-- Takes Fourth Quarter Non-Cash Goodwill Impairment Charge
-- Non-Cash Goodwill Impairment Charge Does Not Impact Cash Flow,
Liquidity or Regulatory Capital -- the Company Remains
Well-Capitalized
DENVER, Jan. 30, 2008 (PRIME NEWSWIRE) -- Centennial Bank Holdings, Inc. (Nasdaq:CBHI) today announced a fourth quarter $142.2 million non-cash goodwill impairment charge related to its prior acquisitions. As a result of this non-cash charge, the Company reported a net loss for the year ended December 31, 2007 of $138.1 million, or $2.60 per share, compared to net income of $24.4 million, or $0.42 per basic and diluted share, in the prior year. The non-cash goodwill impairment charge also caused a net loss of $138.2 million, or $2.68 per share, for the three months ended December 31, 2007, as compared to net income of $5.4 million, or $0.10 per basic and diluted share in the fourth quarter 2006.
Dan Quinn, Centennial Bank Holdings President and CEO, stated, "As with similar impairment charges recently announced by several banks, the goodwill impairment is solely a non-cash accounting charge and it has absolutely no impact on the holding company's or our bank subsidiary's cash flow, liquidity or regulatory capital. Just as importantly, this accounting charge has no impact whatsoever on our ability to continue to serve our customers at the high level that they expect and deserve. Guaranty Bank and Trust Company remains a well-capitalized and fundamentally sound institution dedicated to high touch customer service."
Mr. Quinn continued, "While market conditions and the current environment dictated that we adjust our goodwill, the magnitude of the impairment does not detract from the continued success of our efforts to strategically reposition Centennial Bank Holdings. The fourth quarter saw the continued reduction of credit risk in our portfolio, as Commercial loans increased 6% while Construction and Land Development loans declined 19% and now make up only 13% of our loans. Our lower risk profile, combined with continued improvements in our funding mix and expense management, create a solid foundation for future success."
Without the impact of the non-cash goodwill impairment charge and $5.4 million of after-tax intangible asset amortization, cash net income for the year ended December 31, 2007 was $9.5 million, or $0.18 per basic and diluted share. This compares to cash net income of $31.7 million, or $0.55 per basic and diluted share, in 2006, which excludes $7.3 million of after-tax intangible asset amortization.
Fourth quarter 2007 cash net income was $5.3 million, or $0.10 per basic and diluted share, which excludes after-tax intangible asset amortization of $1.3 million and the goodwill impairment charge. Excluding after-tax intangible asset amortization of $1.8 million, fourth quarter 2006 cash net income was $7.3 million, or $0.13 per basic and diluted share.
The Company's results for 2007 declined largely due to the non-cash goodwill impairment charge discussed above. Additionally, the provision for loan losses was $24.7 million in 2007, as compared to $4.3 million in 2006, an increase of $20.4 million. The provision for loan losses for the fourth quarter 2007 was $3.0 million, as compared to $2.7 million in the fourth quarter 2006. The overall increase of the provision in 2007 is due to a decline in overall general economic conditions in 2007, as well as a result of adopting a more aggressive credit management philosophy during the second quarter 2007, including the implementation of an accelerated disposition strategy. This strategy led to a sale of $47.9 million of nonperforming and classified loans on October 31, 2007. As a result of the adoption of this philosophy and the subsequent sale of certain problem credits, the Company had $26.9 million of net charge-offs during 2007. Other factors causing a decline in income from the prior year include a $6.5 million charge in the second quarter 2007 related to the settlement of a lawsuit and a $1.0 million charge for costs associated with the merger of the Company's two subsidiary banks.
The comparability of the Company's financial information is also affected by the sale of Collegiate Peaks Bank on November 1, 2006, which had been classified as held for sale.
