##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
   FORM 10-K [X]
    
    ANNUAL REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934For the fiscal year ended December 31, 2003
 OR [  ]
    
    TRANSITION REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934For the transition period from
to
 Commission File Number 1-13676 CENTRUE FINANCIAL CORPORATION  Delaware
(State or other jurisdiction of
incorporation or organization)
    
    36-3846489
(I.R.S. Employer
Identification Number)
 310 S. Schuyler Avenue, Kankakee, Illinois
(Address of principal executive offices)
    
    60901
(Zip Code)
 Registrants telephone number, including area code: (815) 937-4440 Securities Registered Pursuant to Section 12(b) of the Act: Title of Each Class
    
    Name of Each Exchange
on which RegisteredCommon Stock, par value $.01 per share
Preferred Share Purchase Rights
    
    American Stock Exchange
American Stock Exchange
 Securities Registered Pursuant to Section 12(g) of the Act:NONE
(Title of Class) Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding twelve months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
requirements for the past 90 days. YES [X] NO [  ] Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of Registrants knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.[ ]




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##### Table of Contents



Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes [  ] No [X] The aggregate market value of the voting and non-voting common equity held
by non-affiliates of the registrant, based on the last sales price on the
American Stock Exchange on June 30, 2003, ($23.06, as adjusted for the October
2003 stock split) the last business day of the registrants most recently
completed second fiscal quarter, was approximately $40,875,925. As of March 3, 2004, the Registrant had issued and outstanding 2,607,816
shares of the Registrants common stock. DOCUMENTS INCORPORATED BY REFERENCE PARTS II and IV of Form 10-KPortions of the 2003 Annual Report to
Stockholders. PART III of Form 10-KPortions of the Proxy Statement for the 2004 Annual
Meeting of Stockholders.




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CENTRUE FINANCIAL CORPORATION 2003 ANNUAL REPORT ON FORM 10-K Table of Contents Page NumberPART IItem 1.
    
    Business
    
    
    4Item 2.
    
    Properties
    
    
    20Item 3.
    
    Legal Proceedings
    
    
    21Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    21PART IIItem 5.
    
    Market for the Registrants Common Stock and Related Stockholder Matters
    
    
    21Item 6.
    
    Selected Financial Data
    
    
    21Item 7.
    
    Management's Discussion and Analysis of Financial Condition and Results of Operations
    
    
    21Item 7A.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    22Item 8.
    
    Financial Statements and Supplementary Data
    
    
    23Item 9.
    
    Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
    
    
    23Item 9A.
    
    Controls and Procedures
    
    
    24PART IIIItem 10.
    
    Directors and Executive Officers of the Registrant
    
    
    24Item 11.
    
    Executive Compensation
    
    
    26Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    
    26Item 13.
    
    Certain Relationships and Related Transactions
    
    
    26Item 14.
    
    Principal Accountant Fees and Services
    
    
    26PART IVItem 15.
    
    Exhibits, Financial Statement Schedules, and Reports on 8-K
    
    
    27Form 10-K Signature Page
    
    
    31Articles of IncorporationEmployment Agreement for Bradley S. RenchEmployment Agreement for Carol S. HoekstraEmployment Agreement for Keith M. RoselandIndenture dated April 10, 20022003 Annual Report to StockholdersSubsidiaries of the RegistrantConsent of Independent AuditorCertification of Chief Executive OfficerCertification of Chief Financial OfficerCertification of Corporate ControllerCertification of Chief Executive OfficerCertification of Chief Financial OfficerCertification of Corporate Controller
  3




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##### Table of Contents



PART I 
 Item 1. Business THE COMPANY General Centrue Financial Corporation, a Delaware corporation (the Company,
formerly known as Kankakee Bancorp, Inc.), is a financial holding company
registered under the Bank Holding Company Act of 1956, as amended (the BHCA).
The Companys primary business activity is acting as the holding company for
Centrue Bank, a state chartered commercial bank (the Bank). The Bank has one
subsidiary, Centrue Service Corp., and its wholly-owned subsidiary, Centrue
Insurance Agency, Inc., which engage in the business of providing securities
brokerage services and insurance and annuity products to its customers. All
references to Centrue Service Corp. include Centrue Insurance Agency, Inc.,
unless clearly indicated otherwise. The Companys common stock is listed on
the American Stock Exchange (AMEX) under the symbol CFF. In February,
2003, the Company sold its Hoopeston, Illinois branch with assets of $19
million. On October 9, 2003, the Company acquired Aviston Financial
Corporation (Aviston Financial). At the time of the acquisition, Aviston
Financial had approximately $98 million in total assets. Subsequent to the
acquisition, the remaining corporation changed its name to Centrue Financial
Corporation. On October 30, 2003, the Company effected a 2 for 1 stock-split
in the form of a stock dividend to stockholders of record as of October 20,
2003. All references to share prices in this document are adjusted for the
split. On October 29, 2003, the Company announced the agreement to acquire
Parish Bank and Trust Company in Momence Illinois, a community bank with
approximately $20 million in total assets. The acquisition was completed on
March 5, 2004. The Company continues to explore opportunities to expand its
banking markets through mergers and acquisitions, as well as branching
opportunities. The Bank is the Companys only financial institution subsidiary and was
initially chartered as an Illinois state savings and loan association in 1885.
The Bank converted to a federally chartered savings and loan association in
1937 and changed its name to Kankakee Federal Savings Bank in connection with
its conversion to stock form in 1992. The Bank changed its name to KFS Bank,
F.S.B., as of December 1, 2002. Upon the acquisition of Aviston Financial in
October 2003, the Bank merged into the State Bank of Aviston, became a state
chartered commercial bank and changed its name to Centrue Bank. All references
to the Company include the Bank and its subsidiaries unless clearly indicated
otherwise. At December 31, 2003, the Company had consolidated assets of $609.2
million, deposits of $494.4 million and stockholders equity of $45.6 million. The Companys focus is to serve residential and small businesses in
western Indiana, central and southern Illinois, and metropolitan St. Louis,
Missouri with a wide array of financial services. The Company is principally
engaged in originating mortgage, commercial real estate, consumer,
multi-family, commercial business and construction loans, and attracting
deposits from the general public. The Company also offers a Visa/MasterCard
program, debit card services, on-line banking and bill payment services and, on
an agency basis through Centrue Service Corp., securities 4




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brokerage services and insurance and annuity products to the Companys
customers. In 2003, management restructured the Company to fulfill its service goals,
while increasing its growth objectives and profitability goals. Previously,
the Companys operations and decision making activities were primarily
conducted at the Companys headquarters in Kankakee. Management has
reorganized the Company based upon four geographic regions, each led by its own
regional president and management team. Each regional president has
responsibility for staffing, loans, deposits and pricing in his or her
respective region. Also, certain operational and decision making activities
have been transferred to the regional level in order to improve efficiency,
competitiveness and overall customer service. Centralized operations,
including accounting, remain at the Companys headquarters in Kankakee.
Management believes this organizational structure will allow the Company to
maintain its community focus, and improve customer service and efficiency,
while growing the Companys asset base. The executive offices of the Company are located at 310 S. Schuyler
Avenue, Kankakee, Illinois 60901 and its telephone number at that address is
(815) 937-4440. Competition The Banks main office is located at 310 S. Schuyler Avenue, Kankakee,
Illinois. The Bank also has eighteen branch offices located in the communities
of Ashkum, Aviston, Bourbonnais, Bradley, Braidwood, Champaign, Channahon, Coal
City (2), Diamond, Dwight (2), Fairview Heights, Herscher, Manteno, Momence,
St. Rose, and Urbana. The Companys market areas include central and southern
Illinois, metropolitan St. Louis, Missouri and the western Indiana markets. The Company faces competition both in originating loans and in attracting
deposits. Competition in originating loans comes primarily from other
commercial banks, savings institutions, credit unions and mortgage bankers
located in the Companys primary market areas. The Company competes for loans
principally on the basis of the interest rates and loan fees it charges, the
types of loans it originates and the quality of services it provides to
borrowers. The Company faces substantial competition in attracting deposits from
other commercial banks, savings institutions, securities firms, money market
and mutual funds, credit unions, insurance companies and other investment
vehicles. The ability of the Company to attract and retain deposits depends on
its ability to provide an investment opportunity that satisfies the
requirements of investors as to rate of return, liquidity, risk, convenient
locations and other factors. The Company competes for these deposits by
offering a variety of deposit accounts at competitive rates, convenient
business hours and with a customer oriented staff. Under the Gramm-Leach-Bliley Act, which became effective in 2000,
securities firms and insurance companies that elect to become financial holding
companies may acquire banks and other financial institutions. Although the
Company has seen no significant impact from it, the Gramm-Leach-Bliley Act has
the potential to significantly change the competitive environment in which the
Company and the Bank conduct business. The financial services industry is also
likely to become more competitive as further technological advances enable more
companies to provide financial services. These technological advances may
diminish the importance of depository institutions and other financial
intermediaries in the transfer of funds between parties. 5




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Lending Activities General. The principal lending activity of the Company is to offer
financial services to our commercial, consumer and residential customers
located in our primary market areas. These financial services include 1-4
family residential, multi-family, commercial business, commercial real estate,
consumer loans and all types of construction loans. In addition, to increase
overall profitability and portfolio mix, we will focus our loan growth rate on
commercial lending to be more in line with our commercial banking peers. From
time to time, the Company has also utilized loan purchases to supplement loan
originations. Loan Composition. The following table provides information concerning the
composition of the Companys loan portfolio in dollar amounts and in
percentages (before deductions for loans in process, deferred fees and
discounts and allowances for loan losses) as of the dates indicated. Loans
held for sale are included primarily in one-to-four family real estate loans. December 31,2003
    
