XML 124 R10.htm IDEA: XBRL DOCUMENT
v3.19.3.a.u2

Acquisitions and Divestiture | 12 Months Ended
--- | ---
Dec. 31, 2019
Business Combinations [Abstract] |
Acquisitions and Divestiture | Note 2. Acquisitions and Divestiture Acquisitions MidSouth Bancorp, Inc. On September 21, 2019, the Company completed the acquisition of all of the outstanding common stock of MidSouth Bancorp, Inc. (“MidSouth”) (NYSE: MSL), parent company of MidSouth Bank, N.A. The acquisition provides the Company opportunity for both enhanced growth in several of its current markets, such as MidSouth’s home market of Lafayette, Louisiana, as well as opportunities for expansion into new markets in Louisiana and Texas. The transaction was accounted for as a business combination whereby the Company acquired net assets with an estimated fair value of $130.5 million and recorded goodwill of $63.4 million. In consideration for the net assets acquired, the Company issued approximately 5.0 million shares of common stock, resulting in a transaction value of $193.8 million. Due to the close proximity to the acquisition date, certain acquisition-date fair value measurements have not been finalized and are subject to change. As the Company obtains the information related to facts and circumstances that existed as of the acquisition date, provisional measurements will be finalized, and any adjustments, if necessary, will be included in the allocation in the reporting period in which the final amounts are determined, not to exceed one year from the acquisition date. The following table sets forth the preliminary acquisition date fair value of the assets acquired and liabilities assumed, and the resulting goodwill. The goodwill is not deductible for federal income tax purposes.
(in thousands) |  |  |  |
ASSETS |  |  |  |
Cash and due from banks |  | $ | 28,059 |
Interest bearing bank deposits |  |  | 276,911 |
Federal funds sold |  |  | 3,475 |
Securities available for sale |  |  | 272,240 |
Loans |  |  | 787,628 |
Property and equipment |  |  | 34,288 |
Other real estate |  |  | 343 |
Identifiable intangible assets |  |  | 31,500 |
Other assets |  |  | 79,888 |
Total identifiable assets |  |  | 1,514,332 |
LIABILITIES |  |  |  |
Deposit liabilities |  |  | 1,280,947 |
Short term borrowings |  |  | 66,996 |
Long term debt |  |  | 13,919 |
Other liabilities |  |  | 21,990 |
Total liabilities |  |  | 1,383,852 |
Net assets acquired |  |  | 130,480 |
Value of stock-based consideration |  |  | 193,849 |
Goodwill |  | $ | 63,369 |
The loans acquired were recorded at an estimated fair value at the acquisition date using a loss adjusted cash flow method, with no carryover of the related allowance for loan losses. Acquired loans are classified as either purchased credit performing or purchased credit impaired based on such factors as past due status, nonaccrual status and internal risk rating. Loans considered to be purchased credit performing were accounted for under Accounting Standards Codification (“ASC”) 310-20. The purchased credit performing loans had a book balance of $686.0 million, of which $18.8 million is not expected to be collected, and an estimated fair value of $667.1 million. Loans considered to be purchased credit impaired were accounted for under ASC 310-30 using the expected cash flow method. The purchased credit impaired loans had a book balance of $143.9 million and an estimated fair value of $120.5 million. The securities available for sale portfolio consisted primarily of collateralized mortgage obligations and mortgaged backed securities. Substantially all of the portfolio acquired was sold prior to December 31, 2019. The core deposit intangible asset of $31.5 million represents the value of the relationships with deposit customers based on the favorable source of funds method. The core deposit intangible will be amortized using sum of years’ digits over the asset’s estimated life of 15 years. Short-term borrowings consisted of customer repurchase agreements of $39.5 million and two FHLB advances totaling $27.5 million. The FHLB advances had 30 day maturities with fixed interest rates of 2.16%. Long-term debt consisted of three trust preferred debentures with maturities through 2037; however, each was callable and were eligible for redemption at the Company’s election. The Company redeemed each debenture in full prior to December 31, 2019. The operating results of the Company for the year ended December 31, 2019 includes the results from the operations of the acquired business from the date of acquisition. The results of the acquired business are not material to the Company’s consolidated results of operations and, as such, neither supplemental pro forma information of the combined entity nor revenue and earnings contributed by the acquired business since the date of acquisition are presented. During the year ended December 31, 2019, the Company incurred acquisition related costs of approximately $32.7 million. The following table presents the acquisition related costs by component:
