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Note 2 - Business Acquisitions | 6 Months Ended
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Jun. 30, 2019
Notes to Financial Statements |
Business Combination Disclosure [Text Block] | ( 2 ) Business Acquisition s Acquisition of Albany, Georgia Branch from Planters First Bank On October 22, 2018, the Bank completed its acquisition of one branch office and a vacant lot from Planters First Bank (“PFB”) located in Albany, Georgia for a total cash consideration of $10.2 million. The assets and liabilities as of the effective date of the transaction were recorded at their respective estimated fair values. The excess of the purchase price over the net estimated fair values of the acquired assets and liabilities was allocated to identifiable intangible assets with the remaining excess allocated to goodwill. In the periods following the acquisition, the financial statements will include the results attributable to the Albany branch purchase beginning on the date of purchase. For the three and six months period ended June 30, 2019, the revenues attributable to the Albany branch were $58 thousand and $129 thousand, respectively. For the three and six months period ended June 30, 2019, net loss attributable to the Albany branch were $85 thousand and $159 thousand. It is impracticable to determine the pro-forma impact to the 2018 revenues and net income if the acquisition had occurred on January 1, 2018 as the Bank does not have access to those records for a single branch. The following table provides the purchase price as of acquisition date, the identifiable assets acquired and liabilities assumed at their estimated fair values, and the resulting goodwill of $202 thousand recorded from the acquisition:
Purchase Price Consideration (in thousands) : |  |  |  |
Cash Consideration |  | $ | 10,238 |
Total purchase price for PFB branch acquisition |  | $ | 10,238 |
Assets acquired at fair value: |  |  |  |
Cash and cash equivalents |  | $ | 195 |
Loans |  |  | 20,430 |
Premises and equipment |  |  | 773 |
Core deposit intangible |  |  | 560 |
Other assets |  |  | 123 |
Total fair value of assets acquired |  | $ | 22,081 |
Liabilities assumed at fair value: |  |  |  |
Deposits |  | $ | 12,032 |
Other liabilities |  |  | 13 |
Total fair value of liabilities assumed |  | $ | 12,045 |
Net Assets acquired at fair value: |  | $ | 10,036 |
Amount of goodwill resulting from acquisition |  | $ | 202 |
The total amount of goodwill arising from this transaction of $202 thousand is deductible for tax purposes, pursuant to section 197 of the Internal Revenue Code. The Bank recorded all loans acquired at the estimated fair value on the purchase date with no carryover of the related allowance for loan losses. The Bank only acquired loans which were deemed to be performing loans with no signs of credit deterioration. Acquisition of LBC Bancshares, Inc. On May 1, 2019, the Company completed its acquisition of LBC Bancshares, Inc. (“LBC”), a bank holding company headquartered in LaGrange, Georgia. Upon consummation of the acquisition, LBC was merged with and into the Company, with Colony as the surviving entity in the merger. At that time, LBC’s wholly owned bank subsidiary, Calumet Bank, was also merged with and into the Bank. The acquisition expanded the Company’s market presence, as Calumet Bank had two full-service banking locations, one each in LaGrange, Georgia and Columbus, Georgia, as well as a loan production office in Atlanta, Georgia. Under the terms of the Merger Agreement, each LBC shareholder had the option to receive either $23.50 in cash or 1.3239 shares of the Company’s Common Stock in exchange for each share of LBC common stock, subject to customary proration and location procedures, such that 55 percent of LBC shares received the stock consideration and 45 percent received the cash consideration, and at least 50 percent of the merger consideration paid in the Company stock. As a result, the Company issued 1,054,029 common shares at a fair value of $18.7 million and paid $15.3 million in cash to the former shareholders of LBC as merger consideration. The merger is being accounted for using the acquisition method accounting, in accordance with the provisions of FASB ASC 805 - 10 Business Combinations. Under this guidance, for accounting purposes, the Company is considered the acquirer in the merger, and as a result the historical financial statements of the combined entity are the historical consolidated financial statements of the Company. The merger was effected by the issuance of shares of the Company’s common stock along with cash consideration to shareholders to LBC. The assets and liabilities of LBC as of the effective date of the merger were recorded at their respective estimated fair values and combined with those of the Company. The excess of the purchase price over the net estimated fair values of the acquired assets and liabilities was allocated to identifiable intangible assets with the remaining excess allocated to goodwill. Goodwill from the transaction was $15,390, none of which is deductible for income tax purposes. The goodwill recognized from the acquisition with LBC was created based on the consideration paid by the Company for enhancing its presence in Georgia in addition to our expected synergies from the combined operations of the Company and LBC. In periods following the merger, the financial statements of the combined entity will include the results attributable to LBC beginning on the date the merger was completed. In the three and six month period ended June 30, 2019, the revenues attributable to LBC were approximately $1.77 million and $1.77 million. In the three and six month period ended June 30, 2019, the net income attributable to LBC was approximately $501 thousand and $501 thousand, respectively. The pro-forma impact to 2018 revenues if the merger had occurred on January 1, 2018 would have been $2.35 million and $4.61 million for the three and six month period ending June 30, 2018, respectively. The pro-forma impact to 2018 net income if the merger had occurred on December 31, 2017 would have been $610 thousand and $1.15 million for the three and six month period ending June 30, 2018, respectively. While certain adjustments were made for the estimated impact of certain fair value adjustments, they are not indicative of what would have occurred had the merger taken place on the indicated date nor are they intended to represent or be indicative of future results of operations. In particular, no adjustments have been made to eliminate the amount of LBC’s provision for credit losses not have been necessary or any adjustments to estimate any additional income that would have been recorded as a result of fair value adjustments for the first six months of 2018 that may have occurred had the acquired loans been recorded at fair value as of the beginning of 2018. In addition, there are no adjustments to reflect any expenses that potentially could have been reduced for the first six months of 2018 had the merger occurred on January 1, 2018. As of June 30, 2019, the Company recorded a preliminary allocation of the purchase price to LBC’s tangible and identifiable intangible assets acquired and liabilities assumed based on estimated fair values as of May 1, 2019. The following table presents the assets acquired and liabilities assumed as of May 1, 2019, and their fair value estimates. The Company continues its evaluation of the facts and circumstances available as of May 1, 2019, to assign fair values to assets acquired and liabilities assumed which could result in further adjustments to the fair values presented below.
