Business Combinations (Tables)

3 Months Ended

Mar. 31, 2020

Summary of Assets Acquired and Liabilities Assumed and Their Initial Fair Value Estimates

The following table summarizes the fair values of the assets acquired and the liabilities assumed at the date of the acquisition for Capital Bank, net of total consideration paid (in thousands):



	At January 31, 2019
	Fair Value
Total Purchase Price:	$	76,834
Assets acquired:
Cash and cash equivalents	$	59,748
Securities	103,775
Loans	307,300
Accrued interest receivable	1,390
Bank Owned Life Insurance	10,460
Deferred tax asset	4,101
Other assets	4,980
Core deposit intangible	2,662
Total assets acquired	494,416
Liabilities assumed:
Deposits	(449,018		)
Other liabilities	(5,210		)
Total liabilities assumed	(454,228		)
Net assets acquired	$	40,188
Goodwill recorded in the merger	$	36,646

The following table summarizes the estimated fair values of the assets acquired and the liabilities assumed at the date of the acquisition for Country Bank, net of total consideration paid (in thousands):



	At January 1, 2020
	Country Bank Book Value			Purchase Accounting Adjustments			Estimated Fair Value
Total Purchase Price:							$	112,836
Assets acquired:
Cash and cash equivalents	$	20,799		$	—		$	20,799
Securities	144,460			39			144,499
Loans	614,285			4,376			618,661
Accrued interest receivable	1,779			—			1,779
Deferred tax asset	(3,254		)	(897		)	(4,151		)
Other assets	10,327			(1,134		)	9,193
Core deposit intangible	—			2,117			2,117
Total assets acquired	788,396			4,501			792,897
Liabilities assumed:
Deposits	(649,399		)	(3,254		)	(652,653		)
Other liabilities	(69,244		)	1,980			(67,264		)
Total liabilities assumed	(718,643		)	(1,274		)	(719,917		)
Net assets acquired	$	69,753		$	3,227		$	72,980
Goodwill recorded in the merger							$	39,856

The following table summarizes the estimated fair values of the assets acquired and the liabilities assumed at the date of the acquisition for Two River, net of total consideration paid (in thousands):



	At January 1, 2020
	Two River Book Value			Purchase Accounting Adjustments			Estimated Fair Value
Total Purchase Price:							$	197,050
Assets acquired:
Cash and cash equivalents	$	51,102		$	—		$	51,102
Securities	62,832			1,549			64,381
Loans	940,885			(49		)	940,836
Accrued interest receivable	2,382			—			2,382
Bank Owned Life Insurance	22,440			—			22,440
Deferred tax asset	5,201			(1,850		)	3,351
Other assets	18,662			(2,700		)	15,962
Core deposit intangible	—			12,130			12,130
Total assets acquired	1,103,504			9,080			1,112,584
Liabilities assumed:
Deposits	(939,132		)	(2,618		)	(941,750		)
Other liabilities	(58,935		)	(21		)	(58,956		)
Total liabilities assumed	(998,067		)	(2,639		)	(1,000,706		)
Net assets acquired	$	105,437		$	6,441		$	111,878
Goodwill recorded in the merger							$	85,172

Business Acquisition, Pro Forma Information

The following table presents financial information regarding the former Two River and Country Bank operations included in the Consolidated Statements of Income from the date of the acquisition (January 1, 2020) through March 31, 2020. The table also presents financial information regarding the former Capital Bank operations included in the Consolidated Statements of Income from the date of the acquisition (January 31, 2019) through March 31, 2020. In addition, the table provides unaudited condensed pro forma financial information assuming the Two River, Country Bank, and Capital Bank acquisitions had been completed as of January 1, 2019 for the three months ended March 31, 2019. The table below has been prepared for comparative purposes only and is not necessarily indicative of the actual results that would have been attained had the acquisition occurred as of the beginning of the periods presented, nor is it indicative of future results. Furthermore, the unaudited pro forma information does not reflect management’s estimate of any revenue-enhancing opportunities nor anticipated cost savings or the impact of conforming certain accounting policies of the acquired company to the Company’s policies that may have occurred as a result of the integration and consolidation of Two River, Country Bank, and Capital Bank’s operations. The pro forma information shown reflects adjustments related to certain purchase accounting fair value adjustments; amortization of core deposit and other intangibles; and related income tax effects.



(in thousands)	Two River Actual for Three Months Ended March 31, 2020			Country Bank Actual for Three Months Ended March 31, 2020		Capital Bank Actual from February 1, 2019 to March 31, 2019			Pro forma Three Months Ended March 31, 2019
Net interest income	$	10,650		$	6,507	$	3,172		$	84,302
Credit loss expense	210			126		70			1,095
Non-interest income	558			162		199			10,963
Non-interest expense	11,630			5,488		6,439			58,535
Provision (benefit) for income taxes	(167		)	589		(6		)	6,506
Net income	$	(465	)	$	466	$	(3,132	)	$	29,129
Fully diluted earnings per share									$	0.47