SEC Company Response from CENTRAL PACIFIC FINANCIAL CORP (CPF) (CIK 0000701347) (CPF) — Jul 11, 2014
CENTRAL PACIFIC FINANCIAL CORP (CPF) (CIK 0000701347)
Date: July 11, 2014 · CIK: 0000701347 · Accession: 0000701347-14-000043
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 001-31567
Letter
VIA EDGAR AND EMAIL Securities and Exchange Commission Division of Corporation Finance 100 F Street, N.E. Washington, DC 20549-4561 Re: Central Pacific Financial Corp. Form 10-K for Fiscal Period Ended December 31, 2013 (File No. 001-31567)
Dear Mr. Rodriguez,
On behalf of Central Pacific Financial Corp., a Hawaii corporation (the “Company”), we respectfully set forth below our responses to your response letter, dated June 19, 2014 (the “Comment Letter”), relating to comments of the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) concerning the Company’s Form 10-K for the fiscal period ended December 31, 2013. Capitalized terms used herein and not otherwise defined herein have the meanings ascribed thereto in Form 10-K. For your convenience, we have included the Staff’s comments below in bold and have keyed our responses accordingly.
The Company acknowledges that:
·
the Company is responsible for the adequacy and accuracy of disclosures in our SEC filing.
·
Staff comments or changes to disclosure in response to SEC staff comments do not foreclose the Commission from taking any action with respect to the filing.
·
the Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.
The Company will revise future filings to provide disclosure as noted in the responses that follow.
Form 10-K for Fiscal Year Ended December 31, 2013
Critical Accounting Policies and Use of Estimates
Allowance for Loan and Lease Losses, page 34
1. Please refer to the response to comment 1 of our May 8, 2014 letter. The comment was intended to elicit more transparency surrounding how you segment your loan portfolio and the categories therein for purposes of measuring impairment, particularly as that segmentation applies to the general allowance component of the allowance for loan and lease losses. The response appears to be consistent with what you have disclosed and; considering the significance of these estimates to your financial condition, results of operations, it appears overly abbreviated. Please tell us and revise future filings to address the following:
·
Please provide a more detailed discussion of how you segment the categories of the portfolio for purposes of determining the general allowance component of the allowance for loan losses. Your revisions should qualitatively and quantitatively clarify how you segmented the loan categories into homogeneous groups and how you identify and measure underlying losses of each segment.
Response:
The Company acknowledges the Staff’s comments and will revise its disclosures in all future filings to be consistent with the following:
In determining the general allowance component of the Allowance for Loan and Lease Losses (“Allowance”), the Company utilizes a comprehensive approach to segment the loan portfolio into homogenous groups. Six criteria divide the Company’s loan portfolio into 128 homogenous subsectors. First, loans are divided by general geographic region (U.S. Mainland and Hawaii). Second, loans are subdivided according to FDIC classification (Construction, Commercial Mortgage, Commercial, Financial and Agricultural, Leases, Residential Mortgage, Consumer). Third, loans within the Construction category are further subdivided by collateral type (Commercial and Residential). Fourth, loans within the Residential Mortgage category are further subdivided by ownership type (Investor-owned and Owner-occupied). Fifth, loans are subdivided by State or for some by County (All Hawaii, Hawaii Island, Kauai, Maui, Oahu, Other Hawaii, All U.S. Mainland, Los Angeles/Orange County CA, Riverside/San Bernardino CA, Sacramento/Placer/El Dorado/Yolo CA, San Diego CA, Washington/Oregon, Other U.S. Mainland). Finally, loans are further subdivided by Risk Rating (Pass, Special Mention, Substandard, and Doubtful).
For the purpose of determining general allowance loss factors, loss experience is derived from charge-offs and recoveries. The calculation of subsector loss factors involve the summation of charge-offs and recoveries that occurred within the last eight quarters (for loans secured by real estate) or four quarters (for all other loans) divided by the average loan balance over the look-back period. A rolling eight quarter period is utilized for FDIC classifications involving real estate collateral to account for prolonged loss recognition and ultimate disposition periods associated with loans secured by real estate. The four or eight quarter period is referred to as the look-back period.
