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Business Combinations | 9 Months Ended
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Sep. 30, 2018
Business Combinations [Abstract] |
Business Combinations | Business Combinations: On August 15, 2017, the Company completed the acquisition of Monitor, the holding company for Monitor Bank. The transaction involved both cash and 465,787 shares of stock totaling $7.5 million. Pursuant to the terms of the merger agreement, common shareholders of Monitor were entitled to elect to receive consideration in cash or in common shares, without par value, of the Company, subject to an overall limitation of 85% of the Monitor common shares being exchanged for the Company’s common shares and 15% exchanged for cash. The per share cash consideration of $769.38 is equal to Monitor’s March 31 tangible book value multiplied by 1.25. Based on the volume weighted average closing price of the Company’s common shares for the 20 trading days ended August 11, 2017 of $14.04, the final stock exchange ratio was 54.80, resulting in an implied value per Monitor common share of $769.38. Goodwill of $1.0 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 $673 thousand is related to core deposits. The following table summarizes the consideration paid for Monitor and the amounts of the assets acquired and liabilities assumed on the closing date of the acquisition.
(In Thousands of Dollars) |  |  |
Consideration |  |  |
Cash | $ | 1,154 |
Stock |  | 6,358 |
Fair value of total consideration transferred | $ | 7,512 |
Fair value of assets acquired |  |  |
Cash and due from financial institutions | $ | 17,673 |
Securities available for sale |  | 3,057 |
Loans, net |  | 19,315 |
Premises and equipment |  | 192 |
Core deposit intangible |  | 673 |
Other assets |  | 272 |
Total assets |  | 41,182 |
Fair value of liabilities assumed |  |  |
Deposits |  | 34,586 |
Accrued interest payable and other liabilities |  | 121 |
Total liabilities |  | 34,707 |
Net assets acquired | $ | 6,475 |
Goodwill created |  | 1,037 |
Total net assets acquired | $ | 7,512 |
On June 1, 2016, the Bank completed the acquisition of Bowers, and merged all activity of Bowers with Insurance, the Bank’s wholly-owned insurance agency subsidiary. Bowers is engaged 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. Subsequent to the first payment, management conducted a valuation of the contingent consideration and found it necessary to reduce the future payment liability associated with the remaining two payments down to $200 thousand at year end 2017. The $364 thousand was recorded as a reduction to acquisition related costs in the Consolidated Statements of Income as of December 31, 2017. The Company conducts this valuation work annually. The earnout calculation for the second of three contingent payments was completed during June of 2018 and determined that no payment was earned or due. 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 Monitor acquisition that occurred during August 2017 actually took place at the beginning of 2017. 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 Sept. 30, |  |  | For Nine Months Ended Sept. 30, |
(In thousands of dollars except per share results) | 2017 |  |  | 2017 |
Net interest income | $ | 18,841 |  |  | $ | 55,408 |
Net income | $ | 6,016 |  |  | $ | 17,641 |
Basic and diluted earnings per share | $ | 0.22 |  |  | $ | 0.64 |

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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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