Exhibit 99.5
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
The following unaudited pro forma condensed combined financial data for Triumph Bancorp, Inc. (“Triumph” or the “Company”), First Bancorp of Durango, Inc. (“FBD”) and Southern Colorado Corp. (“SCC”), have been prepared to reflect the acquisitions of FBD and SCC by the Company, which were effective on September 8, 2018. The unaudited pro forma combined balance sheets as of June 30, 2018 give effect to the acquisitions as if they occurred on that date. The unaudited pro forma combined statements of income for the six months ended June 30, 2018 and the year ended December 31, 2017 give effect to the acquisitions as if they occurred on January 1, 2017.
The unaudited pro forma combined financial statements have been prepared using the acquisition method of accounting for business combinations under U.S. GAAP. The Company is the acquirer for accounting purposes. Under this method of accounting, the assets and liabilities of FBD and SCC were recorded by the Company at their estimated fair values, with the excess cost over the fair value of FBD’s and SCC’s net assets recorded as goodwill. The Company is currently in the process of obtaining fair values for certain assets and assumed liabilities; therefore, the following estimates are preliminary. Certain reclassifications have been made to the historical financial statements of FBD and SCC to conform to the presentation in the Company’s financial statements.
The following unaudited pro forma combined statements of income do not include the effects of any non-recurring costs associated with any restructuring or integration activities resulting from the acquisitions that had not yet been recorded at June 30, 2018, as they are non-recurring in nature and not factually supportable at this time.
The unaudited pro forma combined financial statements are provided for informational purposes only and are not necessarily, and should not be assumed to be, an indication of the results that would have been achieved had the transaction been completed as of the dates indicated or that may be achieved in the future. The preparation of the unaudited pro forma combined financial statements and related adjustments required management to make certain assumptions and estimates. The unaudited pro forma combined financial information is based on, and should be read together with:
| • | The accompanying notes to the unaudited pro forma combined financial statements; |
| • | The Company’s audited consolidated financial statements and accompanying notes as of and for the year ended December 31, 2017, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017; |
| • | FBD’s audited consolidated financial statements and accompanying notes as of and for the year ended December 31, 2017, included as Exhibit 99.1 in this Current Report on Form 8-K/A; |
| • | SCC’s audited consolidated financial statements and accompanying notes as of and for the year ended December 31, 2017, included as Exhibit 99.2 in this Current Report on Form 8-K/A; |
| • | The Company’s unaudited consolidated financial statements and accompanying notes as of and for the six months ended June 30, 2018, included in the Company’s Quarterly Report on Form 10-Q for the six months ended June 30, 2018; |
| • | FBD’s unaudited consolidated financial statements and accompanying notes as of and for the six months ended June 30, 2018, included as Exhibit 99.3 in this Current Report on Form 8-K/A; and |
| • | SCC’s unaudited consolidated financial statements and accompanying notes as of and for the six months ended June 30, 2018, included as Exhibit 99.4 in this Current Report on Form 8-K/A. |
UNAUDITED PRO FORMA COMBINED BALANCE SHEETS
June 30, 2018
(Dollar amounts in thousands)
|
|
|
|
|
|
|
|
| FBD Pro forma |
|
|
|
| FBD Pro forma |
|
|
|
|
|
| SCC Pro forma |
|
|
|
| SCC Pro forma |
|
| Total Pro forma |
| ||||||
|
| Triumph |
|
| FBD |
|
| Adjustments(1) |
|
|
|
| Combined |
|
| SCC |
|
| Adjustments(1) |
|
|
|
| Combined |
|
| Combined |
| ||||||||
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
| $ | 133,365 |
|
| $ | 85,952 |
|
| $ | (134,667 | ) |
| A |
| $ | 84,650 |
|
| $ | 11,374 |
|
| $ | (13,294 | ) |
| A |
| $ | 131,445 |
|
| $ | 82,730 |
|
Securities - available for sale |
|
| 183,184 |
|
|
| 256,434 |
|
|
| — |
|
|
|
|
| 439,618 |
|
|
| 34,258 |
|
|
| — |
|
|
|
|
| 217,442 |
|
|
| 473,876 |
|
Securities - equity investments |
|
| 5,025 |
|
|
| — |
|
|
| — |
|
|
|
|
| 5,025 |
|
|
| — |
|
|
| — |
|
|
|
|
| 5,025 |
|
|
| 5,025 |
|
Securities - held to maturity |
|
| 8,673 |
|
|
| — |
|
|
| — |
|
|
|
|
| 8,673 |
|
|
| — |
|
|
| — |
|
|
|
|
| 8,673 |
|
|
| 8,673 |
|
Loans held for sale, at fair value |