A charge-off occurs when the Company makes the determination that an amount of debt is deemed to be uncollectible. Loans are also charged off when it is probable that a loss has been incurred and it is possible to make a reasonable estimate of the loss. Charge-offs are classified into subsectors according to the underlying loan’s primary geography, loan category, collateral type (if applicable), investment type (if applicable), state/county, and the risk rating of the loan one year prior to the charge-off. For each subsector secured by real estate, the cumulative charge-offs are determined by summing all subsector-specific charge-offs that occurred within the last eight quarters. For all other subsectors, the cumulative charge-offs are determined by summing all subsector-specific charge-offs that occurred within the last four quarters.
A recovery occurs when a loan that is classified as a bad debt was either partially or fully charged off and has been subsequently recovered. Recoveries from loans secured by real estate are classified according to the subsector of the earliest associated charge-off of the loan within the last eight quarters. Recoveries from all other loans are classified according to the earliest associated charge-off of the loan within the last four quarters. Cumulative recoveries are determined for each subsector by summing the subsector-specific recoveries.
Subsector losses are measured by subtracting each subsector’s cumulative recoveries from their respective cumulative charge-offs. Subsector losses are then divided by the subsector loan balance averaged over the relevant time period (again, eight quarters for loans secured by real estate, four quarters for all others) to determine each subsector’s historical loss rate. The sum of each subsector’s historical loss rate plus a region-specific economic/market qualitative adjustment and category-specific other qualitative adjustment is then multiplied by the subsector’s period-ending loan balance to determine each subsector’s general allowance provision. The sum of the 128 subsector general allowance provisions represents the general allowance provision of the entire portfolio.
·
Please provide the loss experience used to measure the losses in each of the segments of your loan portfolio for each period presented and discuss changes between periods. Discuss, to the extent applicable, how the loss experience is weighted.
Response:
The Company acknowledges the Staff’s comments and has provided the loss experience table used to measure losses in each of the categories and a discussion of the changes below.
Net Charge-Offs for Applicable Look back Period by Major Segments
Year Ended December 31,
Hawaii
Mainland
Hawaii
Mainland
Hawaii
Mainland
Hawaii
Mainland
(Dollars in thousands)
Commercial, financial and agricultural
$ 2,752
$ -
$ 3,518
$ -
$ 4,633
$ -
$ 13,081
$
Real estate:
Construction
6,613
16,022
18,825
100,614
47,379
159,685
141,797
Mortgage:
- residential
2,694
-
5,066
-
13,747
-
16,191
-
- commercial
3,272
1,380
1,322
16,488
26,298
17,975
68,602
Consumer
1,463
-
1,172
-
1,771
-
2,811
-
Leases
-
-
-
-
(22 )
-
Total
$ 7,930
$ 9,885
$ 27,185
$ 20,148
$ 137,263
$ 73,677
$ 209,720
$ 211,382
Over the past four years, the Company has experienced a significant reduction in cumulative net charge-offs across every loan segment. This reduction has coincided with the resolution of legacy assets and ongoing improvement in the Company’s underwriting practices. Additionally, the Company has steadily reduced its holdings in select mainland loan categories which incurred substantial losses during the years 2008 through 2010.
The table above presents each subsectors’ net charge-offs, however, only includes recoveries associated with loans which were charged-off in the applicable look-back period. In other words, recoveries only include those recoveries which were preceded by a charge-off within the last four or eight quarters. To minimize confusion with Table 14 in our Form 10-K which reflects charge-offs and recoveries actually recorded in each period, the Company will not include the above table in future filings.
However, in all future filings we will expand the discussion to include a disclosure consistent with the following:
For the purpose of determining general allowance loss factors, loss experience is derived from charge-offs and recoveries. Loan categories secured by real estate incorporate eight quarters of charge-off and recovery history. All other loan categories incorporate four quarters of charge-off and recovery history. Each subsectors’ cumulative recoveries only include those recoveries associated with loans which were charged-off in the applicable look-back period. We do not apply any weighting schema to our loss experience over the look-back period.
·
Please provide quantification of the environmental or qualitative loss factors recorded in each segment of each loan category from the methodology used to develop the general component of the allowance for loan losses.
Response:
The Company’s environmental and qualitative loss factors comprise of an economic/market condition factor and a Company-specific factor. The table below quantifies the economic/market loss factors added to each major regional segment as of December 31, 2013.
