XML 38 R26.htm IDEA: XBRL DOCUMENT
v3.19.2

ACQUISITIONS (Tables) | 6 Months Ended
--- | ---
Jun. 30, 2019
Business Combinations [Abstract] |
Summary of Assets Acquired and Liabilities Assumed and Fair Value Adjustments | The following table provides a summary of the assets acquired and liabilities assumed and the associated fair value adjustments as recorded by the Company at acquisition:
(in thousands) |  | As Acquired |  | Fair Value Adjustments |  | As Recorded by the Company
Consideration Paid: |  |  |  |  |  |
Company common stock issued to SIFI common shareholders | $ | 175,804 |
Fair value of SIFI stock options converted to Berkshire options |  |  |  |  |  | 907 |
Cash in lieu paid to SIFI shareholders |  |  |  |  |  | 14 |
Total consideration paid |  |  |  |  |  | $ | 176,725 |
Recognized amounts of identifiable assets acquired and (liabilities) assumed, at fair value:
Cash and short-term investments |  | $ | 110,774 |  |  | $ | — |  |  | $ | 110,774 |
Investment securities |  | 144,629 |  |  | (1,261 | ) | (a) | 143,368 |
Loans held for sale |  | 1,005 |  |  | — |  |  | 1,005 |
Loans, net |  | 1,332,127 |  |  | (29,388 | ) | (b) | 1,302,739 |
Premises and equipment |  | 19,039 |  |  | (2,092 | ) | (c) | 16,947 |
Core deposit intangibles |  | — |  |  | 17,980 |  | (d) | 17,980 |
Deferred tax assets, net |  | 6,629 |  |  | 10,607 |  | (e) | 17,236 |
Goodwill and other intangibles |  | 16,063 |  |  | (16,063 | ) | (f) | — |
Other assets |  | 60,648 |  |  | (341 | ) |  | 60,307 |
Deposits |  | (1,327,115 | ) |  | (7,733 | ) | (g) | (1,334,848 | )
Borrowings |  | (154,726 | ) |  | 1,717 |  | (h) | (153,009 | )
Other liabilities |  | (33,987 | ) |  | (8,166 | ) | (i) | (42,153 | )
Total identifiable net assets |  | $ | 175,086 |  |  | $ | (34,740 | ) |  | $ | 140,346 |
Goodwill |  |  |  |  |  | 36,379 |
_____________________________________ Explanation of Certain Fair Value Adjustments:
(a) | The adjustment represents the write down of the book value of securities to their estimated fair value at the date of acquisition.
(b) | The adjustment represents the write-off of $15.6 million in allowance for loan and lease losses and the write down of the book value of loans to their estimated fair value based on interest rates and expected cash flows as of the acquisition date, which includes an estimate of expected loan loss inherent in the portfolio. Loans with evidence of credit deterioration at acquisition are accounted for under ASC 310-30 and had a book value of $55.8 million and had a fair value of $32.1 million, including a $4.2 million fair value adjustment that is accretable in earnings. Non-impaired loans accounted for under ASC 310-20 had a book value of $1.29 billion and have a fair value of $1.27 billion, including a $6.7 million fair value adjustment discount that is amortized over the remaining term of the loans using the effective interest method, or a straight-line method if the loan is a revolving credit facility.
(c) | The adjustment represents a decreased fair value based on the appraised value of Savings Institute’s owned branches comprised of $1.1 million for land. This is in addition to a $1.0 million reduction of the book value of furniture, fixtures, and equipment, to their estimated fair value and the immediate expensing of equipment not meeting the thresholds for capitalization in accordance with Company policy. The adjustments will be depreciated over the remaining estimated economic lives of the assets.
(d) | The adjustment represents the value of the core deposit base assumed in the acquisition. The core deposit asset was recorded as an identifiable intangible asset and will be amortized over the estimated useful life of the deposit base (10 years).
(e) | Represents net deferred tax assets resulting from the fair value adjustments related to the acquired assets and liabilities, identifiable intangibles, and other purchase accounting adjustments.
(f) | Represents the write-off of goodwill and intangible assets from a prior SIFI acquisition.
(g) | The adjustment is necessary because the weighted average interest rate of time deposits exceeded the cost of similar funding at the time of acquisition. The amount will be amortized over the estimated useful life of eleven months.
(h) | Adjusts borrowings by a reduction of $0.8 million to their estimated fair value, which is calculated based on current market rates. This is in addition to a $0.9 million reduction to the estimated fair value for the SI Capital Trust II, which is calculated based on the amount an institution would be willing to purchase the instrument at in the open market.
(i) Adjusts the book value of other liabilities to their estimated fair value at the acquisition date. The adjustment consists of a $7.6 million increase to post-retirement liabilities due to change-in-control provisions, a $0.8 million increase in bank-owned life insurance liabilities, offset by a decrease of $0.4 to the unfunded commitment reserve.
Summary of Provisional Information about the Savings Institute Acquired Loan Portfolio | Provisional information about the Savings Institute acquired loan portfolio subject to ASC 310-30 as of May 17, 2019 is as follows (in thousands):
|  | ASC 310-30 Loans
Gross contractual receivable amounts at acquisition |  | $ | 55,754 |
Contractual cash flows not expected to be collected (nonaccretable discount) |  | (19,427 | )
Expected cash flows at acquisition |  | 36,327 |
Interest component of expected cash flows (accretable discount) |  | (4,200 | )
Fair value of acquired loans |  | $ | 32,127 |
Summary of Pro Forma Information | Information in the following table is shown in thousands, except earnings per share:
|  | Pro Forma (unaudited) Six Months Ended June 30,
|  | 2019 |  | 2018
Net interest income |  | $ | 195,624 |  |  | $ | 202,709 |
Non-interest income |  | 43,732 |  |  | 44,228 |
Income available to common shareholders |  | 60,357 |  |  | 67,666 |

X
- Definition Tabular disclosure of pro forma results of operations for a material business acquisition or series of individually immaterial business acquisitions that are material in the aggregate. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (h)(2) -URI http://asc.fasb.org/extlink&oid=79982066&loc=d3e1392-128463 Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (h)(3) -URI http://asc.fasb.org/extlink&oid=79982066&loc=d3e1392-128463 + Details
Name: | us-gaap_BusinessAcquisitionProFormaInformationTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_BusinessCombinationsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the reconciliation of contractual cash flows to the carrying amount relating to certain loans acquired in a transfer. + References No definition available. + Details
Name: | us-gaap_CertainLoansAcquiredInTransferNotAccountedForAsDebtSecuritiesAcquiredDuringPeriodTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the amounts recognized as of the acquisition date for each major class of assets acquired and liabilities assumed. May include but not limited to the following: (a) acquired receivables; (b) contingencies recognized at the acquisition date; and (c) the fair value of noncontrolling interests in the acquiree. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=116869197&loc=d3e4845-128472 + Details
Name: | us-gaap_ScheduleOfRecognizedIdentifiedAssetsAcquiredAndLiabilitiesAssumedTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration