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ACQUISITION ACTIVITY
 12 Months Ended
Dec. 31, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]  
ACQUISITION ACTIVITY ACQUISITION ACTIVITY
On July 31, 2024 (the “Effective Date”), the Company closed the transactions pursuant to the terms of the Agreement and Plan of Merger (the “Merger Agreement”), by and between us, the Bank, and CBB Bancorp (“CBB Bancorp”), the parent company of Century Bank of Georgia (“Century Bank”). On the Effective Date, (i) CBB Bancorp merged with and into us (the “Corporate Merger”), and we were the surviving corporation in the Corporate Merger and (ii) subsequent to the Corporate Merger, Century Bank merged with and into the Bank (the “Bank Merger”) with the Bank as the surviving banking corporation in the Bank Merger.
The Company issued 961,920 shares of its common stock valued at $31,474 as of July 31, 2024, plus $3,150 in cash, in exchange for all outstanding shares of CBB Bancorp common stock.
Prior to the acquisition, Century Bank operated branch offices in Cartersville and Rockmart, Georgia and provided a full range of banking services. Including the effects of the purchase method of accounting adjustments, the Company acquired $334,622 in assets, including $127,871 in loans, and $308,747 in deposits. The merger expanded and strengthened the Company’s footprint in the Georgia market.
The fair value of consideration paid exceeded the net assets acquired and resulted in goodwill of $16,313. The Company performs a quarterly and annual impairment test on goodwill and no impairment was recorded as of December 31, 2024.
The acquired assets and assumed liabilities as of July 31, 2024, as well as the adjustments to record the assets and liabilities at fair value, are presented in the following table:
Fair ValueAs Recorded by
AcquiredAdjustmentsthe Company
Cash and cash equivalents$66,605 $— $66,605 
Securities available for sale - sold day 1104,724 — 104,724 
Securities available for sale2,750 (286)2,464 
Restricted equity securities734 — 734 
Time deposits held as investments10,897 (90)10,807 
Loans132,618 (4,747)127,871 
Less allowance for credit losses(1,619)1,619 — 
Core deposit intangible— 8,896 8,896 
Premises and equipment, net3,903 1,610 5,513 
Other assets9,203 (2,195)7,008 
   Total assets acquired$329,815 $4,807 $334,622 
Deposits308,535 212 308,747 
Subordinated notes5,000 (307)4,693 
Accrued expenses and other liabilities2,871 — 2,871 
   Total liabilities assumed$316,406 $(95)$316,311 
Net assets acquired18,311 
   Cash3,150 
   Common stock issued (961,920 shares)
31,474 
Total consideration paid34,624 
Goodwill$16,313 
The following is a description of the methods used to determine the fair values of significant assets and liabilities presented in the acquisition above.
Cash and Cash Equivalents: The carrying amounts of cash and due from banks, interest-bearing deposits in banks, and federal funds sold make up cash and cash equivalents. The carrying amount of these short-term instruments approximate fair value.
Securities Available for Sale: Securities available for sale were acquired with an adjustment to fair value based upon pricing models and discounted cash flows that consider standard input factors such as observable market data, benchmark yields, interest rate volatilities, broker/dealer quotes, and credit spreads.
Restricted Equity Securities: The carrying amount of restricted equity securities with no readily determinable fair value approximates fair value based on the redemption provisions of the issuers, which is cost.
Time Deposits Held as Investments: Fair values for fixed rate certificates of deposit are estimated using a discounted cash flow calculation that applies market interest rates on comparable instruments to a schedule of aggregated expected monthly maturities on time deposits.
Loans: The carrying amount of variable-rate loans that reprice frequently and have no significant change in credit risk approximates fair value. The fair values of fixed rate loans is estimated based on discounted contractual cash flows using interest rates currently being offered for loans with similar terms to borrowers with similar credit quality. Loans were acquired with an adjustment to fair value based upon these factors.
Core Deposit Intangible: The core deposit intangible represents the value of the relationship that the acquired bank had with its deposit customers. The fair value of this asset was estimated based on a discounted cash flow methodology that gave consideration to expected customer attrition rates, cost of the deposit base and the net maintenance cost attributable to customer deposits.
Premises and Equipment: Premises and equipment were acquired with an adjustment to fair value, which represents the difference between the Company’s current analysis of property and equipment values completed in connection with the acquisition and book value acquired.
Other Assets: The carrying value of other assets approximate fair value.
Deposits: The fair values disclosed for transaction deposits are, by definition, equal to the amount payable on demand at the reporting date (that is, their carrying amounts). Fair values for fixed rate certificates of deposit are estimated using a discounted cash flow calculation that applies market interest rates on comparable instruments to a schedule of aggregated expected monthly maturities on time deposits.
Subordinated Notes: Subordinated notes were acquired with an adjustment to fair value based on a discounted cash flow calculation using the estimated market interest rate of similar instruments.
Accrued Interest and Other Liabilities: The carrying amounts of accrued interest and other liabilities approximate fair value.
The following table presents pro-forma financial information as if the acquisition of CBB Bancorp had occurred on January 1, 2023. The results of operations of CBB Bancorp and Century Bank were included in the Company’s results beginning on August 1, 2024. The pro-forma financial information is not necessarily indicative of the results of operations had the acquisition been effective as of January 1, 2023. No assumptions have been applied to the pro-forma results of operations regarding revenue enhancements, expense efficiencies or asset dispositions. The pro-forma financials below excludes merger-related third party expenses, the accretion of fair value marks on securities available for sale, time deposits held as investments, acquired loans, deposits, as well as the amortization of fair value marks on core deposit intangible and subordinated notes.
For the Years Ended
20242023
Net interest income $96,747 $89,929 
Net income38,733 36,458