    2002
    
    2001
    
    2000
    
    1999Amount
    
    Percent
    
    Amount
    
    Percent
    
    Amount
    
    Percent
    
    Amount
    
    Percent
    
    Amount
    
    Percent(Dollars in thousands)Real Estate LoansOne-to-four family
    
    $
    212,578
    
    
    
    48.72
    %
    
    $
    228,623
    
    
    
    58.26
    %
    
    $
    247,435
    
    
    
    61.81
    %
    
    $
    211,891
    
    
    
    61.48
    %
    
    $
    165,089
    
    
    
    60.25
    %Multi-family
    
    
    16,461
    
    
    
    3.77
    
    
    
    13,672
    
    
    
    3.48
    
    
    
    11,983
    
    
    
    2.99
    
    
    
    11,608
    
    
    
    3.37
    
    
    
    8,923
    
    
    
    3.26Commercial
    
    
    77,142
    
    
    
    17.68
    
    
    
    56,589
    
    
    
    14.42
    
    
    
    48,543
    
    
    
    12.13
    
    
    
    39,564
    
    
    
    11.48
    
    
    
    28,869
    
    
    
    10.53Construction and development
    
    
    28,640
    
    
    
    6.56
    
    
    
    21,286
    
    
    
    5.42
    
    
    
    22,555
    
    
    
    5.63
    
    
    
    17,797
    
    
    
    5.16
    
    
    
    14,235
    
    
    
    5.19Total Real Estate Loans
    
    
    334,821
    
    
    
    76.73
    
    
    
    320,170
    
    
    
    81.58
    
    
    
    330,516
    
    
    
    82.56
    
    
    
    280,860
    
    
    
    81.49
    
    
    
    217,116
    
    
    
    79.23Commercial Loans
    
    
    58,235
    
    
    
    13.35
    
    
    
    33,301
    
    
    
    8.49
    
    
    
    31,255
    
    
    
    7.81
    
    
    
    23,750
    
    
    
    6.89
    
    
    
    22,013
    
    
    
    8.03Consumer LoansHome equity
    
    
    24,305
    
    
    
    5.57
    
    
    
    22,560
    
    
    
    5.75
    
    
    
    18,407
    
    
    
    4.60
    
    
    
    17,815
    
    
    
    5.17
    
    
    
    17,028
    
    
    
    6.21All other consumer loans
    
    
    18,982
    
    
    
    4.35
    
    
    
    16,408
    
    
    
    4.18
    
    
    
    20,163
    
    
    
    5.03
    
    
    
    22,220
    
    
    
    6.45
    
    
    
    17,872
    
    
    
    6.52Total Consumer Loans
    
    
    43,287
    
    
    
    9.92
    
    
    
    38,968
    
    
    
    9.93
    
    
    
    38,570
    
    
    
    9.63
    
    
    
    40,035
    
    
    
    11.62
    
    
    
    34,900
    
    
    
    12.74Total Loans
    
    
    436,343
    
    
    
    100.00
    %
    
    
    392,439
    
    
    
    100.00
    %
    
    
    400,341
    
    
    
    100.00
    %
    
    
    344,645
    
    
    
    100.00
    %
    
    
    274,029
    
    
    
    100.00
    %Less:Loans in process
    
    
    2,467
    
    
    
    
    
    
    
    1,043
    
    
    
    
    
    
    
    2,671
    
    
    
    
    
    
    
    3,341
    
    
    
    
    
    
    
    1,394Deferred loan fees, net
    
    
    565
    
    
    
    
    
    
    
    505
    
    
    
    
    
    
    
    470
    
    
    
    
    
    
    
    192
    
    
    
    
    
    
    
    104Allowance for loan losses
    
    
    7,471
    
    
    
    
    
    
    
    6,524
    
    
    
    
    
    
    
    2,582
    
    
    
    
    
    
    
    2,156
    
    
    
    
    
    
    
    2,171Total Loans, net
    
    $
    425,840
    
    
    
    
    
    
    $
    384,367
    
    
    
    
    
    
    $
    394,618
    
    
    
    
    
    
    $
    338,956
    
    
    
    
    
    
    $
    270,360
 6




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As of December 31, 2003, the total amount of loans due after December 31,
2004, which had predetermined interest rates, was $181.1 million, while the
total amount of loans due after such date which had floating or adjustable
interest rates was $126.3 million. As a state chartered commercial bank, the amount of loans the Bank is
permitted to make to any one borrower is limited to 25% of the Banks total
regulatory capital. At December 31, 2003, the Banks regulatory loan-to-one
borrower limit was $12.3 million. Additionally, as part of the Banks loan
policy and strategic plan the Bank sets guidelines on the percentage of each
type of loan for the loans portfolio. The concentrations of loans by type are
regularly reviewed by the chief lending officer and loan committee. As of
December 31, 2003, the Bank did not have any concentrations in loan types that
are not already disclosed. The following table represents the amount of loans that were on
non-accrual, past due 90 days and still accruing and forgone interest for
each of the last five fiscal years. December 31,2003
    
    2002
    
    2001
    
    2000
    
    1999(Dollars in thousands)Non-accrual
loans
    
    $
    3,248
    
    
    $
    6,834
    
    
    $
    730
    
    
    $
    680
    
    
    $
    553Loans past due 90 days and still
accruing
    
    
    2,232
    
    
    
    3,439
    
    
    
    391
    
    
    
    1,890
    
    
    
    1,195Troubled debt restructurings
    
    
    281
    
    
    
    480
    
    
    
    611
    
    
    
    439
    
    
    
    464Interest income recognized on
non-accrual loans and troubled
debt
restructurings
    
    
    199
    
    
    
    70
    
    
    
    
    
    
    
    
    
    
    
    Foregone interest on non-accrual
loans
    
    
    525
    
    
    
    387
    
    
    
    33
    
    
    
    32
    
    
    
    32
 The Company recognized large loan loss provisions of approximately 1%
of total loans in both 2003 and 2002 on a group of commercial real estate
and real estate development loans that were made in previous years. During
2003, the Company adopted a new loan policy and implemented new loan
approval, documentation and monitoring processes. The Company also
recruited and employed an experienced commercial lending team including
three new regional presidents, each of which is an experienced commercial
lender, as well as two other seasoned commercial lenders. 7




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Analysis of Allowance for Loan Losses. The following table sets forth an
analysis of the Companys allowance for loan losses. Year EndedDecember 31,2003
    
    2002
    
    2001
    
    2000
    
    1999(Dollars in thousands)Balance at beginning of
period
    
    $
    6,524
    
    
    $
    2,582
    
    
    $
    2,156
    
    
    $
    2,171
    
    
    $
    2,375Charge-offs:One-to-four family
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    21Commercial real estate
    
    
    1,134
    
    
    
    
    
    
    
    28
    
    
    
    3
    
    
    
    29Consumer
    
    
    144
    
    
    
    79
    
    
    
    61
    
    
    
    124
    
    
    
    114Commercial business
    
    
    4,964
    
    
    
    
    
    
    
    14
    
    
    
    8
    
    
    
    1236,242
    
    
    
    81
    
    
    
    103
    
    
    
    135
    
    
    
    287Recoveries:Commercial real estate
    
    
    583
    
    
    
    
    
    
    
    1
    
    
    
    28
    
    
    
    16Consumer
    
    
    46
    
    
    
    22
    
    
    
    24
    
    
    
    27
    
    
    
    42Commercial business
    
    
    3
    
    
    
    11
    
    
    
    1
    
    
    
    15
    
    
    
    25632
    
    
    
    33
    
    
    
    26
    
    
    
    70
    
    
    
    83Net charge-offs
    
    
    (5,610
    )
    
    
    (48
    )
    
    
    (77
    )
    
    
    (65
    )
    
    
    (204
    )Additions charged to operations
    
    
    4,122
    
    
    
    3,990
    
    
    
    503
    
    
    
    50
    
    
    
    Additions through acquisitions
    
    
    2,435
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance at end of period
    
    $
    7,471
    
    
    $
    6,524
    
    
    $
    2,582
    
    
    $
    2,156
    
    
    $
    2,171Ratio of net charge-offs during the
period to average loans
outstanding during the period
    
    
    1.53
    %
    
    
    0.01
    %
    
    
    0.02
    %
    
    
    0.02
    %
    
    
    0.08
    %Ratio of net charge-offs during the
period to average non-
performing assets
    
    
    110.06
    %
    
    
    0.75
    %
    
    
    3.07
    %
    
    
    2.75
    %
    
    
    6.65
    %
 The balance in the allowance for loan losses and the related amount
charged to operations is based upon periodic evaluations of the loan portfolio
by management. These evaluations consider several factors including, but not
limited to, general economic conditions, loan portfolio composition, prior loan
loss experience, and managements estimate of future potential losses. During 2003, the Company implemented a new comprehensive loan policy and
underwent a six-month comprehensive loan review. This process indicated the
need for additional allocations in the one-to-four family and multifamily
categories of loans than had previously been identified from a review of
charge-off history. The allowance for loan losses is a material estimate that
is particularly susceptible to significant changes in the near term and is
established through a provision for loan losses. The allowance is based upon
past loan experience and other factors which, in managements judgment, deserve
current recognition in estimating loan losses. The evaluation includes a
review of all loans on which full collectibility may not be reasonably assured.
Other factors considered by management include the size and character of the
loan portfolio, concentrations of 8




