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Parent Company Condensed Financial Statements

12 Months Ended

Dec. 31, 2018

Condensed Financial Information Disclosure [Abstract]

Parent Company Condensed Financial Statements

(20) Parent Company Condensed Financial Statements

The following is condensed financial information of the parent company as of December 31, 2018 and 2017 and for the years ended December 31, 2018, 2017 and 2016:

Condensed Balance Sheets

		As of December 31,
(Dollars in thousands)		2018				2017
Assets:
Cash and cash equivalents		$	100			$	217
Investment securities			237				245
Investment in subsidiaries			112,394				107,443
Other			942				1,261
Total assets		$	113,673			$	109,166
Liabilities and stockholders' equity:
Subordinated debentures		$	21,651			$	21,484
Other			121				60
Stockholders' equity			91,901				87,622
Total liabilities and stockholders' equity		$	113,673			$	109,166

Condensed Statements of Earnings

		Years ended December 31,
(Dollars in thousands)		2018				2017				2016
Dividends from Bank		$	3,200			$	3,700			$	1,250
Interest income			29				49				59
Gain on sale of investment			-				493				324
Other non-interest income			7				7				7
Interest expense			(1,078	)			(898	)			(787	)
Other expense, net			(325	)			(470	)			(314	)
Earnings before equity in undistributed earnings			1,833				2,881				539
Increase in undistributed equity of Bank			7,567				633				8,171
Increase in undistributed equity of Nonbank subsidiary			740				542				-
Earnings before income taxes			10,140				4,056				8,710
Income tax benefit			(286	)			(313	)			(251	)
Net earnings			10,426				4,369				8,961
Other comprehensive (loss) income			(3,579	)			1,010				(3,523	)
Total comprehensive income		$	6,847			$	5,379			$	5,438

Condensed Statements of Cash Flows

		Years ended December 31,
(Dollars in thousands)		2018				2017				2016
Cash flows from operating activities:
Net earnings		$	10,426			$	4,369			$	8,961
Increase in undistributed equity of subsidiaries			(8,307	)			(1,175	)			(8,171	)
Amortization of purchase accounting adjustment on subordinated debentures			167				200				200
Gain on sale of investment			-				(493	)			(324	)
Other			381				(543	)			(112	)
Net cash provided by operating activities			2,667				2,358				554

Cash flows from investing activities:
Investment in subsidiary			-				(250	)			-
Proceeds from sales of investments			7				967				445
Net cash provided by investing activities			7				717				445

Cash flows from financing activities:
Proceeds from exercise of stock options			534				228				1,796
Proceeds from other borrowings			-				100				-
Repayments on other borrowings			-				(100	)			-
Payment of dividends			(3,325	)			(3,108	)			(2,912	)
Net cash used in financing activities			(2,791	)			(2,880	)			(1,116	)
Net (decrease)increase in cash			(117	)			195				(117	)
Cash at beginning of year			217				22				139
Cash at end of year		$	100			$	217			$	22

Dividends paid by the Company are provided through dividends from the Bank. At December 31, 2018, the Bank could distribute dividends of up to $16.4 million without regulatory approvals. The primary source of funds for the Company is dividends from the Bank. Under the National Bank Act, a national bank may pay dividends out of its undivided profits in such amounts and at such times as the bank’s board of directors deems prudent. Without prior OCC approval, however, a national bank may not pay dividends in any calendar year that, in the aggregate, exceed the bank’s year-to-date net income plus the bank’s retained net income for the two preceding years. The payment of dividends by any financial institution 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.