XML 26 R9.htm IDEA: XBRL DOCUMENT v3.25.4
Business Combinations and Asset Acquisitions
 12 Months Ended
Dec. 31, 2025
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
Acquisition Acquisition
On April 30, 2025, the Company completed its acquisition of CenterGroup Financial, Inc. (“Center”) and its banking subsidiary, CenterBank, for consideration of 3,016,009 shares of the Company's common stock. Through the acquisition, the Company obtained three full-service banking offices, a loan production office and a mortgage office, all located in the Cincinnati, Ohio market.
The table below summarizes the net assets acquired (at fair value) and consideration transferred in connection with the Center acquisition (dollars in thousands):
Consideration paid
Cash paid to shareholders - fractional shares$1 
Shares issued to shareholders (3,016,009 shares)
46,205 
Total consideration paid$46,206 
Fair value of assets acquired
Cash and due from banks4,672 
Investment securities21,396 
FHLB stock3,144 
Loans, including loans held for sale291,852 
Premises and equipment4,276 
Core deposit intangible5,355 
Bank owned life insurance430 
Other assets5,039 
Total assets acquired336,164 
Fair value of liabilities assumed
Deposits277,980 
Borrowings22,785 
Other liabilities3,692 
Total liabilities assumed304,457 
Total fair value of identifiable net assets31,707 
Goodwill$14,499 
The Company determined that this acquisition constitutes a business combination and therefore was accounted for using the acquisition method of accounting. Accordingly, as of the date of the acquisition, the Company recorded the assets acquired, liabilities assumed and consideration paid at fair value. The $14.5 million excess of the consideration paid over the fair value of assets acquired was recorded as goodwill and is not amortizable or deductible for tax purposes. The amount of goodwill arising from the acquisition consists largely of the synergies and economies of scale expected from combining the operations of the Company with Center.
The fair value of the 3,016,009 common shares issued was determined based on the $15.32 closing market price of the Company's common shares on the acquisition date, April 30, 2025.
The valuation of acquired assets and liabilities was completed in the third quarter of 2025. The following is a description of the valuation methodologies used to estimate the fair values of major categories of assets acquired and liabilities assumed. The Company used an independent valuation specialist to assist with the determination of fair values for certain acquired assets and assumed liabilities.
Cash and due from banks - The estimated fair value was determined to approximate the carrying amount of these assets.
Investment securities - The estimated fair value of the investment portfolio was based on quoted market prices.
Loans - The estimated fair value of loans was based on a discounted cash flow methodology applied on a pooled basis for both non-purchased credit-deteriorated ("non-PCD") loans and purchased credit-deteriorated ("PCD") loans. For certain PCD loans, the estimated fair value was determined on an individual basis. The valuation considered underlying characteristics including loan type, term, rate, payment schedule and credit rating. Other factors included assumptions related to prepayments, the probability of default and loss given default. The discount rates applied were based on a build-up approach considering the funding mix, servicing costs, liquidity premium and factors related to performance risk.
Acquired loans are classified into two categories: PCD loans and non-PCD loans. PCD loans are defined as a loan or group of loans that have experienced more than insignificant credit deterioration since origination. Non-PCD loans will have an allowance established on acquisition date, which is recognized as an expense through provision for credit losses. For PCD loans, an allowance is recognized on day 1 by adding it to the fair value of the loan, which is the “Day 1 amortized cost”. There is no provision for credit loss expense recognized on PCD loans because the initial allowance is established by grossing-up the amortized cost of the PCD loan.
A day 1 allowance for credit losses of $3.4 million related to non-PCD loans and $0.4 million related to the off-balance sheet commitment liability was recorded through the provision for credit losses within the Consolidated Statements of Income. At the
date of acquisition, of the $303.7 million of portfolio loans acquired from Center, $29.2 million, or 9.6%, of Center's loan portfolio, was accounted for as PCD loans as of May 1, 2025.
Premise and equipment - The estimated fair value of land and buildings were determined by independent market-based appraisals.
Core deposit intangible - The core deposit intangible was valued utilizing the cost savings method approach, which recognizes the cost savings represented by the expense of maintaining the core deposit base versus the cost of an alternative funding source. The valuation incorporates assumptions related to account retention, discount rates, deposit interest rates, deposit maintenance costs and alternative funding rates.
Time deposits - The estimated fair value of time deposits was determined using a discounted cash flow approach incorporating a discount rate equal to current market interest rates offered on time deposits with similar terms and maturities.
Borrowings - The estimated fair value of short-term borrowings was determined to approximate stated value. Long-term debt with the Federal Home Loan Bank of Cincinnati was valued using the prepayment penalty for payoff on April 30, 2025.
The following table provides details related to the fair value of acquired PCD loans as of April 30, 2025.

Unpaid Principal BalancePCD Allowance for Credit Loss at Acquisition(Discount) Premium on Acquired LoansFair Value of PCD Loans at Acquisition
(dollars in thousands)
Commercial, financial, agricultural and other$13,302 $(1,616)$(487)$11,199 
Time and demand13,302 (1,616)(487)11,199 
Real estate construction2,442 (810)(54)1,578 
Construction other557 (182)(17)358 
Construction residential1,885 (628)(37)1,220 
Residential real estate3,845 (45)(138)3,662 
Residential first lien3,372 (38)(137)3,197 
Residential junior lien/home equity473 (7)(1)465 
Commercial real estate9,604 (1,087)(330)8,187 
Multifamily1,210 (120)(78)1,012 
Non-owner occupied5,330 (943)(184)4,203 
Owner occupied3,064 (24)(68)2,972 
Loans to individuals30 (2)— 28 
Automobile and recreational vehicles14 (1)— 13 
Consumer other16 (1)— 15 
Total loans and leases$29,223 $(3,560)$(1,009)$24,654 
The following table provides details related to the fair value and Day 1 provision related to the acquired non-PCD loans as of April 30, 2025.
Unpaid Principal Balance(Discount) premium on acquired loansFair Value of Non-PCD Loans at AcquisitionDay 1 Provision for Credit Losses - Non-PCD Loans
(dollars in thousands)
Commercial, financial, agricultural and other$50,555 $(2,137)$48,418 $630 
Time and demand50,535 (2,137)48,398 630 
Time and demand other20 — 20 — 
Real estate construction32,074 (941)31,133 691 
Construction other18,829 (472)18,357 445 
Construction residential13,245 (469)12,776 246 
Residential real estate82,609 (3,396)79,213 665 
Residential first lien67,906 (3,145)64,761 556 
Residential junior lien/home equity14,703 (251)14,452 109 
Commercial real estate108,843 (3,550)105,293 1,389 
Multifamily17,405 (481)16,924 180 
Non-owner occupied43,927 (1,763)42,164 512 
Owner occupied47,511 (1,306)46,205 697 
Loans to individuals357 (10)347 4 
Automobile and recreational vehicles337 (9)328 4 
Consumer other20 (1)19 — 
Total loans and leases$274,438 $(10,034)$264,404 $3,379 
The following table presents the change in goodwill during the period (dollars in thousands):
For the Year Ended December 31, 2025
Goodwill at December 31, 2024$363,715 
Goodwill from Center acquisition14,499 
Goodwill at December 31, 2025$378,214 
Costs related to the acquisition totaled $4.4 million. These amounts were expensed as incurred and are recorded as a merger and acquisition related expense in the Consolidated Statements of Income.
As a result of the full integration of the operations of Center, it is not practicable to determine revenue or net income included in the Company's operating results relating to Center since the date of acquisition as Center's results cannot be separately identified.