|
| — |
|
|
| 2,019 |
|
|
| — |
|
|
|
|
| 2,019 |
|
|
| — |
|
|
| — |
|
|
|
|
| — |
|
|
| 2,019 |
|
Loans |
|
| 3,196,462 |
|
|
| 269,189 |
|
|
| (7,119 | ) |
| B |
|
| 3,458,532 |
|
|
| 35,578 |
|
|
| (490 | ) |
| B |
|
| 3,231,550 |
|
|
| 3,493,620 |
|
Allowance for loan and lease losses |
|
| (24,547 | ) |
|
| (3,859 | ) |
|
| 3,859 |
|
| C |
|
| (24,547 | ) |
|
| (746 | ) |
|
| 746 |
|
| C |
|
| (24,547 | ) |
|
| (24,547 | ) |
Loans, net of allowance for loan and lease losses |
|
| 3,171,915 |
|
|
| 265,330 |
|
|
| (3,260 | ) |
|
|
|
| 3,433,985 |
|
|
| 34,832 |
|
|
| 256 |
|
|
|
|
| 3,207,003 |
|
|
| 3,469,073 |
|
Federal Home Loan Bank and Federal Reserve Bank stock, at cost |
|
| 19,223 |
|
|
| 811 |
|
|
| — |
|
|
|
|
| 20,034 |
|
|
| 129 |
|
|
| — |
|
|
|
|
| 19,352 |
|
|
| 20,163 |
|
Premises and equipment, net |
|
| 68,313 |
|
|
| 12,909 |
|
|
| (5,128 | ) |
| D |
|
| 76,094 |
|
|
| 1,248 |
|
|
| (391 | ) |
| D |
|
| 69,170 |
|
|
| 76,951 |
|
Other real estate owned, net |
|
| 2,528 |
|
|
| 66 |
|
|
| 147 |
|
| E |
|
| 2,741 |
|
|
| — |
|
|
| — |
|
|
|
|
| 2,528 |
|
|
| 2,741 |
|
Goodwill |
|
| 86,668 |
|
|
| 2,119 |
|
|
| 65,155 |
|
| F |
|
| 153,942 |
|
|
| — |
|
|
| 3,390 |
|
| F |
|
| 90,058 |
|
|
| 157,332 |
|
Intangible assets, net |
|
| 31,109 |
|
|
| 17 |
|
|
| 11,898 |
|
| G |
|
| 43,024 |
|
|
| — |
|
|
| 2,154 |
|
| G |
|
| 33,263 |
|
|
| 45,178 |
|
Bank-owned life insurance |
|
| 40,168 |
|
|
| — |
|
|
| — |
|
|
|
|
| 40,168 |
|
|
| — |
|
|
| — |
|
|
|
|
| 40,168 |
|
|
| 40,168 |
|
Deferred tax assets, net |
|
| 8,810 |
|
|
| — |
|
|
| — |
|
|
|
|
| 8,810 |
|
|
| — |
|
|
| — |
|
|
|
|
| 8,810 |
|
|
| 8,810 |
|
Other assets |
|
| 35,650 |
|
|
| 3,168 |
|
|
| (185 | ) |
| H |
|
| 38,633 |
|
|
| 461 |
|
|
| (30 | ) |
| H |
|
| 36,081 |
|
|
| 39,064 |
|
Total assets |
| $ | 3,794,631 |
|
| $ | 628,825 |
|
| $ | (66,040 | ) |
|
|
| $ | 4,357,416 |
|
| $ | 82,302 |
|
| $ | (7,915 | ) |
|
|
| $ | 3,869,018 |
|
| $ | 4,431,803 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest bearing |
| $ | 561,033 |
|
| $ | 105,172 |
|
| $ | — |
|
|
|
| $ | 666,205 |
|
| $ | 25,535 |
|
| $ | — |
|
|
|
| $ | 586,568 |
|
| $ | 691,740 |
|
Interest bearing |
|
| 2,063,909 |
|
|
| 454,344 |
|
|
| — |
|
|
|
|
| 2,518,253 |
|
|
| 48,647 |
|
|
| — |
|
|
|
|
| 2,112,556 |
|
|
| 2,566,900 |
|
Total deposits |
|
| 2,624,942 |
|
|
| 559,516 |
|
|
| — |
|
|
|
|
| 3,184,458 |
|
|
| 74,182 |
|
|
| — |
|
|
|
|
| 2,699,124 |
|
|
| 3,258,640 |
|
Customer repurchase agreements |
|
| 10,509 |
|
|
| 446 |
|
|
| — |
|
|
|
|
| 10,955 |
|
|
| — |
|
|
| — |
|
|
|
|
| 10,509 |
|
|
| 10,955 |
|
Federal Home Loan Bank advances |
|
| 420,000 |
|
|
| 637 |
|
|
| — |
|
|
|
|
| 420,637 |
|
|
| — |
|
|
| — |
|
|
|
|
| 420,000 |
|
|
| 420,637 |
|
Subordinated notes |
|
| 48,878 |
|
|
| — |
|
|
| — |
|
|
|
|
| 48,878 |
|
|
| — |
|
|
| — |
|
|
|
|
| 48,878 |
|
|
| 48,878 |
|
Junior subordinated debentures |
|
| 38,849 |
|
|
| — |
|
|
| — |
|
|
|
|
| 38,849 |
|
|
| — |
|
|
| — |
|
|
|
|
| 38,849 |
|
|
| 38,849 |
|
Other liabilities |
|
| 44,228 |
|
|
| 1,902 |
|
|
| 284 |
|
| I |
|
| 46,414 |
|
|
| 205 |
|
|
| — |
|
|
|
|
| 44,433 |
|
|
| 46,619 |
|
Total liabilities |
|
| 3,187,406 |
|
|
| 562,501 |
|
|
| 284 |
|
|
|
|
| 3,750,191 |
|
|
| 74,387 |
|
|
| — |
|
|
|
|
| 3,261,793 |
|
|
| 3,824,578 |
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred Stock |
|
| 9,658 |
|
|
| — |
|
|
| — |
|
|
|
|
| 9,658 |
|
|
| — |
|
|
| — |
|
|
|
|
| 9,658 |
|
|
| 9,658 |
|
Common stock |
|
| 264 |
|
|
| 384 |
|
|
| (384 | ) |
| J |
|
| 264 |
|
|
| 160 |
|
|
| (160 | ) |
| J |
|
| 264 |
|
|
| 264 |
|
Additional paid-in-capital |
|
| 457,980 |
|
|
| 14,068 |
|
|
| (14,068 | ) |
| J |
|
| 457,980 |
|
|
| 5,370 |
|
|
| (5,370 | ) |
| J |
|
| 457,980 |
|
|
| 457,980 |
|
Treasury stock, at cost |
|
| (2,254 | ) |
|
| — |
|
|
| — |
|
|
|
|
| (2,254 | ) |
|
| — |
|
|
| — |
|
|
|
|
| (2,254 | ) |
|
| (2,254 | ) |
Retained earnings |
|
| 143,426 |
|
|
| 53,674 |
|
|
| (53,674 | ) |
| J |
|
| 143,426 |
|
|
| 2,654 |
|
|
| (2,654 | ) |
| J |
|
| 143,426 |
|
|
| 143,426 |
|
Note receivable for issuance of common stock |
|
| — |
|
|
| (469 | ) |
|
| 469 |
|
| J |
|
| — |
|
|
| — |
|
|
| — |
|
|
|
|
| — |
|
|
| — |
|
Accumulated other comprehensive income |
|
| (1,849 | ) |
|
| (1,333 | ) |
|
| 1,333 |
|
| J |
|
| (1,849 | ) |
|
| (269 | ) |
|
| 269 |
|
| J |
|
| (1,849 | ) |
|
| (1,849 | ) |
Total stockholders’ equity |
|
| 607,225 |
|
|
| 66,324 |
|
|
| (66,324 | ) |
|
|
|
| 607,225 |
|
|
| 7,915 |
|
|
| (7,915 | ) |
|
|
|
| 607,225 |
|
|
| 607,225 |
|
Total liabilities and stockholders' equity |
| $ | 3,794,631 |
|
| $ | 628,825 |
|
| $ | (66,040 | ) |
|
|
| $ | 4,357,416 |
|
| $ | 82,302 |
|