Company Remains Well-Capitalized
The Company remains well-capitalized for regulatory capital purposes at December 31, 2007. In addition to exceeding the requirements to be a well capitalized institution, the regulatory capital ratios improved from the prior quarter as follows:
Minimum
Requirement for
Ratio at Ratio at Minimum "Well
December 31, September 30, Capital Capitalized"
2007 2007 Requirement Institution
-------------------------------------------------------
Total Risk-
Based
Capital Ratio 10.9% 10.4% 8.00% 10.00%
Tier 1 Risk
Based Capital
Ratio 9.6% 9.2% 4.00% 6.00%
Leverage Ratio 8.6% 8.6% 4.00% 5.00%
Goodwill Impairment Analysis
Under current accounting guidance, goodwill recorded as a result of acquisitions is not amortized. Instead, companies are required to evaluate goodwill for impairment at least annually. This impairment testing requires that the fair value of the reporting unit be assessed as of the testing date. Generally, an impairment may be recorded if the value of the reporting unit is less than its carrying cost. Common valuation practices include using benchmarks of the current market multiples of peer group companies, in addition to a discounted cash flow analysis. Lower market valuations for banking institutions in the latter part of 2007 had a direct negative impact on the Company's valuation. For example, the NASDAQ America's Community Bankers Index (ACBQ), of which the Company is a part, declined by 25% during 2007. Other contributing factors to a decrease in the Company's fourth quarter 2007 valuation include the weakening of the credit market and the decline in real estate values, particularly in Northern Colorado.
Key Financial Measures
Quarter Ended Year Ended
----------------------------- ------------------
Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
2007 2007 2006 2007 2006
----------------------------- ------------------
Earnings (loss) per
share- basic &
diluted $ (2.68) $ 0.03 $ 0.10 $ (2.60) $ 0.42
Cash earnings per
share-basic &
diluted $ 0.10 $ 0.05 $ 0.13 $ 0.18 $ 0.55
Return on average
assets (22.09%) 0.23% 0.78% (5.29%) 0.86%
Return on tangible
average assets
(cash) 0.98% 0.51% 1.23% 0.43% 1.32%
Net Interest Margin 4.75% 4.82% 5.12% 4.93% 5.35%
Efficiency Ratio
(excludes
intangible asset
charges) 57.91% 57.66% 60.01% 67.01% 61.35%
Net Interest Income and Margin
Quarter Ended Year Ended
----------------------------- ------------------
Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
2007 2007 2006 2007 2006
------------------------------------------------
(Dollars in thousands)
Net interest income $ 24,184 $ 25,236 $ 27,907 $102,249 $116,197
Interest rate spread 3.77% 3.84% 4.14% 3.94% 4.48%
Net interest margin 4.75% 4.82% 5.12% 4.93% 5.35%
Net interest margin,
fully tax
equivalent 4.88% 4.97% 5.27% 5.08% 5.49%
The $13.9 million decrease in net interest income in 2007 as compared to 2006 is due both to a reduction in net interest margin and lower interest-earning assets. The 42 basis point decrease in margin caused a $9.1 million decline in net interest income, whereas the $99.0 million decline in average interest-earning assets had a $4.8 million negative effect on net interest margin. This decline in average interest-earning assets was part of a strategic initiative to reduce our concentration risk, primarily in construction and land development loans. Overall yield on earning assets declined by 11 basis points in 2007 from 2006, while cost of funds increased by 43 basis points, causing the 54 basis point decrease in the interest rate spread. The increase in the cost of funds was mostly due to higher costs on time deposits due to competition. Although interest rate spread decreased by 54 basis points, net interest margin declined only by 42 basis points. The primary cause for the smaller impact on overall net interest margin is the relatively high level of noninterest bearing deposits. Noninterest bearing deposits averaged 24.9 percent of total deposits during 2007.
For the fourth quarter 2007, the Company's net interest income decreased by $3.7 million from the same period in 2006. Approximately $2.3 million of this decline is attributable to a lower net interest margin and $1.4 million is due to lower earning assets. The decrease in net interest margin is due to lower yields on earning assets as the cost of funds declined by twelve basis points in the fourth quarter 2007 as compared to the fourth quarter 2006. Although the cost of time deposits increased, rates on repurchase agreements fell in the fourth quarter 2007 as compared to the same period in 2006.
Noninterest Income
The following table presents noninterest income as of the dates indicated.
