Acquisitions

9 Months Ended

Sep. 30, 2021

Business Combination Disclosure [Text Block]

ACQUISITIONS

MVB Bank Branches Acquisition

On July 10, 2021, SCB acquired four MVB Bank locations located in southern West Virginia: one in Kanawha County, one in Putnam County, and two in Cabell County. In addition, SCB acquired two MVB Bank drive-up banking locations in Cabell County. Summit assumed certain deposits and loans totaling approximately $164 million and $54 million, respectively.

The purchase price was $9.8 million equaling the average daily closing balance of the deposits for the thirty (30) day period prior to the closing multiplied by 6.00%.

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 $10.33 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 July 10, 2021 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					$	9,807
Total consideration					9,807

Identifiable assets acquired:
Cash and cash equivalents	$	946	$	—	$	946
Loans
Purchased performing	53,440		478		53,918
Purchased credit deteriorated	488		(91)		397
Premises and equipment	3,431		(129)		3,302
Core deposit intangibles	—		178		178
Other assets	260		—		260
Total identifiable assets acquired	$	58,565	$	436	$	59,001

Identifiable liabilities assumed:
Deposits	163,081		959		164,040
Other liabilities	45		—		45
Total identifiable liabilities assumed	$	163,126	$	959	$	164,085

Net liabilities assumed	$	(104,561)	$	(523)	$	(105,084)

Net cash received from MVB					94,753

Preliminary goodwill resulting from acquisition					$	10,331