Mergers and Acquisitions

12 Months Ended

Dec. 31, 2016

Business Combinations [Abstract]

Mergers and Acquisitions

NOTE 2. MERGERS AND ACQUISITIONS

On September 9, 2016, WesBanco completed its acquisition of Your Community Bankshares, Inc. (“YCB”), and its wholly-owned banking subsidiary, Your Community Bank (“YCB Bank”), an Indiana state-chartered commercial bank headquartered in New Albany, Indiana. The transaction expanded WesBanco’s franchise into Kentucky and southern Indiana.

On the acquisition date, YCB had approximately $1.5 billion in assets, excluding goodwill, which included approximately $1.0 billion in loans, and $173.2 million in securities. The YCB acquisition was valued at $220.5 million, based on WesBanco’s closing stock price on September 9, 2016 of $32.62, and resulted in WesBanco issuing 5,423,348 shares of its common stock and $43.3 million in cash in exchange for all of the outstanding shares of YCB common stock. The assets and liabilities of YCB were recorded on WesBanco’s balance sheet at their preliminary estimated fair value as of September 9, 2016, the acquisition date, and YCB’s results of operations have been included in WesBanco’s Consolidated Statements of Income since that date. Due to the timing of the acquisition relative to the end of the reporting period, the fair values for certain assets and liabilities acquired from YCB on September 9, 2016 represent preliminary estimates. Based on a preliminary purchase price allocation, WesBanco recorded $92.9 million in goodwill and $12.0 million in core deposit intangibles in its Community Banking segment, representing the principal change in goodwill and intangibles from December 31, 2015. None of the goodwill is deductible for income tax purposes as the acquisition is accounted for as a tax-free exchange for tax purposes. As a result of the full integration of the operations of YCB, it is not practicable to determine revenue or net income included in WesBanco’s operating results relating to YCB since the date of acquisition, as YCB’s results cannot be separately identified.

For the twelve months ended December 31, 2016, WesBanco recorded merger-related expenses of $13.3 million associated with the YCB acquisition.

The purchase price of the YCB acquisition and resulting goodwill is summarized as follows:

(in thousands)	September 9, 2016
Purchase Price:
Fair value of WesBanco shares issued	$	177,149
Cash consideration for outstanding YCB shares		43,349
Total purchase price	$	220,498
Fair value of:
Tangible assets acquired	$	1,398,596
Core deposit and other intangible assets acquired		11,957
Liabilities assumed		(1,331,156	)
Net cash received in the acquisition		48,212
Fair value of net assets acquired		127,609
Goodwill recognized	$	92,889

The following table presents the preliminary allocation of the purchase price of the assets acquired and the liabilities assumed at the date of acquisition, as WesBanco intends to finalize its accounting for the acquisition of YCB within one year from the date of acquisition:

(in thousands)	September 9, 2016
Assets acquired
Cash and due from banks	$	48,212
Securities		173,223
Loans		1,013,566
Goodwill and other intangible assets		104,846
Accrued income and other assets (1)		211,807
Total assets acquired	$	1,551,654
Liabilities assumed
Deposits	$	1,193,010
Borrowings		123,001
Accrued expenses and other liabilities		15,145
Total liabilities assumed		1,331,156
Net assets acquired	$	220,498

(1) Includes receivables of $105.8 million from the sale of available-for-sale securities prior to the acquisition date.

The following table presents the changes in the preliminary allocation of the purchase price of the assets acquired and the liabilities assumed at the date of the acquisition previously reported as of September 30, 2016:

(in thousands)	September 9, 2016
Change in fair value of net assets acquired:
Assets
Loans	$	(1,505	)
Accrued income and other assets		31
Liabilities
Borrowings		(184	)
Accrued expenses and other liabilities		(637	)
Fair value of net assets acquired		(2,295	)
Additional goodwill recognized	$	2,295
Goodwill recognized as of September 30, 2016		90,594
Goodwill recognized as of December 31, 2016	$	92,889

The fair value estimates for loans, properties, deferred taxes, borrowings and other liabilities have continued to fluctuate as the final valuations and/or appraisals are completed. The Company expects to finalize the purchase accounting of YCB within one year of the date of the acquisition.