
The Company maintains a Deferred Compensation Plan, effective as of June 30, 2005, for a select group of management or highly compensated employees and
non-employee members of the Board. The plan, which is meant to be an unfunded deferred compensation plan, is intended to be exempt from certain requirements of the Employee Retirement
Income Security Act of 1974. The plan allows the participants to defer up to 80% of their salary and up to 100% of their bonus or incentive compensation, and up to 100% of cash fees in the case of
directors, until termination or upon the occurrence of other specified events (e.g., disability, previously specified dates, and unforeseeable emergencies). The plan permits participants to
elect to have deferred amounts deemed to be invested in various investment funds or Company common stock. The plan does not guarantee any minimum rate of return. Participation in the plan is voluntary
and participants may change their elections annually or otherwise as permitted by the plan and applicable regulations governing the deferred tax treatment of the plan and the Company may, in its sole
discretion, make additional contributions to participants' accounts.
98
CENTENNIAL BANK HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(18) Related-Party Transactions
The Company has granted loans to directors and their affiliates amounting to $5,627,000 and $10,870,000 at December 31, 2007 and 2006, respectively. There
were no related-party loans on past due or non-accrual status.
Activity
during 2007 regarding outstanding loans to certain related-party loan customers (directors of the Company, including companies in which they are principal owners) was as follows
(amounts in thousands):
|
Balance, December 31, 2006
|
|
$
|
10,870
|
|
|
Advances
|
|
|
14,442
|
|
|
Repayments
|
|
|
(19,685
|
)
|
|
|
|
|
|
|
Balance, December 31, 2007
|
|
$
|
5,627
|
|
|
|
|
|
|
Deposits
from related parties held by the Company at December 31, 2007 and 2006 amounted to $13,945,000 and $13,682,000, respectively.
Castle
Creek Financial LLC ("Castle Creek Financial") serves as the exclusive financial advisor for the Company. Castle Creek Financial is an affiliate of Castle Creek
Capital LLC, which is controlled by the Company's Chairman of the Board (who also served as the Company's Chief Executive Officer through May 2006). During 2005, the Company paid Castle Creek
Financial fees of $1,094,000 for services related to acquisitions. Castle Creek Financial was also entitled to reimbursement of expenses and, until August 2005, a quarterly retainer. These amounts
totaled $68,000 in 2005. No payments to Castle Creek Financial were made in 2007 or 2006.
The
Company has incurred costs for facility rental and related services from companies that were affiliated with either members of the Board of Directors or certain former members of
executive management during 2007, 2006 and 2005. We paid $779,000, $2,122,000 and $1,068,000 to companies with such relationships for facility rental and related services in 2007, 2006 and 2005,
respectively. The facility rent for one of the companies affiliated with a member of the Company's board of directors is not disclosed as a related party rent expense in 2007 as the director to whom
this company was affiliated is no longer a member of Company's board of directors. In 2006 and 2005, Guaranty paid $232,000 and $2,145,000, respectively, for construction services to a company that
was affiliated with a former member of the Guaranty Bank board of directors.
(19) Fair Value of Financial Instruments
The fair value of a financial instrument is the current amount that would be exchanged between willing parties, other than in a forced liquidation. Fair value is
best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company's various financial instruments. In cases where quoted market prices are
not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate
and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. Statement of Financial Accounting Standards No. 107
excludes certain financial instruments and all nonfinancial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented may not necessarily represent the
underlying fair value of the Company.
99
CENTENNIAL BANK HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(19) Fair Value of Financial Instruments (Continued)
The
following methods and assumptions were used by the Company in estimating fair value disclosures for financial instruments:
The carrying amounts of cash and short-term instruments approximate fair values.
Fair values for securities are based on quoted market prices. The carrying amount of bank stocks approximates fair value based on the redemption provisions. The
carrying value of other investments approximates their fair value.
For variable-rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values. Fair values
for other loans (e.g., commercial real estate and investment property mortgage loans, commercial and industrial loans) are estimated using discounted cash flow analyses, using interest rates
currently being offered for loans with similar terms to borrowers of similar credit quality. Fair values for non-performing loans are estimated using discounted cash flow analyses or
underlying collateral values, where applicable. Loans held-for-sale are required to be carrying at the lower of cost or fair value. At December 31, 2007, the carrying
amount of loans held-for-sale approximate their fair value.