| $ | (7,915 | ) |
|
|
| $ | 3,869,018 |
|
| $ | 4,431,803 |
|
(1) See Note 3 of the Notes to the Unaudited Pro Forma Combined Financial Statements
UNAUDITED PRO FORMA COMBINED STATEMENTS OF INCOME
For the Six Months Ended June 30, 2018
(Dollar amounts in thousands, except per share amounts)
|
|
|
|
|
|
|
|
| FBD Pro forma |
|
|
|
| FBD Pro forma |
|
|
|
|
|
| SCC Pro forma |
|
|
|
| SCC Pro forma |
|
| Total Pro forma |
| ||||||
|
| Triumph |
|
| FBD |
|
| Adjustments(1) |
|
|
|
| Combined |
|
| SCC |
|
| Adjustments(1) |
|
|
|
| Combined |
|
| Combined |
| ||||||||
Interest and dividend income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, including fees |
| $ | 75,031 |
|
| $ | 7,046 |
|
| $ | 396 |
|
| K |
| $ | 82,473 |
|
| $ | 966 |
|
| $ | 31 |
|
| K |
| $ | 76,028 |
|
| $ | 83,470 |
|
Factored receivables, including fees |
|
| 36,094 |
|
|
| — |
|
|
| — |
|
|
|
|
| 36,094 |
|
|
| — |
|
|
| — |
|
|
|
|
| 36,094 |
|
|
| 36,094 |
|
Securities |
|
| 2,489 |
|
|
| 3,189 |
|
|
| — |
|
|
|
|
| 5,678 |
|
|
| 356 |
|
|
| — |
|
|
|
|
| 2,845 |
|
|
| 6,034 |
|
Federal Home Loan Bank and Federal Reserve Bank stock |
|
| 206 |
|
|
| 12 |
|
|
| — |
|
|
|
|
| 218 |
|
|
| 2 |
|
|
| — |
|
|
|
|
| 208 |
|
|
| 220 |
|
Cash deposits |
|
| 1,547 |
|
|
| 454 |
|
|
| — |
|
|
|
|
| 2,001 |
|
|
| 61 |
|
|
| — |
|
|
|
|
| 1,608 |
|
|
| 2,062 |
|
Total interest income |
|
| 115,367 |
|
|
| 10,701 |
|
|
| 396 |
|
|
|
|
| 126,464 |
|
|
| 1,385 |
|
|
| 31 |
|
|
|
|
| 116,783 |
|
|
| 127,880 |
|
Interest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
| 8,908 |
|
|
| 715 |
|
|
| — |
|
|
|
|
| 9,623 |
|
|
| 154 |
|
|
| — |
|
|
|
|
| 9,062 |
|
|
| 9,777 |
|
Subordinated notes |
|
| 1,675 |
|
|
| — |
|
|
| — |
|
|
|
|
| 1,675 |
|
|
| — |
|
|
| — |
|
|
|
|
| 1,675 |
|
|
| 1,675 |
|
Junior subordinated debentures |
|
| 1,310 |
|
|
| — |
|
|
| — |
|
|
|
|
| 1,310 |
|
|
| — |
|
|
| — |
|
|
|
|
| 1,310 |
|
|
| 1,310 |
|
Other borrowings |
|
| 3,087 |
|
|
| 20 |
|
|
| — |
|
|
|
|
| 3,107 |
|
|
| 3 |
|
|
| — |
|
|
|
|
| 3,090 |
|
|
| 3,110 |
|
Total interest expense |
|
| 14,980 |
|
|
| 735 |
|
|
| — |
|
|
|
|
| 15,715 |
|
|
| 157 |
|
|
| — |
|
|
|
|
| 15,137 |
|
|
| 15,872 |
|
Net interest income |
|
| 100,387 |
|
|
| 9,966 |
|
|
| 396 |
|
|
|
|
| 110,749 |
|
|
| 1,228 |
|
|
| 31 |
|
|
|
|
| 101,646 |
|
|
| 112,008 |
|
Provision for loan losses |
|
| 7,454 |
|
|
| (119 | ) |
|
| — |
|
|
|
|
| 7,335 |
|
|
| (400 | ) |
|
| — |
|
|
|
|
| 7,054 |
|
|
| 6,935 |
|
Net interest income after provision for loan losses |
|
| 92,933 |
|
|
| 10,085 |
|
|
| 396 |
|
|
|
|
| 103,414 |
|
|
| 1,628 |
|
|
| 31 |
|
|
|
|
| 94,592 |
|
|
| 105,073 |
|
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service charges on deposits |
|
| 2,355 |
|
|
| 687 |
|
|
| — |
|
|
|
|
| 3,042 |
|
|
| 51 |
|
|
| — |
|
|
|
|
| 2,406 |
|
|
| 3,093 |
|
Card income |
|
| 2,638 |
|
|
| 1,002 |
|
|
| — |
|
|
|
|
| 3,640 |
|
|
| 100 |
|
|
| — |
|
|
|
|
| 2,738 |
|
|
| 3,740 |
|
Net OREO gains (losses) and valuation adjustments |
|
| (616 | ) |
|
| (797 | ) |
|
| — |
|
|
|
|
| (1,413 | ) |
|
| 92 |
|
|
| — |
|
|
|
|
| (524 | ) |
|
| (1,321 | ) |
Net gains (losses) on sale of securities |
|
| (272 | ) |
|
| (3 | ) |
|
| — |
|
|
|
|
| (275 | ) |
|
| (2 | ) |
|
| — |
|
|
|
|
| (274 | ) |
|
| (277 | ) |
Net gains on sale of loans |
|
| — |
|
|
| 206 |
|
|
| — |
|
|
|
|
| 206 |
|
|
| 64 |
|
|
| — |
|
|
|
|
| 64 |
|
|
| 270 |
|
Fee income |
|
| 1,921 |
|
|
| 166 |
|
|
| — |
|
|
|
|
| 2,087 |
|
|
| — |
|
|
| — |
|
|
|
|
| 1,921 |
|
|
| 2,087 |
|
Insurance commissions |
|
| 1,533 |
|
|
| — |
|
|
| — |
|
|
|
|
| 1,533 |
|
|
| — |
|
|
| — |
|
|
|
|
| 1,533 |
|
|
| 1,533 |
|
Gain on sale of subsidiary or division |
|
| 1,071 |
|
|
| — |
|
|
| — |
|
|
|
|
| 1,071 |
|
|
| — |
|
|
| — |
|
|
|
|
| 1,071 |
|
|
| 1,071 |
|
Other |
|
| 1,487 |
|
|
| 327 |
|
|
| — |
|
|
|
|
| 1,814 |
|
|
| 15 |
|
|
| — |
|
|
|
|
| 1,502 |
|
|
| 1,829 |
|
Total noninterest income |
|
| 10,117 |
|
|
| 1,588 |
|
|
| — |
|
|
|
|
| 11,705 |
|
|
| 320 |
|
|
| — |
|
|
|
|
| 10,437 |
|
|
| 12,025 |
|
Noninterest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
| 39,931 |
|
|
| 4,895 |
|
|
| — |
|
|
|
|
| 44,826 |
|
|
| 625 |
|
|
| — |
|
|
|
|
| 40,556 |
|
|
| 45,451 |
|
Occupancy, furniture and equipment |
|
| 6,068 |
|
|
| 1,233 |
|
|
| (416 | ) |
| L |
|
| 6,885 |
|
|
| 145 |
|
|
| (36 | ) |
| L |
|
| 6,177 |
|
|
| 6,994 |
|
FDIC insurance and other regulatory assessments |
|
| 582 |
|
|
| 126 |
|
|
| — |
|
|
|
|
| 708 |
|
|
| 13 |
|
|
| — |
|
|
|
|
| 595 |
|
|
| 721 |
|
Professional fees |
|
| 3,718 |
|
|
| 963 |
|
|
| — |
|
|
|
|
| 4,681 |
|
|
| 218 |
|
|
| — |
|
|
|
|
| 3,936 |
|
|
| 4,899 |
|
Amortization of intangible assets |
|
| 2,478 |
|
|
| 18 |
