Mergers and Acquisitions (Tables)

9 Months Ended

Sep. 30, 2018

Summary of the allocation of purchase price to assets and liabilities acquired

The following table summarizes the allocation of purchase price to assets and liabilities acquired in connection with the Company’s acquisition of Brand based on their fair values on September 1, 2018.



Purchase Price:
Shares issued to common shareholders	9,306,477
Purchase price per share	$	46.69
Value of stock paid				$	434,519
Cash consideration paid				21,879
Cash paid for fractional shares				4
Cash settlement for stock options, net of tax benefit				17,157
Deal charges				894
Total Purchase Price				$	474,453
Net Assets Acquired:
Stockholders’ equity at acquisition date	$	138,896
Increase (decrease) to net assets as a result of fair value adjustments to assets acquired and liabilities assumed:
Securities	(1,354		)
Loans, including loans held for sale	(16,287		)
Premises and equipment	1,621
Intangible assets	27,354
Other assets	(35		)
Deposits	(1,367		)
Borrowings	(3,236		)
Other liabilities	13,675
Deferred income taxes	(1,029		)
Total Net Assets Acquired				158,238
Goodwill resulting from merger⁽¹⁾				$	316,215

(1) The goodwill resulting from the merger has been assigned to the Community Banks operating segment.

The following table summarizes the allocation of purchase price to assets and liabilities acquired in connection with the Company’s acquisition of Metropolitan based on their fair values on July 1, 2017.



Purchase Price:
Shares issued to common shareholders	4,883,182
Purchase price per share	$	43.74
Value of stock paid				$	213,590
Cash paid for fractional shares				5
Cash settlement for stock options				4,764
Deal charges, net of taxes				1,102
Total Purchase Price				$	219,461
Net Assets Acquired:
Stockholders’ equity at acquisition date	$	89,253
Increase (decrease) to net assets as a result of fair value adjustments to assets acquired and liabilities assumed:
Securities	(731		)
Mortgage loans held for sale	30
Loans, net of Metropolitan’s allowance for loan losses	(13,071		)
Premises and equipment	(4,629		)
Intangible assets, net of Metropolitan’s existing intangibles	2,340
Other real estate owned	(1,251		)
Other assets	2,731
Deposits	(3,603		)
Borrowings	(1,294		)
Other liabilities	3,930
Deferred income taxes	5,244
Total Net Assets Acquired				$	78,949
Goodwill resulting from merger⁽¹⁾				$	140,512

(1) The goodwill resulting from the merger has been assigned to the Community Banks operating segment.

Summary of the fair value of assets acquired and liabilities assumed

The following table summarizes the fair value on July 1, 2017 of assets acquired and liabilities assumed on that date in connection with the merger with Metropolitan.



Cash and cash equivalents	$	47,556
Securities	108,697
Loans, including mortgage loans held for sale	967,804
Premises and equipment	8,576
Other real estate owned	1,203
Intangible assets	147,478
Other assets	69,567
Total assets	$	1,350,881

Deposits	$	942,084
Borrowings	174,522
Other liabilities	20,685
Total liabilities	$	1,137,291

The following table summarizes the significant assets acquired and liabilities assumed from BMG:



(in thousands)	September 1, 2018
Loans held for sale	$	48,100
Borrowings	34,139

The following table summarizes the estimated fair value on September 1, 2018 of assets acquired and liabilities assumed on that date in connection with the merger with Brand. These estimates are subject to change pending the finalization of all valuations.



Cash and cash equivalents	$	193,436
Securities	70,123
Loans, including loans held for sale	1,593,894
Premises and equipment	20,782
Intangible assets	343,569
Other assets	113,324
Total assets	$	2,335,128

Deposits	$	1,714,177
Borrowings	90,912
Other liabilities	55,586
Total liabilities	$	1,860,675

Pro forma combined condensed consolidated financial information

The following table summarizes the results of operations for BMG included in the Company’s Consolidated Statements of Income for the three and nine months ended September 30, 2018:



(in thousands)
Interest income	$	186
Interest expense	143
Net interest income	43
Noninterest income	1,696
Noninterest expense	2,029
Net income before taxes	$	(290	)

The following unaudited pro forma combined condensed consolidated financial information presents the results of operations for the nine months ended September 30, 2018 and 2017 of the Company as though the Brand and Metropolitan mergers had been completed as of January 1, 2017. The unaudited pro forma information combines the historical results of Brand and Metropolitan with the Company’s historical consolidated results and includes certain adjustments reflecting the estimated impact of certain fair value adjustments for the periods presented. The pro forma information is not necessarily indicative of what would have occurred had the acquisitions taken place on January 1, 2017. The pro forma information does not include the effect of any cost-saving or revenue-enhancing strategies. Merger expenses are reflected in the period in which they were incurred.



	(Unaudited)
	Nine Months Ended
	September 30,
	2018		2017
Net interest income - pro forma	$	341,946	$	336,250

Noninterest income - pro forma	$	117,476	$	139,328

Noninterest expense - pro forma	$	359,386	$	327,566

Net income - pro forma	$	72,719	$	93,570

Earnings per share - pro forma:
Basic	$	1.24	$	1.60
Diluted	$	1.24	$	1.59