Year Ended
Quarter Ended December 31,
----------------------------- ------------------
Dec. 31, Sept. 30, Dec. 31,
2007 2007 2006 2007 2006
-------------- -------------- ------------------
(In thousands)
Noninterest income:
Customer service
and other fees $ 2,267 $ 2,390 $ 2,137 $ 9,509 $10,385
Loss on sale of
securities -- -- (5) -- (4)
Gain (loss) on
sale of loans -- -- (55) -- 719
Other 665 230 449 1,187 1,617
----------------------------- ------------------
Total noninterest
income $ 2,932 $ 2,620 $ 2,526 $10,696 $12,717
Customer service and other fees have remained relatively flat in the fourth quarter 2007 as compared to both the third quarter 2007 and fourth quarter 2006. On an annual basis, customer service and other fees decreased by $0.9 million, or 8.4%, in 2007 as compared to 2006 primarily due partly to a $0.5 million decline in loan placement fees due to the discontinuation of the Company's residential mortgage group at the end of the third quarter 2006. Further, there was a $0.5 million decline in service and analysis charges due mostly to higher earnings credit rates on compensating balances.
Noninterest Expense
The following table presents noninterest expense as of the dates indicated.
Quarter Ended Year Ended
----------------------------- ------------------
Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
2007 2007 2006 2007 2006
-------------------------------------------------
(In thousands)
Noninterest expense:
Salaries and
employee benefits $ 8,442 $ 9,039 $10,662 $ 39,179 $46,185
Occupancy expense 1,781 1,855 2,040 7,813 7,977
Furniture and
equipment 1,205 1,188 1,176 4,864 4,859
Impairment of
goodwill 142,210 -- -- 142,211 --
Amortization of
intangible assets 2,132 2,143 2,960 8,665 11,815
Other general and
administrative 4,278 3,980 4,384 23,824 20,072
----------------------------- ------------------
Total noninterest
expense $160,048 $18,205 $21,222 $226,556 $90,908
============================= ==================
Efficiency ratio 57.91% 57.66% 60.01% 67.01% 61.35%
Without the $142.2 million non-cash goodwill impairment charge in the fourth quarter 2007, overall noninterest expense for 2007 was $84.3 million. This amount is $6.6 million lower than in 2006, which is the primary cause for the decline in the efficiency ratio (the efficiency ratio excludes charges for intangible assets). The largest reduction in noninterest expense for the year ended December 31, 2007 as compared to the prior year relates to salaries and employee benefits. Salaries declined by $7.0 million, or 15.2%, in 2007 as compared to 2006. This decline was mostly driven by a $5.0 million decrease in bonus and incentive expense, as well as a $1.4 million decrease in base salary and overtime. The reduction in base salary is due to an eleven percent decline in full-time equivalent employees as a result of the continuing focus on the appropriate level of staff for each business unit.
Other general and administrative expenses increased by $3.8 million in 2007 as compared to 2006. This increase is mostly due to the $6.5 million charge in the second quarter 2007 as a result of the settlement of a lawsuit, as well as a $1.0 million charge related to costs associated with the merger of the Company's subsidiary banks. Without these charges, other expenses would have declined by $3.7 million. The largest portion of this decline relates to $1.8 million of expenses for the management transition in the second quarter 2006. The remainder of the decline is due to the intense scrutiny on expense management in 2007, with declines in professional fees and advertising, business development and other office-related expenses.
For the fourth quarter 2007, noninterest expense was $17.8 million without the goodwill impairment charge, a decrease of $3.4 million from the fourth quarter 2006, and a decrease of $0.4 million from the third quarter 2007. The decline from the same period in 2006 is mostly due to a $2.2 million reduction in salaries and employee benefits attributable to lower bonuses and incentives, as well as fewer employees. Other decreases in noninterest expense from the fourth quarter 2006 include a $0.8 million decrease in amortization costs on intangible assets and a $0.3 million decline in occupancy expense.
Balance Sheet
Dec. 31, Sept. 30, % Dec. 31, %
2007 2007 Change 2006 Change
----------------------------------------------------
(Dollars in thousands, except per share amounts)
Total loans,
net of unearned
discount $1,781,647 $1,819,188 (2.1)% $1,947,487 (8.5)%
Allowance for
loan losses (25,711) (23,979) 7.2% (27,899) (7.8)%
Total assets 2,371,664 2,617,153 (9.4)% 2,720,600 (12.8)%
Average assets,
quarter-to-date 2,482,352 2,626,913 (5.5)% 2,783,375 (10.8)%
Total deposits 1,799,507 1,915,932 (6.1)% 1,960,105 (8.2)%
Book value per
share $7.96 $10.44 (23.8)% $10.30 (22.7)%
Tangible book
value per share $2.57 $2.50 2.8% $2.71 (5.2)%
At December 31, 2007, the Company had total assets of $2.4 billion, or $348.9 million less than the total assets at December 31, 2006. A major part of this decline was a $150.9 million decline in intangible assets due to the goodwill impairment charge and amortization of other intangibles. Total loans, including loans held for sale, declined by $165.3 million at the end of 2007 as compared to December 31, 2006. Approximately $47.9 million of this decline in loans is attributable to the sale of certain impaired and classified loans in October 2007.
