Business Combinations (Tables)

6 Months Ended

Jun. 30, 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
		Estimated Fair Value
Total Purchase Price:		$	112,836
Assets acquired:
Cash and cash equivalents		$	20,799
Securities		144,499
Loans		618,408
Accrued interest receivable		1,779
Deferred tax asset		(3,922		)
Other assets		8,390
Core deposit intangible		2,117
Total assets acquired		792,070
Liabilities assumed:
Deposits		(652,653		)
Other liabilities		(67,226		)
Total liabilities assumed		(719,879		)
Net assets acquired		$	72,191
Goodwill recorded in the merger		$	40,645

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
		Estimated Fair Value
Total Purchase Price:		$	197,050
Assets acquired:
Cash and cash equivalents		$	51,102
Securities		64,381
Loans		940,072
Accrued interest receivable		2,382
Bank Owned Life Insurance		22,440
Deferred tax asset		3,577
Other assets		15,956
Core deposit intangible		12,130
Total assets acquired		1,112,040
Liabilities assumed:
Deposits		(941,750		)
Other liabilities		(59,002		)
Total liabilities assumed		(1,000,752		)
Net assets acquired		$	111,288
Goodwill recorded in the merger		$	85,762

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 June 30, 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 June 30, 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 six months ended June 30, 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 Six Months Ended June 30, 2020		Country Bank Actual for Six Months Ended June 30, 2020		Capital Bank Actual from February 1, 2019 to June 30, 2019			Pro forma Six Months Ended June 30, 2019
Net interest income	$	21,051	$	13,209	$	8,043		$	167,068
Credit loss expense	553		331		175			1,651
Non-interest income	1,127		284		557			22,200
Non-interest expense	18,696		9,146		9,180			121,240
Provision (benefit) for income taxes	708		816		(189		)	12,605
Net income (loss)	$	2,221	$	3,200	$	(566	)	$	53,772
Fully diluted earnings per share								$	0.87