Parent Corporation Only Financial Statements

12 Months Ended

Dec. 31, 2011

Parent Corporation Only Financial Statements

Parent Corporation Only Financial Statements

Note 19 — Parent Corporation Only Financial Statements

The Parent Corporation operates its wholly-owned subsidiary, Union Center National Bank. The earnings of this subsidiary are recognized by the Corporation using the equity method of accounting. Accordingly, earnings are recorded as increases in the Corporation's investment in the subsidiaries and dividends paid reduce the investment in the subsidiaries. The ability of the Parent Corporation to pay dividends will largely depend upon the dividends paid to it by the Bank. Dividends payable by the Bank to the Corporation are restricted under supervisory regulations (see Note 17 of the Notes to Consolidated Financial Statements).

Condensed financial statements of the Parent Corporation only are as follows:

Condensed Statements of Condition

	At December 31,
	2011		2010
	(Dollars in Thousands)
ASSETS
Cash and cash equivalents	$	2,042	$	4,299
Investment in subsidiaries		139,107		122,129
Securities available for sale		419		432
Other assets		191		22
Total assets	$	141,759	$	126,882
LIABILITIES AND STOCKHOLDERS' EQUITY
Other liabilities	$	688	$	460
Securities sold under repurchase agreement		—		310
Subordinated debentures		5,155		5,155
Stockholders' equity		135,916		120,957
Total liabilities and stockholders' equity	$	141,759	$	126,882

Condensed Statements of Income

	For Years Ended December 31,
	2011			2010			2009
	(Dollars in Thousands)
Income:
Dividend income from subsidiaries	$	785		$	500		$	2,474
Other income		7			8			3
Net losses on available for sale securities		—			(97	)		(325	)
Management fees		294			290			298
Total Income		1,086			701			2,450
Expenses		(615	)		(635	)		(604	)
Income before equity in undistributed earnings of subsidiaries		471			66			1,846
Equity in undistributed earnings of subsidiaries		13,455			6,938			1,925
Net Income	$	13,926		$	7,004		$	3,771

Condensed Statements of Cash Flows

	For Years Ended December 31
	2011			2010			2009
	(Dollars in Thousands)
Cash flows from operating activities:
Net income	$	13,926		$	7,004		$	3,771
Adjustments to reconcile net income to net cash provided by operating activities:
Net losses on available for sale securities		—			97			325
Equity in undistributed earnings of subsidiary		(13,455	)		(6,938	)		(1,925	)
Change in deferred tax asset		3			224			(111	)
(Increase) decrease in other assets		(298	)		(44	)		1,838
Increase (decrease) in other liabilities		220			70			(844	)
Stock based compensation		35			51			77
Net cash provided by operating activities		431			464			3,131
Cash flows from investing activities:
Maturity of available-for-sale securities		—			130			659
Investments in subsidiaries		(1,250	)		(8,000	)		(19,000	)
Net cash used in investing activities		(1,250	)		(7,870	)		(18,341	)
Cash flows from financing activities:
Net decrease in borrowings		(310	)		(82	)		(411	)
Cash dividends on common stock		(1,955	)		(1,800	)		(3,166	)
Cash dividends on preferred stock		(417	)		(500	)		(425	)
Proceeds from issuance of Series B preferred stock		11,250			—			—
Redemption of Series A preferred stock		(10,000	)		—			—
Warrant repurchased		(245	)		—			—
Issuance cost of common stock		(5	)		(6	)		(11	)
Issuance cost of Series B preferred stock		(84	)		—			—
Proceeds from exercise of stock options		328			—			57
Proceeds from restricted stock		—			25			—
Proceeds from issuance of preferred stock and warrants		—			—			10,000
Proceeds from issuance of shares from stock offerings		—			12,148			11,000
Issuance cost of common stock from common stock offering		—			(770	)
Tax (expense) from stock based compensation		—			7			(73	)
Net cash (used in) provided by financing activities		(1,438	)		9,022			16,971
Increase (decrease) in cash and cash equivalents		(2,257	)		1,616			1,761
Cash and cash equivalents at beginning of year		4,299			2,683			922
Cash and cash equivalents at the end of year	$	2,042		$	4,299		$	2,683