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Acquisitions | 12 Months Ended
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Dec. 31, 2018
Business Combinations [Abstract] |
Acquisitions | ACQUISITIONS Independent Alliance Banks, Inc. On November 21, 2016, the Corporation purchased 495,112 shares, or 12.1 percent, of IAB's outstanding common stock from an IAB shareholder for $19.8 million, or $40.00 per share. On July 14, 2017, the Corporation acquired the remaining shares of IAB common stock. IAB, an Indiana Corporation, merged with and into the Corporation, whereupon the separate corporate existence of IAB ceased and the Corporation survived. Immediately following the merger, IAB's wholly-owned subsidiary, iAB Financial Bank, merged with and into the Bank, with the Bank continuing as the surviving bank. IAB was headquartered in Fort Wayne, Indiana and had 16 banking centers serving the Fort Wayne market. Pursuant to the merger agreement, each IAB shareholder received 1.653 shares of the Corporation's common stock for each outstanding share of IAB common stock held. The Corporation issued approximately 6.0 million shares of common stock. The transaction value for the remaining shares of common stock, not owned by the Corporation, was approximately $238.8 million, resulting in a total purchase price of $258.6 million. The Corporation engaged in this transaction with the expectation that it would be accretive to income and add a new market area with a demographic profile consistent with many of the current Indiana markets served by the Bank. Goodwill resulted from this transaction due to the expected synergies and economies of scale. In the third quarter of 2017, ASC 805-10 - Business Combinations, required the Corporation to remeasure the 12.1 percent equity interest in IAB's common stock and recognize the resulting gain or loss, if any, in earnings. The remeasurement was based upon the closing price of IAB's common stock immediately prior to the acquisition announcement, and prior to the Corporation obtaining control of IAB. The trading price of IAB's common stock subsequent to the acquisition announcement included a control or acquisition premium and was not indicative of the fair value of the Corporation's pre-existing equity interest immediately prior to the acquisition announcement. The fair value of the equity interest in IAB's common stock after the remeasurement was $19.8 million. The Corporation recorded a $50,000 loss in 2017 as a result of the remeasurement and the loss is reflected in the Corporation's Consolidated Statements of Income in the line titled "Net realized gains on sales of available for sale securities." Under the acquisition method of accounting, the total purchase price is allocated to net tangible and intangible assets based on their current estimated fair values on the date of the acquisition. Based on valuations of the fair value of tangible and intangible assets acquired and liabilities assumed, which are based on assumptions that are subject to change, the purchase price for the IAB acquisition is detailed in the following table.
|  | Fair Value
Cash and cash equivalents |  | $ | 6,016 |
Interest-bearing time deposits |  | 248,212 |
Investment securities |  | 4,078 |
Loans held for sale |  | 594 |
Loans |  | 725,382 |
Premises and equipment |  | 10,107 |
Federal Home Loan Bank stock |  | 4,810 |
Interest receivable |  | 3,445 |
Cash surrender value of life insurance |  | 26,964 |
Other assets |  | 11,780 |
Deposits |  | (862,271 | )
Securities sold under repurchase agreements |  | (17,915 | )
Federal Home Loan Bank Advances |  | (47,575 | )
Subordinated debentures |  | (10,583 | )
Interest payable |  | (1,005 | )
Other liabilities |  | (14,472 | )
Net tangible assets acquired |  | 87,567 |
Other Intangible assets |  | 17,403 |
Goodwill |  | 153,636 |
Purchase price |  | $ | 258,606 |
Of the total purchase price, $17,403,000 has been allocated to other intangible assets. Approximately $13.6 million was allocated to a core deposit intangible, which will be amortized over its estimated life of 10 years. Approximately $3.8 million was allocated to a non-compete intangible, which will be amortized over its estimated life of 2 years. The remaining purchase price was allocated to goodwill, which is not deductible for tax purposes. Acquired loan data for IAB can be found in the table below:
| Fair Value of Acquired Loans at Acquisition Date |  | Gross Contractual Amounts Receivable at Acquisition Date |  | Best Estimate at Acquisition Date of Contractual Cash Flows Not Expected to be Collected
Acquired receivables subject to ASC 310-30 | $ | 4,838 |  |  | $ | 14,131 |  |  | $ | 8,352 |
Acquired receivables not subject to ASC 310-30 | $ | 720,544 |  |  | $ | 864,613 |  |  | $ | 9,786 |
Purchased loans with evidence of credit deterioration since origination and for which it is probable at the date of acquisition that the acquirer will not collect all contractually required principal and interest payments are accounted for under ASC 310-30, Loans Acquired with Deteriorated Credit Quality. The difference between contractually required payments and the cash flows expected to be collected at acquisition is referred to as the nonaccretable difference. The accretable portion of the fair value discount or premium is the difference between the expected cash flows and the net present value of expected cash flows, with such difference accreted into earnings over the term of the loans. The Arlington Bank On May 19, 2017, the Corporation acquired 100 percent of Arlington Bank. Arlington Bank, an Ohio savings bank, merged with and into the Bank, with the Bank continuing as the surviving bank. Arlington Bank was headquartered in Columbus, Ohio and had 3 banking centers serving the Columbus, Ohio market. Pursuant to the merger agreement, each Arlington Bank shareholder received 2.7245 shares of the Corporation's common stock for each outstanding share of Arlington Bank common stock held. The Corporation issued approximately 2.1 million shares of common stock, which was valued at approximately $82.6 million. The Corporation engaged in this transaction with the expectation that it would be accretive to income and expand the existing footprint in Columbus, Ohio. Goodwill resulted from this transaction due to the expected synergies and economies of scale. Under the acquisition method of accounting, the total purchase price is allocated to net tangible and intangible assets based on their current estimated fair values on the date of the acquisition. Based on valuations of the fair value of tangible and intangible assets acquired and liabilities assumed, which are based on assumptions that are subject to change, the purchase price for the Arlington Bank acquisition is detailed in the following table.
