CONDENSED FINANCIAL INFORMATION (PARENT COMPANY ONLY)

12 Months Ended

Dec. 31, 2011

CONDENSED FINANCIAL INFORMATION (PARENT COMPANY ONLY)

18. CONDENSED FINANCIAL INFORMATION (PARENT COMPANY ONLY)

The following condensed statements summarize the balance sheets, operating results and cash flows of First Financial Service Corporation (Parent Company only).

Condensed Balance Sheets

	December 31,
(Dollars in thousands)	2011		2010
Assets
Cash and interest bearing deposits	$	557	$	240
Investment in Bank		73,953		89,701
Securities available-for sale		—		291
Other assets		82		80
	$	74,592	$	90,312
Liabilities and Stockholders’ Equity
Subordinated debentures	$	18,000	$	18,000
Other liabilities		3,129		1,001
Stockholders’ equity		53,463		71,311
	$	74,592	$	90,312

Condensed Statements of Income/(Loss)

	Year Ended December 31,
(Dollars in thousands)	2011			2010			2009
Dividend from Bank	$	—		$	587		$	3,052
Interest income		41			57			107
Interest expense		(1,373	)		(1,368	)		(1,353	)
Gain on sale of investments		157			37			—
Other income		—			—			1
Other expenses		(226	)		(168	)		(378	)
Income/(loss) before income tax benefit		(1,401	)		(855	)		1,429
Income tax benefit		(140	)		(153	)		609
Income before equity in undistributed net income/(loss) of Bank		(1,261	)		(1,008	)		2,038
Equity in undistributed net income/(loss) of Bank		(21,900	)		(8,394	)		(8,747	)
Net income/(loss)	$	(23,161	)	$	(9,402	)	$	(6,709	)

Condensed Statements of Cash Flows

	Year Ended December 31,
(Dollars in thousands)	2011			2010			2009
Operating Activities:
Net income/(loss)	$	(23,161	)	$	(9,402	)	$	(6,709	)
Adjustments to reconcile net income/(loss) to cash provided by operating activities:
Equity in undistributed net income/(loss) of Bank		21,900			8,394			8,747
Gain on sale of investments available-for-sale		(157	)		(37	)		—
Stock-based compensation expense		186			100			103
Changes in:
Other assets		(113	)		305			(107	)
Accounts payable and other liabilities		1,128			702			1
Net cash from operating activities		(217	)		62			2,035
Investing Activities:
Capital contributed to Bank		—			—			(20,000	)
Sales of securities available-for-sale		448			685			—
Net cash from investing activities		448			685			(20,000	)
Financing Activities:
Change in short-term borrowings		0			(1,500	)		1,500
Issuance of preferred stock, net		—			—			20,000
Issuance of common stock under dividend reinvestment program		2			17			303
Issuance of common stock for stock options exercised		—			—			101
Issuance of common stock for employee benefit plans		84			116			103
Dividends paid on common stock		—			—			(2,015	)
Dividends paid on preferred stock		—			(1,000	)		(980	)
Net cash from financing activities		86			(2,367	)		19,012
Net change in cash and interest bearing deposits		317			(1,620	)		1,047
Cash and interest bearing deposits, beginning of year		240			1,860			813
Cash and interest bearing deposits, end of year	$	557		$	240		$	1,860