BRANCH ACQUISITION (Tables)

6 Months Ended

Jun. 30, 2014

BRANCH ACQUISITION

Summary of consideration paid, and fair values of entity's assets acquired and liabilities assumed

				Fair Value			As Recorded at
(in thousands)	As Acquired			Adjustments			Acquisition
Consideration paid:
Cash consideration paid to Bank of Amercia							$	17,105
Recognized amounts of identifiable assets acquired and liabilities assumed, at fair value:
Cash and short-term investments	$	440,521		$	—		$	440,521
Loans	4,541			(533		)(a)	4,008
Premises and equipment	4,381			(710		)(b)	3,671
Core deposit intangibles	—			2,550		(c)	2,550
Other intangibles	—			(79		)(d)	(79		)
Deposits	(440,507		)	(15		)(e)	(440,522		)
Other liabilities	—			(944		)(f)	(944		)
Total identifiable net assets	$	8,936		$	269		$	9,205
Goodwill							$	7,900

Explanation of Certain Fair Value Adjustments

(a) The adjustment represents the write down of the book value of loans to their estimated fair value based on current interest rates and expected cash flows, which includes an estimate of expected loan loss inherent in the portfolio.  Loans that met the criteria and are being accounted for in accordance with ASC 310-30 had a carrying amount of $201 thousand.  Non-impaired loans not accounted for under 310-30 had a carrying value of $4.3 million.

(b) The amount represents the adjustment of the book value of buildings, and furniture and equipment, to their estimated fair value based on appraisals and other methods.  The adjustments will be depreciated over the estimated economic lives of the assets.

(c) The adjustment represents the value of the core deposit base assumed in the acquisition.  The core deposit asset was recorded as an identifiable intangible asset and will be amortized over the estimated useful life of the deposit base.

(d) Represents an intangible liability related to assumed leases, which was recorded as an identifiable intangible and will be amortized over the remaining life of the leases.

(e) The adjustment is necessary because the weighted average interest rate of deposits exceeded the cost of similar funding at the time of acquisition.

(f) Represents an establishment of a reserve on certain acquired lines of credit, which were determined to have specific credit risk at the time of acquisition.

Schedule of acquired loan portfolio

Information about the acquired loan portfolio subject to ASC 310-30 as of January 17, 2014 is as follows (in thousands):

	ASC 310-30 Loans
Contractually required principal and interest at acquisition	$	201
Contractual cash flows not expected to be collected (nonaccretable discount)	(100		)
Expected cash flows at acquisition	101
Interest component of expected cash flows (accretable premium)	20
Fair value of acquired loans	$	121

Schedule of unaudited pro forma supplemental information from the combined results of operations

	Pro Forma (unaudited)
	Six months ended June 30,
	2014		2013
Net interest income	$	88,221	$	86,428
Non-interest income	19,138		32,914
Net income	12,982		22,030
Pro forma earnings per share:
Basic	$	0.53	$	0.89
Diluted	$	0.52	$	0.88