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Acquisitions and FDIC Indemnification Asset
 9 Months Ended
Sep. 30, 2020
Business Combinations [Abstract]  
Acquisitions and FDIC Indemnification Asset Acquisitions
 
On July 27, 2019, the Corporation completed its acquisition of HopFed Bancorp, Inc. and its banking subsidiary, Heritage Bank. Therefore, the results of HopFed have been included in the results of operations beginning on July 27, 2019. Pursuant to the terms of the merger agreement, each issued and outstanding share of HopFed common stock, $0.01 par value per share, was converted into the right to receive, at the stockholder's election, either (or a combination of) 0.444 shares of Corporation common stock, without par value, or $21.00 in cash, subject to proration provisions specified in the merger agreement that provide for an aggregate split of 50% of shares of HopFed Common Stock being exchanged for Corporation Common Stock and 50% for cash, with cash to be paid in lieu of fractional shares. Each outstanding share of Corporation common stock remained outstanding and was unaffected by the merger. Acquisition-related costs of $3.3 million are included in the Corporation's income statement for the year ended December 31, 2019.

Goodwill of $44.2 million arising from the acquisition consisted largely of synergies and the cost savings resulting from the combining of the operations of the companies. The goodwill is not deductible for income tax purposes as the transaction was accounted for as a tax-free exchange. The following table summarizes the consideration paid and the amounts of the assets acquired and liabilities assumed recognized at the acquisition date.
(Dollar amounts in thousands)As Initially ReportedMeasurement Period AdjustmentsAs Adjusted
Consideration
Cash consideration$67,348 $— $67,348 
Stock consideration61,878 — 61,878 
Fair value of total consideration transferred$129,226 $— $129,226 
Assets acquired
Cash$34,518 $34,518 
Investment securities available-for-sale174,851 174,851 
Bank owned life insurance10,693 10,693 
Federal Home Loan Bank stock4,428 4,428 
Loans657,179 1,719 658,898 
Premises and equipment25,316 (6,494)18,822 
Core deposit intangibles10,369 10,369 
Other real estate owned3,364 3,364 
Other assets6,596 1,600 8,196 
     Total assets acquired927,314 (3,175)924,139 
Liabilities assumed
Deposits735,526 735,526 
FHLB advances20,775 20,775 
Other borrowings75,783 75,783 
Other liabilities7,066 7,066 
     Total liabilities assumed839,150 — 839,150 
Net identifiable assets88,164 (3,175)84,989 
Goodwill$41,062 $3,175 $44,237 
The fair value of net assets acquired includes fair value adjustments to certain receivables that were not considered impaired as of the acquisition date. The fair value adjustments were determined using discounted contractual cash flows. However, the Corporation believes that all contractual cash flows related to these financial instruments will be collected. As such, these receivables were not considered impaired at the acquisition date and were not subject to guidance relating to purchase credit impaired loans, which have shown evidence of credit deterioration since origination.

The following table presents supplemental pro forma information as if the acquisition had occurred at the beginning of 2018. The unaudited pro forma information includes adjustments for interest income on loans and securities acquired, interest expense on deposits acquired, and the related income tax effects. The pro forma financial information is not necessarily indicative of the results of operations that would have occurred had the transactions been effected on the assumed dates.
Year ended December 31,
(Dollar amounts in thousands, except per share data)20192018
Net interest income$147,581 $145,136 
Net income$51,088 $52,252 
Basic and diluted earnings per share$3.97 $4.26 
FASB ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality, applies to a loan with evidence of deterioration of credit quality since origination, acquired by completion of a transfer for which it is probable, at acquisition, that the investor will be unable to collect all contractually required payments receivable. FASB ASC 310-30 prohibits carrying over or creating an allowance for loan losses upon initial recognition.

Purchase credit impaired loans purchased during the year ended December 31, 2019, for which it was probable at acquisition that all contractually required payments would not be collected are as follows:
(Dollar amount in thousands)As Initially ReportedMeasurement Period AdjustmentsAs Adjusted
Contractually required payments receivable of loans purchased during the year:
     Commercial$16,530 $(3,523)$13,007 
     Consumer391 (296)95 
$16,921 $(3,819)$13,102 
Fair value of acquired loans at acquisition$8,870 $(1,857)$7,013 

The carrying amount of loans accounted for in accordance with FASB ASC 310-30 at September 30, 2020 and 2019 are shown in the following tables:
 2020
(Dollar amounts in thousands)CommercialConsumerTotal
Beginning balance, July 1,$4,836 $— $4,836 
Discount accretion— — — 
Disposals(469)— (469)
ASC 310-30 Loans, September 30,$4,367 $— $4,367 
 2020
(Dollar amounts in thousands)CommercialConsumerTotal
Beginning balance, January 1,$7,269 $— $7,269 
Discount accretion— — — 
Disposals(2,902)— (2,902)
ASC 310-30 Loans, September 30,$4,367 $— $4,367 
 2019
(Dollar amounts in thousands)CommercialConsumerTotal
Beginning balance, July 1,$1,458 $— $1,458 
Loans added8,610 260 8,870 
Discount accretion— — — 
Disposals(35)— (35)
ASC 310-30 Loans, September 30,$10,033 $260 $10,293 
 2019
(Dollar amounts in thousands)CommercialConsumerTotal
Beginning balance, January 1,$1,530 $— $1,530 
Loans added8,610 260 8,870 
Discount accretion— — — 
Disposals(107)— (107)
ASC 310-30 Loans, September 30,$10,033 $260 $10,293