Business Combinations

9 Months Ended

Sep. 30, 2012

Business Combinations [Abstract]

Business Combinations

Note 3. Business Combinations

The company has accounted for the Paragon Transaction and the VBB Acquisition under the acquisition method of accounting, and accordingly, the acquired assets and assumed liabilities were recorded by the company at estimated fair value as of the acquisition date, which was July 29, 2011, for both acquisitions. Fair value estimates were based on management’s assessment of the best information available as of the acquisition date.  

Paragon Transaction

The allocation of the consideration received to the acquired assets and assumed liabilities in the Paragon Transaction as of the acquisition date was as follows:

Assets acquired:
Cash	$                146
Loans	58,291
Transportation equipment	5
Accrued interest receivable	212
Total assets acquired	58,654
Liabilities assumed:
Deposits	76,550
Accrued interest payable	39
Total liabilities assumed	76,589
Net (liabilities) assumed		$          (17,935)
Adjustments to reflect assets and liabilities at fair value:
Loan discount		(1,823)
Core deposit intangible		2,470
Transaction consideration received		$           17,288

All of the loans acquired in the Paragon Transaction were performing loans as of the acquisition date. As of September 30, 2012, the remaining fair value adjustment related to the acquired loans was $1.3 million.

VBB Acquisition

The allocation of the consideration received to the acquired assets and assumed liabilities in the VBB Acquisition as of the acquisition date was as follows:

Assets acquired:
Cash	$            19,192
Loans	70,893
Other real estate owned	1,500
Accrued interest receivable	254
Other assets	1,038
Total assets acquired	92,877
Liabilities assumed:
Deposits	77,525
FHLB borrowings	9,371
Accrued interest payable	46
Other liabilities	1
Total liabilities assumed	86,943
Net assets acquired		$              5,934
Adjustments to reflect assets and liabilities at fair value:
Loan discount		(13,964)
Other real estate owned discount		(620)
FHLB borrowing		(514)
Net (liabilities) acquired after fair value adjustments		(9,164)
Transaction consideration received		17,822
Bargain purchase gain		8,658
Deferred tax liability		(2,944)
Bargain purchase gain, net of tax		$              5,714

The following table presents the purchased loans receivable at the date of the VBB Acquisition and the fair value adjustment recorded immediately following the acquisition:

	Purchased Performing	Purchased Impaired	Total
Contractual principal payments receivable	$                 30,671	$                 40,222	$                 70,893
Fair value adjustment	(1,274)	(12,690)	(13,964)
Fair value of acquired loans	$                 29,397	$                 27,532	$                 56,929

The remaining fair value adjustment, as of September 30, 2012, related to the loans acquired in the VBB Acquisition was $7.5 million.The carrying value, as of September 30, 2012, of purchased-impaired loans was approximately $19.4 million.