The fair values disclosed for demand deposits (e.g., interest and non-interest checking, passbook savings, and certain types of money market
accounts) are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amount). The carrying amounts of variable-rate,
fixed-term money market accounts and certificates of deposit approximate their fair values at the reporting date. Fair values for fixed-rate certificates of deposit are
estimated using a discounted cash flows calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits.
The carrying amounts of federal funds purchased, borrowings under repurchase agreements, and other short-term borrowings maturing within ninety days
approximate their fair values. Fair values of other short-term borrowings are estimated using discounted cash flow analyses based on the Company's current incremental borrowing rates for
similar types of borrowing arrangements.
The fair values of the Company's long-term borrowings are estimated using discounted cash flow analyses based on the Company's current incremental
borrowing rates for similar types of borrowing arrangements.
100
CENTENNIAL BANK HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(19) Fair Value of Financial Instruments (Continued)
The fair values of the Company's Subordinated Debentures are estimated using discounted cash flow analyses based on the Company's current incremental borrowing
rates for similar types of borrowing arrangements.
The carrying amounts of accrued interest approximate fair value.
Fair values for off-balance sheet, credit-related financial instruments are based on fees currently charged to enter into similar agreements, taking
into account the remaining terms of the agreements and the counterparties' credit standing. The fair value of commitments is not material.
The
estimated fair values, and related carrying or notational amounts, of the Company's financial instruments as of December 31, are as follows:
|
|
2007
|
|
2006
|
|
|
Carrying amount
|
|
Fair value
|
|
Carrying amount
|
|
Fair value
|
|
|
(Amounts in thousands)
|
|
Financial assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
52,356
|
|
$
|
52,356
|
|
$
|
49,620
|
|
$
|
49,620
|
|
|
Securities available for sale
|
|
|
118,964
|
|
|
118,964
|
|
|
157,260
|
|
|
157,260
|
|
|
Securities held to maturity
|
|
|
14,889
|
|
|
14,916
|
|
|
11,217
|
|
|
11,157
|
|
|
Bank stocks
|
|
|
32,464
|
|
|
32,464
|
|
|
31,845
|
|
|
31,845
|
|
|
Loans held for sale
|
|
|
492
|
|
|
492
|
|
|
—
|
|
|
—
|
|
|
Loans, net
|
|
|
1,755,936
|
|
|
1,761,794
|
|
|
1,919,588
|
|
|
1,893,775
|
|
|
Accrued interest receivable
|
|
|
10,252
|
|
|
10,252
|
|
|
13,880
|
|
|
13,880
|
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
1,799,507
|
|
|
1,800,582
|
|
|
1,960,105
|
|
|
1,957,740
|
|
|
Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal funds purchased and sold under agreements to repurchase
|
|
|
23,617
|
|
|
23,617
|
|
|
25,469
|
|
|
25,469
|
|
|
Short-term borrowings
|
|
|
16,359
|
|
|
16,359
|
|
|
58,517
|
|
|
58,517
|
|
|
Subordinated debentures
|
|
|
41,239
|
|
|
43,187
|
|
|
41,239
|
|
|
46,087
|
|
|
Long-term borrowings
|
|
|
47,356
|
|
|
41,800
|
|
|
9,115
|
|
|
8,830
|
|
|
Accrued interest payable
|
|
|
4,122
|
|
|
4,122
|
|
|
5,098
|
|
|
5,098
|
(20) Regulatory Capital Matters
The Company and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital
requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company's consolidated financial
statements. Under capital adequacy
101
CENTENNIAL BANK HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(20) Regulatory Capital Matters (Continued)
guidelines
and the regulatory framework for prompt corrective action, the Company must meet specific capital guidelines that involve quantitative measures of their assets, liabilities, and certain
off-balance sheet items as calculated under regulatory accounting practices. The Company's capital amounts and classification are also subject to qualitative judgments by the regulators
about components, risk weighting, and other factors.
