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Business Combinations | 3 Months Ended
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Mar. 31, 2014
Business Combinations [Abstract] |
Business Combinations | Business Combinations On January 1, 2014, FCB completed its merger with 1st Financial Services Corporation (1st Financial) of Hendersonville, NC and its wholly-owned subsidiary, Mountain 1st Bank & Trust Company (Mountain 1st). The merger allows FCB to expand its presence in Western North Carolina. Mountain 1st had twelve branches located in Asheville, Brevard, Columbus, Etowah, Fletcher, Forest City, Hendersonville, Hickory, Marion, Shelby and Waynesville. FCB requested and received approval from the North Carolina Commissioner of Banks and the FDIC to close seven Mountain 1st branches due to their proximity to legacy FCB branches. Customers have been notified, and the 90-day waiting period will expire on May 1. FCB anticipates closing the branches in Asheville, Brevard, Fletcher, Forest City, Hendersonville, Hickory and Marion sometime in May. All customer relationships assigned to those branches will be transferred to the nearest FCB branch. FCB paid $10.0 million to acquire 1st Financial, including payments of $8.0 million to the U.S. Treasury to acquire and subsequently retire1st Financial's Troubled Asset Relief Program (TARP) obligation and $2.0 million paid to the shareholders of 1st Financial. As a result of the merger, FCB recorded $24.5 million in goodwill and $3.8 million in core deposit intangibles. The 1st Financial transaction was accounted for under the acquisition method of accounting, and the purchased assets, assumed liabilities and identifiable intangible assets were recorded at their acquisition date estimated fair values. Fair values are subject to refinement for up to one year after the closing date of the transaction as additional information regarding closing date fair values becomes available. The following table provides the carrying value of acquired assets and assumed liabilities, as recorded by 1st Financial, the fair value adjustments calculated at the time of the merger and the resulting fair value recorded by FCB.
| January 1, 2014
(Dollars in thousands) | As recorded by 1st Financial |  | Fair value adjustments |  | As recorded by FCB
Assets |  |  |  |  |
Cash and cash equivalents | $ | 28,194 |  |  | $ | — |  |  | $ | 28,194 |
Investment securities | 246,890 |  |  | (9,452 | ) |  | 237,438 |
Loans held for sale | 1,183 |  |  | — |  |  | 1,183 |
Restricted equity securities | 3,105 |  |  | 671 |  |  | 3,776 |
Loans | 338,170 |  |  | (21,843 | ) |  | 316,327 |
Less: allowance for loan losses | (7,796 | ) |  | 7,796 |  |  | — |
Premises and equipment | 3,871 |  |  | (1,185 | ) |  | 2,686 |
Other real estate owned | 12,896 |  |  | (1,305 | ) |  | 11,591 |
Intangible asset | — |  |  | 3,780 |  |  | 3,780 |
Other assets | 16,811 |  |  | (465 | ) |  | 16,346 |
Total assets acquired | $ | 643,324 |  |  | $ | (22,003 | ) |  | $ | 621,321 |
Liabilities |  |  |  |  |
Deposits: |  |  |  |  |
Noninterest-bearing | $ | 152,444 |  |  | $ | — |  |  | $ | 152,444 |
Interest-bearing | 477,881 |  |  | 1,546 |  |  | 479,427 |
Total deposits | 630,325 |  |  | 1,546 |  |  | 631,871 |
Short-term borrowings | 406 |  |  | — |  |  | 406 |
Other liabilities | 3,392 |  |  | 167 |  |  | 3,559 |
Total liabilities assumed | $ | 634,123 |  |  | $ | 1,713 |  |  | 635,836 |
Fair value of net liabilities assumed |  |  |  |  | 14,515 |
Cash paid to shareholders |  |  |  |  | 2,000 |
Cash paid to acquire TARP securities |  |  |  |  | 8,000 |
Goodwill recorded for 1st Financial |  |  |  |  | $ | 24,515 |
Goodwill recorded for 1st Financial represents future revenues to be derived from the existing customer base, including efficiencies that will result from combining operations and other non-identifiable intangible assets. The 1st Financial transaction is a taxable asset acquisition, and goodwill resulting from the transaction is deductible for income tax purposes. Merger costs related to the 1st Financial transaction are estimated to be between $6.0 million and $7.0 million. Revenue generated from 1st Financial was approximately $6.9 million for the first quarter of 2014. All loans resulting from the 1st Financial transaction are accounted for under the expected cash flow method (ASC 310-30). For loans acquired from 1st Financial, the contractually required payments including principal and interest, cash flows expected to be collected and fair values as of the merger date were:
(Dollars in thousands) | January 1, 2014
Contractually required payments | $ | 414,233 |
Cash flows expected to be collected | 400,622 |
Fair value at acquisition date | 316,327 |
The recorded fair values of loans acquired in the 1st Financial transaction as of the merger date were as follows:
(Dollars in thousands) | January 1, 2014
Commercial: |
Construction and land development | $ | 41,516 |
Commercial mortgage | 123,925 |
Other commercial real estate | 6,698 |
Commercial and industrial | 29,126 |
Total commercial loans | 201,265 |
Noncommercial: |
Residential mortgage | 113,177 |
Consumer | 1,885 |
Total noncommercial loans | 115,062 |
Total loans acquired from 1st Financial | $ | 316,327 |

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1383-128463 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e6996-128479 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4922-128472 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4934-128472 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4926-128472 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e7000-128479 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1392-128463 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1486-128463 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e6927-128479 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1497-128463 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1490-128463 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e7008-128479 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4845-128472 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1500-128463 Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 7 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1524-128463 + Details
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