Mergers and Acquisitions

6 Months Ended

Jun. 30, 2014

Business Combinations [Abstract]

Mergers and Acquisitions

Mergers and Acquisitions

On July 4, 2014, the Company completed the merger of VantageSouth Bancshares, Inc., (“VantageSouth”), and Piedmont Community Bank Holdings, Inc. (“Piedmont”), with and into the Company (the "Mergers"). The Mergers were completed pursuant to an Agreement and Plan of Merger dated January 27, 2014, by and among the Company, VantageSouth and Piedmont (as amended, the “Merger Agreement”). At closing, VantageSouth and Piedmont merged with and into the Company, with the Company continuing as the surviving corporation. Immediately following the Mergers, VantageSouth Bank, a North Carolina banking corporation and wholly owned subsidiary of VantageSouth, was merged with and into the Bank, with the Bank continuing as the surviving bank. Pursuant to the Merger Agreement, each outstanding share of VantageSouth common stock (other than shares held by Piedmont which were cancelled) was converted into the right to receive 0.3125 shares of the Company’s voting common stock. Each outstanding share of Piedmont common stock was converted into the right to receive, for each share, (i) 6.28597 shares of the Company’s voting common stock; (ii) $6.6878 in cash; and (iii) a right to receive a pro rata portion of certain shares of the Company’s voting common stock at a later date if such shares do not become payable under the Piedmont Phantom Equity Plan. The Piedmont Phantom Plan, which is a type of deferred compensation plan, has been assumed by the Company. A total of 856,447 shares of the Company’s voting common stock that otherwise would have been issued to Piedmont stockholders as merger consideration if the Piedmont Phantom Equity Plan did not exist has been issued to a rabbi trust established by the Company to serve as a source of payment for both (i) payments due under the Piedmont Phantom Equity Plan and (ii) contingent merger consideration payable to former holders of Piedmont common stock. The Company issued approximately 17,271,145 shares of voting common stock in connection with the Mergers, which represents 55.7% of the voting interests in the Company.

The Mergers will be accounted for as a reverse acquisition in accordance with the provisions of FASB ASC Topic 805-10, Business Combinations. Management is undertaking a comprehensive review and determination of the fair value of the assets and liabilities of the Company to ensure that they conform to the measurement and reporting guidance as set forth for the accounting for business combinations. Determining the fair value of assets and liabilities, especially in the loan portfolio and foreclosed real estate, is a complicated process involving significant judgment regarding estimates and assumptions used to calculate estimated fair values. Accordingly, the initial accounting for the Mergers is not complete. Management is also undertaking a comprehensive review of the classification of certain assets and liabilities to ensure that they conform to the Company’s current policies and reporting practices. As a result of these efforts, the value and classification of certain assets and liabilities may vary in subsequent reporting periods.

Future filings will include the financial statements of Piedmont (consolidated with VantageSouth) for all periods presented, with recognition of the Company’s activity from the date the Mergers were completed. The Company’s financial statements for all periods through the date of the Mergers will not be included in future filings. See Note 16 entitled “Subsequent Events” for additional information on the Mergers.

The table below presents proforma information as if the Company's merger with Vantage had occurred at the beginning of the earliest period presented, which was January 1, 2014. The proforma financial information is not indicative of the results of operations that would have occurred had the transaction been effected on the assumed date.

	Three Months Ended				Six Months Ended
	June 30, 2014		June 30, 2013		June 30, 2014		June 30, 2013
	(dollars in thousands)
Net interest income	$	38,316	$	39,833	$	76,401	$	68,205
Net income available to common shareholders	$	9,282	$	8,736	$	16,928	$	13,579
Net income per common share:
Basic	$	0.29	$	0.31	$	0.54	$	0.50
Diluted	$	0.29	$	0.31	$	0.54	$	0.50
Weighted average common shares:
Basic	31,486,304		28,554,194		30,988,416		26,970,712
Diluted	31,642,902		28,578,395		31,140,464		26,976,444