|
|
| 957 |
|
| M |
|
| 3,453 |
|
|
| — |
|
|
| 176 |
|
| M |
|
| 2,654 |
|
|
| 3,629 |
|
Advertising and promotion |
|
| 2,329 |
|
|
| 312 |
|
|
| — |
|
|
|
|
| 2,641 |
|
|
| 48 |
|
|
| — |
|
|
|
|
| 2,377 |
|
|
| 2,689 |
|
Communications and technology |
|
| 6,630 |
|
|
| 699 |
|
|
| — |
|
|
|
|
| 7,329 |
|
|
| 68 |
|
|
| — |
|
|
|
|
| 6,698 |
|
|
| 7,397 |
|
Other |
|
| 9,709 |
|
|
| 1,445 |
|
|
| — |
|
|
|
|
| 11,154 |
|
|
| 157 |
|
|
| — |
|
|
|
|
| 9,866 |
|
|
| 11,311 |
|
Total noninterest expense |
|
| 71,445 |
|
|
| 9,691 |
|
|
| 541 |
|
|
|
|
| 81,677 |
|
|
| 1,274 |
|
|
| 140 |
|
|
|
|
| 72,859 |
|
|
| 83,091 |
|
Net income before income tax |
|
| 31,605 |
|
|
| 1,982 |
|
|
| (145 | ) |
|
|
|
| 33,442 |
|
|
| 674 |
|
|
| (109 | ) |
|
|
|
| 32,170 |
|
|
| 34,007 |
|
Income tax expense (benefit) |
|
| 7,152 |
|
|
| — |
|
|
| 416 |
|
| N |
|
| 7,568 |
|
|
| — |
|
|
| 128 |
|
| N |
|
| 7,280 |
|
|
| 7,696 |
|
Net income |
|
| 24,453 |
|
|
| 1,982 |
|
|
| (561 | ) |
|
|
|
| 25,874 |
|
|
| 674 |
|
|
| (237 | ) |
|
|
|
| 24,890 |
|
|
| 26,311 |
|
Dividends on preferred stock |
|
| (383 | ) |
|
| — |
|
|
| — |
|
|
|
|
| (383 | ) |
|
| — |
|
|
| — |
|
|
|
|
| (383 | ) |
|
| (383 | ) |
Net income available to common stockholders |
| $ | 24,070 |
|
| $ | 1,982 |
|
| $ | (561 | ) |
|
|
| $ | 25,491 |
|
| $ | 674 |
|
| $ | (237 | ) |
|
|
| $ | 24,507 |
|
| $ | 25,928 |
|
Earnings per common share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
| $ | 1.04 |
|
|
|
|
|
|
|
|
|
|
|
| $ | 1.01 |
|
|
|
|
|
|
|
|
|
|
|
| $ | 1.05 |
|
| $ | 1.02 |
|
Diluted |
| $ | 1.02 |
|
|
|
|
|
|
|
|
|
|
|
| $ | 0.99 |
|
|
|
|
|
|
|
|
|
|
|
| $ | 1.03 |
|
| $ | 1.00 |
|
(1) See Note 3 of the Notes to the Unaudited Pro Forma Combined Financial Statements
UNAUDITED PRO FORMA COMBINED STATEMENTS OF INCOME
For the Year Ended December 31, 2017
(Dollar amounts in thousands, except per share amounts)
|
|
|
|
|
|
|
|
| FBD Pro forma |
|
|
|
| FBD Pro forma |
|
|
|
|
|
| SCC Pro forma |
|
|
|
| SCC Pro forma |
|
| Total Pro forma |
| ||||||
|
| Triumph |
|
| FBD |
|
| Adjustments(1) |
|
|
|
| Combined |
|
| SCC |
|
| Adjustments(1) |
|
|
|
| Combined |
|
| Combined |
| ||||||||
Interest and dividend income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, including fees |
| $ | 121,567 |
|
| $ | 12,780 |
|
| $ | 995 |
|
| K |
| $ | 135,342 |
|
| $ | 1,937 |
|
| $ | 84 |
|
| K |
| $ | 123,588 |
|
| $ | 137,363 |
|
Factored receivables, including fees |
|
| 47,177 |
|
|
| — |
|
|
| — |
|
|
|
|
| 47,177 |
|
|
| — |
|
|
| — |
|
|
|
|
| 47,177 |
|
|
| 47,177 |
|
Securities |
|
| 6,823 |
|
|
| 7,106 |
|
|
| — |
|
|
|
|
| 13,929 |
|
|
| 619 |
|
|
| — |
|
|
|
|
| 7,442 |
|
|
| 14,548 |
|
Federal Home Loan Bank and Federal Reserve Bank stock |
|
| 207 |
|
|
| 20 |
|
|
| — |
|
|
|
|
| 227 |
|
|
| 4 |
|
|
| — |
|
|
|
|
| 211 |
|
|
| 231 |
|
Cash deposits |
|
| 1,450 |
|
|
| 532 |
|
|
| — |
|
|
|
|
| 1,982 |
|
|
| 92 |
|
|
| — |
|
|
|
|
| 1,542 |
|
|
| 2,074 |
|
Total interest income |
|
| 177,224 |
|
|
| 20,438 |
|
|
| 995 |
|
|
|
|
| 198,657 |
|
|
| 2,652 |
|
|
| 84 |
|
|
|
|
| 179,960 |
|
|
| 201,393 |
|
Interest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
| 13,082 |
|
|
| 920 |
|
|
| — |
|
|
|
|
| 14,002 |
|
|
| 233 |
|
|
| — |
|
|
|
|
| 13,315 |
|
|
| 14,235 |
|
Subordinated notes |
|
| 3,344 |
|
|
| — |
|
|
| — |
|
|
|
|
| 3,344 |
|
|
| — |
|
|
| — |
|
|
|
|
| 3,344 |
|
|
| 3,344 |
|
Junior subordinated debentures |
|
| 1,955 |
|
|
| — |
|
|
| — |
|
|
|
|
| 1,955 |
|
|
| — |
|
|
| — |
|
|
|
|
| 1,955 |
|
|
| 1,955 |
|
Other borrowings |
|
| 3,159 |
|
|
| 43 |
|
|
| — |
|
|
|
|
| 3,202 |
|
|
| 21 |
|
|
| — |
|
|
|
|
| 3,180 |
|
|
| 3,223 |
|
Total interest expense |
|
| 21,540 |
|
|
| 963 |
|
|
| — |
|
|
|
|
| 22,503 |
|
|
| 254 |
|
|
| — |
|
|
|
|
| 21,794 |
|
|
| 22,757 |
|
Net interest income |
|
| 155,684 |
|
|
| 19,475 |
|
|
| 995 |
|
|
|
|
| 176,154 |
|
|
| 2,398 |
|
|
| 84 |
|
|
|
|
| 158,166 |
|
|
| 178,636 |
|
Provision for loan losses |
|
| 11,628 |
|
|
| (17 | ) |
|
| — |
|
|
|
|
| 11,611 |
|
|
| (200 | ) |
|
| — |
|
|
|
|
| 11,428 |
|
|
| 11,411 |
|
Net interest income after provision for loan losses |
|
| 144,056 |
|
|
| 19,492 |
|
|
| 995 |
|
|
|
|
| 164,543 |
|
|
| 2,598 |
|
|
| 84 |
|
|
|
|
| 146,738 |
|
|
| 167,225 |
|
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service charges on deposits |
|
| 4,181 |
|
|
| 1,347 |
|
|
| — |
|
|
|
|
| 5,528 |
|
|
| 99 |
|
|
| — |
|
|
|
|
| 4,280 |
|
|
| 5,627 |
|
Card income |
|
| 3,822 |
|
|
| 1,927 |
|
|
| — |
|
|
|
|
| 5,749 |
|
|
| 184 |
|
|
| — |
|
|
|
|
| 4,006 |
|
|
| 5,933 |
|
Net OREO gains (losses) and valuation adjustments |
|
| (850 | ) |
|
| (32 | ) |
|
| — |
|
|
|
|
| (882 | ) |
|
| (7 | ) |
|
| — |
