FDIC-assisted Acquisition

3 Months Ended

Jun. 30, 2012

FDIC-assisted Acquisition:

FDIC-assisted Acquisition

NOTE 14: FDIC-ASSISTED ACQUISITION

On April 27, 2012, Great Southern Bank entered into a purchase and assumption agreement, including a loss sharing agreement as described in Note 8, with the FDIC to purchase substantially all of the assets and assume substantially all of the deposits and other liabilities of Inter Savings Bank, FSB (“InterBank”), a full-service bank headquartered in Maple Grove, MN.  Established in 1965, InterBank operated four locations in three counties in the Minneapolis-St. Paul area.   The fair values of the assets acquired and liabilities assumed in the transaction were as follows:

	April 27,
	2012
Cash	$493
Due from banks	74,834
Cash and cash equivalents	75,327
Investment securities	34,914
Loans receivable, net of discount on loans purchased of $107,816	285,458
Foreclosed real estate	6,216
FDIC indemnification asset	83,989
Federal Home Loan Bank of Des Moines stock	585
Accrued interest receivable	1,672
Core deposit intangible	1,017
Other assets	873
Total assets acquired	490,051
Liabilities
Demand and savings deposits	97,838
Time deposits	358,414
Total deposits	456,252
Accounts payable	2,272
Accrued interest payable	197
Other liabilities	18
Total liabilities assumed	458,739
Gain recognized on business acquisition	$31,312

Under the terms of the Purchase and Assumption Agreement, the FDIC agreed to transfer net assets to Great Southern at a discount of $59.9 million to compensate Great Southern for losses not covered by the loss sharing agreement and troubled asset management costs.  No premium was paid to the FDIC for the deposits, resulting in a net purchase discount of $59.9 million.  Details related to the transfer are as follows:

	April 27,
	2012
Net assets as determined by the FDIC	$21,308
Cash transferred by the FDIC	40,810
Net assets per Purchase and Assumption Agreement	62,118
Purchase accounting adjustments
Loans	(107,816)
Foreclosed real estate	(3,692)
FDIC indemnification asset	83,989
Deposits	(1,972)
Investments	(114)
Core deposit intangible	1,017
Other adjustments	(2,218)
Gain recognized on business acquisition	$31,312

The acquisition of the net assets of InterBank was determined to constitute a business acquisition in accordance with FASB ASC 805.  FASB ASC 805 allows a measurement period of up to one year to adjust initial fair value estimates as of the acquisition date.  Therefore, assets acquired and liabilities assumed were recorded on a preliminary basis at fair value on the date of acquisition, after adjustment for expected loss recoveries under the loss sharing agreement which is described in Note 8.  Based upon the preliminary acquisition date fair values of the net assets acquired, no goodwill was recorded.  The transaction resulted in a preliminary bargain purchase gain of $31.3 million for the three and six months ended June 30, 2012.  The transaction also resulted in the recording of a deferred tax liability in the initial amount of $11.0 million.