Acquisition of New Jersey Community Bank (Tables)

6 Months Ended

Jun. 30, 2018

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The following table summarizes the estimated fair value of the acquired assets and liabilities assumed:



(Dollars in Thousands)	Amount
Consideration paid:
Company stock issued	$	5,495
Cash payment	2,668
Cash held in escrow	401
Total consideration paid	$	8,564


Recognized amounts of identifiable assets acquired and liabilities assumed at fair value:
Cash and cash equivalents	$	2,073
Investment securities available for sale	11,173
Loans	75,144
Premises and equipment, net	1,120
Core deposit intangible asset	80
Bank-owned life insurance	3,972
Accrued interest receivable	259
Other assets	2,786
Deposits	(87,223		)
Other liabilities	(636		)
Total identifiable assets and liabilities, net	$	8,748

Gain from bargain purchase	$	184

The following table summarizes the composition of the loans acquired and recorded at fair value:



			At April 11, 2018
(Dollars in Thousands)	Loans acquired with no credit quality deterioration		Loans acquired with credit quality deterioration		Total
Commercial
Construction	$	798	—		$	798
Commercial real estate	58,191		873		59,064
Commercial business	1,293		8		1,302
Residential real estate	7,572				7,572
Consumer	6,409				6,409
Total loans	$	74,263	$	881	$	75,144

The following is a summary of the loans acquired with evidence of deteriorated credit quality in the NJCB acquisition as of the date of the closing of the merger:



(Dollars in Thousands)	Acquired Credit Impaired Loans

Contractually required principal and interest at acquisition	$	1,658
Contractual cash flows not expected to be collected	609
(non-accretable difference)

Expected cash flows at acquisition	1,049
Interest component of expected cash flows (accretable difference)	168

Fair value of acquired loans	$	881

Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination

The following table presents the projected amortization of the core deposit intangible for each period:



(Dollars in Thousands)	Amount
Year
2018	$	15
2019	13
2020	12
2021	10
2022	8
Thereafter	22
	$	80

Business Acquisition, Pro Forma Information

The following table presents financial information regarding the former NJCB operations included in the Company’s Consolidated Statements of Income from the date of the acquisition (April 11, 2018) through June 30, 2018 under the column “Actual from acquisition date to June 30, 2018.” In addition, the table presents unaudited condensed pro forma financial information assuming that the NJCB acquisition had been completed as of January 1, 2018 and January 1, 2017, respectively. In the table, merger-related expenses of $2.1 million were excluded from the pro forma non-interest expenses for the six months ended June 30, 2018. Income taxes were also adjusted to exclude income tax benefits of $568,000 related to the merger expenses for the six months ended June 30, 2018.

The table has been prepared for comparative purposes only and is not necessarily indicative of the actual results that would have been attained had the acquisition occurred as of the beginning of the periods presented, nor is it indicative of future results. Furthermore, the unaudited pro forma financial information does not reflect management’s estimate of any revenue-enhancing opportunities nor anticipated cost savings that may have occurred as a result of the integration and consolidation of NJCB’s operations. The pro forma financial information reflects adjustments related to certain merger expenses and the related income tax effects.



(Dollars in Thousands)	Actual from Acquisition Date to 6/30/2018		Pro Forma for the Six Months Ended 6/30/2018		Pro Forma for the Six Months Ended 6/30/2017

Net interest income	$	790	$	21,545	$	18,463
Non-interest income	40		3,920		4,312
Non-interest expenses	445		17,004		17,426
Income taxes	116		2,123		1,693
Net income	269		5,888		3,356