|
|
|
|
| (857 | ) |
|
| (889 | ) |
Net gains (losses) on sale of securities |
|
| 35 |
|
|
| 267 |
|
|
| — |
|
|
|
|
| 302 |
|
|
| 16 |
|
|
| — |
|
|
|
|
| 51 |
|
|
| 318 |
|
Net gains on sale of loans |
|
| — |
|
|
| 512 |
|
|
| — |
|
|
|
|
| 512 |
|
|
| 192 |
|
|
| — |
|
|
|
|
| 192 |
|
|
| 704 |
|
Fee income |
|
| 2,503 |
|
|
| 331 |
|
|
| — |
|
|
|
|
| 2,834 |
|
|
| — |
|
|
| — |
|
|
|
|
| 2,503 |
|
|
| 2,834 |
|
Insurance commissions |
|
| 2,981 |
|
|
| — |
|
|
| — |
|
|
|
|
| 2,981 |
|
|
| — |
|
|
| — |
|
|
|
|
| 2,981 |
|
|
| 2,981 |
|
Gain on sale of subsidiary |
|
| 20,860 |
|
|
| — |
|
|
| — |
|
|
|
|
| 20,860 |
|
|
| — |
|
|
| — |
|
|
|
|
| 20,860 |
|
|
| 20,860 |
|
Asset management fees |
|
| 1,717 |
|
|
| — |
|
|
| — |
|
|
|
|
| 1,717 |
|
|
| — |
|
|
| — |
|
|
|
|
| 1,717 |
|
|
| 1,717 |
|
Other |
|
| 5,407 |
|
|
| 562 |
|
|
| — |
|
|
|
|
| 5,969 |
|
|
| 26 |
|
|
| — |
|
|
|
|
| 5,433 |
|
|
| 5,995 |
|
Total noninterest income |
|
| 40,656 |
|
|
| 4,914 |
|
|
| — |
|
|
|
|
| 45,570 |
|
|
| 510 |
|
|
| — |
|
|
|
|
| 41,166 |
|
|
| 46,080 |
|
Noninterest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
| 72,696 |
|
|
| 9,963 |
|
|
| — |
|
|
|
|
| 82,659 |
|
|
| 1,173 |
|
|
| — |
|
|
|
|
| 73,869 |
|
|
| 83,832 |
|
Occupancy, furniture and equipment |
|
| 9,833 |
|
|
| 2,417 |
|
|
| (470 | ) |
| L |
|
| 11,780 |
|
|
| 294 |
|
|
| (73 | ) |
| L |
|
| 10,054 |
|
|
| 12,001 |
|
FDIC insurance and other regulatory assessments |
|
| 1,201 |
|
|
| 228 |
|
|
| — |
|
|
|
|
| 1,429 |
|
|
| 20 |
|
|
| — |
|
|
|
|
| 1,221 |
|
|
| 1,449 |
|
Professional fees |
|
| 7,192 |
|
|
| 1,319 |
|
|
| — |
|
|
|
|
| 8,511 |
|
|
| 290 |
|
|
| — |
|
|
|
|
| 7,482 |
|
|
| 8,801 |
|
Amortization of intangible assets |
|
| 5,201 |
|
|
| 54 |
|
|
| 2,112 |
|
| M |
|
| 7,367 |
|
|
| — |
|
|
| 392 |
|
| M |
|
| 5,593 |
|
|
| 7,759 |
|
Advertising and promotion |
|
| 3,226 |
|
|
| 536 |
|
|
| — |
|
|
|
|
| 3,762 |
|
|
| 82 |
|
|
| — |
|
|
|
|
| 3,308 |
|
|
| 3,844 |
|
Communications and technology |
|
| 8,843 |
|
|
| 1,303 |
|
|
| — |
|
|
|
|
| 10,146 |
|
|
| 142 |
|
|
| — |
|
|
|
|
| 8,985 |
|
|
| 10,288 |
|
Other |
|
| 15,422 |
|
|
| 2,893 |
|
|
| — |
|
|
|
|
| 18,315 |
|
|
| 442 |
|
|
| — |
|
|
|
|
| 15,864 |
|
|
| 18,757 |
|
Total noninterest expense |
|
| 123,614 |
|
|
| 18,713 |
|
|
| 1,642 |
|
|
|
|
| 143,969 |
|
|
| 2,443 |
|
|
| 319 |
|
|
|
|
| 126,376 |
|
|
| 146,731 |
|
Net income before income tax |
|
| 61,098 |
|
|
| 5,693 |
|
|
| (647 | ) |
|
|
|
| 66,144 |
|
|
| 665 |
|
|
| (235 | ) |
|
|
|
| 61,528 |
|
|
| 66,574 |
|
Income tax expense |
|
| 24,878 |
|
|
| — |
|
|
| 2,055 |
|
| N |
|
| 26,933 |
|
|
| — |
|
|
| 175 |
|
| N |
|
| 25,053 |
|
|
| 27,108 |
|
Net income |
|
| 36,220 |
|
|
| 5,693 |
|
|
| (2,702 | ) |
|
|
|
| 39,211 |
|
|
| 665 |
|
|
| (410 | ) |
|
|
|
| 36,475 |
|
|
| 39,466 |
|
Dividends on preferred stock |
|
| (774 | ) |
|
| — |
|
|
| — |
|
|
|
|
| (774 | ) |
|
| — |
|
|
| — |
|
|
|
|
| (774 | ) |
|
| (774 | ) |
Net income available to common stockholders |
| $ | 35,446 |
|
| $ | 5,693 |
|
| $ | (2,702 | ) |
|
|
| $ | 38,437 |
|
| $ | 665 |
|
| $ | (410 | ) |
|
|
| $ | 35,701 |
|
| $ | 38,692 |
|
Earnings per common share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
| $ | 1.85 |
|
|
|
|
|
|
|
|
|
|
|
| $ | 1.68 |
|
|
|
|
|
|
|
|
|
|
|
| $ | 1.83 |
|
| $ | 1.66 |
|
Diluted |
| $ | 1.81 |
|
|
|
|
|
|
|
|
|
|
|
| $ | 1.65 |
|
|
|
|
|
|
|
|
|
|
|
| $ | 1.79 |
|
| $ | 1.63 |
|
(1) See Note 3 of the Notes to the Unaudited Pro Forma Combined Financial Statements
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
NOTE 1 – BASIS OF PRO FORMA PRESENTATION
The unaudited pro forma combined balance sheets as of June 30, 2018 and the unaudited pro forma combined statements of income for the six months ended June 30, 2018 and the year ended December 31, 2017 are based on the historical financial statements of the Company, FBD, and SCC after giving effect to the completion of the acquisitions and the assumptions and adjustments described in the accompanying notes. The unaudited pro forma combined balance sheets as of June 30, 2018 give effect to the acquisitions and other adjustments as if they occurred on that date. The unaudited pro forma combined statements of income for the six months ended June 30, 2018 and the year ended December 31, 2017 give effect to the acquisitions as if they occurred on January 1, 2017. Such financial statements do not reflect cost savings or operating synergies expected to result from the acquisition, or the cost to achieve these cost savings or operating synergies, or any anticipated disposition of assets or liquidation of liabilities that may result from the integration of the operations of the three companies.