Quantitative
measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios (set forth in the following table) of
Total and Tier 1 capital to risk-weighted assets, and of Tier 1 capital to average assets. Management believes, as of December 31, 2007, that the Company and its bank
subsidiaries met all capital adequacy requirements to which they are subject.
As
of December 31, 2007, the most recent notifications from the Company's bank regulatory agencies categorized all the bank subsidiaries as well capitalized under the regulatory
framework for prompt corrective action. To be categorized as well capitalized, an institution must maintain minimum Total risk-based, Tier 1 risk-based, and
Tier 1 leverage ratios, as set forth in the following table. Prompt corrective action provisions are not applicable to bank holding companies. There are no conditions or events since that
notification that management believes have changed the categorization of the
102
CENTENNIAL BANK HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(20) Regulatory Capital Matters (Continued)
Company
or any of the bank subsidiaries as well capitalized. The Company's and the bank subsidiaries' actual capital amounts and ratios for 2007 and 2006 are presented in the table below.
|
|
Actual
|
|
Minimum Capital
Adequacy Requirement
|
|
Minimum to be Well
Capitalized Under
Prompt Corrective
Action Provisions
|
|
|
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
|
|
|
(Dollars in thousands)
|
|
|
As of December 31, 2007:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total capital to risk weighted assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
$
|
213,536
|
|
10.87
|
%
|
$
|
157,129
|
|
8.00
|
%
|
|
N/A
|
|
10.00
|
%
|
|
|
|
CBW
|
|
|
89,956
|
|
13.38
|
|
|
53,779
|
|
8.00
|
|
$
|
67,223
|
|
10.00
|
|
|
|
|
Guaranty Bank
|
|
|
136,255
|
|
10.55
|
|
|
103,347
|
|
8.00
|
|
|
129,184
|
|
10.00
|
|
|
|
Tier 1 capital to risk weighted assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
188,936
|
|
9.62
|
|
|
78,564
|
|
4.00
|
|
|
N/A
|
|
6.00
|
|
|
|
|
CBW
|
|
|
81,524
|
|
12.13
|
|
|
26,889
|
|
4.00
|
|
|
40,334
|
|
6.00
|
|
|
|
|
Guaranty Bank
|
|
|
120,828
|
|
9.35
|
|
|
51,673
|
|
4.00
|
|
|
77,510
|
|
6.00
|
|
|
|
Tier 1 capital to average assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
188,936
|
|
8.55
|
|
|
88,448
|
|
4.00
|
|
|
N/A
|
|
5.00
|
|
|
|
|
CBW
|
|
|
81,524
|
|
9.71
|
|
|
33,591
|
|
4.00
|
|
|
41,989
|
|
5.00
|
|
|
|
|
Guaranty Bank
|
|
|
120,828
|
|
8.82
|
|
|
54,818
|
|
4.00
|
|
|
68,523
|
|
5.00
|
|
As of December 31, 2006:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total capital to risk weighted assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
$
|
237,768
|
|
11.17
|
%
|
$
|
170,260
|
|
8.00
|
%
|
|
N/A
|
|
10.00
|
%
|
|
|
|
CBW
|
|
|
94,065
|
|
11.36
|
|
|
66,255
|
|
8.00
|
|
$
|
82,819
|
|
10.00
|
|
|
|
|
Guaranty Bank
|
|
|
140,614
|
|
10.93
|
|
|
102,965
|
|
8.00
|
|
|
128,707
|
|
10.00
|
|
|
|
Tier 1 capital to risk weighted assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
211,144
|
|
9.92
|
|
|
85,128
|
|
4.00
|
|
|
N/A
|
|
6.00
|
|
|
|
|
CBW
|
|
|
83,666
|
|
10.10
|
|
|
33,128
|
|
4.00
|
|
|
49,691
|
|
6.00
|
|
|
|
|
Guaranty Bank
|
|
|
126,407
|
|
9.82
|
|
|
51,483
|
|
4.00
|
|
|
77,224
|
|
6.00
|
|
|
|
Tier 1 capital to average assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
211,144
|
|
8.93
|
|
|
94,585
|
|
4.00
|
|
|
N/A
|
|
5.00
|
|
|
|
|
CBW
|
|
|
83,666
|
|
8.90
|
|
|
37,584
|
|
4.00
|
|
|
46,980
|
|
5.00
|
|
|
|
|
Guaranty Bank
|
|
|
126,407
|
|
9.14
|
|
|
55,298
|
|
4.00
|
|
|
69,122
|
|
5.00
|
|
103
CENTENNIAL BANK HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(20) Regulatory Capital Matters (Continued)
The Company's principal source of funds for stock repurchases and operating expenses is dividends received from the Bank. Banking regulations limit the amount of
dividends that may be paid without prior approval of regulatory agencies. Under these regulations, the amount of dividends that may be paid in any calendar year is limited to the current year's net
profits, combined with the retained net profits of the preceding two years, subject to the capital requirements described above. From time to time, the Bank dividends funds to the Company to assist
the Company with its general obligations. The Bank will be required to obtain regulatory approval for dividend payments to the Company.
