Business Combinations (Tables)

9 Months Ended

Sep. 30, 2023

Business Combination and Asset Acquisition [Abstract]

Schedule of Business Acquisitions

The following tables provide the purchase price allocation to the identifiable assets acquired and liabilities assumed at their estimated fair values as of the SVBB Acquisition Date. The amounts below reflect Measurement Period adjustments made since the SVBB Acquisition Date, which increased the preliminary after tax gain on acquisition by $67 million. These Measurement Period adjustments primarily relate to refined fair value estimates for acquired affordable housing tax credit investments, loans, and assets and liabilities of acquired SVBB subsidiaries.

Purchase Price Consideration; Unaudited Statement of Assets Acquired and Liabilities Assumed

dollars in millions	Fair Value Purchase Price Allocation as of March 27, 2023
Purchase price consideration
Purchase Money Note (1)	$	35,808
Value Appreciation Instrument	500
Purchase price consideration	$	36,308
Assets
Cash and due from banks	$	1,310
Interest-earning deposits at banks	34,001
Investment securities	385
Loans and leases, net of PCD ALLL	68,468
Affordable housing tax credit investments	1,273
Premises and equipment	308
Core deposit intangibles	230
Other assets	1,564
Total assets acquired	$	107,539
Liabilities
Deposits	$	56,014
Borrowings	10
Deferred tax liabilities	3,281
Other liabilities	2,035
Total liabilities assumed	$	61,340
Fair value of net assets acquired	46,199
Preliminary gain on acquisition, after income taxes (2)	$	9,891
Preliminary gain on acquisition, before income taxes (2)	$	13,172

(1) The principal amount of the Purchase Money Note is the book value of net assets acquired of approximately $52.522 billion less the asset discount of $16.450 billion pursuant to the SVBB Purchase Agreement. The $35.808 billion above is net of a fair value discount of approximately $264 million.

(2) The difference between the preliminary gain on acquisition before and after taxes reflects the deferred tax liabilities recorded in the SVBB Acquisition, as presented above.

Loans and Leases Acquired

dollars in millions	Loans and Leases
	UPB		Fair Value
Non-PCD loans and leases	$	68,719	$	66,422
PCD loans and leases	2,568		2,046
Total loans and leases, before PCD gross-up	$	71,287	$	68,468

The following table summarizes PCD loans and leases that BancShares acquired in the SVBB Acquisition.

PCD Loans and Leases

dollars in millions	Total PCD from SVBB Acquisition
UPB	$	2,568
Fair value	2,046
Total fair value discount	$	522
Less: discount for loans with $0 fair value at SVBB Acquisition Date	26
Less: PCD gross-up	220
PCD discount (1)	$	276

(1) The PCD discount of $276 million will be accreted into income over the contractual life of the applicable loan using the effective interest method.

The following table provides the purchase price allocation to the identifiable assets acquired and liabilities assumed at their estimated fair values as of the Merger Date:

Purchase Price Consideration and Net Assets Acquired

dollars in millions, except shares issued and price per share	Purchase Price Allocation
Common share consideration
Shares of Class A Common Stock issued	6,140,010
Price per share on January 3, 2022	$	859.76
Common stock consideration	$	5,279
Preferred stock consideration	541
Stock-based compensation consideration	81
Cash in lieu of fractional shares and other consideration paid	51
Purchase price consideration	$	5,952
Assets
Cash and interest-earning deposits at banks	$	3,060
Investment securities	6,561
Assets held for sale	59
Loans and leases	32,714
Operating lease equipment	7,838
Bank-owned life insurance	1,202
Intangible assets	143
Other assets	2,198
Total assets acquired	$	53,775
Liabilities
Deposits	$	39,428
Borrowings	4,536
Credit balances of factoring clients	1,534
Other liabilities	1,894
Total liabilities assumed	$	47,392
Fair value of net assets acquired	6,383
Gain on acquisition	$	431

Schedule of Valuation of Core Deposits

The following table presents the intangible asset recorded related to the valuation of core deposits:  

Intangible Asset

dollars in millions	Fair Value		Estimated Useful Life	Amortization Method
Core deposit intangibles	$	230	8 years	Effective Yield

Schedule of Other Assets Acquired and Other Liabilities Assumed

The following table details other assets acquired:

Other Assets

dollars in millions	Fair Value
Accrued interest receivable	$	431
Federal Home Loan Bank stock / Federal Reserve Bank stock	320
Fair value of derivative financial instruments, net	458
Other	355
Total other assets	$	1,564

Other liabilities

The following table details other liabilities assumed:

dollars in millions	Fair Value
Commitments to fund tax credit investments	$	715
Fair value of derivative financial instruments, net	497
Accrued expenses and accounts payable	262
Reserve for off-balance sheet credit exposures	253
Accrued interest payable	109
Other	199
Total other liabilities	$	2,035