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TBBK » Topics » 14. Restrictions on Cash and Due from Banks

These excerpts taken from the TBBK 10-K filed Mar 20, 2009.

14. Restrictions on Cash and Due from Banks

The Bank is required to maintain reserves against customer demand deposits by keeping cash on hand or balances with the Federal Reserve Bank in a non-interest bearing account. The amount of those reserves and cash balances at December 31, 2008 and 2007 were approximately $24.0 million and $7.1 million, respectively.

14. Restrictions on Cash and Due from Banks

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">The Bank is required to maintain reserves against customer demand deposits by keeping cash on hand or balances with the Federal Reserve Bank in a
non-interest bearing account. The amount of those reserves and cash balances at December 31, 2008 and 2007 were approximately $24.0 million and $7.1 million, respectively.

STYLE="margin-top:18px;margin-bottom:0px; margin-left:2%">15. Goodwill and Other Identifiable Intangible Assets

FACE="Times New Roman" SIZE="2">The Company accounts for goodwill in accordance with SFAS No. 142, Goodwill and Intangible Assets. SFAS No. 142 includes requirements to test goodwill and indefinite lived intangible assets for
impairment rather than amortize them. The Company did identify impairment on its outstanding goodwill from its annual testing performed at December 2008. Goodwill resulting from the acquisition of Mears Motor Livery Corporation (Mears) totaled $4.0
million. Goodwill resulting from the acquisition of the Stored Value Solutions division of Marshall BankFirst was $47.9 million. The acquisition also resulted in a customer list intangible of $12.0 million.

STYLE="margin-top:0px;margin-bottom:0px"> 


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THE BANCORP, INC. AND SUBSIDIARY

ALIGN="center">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

 


The gross carrying value and accumulated amortization related to the customer list intangible at
December 31, 2008 and 2007 are presented below.

 






































































   December 31,
   2008  2007
   Gross
Carrying
SIZE="1">Amount		  Accumulated
Amortization		  Gross
Carrying
SIZE="1">Amount		  Accumulated
Amortization
   (Dollars in thousands)

Customer list intangible

  $12,006  $1,001  $12,006  $—
              

The Company has recognized customer list intangibles as a result of the stored value acquisition.
Customer list intangibles are amortized over estimated lives of customer list or twelve years. However, decreases in customer list lives may result in increased amortization and/or a charge for impairment may be recognized. Amortization expense for
customer list intangibles for the years ended December 31, 2008 and 2007 was $1.0 million and $-0-, respectively. Amortization expense will be $1.0 million per year over the next five years.

STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%">Goodwill is tested for impairment using a two-step process that begins with an estimation of the fair value of a reporting unit. A reporting unit is an
operating segment as defined in Statement of Financial Accounting Standards No. 131, “Disclosures about Segments of an Enterprise and Related Information,” or one level below an operating segment. This first step is a screen for potential
impairment. The second step, if necessary, measures the amount of impairment, if any. Goodwill is reviewed for impairment annually as of December 31 or more frequently if indicators of impairment exist. Goodwill has been assigned to the Community
Banking segment for purposes of impairment testing. Significant judgment is applied when goodwill is assessed for impairment. This judgment includes developing cash flow projections, selecting appropriate discount rates, identifying relevant market
comparables, incorporating general economic and market conditions and selecting an appropriate control premium. The assumptions used in the goodwill impairment assessment and the application of these estimates and assumptions are discussed below.
The income approach is based on discounted cash flows which are derived from internal forecasts and economic expectations for each respective reporting unit. The key assumptions used to determine fair value under the income approach included the
cash flow period, terminal values based on a terminal growth rate and the discount rate. The discount rate used in the income approach for the Community banking segment evaluated at December 31, 2008 was 20%. The market approach calculates the
change of control price a market participant would pay for a firm by adding a change of control premium to the trading value of the firm. This valuation approach assumes that the trading level of a firm accurately reflects its intrinsic value and
the intrinsic value of the reporting unit. As a result of applying the first step of goodwill impairment testing to determine if potential goodwill impairment existed at December 31, 2008, the Community Banking segment carrying value exceeded the
fair value which required a Step 2 analysis.

Based on the fair value being less than the carrying value a Step 2 analysis, which
involves a valuation of all of the assets of the Community Banking segment as if it had just been acquired and comparing that with the carrying amount of goodwill, was performed. The results of the Step 2 analysis determined that goodwill was
impaired, which resulted in a pre-tax impairment charge of $51.9 million.

These excerpts taken from the TBBK 10-K filed Mar 17, 2008.

14. Restrictions on Cash and Due from Banks

The Bank is required to maintain reserves against customer demand deposits by keeping cash on hand or balances with the Federal Reserve Bank in a non-interest bearing account. The amount of those reserves and cash balances at December 31, 2007 and 2006 were approximately $7.1 million and $955,000, respectively.

14. Restrictions on Cash and Due from Banks

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">The Bank is required to maintain reserves against customer demand deposits by keeping cash on hand or balances with the Federal Reserve Bank in a
non-interest bearing account. The amount of those reserves and cash balances at December 31, 2007 and 2006 were approximately $7.1 million and $955,000, respectively.

STYLE="margin-top:18px;margin-bottom:0px; margin-left:2%">15. Goodwill and Other Identifiable Intangible Assets

FACE="Times New Roman" SIZE="2">The Company accounts for goodwill in accordance with SFAS No. 142, “Goodwill and Intangible Assets.” SFAS 142 includes requirements to test goodwill and indefinite lived intangible assets for
impairment rather than amortize them. The Company did not identify any impairment on its outstanding goodwill and its identifiable intangible assets from its most recent testing, performed at December 31, 2007 and no events have occurred
subsequent to this evaluation to require additional testing. Goodwill resulting from the acquisition of Mears Motor Livery Corporation (Mears) totaled $4.0 million. Goodwill resulting from the acquisition of the Stored Value Solutions division of
Marshall Bankfirst was $46.2 million. The acquisition also resulted in a customer list intangible of $12.0 million. The Company is in the process of evaluating and finalizing the identifiable assets and purchase accounting adjustments; accordingly,
the allocation of the purchase price is subject to adjustment.

 


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THE BANCORP, INC. AND SUBSIDIARY

ALIGN="center">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

 


This excerpt taken from the TBBK 10-K filed Mar 16, 2007.

12. Restrictions on Cash and Due From Banks

The Bank is required to maintain reserves against customer demand deposits by keeping cash on hand or balances with the Federal Reserve Bank in a non-interest bearing account. The amount of those reserves and cash balances at December 31, 2006 and 2005 were approximately $955,000 and $735,000, respectively.

EXCERPTS ON THIS PAGE:

10-K (2 sections)
Mar 20, 2009
10-K (2 sections)
Mar 17, 2008
10-K
Mar 16, 2007

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