Business Combination

12 Months Ended

Dec. 31, 2016

Business Combination

Business Combination

Note 3. Business Combination

Acquisition of Mission Community Bancorp

On February 28, 2014, the Company acquired 100% of the outstanding common shares of Mission Community Bancorp ("MISN") and all unexercised warrants and options to purchase MISN common stock were cancelled, in exchange for 7,541,326 shares of the Company's common stock and $8.7 million in cash (the "MISN Transaction"). Through the MISN Transaction, the Company acquired $453.7 million in assets, including $280.6 million in loans, and assumed $384.7 million in liabilities, including $371.5 million in deposits. The MISN Transaction was valued at $69.0 million. In conjunction with the MISN Transaction, MISN's wholly-owned bank subsidiary, Mission Community Bank, was merged with and into Heritage Oaks Bank.

The following table presents unaudited pro forma information as if the MISN Transaction had occurred on January 1, 2013, which includes the pre-acquisition period for MISN. The unaudited pro forma information includes adjustments for interest income on loans and securities acquired, amortization of intangibles arising from the transaction, depreciation expense on property acquired, interest expense on deposits and borrowings acquired, and the related income tax effects. The unaudited pro forma financial information is not necessarily indicative of the results of operations that would have occurred had the transaction been effected on the assumed date.

	For the Year Ended December 31, 2014
		(dollars in thousands, except per share data)
Net interest income	$	61,185
Provision for loan and lease losses		–
Non-interest income		10,189
Non-interest expense		58,227
Income before income taxes		13,147
Income tax expense		4,553
Net income	$	8,594
Earnings Per Common Share
Basic	$	0.25
Diluted	$	0.25