Parent Company Financial Information

12 Months Ended

Dec. 31, 2016

Parent Company Financial Information

Parent Company Financial Information

Note 23. Parent Company Financial Information

Heritage Oaks Bancorp

Condensed Balance Sheets

	December 31,
	2016			2015
		(dollars in thousands)
Assets
Cash	$	7,475		$	6,034
Prepaid and other assets		1,294			2,077
Investment in subsidiary		214,876			208,916
Total assets	$	223,645		$	217,027
Liabilities
Junior subordinated debentures	$	10,612		$	10,438
Other liabilities		183			155
Total liabilities		10,795			10,593
Shareholders' Equity
Common stock		164,708			165,517
Additional paid in capital		9,310			8,251
Retained earnings		40,916			32,200
Accumulated other comprehensive (loss) income		(2,084	)		466
Total shareholders' equity		212,850			206,434
Total liabilities and shareholders' equity	$	223,645		$	217,027

Heritage Oaks Bancorp

Condensed Statements of Income

	For the Years Ended December 31,
	2016			2015			2014
		(dollars in thousands)
Income
Dividends from subsidiaries	$	10,000		$	10,000		$	10,000
Gain on extinguishment of debt		–			450			–
Interest income		20			17			16
Loss on sale of investment securities		(41	)		–			–
Total income		9,979			10,467			10,016
Expense
Interest expense		532			540			499
Share-based compensation		257			294			211
Other professional fees and outside services		555			573			737
Total expense		1,344			1,407			1,447
Income before income tax benefit and equity in undistributed earnings of subsidiaries		8,635			9,060			8,569
Income tax benefit		(574	)		(395	)		(576	)
Net income before equity in undistributed earnings of subsidiaries		9,209			9,455			9,145
Equity in undisbursed income of subsidiaries		7,724			5,894			(180	)
Dividends and accretion on preferred stock		–			(70	)		(168	)
Net income available to common shareholders	$	16,933		$	15,279		$	8,797

Heritage Oaks Bancorp

Condensed Statements of Comprehensive Income

	For the Years Ended December 31,
	2016			2015			2014
		(dollars in thousands)
Net income	$	16,933		$	15,349		$	8,965
Other comprehensive income, net of tax:
Unrealized holding (losses) gains on securities arising during the period		(3,509	)		(164	)		8,075
Reclassification for net gains on investments included in net income		(891	)		(641	)		(646	)
Other comprehensive (loss) income, before income tax (benefit) expense		(4,400	)		(805	)		7,429
Income tax (benefit) expense related to items of other comprehensive income		(1,850	)		(339	)		3,072
Other comprehensive (loss) income		(2,550	)		(466	)		4,357
Comprehensive income	$	14,383		$	14,883		$	13,322

Heritage Oaks Bancorp

Condensed Statements of Cash Flows

	For the Years Ended December 31,
	2016			2015			2014
		(dollars in thousands)
Cash flows from operating activities:
Net income	$	16,933		$	15,349		$	8,965
Adjustments to reconcile net income to net cash used in operating activities:
Share-based compensation expense		257			294			211
Amortization of premium on borrowings		169			199			175
Loss on sale of other investments		41			–			–
Gain on extinguishment of debt		–			(450	)		–
Undistributed (income) loss of subsidiaries		(7,724	)		(5,894	)		180
Decrease (increase) in other assets and other liabilities, net		811			30			(868	)
Net cash provided by operating activities		10,487			9,528			8,663
Cash flows from investing activities:
Sale of other investments		59			–			–
Cash acquired in MISN Transaction, net		–			–			(3,928	)
Proceeds from the sale of assets		–			–			338
Other		–			–			(100	)
Net cash provided by (used in) investing activities		59			–			(3,690	)
Cash flows from financing activities:
Proceeds from the exercise of options		747			293			453
Repurchase of common stock		(1,635	)		(28	)		(387	)
Decrease in junior subordinated debentures		–			(2,550	)		–
Dividends paid		(8,217	)		(7,851	)		(2,742	)
Stock issuance costs		–			–			(381	)
Net cash used in financing activities		(9,105	)		(10,136	)		(3,057	)
Net increase (decrease) in cash and cash equivalents		1,441			(608	)		1,916
Cash and cash equivalents, beginning of year		6,034			6,642			4,726
Cash and cash equivalents, end of year	$	7,475		$	6,034		$	6,642