Acquisitions (Tables)

12 Months Ended

Dec. 31, 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	$	60,284	$	—	$	60,284
Securities available for sale, at fair value	90,075		(47)		90,028
Loans
Purchased performing	37,965		188		38,153
Purchased credit deteriorated	1,877		(569)		1,308
Allowance for credit losses on loans	(312)		312		—
Premises and equipment	806		(142)		664
Property held for sale	10		—		10
Core deposit intangibles	—		717		717
Other assets	4,324		(74)		4,250
Total identifiable assets acquired	$	195,029	$	385	$	195,414

Identifiable liabilities assumed:
Deposits	173,027		239		173,266
Other liabilities	3,286		(7)		3,279
Total identifiable liabilities assumed	$	176,313	$	232	$	176,545

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

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 deposit liabilities and acquired certain assets totaling approximately $188.2 million and $38.4 million, respectively. The purchase price, equaling the average daily closing balance of the deposits for the thirty (30) day period prior to the closing multiplied by 8.00%, totaled $13.0 million.

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. The fair values of assets and liabilities 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 $14.7 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 Bank		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 Bank					136,854

Preliminary goodwill resulting from acquisition					$	14,665

WinFirst Financial Corp. Acquisition

On December 15, 2020, Summit Community Bank, Inc. acquired 100% of the ownership of WinFirst Financial Corp. ("WinFirst") and its subsidiary WinFirst Bank, headquartered in Winchester, Kentucky. Pursuant to the Agreement and Plan of Merger dated September 28, 2020, WinFirst's shareholders received $328.05 for each share of WinFirst common stock they owned, or approximately $21.7 million in the aggregate. With this transaction, Summit expanded its footprint into Kentucky. At acquisition, WinFirst's assets and liabilities approximated $143 million and $127 million, respectively.

We accounted for the acquisition using the acquisition method of accounting in accordance with ASC 805, Business Combinations and accordingly, the assets and liabilities of WinFirst were recorded at their respective acquisition date fair values. The fair values of assets and liabilities 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 $7.21 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 December 15, 2020 in connection with the acquisition of WinFirst, the fair values of the assets acquired and liabilities assumed and the resulting preliminary goodwill.


(Dollars in thousands)	As Recorded by WinFirst		Estimated Fair Value Adjustments		Estimated Fair Values as Recorded by Summit
Cash consideration					$	21,705
Total consideration					21,705

Identifiable assets acquired:
Cash and cash equivalents	$	13,030	$	—	$	13,030
Securities available for sale, at fair value	1,613		19		1,632
Loans
Purchased performing	123,754		(968)		122,786
Purchased credit deteriorated	—		—		—
Allowance for credit losses on loans	(1,227)		1,227		—
Premises and equipment	171		(27)		144
Property held for sale	196		(50)		146
Core deposit intangibles	—		81		81
Other assets	5,898		(2)		5,896
Total identifiable assets acquired	$	143,435	$	280	$	143,715

Identifiable liabilities assumed:
Deposits	103,599		1,065		104,664
Short-term borrowings	3,000		—		3,000
Long-term borrowings	20,585		697		21,282
Other liabilities	270		—		270
Total identifiable liabilities assumed	$	127,454	$	1,762	$	129,216

Net identifiable assets acquired	$	15,981	$	(1,482)	$	14,499

Preliminary goodwill resulting from acquisition					$	7,206

Schedule of Carrying Amount of Purchased Credit Deteriorated Financing Receivables

The carrying amount of these loans at acquisition is as follows:


Dollars in thousands	For the Year Ended December 31, 2020
Purchase price of PCD loans at acquisition	$	12,649
Allowance for credit losses - loans at acquisition	796
Non-credit discount at acquisition	568
Par value of PCD loans at acquisition	11,285