Acquisitions (Tables)

6 Months Ended

Jun. 30, 2015

Summary of Assets Acquired and Liabilities Assumed in Acquisition

The following table provides a summary of the assets acquired and liabilities assumed as recorded by Intervest, the estimates of the fair value adjustments necessary to adjust those acquired assets and assumed liabilities to estimated fair value, the recast adjustment described above and the estimates of the resultant fair values of those assets and liabilities as recorded by the Company. As provided for under GAAP, management has up to 12 months following the date of acquisition to finalize the fair values of the acquired assets and assumed liabilities. Once management has finalized the fair values of acquired assets and assumed liabilities within this 12-month period, management considers such values to be the day 1 fair values (“Day 1 Fair Values”). The fair value adjustments and the resultant fair values shown in the following table continue to be evaluated by management and may be subject to further adjustment.


	February 10, 2015
	As Recorded by Intervest			Fair Value Adjustments⁽¹⁾			Recast Adjustment			As Recorded by the Company⁽¹⁾
	(Dollars in thousands)
Assets acquired:
Cash, due from banks and interest earning deposits	$	274,343		$	0		$	0		$	274,343
Investment securities		21,495			321	a		0			21,816
Loans		1,108,439			(33,868	) b		4,393			1,078,964
Allowance for loan losses		(25,208	)		25,208	b		0			0
Premises and equipment		4,357			2,256	c		0			6,613
Foreclosed assets		2,350			(1,710	) d		0			640
Accrued interest receivable and other assets		34,076			(4,091	) e		(689	)		29,296
Core deposit intangible asset		0			4,595	f		0			4,595
Deferred income taxes		11,758			8,082	g		(985	)		18,855

Total assets acquired		1,431,610			793			2,719			1,435,122


Liabilities assumed:
Deposits		1,162,437			22,211	h		0			1,184,648
Subordinated debentures		56,702			(4,463	) i		0			52,239
Accrued interest payable and other liabilities		3,608			358	j		0			3,966

Total liabilities assumed		1,222,747			18,106			0			1,240,853

Net assets acquired	$	208,863		$	(17,313	)	$	2,719			194,269

Consideration paid:
Cash in lieu of fractional shares											(7	)
Stock											(238,476	)

Total consideration paid											(238,483	)

Goodwill										$	44,214

⁽¹⁾

Management is continuing to evaluate each of these fair value adjustments and may revise one or more of such fair value adjustments in future periods. To the extent that any of these fair value adjustments are revised in future periods, the resultant fair values and the amount of goodwill may be subject to further adjustment.

Explanation of preliminary fair value adjustments

a-	Adjustment reflects the fair value adjustment based on the pricing of the acquired investment securities portfolio.

b-	Adjustment reflects the fair value adjustment based on the evaluation of the acquired loan portfolio and to eliminate the recorded allowance for loan losses.

c-	Adjustment reflects the fair value adjustment based on the evaluation of the premises and equipment acquired.

d-	Adjustment reflects the fair value adjustment based on the evaluation of the acquired foreclosed assets.

e-	Adjustment reflects the fair value adjustment based on the evaluation of accrued interest receivable and other assets.

f-	Adjustment reflects the fair value adjustment for the core deposit intangible asset recorded as a result of the acquisition.

g-	This adjustment reflects the differences in the carrying values of acquired assets and assumed liabilities for financial reporting purposes and their basis for federal income tax purposes.

h-	Adjustment reflects the fair value adjustment based on the evaluation of the acquired deposits.

i-	Adjustment reflects the fair value adjustment of these assumed liabilities based on a valuation of such instruments by an independent, third party valuation firm.

j-	Adjustment reflects the amount needed to adjust other liabilities to estimated fair value and to record certain liabilities directly attributable to the Intervest acquisition.

Summary of Financial Statement Captions Impacted by Recast Adjustments

The following is a summary of those financial statement captions that have been impacted by the recast adjustment.


	As Previously Reported		Recast Adjustment			As Recast
	(Dollars in thousands)

Purchased loans	$	2,042,164	$	4,393		$	2,046,557
Net deferred tax asset		63,483		(985	)		62,498
Goodwill		125,603		(2,719	)		122,884
Income taxes receivable		689		(689	)		0

Summary of Supplemental Pro-forma Information

The following unaudited supplemental pro forma information is presented to show the estimated results assuming Intervest was acquired as of the beginning of the earliest period presented, adjusted for estimated potential costs savings. These unaudited pro forma results are not necessarily indicative of the operating results that the Company would have achieved had it completed the acquisition as of January 1, 2014 or 2015 and should not be considered as representative of future operating results.


	Six Months Ended
	June 30,
	2015		2014
	(Dollars in thousands, except per share amounts)

Net interest income – pro forma (unaudited)	$	186,428	$	143,484
Net income – pro forma (unaudited)	$	88,745	$	62,949
Diluted earnings per common share – pro forma (unaudited)	$	1.01	$	0.76