On January 1, 2019, the Company acquired all the outstanding stock of State Bank Financial Corporation (“State Bank”) of Atlanta, Georgia in a stock transaction. The Company completed the accounting for the acquisition of State Bank and the measurement period was closed on December 31, 2019. The acquisition added $3.3 billion in loans and $4.1 billion in deposits. State Bank operated 32 branch locations across Georgia.

Under the terms of the transaction, State Bank shareholders received 1.271 shares of the Company’s Class A common stock in exchange for each share of State Bank common stock resulting in the Company issuing 49.2 million shares of its Class A common stock. In total, the purchase price for State Bank was $826.4 million, including $826.1 million in the Company’s common stock and $0.3 million representing the fair value of unexercised warrants.

The following table provides the purchase price allocation and the consideration paid for State Bank’s net assets.

(In thousands, except shares and per share data)	As Recorded by Cadence
Assets
Cash and cash equivalents	$	414,342
Investment securities available-for-sale		667,865
Loans held for sale		148,469
Loans		3,317,897
Premises and equipment		65,646
Cash surrender value of life insurance		69,252
Intangible assets		117,038
Other assets		47,146
Total assets acquired	$	4,847,655
Liabilities
Deposits	$	4,096,665
Short term borrowings		23,899
Other liabilities		76,368
Total liabilities assumed		4,196,932
Net identifiable assets acquired over liabilities assumed		650,723
Goodwill		175,657
Net assets acquired over liabilities assumed	$	826,380
Consideration:
Cadence Bancorporation common shares issued		49,232,008
Fair value per share of the Company's common stock	$	16.78
Company common stock issued		826,113
Fair value of unexercised warrants		267
Fair value of total consideration transferred	$	826,380

The Company estimated the fair value of loans by utilizing the discounted cash flow method applied to pools of loans aggregated by product categories and interest rate type. In addition, certain cash flows were estimated on an individual loan basis based on current performance and collateral value, if the loan was collateral dependent. Contractual principal and interest cash flows were projected based on the payment type (i.e., amortizing or interest only), interest rate type (i.e., fixed or adjustable), interest rate index, weighted average maturity, weighted average interest rate, weighted average spread, and weighted average interest rate floor of each loan pool. The expected cash flows for each category were determined by estimating future credit losses using probabilities of default (PD), loss given default (LGD) and the rate of prepayments. Projected monthly cash flows were then discounted to present value based on discount rates developed from various sources including an analysis of State Bank’s newly originated loans, a buildup approach and market data. There was no carryover of State Bank’s ACL associated with the loans acquired.

Intangible assets consisted of the core deposit intangible and the customer relationship intangible of a subsidiary. The core deposit intangible asset recognized of $111.9 million is being amortized over its estimated useful life of ten years utilizing an accelerated method. The benefit of the deposit base is equal to the difference in cash flows between maintaining the existing deposits and obtaining alternative funds over the life of the deposit base. The difference was tax effected and discounted to present value at a risk-adjusted discount rate. The valuation of the core deposit base includes estimates of the attrition rates for each deposit type based on historical attrition data and market participant information, in addition to estimates of total costs including interest cost, net maintenance cost, cost of reserves, and cost of float. The customer relationship and trademark intangible recognized of $3.7 million and $1.4 million are being amortized over estimated useful lives of ten and twenty years, respectively, using an accelerated method.

Goodwill of $175.7 million was recorded as a result of the transaction and is not amortized for financial statement purposes. All the goodwill was assigned to the Banking segment. The goodwill recorded is not deductible for income tax purposes. See also Note 5, Goodwill and Other Intangible Assets.

Certificates of deposit, including IRAs, were valued by projecting out the expected cash flows based on the contractual terms of the certificates of deposit. The fair values of savings and transaction deposit accounts were assumed to approximate the carrying value as these accounts have no stated maturity and are payable on demand. These cash flows were discounted using the interest rates on fixed maturity deposits offered by Cadence and State Bank as of January 1, 2019 resulting in a $3.4 million discount amortized over a twelve-month period.

Unfunded commitments are contractual obligations by a financial institution for future funding as it relates to closed end or revolving lines of credit. The Company valued these unfunded commitments at $26.8 million and recorded a liability using the “Netback” method. Because the borrower can draw upon their credit anytime until maturity, the lender must increase its capital on hand to meet funding requirements. Therefore, the undrawn portion is considered a liability (or asset if the loan is valued above par) and is netted back against the asset or the drawn portion. Generally, amortization for revolving lines occurs straight-line over the life of the loan and for closed end loans using the effective yield method over the remaining life of the loan when the loan funds.

On July 1, 2019, the Company’s wholly owned subsidiary, Linscomb & Williams, Inc., acquired certain assets and assumed certain liabilities of Wealth and Pension Services Group, Inc. (“W&P”), a fee-based investment advisory firm with its principal office in Atlanta, Georgia. The total purchase consideration paid of $8.0 million included an initial cash payment of $5.2 million and future cash payments totaling approximately $2.1 million to be paid in installments over a five-year period pursuant to the Asset Purchase Agreement. W&P is also eligible for future earn-out payments pursuant to the Asset Purchase Agreement based on achieving certain levels of earnings growth over a three- and five-year period. The acquisition is accounted for as a business combination. During the third quarter of 2019, the Company recognized provisional identifiable intangible assets with an estimated fair value of $5.1 million, comprised primarily of customer relationships and noncompete agreements. We also recognized provisional goodwill of $2.6 million in connection with the acquisition. These fair value estimates represent our best estimate of fair value and are expected to be finalized over a period of up to one year from the acquisition date. Merger-related expenses of $0.5 million incurred in 2019 are recorded in the consolidated income statement.