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loans to specific borrowers or industries, existing economic conditions and
historical losses on each portfolio category. In connection with the
determination of the allowance for loan losses, management obtains independent
appraisals for significant properties, which collateralize loans. Management
believes it uses the best information available to make such determinations.
If circumstances differ substantially from the assumptions used in making
determinations, future adjustments to the allowance for loan losses may be
necessary and results of operations could be affected. While the Company
believes it has established its existing allowance for loan loses in conformity
with accounting principles generally accepted in the United States of America,
there can be no assurance that regulators, in reviewing the Banks loan
portfolio, will not request an increase in the allowance for loan losses.
Because future events affecting borrowers and collateral cannot be predicted
with certainty, there can be no assurance that increases to the allowance will
not be necessary if loan quality deteriorates. The following table represents
the allocation of the allowance for loan losses by loan category. December 31,2003
    
    2002
    
    2001
    
    2000
    
    1999Percent of
    
    
    
    
    
    Percent of
    
    
    
    
    
    Percent of
    
    
    
    
    
    Percent of
    
    
    
    
    
    Percent ofEach
    
    
    
    
    
    Each
    
    
    
    
    
    Each
    
    
    
    
    
    Each
    
    
    
    
    
    EachCategory to
    
    
    
    
    
    Category to
    
    
    
    
    
    Category to
    
    
    
    
    
    Category to
    
    
    
    
    
    Category toAmount
    
    Total Loans
    
    Amount
    
    Total Loans
    
    Amount
    
    Total Loans
    
    Amount
    
    Total Loans
    
    Amount
    
    Total Loans(Dollars in thousands)One-to-four family
    
    $
    1,012
    
    
    
    48.72
    %
    
    $
    224
    
    
    
    58.26
    %
    
    $
    157
    
    
    
    61.81
    %
    
    $
    209
    
    
    
    61.48
    %
    
    $
    313
    
    
    
    60.24
    %Multi-family
    
    
    197
    
    
    
    3.77
    
    
    
    7
    
    
    
    3.48
    
    
    
    6
    
    
    
    2.99
    
    
    
    24
    
    
    
    3.37
    
    
    
    66
    
    
    
    3.26Commercial real estate
    
    
    2,455
    
    
    
    17.68
    
    
    
    3,212
    
    
    
    14.42
    
    
    
    933
    
    
    
    12.13
    
    
    
    825
    
    
    
    11.48
    
    
    
    611
    
    
    
    10.54Construction and
development
    
    
    1,673
    
    
    
    6.56
    
    
    
    1,403
    
    
    
    5.42
    
    
    
    532
    
    
    
    5.63
    
    
    
    350
    
    
    
    5.16
    
    
    
    208
    
    
    
    5.19Commercial
    
    
    1,454
    
    
    
    13.35
    
    
    
    1,434
    
    
    
    8.49
    
    
    
    729
    
    
    
    7.81
    
    
    
    581
    
    
    
    6.89
    
    
    
    600
    
    
    
    8.03Consumer
    
    
    336
    
    
    
    9.92
    
    
    
    244
    
    
    
    9.93
    
    
    
    225
    
    
    
    9.63
    
    
    
    167
    
    
    
    11.62
    
    
    
    207
    
    
    
    12.74Unallocated
    
    
    344
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    166
    
    
    
    Total
    
    $
    7,471
    
    
    
    100.00
    %
    
    $
    6,524
    
    
    
    100.00
    %
    
    $
    2,582
    
    
    
    100.00
    %
    
    $
    2,156
    
    
    
    100.00
    %
    
    $
    2,171
    
    
    
    100.00
    %
 9




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##### Table of Contents



Investment Activities In February 2004, the Company implemented a new investment policy. In
addition to other permitted investments, the new policy allows for investments
in trust preferred securities and changed the frequency of meetings for the
funds management committee from weekly to monthly. The composition and
maturities of the investment securities portfolios, excluding Federal Home Loan
Bank of Chicago (FHLB) stock and non-marketable equity securities at December
31, 2003, are indicated in the following table. At December 31, 2003Less Than
    
    1 to 5
    
    5 to 10
    
    Over
    
    Total Investment1 Year
    
    Years
    
    Years
    
    10 Years
    
    Securities(Dollars in thousands)Securities available-for-
sale:U.S. Treasury and
government agency
securities
    
    $
    4,275
    
    
    $
    49,327
    
    
    $
    1,736
    
    
    $
    251
    
    
    $
    55,589Municipal bonds
    
    
    265
    
    
    
    1,950
    
    
    
    1,967
    
    
    
    
    
    
    
    4,182Mortgage-backed
securities
    
    
    
    
    
    
    4,834
    
    
    
    891
    
    
    
    21,563
    
    
    
    27,288Mutual fund
shares
    
    
    379
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    379Other securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    274
    
    
    
    274Total
    
    $
    4,919
    
    
    $
    56,111
    
    
    $
    4,594
    
    
    $
    22,088
    
    
    $
    87,712Weighted average
yield
    
    
    3.65
    %
    
    
    3.75
    %
    
    
    3.78
    %
    
    
    4.49
    %
    
    
    3.91
    %Securities held-to-
maturity:Municipal Bonds
    
    $
    210
    
    
    $
    672
    
    
    $
    10
    
    
    $
    
    
    
    $
    892Weighted average
yield
    
    
    3.90
    %
    
    
    3.86
    %
    
    
    4.90
    %
    
    
    
    
    
    
    3.88
    %
 10




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##### Table of Contents



Deposits The following table indicates the amount of the Companys certificates of
deposit of $100,000 or more by time remaining until maturity as of December 31,
2003. MaturityOver
    
    Over3 Months
    
    3 to 6
    
    6 to 12
    
    Overor Less
    
    Months
    
    Months
    
    12 months
    
    Total(Dollars in thousands)Certificates of deposit of
$100,000 or more
    
    $
    7,516
    
    
    $
    4,681
    
    
    $
    10,386
    
    
    $
    17,066
    
    
    $
    39,649
 Borrowings The Company utilizes borrowings primarily for three purposes. The first
is to leverage the Companys capital in order to generate additional net
interest income. The second is the management of short term cash requirements.
The third is to assist in funding acquisitions of other financial
institutions. The decision to borrow money to leverage capital is based on
several factors, including the current asset/liability mix, the regulatory
capital position of the Bank and the adequacy of available interest rate
spreads subject to the limits established by the board of directors.
Borrowings for leveraging purposes are derived from securities sold under
agreements to repurchase and advances from the FHLB. Borrowings related to
short term cash management are in the form of advances from the FHLB, and as
required, federal funds purchased. As a member of the FHLB, the Bank is
authorized to apply for advances from the FHLB. Each FHLB credit program has
its own interest rate, which may be fixed or variable, and range of maturities.
The FHLB may prescribe the acceptable uses for these advances, as well as
limitations on the size of the advances and repayment provisions. Borrowings
related to funding acquisitions are in the form of notes payable from other
financial institutions. Generally, these borrowings are short-term in nature. Capital Management The Company continuously evaluates balance sheet opportunities to augment
and leverage its strong capital base to maximize stockholders return on
equity. During the middle part of the 1990s, the Company employed a
leveraging strategy, borrowing and investing funds to enhance net interest
income. This strategy was minimized in 2000 and 2001, when the Company
increased leverage through internally generated growth. During 2002, the
Company borrowed $30.0 million and purchased investment securities in a new
leverage strategy. During 2003, the Company continued its focus on
repurchasing stock in an effort to increase shareholder value. In the first
quarter of 2003, the Company repurchased 466,540 shares of stock. In October
of 2003, the Company completed the acquisition of Aviston Financial and issued
700,300 shares of stock in the transaction. The Company also effected a 2 for
1 stock split in the form of a dividend in October, 2003. During the third
quarter 11




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##### Table of Contents



of 2003, the Company hired an independent consultant to provide advice on
its fixed income investments in order to streamline its investment accounting
procedures, improve asset/liability management and increase returns on its
investment securities. The Company believes that these initiatives will help
to position the Company for additional future growth and improved
profitability. As a way to create flexibility in its capital management strategies, the
Company issued $10.0 million in trust preferred securities during the second
quarter of 2002. Such securities are includable, within specified limits, in
regulatory capital and the interest paid on the securities is deductible for
tax purposes. The funds provided were used primarily for the repurchase of
common shares. Interest expense related to trust preferred securities totaled
$558,000 and $438,000 during 2003 and 2002, respectively. Additional
information regarding emerging accounting standards that relate to accounting
for trust preferred securities is included in Note 1 in the Notes to
Consolidated Financial Statements on page 34 of the Annual Report to
Stockholders. Employees As of December 31, 2003, the Company had 154 full-time employees and 41
part-time employees. None of the Companys employees are represented by any
collective bargaining group. The Company offers a variety of employee benefits
and management considers its relations with its employees to be good. Code of Ethics Centrue Financial has a code of conduct in place that applies to all of
its directors and employees. The code sets for the standard of ethics that its
expects all directors and employees to follow, including the Chief Executive
Officer and Chief Financial Officer. The code of conduct is posted on Centrue
Financials website at www.centrue.com. Centrue Financial intends to satisfy
the disclosure requirements under Item 10 of Form 8-K regarding any amendment
to or waiver of the code with respect to its Chief Executive Officer and Chief
Financial Officer, and persons performing similar functions, by posting such
information on Centrue Financials website. Internet Website Centrue Financial maintains a website with the address www.centrue.com.
The information contained on its website is not included as a part of, or
incorporated by reference into, this Annual Report on Form 10-K. Centrue
Financial makes available free of charge through our website our Annual Report
on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K,
and amendments to these reports, as soon as reasonably practicable after it has
electronically filed such material with, or furnished such material to, the
Securities and Exchange Commission. 12




