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BUSINESS COMBINATIONS | 9 Months Ended
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Sep. 30, 2019
Business Combinations [Abstract] |
BUSINESS COMBINATIONS | BUSINESS COMBINATIONS In August, 2019, the Company completed the acquisition of Bannockburn Global Forex, LLC. Pursuant to the acquisition agreement, First Financial agreed to acquire all of the issued and outstanding membership interests of BGF for aggregate consideration of approximately $114.6 million consisting of $53.7 million in cash and $60.9 million of First Financial common stock. BGF was a privately held capital markets trading firm specializing in foreign currency advisory, hedge analytics, and transaction processing for closely held enterprises. Upon completion of the transaction, Bannockburn became a division of the Bank, but continues to operate as Bannockburn Global Forex, taking advantage of its existing brand recognition within the foreign exchange industry. The Bannockburn transaction was accounted for using the acquisition method of accounting and accordingly, assets acquired, liabilities assumed and consideration exchanged were recorded at estimated fair value on the acquisition date, in accordance with FASB ASC Topic 805, Business Combinations. The fair value measurements of assets acquired and liabilities assumed were $74.9 million and $18.3 million, respectively, and are subject to refinement for up to one year after the closing date of the acquisition as additional information relative to closing date fair values became available. The measurement period ends in August 2020. Goodwill arising from the BGF acquisition was $58.0 million and reflects the business’s high growth potential and the expectation that the acquisition will provide additional revenue growth and diversification. The goodwill is deductible for income tax purposes as the transaction is considered a taxable exchange. For further detail, see Note 6 – Goodwill and Other Intangible Assets. On April 1, 2018, the Company completed its acquisition of MainSource Financial Group, Inc. and its banking subsidiary, MainSource Bank. Results of MSFG have been included in the Company's results of operations beginning on April 1, 2018. Under the terms of the merger agreement, shareholders of MSFG received 1.3875 common shares of First Financial common stock for each share of MSFG common stock, with cash paid in lieu of fractional shares. Including outstanding options and warrants to purchase MSFG common stock, the total purchase consideration was $1.1 billion and resulted in goodwill of $675.6 million. The goodwill arising from the acquisition largely reflected synergies and cost savings resulting from combining the operations of the companies. First Financial incurred merger related expenses related to the acquisition of MSFG of $3.2 million for the first nine months of 2019 and $37.8 million during the year ended December 31, 2018. The MSFG acquisition provides additional revenue growth and diversification. The goodwill is not deductible for income tax purposes as the transaction was accounted for as a tax-free exchange. For further detail, see Note 6 – Goodwill and Other Intangible Assets. The MainSource transaction was accounted for using the acquisition method of accounting and accordingly, assets acquired, liabilities assumed and consideration exchanged were recorded at estimated fair value on the acquisition date, in accordance with FASB ASC Topic 805, Business Combinations. The fair value measurements of assets acquired and liabilities assumed were subject to refinement for up to one year after the closing date of the acquisition as additional information relative to closing date fair values became available. The fair values of assets acquired and liabilities assumed were considered final as of March 31, 2019. The following table provides the purchase price calculation as of the acquisition date, identifiable assets purchased and liabilities assumed at their estimated fair value. As a condition of the merger, certain acquired assets and liabilities held for sale were divested subsequent to the closing of the merger. There was no gain or loss recorded in the Consolidated Statement of Income in conjunction with this divestiture.
(Dollars in thousands) | MainSource
Purchase consideration |
Cash consideration | $ | 43 |
Stock consideration | 1,043,424 |
Warrant consideration | 14,460 |
Options consideration | 1,577 |
Total purchase consideration | 1,059,504 |
Assets acquired |
Cash | 71,806 |
Investment securities available-for-sale | 900,935 |
Investment securities held-to-maturity | 171,423 |
Other investments | 28,763 |
Loans | 2,792,572 |
Premises and equipment | 98,814 |
Intangible assets | 42,887 |
Other assets | 167,829 |
Assets held for sale | 127,775 |
Total assets acquired | 4,402,804 |
Liabilities assumed |
Deposits | 3,263,920 |
Subordinated notes | 49,027 |
FHLB advances | 291,887 |
Other borrowings | 205,620 |
Other liabilities | 32,649 |
Liabilities held for sale | 175,840 |
Total liabilities assumed | 4,018,943 |
Net identifiable assets | 383,861 |
Goodwill | $ | 675,643 |
The fair value of net assets acquired includes fair value adjustments to certain loans that were not considered impaired as of the acquisition date as the Company believes that all contractual cash flows will be collected. The fair value adjustments were determined using discounted cash flows. In conjunction with the MSFG merger, First Financial acquired loans with a fair value and gross contractual amounts receivable of $2.8 billion and $2.9 billion, respectively, on the date of acquisition. The following table presents supplemental pro forma information as if the MSFG acquisition had occurred at the beginning of 2017. The pro forma information includes adjustments for interest income on acquired loans, amortization of intangible assets arising from the transaction, depreciation expense on property acquired, interest expense on deposits acquired, merger-related expenses incurred and the related income tax effects. The pro forma financial information is not necessarily indicative of the results of operations that would have occurred had the transactions been effected on the assumed date. The disclosures regarding the results of operations for MSFG subsequent to its acquisition date are omitted as this information is not practical to obtain.
| Twelve months ended
|  | December 31,
(Dollars in thousands, except per share data) | 2018 |  | 2017
Pro Forma Condensed Combined Income Statement Information |  |  |  |
Net interest income |  | $ | 484,915 |  |  | $ | 454,579 |
Net income |  | 221,122 |  |  | 130,402 |
Basic earnings per share |  | 2.27 |  |  | 1.34 |
Diluted earnings per share |  | 2.25 |  |  | 1.33 |

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- 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
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