The transaction was accounted for under the acquisition method of accounting in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations (“ASC 805”). Under ASC 805, all of the assets acquired and liabilities assumed in a business combination are recognized at their acquisition-date fair values, while transaction and restructuring costs associated with the business combination are expensed as incurred. The excess of the purchase price over the fair value of assets acquired and liabilities assumed is allocated to goodwill, which resulted from the combination of expected operational synergies and expanded market share.
The unaudited pro forma information is presented solely for informational purposes and is not necessarily indicative of the combined results of operation or financial position that might have been achieved for the periods or dates indicated, nor is it necessarily indicative of the future results of the combined company.
NOTE 2 – PRO FORMA UNAUDITED PURCHASE PRICE AND PURCHASE PRICE ALLOCATION
Pursuant to the acquisition agreements between the Company and FBD as well as the Company and SCC, the Company paid $147,961,000 in cash for the outstanding common stock of FBD and SCC. The following table presents the preliminary purchase accounting allocations used in the pro forma financial statements as of June 30, 2018:
(Dollars in thousands) |
| FBD |
|
| SCC |
|
| Total |
| |||
Fair value of assets acquired: |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
| $ | 85,952 |
|
| $ | 11,374 |
|
| $ | 97,326 |
|
Securities |
|
| 256,434 |
|
|
| 34,258 |
|
|
| 290,692 |
|
Loans held for sale |
|
| 2,019 |
|
|
| — |
|
|
| 2,019 |
|
Loans |
|
| 262,070 |
|
|
| 35,088 |
|
|
| 297,158 |
|
FHLB stock |
|
| 811 |
|
|
| 129 |
|
|
| 940 |
|
Premises and equipment |
|
| 7,781 |
|
|
| 857 |
|
|
| 8,638 |
|
Other real estate owned |
|
| 213 |
|
|
| — |
|
|
| 213 |
|
Intangible assets |
|
| 11,915 |
|
|
| 2,154 |
|
|
| 14,069 |
|
Other assets |
|
| 2,983 |
|
|
| 431 |
|
|
| 3,414 |
|
|
|
| 630,178 |
|
|
| 84,291 |
|
|
| 714,469 |
|
Fair value of liabilities assumed: |
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
| 559,516 |
|
|
| 74,182 |
|
|
| 633,698 |
|
Customer repurchase agreements |
|
| 446 |
|
|
| — |
|
|
| 446 |
|
Federal Home Loan Bank advances |
|
| 637 |
|
|
| — |
|
|
| 637 |
|
Other liabilities |
|
| 2,186 |
|
|
| 205 |
|
|
| 2,391 |
|
|
|
| 562,785 |
|
|
| 74,387 |
|
|
| 637,172 |
|
Fair value of net assets acquired |
|
| 67,393 |
|
|
| 9,904 |
|
|
| 77,297 |
|
Cash consideration transferred |
|
| 134,667 |
|
|
| 13,294 |
|
|
| 147,961 |
|
Goodwill |
| $ | 67,274 |
|
| $ | 3,390 |
|
| $ | 70,664 |
|
Under the acquisition method of accounting, the total purchase price is allocated to the acquired tangible and intangible assets and assumed liabilities of FBD and SCC based on their estimated fair values as of the closing of the acquisitions. The excess of the purchase price over the fair value of assets acquired and liabilities assumed, if any, is allocated to goodwill.
The preliminary allocation is based on estimates, assumptions, valuations, and other studies which have not progressed to a stage where there is sufficient information to make a definitive allocation. Accordingly, the pro forma purchase price allocation and unaudited pro forma adjustments will remain preliminary until the Company's management determines the final fair value of assets acquired and liabilities assumed. The final determination of the purchase price allocation is anticipated to be completed at the earlier of (i) twelve months from the date of the acquisitions or (ii) as soon as the Company receives the information it was seeking about facts and circumstances that existed as of the acquisition date or learns that more information is not obtainable. The final amounts allocated to assets acquired and liabilities assumed could differ significantly from the amounts presented in the unaudited pro forma combined financial statements.
Identifiable intangible assets. The preliminary fair values of intangible assets were determined based on the provisions of ASC 805, which defines fair value in accordance with ASC Topic 820, Fair Value Measurements and Disclosures (“ASC 820”). ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Intangible assets were identified that met either the separability criterion or the contractual-legal criterion described in ASC 805.
The Company has preliminarily allocated $14,069,000 to amortizable core deposit intangible assets acquired. The amortization related to the preliminary fair value of net amortizable intangible assets is reflected as a pro forma adjustment to the unaudited pro forma combined financial statements. The core deposit intangibles will be amortized over a ten year period on an accelerated basis which is expected to produce the following amortization expense for the combined operations:
(Dollars in thousands) |
| FBD |
|
| SCC |
|
| Total |
| |||
Year 1 |
| $ | 2,166 |
|
| $ | 392 |
|
| $ | 2,558 |
|
Year 2 |
|
| 1,950 |
|
|
| 352 |
|
|
| 2,302 |
|
Year 3 |
|
| 1,733 |
|
|
| 313 |
|
|
| 2,046 |
|
Year 4 |
|
| 1,516 |
|
|
| 274 |
|
|
| 1,790 |
|
Year 5 |
|
| 1,300 |
|
|
| 235 |
|
|
| 1,535 |
|
Thereafter |
|
| 3,250 |
|
|
| 588 |
|
|
| 3,838 |
|
|
| $ | 11,915 |
|
| $ | 2,154 |
|
| $ | 14,069 |
|
Goodwill. Goodwill represents the excess of the purchase price over the fair value of the underlying net assets acquired. In accordance with ASC Topic 350, Intangibles – Goodwill and Other, goodwill will not be amortized, but instead will be tested for impairment at least annually and whenever events or circumstances have occurred that may indicate a possible impairment. In the event management determines that the value of goodwill has become impaired, the combined company will incur an accounting charge for the amount of the impairment during the period in which the determination is made.
NOTE 3 – PRELIMINARY UNAUDITED PRO FORMA ADJUSTMENTS
The unaudited pro forma financial information is not necessarily indicative of what the financial position actually would have been had the acquisitions been completed at the date indicated, and includes adjustments which are preliminary and may be revised. Such revisions may result in material changes. The financial position shown herein is not necessarily indicative of what the past financial position of the combined companies would have been, nor necessarily indicative of the financial position of the post-acquisition periods. The unaudited pro forma financial information does not give consideration to the impact of possible expense efficiencies, synergies, or other actions that may result from the acquisition.