12/31/2013
Region
Economic Factors
Oahu/Other HI (Average)
0.32 %
Oahu
0.33
Other HI
0.31
California
(0.13 )
Washington/Oregon (Average)
(0.03 )
Other Mainland
0.11
The Company-specific factor is applied to certain loan categories to capture company-specific conditions for which national/regional statistics are not available. As noted in our initial response, below is a description of the Company-specific qualitative factors utilized:
·
In the second quarter of 2012, adjustment factors ranging from 0.80% to 11.60% were added to the Pass and Special Mention-rated commercial mortgage category in consideration of the refinance risk associated with loans maturing over the next two years. The maximum of the range, 11.60%, is considered anomalous in nature as it represents the refinance risk associated with one individual borrower within one subsector. All other subsector refinance risk factors fell below 2.55%. Adjustment factors were not added to Substandard-rated loans due to the enhanced level of monitoring devoted to these credits, with impairment analysis performed as indicated.
·
In the second quarter of 2012, an adjustment factor of 0.25% was added in recognition of the delegation of increased credit authority to line division management and changes in the underwriting and approval process for small business lending. This change involved moving from a judgmental underwriting process for all loans to a score-based approval process below a certain loan size threshold, and a streamlined judgmental process augmented by relationship officer involvement above a certain loan size threshold.
·
In the first quarter of 2013, benchmark loss rates of 3.00% were applied to loans generated via recent preapproved and invitation to apply promotions in the direct consumer category until historical loss data has been accumulated. Also, a weighted adjustment factor of 6.03% was applied to the syndicated loan portfolio based on Moody’s proxy default rates to account for increased risk associated with recent entrance into this sector and risk exposure attributed to the size of individual credits.
·
In the second quarter of 2013, an adjustment factor of 0.50% was subtracted from the Pass-rated residential mortgage category in consideration of the continued disparity between actual calculated historical loss rates and the loss rates ranging from 2.38% to 2.72% recommended by our primary regulator in 2010.
·
In the third quarter of 2013, benchmark loss rates of 3.00% were applied to the student loans in the direct consumer category until historical loss data has been accumulated for this loan category.
In all future filings the Company will expand its disclosures to add a section titled “Application of Proxies.” This section will provide disclosures consistent with the following:
Our Allowance for Loan and Lease Losses methodology uses qualitative adjustments for economic/market conditions and Company-specific conditions. The economic/market conditions factor is applied on a regional/geographic basis. Two key indicators, unemployment and personal income comprise the economic/market adjustment factor.
Personal income is analyzed by comparing average quarter-to-quarter percentage change trends reported by the U.S. Bureau of Economic Analysis. Specifically, the rolling four (4) quarter average percentage change in personal income is calculated and compared to a baseline historical factor, calculated as the average quarter-to-quarter percentage change over the prior ten years. The difference between the current average change and the historical average change is utilized as the personal income component of the economic/market adjustment factor.
The second component of the economic/market factor, unemployment, is derived by comparing the current quarter unemployment rate, reported by the U.S. Bureau of Labor Statistics, to its ten (10) year historical average. A constant scaling factor is applied to the difference between the current rate and the historical average in order to smooth significant period-to-period fluctuations. The result is utilized as the unemployment component of the economic factor. The personal income factor and unemployment factor are added together to determine each region’s total economic/market adjustment factor.
The general allowance also incorporates qualitative adjustment factors that capture company-specific conditions for which national/regional statistics are not available, or for which significant localized market specific events have not yet been captured within regional statistics or the Company's historical loss experience.
·
Please discuss the specific nature of the loss factors considered in developing the “unallocated” component of the reserve and quantify the amount allocated to each of the factors. Discuss why the environmental or qualitative factors used to determine the general component of the allowance for loan and leases do not capture these loss factors.
