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Business Combinations | 12 Months Ended
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Dec. 31, 2019
Business Combinations [Abstract] |
Business Combinations | BUSINESS COMBINATIONS FCB has evaluated the financial statement significance for all business combinations completed during 2019 and 2018. FCB has concluded the completed business combinations noted below are not material to BancShares’ consolidated financial statements, individually or in aggregate, and therefore, pro forma financial data has not been included. Each 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 value becomes available. As of December 31, 2019, there have been no refinements to the fair value of assets acquired and liabilities assumed. As part of the accounting for each acquisition, we perform an analysis of the acquired bank’s loan portfolio. Based on such credit factors as past due status, nonaccrual status, life-to-date charge-offs and other quantitative and qualitative considerations, the acquired loans were separated into PCI loans with evidence of credit deterioration since origination, which are accounted for under ASC 310-30, and non-PCI loans that do not meet this criteria, which are accounted for under ASC 310-20. Community Financial Holding Co. Inc. On February 1, 2020, FCB completed the merger of Duluth, Georgia-based Community Financial Holding Co. Inc. (“Community Financial”) and its bank subsidiary, Gwinnett Community Bank. Under the terms of the agreement, total cash consideration of $2.3 million was paid to the shareholders of Community Financial. The merger allows FCB to expand its presence and enhance banking efforts in Georgia. As of December 31, 2019, Community Financial reported $224.0 million in consolidated assets, $136.9 million in loans, and $211.8 million in deposits. Entegra Financial Corp. On December 31, 2019, FCB completed the merger of Franklin, North Carolina-based Entegra Financial Corp. (“Entegra”) and its bank subsidiary, Entegra Bank. Under the terms of the agreement, cash consideration of $30.18 per share was paid to the shareholders of Entegra for each share of common stock totaling approximately $222.8 million. The merger allows FCB to expand its presence and enhance banking efforts in western North Carolina. The fair value of the assets acquired was $1.68 billion, including $953.7 million in non-PCI loans, $77.5 million in PCI loans and $4.5 million in a core deposit intangible. Liabilities assumed were $1.51 billion, of which $1.33 billion were deposits. As a result of the transaction, FCB recorded $52.6 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 expected to result from the acquisition. None of the goodwill is deductible for income tax purposes as the merger was accounted for as a qualified stock purchase. FCB was required to agree to divest certain branches, other assets and liabilities in order to obtain regulatory approval for the transaction. FCB and Select Bank & Trust Company (“Select Bank”) have entered into an agreement for Select Bank to purchase North Carolina branches, located in Highlands, Sylva and Franklin. The branch sales are anticipated to close in 2020. The assets and liabilities of the branches to be divested are recorded on the Consolidated Balance Sheets and in the related Notes to the Consolidated Financial Statements within loans and leases, premises and equipment and total deposits with a fair value of $106.4 million, $2.3 million, and $186.4 million, respectively as of December 31, 2019. 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 |  |  |  | $ | 222,750 |
Assets |  |  |  |
Cash and due from banks |  | $ | 59,815 |  |  |
Overnight investments |  | 242,770 |  |  |
Investment securities |  | 227,834 |  |  |
Loans |  | 1,031,186 |  |  |
Premises and equipment |  | 24,458 |  |  |
Other real estate owned |  | 1,846 |  |  |
Income earned not collected |  | 5,447 |  |  |
Intangible assets |  | 6,899 |  |  |
Other assets |  | 81,069 |  |  |
Total assets acquired |  | 1,681,324 |  |  |
Liabilities |  |  |  |
Deposits |  | 1,326,967 |  |  |
Borrowings |  | 169,433 |  |  |
Other liabilities |  | 14,808 |  |  |
Total liabilities assumed |  | $ | 1,511,208 |  |  |
Fair value of net assets acquired |  |  |  | 170,116 |
Goodwill recorded for Entegra |  |  |  | $ | 52,634 |
Merger-related expenses of $5.4 million from the Entegra transaction were recorded in the Consolidated Statement of Income for the year ended December 31, 2019. Entegra assets generated no loan-related interest income for the year ended December 31, 2019. 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 and enhance banking efforts in South Carolina. The fair value of the assets acquired was $239.2 million, including $162.8 million in non-PCI loans, $16.4 million in 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 expected to result from the acquisition. None of the goodwill is deductible for income tax purposes as the merger was 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 |  |  |  | $ | 37,486 |
