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Business Combinations | 6 Months Ended
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Jun. 30, 2017
Business Combinations [Abstract] |
Business Combinations | Business Combinations: On March 13, 2017, the Company announced the agreement and plan of merger with Monitor Bancorp, Inc. (“Monitor”), the holding company for Monitor Bank. Pursuant to the agreement, the actual consideration to be paid will be calculated based on Monitor’s consolidated tangible book value per share as of March 31, 2017, plus the after-tax proceeds of the anticipated sale of Monitor’s interest in the Monitor Wealth Group (in aggregate, “March 31 TBV”). Each shareholder of Monitor will be entitled to elect to receive consideration in cash or in Farmers’ common shares, subject to an overall limitation of 85% of the shares being exchanged for Farmers’ shares and 15% for cash. Based on a current estimate of March 31 TBV, the transaction would be valued at approximately $7.8 million with $1.4 million of goodwill recorded. The merger is expected to qualify as a tax-free reorganization for those Monitor shareholders electing to receive Farmers’ shares. The transaction has received customary regulatory approval and is now subject to Monitor shareholder approval. The Company expects the transaction to close in the third quarter of 2017. On June 1, 2016, the Bank completed the acquisition of the Bowers Insurance Agency, Inc., and merged all activity of Bowers with Insurance, the Bank’s wholly-owned insurance agency subsidiary. The Bowers group is engage in selling insurance including commercial, farm, home, and auto property/casualty insurance and will help to meet the needs of all the Company’s customers. The transaction involved both cash and 123,280 shares of stock totaling $3.2 million, including up to $1.2 million of future payments, contingent upon Bowers meeting performance targets, with an estimated fair value at the acquisition date of $880 thousand. The first of three contingent payments of cash and stock were made, during July 2017, totaling $316 thousand, which reduce the earnout payable to $564 thousand. The acquisition is part of the Company’s plan to increase the levels of noninterest income and to complement the existing insurance services currently being offered. Goodwill of $1.8 million, which is recorded on the balance sheet, arising from the acquisition consisted largely of synergies and the cost savings resulting from the combining of the companies. The goodwill was determined not to be deductible for income tax purposes. The fair value of other intangible assets of $1.6 million is related to client relationships, company name and noncompetition agreements. The following table summarizes the consideration paid for Bowers and the amounts of the assets acquired and liabilities assumed on the closing date of the acquisition.
(In Thousands of Dollars) |  |  |
Consideration |  |  |
Cash | $ | 1,137 |
Stock |  | 1,138 |
Contingent consideration |  | 880 |
Fair value of total consideration transferred | $ | 3,155 |
Fair value of assets acquired |  |  |
Cash | $ | 64 |
Premises and equipment |  | 290 |
Other assets |  | 34 |
Total assets acquired |  | 388 |
Fair value of liabilities assumed |  | 124 |
Net assets acquired | $ | 264 |
Assets and liabilities arising from acquisition |  |  |
Identified intangible assets |  | 1,630 |
Deferred tax liability |  | (588 | )
Goodwill created |  | 1,849 |
Total net assets acquired | $ | 3,155 |
The following table presents pro forma information as if the above acquisition that occurred during June 2016 actually took place at the beginning of 2016. The pro forma information includes adjustments for merger related costs, amortization of intangibles arising from the transaction 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 effective on the assumed date.
| For Three Months Ended |  | For Six Months Ended |
(In thousands of dollars except per share results) | June 30, 2016 |
Net interest income | $ | 16,889 |  | $ | 33,636 |
Net income | $ | 5,003 |  | $ | 9,789 |
Basic and diluted earnings per share | $ | 0.18 |  | $ | 0.36 |

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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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