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Acquisition of a Business | 12 Months Ended
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Dec. 31, 2017
Business Combinations [Abstract] |
Acquisition of a Business | Note 3—Acquisition of a Business On October 14, 2016, the Company acquired stock of Ridgestone Financial Services, Inc. (“Ridgestone”) and its subsidiaries under the terms of a definitive merger agreement (“Agreement”) dated June 9, 2016. Ridgestone operated two wholly-owned subsidiaries, Ridgestone Bank and RidgeStone Capital Trust I, and specialized in government guaranteed lending as a participant in the SBA and USDA lending programs. Ridgestone provided financial services through its two full-service banking offices in Brookfield, Wisconsin and Schaumburg, Illinois. In addition, Ridgestone had loan production offices located in Wisconsin (Green Bay and Wausau), Indiana (Indianapolis) and California (Newport Beach). Under the terms of the Agreement, each Ridgestone common share was converted into the right to receive, at the election of the shareholder (subject to proration as outlined in the Agreement), either cash or Company common stock, or the combination of both. Total consideration included aggregate cash in the amount of $36.8 million and the issuance of 4,199,791 shares of the Company’s common stock valued at $16.25 per common share. The transaction resulted in goodwill of $26.3 million, which is nondeductible for tax purposes, as this acquisition was a nontaxable transaction. Goodwill represents the premium paid over the fair value of the net tangible and intangible assets acquired and reflects related synergies expected from the combined operations. Acquisition advisory expenses related to the Ridgestone acquisition of $1.6 million are reflected in non‑interest expense on the Consolidated Statements of Operations. Stock issuance costs were not material. There were no contingent assets or liabilities arising from the acquisition. The acquisition of Ridgestone was accounted for using the acquisition method of accounting in accordance with ASC Topic 805. Assets acquired, liabilities assumed and consideration exchanged were recorded at their respective acquisition date fair values. Determining the fair value of assets and liabilities involves significant judgment regarding methods and assumptions used to calculate estimated fair values. The fair value adjustments associated with this transaction were finalized during the fourth quarter of 2017 and required no measurement period adjustments during 2017. Note 3—Acquisition of a Business (continued) The following table presents a summary of the estimates of fair values of assets acquired and liabilities assumed as of the acquisition date:
Assets |  |  |  |
Cash and cash equivalents |  | $ | 25,480 |
Securities available-for-sale |  |  | 27,662 |
Restricted stock |  |  | 931 |
Loans held for sale |  |  | 15,363 |
Loans |  |  | 351,820 |
Servicing assets |  |  | 20,295 |
Premises and equipment |  |  | 2,011 |
Other real estate owned |  |  | 1,525 |
Other intangible assets |  |  | 486 |
Bank-owned life insurance |  |  | 2,352 |
Other assets |  |  | 8,228 |
Total assets acquired |  | $ | 456,153 |
Liabilities |  |  |  |
Deposits |  | $ | 361,370 |
Federal Home Loan Bank advances |  |  | 9,773 |
Junior subordinated debentures |  |  | 1,339 |
Accrued expenses and other liabilities |  |  | 4,958 |
Total liabilities assumed |  |  | 377,440 |
Net assets acquired |  | $ | 78,713 |
Consideration paid |  |  |  |
Common stock (4,199,791 shares issued at $16.25 per share) |  | $ | 68,247 |
Cash paid |  |  | 36,753 |
Total consideration paid |  |  | 105,000 |
Goodwill |  | $ | 26,287 |
The following table presents the acquired non-impaired loans as of the acquisition date:
Fair value |  | $ | 312,166 |
Gross contractual amounts receivable |  |  | 450,292 |
Estimate of contractual cash flows not expected to be collected(1) |  |  | 19,661 |
Estimate of contractual cash flows expected to be collected |  |  | 430,631 |
(1) | Includes interest payments not expected to be collected due to loan prepayments as well as principal and interest payments not expected to be collected due to customer default.
The discount on the acquired non-impaired loans is being accreted into income over the life of the loans on an effective yield basis. Note 3—Acquisition of a Business (continued) The following table provides the pro forma information for the results of operations for the years ended December 31, 2016 and 2015, as if the acquisition had occurred on January 1, 2015. The pro forma results combine the historical results of Ridgestone into the Company’s Consolidated Statements of Operations, including the impact of certain acquisition accounting adjustments, which includes loan discount accretion, intangible assets amortization, deposit premium accretion and borrowing net discount amortization. The pro forma results have been prepared for comparative purposes only and are not necessarily indicative of the results that would have been obtained had the acquisition actually occurred on January 1, 2015. No assumptions have been applied to the pro forma results of operations regarding possible revenue enhancements, provision for credit losses, expense efficiencies or asset dispositions. The acquisition-related expenses that have been recognized are included in net income (loss) in the following table.
|  | Years ended December 31, |
|  | 2016 |  |  | 2015 |
Total revenues (net interest income and non-interest income) |  | $ | 171,059 |  |  | $ | 151,054 |
Net income (loss) |  | $ | 82,252 |  |  | $ | (1,437 | )
Earnings per share—basic |  | $ | 3.54 |  |  | $ | (0.07 | )
Earnings per share—diluted |  | $ | 3.50 |  |  | $ | (0.07 | )
The operating results of the Company include the operating results produced by the acquired assets and assumed liabilities of Ridgestone for period from October 15, 2016 through December 31, 2017. Revenues and earnings of the acquired company since the acquisition date have not been disclosed as it is not practicable as Ridgestone was merged into the Company and separate financial information is not readily available.

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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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