(21) Assets Held for Sale and Discontinued Operations
On March 1, 2006, the Company sold certain assets of its First MainStreet Insurance Subsidiary. First MainStreet Insurance was acquired by the Company on
October 1, 2005 as part of the First MainStreet Financial, Ltd. acquisition. The following table presents the results of operations that were reported as discontinued operations for the
years ended December 31, 2006 and 2005.
|
|
Year Ended December 31,
|
|
|
|
2006
|
|
2005(a)
|
|
|
|
(Amounts in thousands)
|
|
|
Results of operations:
|
|
|
|
|
|
|
|
|
Interest expense
|
|
$
|
1
|
|
$
|
1
|
|
|
|
|
|
|
|
|
|
Noninterest income
|
|
|
507
|
|
|
801
|
|
|
|
|
|
|
|
|
|
Noninterest expense:
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits
|
|
|
253
|
|
|
502
|
|
|
|
Occupancy expense
|
|
|
21
|
|
|
31
|
|
|
|
Furniture and equipment
|
|
|
17
|
|
|
14
|
|
|
|
Amortization
|
|
|
46
|
|
|
69
|
|
|
|
Merger, acquisition and transition
|
|
|
—
|
|
|
60
|
|
|
|
Other general and administrative
|
|
|
143
|
|
|
190
|
|
|
|
|
|
|
|
|
|
|
Total noninterest expense
|
|
|
480
|
|
|
866
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
|
|
26
|
|
|
(66
|
)
|
|
|
Income taxes provision (benefit)
|
|
|
9
|
|
|
(21
|
)
|
|
|
|
|
|
|
|
|
Income from discontinued operations, net of tax
|
|
$
|
17
|
|
$
|
(45
|
)
|
|
|
|
|
|
|
|
-
(a)
-
The
2005 results of operations were reclassified to income from discontinued operations.
104
CENTENNIAL BANK HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(21) Assets Held for Sale and Discontinued Operations (Continued)
On
June 19, 2006, the Company signed a definitive agreement to sell Collegiate Peaks to a new group of investors. This agreement followed the August 25, 2005 definitive
agreement for the sale of Collegiate Peaks that was terminated on April 25, 2006. The Company consummated the sale of Collegiate Peaks as of November 1, 2006. Pursuant to the Company's
2005 decision to sell Collegiate Peaks, the Company classified Collegiate Peaks' assets and liabilities as held for sale at the lower of cost or fair value at December 31, 2005. The following
table presents the results of operations that are presented in discontinued operations for the years ended December 31, 2006 and 2005:
|
|
Year Ended December 31,
|
|
|
2006
|
|
2005
|
|
|
(Amounts in thousands)
|
|
Selected Results of Operations:
|
|
|
|
|
|
|
|
|
Interest income
|
|
$
|
4,651
|
|
$
|
3,969
|
|
|
Noninterest income
|
|
|
300
|
|
|
425
|
|
|
Income before income taxes
|
|
|
1,583
|
|
|
1,497
|
|
|
Net income from discontinued operations, net of tax
|
|
|
1,141
|
|
|
1,105
|
The
income from discontinued operations consisted of the following:
|
|
Year Ended December 31,
|
|
|
|
2006
|
|
2005
|
|
|
|
(Amounts in thousands)
|
|
|
Collegiate Peaks income from operations
|
|
$
|
1,141
|
|
$
|
1,105
|
|
|
Impairment of Collegiate Peaks assets
|
|
|
(325
|
)
|
|
(1,937
|
)
|
|
Tax benefit from impaired Collegiate Peaks income
|
|
|
124
|
|
|
395
|
|
|
Gain on sale of Collegiate Peaks
|
|
|
1,039
|
|
|
—
|
|
|
First MainStreet Insurance net income (loss)
|
|
|
17
|
|
|
(45
|
)
|
|
Elimination of intercompany income from Collegiate Peaks and First MainStreet Ins.
