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Business Combinations | 6 Months Ended
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Jun. 30, 2017
Business Combinations [Abstract] |
Business Combinations | NOTE B - BUSINESS COMBINATIONS Guaranty Bank On May 5, 2017, FCB entered into an agreement with the FDIC, as Receiver, to purchase certain assets and assume certain liabilities of Guaranty Bank (Guaranty) of Milwaukee, Wisconsin. The acquisition provides FCB with the opportunity to grow capital and enhance earnings. The Guaranty 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 $875.1 million, including $574.6 million in non-purchased credit-impaired (non-PCI) loans, $114.5 million in purchased credit-impaired (PCI) loans and $9.9 million in core deposit intangibles. Liabilities assumed were $982.7 million, of which $982.3 million were deposits. The total gain on the transaction was $122.7 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 | $ | 48,824 |
Overnight investments | 94,134 |
Investment securities | 12,140 |
Loans | 689,086 |
Premises and equipment | 8,603 |
Other real estate owned | 55 |
Income earned not collected | 6,720 |
Intangible assets | 9,870 |
Other assets | 5,693 |
Total assets acquired | 875,125 |
Liabilities |
Deposits | 982,307 |
Other liabilities | 440 |
Total liabilities assumed | 982,747 |
Fair value of net liabilities assumed | (107,622 | )
Cash received from FDIC | 226,233 |
Due from FDIC | 4,117 |
Gain on acquisition of Guaranty | $ | 122,728 |
Merger-related expenses of $6.7 million from the Guaranty transaction were recorded in the Consolidated Statements of Income for the three and six months ended June 30, 2017. Loan-related interest income generated from Guaranty was approximately $4.9 million during the second quarter 2017. Based on such factors as past due status, nonaccrual status, loan-to-value, credit scores and credit risk ratings, the acquired loans were divided into loans with evidence of credit quality deterioration, which are accounted for under ASC 310-30 (included in PCI loans), and loans that do not meet this criteria, which are accounted for under ASC 310-20 (included in non-PCI loans). Harvest Community Bank On January 13, 2017, FCB entered into an agreement with the FDIC, as Receiver, to purchase certain assets and assume certain liabilities of Harvest Community Bank (HCB) of Pennsville, New Jersey. The acquisition provides FCB with the opportunity to grow capital and enhance earnings. The HCB 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 $111.6 million, including $85.1 million in purchased credit-impaired (PCI) loans and $850 thousand in core deposit intangibles. Liabilities assumed were $121.8 million of which the majority were deposits. As a result of the transaction, FCB recorded a gain on the acquisition of $12.0 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 | $ | 3,350 |
Overnight investments | 7,478 |
Investment securities | 14,455 |
Loans | 85,149 |
Income earned not collected | 31 |
Intangible assets | 850 |
Other assets | 237 |
Total assets acquired | 111,550 |
Liabilities |
Deposits | 121,755 |
Other liabilities | 74 |
Total liabilities assumed | 121,829 |
Fair value of net liabilities assumed | (10,279 | )
Cash received from FDIC | 22,296 |
Gain on acquisition of HCB | $ | 12,017 |
Merger-related expenses were immaterial for the three months ended June 30, 2017 and $698 thousand were recorded in the Consolidated Statements of Income for the six months ended June 30, 2017. Loan-related interest income generated from HCB was approximately $1.8 million and $2.8 million for the three and six months ended June 30, 2017, respectively. All loans resulting from the HCB transaction were recorded at the acquisition date with a discount attributable, at least in part, to credit quality deterioration, and are therefore accounted for as PCI under ASC 310-30.

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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 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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- References No definition available. + Details
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