Note 22: Acquisitions

 

On January 8, 2015, First Busey completed its acquisition of Herget Financial, headquartered in Pekin, Illinois and its wholly-owned bank subsidiary, Herget Bank.  Herget Bank operates three branches in Pekin, Illinois.  The acquisition of Herget Financial allows us to further increase our presence in the Pekin and greater Peoria market.  Additionally, Herget Financial holds a dominant deposit market position in its community and offers trust, estate and asset management services, as well as competitive commercial loan and mortgage offerings, all of which complement First Busey’s offerings. First Busey acquired 100% of Herget Financial’s outstanding common stock for aggregate cash consideration of $34.1 million.  Each share of Herget Financial common stock received $588.00 in cash.

 

First Busey will operate Herget Bank as a separate banking subsidiary from January 9, 2015 until it is merged with Busey Bank, which is expected to occur shortly after the filing of this Form 10-K.  At that time, Herget Bank’s banking offices will become branches of Busey Bank.

 

This transaction will be accounted for using the acquisition method of accounting and, accordingly, assets acquired, liabilities assumed, and consideration exchanged will be recorded at estimated fair values on the date of acquisition.  Fair value assessments are incomplete as of the filing date of this Form 10-K.  Fair values are subject to refinement for up to one year after the closing date of January 8, 2015.

 

During 2014, First Busey incurred $0.4 million of acquisition expenses related to this transaction, comprised primarily of legal, accounting, and system conversion costs.  As of December 31, 2014, Herget Financial and Herget Bank had total consolidated assets of $278.8 million, total investments of $113.0 million, total gross loans of $112.6 million and total deposits of $246.4 million.