|
|
|
(8
|
)
|
|
—
|
|
|
|
|
|
|
|
|
|
Income (loss) from discontinued operations, net of tax of $327 and $(3), respectively
|
|
$
|
1,988
|
|
$
|
(482
|
)
|
|
|
|
|
|
|
|
105
CENTENNIAL BANK HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(22) Supplemental Cash Flow Disclosures
The cash balances and activity associated with Collegiate Peaks Bank were classified as assets held for sale, and as such, did not affect cash and cash
equivalents as classified in the Company's consolidated balance sheets as of December 31, 2005, and through November 1, 2006, the date of sale. The following table presents Collegiate
Peaks Bank cash activity for the period from January 1, 2006 to November 1, 2006, and the year ended December 31, 2005, which is included in the accompanying statements of cash
flows for the years ended December 31, 2006 and 2005. The consolidated statements of cash flows include all cash activity of the Company, including cash and cash equivalents classified within
assets held for sale in the Company's consolidated balance sheets.
|
|
Period from
January 1, 2006 to
November 1, 2006
|
|
Year Ended
December 31, 2005
|
|
|
|
(Amounts in thousands)
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
1,141
|
|
$
|
1,105
|
|
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
Provision for loan losses
|
|
|
100
|
|
|
84
|
|
|
|
|
Depreciation and amortization
|
|
|
77
|
|
|
93
|
|
|
|
|
(Gain) loss on sale of real estate owned and assets
|
|
|
9
|
|
|
—
|
|
|
|
|
Other
|
|
|
(228
|
)
|
|
(128
|
)
|
|
|
|
|
Accrued interest receivable and other assets
|
|
|
(245
|
)
|
|
15
|
|
|
|
|
|
Accrued interest payable and other liabilities
|
|
|
60
|
|
|
25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
914
|
|
|
1,194
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
Activity in available-for-sale securities:
|
|
|
—
|
|
|
—
|
|
|
|
|
Maturities, prepayments, and calls
|
|
|
11,550
|
|
|
15,854
|
|
|
|
|
Purchases
|
|
|
(12,231
|
)
|
|
(14,849
|
)
|
|
|
Activity in held-to-maturity securities and bank stocks:
|
|
|
—
|
|
|
—
|
|
|
|
|
Maturities, prepayments, and calls
|
|
|
231
|
|
|
—
|
|
|
|
Loan originations and principal collections, net
|
|
|
(1,594
|
)
|
|
2,499
|
|
|
|
Proceeds from sales of premises and equipment
|
|
|
8
|
|
|
—
|
|
|
|
Additions to premises and equipment
|
|
|
(40
|
)
|
|
(63
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided (used) by investing activities
|
|
|
(2,076
|
)
|
|
3,441
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in deposits
|
|
|
15,687
|
|
|
8,400
|
|
|
|
Net change in federal funds purchased and repurchase agreements
|
|
|
6,582
|
|
|
508
|
|
|
|
Dividends paid on common stock
|
|
|
(1,750
|
)
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided (used) by financing activities
|
|
|
20,519
|
|
|
8,908
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash and cash equivalents
|
|
|
19,357
|
|
|
13,543
|
|
|
Cash and cash equivalents, beginning of period
|
|
|
19,869
|
|
|
6,326
|
|
|
Cash and cash equivalents, end of period
|
|
$
|
39,226
|
|
$
|
19,869
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow activity:
|
|
|
|
|
|
|
|
|
|
Interest paid on deposits and borrowed funds
|
|
$
|
926
|
|
$
|
745
|
|
106
CENTENNIAL BANK HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(23) Parent Company Only Condensed Financial Information
The following is condensed financial information of Centennial Bank Holdings, Inc. (parent company only).
