MERGERS AND ACQUISITIONS (Tables)

12 Months Ended

Dec. 31, 2015

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

These amounts reflect NBBC's historical basis in the assets and liabilities, prior to the fair value adjustments resulting from the merger.



	December 31, 2015
Assets:
Cash and cash equivalents	$	42,426
Investment securities	496,809
Loans, net	2,067,627
Other assets	203,878
Total assets	$	2,810,740

Liabilities and Shareholders' Equity:
Deposits	$	1,948,655
Short-term borrowings and long-term debt	576,024
Other liabilities	29,065
Total liabilities	2,553,744
Shareholders' equity	256,996
Total liabilities and shareholders' equity	$	2,810,740

Schedule of Business Acquisitions by Acquisition, Equity Interest Issued or Issuable

Next, the number of shares Piedmont would have had to issue to give Yadkin and other owners the same percentage ownership in the combined institution is calculated in the table below.



	Hypothetical Piedmont Ownership
Shareholder Groups Immediately Prior to 2014 Mergers	Number of Outstanding Piedmont Shares	Percentage Ownership

Piedmont shareholders	1,466,664	29.13	%
VantageSouth shareholders (excluding Piedmont)	1,144,633	22.73
Shares issued and held in Rabbi Trust	136,247	2.71
Total Piedmont and VantageSouth shareholders	2,747,544	54.57
Yadkin shareholders	2,287,654	45.43
Total	5,035,198	100.00	%

The equivalent Piedmont market price per share was calculated based on the 6.28597 exchange ratio in the 2014 Mergers.



	Calculation of Purchase Price

Equivalent Piedmont market price per share	$	122.01
Number of Piedmont shares issued to Yadkin shareholders	2,287,654
Purchase price (in thousands)	$	279,115

The table below summarizes, for each shareholder group immediately prior to the 2014 Mergers, the ownership of Yadkin common stock immediately following the 2014 Mergers as well as the market capitalization of the combined institution using Yadkin’s stock price at the time of the 2014 Mergers.



	Yadkin Financial Corporation Ownership and Market Value Table
Shareholder Groups Immediately Prior to 2014 Mergers	Number of Outstanding YDKN Shares	Percentage Ownership		Market Value at $19.41 YDKN Share Price

Piedmont shareholders	9,219,406	29.10	%	$	178,949
VantageSouth shareholders (excluding Piedmont)	7,195,127	22.75		139,657
Shares issued and held in Rabbi Trust	856,447	2.75		16,624
Total Piedmont and VantageSouth shareholders	17,270,980	54.60		335,230
Yadkin shareholders	14,380,127	45.40		279,118
Total	31,651,107	100.00	%	$	614,348

Schedule of assets acquired, liabilities assumed and other equity interest

The following table presents the Yadkin assets acquired, liabilities assumed and other equity interests as of July 4, 2014 as well as the related purchase price allocation and calculation of the residual goodwill.



	As Reported by Yadkin at July 4, 2014		Initial Fair Value Adjustments				Measurement Period Adjustments			As Reported by the Company at July 4, 2014
Assets:
Cash and cash equivalents	$	36,116	$	—			$	—		$	36,116
Investment securities available for sale	259,143		(1,488		)	(a)	—			257,655
Loans held for sale	15,696		—				—			15,696
Loans, net	1,403,419		(30,740		)	(b)	—			1,372,679
Federal Home Loan Bank stock, at cost	3,778		—				—			3,778
Premises and equipment	40,204		(2,344		)	(c)	—			37,860
Bank-owned life insurance	27,306		—				—			27,306
Foreclosed assets	2,271		(601		)	(d)	—			1,670
Deferred tax asset, net	16,955		5,939			(e)	1,197			24,091
Goodwill	—		124,172			(f)	1,727		(n)	125,899
Other intangible assets	1,665		10,965			(g)	321		(o)	12,951
Accrued interest receivable and other assets	16,330		(2,229		)	(h)	—		(p)	14,101
Total assets	1,822,883		103,674				3,245			1,929,802
Liabilities:
Deposits	$	1,509,581	$	5,019		(i)	$	—		$	1,514,600
Short-term borrowings	72,879		—				—			72,879
Long-term debt	38,217		(15,486		)	(j)	—			22,731
Accrued interest payable and other liabilities	8,448		(338		)	(k)	3,245		(q)	11,355
Total liabilities	1,629,125		(10,805		)		3,245			1,621,565
Net assets acquired	193,758		114,479				—			308,237
Other equity interests:
Preferred stock	28,405		—			(l)	—			28,405
Common stock warrants	1,850		(1,133		)	(m)	—			717
Total other equity interests	30,255		(1,133		)		—			29,122
Purchase price										$	279,115

Explanation of fair value adjustments

(a) Adjustment reflects opening fair value of securities portfolio, which was established as the new book basis of the portfolio.