|  | Fair Value
Cash and cash equivalents |  | $ | 48,532 |
Interest-bearing time deposits |  | 292 |
Loans held for sale |  | 7,626 |
Loans |  | 224,680 |
Premises and equipment |  | 1,986 |
Federal Home Loan Bank stock |  | 1,091 |
Interest receivable |  | 653 |
Other assets |  | 1,620 |
Deposits |  | (252,783 | )
Interest payable |  | (244 | )
Other liabilities |  | (3,106 | )
Net tangible assets acquired |  | 30,347 |
Core deposit intangible |  | 4,526 |
Goodwill |  | 47,719 |
Purchase price |  | $ | 82,592 |
Of the total purchase price, $4,526,000 has been allocated to a core deposit intangible that will be amortized over its estimated life of 10 years. The remaining purchase price was allocated to goodwill, which is not deductible for tax purposes. Acquired loan data for Arlington Bank can be found in the table below:
| Fair Value of Acquired Loans at Acquisition Date |  | Gross Contractual Amounts Receivable at Acquisition Date |  | Best Estimate at Acquisition Date of Contractual Cash Flows Not Expected to be Collected
Acquired receivables subject to ASC 310-30 | $ | 2,625 |  |  | $ | 6,183 |  |  | $ | 2,891 |
Acquired receivables not subject to ASC 310-30 | $ | 222,055 |  |  | $ | 308,857 |  |  | $ | 2,741 |
Purchased loans with evidence of credit deterioration since origination and for which it is probable at the date of acquisition that the acquirer will not collect all contractually required principal and interest payments are accounted for under ASC 310-30, Loans Acquired with Deteriorated Credit Quality. The difference between contractually required payments and the cash flows expected to be collected at acquisition is referred to as the nonaccretable difference. The accretable portion of the fair value discount or premium is the difference between the expected cash flows and the net present value of expected cash flows, with such difference accreted into earnings over the term of the loans. Pro Forma Financial Information The results of operations of Arlington Bank and IAB have been included in the Corporation's consolidated financial statements since the acquisition dates. The following schedule includes pro forma results for the year ended December 31, 2017 and 2016, as if the Arlington Bank and IAB acquisitions occurred as of the beginning of the periods presented.
| 2017 |  | 2016
Total revenue (net interest income plus other income) | $ | 380,324 |  |  | $ | 353,732 |
Net income available to common shareholders | $ | 95,009 |  |  | $ | 95,288 |
Earnings per share: |  |  |
Basic | $ | 1.94 |  |  | $ | 1.95 |
Diluted | $ | 1.93 |  |  | $ | 1.94 |
The pro forma information includes adjustments for interest income on loans, interest expense on deposits and borrowings, premises expense for the banking centers acquired and amortization of intangibles arising from the transaction and the related income tax effects. The pro forma information for the year ended December 31, 2017 includes operating revenue of $9.0 million and $21.4 million from Arlington Bank and IAB acquisitions since the date of acquisition, respectively. Additionally, $15.4 million, net of tax, of expenses directly attributable to the Arlington Bank and IAB acquisitions were included in the year ended December 31, 2017 pro forma information. The pro forma information for the year ended December 31, 2016 includes operating results from Arlington Bank and IAB as if the acquisitions occurred at the beginning of the year. The pro forma information is presented for information purposes only and is not indicative of the results of operations that actually would have been achieved had the acquisitions been consummated as of that time, nor is it intended to be a projection of future results.

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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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- References No definition available. + Details
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