Note 2 - Business Combinations |
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| Notes to Financial Statements | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Business Combination [Text Block] |
On January 1, 2026, the Company completed the acquisition of WFB and its wholly-owned subsidiary, FNB, headquartered in Wichita Falls, Texas, with seven branches (including the headquarters) serving the surrounding areas. All of the issued and outstanding shares of WFB common stock were converted into aggregate merger consideration consisting of $7.2 million in cash and 3,955,272 shares of Company common stock for an aggregate transaction value of $112.9 million. After fair value adjustments, including total adjustments of ($0.2 million) to the fair value of total assets, recorded in the three months ended June 30, 2026, the acquisition added $1.15 billion in total assets, including $950.2 million in net loans, and $1.02 billion in deposits. As consideration paid was in excess of the net fair value of acquired assets, the Company recorded $18.2 million of goodwill, none of which is anticipated to be deductible for tax purposes. Goodwill resulted from a combination of synergies and cost savings, and further expansion into Texas.
The table below shows the allocation of the consideration paid for WFB’s common equity to the acquired identifiable assets and liabilities assumed and the goodwill generated from the transaction (dollars in thousands, except per share data). The fair values listed below are subject to refinement for up to one year after the closing date of the acquisition as additional information becomes available.
Loans
The Company adopted ASU 2025-08 for the annual reporting period beginning on January 1, 2026. Accordingly, the initial estimate of expected credit losses recognized in the ACL included both PCD and non-PCD loans which were deemed PSLs.
The following table includes principal balance and the fair value of the loans acquired from WFB (dollars in thousands).
The Company has determined it was impracticable to disclose stand-alone revenues and net income for legacy WFB since January 1, 2026 due to the streamlining and integration of the operating activities during the first quarter of 2026. The Company has also determined it was impracticable to include pro forma information for the WFB acquisition due to the cost versus benefit of including such disclosures.
Acquisition Expense
Acquisition related costs of $2.6 million and $4.3 million are included in “Acquisition expense” in the accompanying consolidated statements of income for the three and six months ended June 30, 2026, respectively, and $0.2 million and $0.3 million for the three and six months ended June 30, 2025, respectively. These costs include system conversion and integrating operations charges and legal and consulting expenses.
INVESTAR HOLDING CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) |
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