Balance Sheets
(Parent Company Only)
December 31, 2007 and 2006
|
|
2007
|
|
2006
|
|
|
|
(Amounts in thousands)
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
—
|
|
$
|
613
|
|
|
Other loans
|
|
|
872
|
|
|
1,258
|
|
|
Goodwill
|
|
|
4,756
|
|
|
4,756
|
|
|
Investment in subsidiaries
|
|
|
467,446
|
|
|
624,871
|
|
|
Due from subsidiaries
|
|
|
—
|
|
|
247
|
|
|
Other assets
|
|
|
7,128
|
|
|
10,487
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
480,202
|
|
$
|
642,232
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
Borrowings
|
|
$
|
15,160
|
|
$
|
2,450
|
|
|
|
Subordinated debentures
|
|
|
41,239
|
|
|
41,239
|
|
|
|
Other liabilities
|
|
|
5,149
|
|
|
9,084
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
61,548
|
|
|
52,773
|
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
|
64
|
|
|
64
|
|
|
|
Additional paid-in capital
|
|
|
617,611
|
|
|
614,489
|
|
|
|
Stock to be issued
|
|
|
573
|
|
|
775
|
|
|
|
Retained earnings (accumulated deficit)
|
|
|
(95,196
|
)
|
|
42,896
|
|
|
|
Accumulated other comprehensive income (loss)
|
|
|
(1,472
|
)
|
|
809
|
|
|
|
Treasury stock
|
|
|
(102,926
|
)
|
|
(69,574
|
)
|
|
|
|
|
|
|
|
|
|
|
Total stockholders' equity
|
|
|
418,654
|
|
|
589,459
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
|
$
|
480,202
|
|
$
|
642,232
|
|
|
|
|
|
|
|
|
107
CENTENNIAL BANK HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(23) Parent Company Only Condensed Financial Information (Continued)
Statements of Income (Loss)
(Parent Company Only)
Years ended December 31, 2007, 2006 and 2005
|
|
2007
|
|
2006
|
|
2005
|
|
|
|
(Amounts in thousands)
|
|
|
Income:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income on other investments
|
|
$
|
74
|
|
$
|
111
|
|
$
|
97
|
|
|
|
Charges for services—subsidiary banks
|
|
|
15,511
|
|
|
12,620
|
|
|
3,086
|
|
|
|
Other
|
|
|
289
|
|
|
405
|
|
|
119
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total income
|
|
|
15,874
|
|
|
13,136
|
|
|
3,302
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
4,912
|
|
|
4,420
|
|
|
2,875
|
|
|
|
Salaries and benefits
|
|
|
12,218
|
|
|
11,489
|
|
|
4,343
|
|
|
|
Professional services
|
|
|
3,024
|
|
|
3,798
|
|
|
3,126
|
|
|
|
Merger, acquisitions and transition
|
|
|
—
|
|
|
805
|
|
|
2,797
|
|
|
|
Other
|
|
|
5,377
|
|
|
4,603
|
|
|
439
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses
|
|
|
25,531
|
|
|
25,115
|
|
|
13,580
|
|
|
|
|
|
|
|
|
|
|
|
Loss before federal income taxes and equity in undistributed net income of subsidiaries
|
|
|
(9,656
|
)
|
|
(11,979
|
)
|
|
(10,278
|
)
|
|
Income tax benefit
|
|
|
(3,617
|
)
|
|
(4,233
|
)
|
|
(3,941
|
)
|
|
|
|
|
|
|
|
|
|
|
Loss before equity in undistributed net income of subsidiaries
|
|
|
(6,039
|
)
|
|
(7,746
|
)
|
|
(6,337
|
)
|
|
Equity in undistributed net income (loss) of subsidiaries
|
|
|
(132,053
|
)
|
|
31,327
|
|
|
22,561
|
|
|
Income (loss) from discontinued operations, net of tax
|
|
|
—
|
|
|
837
|
|
|
(1,542
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(138,092
|
)
|
$
|
24,418
|
|
$
|
14,682
|
|
|
|
|
|
|
|
|
|
|
108
CENTENNIAL BANK HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(23) Parent Company Only Condensed Financial Information (Continued)
