CASH 2018 Special Proxy Statement

CRESTMARK BANCORP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 20 – PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION (Continued) CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME Years ended December 31 2017 2016 2015 Net equity in income of subsidiaries . . . . . . . $29,429,108 $15,585,648 $12,648,012 Interest expense . . . . . . . . . . . . . . . . . . . . . . . (418,212) (206,102) (188,440) Other income (expense) . . . . . . . . . . . . . . . . (69,836) 143,783 (65,895) Income before income tax expense . . . . . . . . 28,941,060 15,523,329 12,393,677 Income tax expense (benefit) . . . . . . . . . . . . (170,110) (21,500) (88,700) Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . $29,111,170 $15,544,829 $12,482,377 Comprehensive income . . . . . . . . . . . . . . . . . $29,464,707 $15,852,009 $ 9,891,613 CONDENSED STATEMENTS OF CASH FLOWS Years ended December 31 2017 2016 2015 Cash flows from operating activities Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 29,111,170 $15,544,829 $12,482,377 Adjustments: Equity in undistributed subsidiary income . . . . . . . . . . . . (29,729,108) (9,885,649) (8,148,012) Stock based compensation expense . . . . . . . . . . . . . . . . . . 300,000 300,000 300,000 Change in other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . (180,848) (16,266) 1,106 Change in other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . (155,261) 163,068 11,807 Net cash from operating activities . . . . . . . . . . . . . . . (654,047) 6,105,982 4,647,278 Cash flows from investing activities Investment in bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,000,000) — — Net cash from investing activities . . . . . . . . . . . . . . . . . . . (4,000,000) — — Cash flows from financing activities Proceeds of borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,000,000 — — Repayment of borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (500,000) — Proceeds from exercise of stock options . . . . . . . . . . . . . . . . . . 1,098,650 922,550 55,324 Dividends on common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . — (5,518,111) (4,972,275) Redemption of preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . (8,250,000) — — Dividends on prefered stock . . . . . . . . . . . . . . . . . . . . . . . . . . . (152,625) (668,250) (83,646) 4,696,025 (5,763,811) (5,000,597) Net change in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . 41,978 342,171 (353,319) Beginning cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . 1,269,343 927,172 1,280,491 Ending cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,311,321 $ 1,269,343 $ 927,172 F-40