Parent Only Condensed Financial Statements

12 Months Ended

Dec. 31, 2015

PARENT ONLY CONDENSED FINANCIAL STATEMENTS

CONDENSED BALANCE SHEETS

December 31, 2015 and 2014



(In thousands)	2015		2014
ASSETS
Cash and cash equivalents	$	584	$	368
Investment in Bank subsidiary	143,531		135,366
Other assets	454		589
Total assets	$	144,569	$	136,323
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Junior subordinated debentures due to subsidiary grantor trust	$	5,155	$	5,155
Other liabilities	91		123
Total liabilities	5,246		5,278
Shareholders’ equity:
Common stock	54,424		54,216
Retained earnings	80,437		71,452
Accumulated other comprehensive income, net of tax	4,462		5,377
Total shareholders’ equity	139,323		131,045
Total liabilities and shareholders’ equity	$	144,569	$	136,323

CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

For the Years Ended December 31, 2015, 2014, and 2013



(In thousands)	2015		2014		2013
Income:
Dividends declared by Subsidiary - eliminated in consolidation	$	2,260	$	2,350	$	18,000
Other income	3		3		5
Total income	2,263		2,353		18,005
Expenses:
Interest on junior subordinated deferrable interest debentures	99		96		98
Professional fees	156		187		102
Other expenses	411		389		424
Total expenses	666		672		624
Income before equity in undistributed net income of Subsidiary	1,597		1,681		17,381
Equity in undistributed net income of Subsidiary, net of distributions	9,080		3,325		(9,414		)
Income before income tax benefit	10,677		5,006		7,967
Benefit from income taxes	287		288		283
Net income	10,964		5,294		8,250
Preferred stock dividend and accretion of discount	—		—		350
Income available to common shareholders	$	10,964	$	5,294	$	7,900

Comprehensive income (loss)	$	10,049	$	12,957	$	(1,622	)

CONDENSED STATEMENTS OF CASH FLOWS

For the Years Ended December 31, 2015, 2014, and 2013



(In thousands)	2015			2014			2013
Cash flows from operating activities:
Net income	$	10,964		$	5,294		$	8,250
Adjustments to reconcile net income to net cash provided by operating activities:
Undistributed net income of subsidiary, net of distributions	(9,080		)	(3,325		)	9,414
Stock-based compensation	238			173			98
Tax benefit from exercise of stock options	(6		)	(7		)	(17		)
Net (increase) decrease in other assets	50			(50		)	86
Net increase (decrease) in other liabilities	(32		)	34			(198		)
Benefit from deferred income taxes	(5		)	(8		)	(18		)
Net cash provided by operating activities	2,129			2,111			17,615
Cash flows used in investing activities:
Investment in subsidiary	—			—			(11,358		)
Cash flows from financing activities:
Cash dividend payments on common stock	(1,979		)	(2,190		)	(2,048		)
Cash dividend payments on preferred stock	—			—			(437		)
Proceeds from exercise of stock options	60			55			789
Redemption of preferred stock Series C	—			—			(7,000		)
Tax benefit from exercise of stock options	6			7			17
Net cash used in financing activities	(1,913		)	(2,128		)	(8,679		)
Increase (decrease) in cash and cash equivalents	216			(17		)	(2,422		)
Cash and cash equivalents at beginning of year	368			385			2,807
Cash and cash equivalents at end of year	$	584		$	368		$	385

Supplemental Disclosure of Cash Flow Information:
Cash paid during the year for interest	$	97		$	194		$	125
Non-cash investing and financing activities:
Common stock issued in Visalia Community Bank acquisition	$	—		$	—		$	12,494