Acquisitions

3 Months Ended

Mar. 31, 2025

Acquisitions

Acquisitions

12.   Acquisitions

On July 1, 2024, the Corporation completed its acquisition of SimplyBank. Therefore, the results of SimplyBank have been included in the results of operations beginning on July 1, 2024. Upon the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the Interim Merger (the “Effective Time”), other than dissenting shares, each share of SimplyBank Common Stock issued and outstanding immediately prior to the Effective Time, was converted into the right to receive $718.38 per share in cash. The aggregate value of the transaction was approximately $73.4 million. Acquisition-related costs of $1.7 million were included in the Corporation’s income statement for the year-to-date period ended December 31, 2024.

Goodwill of $13.0 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 value is subject to change pending receipt of the final valuation. The goodwill for SimplyBank is deductible for income tax purposes as the transaction was accounted for as a taxable acquisition. The following table summarizes the consideration paid and the amounts of the assets acquired and liabilities assumed recognized at the acquisition date.

			Measurement
	As Initially		Period
(Dollar amounts in thousands)	Reported		Adjustments		As Adjusted
Consideration
Cash consideration	$	73,400	$	—	$	73,400
Fair value of total consideration transferred	$	73,400	$	—	$	73,400
Assets acquired
Cash	$	101,553	$	—	$	101,553
Investment securities available-for-sale		77,350		—		77,350
Federal funds sold		—		—		—
Bank owned life insurance		12,816		—		12,816
Federal Home Loan Bank stock		726		—		726
Loans		467,997		(2,731)		465,266
Premises and equipment		14,231		—		14,231
Core deposit intangibles		19,788		—		19,788
Other assets		6,184		—		6,184
Total assets acquired		700,645		(2,731)		697,914
Liabilities assumed
Deposits		622,937		—		622,937
FHLB advances		1,719		—		1,719
Other liabilities		12,899		—		12,899
Total liabilities assumed		637,555		—		637,555
Net identifiable assets		63,090		(2,731)		60,359
Goodwill	$	10,310	$	2,731	$	13,041

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 deteriorated loans, which have shown evidence of credit deterioration since origination.

The fair value of purchased financial assets with credit deterioration was $1.7 million on the date of acquisition. The gross contractual amounts receivable relating to the purchased financial assets with credit deterioration was $4.7 million. The Corporation estimates, on the date of acquisition, that $3.0 million of the contractual cash flows specific to the purchased financial assets with credit deterioration will not be collected.

The following table presents supplemental pro forma information as if the acquisition had occurred at the beginning of 2023. 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)	2024		2023
Net interest income	$	188,441	$	196,646
Net income	$	36,425	$	70,586
Basic and diluted earnings per share	$	3.08	$	5.91