Business Combinations and Divestitures (Tables)

9 Months Ended

Sep. 30, 2018

Summary of Assets Held for Sale and Consideration Received and Gain on Sale

A summary of the carrying amount of the assets in the Disposal Group and the gain on sale is as follows:

(Dollars in thousands)
Carrying amount of assets in the disposal group:
Loans	$	70,147
Premises and equipment, net		19
Goodwill		1,457
Intangible assets, net		958
Other assets		197
Total carrying amount		72,778
Total consideration received		74,017
Gain on sale of division		1,239
Transaction costs		168
Gain on sale of division, net of transaction costs	$	1,071

Triumph Capital Advisors, LLC

Business Acquisition [Line Items]

Summary of Assets Held for Sale and Consideration Received and Gain on Sale

A summary of the consideration received and the gain on sale is as follows:

(Dollars in thousands)
Consideration received (fair value):
Cash	$	10,554
Loan receivable		10,500
Revenue share		1,623
Total consideration received		22,677
Carrying value of TCA membership interest		1,417
Gain on sale of subsidiary or division		21,260
Transaction costs		400
Gain on sale of subsidiary or division, net of transaction costs	$	20,860

First Bancorp of Durango, Inc. And Southern Colorado Corp.

Business Acquisition [Line Items]

Summary of Fair Values of the Identifiable Assets Acquired and Liabilities Assumed

A summary of the estimate fair values of assets acquired, liabilities assumed, consideration transferred, and the resulting goodwill is as follows:

(Dollars in thousands)	FBD		SCC		Total
Assets acquired:
Cash and cash equivalents	$	151,973	$	14,299	$	166,272
Securities		237,183		33,477		270,660
Loans held for sale		1,238		—		1,238
Loans		256,384		31,454		287,838
FHLB stock		786		129		915
Premises and equipment		7,495		840		8,335
Other real estate owned		213		—		213
Intangible assets		11,915		2,154		14,069
Other assets		2,730		403		3,133
		669,917		82,756		752,673
Liabilities assumed:
Deposits		601,194		73,464		674,658
Federal Home Loan Bank advances		737		—		737
Other liabilities		1,313		64		1,377
		603,244		73,528		676,772
Fair value of net assets acquired		66,673		9,228		75,901
Cash consideration transferred		134,667		13,294		147,961
Goodwill	$	67,994	$	4,066	$	72,060

Summary of Acquired Loans

In connection with the acquisitions, the Company acquired loans both with and without evidence of credit quality deterioration since origination. The acquired loans were initially recorded at fair value with no carryover of any allowance for loan and lease losses. Acquired loans were segregated between those considered to be purchased credit impaired (“PCI”) loans and those without credit impairment at acquisition. The following table presents details of the estimated fair value of acquired loans at the acquisition date:

	Loans Excluding PCI Loans						PCI Loans						Total Loans
(Dollars in thousands)	FBD		SCC		Total		FBD		SCC		Total		Acquired
Commercial real estate	$	140,955	$	11,894	$	152,849	$	832	$	200	$	1,032	$	153,881
Construction, land development, land		13,949		5,229		19,178		3,081		—		3,081		22,259
1-4 family residential properties		59,228		10,180		69,408		75		—		75		69,483
Farmland		5,709		1,207		6,916		—		—		—		6,916
Commercial		26,125		2,121		28,246		1,020		—		1,020		29,266
Factored receivables		—		—		—		—		—		—		—
Consumer		5,410		623		6,033		—		—		—		6,033
Mortgage warehouse		—		—		—		—		—		—		—
	$	251,376	$	31,254	$	282,630	$	5,008	$	200	$	5,208	$	287,838

Schedule of Loans Acquired in Business Combination

The following presents information at the acquisition date for non-PCI loans acquired in the transactions:

(Dollars in thousands)	FBD		SCC		Total
Contractually required principal and interest payments	$	318,674	$	38,590	$	357,264
Contractual cash flows not expected to be collected	$	4,255	$	550	$	4,805
Fair value at acquisition	$	251,376	$	31,254	$	282,630

The following presents information at the acquisition date for PCI loans acquired in the transactions:

(Dollars in thousands)	FBD		SCC		Total
Contractually required principal and interest payments	$	10,511	$	269	$	10,780
Contractual cash flows not expected to be collected (nonaccretable difference)		2,570		5		2,575
Expected cash flows at acquisition		7,941		264		8,205
Interest component of expected cash flows (accretable yield)		2,933		64		2,997
Fair value of loans acquired with deterioration of credit quality	$	5,008	$	200	$	5,208

Schedule of Supplemental Pro Forma Information on Acquisition

The following table presents supplemental pro forma information for the three and nine months ended September 30, 2018 and 2017 as if the FBD and SCC acquisitions had occurred at the beginning of 2017. The supplemental pro forma information includes adjustments for interest income on loans acquired, depreciation expense on property acquired, amortization of intangibles arising from the transactions, and the related income tax effects. Additionally, because FBD and SCC were Subchapter S corporations before the acquisitions and did not incur any federal income tax liabilities, adjustments have been included to estimate the impact of federal income taxes on FBD and SCC’s net income for the periods presented. The supplemental pro forma financial information is not necessarily indicative of the results of operations that would have occurred had the transactions been completed on the assumed date.

	Three months ended September 30, 2018						Three months ended September 30, 2017
(Dollars in thousands)	FBD		SCC		Total		FBD		SCC		Total
Net interest income	$	65,694	$	62,269	$	66,181	$	44,683	$	40,147	$	45,318
Noninterest income	$	7,167	$	6,159	$	7,267	$	5,404	$	4,260	$	5,493
Net income	$	8,371	$	8,578	$	7,778	$	10,595	$	9,804	$	10,617
Basic earnings per common share	$	0.31	$	0.32	$	0.29	$	0.44	$	0.48	$	0.43
Diluted earnings per common share	$	0.31	$	0.32	$	0.29	$	0.43	$	0.47	$	0.43

	Nine months ended September 30, 2018						Nine months ended September 30, 2017
(Dollars in thousands)	FBD		SCC		Total		FBD		SCC		Total
Net interest income	$	176,441	$	163,916	$	178,188	$	125,098	$	111,756	$	126,966
Noninterest income	$	19,679	$	16,618	$	20,121	$	40,072	$	37,028	$	40,442
Net income	$	34,179	$	33,458	$	34,013	$	32,291	$	30,065	$	32,441
Basic earnings per common share	$	1.31	$	1.35	$	1.30	$	1.42	$	1.55	$	1.40
Diluted earnings per common share	$	1.30	$	1.33	$	1.28	$	1.39	$	1.51	$	1.37

Interstate Capital Corporation

Business Acquisition [Line Items]

Summary of Fair Values of the Identifiable Assets Acquired and Liabilities Assumed

A summary of the estimated fair values of assets acquired, liabilities assumed, consideration transferred, and the resulting goodwill is as follows:

(Dollars in thousands)
Assets acquired:
Cash and cash equivalents	$	75
Factored receivables		131,017
Premises and equipment		279
Intangible assets		13,920
Other assets		144
		145,435
Liabilities assumed:
Deposits		7,389
Other liabilities		763
		8,152
Fair value of net assets acquired		137,283
Consideration:
Cash paid		160,258
Contingent consideration		20,000
Total consideration		180,258
Goodwill	$	42,975

Valley Bancorp, Inc.

Business Acquisition [Line Items]

Summary of Fair Values of the Identifiable Assets Acquired and Liabilities Assumed

A summary of the estimated fair values of assets acquired, liabilities assumed, consideration transferred, and the resulting goodwill is as follows:

(Dollars in thousands)
Assets acquired:
Cash and cash equivalents	$	38,473
Securities		97,687
Loans		171,199
FHLB stock		315
Premises and equipment		6,238
Other real estate owned		2,282
Intangible assets		6,072
Bank-owned life insurance		7,153
Other assets		1,882
		331,301
Liabilities assumed:
Deposits		293,398
Junior subordinated debentures		5,470
Other liabilities		2,881
		301,749
Fair value of net assets acquired		29,552
Consideration transferred		40,075
Goodwill	$	10,523

Summary of Acquired Loans

In connection with the acquisition, the Company acquired loans both with and without evidence of credit quality deterioration since origination. The acquired loans were initially recorded at fair value with no carryover of any allowance for loan and lease losses. Acquired loans were segregated between those considered to be purchased credit impaired (“PCI”) loans and those without credit impairment at acquisition. The following table presents details of the estimated fair value of acquired loans at the acquisition date:

	Loans,
	Excluding		PCI		Total
(Dollars in thousands)	PCI Loans		Loans		Loans
Commercial real estate	$	73,273	$	254	$	73,527
Construction, land development, land		19,770		1,199		20,969
1-4 family residential properties		26,264		—		26,264
Farmland		16,934		—		16,934
Commercial		31,893		—		31,893
Factored receivables		—		—		—
Consumer		1,612		—		1,612
Mortgage warehouse		—		—		—
	$	169,746	$	1,453	$	171,199

Independent Bank - Colorado Branches

Business Acquisition [Line Items]

Summary of Fair Values of the Identifiable Assets Acquired and Liabilities Assumed

A summary of the estimated fair values of assets acquired, liabilities assumed, consideration transferred, and the resulting goodwill is as follows:

(Dollars in thousands)
Assets acquired:
Cash and cash equivalents	$	1,611
Loans		95,794
Premises and equipment		7,524
Intangible assets		3,255
Other assets		1,644
		109,828
Liabilities assumed:
Deposits		160,702
Other liabilities		249
		160,951
Fair value of net assets acquired		(51,123	)
Cash received from seller, net of $6,771 deposit premium		45,306
Goodwill	$	5,817

Summary of Acquired Loans

The following table presents details of the estimated fair value of acquired loans at the acquisition date:

(Dollars in thousands)
Commercial real estate	$	13,382
Construction, land development, land		537
1-4 family residential properties		6,986
Farmland		31,490
Commercial		43,104
Factored receivables		—
Consumer		295
Mortgage warehouse		—
	$	95,794