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Acquisitions and Divestitures
 12 Months Ended
Dec. 31, 2014
Acquisitions and Divestitures
Note 2. Acquisitions and Divestitures

Peoples Bank of Virginia

On May 31, 2012, the Company completed the acquisition of Peoples, based in Richmond, Virginia. Peoples, a full service community bank, operated four branches throughout the Richmond area. At acquisition, Peoples had total assets of $275.76 million, loans of $184.84 million, and deposits of $232.75 million. The purchase price was $40.28 million, including common stock valued at $26.47 million and cash consideration of $12.26 million. The Company issued 2,157,005 shares of common stock with an estimated fair value of $12.27 per share. Each outstanding share of Peoples was exchanged for $6.08 in cash and 1.07 shares of the Company’s common stock. The Company recorded goodwill of $10.32 million from the acquisition.

Waccamaw Bank

On June 8, 2012, the Company entered into a purchase and assumption agreement with loss share arrangements with the FDIC to purchase certain assets and assume substantially all deposits and certain liabilities of Waccamaw, headquartered in Whiteville, North Carolina. Waccamaw, a full service community bank, operated sixteen branches throughout North Carolina and South Carolina. At acquisition, Waccamaw had total assets of $500.64 million, loans of $318.35 million, and deposits of $414.13 million. Under the loss share agreements, the FDIC covers 80% of most loan and foreclosed real estate losses. The Company recorded an indemnification asset of $49.76 million at acquisition representing the present value of estimated losses on covered assets to be reimbursed by the FDIC. The Company recorded goodwill of $10.62 million from the acquisition.

Bank of America

On October 24, 2014, the Company completed the acquisition of seven branches from Bank of America, National Association. At acquisition, the branches had total deposits of $318.88 million. The Company assumed the deposits for a premium of $5.79 million. No loans were included in the purchase. Additionally, the Company purchased the real estate or assumed the leases associated with the branches. The acquisition expands the Company’s presence by six branches in Southwestern Virginia and one branch in Central North Carolina.

CresCom Bank

On December 12, 2014, the Company completed the sale of thirteen branches to CresCom Bank (“CresCom”), Charleston, South Carolina. The divestiture consisted of ten branches in the Southeastern, Coastal region of North Carolina and three branches in South Carolina, all of which were previously acquired in the FDIC-assisted acquisition of Waccamaw. At closing, CresCom assumed total deposits of $215.19 million and total loans of $70.04 million. The transaction excluded loans covered under FDIC loss share agreements. The Company recorded a net gain of $755 thousand in connection with the divestiture, which included a deposit premium received from CresCom of $6.45 million and goodwill allocation of $6.45 million.

Insurance Services

In 2013 the Company issued cash consideration of $150 thousand to purchase one agency. The acquisition terms call for further cash consideration of $253 thousand if certain operating targets are met. The fair value of these payments was booked at acquisition and added $324 thousand of goodwill and other intangibles to the Company’s consolidated balance sheet as of December 31, 2013.

Acquisitions that occurred before 2009 call for issuing further cash consideration if certain operating targets are met. If those targets are met, the value of the consideration will be added to the cost of the acquisition. Earn-out payments related to these acquisitions totaled $353 thousand in 2014, $442 thousand in 2013, and $692 thousand in 2012.

 

Net Cash Paid (Received) in Acquisitions and Divestitures

The following table presents the components of net cash acquired, or paid, in acquisitions and divestitures, an investing activity in the Company’s statements of cash flows, in the periods indicated:

 

     Year Ended December 31,  
(Amounts in thousands)    2014          2013          2012  

Acquisitions

         

Fair value of assets and liabilities acquired:

         

Investments

    $ —         $ —         $ 62,919   

Loans

      140         281         419,320   

Premises and equipment

      4,547         —           7,535   

Other assets

      4,563         —           255,924   

Deposits

      (318,877 )       —           (649,184 ) 

Other liabilities

      (76 )       —           (60,085 ) 

Purchase price in excess of net assets acquired

      1,721         663         21,810   
  

 

 

     

 

 

     

 

 

  

Total purchase price

      (307,982 )       944         58,239   

Non-cash purchase price

      —           247         26,469   

Cash acquired

      —           —           184,053   
  

 

 

     

 

 

     

 

 

  

Net cash (received) paid in acquisitions

      (307,982 )       697         (152,283 ) 

Divestitures

         

Book value of assets sold

      (83,283 )       —           —     

Book value of liabilities sold

      215,268         —           —     

Sales price in excess of net liabilities assumed

      (755 )       —           —     
  

 

 

     

 

 

     

 

 

  

Total sales price

      131,230         —           —     

Cash sold

      (1,852 )       —           —     
  

 

 

     

 

 

     

 

 

  

Net cash paid (received) in divestitures

      129,378         —           —     
  

 

 

     

 

 

     

 

 

  

Net cash (received) paid in acquisitions and divestitures

    $ (178,604 )     $ 697       $ (152,283 )