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 $4.1 million from the First South Bancorp transaction were recorded in the Consolidated Statement of Income for the year ended December 31, 2019. Loan-related interest income generated from First South Bancorp was approximately $6.1 million since the acquisition date. 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 allows FCB to expand its presence in Florida and enhance banking efforts in South Florida. The fair value of the assets acquired was $1.03 billion, including $850.4 million in non-PCI loans, $13.0 million in 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 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. 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 |  |  |
Accrued interest payable | — |  |  |
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 $5.8 million were recorded in the Consolidated Statement of Income for the year ended December 31, 2019. Loan-related interest income generated from Biscayne Bancshares was approximately $33.8 million since the acquisition date. Palmetto Heritage Bancshares, Inc. On November 1, 2018, FCB completed the merger of Pawleys Island, South Carolina-based Palmetto Heritage Bancshares, Inc. (“Palmetto Heritage”) and its subsidiary, Palmetto Heritage Bank & Trust, into FCB. The Palmetto Heritage 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 were subject to refinement for up to one year after the closing date of the acquisition. The measurement period ended on October 31, 2019, with no material changes to the original calculated fair values. The fair value of the assets acquired was $162.2 million, including $131.3 million in non-PCI loans, $3.9 million in PCI loans and $1.7 million in a core deposit intangible. Liabilities assumed were $149.3 million, of which $124.9 million were deposits. As a result of the transaction, FCB recorded $17.5 million of goodwill. The amount of goodwill represents the excess purchase price over the estimated fair value of the net assets acquired. Merger-related expenses of $0.6 million and $0.5 million from the Palmetto Heritage transaction were recorded in the Consolidated Statements of Income for the years ended December 31, 2019 and 2018, respectively. Loan-related interest income generated from Palmetto Heritage was approximately $5.6 million and $1.2 million for the years ended December 31, 2019 and 2018, respectively. Capital Commerce Bancorp, Inc. On October 2, 2018, FCB completed the merger of Milwaukee, Wisconsin-based Capital Commerce Bancorp, Inc. (“Capital Commerce”) and its subsidiary, Securant Bank & Trust, into FCB. The Capital Commerce 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 were subject to refinement for up to one year after the closing date. The measurement period ended on October 1, 2019, with no material changes to the original calculated fair values. The fair value of the assets acquired was $221.9 million, including $173.4 million in non-PCI loans, $10.8 million in PCI loans and $2.7 million in a core deposit intangible. Liabilities assumed were $204.5 million, of which $172.4 million were deposits. As a result of the transaction, FCB recorded $10.7 million of goodwill. Merger-related expenses of $0.7 million and $1.2 million from the Capital Commerce transaction were recorded in the Consolidated Statements of Income for the years ended December 31, 2019 and 2018, respectively. Loan-related interest income generated from Capital Commerce was approximately $8.1 million and $3.2 million for the years ended December 31, 2019 and 2018, respectively. HomeBancorp, Inc. On May 1, 2018, FCB completed the merger of Tampa, Florida-based HomeBancorp, Inc. (“HomeBancorp”) and its subsidiary, HomeBanc, into FCB. The HomeBancorp 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 were subject to refinement for up to one year after the closing date. The measurement period ended on April 30, 2019, with no material changes to the original calculated fair values. The fair value of the assets acquired was $842.7 million, including $550.6 million in non-PCI loans, $15.6 million in PCI loans and $9.9 million in a core deposit intangible. Liabilities assumed were $787.7 million, of which $619.6 million were deposits. As a result of the transaction, FCB recorded $57.6 million of goodwill. Merger-related expenses of $0.1 million and $2.3 million from the HomeBancorp transaction were recorded in the Consolidated Statements of Income for the years ended December 31, 2019 and 2018, respectively. Loan-related interest income generated from HomeBancorp was approximately $21.4 million and $17.4 million for the years ended December 31, 2019 and 2018, respectively.

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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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