Acquisitions Acquisitions (Tables)

6 Months Ended

Jun. 30, 2020

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]

The following table details the total consideration paid on January 1, 2020 in connection with the acquisition of Cornerstone, the fair values of the assets acquired and liabilities assumed and the resulting preliminary goodwill.



(Dollars in thousands)	As Recorded by Cornerstone			Estimated Fair Value Adjustments			Estimated Fair Values as Recorded by Summit
Cash consideration							$	14,250
Stock consideration							15,441
Total consideration							29,691

Identifiable assets acquired:
Cash and cash equivalents	$	60,285		$	—		$	60,285
Securities available for sale, at fair value	90,154			(47		)	90,107
Loans
Purchased performing	37,965			188			38,153
Purchased credit deteriorated	1,877			(569		)	1,308
Allowance for loan losses	(312		)	312			—
Premises and equipment	807			(142		)	665
Property held for sale	10			—			10
Core deposit intangibles	—			717			717
Other assets	4,263			(474		)	3,789
Total identifiable assets acquired	$	195,049		$	(15	)	$	195,034

Identifiable liabilities assumed:
Deposits	173,030			239			173,269
Other liabilities	3,303			(407		)	2,896
Total identifiable liabilities assumed	$	176,333		$	(168	)	$	176,165

Net identifiable assets acquired	$	18,716		$	153		$	18,869

Preliminary goodwill resulting from acquisition							$	10,822

MVB Bank Branches Acquisition

On April 24, 2020, SCB expanded its presence in the Eastern Panhandle of West Virginia by acquiring three MVB Bank locations in Berkeley County, West Virginia and one MVB Bank location in Jefferson County, West Virginia. Summit assumed certain deposits and loans totaling approximately $195.0 million and $35.3 million, respectively. The purchase price was $50.3 million consisting of (i) the average daily closing balance of the deposits for the thirty (30) day period prior to the closing multiplied by 8.00%, (ii) the aggregate amount of cash on hand as of the closing date, (iii) the aggregate net book value of all assets being assumed (excluding cash on hand, real property and accrued interest with respect to the loans acquired), (iv) the appraised value of the real property acquired, and (v) accrued interest with respect to the loans acquired.

This acquisition was determined to constitute a business combination in accordance with ASC 805, Business Combinations,and accordingly we accounted for the acquisition using the acquisition method of accounting, recording the assets and liabilities of MVB Bank at their acquisition date respective fair values. Determining the fair value of assets and liabilities, particularly related to the loan portfolio, is a complicated process involving significant judgment regarding methods and assumptions used to calculate the estimated fair values. The fair values are preliminary and subject to refinement for up to one year after the acquisition date as additional information relative to the acquisition date fair values becomes available. We recognized preliminary goodwill of $14.67 million in connection with the acquisition (deductible for income tax purposes), which is not amortized for financial reporting purposes, but is subject to annual impairment testing. The core deposit intangible represents the value of long-term deposit relationships acquired in this transaction and will be amortized over an estimated weighted average life of 10 years using an accelerated method which approximates the estimated run-off of the acquired deposits. The following table details the total consideration paid on April 24, 2020 in connection with the acquisition of the MVB Bank branches, the fair values of the assets acquired and liabilities assumed and the resulting preliminary goodwill.



(Dollars in thousands)	As Recorded by MVB			Estimated Fair Value Adjustments			Estimated Fair Values as Recorded by Summit
Cash consideration							$	12,965
Total consideration							12,965

Identifiable assets acquired:
Cash and cash equivalents	$	800		$	—		$	800
Loans
Purchased performing	35,127			(1,185		)	33,942
Premises and equipment	2,376			(42		)	2,334
Core deposit intangibles	—			125			125
Other assets	114			—			114
Total identifiable assets acquired	$	38,417		$	(1,102	)	$	37,315

Identifiable liabilities assumed:
Deposits	188,134			598			188,732
Other liabilities	102			—			102
Total identifiable liabilities assumed	$	188,236		$	598		$	188,834

Net liabilities assumed	$	(149,819	)	$	(1,700	)	$	(151,519	)

Net cash received from MVB							136,854

Preliminary goodwill resulting from acquisition							$	14,665

Financial Effects of Purchase Accounting Adjustments [Table Text Block]

The following presents the financial effects of adjustments recognized in the statements of income for the three and six months ended June 30, 2020 and 2019 related to business combinations that occurred during 2016, 2017, 2019 and 2020.



	Income increase (decrease)
	Three Months Ended June 30,						Six Months Ended June 30,
Dollars in thousands	2020			2019			2020			2019
Interest and fees on loans	$	264		$	425		$	519		$	467
Interest expense on deposits	188			82			286			170
Amortization of intangibles	(410		)	(404		)	(839		)	(830		)
Income before income tax expense	$	42		$	103		$	(34	)	$	(193	)