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##### Table of Contents



SUPERVISION AND REGULATION Financial institutions, their holding companies and their affiliates are
extensively regulated under federal and state law. As a result, the growth and
earnings performance of the Company may be affected not only by management
decisions and general economic conditions, but also by the requirements of
federal and state statutes and by the regulations and policies of various bank
regulatory authorities, including the Illinois Commissioner of Banks and Real
Estate (the Commissioner), the Board of Governors of the Federal Reserve
System (the Federal Reserve) and the Federal Deposit Insurance Corporation
(the FDIC). Furthermore, taxation laws administered by the Internal Revenue
Service and state taxing authorities and securities laws administered by the
Securities and Exchange Commission (the SEC) and state securities authorities
have an impact on the business of the Company. The effect of these statutes,
regulations and regulatory policies may be significant, and cannot be predicted
with a high degree of certainty. Federal and state laws and regulations generally applicable to financial
institutions regulate, among other things, the scope of business, the kinds and
amounts of investments, reserve requirements, capital levels relative to
operations, the nature and amount of collateral for loans, the establishment of
branches, mergers and consolidations and the payment of dividends. This system
of supervision and regulation establishes a comprehensive framework for the
respective operations of the Company and its subsidiaries and is intended
primarily for the protection of the FDIC-insured deposits and depositors of the
Bank, rather than shareholders. The following is a summary of the material elements of the regulatory
framework that applies to the Company and its subsidiaries. It does not
describe all of the statutes, regulations and regulatory policies that apply,
nor does it restate all of the requirements of those that are described. As
such, the following is qualified in its entirety by reference to applicable
law. Any change in statutes, regulations or regulatory policies may have a
material effect on the business of the Company and its subsidiaries. Recent Regulatory Developments National Bank Preemption.On January 7, 2004, the Office of the
Comptroller of the Currency (the OCC) issued two final rules that clarify the
federal character of the national banking system. The first rule provides
that, except where made applicable by federal law, state laws that obstruct,
impair or condition national banks ability to fully exercise their
deposit-taking, lending and operational powers are not applicable to national
banks. That rule further provides that the following types of state laws apply
to national banks to the extent that they only incidentally affect the exercise
of national banks deposit-taking, lending and operational powers: contract,
criminal, taxation, tort, zoning and laws relating to certain homestead rights,
rights to collect debts, acquisitions and transfers of property and other laws
as determined to apply to national banks by the OCC. The second rule affirms
that, under federal law, with some exceptions, the OCC has exclusive visitorial
authority (the power to inspect, examine, supervise and regulate) with respect
to the content and conduct of activities authorized for national banks. These
controversial rules give national banks, especially those that operate in
multiple states, a significant competitive advantage over state-chartered banks
and are therefore likely to be challenged by individuals and organizations that
represent the interests of individual states and state-chartered banks. Both
the U.S. House Committee on Financial Services and the New York Attorney
General have already initiated such challenges. 13




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##### Table of Contents



FACT Act.On December 4, 2003, President Bush signed into law the Fair
and Accurate Credit Transactions Act of 2003 (the FACT Act), which contains
numerous amendments to the Fair Credit Reporting Act relating to matters
including identity theft and privacy. Among its other provisions, the FACT Act
requires financial institutions: (i) to establish an identity theft prevention
program; (ii) to enhance the accuracy and integrity of information furnished to
consumer reporting agencies; and (iii) to allow customers to prevent financial
institution affiliates from using, for marketing solicitation purposes,
transaction and experience information about the customers received from the
financial institution. The FACT Act also requires the federal banking
regulators, and certain other agencies, to promulgate regulations to implement
its provisions. The various provisions of the FACT Act contain different
effective dates including March 31, 2004, for those provisions of the FACT Act
that do not require significant changes to business procedures and December 1,
2004, for certain other provisions that will require significant business
procedure changes. The Company General.The Company, as the sole shareholder of the Bank, is a bank
holding company. As a bank holding company, the Company is registered with,
and is subject to regulation by, the Federal Reserve under the Bank Holding
Company Act of 1956, as amended (the BHCA). In accordance with Federal
Reserve policy, the Company is expected to act as a source of financial
strength to the Bank and to commit resources to support the Bank in
circumstances where the Company might not otherwise do so. Under the BHCA, the
Company is subject to periodic examination by the Federal Reserve. The Company
is also required to file with the Federal Reserve periodic reports of the
Companys operations and such additional information regarding the Company and
its subsidiaries as the Federal Reserve may require. Acquisitions, Activities and Change in Control.The primary purpose of a
bank holding company is to control and manage banks. The BHCA generally
requires the prior approval of the Federal Reserve for any merger involving a
bank holding company or any acquisition by a bank holding company of another
bank or bank holding company acquisition. Subject to certain conditions
(including certain deposit concentration limits established by the BHCA), the
Federal Reserve may allow a bank holding company to acquire banks located in
any state of the United States. In approving interstate acquisitions, the
Federal Reserve is required to give effect to applicable state law limitations
on the aggregate amount of deposits that may be held by the acquiring bank
holding company and its insured depository institution affiliates in the state
in which the target bank is located (provided that those limits do not
discriminate against out-of-state depository institutions or their holding
companies) and state laws that require that the target bank have been in
existence for a minimum period of time (not to exceed five years) before being
acquired by an out-of-state bank holding company. The BHCA generally prohibits a bank holding company from acquiring direct
or indirect ownership or control of more than 5% of the voting shares of any
company that is not a bank and from engaging in any business other than that of
banking, managing and controlling banks or furnishing services to banks and
their subsidiaries. This general prohibition is subject to a number of
exceptions. The principal exception allows bank holding companies to engage in,
and to own shares of companies engaged in, certain businesses found by the
Federal Reserve to be so closely related to banking ... as to be a proper
incident thereto. This authority would permit the Company to engage in a
variety of banking-related businesses, including the operation of a thrift,
consumer finance, 14




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##### Table of Contents



equipment leasing, the operation of a computer service bureau (including
software development), and mortgage banking and brokerage. The BHCA generally
does not place territorial restrictions on the domestic activities of non-bank
subsidiaries of bank holding companies. Additionally, bank holding companies that meet certain eligibility
requirements prescribed by the BHCA and elect to operate as financial holding
companies may engage in, or own shares in companies engaged in, a wider range
of nonbanking activities, including securities and insurance underwriting and
sales, merchant banking and any other activity that the Federal Reserve, in
consultation with the Secretary of the Treasury, determines by regulation or
order is financial in nature, incidental to any such financial activity or
complementary to any such financial activity and does not pose a substantial
risk to the safety or soundness of depository institutions or the financial
system generally. The Company has elected (and the Federal Reserve has
accepted the Companys election) to operate as a financial holding company. Federal law also prohibits any person or company from acquiring control
of an FDIC-insured depository institution or its holding company without prior
notice to the appropriate federal bank regulator. Control is conclusively
presumed to exist upon the acquisition of 25% or more of the outstanding voting
securities of a bank or bank holding company, but may arise under certain
circumstances at 10% ownership. Capital Requirements.Bank holding companies are required to maintain
minimum levels of capital in accordance with Federal Reserve capital adequacy
guidelines. If capital levels fall below the minimum required levels, a bank
holding company, among other things, may be denied approval to acquire or
establish additional banks or non-bank businesses. The Federal Reserves capital guidelines establish the following minimum
regulatory capital requirements for bank holding companies: (i) a risk-based
requirement expressed as a percentage of total assets weighted according to
risk; and (ii) a leverage requirement expressed as a percentage of total
assets. The risk-based requirement consists of a minimum ratio of total
capital to total risk-weighted assets of 8% and a minimum ratio of Tier 1
capital to total risk-weighted assets of 4%. The leverage requirement consists
of a minimum ratio of Tier 1 capital to total assets of 3% for the most highly
rated companies, with a minimum requirement of 4% for all others. For purposes
of these capital standards, Tier 1 capital consists primarily of permanent
stockholders equity less intangible assets (other than certain loan servicing
rights and purchased credit card relationships). Total capital consists
primarily of Tier 1 capital plus certain other debt and equity instruments that
do not qualify as Tier 1 capital and a portion of the companys allowance for
loan and lease losses. The risk-based and leverage standards described above are minimum
requirements. Higher capital levels will be required if warranted by the
particular circumstances or risk profiles of individual banking organizations.
For example, the Federal Reserves capital guidelines contemplate that
additional capital may be required to take adequate account of, among other
things, interest rate risk, or the risks posed by concentrations of credit,
nontraditional activities or securities trading activities. Further, any
banking organization experiencing or anticipating significant growth would be
expected to maintain capital ratios, including tangible capital positions
(i.e., Tier 1 capital less all intangible assets), well above the minimum
levels. As of December 31, 2003, the Company had regulatory capital in excess
of the Federal Reserves minimum requirements. Dividend Payments.The Companys ability to pay dividends to its
shareholders may be affected by both general corporate law considerations and
policies of the Federal Reserve applicable 15




