CONDENSED FINANCIAL STATEMENTS OF PARENT COMPANY

Our investment in our wholly-owned subsidiaries is presented on the equity method of accounting. Information relative to our balance sheets at December 31, 2015 and 2014, and the related statements of income and cash flows for the years ended December 31, 2015, 2014 and 2013, are presented as follows:



Balance Sheets
	December 31,
Dollars in thousands	2015			2014
Assets
Cash	$	1,984		$	13,115
Investment in subsidiaries, eliminated in consolidation	164,787			159,839
Securities available for sale	166			102
Premises and equipment	81			65
Other assets	1,677			1,641
Total assets	$	168,695		$	174,762
Liabilities and Shareholders' Equity
Long-term borrowings	$	2,708		$	4,513
Subordinated debentures	—			16,800
Subordinated debentures owed to unconsolidated subsidiary trusts	19,589			19,589
Other liabilities	2,654			2,216
Total liabilities	24,951			43,118
Preferred stock and related surplus, authorized 250,000 shares:
Series 2009, 8% Non-cumulative convertible preferred stock,
par value $1.00; issued 2014 - 3,610 shares	—			3,419
Series 2011, 8% Non-cumulative convertible preferred stock,
par value $1.00; issued 2014 - 11,914 shares	—			5,764
Common stock and related surplus, $2.50 par value, authorized
20,000,000 shares; issued 2015 - 10,671,744 shares; 2014 - 8,301,746 shares	45,741			32,670
Unallocated common stock held by Employee Stock Ownership Plan - 2015 - 181,822	(1,964		)	—
Retained earnings	100,423			87,719
Accumulated other comprehensive income (loss)	(456		)	2,072
Total shareholders' equity	143,744			131,644
Total liabilities and shareholders' equity	$	168,695		$	174,762



Statements of Income
	For the Year Ended December 31,
Dollars in thousands	2015			2014			2013
Income
Dividends from subsidiaries	$	10,000		$	6,500		$	2,500
Other dividends and interest income	19			22			26
Realized securities gains	—			41			—
Management and service fees from subsidiaries	1,133			1,189			1,087
Total income	11,152			7,752			3,613
Expense
Interest expense	747			1,845			1,948
Operating expenses	2,390			1,746			1,717
Total expenses	3,137			3,591			3,665
Income (loss) before income taxes and equity in
undistributed income of subsidiaries	8,015			4,161			(52		)
Income tax (benefit)	(692		)	(739		)	(894		)
Income before equity in undistributed income of subsidiaries	8,707			4,900			842
Equity in (distributed) undistributed income of subsidiaries	7,395			6,456			7,226
Net income	16,102			11,356			8,068
Dividends on preferred shares	—			771			775
Net income applicable to common shares	$	16,102		$	10,585		$	7,293



Statements of Cash Flows
	For the Year Ended December 31,
Dollars in thousands	2015			2014			2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	16,102		$	11,356		$	8,068
Adjustments to reconcile net earnings to net cash provided by operating activities:
Equity in (undistributed) distributed net income of subsidiaries	(7,395		)	(6,456		)	(7,226		)
Deferred tax expense (benefit)	(42		)	46			(107		)
Depreciation	30			23			2
Realized securities gains	—			(41		)	—
Stock compensation expense	72			1			2
(Increase) decrease in cash surrender value of bank owned life insurance	4			1			(5		)
(Increase) decrease in other assets	5			19			15
Increase (decrease) in other liabilities	943			57			(738		)
Net cash provided by operating activities	9,719			5,006			11
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds sales of available for sale securities	—			112			—
Principal payments received on available for sale securities	—			8			440
Purchase of available for sale securities	(70		)	—			(199		)
Purchases of premises and equipment	(46		)	(6		)	(84		)
Net cash provided by (used in) investing activities	(116		)	114			157
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid on preferred stock	(191		)	(774		)	(776		)
Dividends paid on common stock, net of reinvestment	(3,330		)	—			—
Exercise of stock options	51			71			96
Net proceeds from long-term borrowings	—			—			3,454
Repayment of long-term borrowings	(1,838		)	(4,402		)	(3,159		)
Repayment of subordinated debt	(16,800		)	—			—
Repurchase and retirement of common stock	(1,080		)	—			—
Purchase of unallocated common stock held by ESOP	(2,250		)	—			—
Net proceeds from issuance of common stock	4,704			7,822			—
Net cash provided by (used in) financing activities	(20,734		)	2,717			(385		)
Increase (decrease) in cash	(11,131		)	7,837			(217		)
Cash:
Beginning	13,115			5,278			5,495
Ending	$	1,984		$	13,115		$	5,278
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash payments for:
Interest	$	761		$	1,909		$	1,942