Response:
The Company maintains the unallocated portion of the Allowance as a reserve for potential global events that could indirectly adversely impact any of the principal components of the Hawaii economy and that cannot be captured in our methodology’s historical experience base. The Company considers several global economic risks and uncertainties in developing the unallocated component of the Allowance. The Company applies qualitative adjustments based on our assessment of these factors which are described in the draft disclosure below. We do not specifically quantify the amount allocated to each factor as we believe that the fact
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CORRESP
1
filename1.htm
letter.htm
Central Pacific Plaza
PO Box 3590
Honolulu Hawaii 96811-3590
Telephone 808-544-0500
Fax Line 808-531-2875
VIA EDGAR AND EMAIL
July 11, 2014
Mr. Gus Rodriguez
Accounting Branch Chief
Securities and Exchange Commission
Division of Corporation Finance
100 F Street, N.E.
Washington, DC 20549-4561
Re: Central Pacific Financial Corp.
Form 10-K for Fiscal Period Ended December 31, 2013 (File No. 001-31567)
Dear Mr. Rodriguez,
On behalf of Central Pacific Financial Corp., a Hawaii corporation (the “Company”), we respectfully set forth below our responses to your response letter, dated June 19, 2014 (the “Comment Letter”), relating to comments of the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) concerning the Company’s Form 10-K for the fiscal period ended December 31, 2013. Capitalized terms used herein and not otherwise defined herein have the meanings ascribed thereto in Form 10-K. For your convenience, we have included the Staff’s comments below in bold and have keyed our responses accordingly.
The Company acknowledges that:
·
the Company is responsible for the adequacy and accuracy of disclosures in our SEC filing.
·
Staff comments or changes to disclosure in response to SEC staff comments do not foreclose the Commission from taking any action with respect to the filing.
·
the Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.
The Company will revise future filings to provide disclosure as noted in the responses that follow.
Form 10-K for Fiscal Year Ended December 31, 2013
Critical Accounting Policies and Use of Estimates
Allowance for Loan and Lease Losses, page 34
1. Please refer to the response to comment 1 of our May 8, 2014 letter. The comment was intended to elicit more transparency surrounding how you segment your loan portfolio and the categories therein for purposes of measuring impairment, particularly as that segmentation applies to the general allowance component of the allowance for loan and lease losses. The response appears to be consistent with what you have disclosed and; considering the significance of these estimates to your financial condition, results of operations, it appears overly abbreviated. Please tell us and revise future filings to address the following:
·
Please provide a more detailed discussion of how you segment the categories of the portfolio for purposes of determining the general allowance component of the allowance for loan losses. Your revisions should qualitatively and quantitatively clarify how you segmented the loan categories into homogeneous groups and how you identify and measure underlying losses of each segment.
Response:
The Company acknowledges the Staff’s comments and will revise its disclosures in all future filings to be consistent with the following:
In determining the general allowance component of the Allowance for Loan and Lease Losses (“Allowance”), the Company utilizes a comprehensive approach to segment the loan portfolio into homogenous groups. Six criteria divide the Company’s loan portfolio into 128 homogenous subsectors. First, loans are divided by general geographic region (U.S. Mainland and Hawaii). Second, loans are subdivided according to FDIC classification (Construction, Commercial Mortgage, Commercial, Financial and Agricultural, Leases, Residential Mortgage, Consumer). Third, loans within the Construction category are further subdivided by collateral type (Commercial and Residential). Fourth, loans within the Residential Mortgage category are further subdivided by ownership type (Investor-owned and Owner-occupied). Fifth, loans are subdivided by State or for some by County (All Hawaii, Hawaii Island, Kauai, Maui, Oahu, Other Hawaii, All U.S. Mainland, Los Angeles/Orange County CA, Riverside/San Bernardino CA, Sacramento/Placer/El Dorado/Yolo CA, San Diego CA, Washington/Oregon, Other U.S. Mainland). Finally, loans are further subdivided by Risk Rating (Pass, Special Mention, Substandard, and Doubtful).
For the purpose of determining general allowance loss factors, loss experience is derived from charge-offs and recoveries. The calculation of subsector loss factors involve the summation of charge-offs and recoveries that occurred within the last eight quarters (for loans secured by real estate) or four quarters (for all other loans) divided by the average loan balance over the look-back period. A rolling eight quarter period is utilized for FDIC classifications involving real estate collateral to account for prolonged loss recognition and ultimate disposition periods associated with loans secured by real estate. The four or eight quarter period is referred to as the look-back period.
A charge-off occurs when the Company makes the determination that an amount of debt is deemed to be uncollectible. Loans are also charged off when it is probable that a loss has been incurred and it is possible to make a reasonable estimate of the loss. Charge-offs are classified into subsectors according to the underlying loan’s primary geography, loan category, collateral type (if applicable), investment type (if applicable), state/county, and the risk rating of the loan one year prior to the charge-off. For each subsector secured by real estate, the cumulative charge-offs are determined by summing all subsector-specific charge-offs that occurred within the last eight quarters. For all other subsectors, the cumulative charge-offs are determined by summing all subsector-specific charge-offs that occurred within the last four quarters.
A recovery occurs when a loan that is classified as a bad debt was either partially or fully charged off and has been subsequently recovered. Recoveries from loans secured by real estate are classified according to the subsector of the earliest associated charge-off of the loan within the last eight quarters. Recoveries from all other loans are classified according to the earliest associated charge-off of the loan within the last four quarters. Cumulative recoveries are determined for each subsector by summing the subsector-specific recoveries.
Subsector losses are measured by subtracting each subsector’s cumulative recoveries from their respective cumulative charge-offs. Subsector losses are then divided by the subsector loan balance averaged over the relevant time period (again, eight quarters for loans secured by real estate, four quarters for all others) to determine each subsector’s historical loss rate. The sum of each subsector’s historical loss rate plus a region-specific economic/market qualitative adjustment and category-specific other qualitative adjustment is then multiplied by the subsector’s period-ending loan balance to determine each subsector’s general allowance provision. The sum of the 128 subsector general allowance provisions represents the general allowance provision of the entire portfolio.
·
Please provide the loss experience used to measure the losses in each of the segments of your loan portfolio for each period presented and discuss changes between periods. Discuss, to the extent applicable, how the loss experience is weighted.
Response:
The Company acknowledges the Staff’s comments and has provided the loss experience table used to measure losses in each of the categories and a discussion of the changes below.
Net Charge-Offs for Applicable Look back Period by Major Segments
Year Ended December 31,
2013
2012
2011
2010
Hawaii
Mainland
Hawaii
Mainland
Hawaii
Mainland
Hawaii
Mainland
(Dollars in thousands)
Commercial, financial and agricultural
$
2,752
$
-
$
3,518
$
-
$
4,633
$
-
$
13,081
$
982
Real estate:
Construction
409
6,613
16,022
18,825
100,614
47,379
159,685
141,797
Mortgage:
- residential
2,694
-
5,066
-
13,747
-
16,191
-
- commercial
612
3,272
1,380
1,322
16,488
26,298
17,975
68,602
Consumer
1,463
-
1,172
-
1,771
-
2,811
-
Leases
-
-
28
-
10
-
(22
)
-
Total
$
7,930
$
9,885
$
27,185
$
20,148
$
137,263
$
73,677
$
209,720
$
211,382
Over the past four years, the Company has experienced a significant reduction in cumulative net charge-offs across every loan segment. This reduction has coincided with the resolution of legacy assets and ongoing improvement in the Company’s underwriting practices. Additionally, the Company has steadily reduced its holdings in select mainland loan categories which incurred substantial losses during the years 2008 through 2010.
The table above presents each subsectors’ net charge-offs, however, only includes recoveries associated with loans which were charged-off in the applicable look-back period. In other words, recoveries only include those recoveries which were preceded by a charge-off within the last four or eight quarters. To minimize confusion with Table 14 in our Form 10-K which reflects charge-offs and recoveries actually recorded in each period, the Company will not include the above table in future filings.
However, in all future filings we will expand the discussion to include a disclosure consistent with the following:
For the purpose of determining general allowance loss factors, loss experience is derived from charge-offs and recoveries. Loan categories secured by real estate incorporate eight quarters of charge-off and recovery history. All other loan categories incorporate four quarters of charge-off and recovery history. Each subsectors’ cumulative recoveries only include those recoveries associated with loans which were charged-off in the applicable look-back period. We do not apply any weighting schema to our loss experience over the look-back period.
·
Please provide quantification of the environmental or qualitative loss factors recorded in each segment of each loan category from the methodology used to develop the general component of the allowance for loan losses.
Response:
The Company’s environmental and qualitative loss factors comprise of an economic/market condition factor and a Company-specific factor. The table below quantifies the economic/market loss factors added to each major regional segment as of December 31, 2013.