Statements of Cash Flows
(Parent Company Only)
Years ended December 31, 2007, 2006 and 2005
|
|
Years ended December 31,
|
|
|
|
2007
|
|
2006
|
|
2005
|
|
|
|
(Amounts in thousands)
|
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(138,092
|
)
|
$
|
24,418
|
|
$
|
14,682
|
|
|
|
Adjustments to reconcile net income (loss) to net cash used by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation (accretion)
|
|
|
942
|
|
|
831
|
|
|
(804
|
)
|
|
|
|
Loss (gain) on sale of assets
|
|
|
1
|
|
|
3
|
|
|
(111
|
)
|
|
|
|
Loss (gain) on discontinued operation
|
|
|
—
|
|
|
(442
|
)
|
|
1,542
|
|
|
|
|
Equity based compensation
|
|
|
964
|
|
|
1,673
|
|
|
470
|
|
|
|
|
Deferred compensation—shares to be issued
|
|
|
83
|
|
|
275
|
|
|
—
|
|
|
|
|
Amortization of purchase adjustment
|
|
|
—
|
|
|
(36
|
)
|
|
—
|
|
|
|
|
Other
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
|
|
Change in accrued and deferred income taxes, net
|
|
|
—
|
|
|
—
|
|
|
227
|
|
|
|
|
Net change in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other assets
|
|
|
3,152
|
|
|
6,695
|
|
|
(6,143
|
)
|
|
|
|
|
Other liabilities
|
|
|
(3,935
|
)
|
|
(3,502
|
)
|
|
353
|
|
|
|
|
|
Due from subsidiaries
|
|
|
247
|
|
|
—
|
|
|
—
|
|
|
|
|
|
Equity in (earnings) loss of consolidated subsidiaries
|
|
|
132,053
|
|
|
(31,327
|
)
|
|
(22,561
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used by operating activities
|
|
|
(4,588
|
)
|
|
(1,412
|
)
|
|
(12,345
|
)
|
|
|
|
|
|
|
|
|
|
Cash flow from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash and cash equivalents paid in acquisitions
|
|
|
—
|
|
|
(4,122
|
)
|
|
—
|
|
|
|
Proceeds from sale of assets
|
|
|
—
|
|
|
31
|
|
|
1,515
|
|
|
|
Cash from sale of subsidiaries
|
|
|
—
|
|
|
19,835
|
|
|
—
|
|
|
|
Cash invested in subsidiaries
|
|
|
—
|
|
|
—
|
|
|
(4,413
|
)
|
|
|
Payments on discontinued operations
|
|
|
—
|
|
|
(189
|
)
|
|
(104
|
)
|
|
|
Loan originations and principal collections, net
|
|
|
386
|
|
|
—
|
|
|
—
|
|
|
|
Additions to premises and equipment
|
|
|
(735
|
)
|
|
—
|
|
|
—
|
|
|
|
Dividends received from subsidiaries
|
|
|
25,000
|
|
|
29,653
|
|
|
41,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by investing activities
|
|
|
24,651
|
|
|
45,208
|
|
|
38,498
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net changes in short-term borrowings
|
|
|
12,710
|
|
|
(5,358
|
)
|
|
(4,190
|
)
|
|
|
Costs associated with issuance of common stock
|
|
|
—
|
|
|
—
|
|
|
(504
|
)
|
|
|
Repurchase of common stock
|
|
|
(33,386
|
)
|
|
(37,854
|
)
|
|
(31,720
|
)
|
|
|
Tax benefit from vesting of stock compensation
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used by financing activities
|
|
|
(20,676
|
)
|
|
(43,210
|
)
|
|
(36,414
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash and cash equivalents
|
|
|
(613
|
)
|
|
586
|
|
|
(10,261
|
)
|
|
Cash and cash equivalents, beginning of year
|
|
|
613
|
|
|
27
|
|
|
10,288
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of year
|
|
$
|
—
|
|
$
|
613
|
|
$
|
27
|
|
|
|
|
|
|
|
|
|
|
109
CENTENNIAL BANK HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(24) Quarterly Results of Operations (Unaudited)
|
|
Quarter Ended
|
|
|
December 31,
