|12 Months Ended|
Dec. 31, 2021
|Business Combinations [Abstract]|
NOTE 3. BUSINESS COMBINATIONS
Simmons Branch Acquisition
On February 28, 2020, the Company completed its acquisition of certain assets and assumption of certain liabilities associated with five branch offices of Simmons Bank (the “Simmons branch acquisition”). The offices are located in Austin, San Antonio and Tilden, Texas. The Company paid total cash for the purchase of $131.6 million. The Simmons branch acquisition was accounted for as a business combination in accordance with ASC 805 “Business Combinations”.
The Company has recognized total goodwill of $11.5 million which is calculated as the excess of both the consideration exchanged and liabilities assumed compared to the fair market value of identifiable assets acquired. Goodwill in the amount of $7.5 million recognized is expected to be deductible for income tax purposes and will be amortized over 15 years.
The Company incurred expenses related to the Simmons branch acquisition of approximately $441 thousand for the year ended December 31, 2020, which are included in noninterest expense in the consolidated statements of income. The Company did not incur any expenses related to the acquisition for the year ended December 31, 2019.
The Company did not identify any loans deemed purchased credit impaired at the acquisition date. Non-credit impaired loans had a preliminary fair value of $255.5 million at the acquisition date and contractual balance of $260.3 million. As of the acquisition date, the Company expects that an insignificant amount of the contractual balance of these loans will be uncollectible. The difference of $4.8 million will be recognized into interest income as an adjustment to yield over the life of the loans.
Estimated fair values of the assets acquired and the liabilities assumed in the Simmons branch acquisition as of the closing date are as follows:
As of June 30, 2020, management completed evaluating the fair values of all assets acquired and liabilities assumed in the Simmons branch acquisition.
Revenues and earnings of Simmons branches since the acquisition date have not been disclosed as these branches were merged into the Company during 2020.
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).
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef