CASH 2018 Special Proxy Statement

CRESTMARK BANCORP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 10 – INCOME TAXES (Continued) information is not yet available, prepared or analyzed sufficiently to complete its accounting for the effect of the changes in the Tax Act. The income tax benefit of $5.7 million represents all known and estimable impacts of the Tax Act and is a provisional amount based on the Company’s current best estimate. This provisional amount incorporates assumptions made based upon the Company’s current interpretations of the Tax Act and may change as the Company receives additional clarification and implementation guidance, and as data becomes available allowing for a more accurate scheduling of the deferred tax assets and liabilities, including those related to items potentially impacted by the Tax Act such as fixed assets, leasing and employee compensation. Adjustments to this provisional amount through December 31, 2018 will be included in income from operations as an adjustment to tax expense in future periods. NOTE 11 – OFF-BALANCE-SHEET RISK ACTIVITIES Some financial instruments, such as loan commitments, credit lines, letters of credit, and overdraft protection, are issued to meet client financing needs. These are agreements to provide credit or to support the credit of others, as long as conditions established in the contract are met, and usually have expiration dates. Commitments may expire without being used. 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 at the exercise of the commitment. The contractual amount of financial instruments with off-balance-sheet risk was as follows at year-end: 2017 2016 Available balances on client lines of credit . . . . . $363,631,414 $280,080,472 Standby letter of credit . . . . . . . . . . . . . . . . . . . . 1,613,417 1,523,417 NOTE 12 – NON-RECOURSE NOTES PAYABLE The Corporation assigns cash flows from certain leases to financial institutions and in return the Corporation receives a discounted cash payment. The discounted leases are collateralized by the related leased equipment and future contractual lease payments. The obligations are nonrecourse to the Corporation. As of December 31, 2017 and 2016, the balance of the notes payable were $30,765,489 and $30,477,360, respectively. The weighted average interest rate at December 31, 2017 and 2016 was 3.34% and 3.47%, respectively. The contractual payments on these non-recourse notes payable at year-end 2017 were as follows: 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $14,829,209 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,058,390 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,307,142 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,570,748 $30,765,489 NOTE 13 – SUBORDINATED DEBT AND OTHER BORROWINGS Crestmark Preferred, Limited Partnership, a business trust formed by CBI, sold 30,000 floating rate series A securities (“trust preferred securities”) at $25 per trust preferred security in a September 29, 2004 offering. The trust preferred securities bear interest at prime rate plus 1.25%, have a stated maturity of 30 years, are guaranteed F-29