Business Combinations (Tables)

9 Months Ended

Sep. 30, 2020

Schedule of Recognized Identifiable Assets Acquired and Liabilities Assumed

The following table summarizes the amounts of assets acquired and liabilities assumed recognized at the acquisition date.


(Dollars in thousands)
Consideration paid:
Cash	$	67,944
Fair value of assets acquired:
Cash and cash equivalents	38,480
Investment securities	47,416
Federal Home Loan Bank stock	923
Loans held for sale	1,703
Loans held for investment	222,356
Premises and equipment	2,404
Core deposit intangibles	3,663
Other assets	8,358
Total assets acquired	325,303
Fair value of liabilities assumed:
Deposits	264,820
Federal Home Loan Bank advances	15,279
Other liabilities	3,427
Total liabilities assumed	283,526
Total identifiable net assets	41,777
Goodwill recognized in the acquisition	$	26,167

Purchased Loans Accounted for Under and Excluded from ASC 310-30

Purchased loans outside the scope of ASC 310-30 are accounted for under ASC 310-20. Premiums and discounts created when the loans were recorded at their fair values at acquisition are amortized over the remaining terms of the loans as an adjustment to the related loan's yield.


(Dollars in thousands)
Accounted for under ASC 310-30:
Contractual cash flows	$	1,018
Contractual cash flows not expected to be collected (nonaccretable difference)	82
Expected cash flows	936
Interest component of expected cash flows (accretable yield)	35
Fair value at acquisition	901
Accounted for under ASC 310-20:
Unpaid principal and interest balance	221,061
Fair value premium	394
Fair value at acquisition	221,455
Total fair value at acquisition	$	222,356

Business Acquisition, Pro Forma Information

The pro forma table below presents information as if the acquisition had occurred on January 1, 2019. The pro forma information includes adjustments to give the effects to any changes in interest income due to the accretion (amortization) of the discount (premium) associated with the fair value adjustments to acquired loans, any changes in interest expense due to estimated premium amortization/discount accretion associated with the fair value adjustments to acquired time deposits and borrowings and other debt, amortization of core deposit intangibles that would have resulted had the deposits been acquired as of January 1, 2019, and the related income tax effects. The pro forma financial information is not necessarily indicative of the results of operations that would have occurred had the transaction been effected on the assumed date. Due diligence, professional fees, and other expenses related to the merger were incurred by the Company and AAB during the three and nine months ended September 30, 2020, but the pro forma condensed combined statement of income is not adjusted to exclude these costs.


	Three months ended September 30,				Nine months ended September 30,
(Dollars in thousands, except per share data)	2020		2019		2020		2019
Net interest income	$	16,593	$	16,036	$	47,709	$	46,217
Noninterest income	9,125		4,486		21,604		11,228
Noninterest expense	15,143		13,742		44,822		38,879
Net income	5,211		4,865		12,062		13,188
Net income per diluted share	0.67		0.62		1.55		1.68