Further, the Company continues to employ its strategy of reducing its concentration of residential construction and land development loans. Partially offsetting this decrease is an increase in middle-market and energy loans. The December 31, 2007 energy and middle-market loan portfolio balances grew by $123.6 million from December 31, 2006, while total residential and commercial construction and land development loans decreased by $193.0 million.
The balances of total residential and commercial construction and land development loans were as follows:
Dec. 31, Sept. 30, Dec. 31, Dec. 31,
2007 2007 2006 2005
-------------------------------------------
(Dollars in thousands)
Construction and Land
Development:
Loan balances - Northern
Colorado $ 67,234 $ 100,817 $ 206,414 $ 279,361
Loan balances - All
Other Areas 167,413 189,774 221,051 251,355
-------------------------------------------
Total Construction and
Land Development Loans $ 234,647 $ 290,591 $ 427,465 $ 530,716
===========================================
Percent of Total Loan
Portfolio 13% 16% 22% 26%
Total deposits at December 31, 2007 decreased by $160.6 million from December 31, 2006. Approximately $97.5 million, or 51% of this decline, is from a decrease in time deposits due to a strategic decision to mitigate the impact of margin compression. Overall, the Company maintained high levels of noninterest bearing deposits as these balances declined by just 0.5% at December 31, 2007, as compared to the end of 2006. Most of the remainder of the decline in deposits is attributable to lower interest-bearing demand deposits.
Asset Quality
The following table presents selected asset quality data (excluding loans held for sale) as of the dates indicated.
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
2007 2007 2007 2007 2006
----------------------------------------------
(Dollars in thousands)
Nonaccrual loans, not
restructured $19,309 $16,831 $35,515 $31,940 $32,852
Accruing loans past
due 90 days or more 527 9 122 323 3
----------------------------------------------
Total nonperforming
loans (NPLs) 19,836 16,840 35,637 32,263 32,855
Other real estate owned 3,517 3,401 1,385 861 1,207
----------------------------------------------
Total nonperforming
assets (NPAs) $23,353 $20,241 $37,022 $33,124 $34,062
Total NPLs held for
sale 100 12,758 -- -- --
----------------------------------------------
Total NPAs $23,453 $32,999 $37,022 $33,124 $34,062
==============================================
Allowance for loan
losses $25,711 $23,979 $35,594 $27,492 $27,899
==============================================
Selected ratios:
NPLs not held for
sale to loans,
net of unearned
discount 1.11% 0.93% 1.88% 1.69% 1.69%
NPAs not held for sale
to total assets 0.98% 0.77% 1.40% 1.23% 1.25%
Allowance for loan
losses to NPAs not
held for sale 110.10% 118.47% 96.14% 83.00% 81.91%
Allowance for loan
losses to NPLs not
held for sale 129.61% 142.39% 99.88% 85.21% 84.92%
Allowance for loan
losses to loans, net
of unearned discount 1.44% 1.32% 1.88% 1.46% 1.43%
Nonperforming assets decreased by $10.6 million, or 31.2%, at December 31, 2007 as compared to December 31, 2006. This decrease was mostly due to the sale of certain nonperforming and classified loans on October 31, 2007.
Similarly, the decrease in nonperforming loans over the fourth quarter 2006 was mostly due to the sale of a portfolio of nonperforming and classified loans. These loans were classified as held for sale effective September 30, 2007 and written down to their estimated market value. Excluding the loans held for sale at the end of the third quarter 2007, nonperforming assets increased by $3.1 million due mostly to loans in Northern Colorado.
The Company took a fourth quarter 2007 provision for loan losses of $3.0 million, compared to $8.0 million in the third quarter 2007 and $2.6 million in the fourth quarter 2006. The decline from the prior quarter is primarily attributable to the additional provision taken in the third quarter 2007 as a result of the Company's decision to sell a large portion of its nonperforming and classified credits in a bulk sale.
