BUSINESS COMBINATIONS AND BRANCH SALES

6 Months Ended

Jun. 30, 2024

NOTE 14 – BUSINESS COMBINATIONS AND BRANCH SALES

At close of business on February 9, 2024, the Company acquired 100% of the outstanding common shares of Rockhold BanCorp ("Rockhold"), the holding company of the Bank of Kirksville (“BOK”), based in Kirksville, Missouri. Results of operations of BOK were included in the Company’s results of operations beginning February 10, 2024. Acquisition-related costs associated with this acquisition were $3,822 ($3,028 on an after-tax basis) and are included in merger expense in the Company’s income statement for the six months ended June 30, 2024.

Information necessary to recognize the fair value of assets acquired and liabilities assumed is currently still on-going. The acquisition was an expansion to the Company’s current footprint in Missouri with the addition of eight branch locations in the Kirksville area.

The following table summarizes the amounts of assets acquired and liabilities assumed recognized at the acquisition date.


Fair value of consideration:
Cash	$	44,304
	$	44,304

Recognized amounts of identifiable assets acquired and
liabilities assumed:
Cash and due from banks	$	105,218
Available-for-sale securities		164,629
Loans		118,131
Premises and equipment		3,473
Core deposit intangible		11,530
Other assets		3,255
Total assets acquired		406,236
Deposits		349,777
Federal funds purchased and retail repurchase agreements		8,818
Interest payable and other liabilities		2,037
Total liabilities assumed		360,632
Total identifiable net assets		45,604
Bargain purchase gain		(1,300	)
	$	44,304

The following tables reconcile the par value of BOK loan portfolio as of the purchase date to the fair value indicated in the table above. For non-purchase credit deteriorated assets, the entire fair value adjustment including both interest and credit related components is recorded as an adjustment to par (“Fair Value Marks”) and reflected as an adjustment to the carrying value of that asset within the Consolidated Balance Sheet. Following purchase, an ACL is also established for these non-purchase credit deteriorated assets which is not reflected in this table as it is accounted for outside of the business combination. For purchase-credit deteriorated assets, as required by CECL, the fair value mark is divided between an adjustment to par (“Non-Credit Rate Marks”) and an addition to the ACL (“Credit Marks in ACL”). The addition to ACL is based on the application of management’s CECL methodology to the individual loans.


Non-Purchase Credit Deteriorated Loans	Loan Par Value		Fair Value Marks			Purchase Price
Commercial real estate	$	1,959	$	(85	)	$	1,874
Commercial and industrial		32,300		(578	)		31,722
Residential real estate		42,318		(1,182	)		41,136
Agricultural		37,641		(949	)		36,692
Consumer		1,373		(36	)		1,337
Total non-PCD loans	$	115,591	$	(2,830	)	$	112,761


Purchase Credit Deteriorated Loans	Loan Par Value		Discounts from Other Factors Excluding ACL			Credit Marks in ACL			Purchase Price
Commercial and industrial	$	1,366	$	(178	)	$	(119	)	$	1,069
Residential real estate		2,044		(210	)		(183	)		1,651
Agricultural		3,316		(472	)		(284	)		2,560
Consumer		115		(15	)		(10	)		90
Total PCD loans	$	6,841	$	(875	)	$	(596	)	$	5,370

Total Purchased Loans	Purchase Price
Non-Purchase Credit Deteriorated Loans	$	112,761
Purchase Credit Deteriorated Loans		5,370
Total loans	$	118,131

Assuming the Rockhold acquisition would have taken place on January 1, 2023, total combined revenue would have been $112,840 for the six months ended June 30, 2024, and $153,188 for the year ended December 31, 2023. Net income would have been $28,123 at June 30, 2024, and $14,020 at December 31, 2023. The pro forma amounts disclosed exclude merger expense from

non-interest expense, which is considered a non-recurring adjustment. Separate revenue and earnings of the former Rockhold locations are not available subsequent to the acquisition.