The following unaudited pro forma adjustments result from accounting for the acquisitions, including the determination of fair value of the assets, liabilities and commitments which the Company, as the acquirer for accounting purposes, acquired from FBD and SCC. Additionally, because FBD and SCC were Subchapter S corporations before the acquisitions and did not incur any federal income tax liabilities, adjustments have been included to estimate the impact of federal income taxes on FBD and SCC’s net income for the periods presented. The descriptions related to these preliminary adjustments are as follows (in thousands):
Balance Sheets
| June 30, 2018 |
| ||||||||||
|
| FBD |
|
| SCC |
|
| Total |
| |||
A Adjustments to cash |
|
|
|
|
|
|
|
|
|
|
|
|
To reflect cash consideration for outstanding FBD and SCC common stock |
| $ | (134,667 | ) |
| $ | (13,294 | ) |
| $ | (147,961 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
B Adjustments to loans |
|
|
|
|
|
|
|
|
|
|
|
|
To reflect estimated fair value at acquisition date. The estimated fair value includes an analysis of expected cash flows, which considers credit losses expected over the assumed life of the portfolio as a result of future events and other factors. The expected cash flows were present valued using current market discount rates for similar lending arrangements to arrive at the estimated fair value |
| $ | (7,119 | ) |
| $ | (490 | ) |
| $ | (7,609 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
C Adjustments to allowance for loan and lease losses |
|
|
|
|
|
|
|
|
|
|
|
|
To eliminate FBD and SCC historical allowance for loan and lease losses, as credit risk is contemplated in the fair value adjustments to loans |
| $ | 3,859 |
|
| $ | 746 |
|
| $ | 4,605 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
D Adjustments to premises and equipment, net |
|
|
|
|
|
|
|
|
|
|
|
|
To reflect estimated fair value at acquisition date. The adjustment to premises and equipment was based on independent third party appraisals obtained on acquired land and buildings |
| $ | (5,128 | ) |
| $ | (391 | ) |
| $ | (5,519 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
E Adjustments to other real estate owned, net |
|
|
|
|
|
|
|
|
|
|
|
|
To reflect estimated fair value at acquisition date. The estimated fair value of other real estate owned was based on independent third party appraisals, less estimated costs to sell |
| $ | 147 |
|
| $ | — |
|
| $ | 147 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F Adjustments to goodwill |
|
|
|
|
|
|
|
|
|
|
|
|
To reflect the goodwill associated with the FBD and SCC acquisitions |
| $ | 67,274 |
|
| $ | 3,390 |
|
| $ | 70,664 |
|
To eliminate FBD historical acquired goodwill |
|
| (2,119 | ) |
|
| — |
|
|
| (2,119 | ) |
|
| $ | 65,155 |
|
| $ | 3,390 |
|
| $ | 68,545 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
G Adjustments to intangible assets, net |
|
|
|
|
|
|
|
|
|
|
|
|
To reflect the estimated core deposit intangible assests associated with the acquisitions. The core deposit intangible assets were estimated by comparing the cost of alternative funding sources to the cost of the deposit base of FBD and SCC. Time deposits are generally not included in the analysis, which uses a discounted cash flow approach |
| $ | 11,915 |
|
| $ | 2,154 |
|
| $ | 14,069 |
|
To eliminate FBD historical acquired intangible asset |
|
| (17 | ) |
|
| — |
|
|
| (17 | ) |
|
| $ | 11,898 |
|
| $ | 2,154 |
|
| $ | 14,052 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
H Adjustments to other assets |
|
|
|
|
|
|
|
|
|
|
|
|
To reflect estimated fair value at acquisition date |
| $ | (185 | ) |
| $ | (30 | ) |
| $ | (215 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
I Adjustments to other liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
To reflect estimated fair value at acquisition date |
| $ | 284 |
|
| $ | — |
|
| $ | 284 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
J Adjustments to stockholders' equity |
|
|
|
|
|
|
|
|
|
|
|
|
To eliminate FBD and SCC historical common stock |
| $ | (384 | ) |
| $ | (160 | ) |
| $ | (544 | ) |
To eliminate FBD and SCC historical additional paid-in-capital |
|
| (14,068 | ) |
| $ | (5,370 | ) |
|
| (19,438 | ) |
To eliminate FBD and SCC historical retained earnings |
|
| (53,674 | ) |
|
| (2,654 | ) |
|
| (56,328 | ) |
To eliminate FBD historical note receivable for issuance of common stock |
|
| 469 |
|
|
| — |
|
|
| 469 |
|
To eliminate FBD and SCC historical accumulated other comprehensive income |
|
| 1,333 |
|
|
| 269 |
|
|
| 1,602 |
|
|
| $ | (66,324 | ) |
| $ | (7,915 | ) |
| $ | (74,239 | ) |
| Six Months Ended June 30, 2018 |
|
| Year Ended December 31, 2017 |
| |||||||||||||||||||
|
| FBD |
|
| SCC |
|
| Total |
|
| FBD |
|
| SCC |
|
| Total |
| ||||||
K Adjustments to loan interest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
To reflect accretion of loan discounts resulting from the loan fair value adjustments. The discounts will be accreted under the effective interest method as an increase to interest income on a pro rata basis based on the contractual maturities of the underlying loans |
| $ | 396 |
|
| $ | 31 |
|
| $ | 427 |
|
| $ | 995 |
|
| $ | 84 |
|
| $ | 1,079 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
L Adjustments to occupancy, furniture and equipment expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
To reflect depreciation resulting from premises and equipment fair value adjustments. The fair value of premises and equipment will be depreciated over the remaining estimated useful lives on a straight-line basis |
| $ | 132 |
|
| $ | 17 |
|
| $ | 149 |
|
| $ | 518 |
|
| $ | 33 |
|
| $ | 551 |
|
To eliminate FBD and SCC historical depreciation expense associated with premises and equipment that have been adjusted to fair value |
|
| (548 | ) |
|
| (53 | ) |
|
| (601 | ) |
|
| (988 | ) |
|
| (106 | ) |
|
| (1,094 | ) |
|
| $ | (416 | ) |
| $ | (36 | ) |
| $ | (452 | ) |
| $ | (470 | ) |
| $ | (73 | ) |
| $ | (543 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
M Adjustments to amortization of intangible assets expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
To reflect amortization of acquired intangible assets. The core deposit intangibles will be amortized over a ten year period on an accelerated basis |
| $ | 975 |
|
| $ | 176 |
|
| $ | 1,151 |
|
| $ | 2,166 |
|
| $ | 392 |
|
| $ | 2,558 |
|
To eliminate FBD historical amortization of intangible assets |
|
| (18 | ) |
|
| — |
|
|
| (18 | ) |
|
| (54 | ) |
|
| — |
|
|
| (54 | ) |
|
| $ | 957 |
|
| $ | 176 |
|
| $ | 1,133 |
|
| $ | 2,112 |
|
| $ | 392 |
|
| $ | 2,504 |
|
N Adjustments to income tax expense (benefit) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
To reflect the income tax expense of the pro forma combined entity using the Company’s historical effective tax rate. The pro forma adjustment for income tax expense considers the pretax income of FBD and SCC as well as the income statement pro forma adjustments for the periods |
| $ | 416 |
|
| $ | 128 |
|
| $ | 544 |
|
| $ | 2,055 |
|
| $ | 175 |
|
| $ | 2,230 |
|
NOTE 4 – UNAUDITED EARNINGS PER COMMON SHARE
Unaudited pro forma earnings per common share for the six months ended June 30, 2018 and the year ended December 31, 2017 have been calculated using the Company’s weighted average common shares outstanding for the respective periods increased by the portion of the common shares sold in the Company’s April 12, 2018 underwritten public offering for which the proceeds were assumed to be used for the purpose of funding the acquisitions of FBD and SCC. The weighted average impact of the common shares assumed to have been issued to fund the acquisitions was calculated as if the shares were issued on January 1, 2017.
