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Acquisitions and Divestitures
 9 Months Ended
Sep. 30, 2016
Acquisitions and Divestitures

Note 2. Acquisitions and Divestitures

First Bank

On July 15, 2016, the Company completed the previously announced branch exchange with First Bank, North Carolina, pursuant to which the Bank exchanged a portion of its North Carolina branch network for First Bank’s Virginia branch network. Under the agreements, the Bank simultaneously sold six branches in the Winston-Salem and Mooresville areas of North Carolina and acquired seven branches in Southwestern Virginia. The branch acquisition complements the Company’s 2014 acquisition of seven branches from Bank of America by expanding the Company’s existing presence in Southwest Virginia and affords the opportunity to realize certain operating cost savings. The Company incurred expenses related to the First Bank transaction of $226 thousand for the three months ended September 30, 2016, and $675 thousand for the nine months ended September 30, 2016. The estimated fair values, including identifiable intangible assets, are preliminary and subject to refinement for up to one year after the closing date of the acquisition. See “Acquisition” and “Divestiture” below for additional transaction details.

Acquisition

On July 15, 2016, the Company completed the acquisition of seven branches in Southwestern Virginia from First Bank. The consideration transferred included the net fair value of certain assets and liabilities divested, see “Divestiture” below, plus a premium paid of $3.84 million. The Company did not acquire any purchased credit-impaired loans as a result of the branch acquisition.

The following table summarizes the fair value of assets purchased and liabilities assumed:

 

(Amounts in thousands)       

Assets

   

Loans receivable

    $ 149,122   

Premises and equipment

      4,829   

Goodwill and other intangible assets

      6,288   

Other assets

      448   
  

 

 

  

Total assets purchased

    $ 160,687   
  

 

 

  

Liabilities

   

Deposits

    $ 134,307   

Other liabilities

      75   
  

 

 

  

Total liabilities assumed

    $ 134,382   
  

 

 

  

Divestiture

On July 15, 2016, the Company completed the exchange of six branches in the Winston-Salem and Mooresville areas of North Carolina to First Bank. At closing, the Company divested certain assets and liabilities at fair value and received a premium of $4.07 million. The Company recorded a net gain of $3.07 million in connection with the divestiture and reversed $1.35 million in the allowance for loan losses related to divested loans. The Company received $24.82 million in cash in connection with the First Bank transaction.

The following table summarizes the fair value of assets and liabilities divested:

 

(Amounts in thousands)       

Assets

   

Loans receivable

    $ 155,538   

Premises and equipment

      3,861   

Goodwill and other intangible assets

      2,326   

Other assets

      443   
  

 

 

  

Total assets divested

    $ 162,168   
  

 

 

  

Liabilities

   

Deposits

    $ 111,019   

Other liabilities

      28   
  

 

 

  

Total liabilities divested

    $ 111,047