Note 7 - Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2017

Goodwill and Intangible Assets Disclosure [Text Block]

NOTE

GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill is tested annually, or more often than annually, if circumstances warrant, for impairment. If the implied fair value of goodwill is lower than its carrying amount, goodwill impairment is indicated, and goodwill is written down to its implied fair value. Subsequent increases in goodwill value are

not

recognized in the financial statements. Goodwill totaled

$842.7

million at

December 31, 2017

and

$348.5

million at

December 31, 2016.

The Company recorded

$228.9

million,

$238.0

million and

$29.4

million of goodwill as a result of its acquisitions of OKSB, First Texas and Hardeman, respectively, partially offset by

$4.1

million due to the sale of the Company’s property and casualty insurance lines of business during the

third

quarter

2017.

The Company recorded

$21.5

million of goodwill during

2016

as a result of its Citizens acquisition. The Company recorded

$95.2

million,

$110.4

million and

$13.3

million of goodwill during

2015

as a result of its acquisitions of Liberty, Community First and Ozark Trust, respectively. Goodwill impairment was neither indicated nor recorded in

2017,

2016

2015.

The goodwill recorded in the Citizens acquisition will be deductible for tax purposes.

Core deposit premiums are amortized over periods ranging from

years and are periodically evaluated, at least annually, as to the recoverability of their carrying value. Core deposit premiums of

$42.1

million,

$7.3

million, and

$7.8

million were recorded during

2017

as part of the OKSB, First Texas and Hardeman acquisitions, respectively. Core deposit premiums of

$5.1

million were recorded in

2016

as part of the Citizens acquisition. Core deposit premiums of

$11.3

million and

$14.6

million were recorded in

2015

as part of the Community First and Liberty acquisitions, respectively. During the

third

quarter of

2015,

the Company sold the Salina, Kansas banking operations and as a result reduced the related core deposit premium by

$382,000.

Intangible assets are being amortized over various periods ranging from

years. The Company recorded

$830,000

of intangible assets during

2017

related to the insurance operations in the Hardeman acquisition. The Company recorded

$591,000

of intangible assets during

2016

related to the trust operations acquired in the Citizens acquisition. The Community First acquisition included an insurance line of business and the Company recorded an intangible asset of

$420,000

during

2015.

Additionally, during

2015,

the Company recorded

$9.7

million of intangible related to the trust operations acquired in the Ozark Trust merger. Intangible assets decreased by

$1.3

million due to the sale of insurance lines of business during the

third

quarter of

2017.

The Company recorded

$3.8

million of other intangible assets during

2017

as part of the OKSB acquisition.

The Company’s goodwill and other intangibles (carrying basis and accumulated amortization) at

December 31, 2017

and

2016

were as follows:

(In thousands)	2017			2016

Goodwill	$	842,651		$	348,505
Core deposit premiums:
Gross carrying amount		105,984			48,692
Accumulated amortization		(16,659	)		(10,625	)
Core deposit premiums, net		89,325			38,067
Books of business intangible:
Gross carrying amount		15,414			15,884
Accumulated amortization		(2,827	)		(1,716	)
Books of business intangible, net		12,587			14,168
Other intangibles:
Gross carrying amount		6,037			2,068
Accumulated amortization		(1,878	)		(1,344	)
Other intangibles, net		4,159			724
Other intangible assets, net		106,071			52,959
Total goodwill and other intangible assets	$	948,722		$	401,464

Core deposit premium amortization expense recorded for the years ended

December 31, 2017,

2016

and

2015

was

$6.0

million,

$4.4

million and

$3.9

million, respectively. Amortization expense recorded for purchased credit card relationships for the years ended

December 31, 2017,

2016

and

2015

was

$414,000

Book of business amortization expense recorded for the year ended

December 31, 2017,

2016

and

2015

was

$1.1

million,

$1.1

million and

$528,000,

respectively.

The Company’s estimated remaining amortization expense on intangibles as of

December 31, 2017

is as follows:

Year	(In thousands)
2018	$	11,355
2019		11,045
2020		11,032
2021		10,970
2022		10,918
Thereafter		50,751
Total	$	106,071

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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