Business Combinations |
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| Business Combinations | 20. Business Combinations Effective February 1, 2026, the Company acquired 100% of the outstanding stock of Keystone Bancshares, Inc. and its subsidiary, Keystone Bank, SSB, with two branches located in Austin, Texas, one branch located in Ballinger, Texas, and one loan production office in Bastrop, Texas. At March 31, 2026, the Company had issued 2,560,695 shares of Company common stock and paid approximately $20.0 million in cash for the outstanding shares of stock of Keystone Bancshares, Inc. The Company recognized total goodwill of approximately $28.3 million, which is calculated as the excess of both the consideration exchanged and liabilities assumed compared to the fair market value of identifiable assets acquired. The fair value of consideration exchanged related to the Company’s stock was calculated based upon the price of the Company’s stock as of January 31, 2026. The goodwill in this acquisition resulted from a combination of expected synergies and expanded presence in the Austin market. None of the goodwill is expected to be deductible for income tax purposes. During the three months ended March 31, 2026, the Company incurred expenses of approximately $3.3 million related to the acquisition. These expenses are primarily included in legal and professional expense, and salaries and employee benefits expense line items of the consolidated statements of income. Results of the acquired company were included in the Company’s results of operations beginning February 1, 2026. Estimated values of the assets acquired and liabilities assumed on the effective date of February 1, 2026 are as follows:
The loan portfolio had a fair value of $805.2 million at acquisition date and a contractual balance of $812.8 million. Proforma Financial Information (unaudited) The results of operations of Keystone have been included in the Company’s consolidated financial statements prospectively beginning on February 1, 2026. The Company has determined it is impractical to disclose stand-alone revenues and earnings for legacy Keystone subsequent to merger date due to the merging of certain processes. The following table provides the unaudited pro forma results of operations for the three months ended March 31, 2026 and 2025, as if the acquisition had occurred on January 1, 2025. The pro forma results combine the historical results of Keystone into our consolidated statements of income, including the impact of certain acquisition accounting adjustments which include loan discount accretions, intangible assets amortization, and deposit premium amortization. Proforma combined results for the three months ended March 31, 2026 include $3.3 million of acquisition-related expenses attributable to the acquisition, which primarily include, but are not limited to, severance costs and legal and professional services. The pro forma results have been prepared for comparative purposes only and are not necessarily indicative of the results that would have been obtained had the acquisition actually occurred on January 1, 2025. No assumptions have been applied to the pro forma results of operations regarding possible revenue enhancements, provision for credit losses, expense efficiencies or asset disposition. Recognized acquisition-related expense and other adjustments related to the timing of expenses are included in net income before income tax expense in the following table:
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