The allowance for loan losses to total loans outstanding was 1.44% at December 31, 2007, as compared to 1.32% at September 30, 2007 and 1.43% at December 31, 2006.
Stock Repurchase Programs
At December 31, 2007, the Company had 1,349,858 shares remaining under its previously existing stock repurchase programs. The remaining shares will be acquired from time to time either in the open market or in privately negotiated transactions in accordance with applicable regulations of the Securities and Exchange Commission. During the fourth quarter 2007, the Company repurchased 1,265,553 shares at a cost of $6.5 million, or an average price of $5.13 per share. Cumulative shares repurchased for the year ended December 31, 2007 are 4,618,438 at a cost of $33.4 million, or an average price of $7.22 per share. As of December 31, 2007, the Company had 52,616,991 shares outstanding, including 1,651,345 shares of unvested stock awards.
Merger of Subsidiary Banks
On January 1, 2008, the Company consummated the previously announced merger of its subsidiary banks. As a result, Centennial Bank Holdings now has a single bank subsidiary, Guaranty Bank and Trust Company.
Both banks will operate separately until the close of business on February 15, 2008. At that time, the signage on the Centennial Bank of the West branches will change to Guaranty Bank and Trust Company and customers of both banks will have access to the merged Guaranty Bank's 36 branch network throughout the Colorado Front Range.
Non-GAAP Financial Measures
This press release includes non-GAAP financial measures related to the income statement, including cash net income (loss), cash earnings (loss) per share and return on average tangible assets (cash), which exclude from income the non-cash goodwill impairment charge in the fourth quarter 2007 and the after-tax impact of intangible asset amortization expense. There is no tax effect of the non-cash goodwill impairment charge under current accounting guidance.
This press release also includes non-GAAP financial measures related to tangible assets, including return on average tangible assets (cash) and tangible book value. These items exclude the average and actual intangible assets, respectively.
The Company discloses these non-GAAP financial measures to provide meaningful supplemental information regarding the Company's operational performance and to enhance investors' overall understanding of the Company's core financial performance. Management believes that these non-GAAP financial measures allow for additional transparency and are used by some investors, analysts and other users of the Company's financial information as performance measures. These non-GAAP financial measures are presented for supplemental informational purposes only for understanding the Company's operating results and should not be considered a substitute for financial information presented in accordance with GAAP. These non-GAAP financial measures presented by the Company may be different from non-GAAP financial measures used by other companies.
Quarter Ended Year Ended
---------------------------------- ----------------------
Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
2007 2007 2006 2007 2006
---------------------------------- ----------------------
(Dollars in thousands, except per share data)
GAAP net
income
(loss) $ (138,210) $ 1,503 $ 5,443 $ (138,092) $ 24,418
Add:
Impairment
of
goodwill 142,210 -- -- 142,210 --
Add:
Amorti-
zation
of
intangible
assets 2,132 2,143 2,960 8,665 11,815
Less:
Income
tax
effect (810) (815) (1,125) (3,294) (4,491)
---------------------------------- ----------------------
Cash net
income $ 5,322 $ 2,831 $ 7,278 $ 9,489 $ 31,742
================================== ======================
Weighted
average
shares -
diluted 51,559,554 52,742,028 56,161,626 53,109,307 57,636,365
Earnings
(loss)
per share
- diluted $ (2.68) $ 0.03 $ 0.10 $ (2.60) $ 0.42
Add:
Impairment
and
amorti-
zation of
intangible
assets
(after
tax
effect) 2.78 0.02 0.03 2.78 0.13
----------------------------------------------------------
Cash
earnings
per share $ 0.10 $ 0.05 $ 0.13 $ 0.18 $ 0.55
==========================================================
Return on
tangible
net assets
(cash)
Cash net
income $ 5,322 $ 2,831 $ 7,278 $ 9,489 $ 31,742
---------------------------------- ----------------------
Average
total
assets $2,482,352 $2,626,913 $2,783,375 $2,611,972 $2,850,533
Less
average
intangible
assets (331,082) (429,045) (434,369) (406,012) (439,018)
---------------------------------- ----------------------
Average
tangible
assets $2,151,270 $2,197,868 $2,349,006 $2,205,960 $2,411,515
---------------------------------- ----------------------
Return on
average
assets -
GAAP net
income
divided
by total
average
assets -22.09% 0.23% 0.78% -5.29% 0.86%
================================== ======================
Return on
average
tangible
assets
(cash) -
cash net
income
divided
by
average
tangible
assets 0.98% 0.51% 1.23% 0.43% 1.32%
The following Non-GAAP schedule reconciles the book value per share to the tangible book value per share as of the dates indicated:
Dec. 31, Sept. 30, Dec. 31,
2007 2007 2006
------------------------------------
(Dollars in thousands, except
per share amounts)
Tangible Book Value per Share
Stockholders' equity $418,654 $562,656 $589,459
Intangible assets (283,681) (428,024) (434,557)
------------------------------------
Tangible equity $134,973 $134,632 $154,902
====================================
Number of shares outstanding 52,616,991 53,870,812 57,236,795
Book value per share $7.96 $10.44 $10.30
Tangible book value per share $2.57 $2.50 $2.71
About Centennial Bank Holdings, Inc.
