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Note 13: Acquisitions
 3 Months Ended
Dec. 31, 2014
Notes  
Note 13: Acquisitions

Note 13: Acquisitions

On August 5, 2014, the Company completed its acquisition of Peoples Service Company (PSC) and its subsidiary, the Peoples Bank of the Ozarks (Peoples), Nixa, Missouri. Peoples was merged into the Company’s bank subsidiary, Southern Bank, in early December, 2014, in connection with the conversion of its data system. The Company acquired Peoples primarily for the purpose of conducting commercial banking activities in markets where it believes the Company’s business model will perform well, and for the long-term value of its core deposit franchise. Through December 31, 2014, the Company incurred $658,000 in third-party acquisition-related costs. Expenses totaling $508,000 are included in noninterest expense in the Company’s consolidated statement of income for the six-months ended December 30, 2014, compared to $0 at December 31, 2013. Notes payable of $2.9 million were contractually required to be repaid on the date of acquisition. The goodwill of $2.9 million arising from the acquisition consists largely of synergies and economies of scale expected from combining the operations of the Company and Peoples. Total goodwill was assigned to the acquisition of the bank holding company.

 

 

The following table summarizes the consideration paid for PSC and Peoples, and the amounts of assets acquired and liabilities assumed recognized at the acquisition date:

 

 

 

Fair Value of Consideration Transferred

(dollars in thousands)

 

Cash

$12,094

Common stock, at fair value

12,331

     Total consideration

$24,425

Recognized amounts of identifiable assets acquired

     and liabilities assumed

Cash and Cash equivalents

$18,236

Interest bearing time deposits

9,950

Investment Securities

31,257

Loans

190,445

Premises and equipment

11,785

Identifiable intangible assets

3,000

Miscellaneous other assets

4,067

Deposits

(221,887)

Advances from FHLB

(16,038)

Subordinated debt

(4,844)

Miscellaneous other liabilities

(1,558)

Notes Payable

(2,921)

     Total identifiable net assets

                                       21,492

          Goodwill

$2,933

 

 

The following unaudited pro forma condensed financial information presents the results of operations of the company, including the effects of the purchase accounting adjustments and acquisition expenses, had the acquisition taken place at the beginning of each period:

 

 

 

Three months ended

Six months ended

 

December 31,

December 31,

 

 2014

2013

2014

2013

(dollars in thousands except per share data)

Interest income

$14,357

$13,460

$28,765

$25,688

Interest expense

2,195

2,288

4,385

4,476

Net interest income

12,162

11,172

24,380

21,212

Provision for loan losses

862

295

1,689

794

Noninterest income

2,187

1,968

4,164

3,621

Noninterest expense

8,590

8,812

17,978

15,636

   Income before income taxes

4,897

4,033

8,877

8,403

Income taxes

1,460

1,179

2,767

2,494

   Net income

3,437

2,854

6,110

5,909

Dividends on preferred shares

50

50

100

100

   Net income available to common stockholders

$3,387

$2,804

$6,010

$5,809

Earnings per share

   Basic

$0.91

$0.77

$1.63

$1.60

   Diluted

$0.89

$0.75

$1.59

$1.55

Basic weighted average shares outstanding

3,702,177

3,642,698

3,695,352

3,641,817

Diluted weighted average shares outstanding

3,796,461

3,747,457

3,788,623

3,740,384

 

 

 

The unaudited pro forma condensed combined financial statements do not reflect any anticipated cost savings and revenue enhancements. Accordingly, the pro forma results of operations of the company as of and after the business combination may not be indicative of the results that actually would have occurred if the combination had been in effect during the periods presented or of the results that may be attained in the future.