2007
|
|
September 30,
2007
|
|
June 30,
2007
|
|
March 31,
2007
|
|
|
(Amounts in thousands, except share data)
|
|
Interest income
|
|
$
|
38,542
|
|
$
|
41,084
|
|
$
|
41,703
|
|
$
|
42,360
|
|
Interest expense
|
|
|
14,358
|
|
|
15,848
|
|
|
15,716
|
|
|
15,517
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
|
|
24,184
|
|
|
25,236
|
|
|
25,987
|
|
|
26,843
|
|
|
Provision for loan losses
|
|
|
3,025
|
|
|
8,026
|
|
|
12,766
|
|
|
849
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income after provision for loan losses
|
|
|
21,159
|
|
|
17,210
|
|
|
13,221
|
|
|
25,994
|
|
Noninterest income
|
|
|
2,932
|
|
|
2,620
|
|
|
2,577
|
|
|
2,567
|
|
Noninterest expense
|
|
|
160,048
|
|
|
18,205
|
|
|
27,622
|
|
|
20,682
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
|
|
(135,957
|
)
|
|
1,625
|
|
|
(11,824
|
)
|
|
7,879
|
|
Income tax expense (benefit)
|
|
|
2,253
|
|
|
122
|
|
|
(5,030
|
)
|
|
2,470
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(138,210
|
)
|
$
|
1,503
|
|
$
|
(6,794
|
)
|
$
|
5,409
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share—basic and diluted
|
|
$
|
(2.68
|
)
|
$
|
0.03
|
|
$
|
(0.13
|
)
|
$
|
0.10
|
The
primary difference between the first quarter and second quarter 2007 results is the $11.9 million higher provision for loan losses made and a $6.5 million charge for a
litigation settlement recorded in the second quarter 2007. The fourth quarter 2007 results were affected primarily by the $142.2 million goodwill impairment charge, which was not deductible for
income tax purposes.
110
CENTENNIAL BANK HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(24) Quarterly Results of Operations (Unaudited) (Continued)
|
|
Quarter Ended
|
|
|
December 31,
2006
|
|
September 30,
2006
|
|
June 30,
2006
|
|
March 31,
2006
|
|
|
(Amounts in thousands, except per share data)
|
|
Interest income
|
|
$
|
43,881
|
|
$
|
44,224
|
|
$
|
42,966
|
|
$
|
42,710
|
|
Interest expense
|
|
|
15,974
|
|
|
15,229
|
|
|
13,578
|
|
|
12,803
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
|
|
27,907
|
|
|
28,995
|
|
|
29,388
|
|
|
29,907
|
|
|
Provision for credit losses
|
|
|
2,724
|
|
|
1,566
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income, after provision for loan losses
|
|
|
25,183
|
|
|
27,429
|
|
|
29,388
|
|
|
29,907
|
|
Noninterest income
|
|
|
2,526
|
|
|
3,474
|
|
|
3,605
|
|
|
3,112
|
|
Noninterest expense
|
|
|
21,222
|
|
|
22,942
|
|
|
25,005
|
|
|
21,739
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
6,487
|
|
|
7,961
|
|
|
7,988
|
|
|
11,280
|
|
Income tax expense
|
|
|
2,163
|
|
|
2,521
|
|
|
2,611
|
|
|
3,991
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
|
4,324
|
|
|
5,440
|
|
|
5,377
|
|
|
7,289
|
|
|
Income from discontinued operations, net of tax
|
|
|
1,119
|
|
|
380
|
|
|
349
|
|
|
140
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
5,443
|
|
$
|
5,820
|
|
$
|
5,726
|
|
$
|
7,429
|
|
|
|
|
|
|
|
|
|
|
Earnings per share—basic and diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
$
|
0.08
|
|
$
|
0.10
|
|
$
|
.09
|
|
$
|
0.12
|
|
|
Income from discontinued operations, net of tax
|
|
|
0.02
|
|
|
—
|
|
|
0.01
|
|
|
0.01
|
|
|
Net income
|
|
|
0.10
|
|
|
0.10
|
|
|
0.10
|
|
|
0.13
|
111