Centennial Bank Holdings, Inc. is a bank holding company that operates 36 branches in Colorado through a single bank, Guaranty Bank and Trust Company. The bank provides banking and other financial services including real estate, construction, commercial and industrial, energy, consumer and agricultural loans throughout its targeted Colorado markets to consumers and small to medium-sized businesses, including the owners and employees of those businesses. The bank also provides trust services, including personal trust administration, estate settlement, investment management accounts and self-directed IRAs. More information about Centennial Bank Holdings, Inc. can be found at www.cbhi.com.
Forward-Looking Statements
Certain statements contained in this press release, including, without limitation, statements containing the words "believes", "anticipates", "intends", "expects", and words of similar import, constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following: general economic and business conditions in those areas in which the Company operates; demographic changes; competition; fluctuations in interest rates; continued ability to attract and employ qualified personnel; costs and uncertainties related to the outcome of pending litigation; changes in business strategy or development plans; changes that occur in the securities markets; changes in governmental legislation or regulation; changes in credit quality; the availability of capital to fund the expansion of the Company's business; economic, political and global changes arising from natural disasters; the war on terrorism; conflicts in the Middle East; and additional "Risk Factors" referenced in the Company's most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission, as supplemented from time to time. When relying on forward-looking statements to make decisions with respect to the Company, investors and others are cautioned to consider these and other risks and uncertainties. The Company can give no assurance that any goal or plan or expectation set forth in forward-looking statements can be achieved and readers are cautioned not to place undue reliance on such statements, which speak only as of the date made. The forward-looking statements are made as of the date of this press release, and the Company does not intend, and assumes no obligation, to update the forward-looking statements or to update the reasons why actual results could differ from those projected in the forward-looking statements.
CENTENNIAL BANK HOLDINGS, INC. AND SUBSIDIARIES
Unaudited Consolidated Balance Sheets
December 31, December 31,
2007 2006
-------------------------
(In thousands)
Assets
Cash and due from banks $ 51,611 $ 45,409
Federal funds sold 745 4,211
-------------------------
Cash and cash equivalents 52,356 49,620
-------------------------
Securities available for sale, at fair value 118,964 157,260
Securities held to maturity 14,889 11,217
Bank stocks, at cost 32,464 31,845
-------------------------
Total investments 166,317 200,322
-------------------------
Loans, net of unearned discount 1,781,647 1,947,487
Less allowance for loan losses (25,711) (27,899)
-------------------------
Net loans 1,755,936 1,919,588
-------------------------
Loans, held for sale 492 --
Premises and equipment, net 69,981 74,166
Other real estate owned and foreclosed
assets 3,517 1,207
Goodwill 250,748 392,958
Other intangible assets, net 32,933 41,599
Other assets 39,384 41,140
-------------------------
Total assets $ 2,371,664 $ 2,720,600
=========================
Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Noninterest-bearing demand $ 515,299 $ 517,612
Interest-bearing demand 732,156 777,579
Savings 71,944 87,265
Time 480,108 577,649
-------------------------
Total deposits 1,799,507 1,960,105
Securities sold under agreements to
repurchase and federal fund purchases 23,617 25,469
Borrowings 63,715 67,632
Subordinated debentures 41,239 41,239
Interest payable and other liabilities 24,932 36,696
-------------------------
Total liabilities 1,953,010 2,131,141
Stockholders' equity:
Common stock 64 64
Additional paid-in capital 617,611 614,489
Shares to be issued for deferred
compensation obligations 573 775
Retained earnings (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 $ 2,371,664 $ 2,720,600
=========================
CENTENNIAL BANK HOLDINGS, INC. AND SUBSIDIARIES
Unaudited Consolidated Statements of Income
Three Months Ended Year Ended
December 31, December 31,
---------------------- ----------------------
2007 2006 2007 2006
----------------------------------------------
(In thousands, except per share data)