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##### Table of Contents



to bank holding companies.As a Delaware corporation, the Company is
subject to the limitations of the Delaware General Corporation Law (the
DGCL), which allow the Company to pay dividends only out of its surplus (as
defined and computed in accordance with the provisions of the DGCL) or if the
Company has no such surplus, out of its net profits for the fiscal year in
which the dividend is declared and/or the preceding fiscal year. Additionally,
policies of the Federal Reserve caution that a bank holding company should not
pay cash dividends that exceed its net income or that can only be funded in
ways that weaken the bank holding companys financial health, such as by
borrowing. The Federal Reserve also possesses enforcement powers over bank
holding companies and their non-bank subsidiaries to prevent or remedy actions
that represent unsafe or unsound practices or violations of applicable statutes
and regulations. Among these powers is the ability to proscribe the payment of
dividends by banks and bank holding companies. Federal Securities Regulation.The Companys common stock is registered
with the SEC under the Securities Act of 1933, as amended, and the Securities
Exchange Act of 1934, as amended (the Exchange Act). Consequently, the
Company is subject to the information, proxy solicitation, insider trading and
other restrictions and requirements of the SEC under the Exchange Act. The Bank General.The Bank is an Illinois-chartered bank, the deposit accounts of
which are insured by the FDICs Savings Association Insurance Fund (SAIF) and
its Bank Insurance Fund (BIF). As an Illinois-chartered bank, the Bank is
subject to the examination, supervision, reporting and enforcement requirements
of the Commissioner, the chartering authority for Illinois banks, and the FDIC,
designated by federal law as the primary federal regulator of state-chartered,
FDIC-insured banks that, like the Bank, are not members of the Federal Reserve
System (non-member banks). Deposit Insurance.As an FDIC-insured institution, the Bank is required
to pay deposit insurance premium assessments to the FDIC. The FDIC has adopted
a risk-based assessment system under which all insured depository institutions
are placed into one of nine categories and assessed insurance premiums based
upon their respective levels of capital and results of supervisory evaluations.
Institutions classified as well-capitalized (as defined by the FDIC) and
considered healthy pay the lowest premium while institutions that are less than
adequately capitalized (as defined by the FDIC) and considered of substantial
supervisory concern pay the highest premium. Risk classification of all
insured institutions is made by the FDIC for each semi-annual assessment
period. During the year ended December 31, 2003, SAIF and BIF assessments ranged
from 0% of deposits to 0.27% of deposits. For the semi-annual assessment
period beginning January 1, 2004, SAIF and BIF assessment rates will continue
to range from 0% of deposits to 0.27% of deposits. FICO Assessments.Since 1987, a portion of the deposit insurance
assessments paid by SAIF members has been used to cover interest payments due
on the outstanding obligations of the Financing Corporation (FICO). FICO was
created in 1987 to finance the recapitalization of the Federal Savings and Loan
Insurance Corporation, the SAIFs predecessor insurance fund. As a result of
federal legislation enacted in 1996, beginning as of January 1, 1997, both SAIF
members and BIF members became subject to assessments to cover the interest
payments on outstanding FICO obligations until the final maturity of such
obligations in 2019. These FICO assessments are in addition to amounts
assessed by the FDIC for deposit insurance. During the year ended 16




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##### Table of Contents



December 31, 2003, the FICO assessment rate for SAIF members and BIF
members was approximately 0.02% of deposits. Supervisory Assessments.All Illinois banks are required to pay
supervisory assessments to the Commissioner to fund the operations of the
Commissioner. The amount of the assessment is calculated on the basis of an
institutions total assets, including consolidated subsidiaries, as reported to
the Commissioner. Capital Requirements.Banks are generally required to maintain capital
levels in excess of other businesses. The FDIC has established the following
minimum capital standards for state-chartered insured non-member banks, such as
the Bank: (i) a leverage requirement consisting of a minimum ratio of Tier 1
capital to total assets of 3% for the most highly-rated banks with a minimum
requirement of at least 4% for all others; and (ii) a risk-based capital
requirement consisting of a minimum ratio of total capital to total
risk-weighted assets of 8% and a minimum ratio of Tier 1 capital to total
risk-weighted assets of 4%. For purposes of these capital standards, the
components of Tier 1 capital and total capital are the same as those for bank
holding companies discussed above. The capital requirements described above are minimum requirements. Higher
capital levels will be required if warranted by the particular circumstances or
risk profiles of individual institutions. For example, regulations of the FDIC
provide that additional capital may be required to take adequate account of,
among other things, interest rate risk or the risks posed by concentrations of
credit, nontraditional activities or securities trading activities. Further, federal law and regulations provide various incentives for
financial institutions to maintain regulatory capital at levels in excess of
minimum regulatory requirements. For example, a financial institution that is
well-capitalized may qualify for exemptions from prior notice or application
requirements otherwise applicable to certain types of activities and may
qualify for expedited processing of other required notices or applications.
Additionally, one of the criteria that determines a bank holding companys
eligibility to operate as a financial holding company is a requirement that all
of its financial institution subsidiaries be well-capitalized. Under the
regulations of the FDIC, in order to be well-capitalized a financial
institution must maintain a ratio of total capital to total risk-weighted
assets of 10% or greater, a ratio of Tier 1 capital to total risk-weighted
assets of 6% or greater and a ratio of Tier 1 capital to total assets of 5% or
greater. Federal law also provides the federal banking regulators with broad power
to take prompt corrective action to resolve the problems of undercapitalized
institutions. The extent of the regulators powers depends on whether the
institution in question is adequately capitalized, undercapitalized,
significantly undercapitalized or critically undercapitalized, in each case
as defined by regulation. Depending upon the capital category to which an
institution is assigned, the regulators corrective powers include: (i)
requiring the institution to submit a capital restoration plan; (ii) limiting
the institutions asset growth and restricting its activities; (iii) requiring
the institution to issue additional capital stock (including additional voting
stock) or to be acquired; (iv) restricting transactions between the institution
and its affiliates; (v) restricting the interest rate the institution may pay
on deposits; (vi) ordering a new election of directors of the institution;
(vii) requiring that senior executive officers or directors be dismissed;
(viii) prohibiting the institution from accepting deposits from correspondent
banks; (ix) requiring the institution to divest certain subsidiaries; (x)
prohibiting the payment of principal or interest on subordinated debt; and (xi)
ultimately, appointing 17




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##### Table of Contents



a receiver for the institution. As of December 31, 2003: (i) the Bank was not subject to a directive from
the FDIC to increase its capital to an amount in excess of the minimum
regulatory capital requirements; (ii) the Bank exceeded its minimum regulatory
capital requirements under FDIC capital adequacy guidelines; and (iii) the Bank
was well-capitalized, as defined by FDIC regulations. Dividend Payments.The primary source of funds for the Company is
dividends from the Bank. Under the Illinois Banking Act, Illinois-chartered
banks generally may not pay dividends in excess of their net profits. The payment of dividends by any financial institution or its holding company is
affected by the requirement to maintain adequate capital pursuant to applicable
capital adequacy guidelines and regulations, and a financial institution
generally is prohibited from paying any dividends if, following payment
thereof, the institution would be undercapitalized. As described above, the
Bank exceeded its minimum capital requirements under applicable guidelines as
of December 31, 2003. Further, the Bank may not pay dividends in an amount
that would reduce its capital below the amount required for the liquidation
account established in connection with the Banks conversion from the mutual to
the stock form of ownership in 1992. As of December 31, 2003, without prior
regulatory approval, approximately $1.5 million was available to be paid as
dividends by the Bank. Notwithstanding the availability of funds for
dividends, however, the FDIC may prohibit the payment of any dividends by the
Bank if the FDIC determines such payment would constitute an unsafe or unsound
practice. Insider Transactions.The Bank is subject to certain restrictions imposed
by federal law on extensions of credit to the Company, on investments in the
stock or other securities of the Company and the acceptance of the stock or
other securities of the Company as collateral for loans made by the Bank.
Certain limitations and reporting requirements are also placed on extensions of
credit by the Bank to its directors and officers, to directors and officers of
the Company, to principal shareholders of the Company and to related
interests of such directors, officers and principal shareholders. In
addition, federal law and regulations may affect the terms upon which any
person who is a director or officer of the Company or the Bank or a principal
shareholder of the Company may obtain credit from banks with which the Bank
maintains a correspondent relationship. Safety and Soundness Standards.The federal banking agencies have adopted
guidelines that establish operational and managerial standards to promote the
safety and soundness of federally insured depository institutions. The
guidelines set forth standards for internal controls, information systems,
internal audit systems, loan documentation, credit underwriting, interest rate
exposure, asset growth, compensation, fees and benefits, asset quality and
earnings. In general, the safety and soundness guidelines prescribe the goals to be
achieved in each area, and each institution is responsible for establishing its
own procedures to achieve those goals. If an institution fails to comply with
any of the standards set forth in the guidelines, the institutions primary
federal regulator may require the institution to submit a plan for achieving
and maintaining compliance. If an institution fails to submit an acceptable
compliance plan, or fails in any material respect to implement a compliance
plan that has been accepted by its primary federal regulator, the regulator is
required to issue an order directing the institution to cure the deficiency.
Until the deficiency cited in the regulators order is cured, the regulator may
restrict the institutions rate of growth, require the institution to increase
its capital, restrict the rates the institution pays on deposits or require the
institution to take any action the regulator deems appropriate under the
circumstances. 18




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##### Table of Contents



Noncompliance with the standards established by the safety and soundness
guidelines may also constitute grounds for other enforcement action by the
federal banking regulators, including cease and desist orders and civil money
penalty assessments. Branching Authority.Illinois banks, such as the Bank, have the authority
under Illinois law to establish branches anywhere in the State of Illinois,
subject to receipt of all required regulatory approvals. Federal law permits state and national banks to merge with banks in other
states subject to: (i) regulatory approval; (ii) federal and state deposit
concentration limits; and (iii) state law limitations requiring the merging
bank to have been in existence for a minimum period of time (not to exceed five
years) prior to the merger. The establishment of new interstate branches or
the acquisition of individual branches of a bank in another state (rather than
the acquisition of an out-of-state bank in its entirety) is permitted only in
those few states that authorize such expansion. State Bank Investments and Activities.The Bank generally is permitted to
make investments and engage in activities directly or through subsidiaries as
authorized by Illinois law. However, under federal law and FDIC regulations,
FDIC-insured state banks are prohibited, subject to certain exceptions, from
making or retaining equity investments of a type, or in an amount, that are not
permissible for a national bank. Federal law and FDIC regulations also
prohibit FDIC-insured state banks and their subsidiaries, subject to certain
exceptions, from engaging as principal in any activity that is not permitted
for a national bank unless the bank meets, and continues to meet, its minimum
regulatory capital requirements and the FDIC determines the activity would not
pose a significant risk to the deposit insurance fund of which the bank is a
member. These restrictions have not had, and are not currently expected to
have, a material impact on the operations of the Bank. Federal Reserve System.Federal Reserve regulations, as presently in
effect, require depository institutions to maintain non-interest earning
reserves against their transaction accounts (primarily NOW and regular checking
accounts), as follows: for transaction accounts aggregating $45.4 million or
less, the reserve requirement is 3% of total transaction accounts; and for
transaction accounts aggregating in excess of $45.4 million, the reserve
requirement is $1.164 million plus 10% of the aggregate amount of total
transaction accounts in excess of $45.4 million. The first $6.6 million of
otherwise reservable balances are exempted from the reserve requirements.
These reserve requirements are subject to annual adjustment by the Federal
Reserve. The Bank is in compliance with the foregoing requirements. 19




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##### Table of Contents



Item 2. Properties The following table sets forth information concerning the main office and
each branch office of the Bank at December 31, 2003. At December 31, 2003, the
Companys premises had an aggregate net book value of approximately $11.0
million. Year
    
    Owned
    
    Lease
    
    NetLocation
    
    Opened (1)
    
    or Leased
    
    Expiration Date
    
    Book Value(in thousands)Main Office310 S. Schuyler Avenue
    
    1958
    
    Owned
    
    N/A
    
    $
    2,501Kankakee, IllinoisFull Service BranchesMain Street and U.S. 45
    
    1977
    
    Owned
    
    N/A
    
    
    16Ashkum, Illinois101 S. Page Street
    
    2003
    
    Owned
    
    N/A
    
    
    1,167Aviston, Illinois680 S. Main Street
    
    1974
    
    Owned
    
    N/A
    
    
    386Bourbonnais, Illinois980 N. Kinzie Avenue
    
    1998
    
    Owned
    
    N/A
    
    
    2,807Bradley, Illinois180 N. Front Street
    
    1998
    
    Leased
    
    July 24, 2005 (2)
    
    
    13Braidwood, Illinois1001 S. Neil Street
    
    1992
    
    Owned
    
    N/A
    
    
    636Champaign, Illinois100 S. Broadway
    
    1998
    
    Leased
    
    July 24, 2005 (2)
    
    
    51Coal City, Illinois660 S. Broadway
    
    1998
    
    Owned
    
    N/A
    
    
    907Coal City, Illinois1275 E. Division Street
    
    1998
    
    Owned
    
    N/A
    
    
    362Diamond, Illinois317 W. Waupansie Street
    
    2003
    
    Leased
    
    November 30, 2004
    
    
    Dwight, Illinois302 W. Mazon Avenue
    
    1987
    
    Owned
    
    N/A
    
    
    346Dwight, Illinois8 Executive Drive
    
    2003
    
    Leased
    
    May 31, 2004
    
    
    Suite 215
Fairview Heights, Illinois654 N. Park Road
    
    1998
    
    Owned
    
    N/A
    
    
    532Herscher, Illinois310 Section Line Road
    
    1975
    
    Owned
    
    N/A
    
    
    219Manteno, Illinois200 W. Washington Street
    
    1995
    
    Owned
    
    N/A
    
    
    279Momence, Illinois18001 Main Street
    
    2003
    
    Owned
    
    N/A
    
    
    105St. Rose, Illinois
 20




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##### Table of Contents



Year
    
    Owned
    
    Lease
    
    NetLocation
    
    Opened (1)
    
    or Leased
    
    Expiration Date
    
    Book Value(in thousands)1708 S. Philo Road
    
    1998
    
    Owned
    
    N/A
    
    
    687Urbana, IllinoisLoan Production Office25520C S. Pheasant Ln
    
    2003
    
    Leased
    
    September 14, 2004
    
    
    Channahon, Illinois$
    11,014
  (1)
    
    Year opened refers to the year in which the current facility opened or
was acquired.(2)
    
    The Bank has an option to renew this lease for two consecutive
five-year terms. The Company has acquired land in Fairview Heights, Illinois for a
permanent branch location to replace the current leased space. The
construction of the permanent branch is expected to be completed in the fourth
quarter of 2004. The Company believes that all other current facilities are
adequate to meet present and immediately foreseeable needs. 
 Item 3. Legal Proceedings The Company is involved from time to time as plaintiff or defendant in
various legal actions arising in the normal course of its business. While the
ultimate outcome of current legal proceedings cannot be predicted with
certainty, it is the opinion of management that the resolution of these legal
actions should not have a material effect on the Companys consolidated
financial position or results of operations. 
 Item 4. Submission of Matters to a Vote of Security Holders No matter was submitted to a vote of security holders, through the
solicitation of proxies or otherwise, during the quarter ended December 31,
2003. 
 PART II 
 Item 5. Market for Registrants Common Equity and Related Stockholder Matters Page 53 of the 2003 Annual Report to Stockholders is incorporated by
reference. 
 Item 6. Selected Financial Data Page 4 of the 2003 Annual Report to Stockholders is incorporated by
reference. 
 Item 7. Managements Discussion and Analysis of Financial Condition and
Results of Operation Pages 5 through 22 of the 2003 Annual Report to Stockholders are
incorporated by reference. 21




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##### Table of Contents



Item 7a. Quantitative and Qualitative Disclosures About Market Risk The Companys net income and economic value of equity (EVE), in the
normal course of business, are exposed to interest rate risk, and can vary
based on changes in the general level of interest rates. All financial
products carry some amount of interest rate risk, and substantial portions of
both the Companys assets and liabilities are financial products. These
include investment securities, loans, deposits and borrowed money. Off-balance
sheet items, such as loan commitments, letters of credit, commitments to buy or
sell loans or securities, and derivative financial instruments, also carry some
amount of interest rate risk. The Banks Funds Management Committee, consisting of the CEO and
President, Chief Financial Officer, two Senior Vice Presidents and the
Corporate Controller, is responsible for developing methods and strategies for
the Company to manage the sensitivity characteristics of its assets and
liabilities, and for directing the implementation of these methods and
strategies. The Funds Management Committee meets on a monthly basis, and the
boards of both the Bank and the Company review the Companys exposure to
interest rate risk on at least a quarterly basis. The Funds Management Committee generally uses three types of analysis in
measuring and reviewing the Companys interest rate sensitivity. These are
Static GAP analysis, Dynamic Gap Analysis and Economic Value of Equity. The
Static GAP analysis measures assets and liabilities as they reprice in various
time periods and is discussed under the heading of Asset/Liability Management
on page 17 of the 2003 Annual Report to Shareholders. The dynamic interest rate risk analysis calculates risk to net interest
income under three different scenarios, including flat, upward and downward
rate shifts. The analysis assumes that rates change over a 12 month time
frame. The analysis calculates net interest spread, net interest margin, loan
to deposit, cost of funds, ratio of earning assets and capital. The model
assumes that as principal runs off, principal is reinvested into the same
category. Other assumptions which are varied include: loan rates, investment
yields and growth rates. The economic value of equity calculation uses information about the
Companys assets, liabilities and off-balance sheet items, market interest rate
levels and assumptions about the behavior of the assets and liabilities, to
calculate the Companys equity value. The economic value of equity is the
market value of assets minus the market value of liabilities, adjusted for
off-balance sheet items divided by the market value of assets. The economic
value of equity is then subjected to immediate and permanent upward changes of
300 basis points in market interest rate levels, in 100 basis point increments,
and a downward change of 100 basis points. The resulting changes in equity
value and net interest income at each increment are measured against
pre-determined, minimum EVE ratios for each incremental rate change, as
approved by the board in the interest rate risk policy. The following table presents the Banks EVE ratios for the various rate
change levels at December 31, 2003 and 2002: 22