12/31/2013
Region
Economic Factors
Oahu/Other HI (Average)
0.32
%
Oahu
0.33
Other HI
0.31
California
(0.13
)
Washington/Oregon (Average)
(0.03
)
Other Mainland
0.11
The Company-specific factor is applied to certain loan categories to capture company-specific conditions for which national/regional statistics are not available. As noted in our initial response, below is a description of the Company-specific qualitative factors utilized:
·
In the second quarter of 2012, adjustment factors ranging from 0.80% to 11.60% were added to the Pass and Special Mention-rated commercial mortgage category in consideration of the refinance risk associated with loans maturing over the next two years. The maximum of the range, 11.60%, is considered anomalous in nature as it represents the refinance risk associated with one individual borrower within one subsector. All other subsector refinance risk factors fell below 2.55%. Adjustment factors were not added to Substandard-rated loans due to the enhanced level of monitoring devoted to these credits, with impairment analysis performed as indicated.
·
In the second quarter of 2012, an adjustment factor of 0.25% was added in recognition of the delegation of increased credit authority to line division management and changes in the underwriting and approval process for small business lending. This change involved moving from a judgmental underwriting process for all loans to a score-based approval process below a certain loan size threshold, and a streamlined judgmental process augmented by relationship officer involvement above a certain loan size threshold.
·
In the first quarter of 2013, benchmark loss rates of 3.00% were applied to loans generated via recent preapproved and invitation to apply promotions in the direct consumer category until historical loss data has been accumulated. Also, a weighted adjustment factor of 6.03% was applied to the syndicated loan portfolio based on Moody’s proxy default rates to account for increased risk associated with recent entrance into this sector and risk exposure attributed to the size of individual credits.
·
In the second quarter of 2013, an adjustment factor of 0.50% was subtracted from the Pass-rated residential mortgage category in consideration of the continued disparity between actual calculated historical loss rates and the loss rates ranging from 2.38% to 2.72% recommended by our primary regulator in 2010.
·
In the third quarter of 2013, benchmark loss rates of 3.00% were applied to the student loans in the direct consumer category until historical loss data has been accumulated for this loan category.
In all future filings the Company will expand its disclosures to add a section titled “Application of Proxies.” This section will provide disclosures consistent with the following:
Our Allowance for Loan and Lease Losses methodology uses qualitative adjustments for economic/market conditions and Company-specific conditions. The economic/market conditions factor is applied on a regional/geographic basis. Two key indicators, unemployment and personal income comprise the economic/market adjustment factor.
Personal income is analyzed by comparing average quarter-to-quarter percentage change trends reported by the U.S. Bureau of Economic Analysis. Specifically, the rolling four (4) quarter average percentage change in personal income is calculated and compared to a baseline historical factor, calculated as the average quarter-to-quarter percentage change over the prior ten years. The difference between the current average change and the historical average change is utilized as the personal income component of the economic/market adjustment factor.
The second component of the economic/market factor, unemployment, is derived by comparing the current quarter unemployment rate, reported by the U.S. Bureau of Labor Statistics, to its ten (10) year historical average. A constant scaling factor is applied to the difference between the current rate and the historical average in order to smooth significant period-to-period fluctuations. The result is utilized as the unemployment component of the economic factor. The personal income factor and unemployment factor are added together to determine each region’s total economic/market adjustment factor.
The general allowance also incorporates qualitative adjustment factors that capture company-specific conditions for which national/regional statistics are not available, or for which significant localized market specific events have not yet been captured within regional statistics or the Company's historical loss experience.
·
Please discuss the specific nature of the loss factors considered in developing the “unallocated” component of the reserve and quantify the amount allocated to each of the factors. Discuss why the environmental or qualitative factors used to determine the general component of the allowance for loan and leases do not capture these loss factors.
Response:
The Company maintains the unallocated portion of the Allowance as a reserve for potential global events that could indirectly adversely impact any of the principal components of the Hawaii economy and that cannot be captured in our methodology’s historical experience base. The Company considers several global economic risks and uncertainties in developing the unallocated component of the Allowance. The Company applies qualitative adjustments based on our assessment of these factors which are described in the draft disclosure below. We do not specifically quantify the amount allocated to each factor as we believe that the fact