CASH 2018 Special Proxy Statement

CRESTMARK BANCORP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS Years ended December 31, 2017, 2016 and 2015 2017 2016 2015 Cash flows from operating activities Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,436,665 $ 19,786,678 16,503,931 Adjustments to reconcile net income to net cash operating activities: Provision for credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,250,000 4,355,000 46,832 Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38,213,504 29,756,803 17,122,070 Gain on sale of securities available for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (253,624) Write-down of acquired lease residuals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 600,000 — Gain on extinguishment of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (200,000) — Net loss (gain) on sales of leases and off lease equipment . . . . . . . . . . . . . . . 133,222 (882,119) (1,302,142) Gain on sale of government guaranteed loans . . . . . . . . . . . . . . . . . . . . . . . . . (4,647,176) (4,946,898) (3,017,236) Net amortization (accretion) on securities available for sale . . . . . . . . . . . . . . (34,035) (4,515) 12,867 Stock based compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300,000 300,000 300,000 Originations of government guaranteed loans for sale . . . . . . . . . . . . . . . . . . (83,042,706) (55,175,861) (25,670,044) Proceeds from sale of government guaranteed loans . . . . . . . . . . . . . . . . . . . . 60,737,642 60,122,759 28,687,280 Net change: Accrued interest receivable and other assets . . . . . . . . . . . . . . . . . . . . . . (1,041,834) 4,345,873 (9,761,048) Accrued interest payable and other liabilities . . . . . . . . . . . . . . . . . . . . . 1,148,794 7,150,608 16,090,499 Net cash from operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . 51,454,076 65,208,328 38,759,385 Cash flows for investing activities Purchase of securities available for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9,803,000) (7,814,508) (7,000,800) Maturities, calls, and pay downs of securities available for sale . . . . . . . . . . . . . . . 2,080,076 10,777,991 4,064,852 Proceeds from sale of securities available for sale . . . . . . . . . . . . . . . . . . . . . . . . . — — 503,624 Net change in loans, leases and receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (70,333,057) (54,741,402) (13,306,023) Purchases of premises, leasehold improvements and equipment . . . . . . . . . . . . . . (17,381,052) (124,551) (758,631) Proceeds from settlement of acquired lease residuals . . . . . . . . . . . . . . . . . . . . . . . 1,144,537 4,049,636 4,031,122 Purchase of lease equipment inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (224,082,646) (137,026,088) (131,148,730) Proceeds from sales of lease equipment inventory . . . . . . . . . . . . . . . . . . . . . . . . . 12,980,495 8,744,982 5,131,787 Proceeds from sales of leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,332,079 18,483,680 41,766,594 Net cash used in acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,981,394) — — Net cash for investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . (285,043,962) (157,650,260) (96,716,205) Cash flows from financing activities Net change in interest-bearing deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 299,627,230 71,681,473 50,957,537 Net change in federal funds purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (30,000,000) 30,000,000 — Proceeds from non-recourse notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,911,023 21,851,453 22,742,742 Repayments of non-recourse notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (16,694,118) (14,717,516) (9,785,983) Proceeds from notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,000,000 — — Proceeds from exercise of stock options, including tax benefit in 2015 . . . . . . . . . 1,098,650 922,550 55,324 Distributions paid to noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,865,280) (4,110,073) (3,098,646) Dividends paid on common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (5,518,111) (4,972,275) Redemption of subordinated debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (300,000) — Redemption of preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8,250,000) — — Dividends paid on preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (152,625) (668,250) (83,646) Net cash from financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . 272,674,880 99,141,526 55,815,053 Effect of exchange rate changes on Canadian cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,424) 59,085 (269,251) Net change in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39,082,570 6,758,679 (2,411,018) Cash and cash equivalents at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,676,737 38,918,058 41,329,076 Cash and cash equivalents at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 84,759,307 $ 45,676,737 $ 38,918,058 Supplemental cash flow information: Cash paid for interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 11,328,783 $ 7,337,366 5,814,045 Cash paid for income taxes, net of refunds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,970,336 (8,463,571) 486,149 Transfer from acquired lease residuals to equipment on operating leases, net . . . . 3,659,443 18,840,887 5,062,881 Transfer from lease equipment inventory to loans, leases, and receivables . . . . . . 164,186,414 90,410,114 82,160,546 Transfers from lease equipment inventory to equipment on operating leases, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,667,492 39,698,562 42,819,301 Transfers from acquired lease residuals to loans, leases and receivables . . . . . . . . — 1,884,887 8,325,190 Transfers of loans, leases, and receivables to lease equipment inventory . . . . . . . . 7,689,470 3,465,841 4,645,951 Net transfers from loans, leases, and receivables to repossessed assets . . . . . . . . . 2,086,553 3,854,931 — Assumption of non-recourse notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,928,777 939,180 — See notes to consolidated financial statements. 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