Interest income:
Loans, including
fees $ 36,020 $ 41,238 $ 153,214 $ 163,830
Investment securities:
Taxable 669 661 2,515 2,868
Tax-exempt 1,102 1,449 5,193 4,869
Dividends 429 460 1,853 1,805
Federal funds sold
and other 322 73 914 409
---------------------- ----------------------
Total interest
income 38,542 43,881 163,689 173,781
---------------------- ----------------------
Interest expense:
Deposits 12,576 13,374 53,594 47,337
Federal funds
purchased and
repurchase agreements 213 369 1,390 1,274
Borrowings 627 1,285 2,700 5,307
Subordinated
debentures 942 946 3,756 3,666
---------------------- ----------------------
Total interest
expense 14,358 15,974 61,440 57,584
---------------------- ----------------------
Net interest income 24,184 27,907 102,249 116,197
Provision for loan
losses 3,025 2,724 24,666 4,290
---------------------- ----------------------
Net interest income,
after provision for
loan losses 21,159 25,183 77,583 111,907
Noninterest income:
Customer service and
other fees 2,267 2,137 9,509 10,385
Gain (loss) on sale
of securities -- (5) -- (4)
Gain (loss) on sale
of loans -- (55) -- 719
Other 665 449 1,187 1,617
---------------------- ----------------------
Total noninterest
income 2,932 2,526 10,696 12,717
Noninterest expense:
Salaries and employee
benefits 8,442 10,662 39,179 46,185
Occupancy expense 1,781 2,040 7,813 7,977
Furniture and
equipment 1,205 1,176 4,864 4,859
Impairment of
goodwill 142,210 -- 142,211 --
Amortization of
intangible assets 2,132 2,960 8,665 11,815
Other general and
administrative 4,278 4,384 23,824 20,072
---------------------- ----------------------
Total noninterest
expense 160,048 21,222 226,556 90,908
---------------------- ----------------------
Income (loss) before
income taxes (135,957) 6,487 (138,277) 33,716
Income tax expense
(benefit) 2,253 2,163 (185) 11,286
---------------------- ----------------------
Income (loss) from
continuing
operations (138,210) 4,324 (138,092) 22,430
Income from
discontinued
operations, net of
tax -- 1,119 -- 1,988
---------------------- ----------------------
Net income (loss) $ (138,210) $ 5,443 $ (138,092) $ 24,418
====================== ======================
Earnings (loss) per
share-basic:
Income (loss) from
continuing operations
$ (2.68) $ 0.08 $ (2.60) $ 0.39
Income (loss) from
discontinued
operations, net of
tax -- 0.02 -- 0.03
Net income (loss)
(2.68) 0.10 (2.60) 0.42
Earnings (loss) per
share-diluted:
Income (loss) from
continuing operations
$ (2.68) $ 0.08 $ (2.60) $ 0.39
Income (loss) from
discontinued
operations, net of
tax -- 0.02 -- 0.03
Net income (loss)
(2.68) 0.10 (2.60) 0.42
Weighted average shares
outstanding-basic 51,559,554 55,985,528 53,109,307 57,539,986
Weighted average shares
outstanding-diluted 51,559,554 56,161,626 53,109,307 57,636,365
Centennial Bank Holdings, Inc. and Subsidiaries
Unaudited Consolidated Average Balance Sheets
QTD Average YTD Average
-------------------------------- ---------------------
Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
2007 2007 2006 2007 2006
-------------------------------- ---------------------
(In thousands)
Assets
Interest
earning
assets
Loans, net of
unearned
discount $1,823,363 $1,871,939 $1,959,629 $1,871,703 $1,978,003
Securities 178,218 189,526 199,665 188,850 188,642
Other earning
assets 19,715 16,326 3,616 13,016 5,496
-------------------------------- ---------------------
Average
earning
assets 2,021,296 2,077,791 2,162,910 2,073,569 2,172,141
Other assets 461,056 549,122 620,465 538,404 678,392
-------------------------------- ---------------------
Total average
assets $2,482,352 $2,626,913 $2,783,375 $2,611,973 $2,850,533
================================ =====================
Liabilities
and
Stockholders'
Equity
Average
liabilities:
Average
deposits:
Noninterest-
bearing
deposits $ 487,805 $ 458,143 $ 512,091 $ 476,876 $ 519,893
Interest-
bearing
deposits 1,391,045 1,460,366 1,456,982 1,435,779 1,463,664
-------------------------------- ---------------------
Average
deposits 1,878,850 1,918,509 1,969,073 1,912,655 1,983,557
Other interest-
bearing
liabilities 112,402 112,298 164,240 118,979 172,018
Other
liabilities 23,220 26,848 58,183 28,807 97,467
-------------------------------- ---------------------
Total average
liabilities 2,014,472 2,057,655 2,191,496 2,060,441 2,253,042
Average
stockholders'
equity 467,880 569,258 591,879 551,532 597,491
-------------------------------- ---------------------
Total average
liabilities
and
stockholders'
equity $2,482,352 $2,626,913 $2,783,375 $2,611,973 $2,850,533
================================ =====================
Centennial Bank Holdings, Inc.
