Page 14 - CNB Bank Shares 2018 Annual Report

CNB BANK SHARES, INC. AND SUBSIDIARIES CNB BANK SHARES, INC. AND SUBSIDIARIES

Consolidated Statements of Stockholders’ Equity Consolidated Statements of Cash Flows

Years ended December 31, 2018 and 2017 Years ended December 31, 2018 and 2017

2018 2017
Accumulated Total Cash flows from operating activities:
Preferred other stock- Net income $ 9,423,224 8,191,915
stock and Common Retained Treasury comprehensive holders’
related surplus stock Surplus earnings stock loss equity Adjustments to reconcile net income to net cash
provided by operating activities:
Balance at December 31, 2016 $ − 262,710 8,678,204 73,483,743 (4,923,207) (573,996) 76,927,454 Depreciation and amortization 2,586,798 3,116,283
Provision for possible loan losses 3,101,114 2,254,528
Net income − − − 8,191,915 − − 8,191,915 Net security sale gains (31,066) (51,096)
Net cash gains on sales of mortgage loans in secondary market (414,873) (388,793)
Compensation expense recorded for stock Capitalized mortgage servicing rights (281,497) (242,195)
options granted − − 26,830 − − − 26,830
Net losses (gains) and write-downs on sales of other real estate owned (55,461) 120,174
Cash dividends paid – $0.37 per share − − − (1,743,916) − − (1,743,916) Deferred income tax expense (benefit) (5,497) 812,845
Stock option expense 25,342 26,830
Purchase of 80,200 common shares for treasury − − − − (1,287,637) − (1,287,637) Increase in accrued interest receivable (685,063) (613,384)
Increase in accrued interest payable 537,808 245,407
Stock options exercised – 90,040 common Mortgage loans originated for sale in secondary market (32,741,956) (24,366,704)
shares from treasury − − 84,044 − 945,262 − 1,029,306 Proceeds from mortgage loans sold in secondary market 33,407,409 24,608,293

Tax benefit received on sale of shares from Increase in cash surrender value of life insurance policies,
disqualified stock options − − 140,028 − − − 140,028 net of mortality costs (155,618) (113,201)
Other operating activities, net (5,297,975) 1,270,103
Deferred tax adjustment for tax rate change Net cash provided by operating activities 9,412,689 14,871,005
relating to items in other comprehensive income − − − 34,978 − (34,978) − Cash flows from investing activities:
Net cash paid for acquisition of subsidiary (30,044,491) −
Unrealized net holding gains on
available-for-sale securities, net of related Proceeds from calls and maturities of and principal
tax effect − − − − − 396,418 396,418 payments on available-for-sale debt securities 23,711,851 23,489,472
Purchases of available-for-sale debt and equity securities (6,741,403) (25,685,246)
Balance at December 31, 2017 − 262,710 8,929,106 79,966,720 (5,265,582) (212,556) 83,680,398 Proceeds from sales of available-for-sale debt securities 23,648,022 1,949,892
Redemption of Federal Home Loan Bank stock 640,773 806,054
Net income − − − 9,423,224 − − 9,423,224 Net increase in loans (35,832,467) (26,022,879)
Purchases of bank premises and equipment, net (1,106,640) (926,032)
Compensation expense recorded for stock
options granted − − 25,342 − − − 25,342 Proceeds from sale of other real estate owned 400,007 214,410
Proceeds from redemption of life insurance contract − 50,000
Cash dividends paid – $0.39 per share − − − (2,261,131) − − (2,261,131) Net cash used in investing activities (25,324,348) (26,124,329)
Cash flows from financing activities:
Issuance of 9,745 shares of preferred stock 19,352,310 − − − − − 19,352,310 Net increase (decrease) in deposits 21,951,310 (11,485,334)
Net increase in short-term borrowings 6,454,369 1,031,202
Issuance of 525,459 shares of common stock − 26,273 10,410,284 − − − 10,436,557 Proceeds from notes payable 6,700,000 −

Purchase of 75,027 common shares for treasury − − − − (1,412,143) − (1,412,143) Principal payments on notes payable (1,000,000) (1,000,000)
Proceeds from Federal Home Loan Bank borrowings 7,000,000 11,000,000
Stock options exercised – 100,640 common Payments of Federal Home Loan Bank borrowings (26,741,621) (3,380,693)
shares from treasury − − 134,391 − 1,153,116 − 1,287,507 Stock options exercised 1,287,507 1,029,306
Issuance of preferred stock 19,352,310 −
Unrealized net holding losses on Issuance of common stock 10,436,557 −
available-for-sale securities, net of related
tax effect − − − − − (870,578) (870,578) Purchase of treasury stock (1,412,143) (1,287,637)
Dividends paid (2,261,131) (1,743,916)
Balance at December 31, 2018 $ 19,352,310 288,983 19,499,123 87,128,813 (5,524,609) (1,083,134) 119,661,486 Net cash provided by (used in) financing activities 41,767,158 (5,837,072)
Net increase (decrease) in cash and cash equivalents 25,855,499 (17,090,396)
Cash and cash equivalents at beginning of year 54,455,928 71,546,324
See accompanying notes to consolidated financial statements. Cash and cash equivalents at end of year $ 80,311,427 54,455,928

See accompanying notes to consolidated financial statements.

12 ANNUAL REPOR T 2018 ANNUAL REPOR T 2018 13