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##### Table of Contents



EVE RatiosChanges in Interest Rates
    
    2003
    
    2002300 basis point rise
    
    
    7.87
    %
    
    
    6.92
    %200 basis point rise
    
    
    7.94
    %
    
    
    7.83
    %100 basis point rise
    
    
    8.13
    %
    
    
    8.59
    %Base rate scenario
    
    
    7.45
    %
    
    
    8.94
    %100 basis point decline
    
    
    6.08
    %
    
    
    8.69
    %
 The preceding table indicates that at December 31, 2003, in the event of
an immediate and permanent increase in prevailing market interest rates, the
Banks EVE ratio, would be expected to increase and that in the event of an
immediate and permanent decrease in prevailing market interest rates, the
Banks EVE ratio would be expected to decrease. At December 31, 2003, the EVE increases in a rising rate scenario because
the Company is asset sensitive and would have more interest earning assets
repricing than interest-bearing liabilities. This effect is increased by
periodic and lifetime limits on changes in rate on most adjustable-rate,
interest-earning assets. The EVE decreases in a falling rate scenario because
of the limits on the Companys ability to decrease rates on some of its deposit
sources, such as money market accounts and NOW accounts, and by the ability of
borrowers to repay loans ahead of schedule and refinance at lower rates. The EVE ratio is calculated by the Companys fixed income investment
advisor, and reviewed by management, on a quarterly basis utilizing information
about the Companys assets, liabilities and off-balance sheet items, which is
provided by the Company. The calculation is designed to estimate the effects
of hypothetical rate changes on the EVE, utilizing projected cash flows, and is
based on numerous assumptions, including relative levels of market interest
rates, loan prepayments speeds and deposit decay rates. Actual changes in the
EVE, in the event of market interest rate changes of the type and magnitude
used in the calculation, could differ significantly. Additionally, the
calculation does not account for possible actions taken by Funds Management to
mitigate the adverse effects of changes in market interest rates. 
 Item 8. Financial Statements and Supplementary Data Pages 23 through 51 of the 2003 Annual Report to Stockholders are
incorporated by reference. 
 Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure None. 23




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##### Table of Contents



Item 9A. Controls and Procedures An evaluation was performed under the supervision and with the
participation of the Companys management, including the Chief Executive
Officer, Chief Financial Officer and Corporate Controller, of the effectiveness
of the design and operation of the Companys disclosure controls and procedures
(as defined in Rule 13a-15(e) promulgated under the Securities and Exchange Act
of 1934, as amended) as of December 31, 2003. Based on that evaluation, the
Companys management, including the Chief Executive Officer, Chief Financial
Officer and Corporate Controller, concluded that the Companys disclosure controls and procedures were
effective. There have been no significant changes in the Companys internal
controls or in other factors that could significantly affect internal controls. 
 PART III 
 Item 10. Directors and Officers of the Registrant Information concerning directors of the Company is incorporated by
reference to the sections Election of Directors and Corporate Governance and
the Board of Directors located in the Companys definitive Proxy Statement for
the Annual Meeting of Stockholders to be held in 2004, a copy of which was
filed with the Securities and Exchange Commission on March 19, 2004 (the 2004
Proxy Statement). Executive Officers Who are Not Directors The business experience during the past five years with respect to
executive officers of the Company and the Bank who do not serve on the
Companys board of directors is listed below. Each officer is elected annually
to serve until his or her successor is elected and qualified, or until he or
she is no longer employed by the Company or its subsidiaries or is removed by
the board of directors. There are no arrangements or understandings between
the persons named and any other person pursuant to which such officers were
selected. James M. Lindstrom, age 31, was named Chief Financial Officer of the
Company and the Bank in July 2003. As Chief Financial Officer, Mr. Lindstrom is
responsible for the Banks finance, information technology and operations
departments. Prior to joining Centrue, he was a principal from 2001 to 2003
with Stolberg Equity Partners, a private equity firm. From 1996 to 2000, Mr.
Lindstrom held senior management roles with ChiRex, Inc., a pharmaceutical
services company. Mr. Lindstrom started his career in the investment banking
department at Credit Suisse First Boston and received his MBA at The Tuck
School of Business at Dartmouth. Carol S. Hoekstra, age 48, was elected Senior Vice President of the Bank
in January 2004. Mrs. Hoekstra is responsible for oversight of the Banks
retail products and services. Mrs. Hoekstra was previously Executive Vice
President and Interim Chief Operating Officer of both the Company and the Bank
in 2003 and assumed the duties of President of Centrue North until January
2004. She 24




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##### Table of Contents



was a Senior Vice President of the Bank since 1999 and an Assistant
Secretary of the Company since 1992. Previously, she was a Vice President of
the Bank since 1995. Mrs. Hoekstra first joined the Bank in 1977. She
rejoined the Bank in 1991 as consumer loan manager, following her return to the
area from Texas where she worked at a commercial bank in consumer lending. John N. Kempen, age 42, serves as President of Centrue East which consists
of two offices in Champaign County. Mr. Kempen also serves as the regions
senior lender. Prior to joining the Company, Mr. Kempen served as Champaign
region president of National City Bank. Mr. Kempen also held the positions of
senior vice president/chief credit officer, as well as regional commercial
banking manager for the Old National Bancorp from 1995 to 2001. He served in
retail and commercial officer roles with the Champion Federal and First of
America affiliate banks in the Kankakee area from 1983 to 1995. Bryan L. Marsh, age 54, was elected on October 9, 2003, as President of
Centrue South which consists of three offices in Clinton and St. Clair
Counties. Prior to the merger with Aviston Financial, Mr. Marsh served as the
President and a Director of the State Bank of Aviston. He also served as the
Corporate Secretary and a Director of Aviston Financial. Mr. Marsh joined the
State Bank of Aviston in 1985 and served as the Senior Lending Officer prior to
being elected President. Michael A. OGorman, age 37, joined the Bank in January 2004 as President
of Centrue North which consists of six offices in Kankakee and Iroquois
counties. From 2000 to 2004, he was Community President of National City Bank
in Kankakee, Illinois. From 1989 to 2000, Mr. OGorman also held various
positions with American National Bank and Trust Company of Chicago (now Bank
One), including Vice President and Division Head of its Central Illinois
commercial banking operations. Brad S. Rench, age 45, was appointed Chief Lending Officer of the Company
effective with the Aviston Financial merger in October 2003. He joined the
State Bank of Aviston as Chief Lending Officer in March of 2003. Prior to that,
Mr. Rench was Senior Vice President and Senior Lending Officer for the southern
Illinois Region of Associated Bank from February 1999 until March 2003. Prior
to March 2003, Mr. Rench held similar positions with Mercantile Bank, First
Illinois Bank Co., Magna Bank Group and First National Bank of Highland. He has
over 20 years of banking experience in the St. Louis metro and southern
Illinois markets. Keith M. Roseland, age 54, was promoted in October 2003 from Senior Vice
President to President of Centrue West which consists of seven offices in
Grundy, Livingston, and Will Counties. Previously, Mr. Roseland was a Senior
Vice President and Chief Commercial Lending Officer of the Bank, a position he
was appointed to in 2002. Mr. Roseland was Regional Commercial Lending Officer
of the Bank since 1999, and Regional Branch Manager responsible for the
operation of the Coal City, Diamond and Braidwood, Illinois branches of the
Bank since 1998. He had previously served as President, since 1986, of Coal
City National Bank, which was acquired by the Bank in January, 1998. Mr.
Roseland had been with Coal City National Bank since 1967. 25




---



##### Table of Contents



Compliance with Section 16(a) of the Exchange Act Information concerning compliance with Section 16(a) of the Exchange Act
called for by Item 10 of this Form 10-K is incorporated by reference from the
sectionCompliance with Section 16(a) of the Exchange Act in the Companys
2004 Proxy Statement. 
 Item 11. Executive Compensation Information concerning executive compensation called for by Item 11 of
this Form 10-K is incorporated by reference from the section Executive
Compensation and Director Compensation located in the Companys 2004 Proxy
Statement. 
 Item 12. Security Ownership of Certain Beneficial Owners and Management and
related stockholder matters Information concerning security ownership of certain beneficial owners and
management called for by Item 12 of this Form 10-K is incorporated by reference
from the section Voting Securities and Principal Holders and Aggregated
Equity Plan Information located in the Companys 2004 Proxy Statement. 
 Item 13. Certain Relationships and Related Transactions Information concerning certain relationships and related transactions
called for by Item 13 of this Form 10-K is incorporated by reference from the
section Certain Relationships and Related Transactions located in the
Companys 2004 Proxy Statement. 
 Item 14. Principal Accountant Fees and Services Information concerning accounting fees and services called for by item 14
of this Form 10-K is incorporated by reference from the section Independent
Public Accountants located in the 2004 Proxy Statement. 26




---



##### Table of Contents



PART IV 
 Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K (a)(1) Consolidated Financial Statements: The following information appearing in the Registrants 2003 Annual Report
to Stockholders is incorporated by reference in this Annual Report on Form 10-K
as Exhibit 13.1. Pages inAnnual Report Section
    
    Annual ReportSelected Financial Data
    
    
    4Managements Discussion and Analysis of
Financial Condition and Results of Operations
    
    
    5-22Report of Independent Auditors
    
    
    23Consolidated Balance Sheets
    
    
    24Consolidated Statements of Income
    
    
    25Consolidated Statements of Stockholders Equity
    
    
    26Consolidated Statements of Cash Flows
    
    
    27-28Notes to Consolidated Financial Statements
    
    
    29-50Quarterly Financial Information
    
    
    51
 With the exception of those sections specifically incorporated by
reference, the Registrants 2003 Annual Report to Stockholders is not deemed
filed as part of this Annual Report on Form 10-K. (a)(2) Financial Statement Schedules: Financial statement schedules have been omitted as the required
information is contained in the consolidated financial statements and notes
thereto, or because such schedules are not required or applicable. 27




---



##### Table of Contents



(a)(3) Exhibits: Reference to PriorRegulation
    
    
    
    Filing or ExhibitS-K Exhibit
    
    
    
