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Business Combinations | 9 Months Ended
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Sep. 30, 2019
Business Combinations [Abstract] |
Business Combinations | BUSINESS COMBINATIONS Community Financial Holding Co. Inc. On September 24, 2019, FCB and Community Financial Holding Co. Inc. (Community Financial) entered into a definitive merger agreement for the acquisition by FCB of Duluth, Georgia-based Community Financial and its bank subsidiary, Gwinnett Community Bank. Under the terms of the agreement, total cash consideration of $2.3 million will paid to the shareholders of Community Financial. The transaction is anticipated to close during the first quarter of 2020, subject to the receipt of regulatory approvals and the satisfaction of other customary closing conditions. As of September 30, 2019, Community Financial reported $223.5 million in consolidated assets, $211.3 million in deposits and $147.0 million in loans. Entegra Financial Corp. On April 23, 2019, FCB and Entegra Financial Corp. (Entegra) entered into a definitive merger agreement for the acquisition by FCB of Franklin, North Carolina-based Entegra and its bank subsidiary, Entegra Bank. Under the terms of the agreement, cash consideration of $30.18 per share will be paid to the shareholders of Entegra for each share of common stock and for each restricted stock unit after conversion to common stock, and each option to purchase Entegra common stock will be canceled and each option holder will receive a cash payment. The total transaction value is estimated to be approximately $219.8 million. The transaction is anticipated to close during the fourth quarter of 2019 or first quarter of 2020, subject to the receipt of regulatory approvals and the satisfaction of other customary closing conditions. FCB will be required to divest certain branches or other assets and liabilities in order to obtain regulatory approval for the transactions contemplated by the merger agreement. Any divestiture plan is subject to approval by the Federal Reserve Board in conjunction with the Department of Justice and has not been finalized as of the date of this filing. As of September 30, 2019, Entegra Bank reported $1.70 billion in total assets, $1.28 billion in deposits and $1.09 billion in loans. First South Bancorp, Inc. On May 1, 2019, FCB completed the merger of Spartanburg, South Carolina-based First South Bancorp, Inc. (First South Bancorp) and its bank subsidiary, First South Bank. Under the terms of the agreement, cash consideration of $1.15 per share was paid to the shareholders of First South Bancorp for each share of common stock, totaling approximately $37.5 million. The merger allows FCB to expand its presence in South Carolina. The First South Bancorp 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 $239.2 million, including $162.8 million in non-purchased credit impaired (non-PCI) loans, $16.4 million in purchased credit impaired (PCI) loans and $2.3 million in a core deposit intangible. Liabilities assumed were $215.6 million, of which $207.6 million were deposits. As a result of the transaction, FCB recorded $13.9 million of goodwill. The amount of goodwill represents the excess purchase price over the estimated fair value of the net assets acquired. The premium paid reflects the increased market share and related synergies that are expected to result from the acquisition. None of the goodwill was deductible for income tax purposes as the merger was accounted for as a qualified stock purchase. Based on such credit factors as past due status, nonaccrual status, loan-to-value, credit scores, and other quantitative and qualitative considerations, the acquired loans were separated into loans with evidence of credit deterioration, which are accounted for under ASC 310-30 (PCI loans), and loans that do not meet this criteria, which are accounted for under ASC 310-20 (non-PCI loans). 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 |  |  | $ | 37,486 |
Assets |  |  |
Cash and due from banks | $ | 4,633 |  |  |
Overnight investments | 3,188 |  |  |
Investment securities | 23,512 |  |  |
Loans | 179,243 |  |  |
Premises and equipment | 4,944 |  |  |
Other real estate owned | 1,567 |  |  |
Income earned not collected | 604 |  |  |
Intangible assets | 2,268 |  |  |
Other assets | 19,192 |  |  |
Total assets acquired | 239,151 |  |  |
Liabilities |  |  |
Deposits | 207,556 |  |  |
Borrowings | 5,155 |  |  |
Other liabilities | 2,850 |  |  |
Total liabilities assumed | $ | 215,561 |  |  |
Fair value of net assets acquired |  |  | 23,590 |
Goodwill recorded for First South Bancorp |  |  | $ | 13,896 |
Merger-related expenses of $2.5 million and $3.9 million were recorded in the Consolidated Statements of Income for the three and nine months ended September 30, 2019, respectively. Loan-related interest income generated from First South Bancorp was approximately $4.0 million since the acquisition date. The ongoing contributions of this transaction to BancShares' financial statements is not considered material, and therefore pro forma financial data is not included. Biscayne Bancshares, Inc. On April 2, 2019, FCB completed the merger of Coconut Grove, Florida-based Biscayne Bancshares, Inc. (Biscayne Bancshares) and its bank subsidiary, Biscayne Bank. Under the terms of the agreement, cash consideration of $25.05 per share was paid to the shareholders of Biscayne Bancshares for each share of common stock, totaling approximately $118.9 million. The merger will allow FCB to expand its presence in Florida and enhance banking efforts in South Florida. The Biscayne Bancshares 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 $1.03 billion, including $850.4 million in non-purchased credit impaired (non-PCI) loans, $13.0 million in purchased credit impaired (PCI) loans and $4.7 million in a core deposit intangible. Liabilities assumed were $956.8 million, of which $786.5 million were deposits. As a result of the transaction, FCB recorded $46.5 million of goodwill. The amount of goodwill represents the excess purchase price over the estimated fair value of the net assets acquired. The premium paid reflects the increased market share and related synergies that are expected to result from the acquisition. None of the goodwill was deductible for income tax purposes as the merger was accounted for as a qualified stock purchase. Based on such credit factors as past due status, nonaccrual status, loan-to-value, credit scores, and other quantitative and qualitative considerations, the acquired loans were separated into loans with evidence of credit deterioration, which are accounted for under ASC 310-30 (PCI loans), and loans that do not meet this criteria, which are accounted for under ASC 310-20 (non-PCI loans). 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 |  |  | $ | 118,949 |
Assets |  |  |
Cash and due from banks | $ | 78,010 |  |  |
Overnight investments | 306 |  |  |
Investment securities held to maturity | 34,539 |  |  |
Loans | 863,384 |  |  |
Premises and equipment | 1,533 |  |  |
Other real estate owned | 2,046 |  |  |
Income earned not collected | 3,049 |  |  |
Intangible assets | 4,745 |  |  |
Other assets | 41,572 |  |  |
Total assets acquired | 1,029,184 |  |  |
Liabilities |  |  |
Deposits | 786,512 |  |  |
Borrowings | 157,415 |  |  |
Other liabilities | 12,829 |  |  |
Total liabilities assumed | $ | 956,756 |  |  |
Fair value of net assets acquired |  |  | 72,428 |
Goodwill recorded for Biscayne Bancshares |  |  | $ | 46,521 |
Merger-related expenses of $0.6 million and $3.5 million were recorded in the Consolidated Statements of Income for the three and nine months ended September 30, 2019, respectively. Loan-related interest income generated from Biscayne Bancshares was approximately $22.6 million since the acquisition date. The ongoing contributions of this transaction to BancShares' financial statements is not considered material, and therefore pro forma financial data is not included.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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