Business Combinations (Tables)

6 Months Ended

Jun. 30, 2018

Schedules of Recognized Identified Assets Acquired and Liabilities Assumed

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 date of the RBPI Merger, 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	567,308
Premises and equipment	8,264
Deferred income taxes	34,208
Bank-owned life insurance	16,550
Core deposit intangible	4,670
Favorable lease asset	566
Other assets	13,996
Total assets	$	784,241

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	$	63,382

Goodwill resulting from acquisition of RBPI	$	75,358

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

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 December 15, 2017 from the amounts originally reported in the Corporation’s 2017 Annual Report for the year ended December 31, 2017:



(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	3,065
Other assets	491
Deferred income taxes	(1,073		)
Total Fair Value Adjustments	2,483

Goodwill from the acquisition of RBPI as of June 30, 2018	$	75,358

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 December 15, 2017, 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	$	38,404
Contractual cash flows not expected to be collected (nonaccretable difference)	(16,025		)
Cash flows expected to be collected	22,379
Interest component of expected cash flows (accretable yield)	(2,526		)
Fair value of loans acquired with deterioration of credit quality	$	19,853

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 six months ended June 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 June 30, 2017			Six Months Ended June 30, 2017
Total interest income	$	42,337		$	83,564
Total interest expense	4,971			9,533
Net interest income	37,366			74,031
Provision for loan and lease losses	(26		)	562
Net interest income after provision for loan and lease losses	37,392			73,469
Total noninterest income	15,728			29,466
Total noninterest expenses*	34,040			66,335
Income before income taxes	19,080			36,600
Income tax expense	6,526			12,463
Net income	$	12,554		$	24,137
Per share data**:
Weighted-average basic shares outstanding	20,083,317			20,068,185
Dilutive shares	278,199			267,210
Adjusted weighted-average diluted shares	20,361,516			20,335,395
Basic earnings per common share	$	0.63		$	1.20
Diluted earnings per common share	$	0.62		$	1.19

* 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 six month periods ended June 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 June 30,				Six Months Ended June 30,
(dollars in thousands)	2018		2017		2018		2017
Advertising	$	2	$	19	$	61	$	19
Employee Benefits	68		5		271		5
Occupancy and bank premises	289		—		2,145		—
Furniture, fixtures, and equipment	186		6		365		6
Information technology	142		259		254		259
Professional fees	510		542		1,257		938
Salaries and wages	477		320		823		400
Other	1,378		85		2,195		120
Total due diligence, merger-related and merger integration expenses	$	3,052	$	1,236	$	7,371	$	1,747