(b) Adjustment reflects the elimination of Yadkin's historical allowance for loan losses of $16.4 million and the recording of a fair value discount of $47.2 million on the loan portfolio. The fair value discount was calculated by forecasting cash flows over the expected remaining life of each loan and discounting those cash flows to present value using current market rates for similar loans. Forecasted cash flows include an estimate of lifetime credit losses on the loan portfolio.

(c) Adjustment reflects fair value adjustments on certain acquired branch offices as well as certain software and computer equipment.

(d) Adjustment reflects the write down of certain foreclosed assets based on current estimates of property values given current market conditions and additional discounts based on the Company's planned disposition strategy.

(e) Adjustment reflects the tax impact of acquisition accounting fair value adjustments.

(f) Goodwill represents the excess of the purchase price over the fair value of acquired net assets.

(g) Adjustment reflects the estimated fair value of the acquired core deposit intangible.

(h) Adjustment reflects the impact of fair value adjustments on other assets, which include mortgage servicing assets, certain unusable prepaid expenses, and the elimination of accrued interest on purchased credit-impaired loans.

(i) Adjustment reflects the fair value premium on time deposits, which was calculated by discounting future contractual interest payments at a current market interest rate.

(j) Adjustments reflect the fair value adjustments for subordinated debt issued to fund trust preferred securities and long-term Federal Home Loan Bank ("FHLB") advances, which were calculated by discounting future contractual interest payments at a current market interest rate for similar instruments. For FHLB advances, the fair value adjustment is consistent with the prepayment penalty the FHLB would charge to terminate the advance.

(k) Adjustments reflect accruals and fair value adjustments for other liabilities, which include the write-off of unearned income, deferred gains, and accrued liabilities that will not be paid.

(l) No fair value adjustments were made to Yadkin's outstanding preferred stock. The current preferred dividend rate of 9.0 percent approximates the current market yield for issuances of similar perpetual preferred stock. The preferred stock is currently redeemable at the liquidation value, and the Company expects the remaining life of this preferred stock to be relatively short.

(m) The fair value of the common stock warrants was estimated using a Black-Scholes option pricing model assuming all 91,178 warrants will remain outstanding through expiration on July 24, 2019. Assumptions and inputs used in the option pricing model included stock price volatility of 48.6 percent, no dividends, a risk free interest rate of 1.74 percent, and an exercise price of $21.90 per common warrant.

(n) Amount reflects adjustments to goodwill resulting from adjustments (o), (p) and (q).

(o) Amount reflects an adjustment to estimated fair value of the acquired core deposit intangible.

(p) Amount reflects adjustments to acquired deferred tax assets and the tax impact of adjustments (o) and (q).

(q) Amount reflects the adjustment of change in control obligations existing under various employment agreements that were triggered by the 2014 Mergers, an increase in reserves for unfunded letters of credit, and additional accruals for certain legal matters and other liabilities.

Pro forma information

The table below presents supplemental pro forma information as if the Company's 2014 Mergers with VantageSouth and Piedmont had occurred on January 1, 2014. Pro forma results include adjustments for amortization and accretion of estimated fair value adjustments and do not include any projected cost savings or other anticipated benefits of the 2014 Mergers. Therefore, the pro forma financial information is not indicative of the results of operations that would have occurred had the transactions been effected on the assumed date.



	Year ended December 31,
		2014

Total interest and non-interest income		$	212,531

Net interest income		$	157,805

Net income		$	34,370

Net income available to common shareholders		$	31,934

Basic income per common share		$	1.02

Diluted income per common share		$	1.02

Weighted average basic common shares outstanding		31,295,562

Weighted average diluted common shares outstanding		31,375,585