page 77 Audited Financial Statements Year ended December 31 (Dollars in thousands) 2011 2010 2009 Cash flows from operating activities: Net earnings $ 5,538 5,346 2,404 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 80 106 105 Net decrease in other assets 22 16 11 Net (decrease) increase in other liabilities (727) 32 (78) Equity in (undistributed) distributed earnings of bank subsidiary (2,685) (2,592) 329 Net cash provided by operating activities 2,228 2,908 2,771 Cash flows from investing activities: Purchases of premises and equipment — (20) (4) Proceeds from sale of premises and equipment to bank subsidiary 4,450 — — Capital contribution to bank subsidiary (3,200) Net cash provided by (used in) investing activities 1,250 (20) (4) Cash flows from financing activities: Stock repurchases — (9) (90) Proceeds from sale of treasury stock 1 2 3 Dividends paid (2,914) (2,842) (2,770) Net cash used in financing activities (2,913) (2,849) (2,857) Net change in cash and cash equivalents 565 39 (90) Cash and cash equivalents at beginning of period 804 765 855 Cash and cash equivalents at end of period $ 1,369 804 765 CONDENSED STATEMENTS OF CASH FLOWS NOTE 22: SUBSEQUENT EVENTS The Company sold its interests in three affordable housing limited partnerships with a carrying value of $5.2 million  during January 2012. Net proceeds from the sale of these investments were approximately $8.5 million. As a result, the  Company will recognize a pre-tax gain on sale of $3.3 million during the first quarter of 2012. In addition, during January 2012, the Company paid off $38.0 million in FHLB advances with a weighted average rate  of 4.26% and a weighted average duration of 2.6 years. In connection with paying off the FHLB advances, the Company will  incur prepayment penalties of approximately $3.7 million during the first quarter of 2012. Sources available to repay the  FHLB advances included net proceeds from the sale of the Company’s limited partnership interests and excess liquidity  previously invested in federal funds. 