ACQUISITION |
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| ACQUISITION | NOTE 2 – ACQUISITION On January 1, 2026, the Company completed a merger with Centre, a bank holding company headquartered in Beloit, Wisconsin, pursuant to the merger agreement, dated as of July 17, 2025, by and between the Company and Centre, whereby Centre merged with and into the Company, and First National Bank and Trust, Centre’s wholly-owned banking subsidiary, merged with and into the Bank. Centre’s principal activity was the ownership and operation of First National Bank and Trust, a federal-chartered banking institution that operated seventeen (17) branches in Wisconsin and Illinois at the time of closing. The merger consideration totaled approximately $168.8 million. Pursuant to the Merger Agreement, Centre shareholders were entitled to receive, for each share of Centre common stock that was outstanding immediately prior to the merger, 0.9200 shares of the Company’s common stock and cash in lieu of fractional shares. Company stock issued totaled 1,382,940 shares valued at approximately $168.5 million, with cash of $0.3 million comprising the remainder of merger consideration. After close the combined company had total assets of approximately $6.2 billion, loans of approximately $4.6 billion, and deposits of approximately $5.0 billion. The fair value of the assets acquired and liabilities assumed on January 1, 2026 was as follows:
The Company purchased loans through the acquisition of Centre for which there was, at the date of acquisition, more than insignificant deterioration of credit quality since origination (PCD Loans). The carrying amount of these loans at acquisition was as follows:
All other loans purchased through this acquisition were classified as Purchased Seasoned Loans under the guidance of ASU 2025-08. The following unaudited pro forma information is presented for illustrative purposes only. The pro forma information should not be relied upon as being indicative of the historical results of operations the Company would have had if the Centre merger had occurred before such periods or the future results of operations that the Company will experience as a result of the merger. The pro forma information, although helpful in illustrating the financial characteristics of the combined company under one set of assumptions, does not reflect the benefits of expected cost savings, opportunities to earn additional revenue, the impact of restructuring and merger-related expenses, or other factors that may result as a consequence of the merger and, accordingly, does not attempt to predict or suggest future results. The unaudited pro forma information set forth below gives effect to the merger as if it had occurred on January 1, 2025, the beginning of the earliest period presented.
The Company accounted for this transaction under the acquisition method of accounting, and thus, the financial position and results of operations of Centre prior to the consummation dates were not included in the accompanying consolidated financial statements. The accounting required assets purchased and liabilities assumed to be recorded at their respective fair values at the date of acquisition. The Company determined the fair value of core deposit intangibles, securities, premises and equipment, loans, other assets and liabilities and deposits with the assistance of third-party valuations, appraisals and third-party advisors. The acquisition accounting is provisional for up to one year after the acquisition and could be adjusted in subsequent quarters during 2026 if additional relevant information to the fair values listed above becomes available. |
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