Note 9. Mergers and Acquisitions

On May 31, 2013, the Company acquired 100 percent of the outstanding common stock of Wheatland and its wholly-owned subsidiary, First State Bank, a community bank based in Wheatland, Wyoming. First State Bank provides community banking services to individuals and businesses from banking offices in Wheatland, Torrington and Guernsey, Wyoming. As a result of the acquisition, the Company will increase its presence in the State of Wyoming and will further diversify its loan, customer and deposit base with First State Bank’s strong commitment to agriculture. First State Bank will operate as a division of the Bank under the name “First State Bank, division of Glacier Bank.”

The Wheatland acquisition was valued at $39,315,000 and resulted in the Company issuing 1,455,256 shares of its common stock and $11,025,000 in cash in exchange for all of Wheatland’s outstanding common stock shares. The fair value of the Company’s common stock shares issued was determined on the basis of the closing market price of the Company’s common stock shares on the May 31, 2013 acquisition date.

The assets and liabilities of Wheatland were recorded on the Company’s consolidated statements of financial condition at their estimated fair values as of the May 31, 2013 acquisition date, and Wheatland’s results of operations have been included in the Company’s consolidated statements of operations since that date. The following table summarizes the fair value of the net assets that the Company acquired from Wheatland:



(Dollars in thousands)	May 31, 2013
Assets
Cash and cash equivalents	$	23,148
Investment securities, available-for-sale	75,643
Loans receivable	171,199
Goodwill and core deposit intangible	15,488
Accrued income and other assets	15,063
Total assets	300,541
Liabilities
Deposits	255,197
Federal Home Loan Bank advances	5,467
Accrued expenses and other liabilities	562
Total liabilities	261,226
Purchase price	$	39,315

The excess of the purchase price over tangible assets, identifiable intangible assets and assumed liabilities was recorded as goodwill. The goodwill arising from the acquisition consists largely of the synergies and economies of scale expected from combining the operations of the Company and Wheatland. None of the goodwill is deductible for income tax purposes as the acquisition is accounted for as a tax-free exchange. The following table discloses the calculation of the purchase price and the resulting goodwill relating to the Wheatland acquisition:



(Dollars in thousands)	May 31, 2013
Purchase price
Fair value of Company common stock shares issued	$	28,290
Cash consideration for outstanding shares	11,025
Total purchase price	39,315
Fair value of net assets acquired
Tangible assets acquired	285,053
Core deposit intangible asset acquired	2,079
Liabilities assumed	(261,226		)
Total fair value of net assets acquired	25,906
Goodwill recognized	$	13,409

The fair value of the assets acquired includes loans with a fair value of $171,199,000. The gross principal and contractual interest due under the contracts is $176,698,000, all of which is expected to be collectible.

The Company incurred $571,000 of Wheatland third-party acquisition-related costs during the six month period ended June 30, 2013. The expenses are included in other expense in the Company's consolidated statements of operations.

Total income consisting of net interest income and non-interest income of the acquired operations of Wheatland was approximately $1,145,000 and net income was approximately $311,000 from May 31, 2013 to June 30, 2013. The following unaudited pro forma summary presents consolidated information of the Company as if the Wheatland acquisition had occurred on January 1, 2012:

Six Months ended

(Dollars in thousands)

June 30,
2013

June 30,
2012

Net interest income and non-interest income

Net income