(in thousands) |  |  |
Personnel expense |  | $ | 7,506 |
Net occupancy and equipment expense |  |  | 1,464 |
Professional services expense |  |  | 7,075 |
Data processing expense |  |  | 1,092 |
Other real estate |  |  | 130 |
Advertising expense |  |  | 2,581 |
Other expense |  |  | 12,818 |
Total merger-related expenses |  | $ | 32,666 |
Personnel expense includes severance and change in control costs. Professional services expense includes legal and consulting costs, including costs associated with systems conversion. Other expense includes contract and lease termination fees and other transaction-related costs. Trust and Asset Management Business On July 13, 2018, the Company acquired the bank-managed high net worth individual and institutional investment management and trust business of Capital One, National Association (“Capital One”). The transaction added assets under management of $4 billion and assets under management and administration of $10.4 billion to the Company’s existing trust and asset management business. In addition, the Company assumed approximately $217 million of customer deposit liabilities. The following table sets forth the acquisition date fair value of the assets acquired and the liabilities assumed, the consideration received, and the resulting goodwill. The goodwill is deductible for federal income tax purposes.
(in thousands) |  |  |  |
ASSETS |  |  |  |  |
Accounts receivable |  | $ | 2,803 |  |
Identifiable intangible assets |  |  | 27,562 |  |
Total identifiable assets |  |  | 30,365 |  |
LIABILITIES |  |  |  |  |
Deposit liabilities |  |  | 217,432 |  |
Other liabilities |  |  | 151 |  |
Total liabilities |  |  | 217,583 |  |
Net liabilities assumed |  |  | (187,218 | ) |
Consideration received |  |  | 140,657 |  |
Goodwill |  | $ | 46,561 |  |
Identifiable intangible assets include customer relationships that are being amortized using an accelerated method based on forecasted cash flows over a useful life of approximately 17 years. The operating results of the Company for the years ended December 31, 2019 and 2018 includes the results from the operations of the acquired trust and asset management business from the date of acquisition. The results are not material to the Company’s results of operations and, as such, supplemental proforma financial information for the years ended December 31, 2019 and 2018 is not presented. During year ended December 31, 2018, the Company incurred acquisition related costs of approximately $6.2 million. Goodwill Resulting from Business Combinations Goodwill represents the excess of the consideration transferred over the fair value of the net assets acquired or the excess of the fair value of net liabilities assumed over the consideration received. It is comprised of estimated future economic benefits arising from the transaction that cannot be individually identified or do not qualify for separate recognition. These benefits include expanded presence in existing markets and entry into new markets, and expected earnings streams and operational efficiencies that the Company believes will result from these business combinations. The following table illustrates the change in the Company’s goodwill for the years ended December 31, 2019 and 2018:
(in thousands) |  |  |  |
Goodwill balance at December 31, 2017 |  | $ | 745,523 |
Additions and adjustments: |  |  |  |
Initial goodwill recorded in acquisition of trust and asset management business |  |  | 45,634 |
Measurement period adjustments - acquisition of trust and asset management business |  |  | (185 | )
Goodwill balance at December 31, 2018 |  | $ | 790,972 |
Additions and adjustments: |  |  |  |
Final settlement of cash consideration - acquisition of trust and asset management business |  | $ | 1,112 |
Initial goodwill recorded in acquisition of MidSouth Bancorp, Inc. |  |  | 69,207 |
Measurement period adjustments - acquisition of MidSouth Bancorp, Inc. |  |  | (5,838 | )
Goodwill balance at December 31, 2019 |  | $ | 855,453 |
Divestiture On March 9, 2018, the Company sold its consumer finance subsidiary, Harrison Finance Company. The Company received cash of approximately $78.9 million and recorded a loss on the sale of $1.1 million.

X
- 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
Name: | us-gaap_BusinessCombinationDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_BusinessCombinationsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration