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Business Combinations | 12 Months Ended
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Dec. 31, 2016
Business Acquisition [Line Items] |
Business Combinations | BUSINESS COMBINATIONS Cordia Bancorp, Inc. On September 1, 2016, FCB completed the merger of Cordia and its subsidiary, BVA, into FCB. Under the terms of the merger agreement, cash consideration of $5.15 was paid to Cordia’s shareholders for each of their shares of Cordia’s common stock, with total consideration paid of $37.1 million. The merger allowed FCB to strengthen its presence in the greater Richmond, Virginia area as Cordia operated six BVA branches in Richmond, Midlothian, Chesterfield, Colonial Heights and Chester, Virginia. The Cordia transaction was accounted for under the acquisition method of accounting and, accordingly, assets acquired and liabilities assumed were recorded at their estimated fair values on the acquisition date. Fair values are preliminary and subject to refinement for up to one year after the closing date of the acquisition as additional information regarding closing date fair values becomes available. The fair value of assets acquired was $349.3 million, including $241.4 million in loans and $2.2 million of identifiable intangible assets. Liabilities assumed were $323.1 million, including $292.2 million in deposits. As a result of the transaction, FCB recorded $10.8 million of goodwill. The amount of goodwill recorded represents the excess purchase price over the estimated fair value of the net assets acquired. This premium paid reflects the increased market share and related synergies that are expected to result from the acquisition. None of the goodwill is deductible for income tax purposes as the merger is accounted for as a qualified stock purchase. The following table provides the purchase price as of the acquisition date and the identifiable assets acquired and liabilities assumed at their estimated fair values.
(Dollars in thousands) | As recorded by FCB
Purchase price |  |  | $ | 37,053 |
Assets |  |  |
Cash and due from banks | $ | 8,383 |  |  |
Overnight investments | 3,081 |  |  |
Investment securities available for sale | 76,633 |  |  |
Loans and leases | 241,392 |  |  |
Premises and equipment | 4,151 |  |  |
Other real estate owned | 1,170 |  |  |
Income earned not collected | 1,990 |  |  |
Intangible assets | 2,210 |  |  |
Other assets | 10,318 |  |  |
Total assets acquired | 349,328 |  |  |
Liabilities |  |  |
Deposits | 292,192 |  |  |
Short-term borrowings | 30,164 |  |  |
Other liabilities | 747 |  |  |
Total liabilities assumed | $ | 323,103 |  |  |
Fair value of net assets acquired |  |  | 26,225 |
Goodwill recorded for Cordia |  |  | $ | 10,828 |
Merger-related expenses of $3.8 million were recorded in the Consolidated Statements of Income for the year ended December 31, 2016. Loan-related interest income generated from Cordia was approximately $4.2 million since the acquisition date for the year ended December 31, 2016. The transaction is not considered material to BancShares' financial statements and therefore pro forma financial data is not included. Due to the immaterial amount of loans resulting from the Cordia transaction that had evidence of credit quality deterioration, all loans were accounted for as non-PCI loans under ASC 310-20. First CornerStone Bank On May 6, 2016, FCB entered into an agreement with the FDIC, as Receiver, to purchase certain assets and assume certain liabilities of FCSB of King of Prussia, Pennsylvania. The acquisition provided FCB the opportunity to grow capital and enhance earnings. The FCSB transaction was accounted for under the acquisition method of accounting and, accordingly, assets acquired and liabilities assumed were recorded at their estimated fair values on the acquisition date. Fair values are preliminary and subject to refinement for up to one year after the closing date of the acquisition as additional information regarding closing date fair values becomes available. The fair value of the assets acquired was $87.4 million, including $43.8 million in loans and $390 thousand of identifiable intangible assets. Liabilities assumed were $96.9 million of which the majority were deposits. During the third quarter of 2016, adjustments were made to the acquisition fair values primarily based upon updated collateral valuations resulting in an increase of $837 thousand to the gain on acquisition. These adjustments brought the total gain on the transaction to $3.0 million which is included in noninterest income in the Consolidated Statements of Income. The following table provides the identifiable assets acquired and liabilities assumed at their estimated fair values as of the acquisition date.
