Note 17: Acquisitions

12 Months Ended

Jun. 30, 2016

Notes

Note 17: Acquisitions

NOTE 17: Acquisitions

On August 5, 2014, the Company completed its acquisition of Peoples Service Company (PSC) and its subsidiary, Peoples Bank of the Ozarks (Peoples), Nixa, Missouri. Peoples was merged into the Company’s bank subsidiary, Southern Bank, in early December, 2014, in connection with the conversion of Peoples’ data system. The Company acquired Peoples 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, 2016, the Company incurred $678,000 in third-party acquisition-related costs. Expenses totaling $528,000 are included in noninterest expense in the Company’s consolidated statement of income for the year ended June 30, 2015 and $150,000 for the year ended June 30, 2014 with no comparable expenses in the current period. Notes payable of $2.9 million were contractually required to be repaid on the date of acquisition. The goodwill of $3.0 million arising from the acquisition consists largely of synergies and economies of scale expected from combining the operations of the Company and Peoples. Goodwill from this transaction was assigned to the acquisition of the bank holding company, and is not expected to be deductible for tax purposes.

The following unaudited pro forma condensed financial information presents the results of operations of the Company, including the effects of the purchase accounting adjustments and acquisition expenses, had the acquisition taken place at the beginning of the period:

	For the year ended June 30,
	2016	2015
(dollars in thousands except per share data)
Interest income	56,317	56,368
Interest expense	9,365	8,864
Net interest income	46,952	47,504
Provision for loan losses	2,494	3,185
Noninterest income	9,758	8,774
Noninterest expense	32,686	34,066
Income before income taxes	21,530	19,027
Income taxes	6,682	5,982
Net income	14,848	13,045
Dividends on preferred shares	85	200
Net income available to common stockholders	14,763	12,845
Earnings per share
Basic	$                 1.99	$                 1.72
Diluted	$                 1.98	$                 1.70
Basic weighted average shares outstanding - split adjusted	7,430,170	7,469,027
Diluted weighted average shares outstanding - split adjusted	7,458,759	7,573,027