Purchase Price Consideration (in thousands): |  |  |  |
Shares of CBAN Common Stock Issued to LBC Shareholders as of May 1, 2019 |  |  | 1,054,029 |
Market Price of CBAN Common Stock on May 1, 2019 |  | $ | 17.75 |
Estimated Fair Value of CBAN Common Stock Issued |  |  | 18,709 |
Cash Consideration Paid |  |  | 15,312 |
Total Consideration |  | $ | 34,021 |
Assets acquired at fair value: |  |  |  |
Cash and Cash Equivalents |  | $ | 15,678 |
Investments Securities Available for Sale |  |  | 49,172 |
Investments Securities Held to Maturity |  |  | 1,766 |
Restricted Investments |  |  | 479 |
Loans |  |  | 130,568 |
Premises and Equipment |  |  | 3,009 |
Core Deposit Intangible |  |  | 3,100 |
Other Real Owned |  |  | 243 |
Prepaid and Other Assets |  |  | 6,487 |
Total Fair Value of Assets Acquired |  | $ | 210,502 |
Liabilities Assumed at Fair Value: |  |  |  |
Deposits |  | $ | (189,896 | )
FHLB Advances |  |  | (1,000 | )
Payables and Other Liabilities |  |  | (975 | )
Total Fair Value of Liabilities Assumed |  | $ | (191,871 | )
Net Assets Acquired at Fair Value: |  | $ | 18,631 |
Amount of Goodwill Resulting From Acquisition |  | $ | 15,390 |
In the acquisition, the Company purchased $130.57 million of loans at fair value, net of $2.17 million, or 1.63%, estimated discount to the outstanding principal balance. Of the total loans acquired, management identified $176 thousand that were considered to be credit impaired and are accounted for under ASC Topic 310 - 30. The table below summarizes the total contractually required principal and interest cash payments, management’s estimate of expected total cash payments and fair value of the loans as of the acquisition date for purchased credit impaired loans. Contractually required principal and interest payments have been adjusted for estimated prepayments.
Contractually Required Principal and Interest |  | $ | 695 |
Non-accretable Difference |  |  | (519 | )
Cash Flows Expected to be Collected |  |  | 176 |
Accretable Yield |  |  | - |
Total Purchased Credit-Impaired Loans Acquired |  | $ | 176 |
The following table presents the acquired loan data for the LBC acquisition.
|  | Fair Value of Acquired Loans at Acquisition Date |  |  | Gross Contractual Amounts Receivable at Acquisition Date |  |  | Estimate at Acquisition Date of Contractual Cash Flows Not Expected to be Collected |
Acquired receivables subject to ASC 310-30 |  | $ | 176 |  |  | $ | 695 |  |  | $ | 519 |
Acquired receivables not subject to ASC 310-30 |  | $ | 130,392 |  |  | $ | 132,381 |  |  | $ | - |
Acquisition of PFB Mortgage from Planters First Bank On May 1, 2019, the Bank completed its acquisition of PFB Mortgage, the secondary market mortgage business of Planters First Bank for a total cash consideration of $833 thousand. It included fixed assets and all pipeline loans, and customers will not be affected as loans will close and be processed as normal. Planters First Bank retained closed loans not yet sold (loans held for sale). The assets and liabilities as of the effective date of the transaction were recorded at their respective estimated fair values. The excess of the purchase price over the net estimated fair values of the acquired assets and liabilities was allocated to identifiable intangible assets with the remaining excess allocated to goodwill. In the periods following the acquisition, the financial statements will include the results attributable to PFB Mortgage beginning on the date of purchase. For the three and six months period ended June 30, 2019, the revenues attributable to PFB Mortgage were $228 thousand and $228 thousand, respectively. For the three and six months period ended June 30, 2019, net loss attributable to PFB Mortgage were $211 thousand and $211 thousand. It is impracticable to determine the pro-forma impact to the 2018 revenues and net income if the acquisition had occurred on January 1, 2018 as the Bank does not have access to those records for PFB Mortgage. The following table provides the purchase price as of acquisition date, the identifiable assets acquired and liabilities assumed at their estimated fair values, and the resulting goodwill of $541 thousand recorded from the acquisition:
Purchase Price Consideration (in thousands): |  |  |  |
Cash Consideration Paid |  | $ | 833 |
Total Consideration |  | $ | 833 |
Assets acquired at fair value: |  |  |  |
Premises and Equipment |  | $ | 78 |
Premium on Loan Commitments |  |  | 209 |
Other Assets |  |  | 5 |
Total Fair Value of Assets Acquired |  | $ | 292 |
Liabilities Assumed at Fair Value: |  |  |  |
Total Fair Value of Liabilities Assumed |  | $ | - |
Net Assets Acquired at Fair Value: |  | $ | 292 |
Amount of Goodwill Resulting From Acquisition |  | $ | 541 |
The total amount of goodwill arising from this transaction of $541 thousand is deductible for tax purposes, pursuant to section 197 of the Internal Revenue Code.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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