The following table sets forth the calculation of basic and diluted unaudited pro forma earnings per common share for the six months ended June 30, 2018:
| Six Months Ended June 30, 2018 |
| ||||||||||
(Dollars in thousands) |
| FBD |
|
| SCC |
|
| Total |
| |||
Basic |
|
|
|
|
|
|
|
|
|
|
|
|
Net income to common stockholders |
| $ | 25,491 |
|
| $ | 24,507 |
|
| $ | 25,928 |
|
Weighted average common shares outstanding |
|
| 23,133,489 |
|
|
| 23,133,489 |
|
|
| 23,133,489 |
|
Pro forma adjustment for assumed stock issuance |
|
| 2,135,792 |
|
|
| 210,838 |
|
|
| 2,346,630 |
|
Pro forma weighted average common shares outstanding |
|
| 25,269,281 |
|
|
| 23,344,327 |
|
|
| 25,480,119 |
|
Basic earnings per common share |
| $ | 1.01 |
|
| $ | 1.05 |
|
| $ | 1.02 |
|
Diluted |
|
|
|
|
|
|
|
|
|
|
|
|
Net income to common stockholders |
| $ | 25,491 |
|
| $ | 24,507 |
|
| $ | 25,928 |
|
Dilutive effect of preferred stock |
|
| 383 |
|
|
| 383 |
|
|
| 383 |
|
Net income to common stockholders - diluted |
| $ | 25,874 |
|
| $ | 24,890 |
|
| $ | 26,311 |
|
Pro forma weighted average common shares outstanding |
|
| 25,269,281 |
|
|
| 23,344,327 |
|
|
| 25,480,119 |
|
Dilutive effects of: |
|
|
|
|
|
|
|
|
|
|
|
|
Assumed conversion of Preferred A |
|
| 315,773 |
|
|
| 315,773 |
|
|
| 315,773 |
|
Assumed conversion of Preferred B |
|
| 354,471 |
|
|
| 354,471 |
|
|
| 354,471 |
|
Assumed exercises of stock warrants |
|
| — |
|
|
| — |
|
|
| — |
|
Assumed exercises of stock options |
|
| 85,123 |
|
|
| 85,123 |
|
|
| 85,123 |
|
Restricted stock awards |
|
| 60,425 |
|
|
| 60,425 |
|
|
| 60,425 |
|
Restricted stock units |
|
| 862 |
|
|
| 862 |
|
|
| 862 |
|
Average shares and dilutive potential common shares |
|
| 26,085,935 |
|
|
| 24,160,981 |
|
|
| 26,296,773 |
|
Dilutive earnings per common share |
| $ | 0.99 |
|
| $ | 1.03 |
|
| $ | 1.00 |
|
Shares that were not considered in computing diluted earnings per common share because they were antidilutive are as follows:
| Six Months Ended June 30, 2018 |
| ||||||||||
|
| FBD |
|
| SCC |
|
| Total |
| |||
Shares assumed to be converted from Preferred Stock Series A |
|
| — |
|
|
| — |
|
|
| — |
|
Shares assumed to be converted from Preferred Stock Series B |
|
| — |
|
|
| — |
|
|
| — |
|
Stock options |
|
| 51,952 |
|
|
| 51,952 |
|
|
| 51,952 |
|
Restricted stock awards |
|
| — |
|
|
| — |
|
|
| — |
|
Restricted stock units |
|
| — |
|
|
| — |
|
|
| — |
|
Performance stock units |
|
| 59,658 |
|
|
| 59,658 |
|
|
| 59,658 |
|
The following table sets forth the calculation of basic and diluted unaudited pro forma earnings per common share for the year ended December 31, 2017:
| Year Ended December 31, 2017 |
| ||||||||||
(Dollars in thousands) |
| FBD |
|
| SCC |
|
| Total |
| |||
Basic |
|
|
|
|
|
|
|
|
|
|
|
|
Net income to common stockholders |
| $ | 38,437 |
|
| $ | 35,701 |
|
| $ | 38,692 |
|
Weighted average common shares outstanding |
|
| 19,133,745 |
|
|
| 19,133,745 |
|
|
| 19,133,745 |
|
Pro forma adjustment for assumed stock issuance |
|
| 3,789,984 |
|
|
| 374,134 |
|
|
| 4,164,118 |
|
Pro forma weighted average common shares outstanding |
|
| 22,923,729 |
|
|
| 19,507,879 |
|
|
| 23,297,863 |
|
Basic earnings per common share |
| $ | 1.68 |
|
| $ | 1.83 |
|
| $ | 1.66 |
|
Diluted |
|
|
|
|
|
|
|
|
|
|
|
|
Net income to common stockholders |
| $ | 38,437 |
|
| $ | 35,701 |
|
| $ | 38,692 |
|
Dilutive effect of preferred stock |
|
| 774 |
|
|
| 774 |
|
|
| 774 |
|
Net income to common stockholders - diluted |
| $ | 39,211 |
|
| $ | 36,475 |
|
| $ | 39,466 |
|
Pro forma weighted average common shares outstanding |
|
| 22,923,729 |
|
|
| 19,507,879 |
|
|
| 23,297,863 |
|
Dilutive effects of: |
|
|
|
|
|
|
|
|
|
|
|
|
Assumed conversion of Preferred A |
|
| 315,773 |
|
|
| 315,773 |
|
|
| 315,773 |
|
Assumed conversion of Preferred B |
|
| 354,471 |
|
|
| 354,471 |
|
|
| 354,471 |
|
Assumed exercises of stock warrants |
|
| 82,567 |
|
|
| 82,567 |
|
|
| 82,567 |
|
Assumed exercises of stock options |
|
| 45,653 |
|
|
| 45,653 |
|
|
| 45,653 |
|
Restricted stock awards |
|
| 68,079 |
|
|
| 68,079 |
|
|
| 68,079 |
|
Restricted stock units |
|
| — |
|
|
| — |
|
|
| — |
|
Average shares and dilutive potential common shares |
|
| 23,790,272 |
|
|
| 20,374,422 |
|
|
| 24,164,406 |
|
Dilutive earnings per common share |
| $ | 1.65 |
|
| $ | 1.79 |
|
| $ | 1.63 |
|
Shares that were not considered in computing diluted earnings per common share because they were antidilutive are as follows:
|
| Year Ended December 31, 2017 |
| |||||||||
|
| FBD |
|
| SCC |
|
| Total |
| |||
Shares assumed to be converted from Preferred Stock Series A |
|
| — |
|
|
| — |
|
|
| — |
|
Shares assumed to be converted from Preferred Stock Series B |
|
| — |
|
|
| — |
|
|
| — |
|
Stock options |
|
| 57,926 |
|
|
| 57,926 |
|
|
| 57,926 |
|
Restricted stock awards |
|
| — |
|
|
| — |
|
|
| — |
|
Restricted stock units |
|
| — |
|
|
| — |
|
|
| — |
|
Performance stock units |
|
| — |
|
|
| — |
|
|
| — |
|