Business Combinations (Tables)

9 Months Ended

Sep. 30, 2018

Schedules of Recognized Identified Assets Acquired and Liabilities Assumed

The following table details the consideration paid, the initial estimated fair value of identifiable assets acquired and liabilities assumed as of the date of acquisition and the resulting goodwill recorded:



(dollars in thousands)
Consideration paid:
Cash paid at closing	$	750
Contingent payment liability (present value)	706
Value of consideration	$	1,456

Assets acquired:
Cash and due from banks	370
Intangible assets - customer relationships	779
Premises and equipment	1
Other assets	316
Total assets	1,466

Liabilities assumed:
Accounts payable	657
Other liabilities	30
Total liabilities	$	687

Net assets acquired	$	779

Goodwill resulting from acquisition of Domenick	$	677

In connection with the Hirshorn acquisition, the following table details the consideration paid, the initial estimated fair value of identifiable assets acquired and liabilities assumed as of the date of acquisition and the resulting goodwill recorded:



(dollars in thousands)
Consideration paid:
Cash paid at closing	$	5,770
Contingent payment liability (present value)	1,690
Value of consideration	7,460

Assets acquired:
Cash operating accounts	978
Intangible assets – trade name	195
Intangible assets – customer relationships	2,672
Intangible assets – non-competition agreements	41
Premises and equipment	1,795
Accounts receivable	192
Other assets	27
Total assets	5,900

Liabilities assumed:
Accounts payable	800
Other liabilities	2
Total liabilities	802

Net assets acquired	5,098

Goodwill resulting from acquisition of Hirshorn	$	2,362

In connection with the RBPI Merger, the consideration paid and the estimated fair value of identifiable assets acquired and liabilities assumed as of the Effective Date, which include the effects of any measurement period adjustments in accordance with ASC 805-10, are summarized in the following table:



(dollars in thousands)
Consideration paid:
Common shares issued (3,101,316)	$	136,768
Cash in lieu of fractional shares	7
Cash-out of certain options	112
Fair value of warrants assumed	1,853
Value of consideration	$	138,740

Assets acquired:
Cash and due from banks	17,092
Investment securities available for sale	121,587
Loans	566,228
Premises and equipment	8,264
Deferred income taxes	34,586
Bank-owned life insurance	16,550
Core deposit intangible	4,670
Favorable lease asset	566
Other assets	13,996
Total assets	$	783,539

Liabilities assumed:
Deposits	593,172
FHLB and other long-term borrowings	59,568
Short-term borrowings	15,000
Junior subordinated debentures	21,416
Unfavorable lease liability	322
Other liabilities	31,381
Total liabilities	$	720,859

Net assets acquired	$	62,680

Goodwill resulting from acquisition of RBPI	$	76,060

Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustments

The following table details the changes in fair value of the net assets acquired and liabilities assumed as of the Effective Date from the amounts originally reported in the 2017 Annual Report:



(dollars in thousands)
Goodwill resulting from the acquisition of RBPI reported as of December 31, 2017	$	72,762

Value of Consideration Adjustment:
Common shares issued (2,562)	113

Fair Value Adjustments:
Loans	4,145
Other assets	491
Deferred income taxes	(1,451		)
Total Fair Value Adjustments	3,185

Goodwill from the acquisition of RBPI as of September 30, 2018	$	76,060

Summary of Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period

The following table provides an updated summary of the acquired impaired loans and leases as of the Effective Date, which include the effects of any measurement period adjustments in accordance with ASC 805-10, resulting from the RBPI Merger:



(dollars in thousands)
Contractually required principal and interest payments	$	40,741
Contractual cash flows not expected to be collected (nonaccretable difference)	(17,637		)
Cash flows expected to be collected	23,104
Interest component of expected cash flows (accretable yield)	(2,644		)
Fair value of loans acquired with deterioration of credit quality	$	20,460

Business Acquisition, Pro Forma Information

The following table presents the pro forma income statement of the combined institution (RBPI and the Corporation) for the three and nine months ended September 30, 2017 as if the RBPI Merger had occurred on January 1, 2017. The pro forma income statement adjustments are limited to the effects of purchase accounting fair value mark amortization and accretion and intangible asset amortization. No cost savings or additional merger expenses have been included in the pro forma income statement. Due to the immaterial contribution to net income of the Hirshorn acquisition, which occurred during the year shown in the table, the pro forma effects of the Hirshorn acquisition have been excluded.



(dollars in thousands)	Three Months Ended September 30, 2017		Nine Months Ended September 30, 2017
Total interest income	$	43,412	$	126,976
Total interest expense	5,480		15,013
Net interest income	37,932		111,963
Provision for loan and lease losses	1,492		2,054
Net interest income after provision for loan and lease losses	36,440		109,909
Total noninterest income	16,015		45,481
Total noninterest expenses*	33,364		99,699
Income before income taxes	19,091		55,691
Income tax expense	5,843		18,306
Net income	$	13,248	$	37,385
Per share data**:
Weighted-average basic shares outstanding	20,121,800		20,086,253
Dilutive shares	261,935		284,294
Adjusted weighted-average diluted shares	20,383,735		20,370,547
Basic earnings per common share	$	0.66	$	1.86
Diluted earnings per common share	$	0.65	$	1.84

* Total noninterest expense includes RBPI Net Income Attributable to Noncontrolling Interest and Preferred Stock Series A Accumulated Dividend and Accretion for pro forma presentation.

** Assumes that the shares of RBPI common stock outstanding as of December 31, 2017 were outstanding for the full three and nine month periods ended September 30, 2017.

Summary of Integration Related Costs

The following table details the costs identified and classified as due diligence, merger-related and merger integration costs for the periods indicated:



	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2018		2017		2018		2017
Advertising	$	—	$	89	$	61	$	108
Employee Benefits	—		5		271		10
Occupancy and bank premises	—		—		2,145		—
Furniture, fixtures, and equipment	—		31		365		37
Information technology	167		41		421		300
Professional fees	193		632		1,450		1,570
Salaries and wages	29		28		852		428
Other	—		24		2,196		144
Total due diligence, merger-related and merger integration expenses	$	389	$	850	$	7,761	$	2,597