Unaudited Credit Quality Measures
Quarter Ended
-------------------------------------------------
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
2007 2007 2007 2007 2006
-------------------------------------------------
(Dollars in thousands)
Nonaccrual loans
and leases, not
held for sale $ 19,309 $ 16,831 $ 35,515 $ 31,940 $ 32,852
Accruing loans past
due 90 days or
more not held for
sale 527 9 122 323 3
Other real estate
owned 3,517 3,401 1,385 861 1,207
-------------------------------------------------
Total
nonperforming
assets not held
for sale $ 23,353 $ 20,241 $ 37,022 $ 33,124 $ 34,062
-------------------------------------------------
Nonperforming loans
held for sale 100 12,758 -- -- --
-------------------------------------------------
Total
nonperforming
assets $ 23,453 $ 32,999 $ 37,022 $ 33,124 $ 34,062
=================================================
Nonperforming loans
not held for sale $ 19,836 $ 16,840 $ 35,637 $ 32,263 $ 32,855
Other impaired
loans 3,492 510 20,208 8,079 5,978
-------------------------------------------------
Total impaired
loans not held for
sale 23,328 17,350 55,845 40,342 38,833
Allocated allowance
for loan losses (4,283) (4,028) (14,113) (7,673) (8,028)
-------------------------------------------------
Net investment in
impaired loans $ 19,045 $ 13,322 $ 41,732 $ 32,669 $ 30,805
=================================================
Charged-off loans $ 1,729 $ 20,079 $ 5,473 $ 1,692 $ 1,088
Recoveries (436) (438) (809) (436) (366)
-------------------------------------------------
Net recoveries
(charge-offs) $ 1,293 $ 19,641 $ 4,664 $ 1,256 $ 722
=================================================
Provision for loan
loss $ 3,025 $ 8,026 $ 12,766 $ 849 $ 2,641
=================================================
Allowance for loan
losses $ 25,711 $ 23,979 $ 35,594 $ 27,492 $ 27,899
Allowance on
unfunded
commitments 522 586 610 572 411
-------------------------------------------------
Total allowance for
credit losses $ 26,233 $ 24,565 $ 36,204 $ 28,064 $ 28,310
=================================================
Allowance for loan
losses to loans,
net of unearned
discount 1.44% 1.32% 1.88% 1.46% 1.43%
Allowance for loan
losses to
nonaccrual loans
not held for sale 133.16% 142.47% 100.22% 86.07% 84.92%
Allowance for loan
losses to
nonperforming assets
not held for sale 110.10% 118.47% 96.14% 83.00% 81.91%
Allowance for loan
losses to
nonperforming loans
not held for sale 129.61% 142.39% 99.88% 85.21% 84.92%
Nonperforming assets
not held for sale to
loans, net of
unearned discount,
and other real
estate owned 1.31% 1.11% 1.96% 1.76% 1.75%
Annualized net
charge-offs
(recoveries) to
average loans 0.28% 4.16% 0.99% 0.27% 0.15%
Nonaccrual loans
not held for sale
to loans, net of
unearned discount 1.08% 0.93% 1.88% 1.69% 1.69%