Note 17: Acquisitions

12 Months Ended

Jun. 30, 2014

Notes

Note 17: Acquisitions

NOTE 17: Acquisitions

On October 4, 2013, the Company acquired 100% of the outstanding stock of Ozarks Legacy Community Financial, Inc. (OLCF), and its subsidiary, the Bank of Thayer, headquartered in Thayer, Missouri. The Bank of Thayer was merged into the Company’s existing bank subsidiary, Southern Bank, on that date. The Company completed the conversion of data systems for the OLCF operations in December, 2013.  The Company acquired OLCF primarily for the purpose of conducting commercial banking activities in markets where it believes the Company’s business model will perform well, and for the long-term value of its core deposit franchise. Through June 30, 2014, the Company incurred $718,000 in third-party acquisition-related costs. The expenses are included in noninterest expense in the Company’s consolidated statement of income for the year ended June 30, 2014. The goodwill of $1,474,000 arising from the acquisition consists largely of synergies and economies of scale expected from combining the operations of the Company and OLCF. Total goodwill was assigned to the acquisition of the bank holding company.

The following table summarizes the consideration paid for OLCF and its subsidiary, the Bank of Thayer and the amounts of assets acquired and liabilities assumed recognized at the acquisition date:

Fair Value of Consideration Transferred
Cash	$6,279,694
Contingent consideration	-
Total consideration	$6,279,694
Recognized amounts of identifiable assets acquired
and liabilities assumed
Cash and Cash equivalents	$2,234,980
Investment Securities	34,271,743
Loans	39,368,508
Premises and equipment	1,155,297
Identifiable intangible assets	1,432,645
Miscellaneous other assets	1,285,870
Deposits	(68,234,600)
Securities sold under agreements to repurchase	(1,099,675)
Advances from FHLB	(1,095,928)
Subordinated debt	(2,490,890)
Miscellaneous other liabilities	(2,022,076)
Liability arising from a contingency
Total identifiable net assets	4,805,874
Goodwill	$1,473,820

On February 21, 2014, the Company completed its acquisition of Citizens State Bankshares of Bald Knob, Inc., and its subsidiary, the Citizens State Bank, Bald Knob, Arkansas (herein collectively, “Citizens State Bank”).  Citizens State Bank was merged into the Company’s existing bank subsidiary, Southern Bank, on that date. The Company completed the conversion of data systems for the Citizens State Bank operations in April, 2014. The Company acquired CSB primarily for the purpose of conducting commercial banking activities in markets where it believes the Company’s business model will perform well, and for the long-term value of its core deposit franchise.  Through June 30, 2014, the Company incurred $368,000 in third-party acquisition-related costs. The expenses are included in noninterest expense in the Company’s consolidated statement of income for the year ended June 30, 2014.   There was no goodwill arising from the acquisition.

The following table summarizes the consideration paid for Citizens State Bankshares of Bald Knob, Inc. and its subsidiary, Citizens State Bank and the amounts of assets acquired and liabilities assumed recognized at the acquisition date:

Fair Value of Consideration Transferred
Cash	$5,708,211
Contingent consideration	-
Total consideration	$5,708,211
Recognized amounts of identifiable assets acquired
and liabilities assumed
Cash and Cash equivalents	$4,167,979
Investment Securities	50,539,865
Loans	11,984,135
Premises and equipment	612,540
Identifiable intangible assets	624,440
Miscellaneous other assets	4,075,288
Deposits	(64,154,307)
Advances from FHLB	(1,499,904)
Securities sold under agreements to repurchase
Subordinated debt	-
Miscellaneous other liabilities	(641,825)
Liability arising from a contingency	-
Total identifiable net assets	5,708,211
Goodwill	$-