Condensed Financial Statements of Parent Company

12 Months Ended

Dec. 31, 2014

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Condensed Financial Statements of Parent Company

Note 18 – Condensed Financial Statements of Parent Company

Balance Sheet


	(In Thousands)
	2014		2013
Assets
Cash	$	302	$	322
Related party receivables:
Dividends & Accounts receivable from subsidiary		2,030		951
Accrued interest receivable Municipals		58		49
Note receivable from Bank subsidiary		—		—
Securities - Municipals		14,998		14,956
Investment in subsidiaries		98,088		93,436

Total Assets	$	115,476	$	109,714


Liabilities
Accrued expenses	$	18	$	130
Dividends payable		965		967

Total Liabilities		983		1,097


Stockholders’ Equity		114,493		108,617

Total Liabilities and Stockholders’ Equity	$	115,476	$	109,714

Statement of Income


	(In Thousands)
	2014			2013			2012
Income
Dividends from subsidiary	$	5,725		$	3,830		$	3,870
Interest		—			566			713
Interest Municipals		215			30			—

Total Income		5,940			4,426			4,583

Operating Expenses		577			304			305


Income Before Income Taxes and Equity in Undistributed Earnings of Subsidiaries		5,363			4,122			4,278
Income Taxes		(196	)		89			139

		5,559			4,033			4,139
Equity in undistributed earnings of Subsidiaries		4,087			4,974			5,649

Net Income	$	9,646		$	9,007		$	9,788

Other Comprehensive Loss:
Unrealized gains (losses) on securities	$	438		$	(6,087	)	$	(288	)

Comprehensive Income	$	10,084		$	2,920		$	9,500

Statements of Cash Flows


	(In Thousands)
	2014			2013			2012
Cash Flows from Operating Activities
Net income	$	9,646		$	9,007		$	9,788
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Equity in undistributed net income (Distributions in excess earnings) of subsidiaries		(4,087	)		(4,974	)		(5,649	)
Accretion & Amortization of Securities		146			21
Changes in Assets and Liabilities:
Dividends receivable		(1,025	)		(10	)		260
Other Assets and Liabilities		(12	)		52			282

Net Cash Provided by Operating Activities		4,668			4,096			4,681
Cash Flows from Investing Activities
Investing in Subsidiary		(250	)		—			—
Purchase of Available for Sale Securities		—			(14,992	)		—
Repayment of Subsidiary Subordinated Debt		—			15,000			—

Net Cash Provided by Investing Activities		(250	)		8			—
Cash Flows from Financing Activities
Payment of dividends		(3,862	)		(3,719	)		(3,597	)
Purchase of Treasury Stock		(576	)		(1,236	)		(894	)

Net Cash Used in Financing Activities		(4,438	)		(4,955	)		(4,491	)

Net Change in Cash and Cash Equivalents		(20	)		(851	)		190
Cash and Cash Equivalents
Beginning of year		322			1,173			983

Cash and Cash Equivalents
End of year	$	302		$	322		$	1,173

The intercompany subordinated debt between the Company and the Bank matured during the fourth quarter of 2013. The Company invested the proceeds into tax exempt municipal securities, thereby replacing a revenue stream independent of dividends from the Bank with which to operate. The Company also benefits from a more favorable tax treatment for these holdings.

During the fourth quarter of 2014, the Company established a new subsidiary, Farmers & Merchants Risk Management, Inc. which is a Captive insurance company.

- Definition

The entire disclosure for condensed financial information, including the financial position, cash flows, and the results of operations of the registrant (parent company) as of the same dates or for the same periods for which audited consolidated financial statements are being presented. Alternatively, the details of this disclosure can be reported by the specific parent company taxonomy elements, indicating the appropriate date and period contexts in an instance document.

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