(Dollars in thousands) 2012 2011 2010 Cash flows from operating activities: Net earnings  6,367 $ 4,484 $ 2,043 $ Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: Provision for loan losses 1,900 2,000 5,900 Valuation allowance on real estate owned 175 517 367 Amortization of investment security premiums, net 1,391 823 669 Amortization of intangibles 1,178 778 790 Depreciation  953 881 972 Bank owned life insurance (540) (594) (506) Stock-based compensation 82 107 100 Deferred income taxes 227 (793) (523) Net gains on investment securities (423) (114) (172) Net gains on sales of premises and equipment and foreclosed assets (31) (166) (24) Net gains on sales of loans (5,680) (2,775) (3,446) Proceeds from sale of loans 218,046 123,431 165,349 Origination of loans held for sale (209,775) (117,834) (169,776) Changes in assets and liabilities: Accrued interest and other assets (1,274) (2) (356) Accrued expenses, taxes, and other liabilities (211) 2,327 (3,446) Net cash provided by (used in) operating activities 12,385 13,070 (2,059) Cash flows from investing activities: Net decrease (increase) in loans 7,192 (6,436) 26,430 Maturities and prepayments of investment securities  50,348 55,002 38,142 Net cash received in bank acquisition 3,965 - - Purchases of investment securities  (79,787) (87,003) (55,910) Proceeds from sale of investment securities  28,967 6,494 10,097 Purchase of bank owned life insurance - (2,500) - Proceeds from sales of premises and equipment and foreclosed assets 497 2,317 1,612  Purchases of premises and equipment, net (799) (349) (320) Net cash provided by (used in) investing activities 10,383 (32,475) 20,051 Cash flows from financing activities: Net (decrease) increase in deposits (6,604) 22,820 (7,281) Federal Home Loan Bank advance borrowings 51,922 210,650 129,350 Federal Home Loan Bank advance repayments (62,659) (205,787) (140,887) Proceeds from other borrowings 2,600 6,118 2,732 Repayments on other borrowings (8,493) (4,685) (2,910) Proceeds from issuance of common stock under stock option plans 5 57 228  Excess tax benefit related to stock option plans 1 12 40 Payment of dividends (2,121) (2,014) (1,908) Net cash (used in) provided by financing activities (25,349) 27,171 (20,636) Net (decrease) increase in cash and cash equivalents (2,581) 7,766 (2,644) Cash and cash equivalents at beginning of year 17,501 9,735 12,379 Cash and cash equivalents at end of year 14,920 $ 17,501 $ 9,735 $ Years ended December 31,  See accompanying notes to consolidated financial statements. 67  LANDMARK BANCORP, INC. AND SUBSIDIARY  Consolidated Statements of Cash Flows 