CONDENSED FINANCIAL STATEMENTS OF PARENT COMPANY

Information relative to our parent company balance sheets at December 31, 2019 and 2018 and the related statements of income and cash flows for the years ended December 31, 2019, 2018 and 2017, are presented as follows:



Balance Sheets
	December 31,
Dollars in thousands	2019			2018
Assets
Cash	$	2,185		$	4,326
Investment in subsidiaries	267,132			236,422
Other investments	77			77
Premises and equipment	146			126
Other assets	1,317			1,365
Total assets	$	270,857		$	242,316
Liabilities and Shareholders' Equity
Subordinated debentures owed to unconsolidated subsidiary trusts	$	19,589		$	19,589
Other liabilities	3,504			2,897
Total liabilities	23,093			22,486

Preferred stock, $1.00 par value, authorized 250,000 shares	—			—
Common stock and related surplus, $2.50 par value, authorized
20,000,000 shares; issued: 12,474,641 shares 2019, 12,399,887 shares 2018; outstanding: 12,408,542 shares 2019, 12,312,933 shares 2018	80,084			80,431
Unallocated common stock held by Employee Stock Ownership Plan - 2019 - 66,099 shares, 2018 - 86,954 shares	(714		)	(939		)
Retained earnings	165,859			141,354
Accumulated other comprehensive income (loss)	2,535			(1,016		)
Total shareholders' equity	247,764			219,830
Total liabilities and shareholders' equity	$	270,857		$	242,316



Statements of Income
	For the Year Ended December 31,
Dollars in thousands	2019			2018			2017
Income
Dividends from subsidiaries	$	16,757		$	10,600		$	6,500
Other dividends and interest income	54			28			24
Management and service fees from subsidiaries	1,542			1,555			1,964
Total income	18,353			12,183			8,488
Expense
Interest expense	949			899			714
Operating expenses	3,755			2,565			2,462
Total expenses	4,704			3,464			3,176
Income before income taxes and equity in
undistributed income of subsidiaries	13,649			8,719			5,312
Income tax (benefit)	(276		)	(374		)	(129		)
Income before equity in undistributed income of subsidiaries	13,925			9,093			5,441
Equity in undistributed income of subsidiaries	17,941			18,979			6,474
Net income	$	31,866		$	28,072		$	11,915



Statements of Cash Flows
	For the Year Ended December 31,
Dollars in thousands	2019			2018			2017
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	31,866		$	28,072		$	11,915
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in undistributed net income of subsidiaries	(17,941		)	(18,979		)	(6,474		)
Deferred tax (benefit) expense	(18		)	(8		)	346
Depreciation	50			41			39
Share-based compensation expense	274			181			174
Earnings on bank owned life insurance	—			7			(1		)
Decrease (increase) in other assets	491			(375		)	535
Increase in other liabilities	807			1,036			512
Net cash provided by operating activities	15,529			9,975			7,046
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of premises and equipment	(123		)	(86		)	(92		)
Proceeds from sale of premises and equipment	53			13			60
Net cash used in investing activities	(70		)	(73		)	(32		)
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid on common stock	(7,361		)	(6,545		)	(5,238		)
Exercise of stock options	7			122			303
Repayment of long-term borrowings	—			—			(902		)
Purchase and retirement of common stock	(10,405		)	(1,689		)	—
Proceeds from issuance of common stock, net of issuance costs	159			237			10
Net cash used in financing activities	(17,600		)	(7,875		)	(5,827		)
(Decrease) increase in cash	(2,141		)	2,027			1,187
Cash:
Beginning	4,326			2,299			1,112
Ending	$	2,185		$	4,326		$	2,299
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash payments for:
Interest	$	961		$	875		$	704