(Dollars in thousands) | As recorded by FCB
Assets |
Cash and due from banks | $ | 748 |
Overnight investments | 37,540 |
Investment securities | 4,564 |
Loans | 43,776 |
Other real estate owned | 375 |
Income earned not collected | 8 |
Intangible assets | 390 |
Other assets | 13 |
Total assets acquired | 87,414 |
Liabilities |
Deposits | 96,882 |
Other liabilities | 23 |
Total liabilities assumed | 96,905 |
Fair value of net liabilities assumed | (9,491 | )
Cash received from FDIC | 12,450 |
Gain on acquisition of FCSB | $ | 2,959 |
Merger-related expenses of $1.0 million were recorded in the Consolidated Statement of Income for the year ended December 31, 2016. Loan-related interest income generated from FCSB was approximately $1.6 million since the acquisition date for the year ended December 31, 2016. The transaction is not considered material to BancShares' financial statements and therefore pro forma financial data is not included. All loans resulting from the FCSB transaction were recorded at the acquisition date with a discount attributable, at least in part, to credit quality, and are therefore accounted for as PCI loans under ASC 310-30. North Milwaukee State Bank On March 11, 2016, FCB entered into an agreement with the FDIC, as Receiver, to purchase certain assets and assume certain liabilities of NMSB with two branches in Milwaukee, Wisconsin. The acquisition provided FCB with the opportunity to grow capital and enhance earnings. The NMSB transaction was accounted for under the acquisition method of accounting and, accordingly, assets acquired and liabilities assumed were recorded at their estimated fair values on the acquisition date. Fair values are preliminary and subject to refinement for up to one year after the closing date of the acquisition as additional information regarding closing date fair values becomes available. The fair value of the assets acquired was $53.6 million, including $36.9 million in loans and $240 thousand of identifiable intangible assets. Liabilities assumed were $60.9 million of which $59.2 million were deposits. During the second quarter of 2016, adjustments were made to the acquisition fair values primarily based upon updated collateral valuations resulting in an increase of $1.2 million to the gain on acquisition. These adjustments brought the total gain on the transaction to $2.9 million which is included in noninterest income in the Consolidated Statements of Income. The following table provides the identifiable assets acquired and liabilities assumed at their estimated fair values as of the acquisition date.
(Dollars in thousands) | As recorded by FCB
Assets |
Cash and due from banks | $ | 4,545 |
Overnight investments | 2,274 |
Investment securities available for sale | 9,425 |
Loans | 36,914 |
Other intangible assets | 240 |
Other assets | 216 |
Total assets acquired | 53,614 |
Liabilities |
Deposits | 59,206 |
Short-term borrowings | 1,662 |
Other liabilities | 74 |
Total liabilities assumed | 60,942 |
Fair value of net liabilities assumed | (7,328 | )
Cash received from FDIC | 10,200 |
Gain on acquisition of NMSB | $ | 2,872 |
Merger-related expenses of $517 thousand from the NMSB transaction were recorded in the Consolidated Statements of Income for the year ended December 31, 2016. Loan-related interest income generated from NMSB was approximately $1.9 million since the acquisition date for the year ended December 31, 2016. The transaction is not considered material to BancShares' financial statements and therefore pro forma financial data is not included. All loans resulting from the NMSB transaction were recorded at the acquisition date with a discount attributable, at least in part, to credit quality, and are therefore accounted for as PCI loans under ASC 310-30. Capitol City Bank & Trust Company On February 13, 2015, FCB entered into an agreement with the FDIC, as Receiver, to purchase certain assets and assume certain liabilities of CCBT. The CCBT transaction was accounted for under the acquisition method of accounting and, accordingly, assets acquired and liabilities assumed were recorded at their estimated fair values on the acquisition date. These fair values were subject to refinement for up to one year after the closing date of the acquisition. The measurement period ended on February 12, 2016. The fair value of the assets acquired was $211.9 million, including $154.5 million in loans and $690 thousand of identifiable intangible assets. Liabilities assumed were $272.5 million of which $266.4 million were deposits. The fair value of the net liabilities assumed was $60.6 million and cash received from the FDIC was $103.5 million. The total gain on the transaction was $42.9 million which is included in noninterest income in the Consolidated Statement of Income. The total after-tax impact of the gain was $26.4 million. Merger-related expenses of $1.9 million were recorded in the Consolidated Statement of Income for the year ended December 31, 2015. Loan-related interest income generated from CCBT was approximately $8.3 million for the year ended December 31, 2015. The transaction is not considered material to BancShares' financial statements and therefore pro forma financial data is not included. All loans resulting from the CCBT transaction were recorded at the acquisition date with a discount attributable, at least in part, to credit quality, and are therefore accounted for as PCI loans under ASC 310-30.

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