    Number AttachedNumber
    
    Document
    
    Hereto3.1
    
    Articles of Incorporation
    
    
    3.13.2
    
    Bylaws
    
    
    (1
    )4.1
    
    Form of Rights Agreement
    
    
    (4
    )10.1
    
    Stock Option Plan
    
    
    (2
    )10.2
    
    Employee Stock Ownership Plan
    
    
    (1
    )10.3
    
    401(k) Plan
    
    
    (1
    )10.4
    
    Employment Agreement between the
Bank and Thomas A. Daiber
    
    
    (3
    )10.5
    
    Employment Agreement between the
Bank and James M. Lindstrom
    
    
    (5
    )10.6
    
    Employment Agreement between the
Bank and Bradley S. Rench
    
    
    10.610.7
    
    Employment Agreement between the
Bank and Carol S. Hoekstra
    
    
    10.710.8
    
    Employment Agreement between the
Bank and Keith M. Roseland
    
    
    10.810.9
    
    Indenture dated April 10, 2002,
between the Company and
Wilmington Trust Company
    
    
    10.913.1
    
    2003 Annual Report to Stockholders
    
    
    13.121.1
    
    Subsidiaries of the Registrant
    
    
    21.123.1
    
    Consent of Independent Auditor
    
    
    23.131.1
    
    Certification of Chief Executive
Officer Pursuant to Rule
13a-14(a)/15d-14(a)
    
    
    31.131.2
    
    Certification of Chief Financial
Officer Pursuant to Rule
13a-14(a)/15d-14(a)
    
    
    31.2
 28




---



##### Table of Contents



Reference to PriorRegulation
    
    
    
    Filing or ExhibitS-K Exhibit
    
    
    
    Number AttachedNumber
    
    Document
    
    Hereto31.3
    
    Certification of Corporate
Controller Pursuant to Rule
13a-14(a)/15d-14(a)
    
    
    31.332.1
    
    Certification of Chief Executive
Officer Pursuant to 18 U.S.C.
Section 1350, as adopted Pursuant
to Section 906 of the
Sarbanes-Oxley Act of 2002
    
    
    32.132.2
    
    Certification of Chief Financial
Officer Pursuant to 18 U.S.C.
Section 1350, as adopted Pursuant
to Section 906 of the
Sarbanes-Oxley Act of 2002
    
    
    32.232.3
    
    Certification of Corporate
Controller Pursuant to 18 U.S.C.
Section 1350, as adopted Pursuant
to Section 906 of the
Sarbanes-Oxley Act of 2002
    
    
    32.3
   (1)
    
    Filed on September 11, 1992, as exhibits to the Registrants Registration
Statement No. 33-51950 on Form S-1. Such previously filed documents are
hereby incorporated herein by reference in accordance with Item 601 of
Regulation S-K.(2)
    
    Filed on May 1, 2003, as exhibits to the Registrants Annual Report on
Form S-8. Such previously filed documents are hereby incorporated herein
by reference in accordance with Item 601 of Regulation S-K.(3)
    
    Filed on June 27, 2003, as an exhibit to the Registrants Registration
Statement on Form S-4. Such previously filed documents are hereby
incorporated herein by reference in accordance with Item 601 of Regulation
S-K.(4)
    
    Filed on May 21, 1999, as an exhibit to the Registrants Form 8-K. Such
previously filed document is hereby incorporated herein by reference in
accordance with Item 601 of Regulation S-K.(5)
    
    Filed on July 30, 2004, as an exhibit to the Registrants Registration
Statement on Form S-4/A. Such previously filed documents are hereby
incorporated herein by reference in accordance with Item 601 of Regulation
S-K.  (b)
    
    Reports on Form 8-K  On October 9, 2003, the Company filed a Form 8-K pursuant to Item 5
announcing the completion of the merger between Kankakee Bancorp, Inc.
and Aviston Financial Corporation as well as the name change to Centrue
Financial Corporation. The Company also announced the approval of a 2
for 1 stock split in the form of a dividend, the approval of a share
repurchase program, and the appointment of two new Directors.On October 30, 2003, the Company filed a Form 8-K pursuant to Item 5
announcing that the Company entered into an Agreement and Plan of Merger
with Parish Bank and Trust Company. Additionally, the Company announced
the hiring of John N. Kempen as the President of Centrue East. 29




---



##### Table of Contents



On October 30, 2003, the Company filed a Form 8-K pursuant to Item 5
announcing its declaration of a quarterly cash dividend to shareholders.On October 31, 2003, the Company filed a Form 8-K pursuant to Item 12
announcing its earnings for the quarter ended September 30, 2003.On February 23, 2004, the Company filed a Form 8-K pursuant to Item 11
announcing the temporary supervision of trading under the Companys
employee benefit plans as a result of the merger of assets of the Centrue
employee Stock Ownership Plan and the Centrue Bank 401(k) Savings Plan.On March 12, 2004, the Company filed a Form 8-K pursuant to Item 12
announcing its earnings for the year and quarter ended December 31, 2003. 30




---



##### Table of Contents



SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed
on its behalf by the undersigned, thereunto duly authorized. CENTRUE FINANCIAL CORPORATIONDate: March 29, 2004
    
    
    
    By:
    
    /s/ Thomas A. DaiberThomas A. Daiber,Chief Executive Officer and PresidentBy:
    
    /s/ James M. LindstromJames M. Lindstrom, Chief Financial OfficerBy:
    
    /s/ John A. BettsJohn A. Betts, Corporate Controller
 31




---



##### Table of Contents



Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated. /s/ Michael A. Griffith
    
    3-29-04
    
    Chairman of the BoardMichael A. Griffith
    
    Date/s/ Michael J. Hejna
    
    3-29-04
    
    DirectorMichael J. Hejna
    
    Date/s/ Wesley E. Walker
    
    3-29-04
    
    DirectorWesley E. Walker
    
    Date/s/ Thomas A. Daiber
    
    3-29-04
    
    President, Chief Executive Officer andDirectorThomas A. Daiber
    
    Date/s/ Mark L. Smith
    
    3-29-04
    
    DirectorMark L. Smith
    
    Date
 32




---



##### Table of Contents



INDEX TO EXHIBITS Reference to PriorRegulation
    
    
    
    Filing or ExhibitS-K Exhibit
    
    
    
    Number AttachedNumber
    
    Document
    
    Hereto3.1
    
    Articles of Incorporation
    
    
    3.13.2
    
    Bylaws
    
    
    (1
    )4.1
    
    Form of Rights Agreement
    
    
    (4
    )10.1
    
    Stock Option Plan
    
    
    (2
    )10.2
    
    Employee Stock Ownership Plan
    
    
    (1
    )10.3
    
    401(k) Plan
    
    
    (1
    )10.4
    
    Employment Agreement between the
Bank and Thomas A. Daiber
    
    
    (3
    )10.5
    
    Employment Agreement between the
Bank and James M. Lindstrom
    
    
    (5
    )10.6
    
    Employment Agreement between the
Bank and Bradley S. Rench
    
    
    10.610.7
    
    Employment Agreement between the
Bank and Carol S. Hoekstra
    
    
    10.710.8
    
    Employment Agreement between the
Bank and Keith M. Roseland
    
    
    10.810.9
    
    Indenture dated April 10, 2002,
between the Company and
Wilmington Trust Company
    
    
    10.913.1
    
    2003 Annual Report to Stockholders
    
    
    13.121.1
    
    Subsidiaries of the Registrant
    
    
    21.123.1
    
    Consent of Independent Auditor
    
    
    23.131.1
    
    Certification of Chief Executive
Officer Pursuant to Rule
13a-14(a)/15d-14(a)
    
    
    31.131.2
    
    Certification of Chief Financial
Officer Pursuant to Rule
13a-14(a)/15d-14(a)
    
    
    31.2
 33




---



##### Table of Contents



Reference to PriorRegulation
    
    
    
    Filing or ExhibitS-K Exhibit
    
    
    
    Number AttachedNumber
    
    Document
    
    Hereto31.3
    
    Certification of Corporate
Controller Pursuant to Rule
13a-14(a)/15d-14(a)
    
    
    31.332.1
    
    Certification of Chief Executive
Officer Pursuant to 18 U.S.C.
Section 1350, as adopted Pursuant
to Section 906 of the
Sarbanes-Oxley Act of 2002
    
    
    32.132.2
    
    Certification of Chief Financial
Officer Pursuant to 18 U.S.C.
Section 1350, as adopted Pursuant
to Section 906 of the
Sarbanes-Oxley Act of 2002
    
    
    32.232.3
    
    Certification of Corporate
Controller Pursuant to 18 U.S.C.
Section 1350, as adopted Pursuant
to Section 906 of the
Sarbanes-Oxley Act of 2002
    
    
    32.3
   (1)
    
    Filed on September 11, 1992, as exhibits to the Registrants Registration
Statement No. 33-51950 on Form S-1. Such previously filed documents are
hereby incorporated herein by reference in accordance with Item 601 of
Regulation S-K.(2)
    
    Filed on May 1, 2003, as exhibits to the Registrants Annual Report on
Form S-8. Such previously filed documents are hereby incorporated herein
by reference in accordance with Item 601 of Regulation S-K.(3)
    
    Filed on March 30, 1994, as an exhibit to the Registrants Annual Report
on Form 10-K. Such previously filed documents are hereby incorporated
herein by reference in accordance with Item 601 of Regulation S-K.(4)
    
    Filed on May 21, 1999, as an exhibit to the Registrants Form 8-K. Such
previously filed document is hereby incorporated herein by reference in
accordance with Item 601 of Regulation S-K.(5)
    
    Filed on July 30, 2004, as an exhibit to the Registrants Registration
Statement on Form S-4/A. Such previously filed documents are hereby
incorporated herein by reference in accordance with Item 601 of Regulation
S-K.