v3.26.1
Note 11 - Acquisitions
3 Months Ended
Mar. 31, 2026
Notes to Financial Statements  
Business Combination [Text Block]

Note 11. Acquisition

 

Fair Value Premiums and Discounts

 

The net effect of the amortization and accretion of premiums and discounts associated with the Company’s acquisition accounting adjustments, which includes previous acquisitions in addition to Touchstone Bankshares, Inc. (Touchstone), had the following impact on the Consolidated Statements of Income for the three months ended March 31, 2026 and 2025, as follows (in thousands):

 

  

For the Three Months Ended March 31,

 
  

2026

  

2025

 

Loans (1)

 $294  $(194)

Core deposit intangible (2)

  (434)  (442)

Subordinated Debt (3)

  (73)  (285)

Time deposits (4)

  (10)  443 

Net impact to income before taxes

 $(223) $(478)

 

 

(1)           Loan acquisition-related fair value adjustments accretion (amortization) is included in "Interest and fees on loans" in the "Interest and dividend income" section of the Company’s Consolidated Statements of Income.

 

(2)           Core deposit and other intangible premium amortization is included in "Amortization expense" in the "Noninterest expense" section of the Company’s Consolidated Statements of Income.

 

(3)           Borrowings acquisition-related fair value adjustments (accretion) amortization is included in "Interest on subordinated debt" in the "Interest Expense" section of the Company’s Consolidated Statements of Income.

 

(4)           Certificate of deposit acquisition-related fair value adjustments (accretion) amortization is included in "Interest on deposits" in the "Interest expense" section of the Company’s Consolidated Statements of Income.

 

Other Intangible Assets

 

Other intangible assets consist of the core deposit intangible which is being amortized on an accelerated basis over its estimated useful life of 7 years. The gross carrying amounts and accumulated amortization of other intangible assets, which includes previous acquisitions in addition to Touchstone for the three months ended March 31, 2026 and 2025, were as follows (in thousands):

 

  

For the Three Months Ended March 31,

 
  

2026

  

2025

 

Beginning of period, December 31

 $13,219  $14,986 

Core deposit intangible acquired

      

Amortization

  (434)  (442)

Total core deposit intangible

 $12,785  $14,544 

 

The Company reviews other intangible assets for possible impairment whenever events or changes in circumstances indicate that the carry amounts may not be recoverable. Total amortization expense associated with intangible assets was $434 thousand for the three months ended March 31, 2026

 

Estimated amortization expense for future years is as follows (in thousands):

 

  

Estimated Amortization

 

Remaining nine months ending December 31, 2026

 $1,301 

2027

  1,695 

2028

  1,648 

2029

  1,593 

2030

  1,530 

Thereafter

  5,018 

Total

 $12,785