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Acquisition | 3 Months Ended
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Mar. 31, 2019
Business Combinations [Abstract] |
Acquisition | ACQUISITION Acquisition of Trinity Capital Corporation. On March 8, 2019, the Company closed its acquisition of 100% of Trinity Capital Corporation (“Trinity”) and its wholly-owned subsidiary, Los Alamos National Bank (“LANB”). Trinity operated six full-service retail and commercial banking offices in Los Alamos, Santa Fe, and Albuquerque, New Mexico. Trinity shareholders received cash consideration in an amount of $1.84 per share of Trinity common stock and 0.1972 shares of EFSC common stock per share of Trinity common stock with cash in lieu of fractional shares. Aggregate consideration at closing was 4.0 million shares of EFSC common stock and $37.3 million cash paid to Trinity shareholders. Based on EFSC’s closing stock price of $43.07 on March 7, 2019, the overall transaction had a value of $209.2 million. The Company also recognized $7.3 million and $1.3 million of merger related costs that were recorded in noninterest expense in the statement of operations for the three months ended March 31, 2019, and year ended December 31, 2018, respectively. The acquisition of Trinity has been accounted for as a business combination using the acquisition method of accounting which requires assets acquired and liabilities assumed to be recognized at fair value as of the acquisition date. The estimates of fair value are preliminary and subject to refinement as the Company completes its evaluation of the acquired assets and liabilities. Goodwill of $90.3 million arising from the acquisition consists largely of the synergies and economies of scale expected from combining the operations of Trinity into Enterprise. The goodwill is assigned as part of the Company’s Banking reporting unit. None of the goodwill recognized is expected to be deductible for income tax purposes. The following table presents the assets acquired and liabilities assumed of Trinity as of March 8, 2019. The following information is presented on a provisional basis based upon all information available to the Company at the present time and is subject to change, and such changes could be material. The Company continues to review the underlying assumptions and valuation techniques utilized to calculate the fair value of certain definite-lived intangibles, loans, goodwill and deferred income taxes. Additional adjustments may be recorded during the allocation period specified by ASC 805 as additional information becomes known.
(in thousands) | As Recorded by TCC |  | Adjustments |  | As Recorded by EFSC
Assets acquired: |  |  |  |  |
Cash and cash equivalents | $ | 13,899 |  |  | $ | — |  |  | $ | 13,899 |
Interest-earning deposits greater than 90 days | 100 |  |  | — |  |  | 100 |
Securities | 428,715 |  |  | (414 | ) | (a) | 428,301 |
Loans, net | 705,057 |  |  | (21,493 | ) | (b) | 683,564 |
Other real estate | 5,284 |  |  | (321 | ) | (c) | 4,963 |
Other investments | 6,673 |  |  | — |  |  | 6,673 |
Fixed assets, net | 27,586 |  |  | 500 |  | (d) | 28,086 |
Accrued interest receivable | 3,997 |  |  | — |  |  | 3,997 |
Intangible assets | — |  |  | 23,333 |  | (e) | 23,333 |
Deferred tax assets | 10,708 |  |  | 2 |  | (f) | 10,710 |
Other assets | 35,045 |  |  | (2,947 | ) | (g) | 32,098 |
Total assets acquired | $ | 1,237,064 |  |  | $ | (1,340 | ) |  | $ | 1,235,724 |
Liabilities assumed: |  |  |  |  |
Deposits | $ | 1,081,151 |  |  | $ | 36 |  | (h) | $ | 1,081,187 |
Subordinated debentures | 26,806 |  |  | (4,325 | ) | (i) | 22,481 |
Federal Home Loan Bank advances | 6,800 |  |  | 171 |  | (j) | 6,971 |
Accrued interest payable | 370 |  |  | — |  |  | 370 |
Other liabilities | 5,842 |  |  | — |  |  | 5,842 |
Total liabilities assumed | $ | 1,120,969 |  |  | $ | (4,118 | ) |  | $ | 1,116,851 |
Net assets acquired | $ | 116,095 |  |  | $ | 2,778 |  |  | $ | 118,873 |
Consideration paid: |  |  |  |  |
Cash |  |  |  |  | $ | 37,276 |
Common stock |  |  |  |  | 171,884 |
Total consideration paid |  |  |  |  | $ | 209,160 |
Goodwill |  |  |  |  | $ | 90,287 |
(a) | Fair value adjustments of the securities portfolio as of the acquisition date.
(b) | Fair value adjustments based on the Company’s evaluation of the acquired loan portfolio, write-off of net deferred loan costs and elimination of the allowance for loan losses recorded by Trinity.
(c) | Fair value adjustment based on the Company’s evaluation of the acquired OREO portfolio.
(d) | Fair value adjustments based on the Company’s evaluation of the acquired premises and equipment.
(e) | Recording of the core deposit intangible asset on the acquired core deposit accounts. Amount to be amortized using a sum of years digits method over a useful life of 10 years.
(f) | Adjustment for deferred taxes at the acquisition date.
(g) | Fair value adjustment of other assets at the acquisition date.
(h) | Fair value adjustment to time deposits.
(i) | Fair value adjustment to the trust preferred securities at the acquisition date.
(j) | Fair value adjustment to the Federal Home Loan Bank borrowings.
The following table provides the unaudited pro forma information for the results of operations for the three months ended March 31, 2019 and 2018, as if the acquisition had occurred on January 1, 2018. The pro forma results combine the historical results of Trinity with the Company’s Consolidated Statements of Income, adjusted for the impact of the application of the acquisition method of accounting including loan discount accretion, intangible assets amortization, and deposit and trust preferred securities premium accretion, net of taxes. The pro forma results have been prepared for comparative purposes only and are not necessarily indicative of the results that would have been obtained had the acquisition actually occurred on January 1, 2018. No assumptions have been applied to the pro forma results of operations regarding possible revenue enhancements, expense efficiencies or asset dispositions. Only the acquisition related expenses that have been incurred as of March 31, 2019 are included in net income in the table below.
| Pro Forma
| Three months ended March 31,
(in thousands, except per share data) | 2019 |  | 2018
Total revenues (net interest income plus noninterest income) | $ | 71,983 |  |  | $ | 68,874 |
Net income | 23,100 |  |  | 15,009 |
Diluted earnings per common share | 0.82 |  |  | 0.55 |

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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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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