v3.26.1
Acquisitions
 6 Months Ended
Jun. 30, 2026
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
Acquisitions Acquisitions
Acquisition of Mountain Commerce Bancorp, Inc.
On April 1, 2026, the Company completed the acquisition of Mountain Commerce Bancorp, Inc (“MCBI”), and merged Mountain Commerce Bank into Centennial Bank. The Company issued approximately 5.4 million shares of its common stock valued at approximately $146.0 million as of April 1, 2026. No cash consideration was paid in connection with the merger, except for cash paid in lieu of fractional shares of Home common stock, equal to $26.77 multiplied by any resulting fractional shares. The acquisition added new markets for expansion and brings complementary businesses together to drive synergies and growth.
Including the effects of the known purchase accounting adjustments, as of the acquisition date, MCBI had approximately $1.77 billion in total assets, $1.47 billion in loans and $1.54 billion in customer deposits. Prior to the merger, MCBI operated its banking business from eight locations in Tennessee.
The purchase price allocation and certain fair value measurements remain preliminary due to the timing of the acquisition. The Company will continue to review the estimated fair values of loans, deposits and intangible assets, and to evaluate the assumed tax positions and contingencies.
The Company has determined that the acquisition of the net assets of MCBI constitutes a business combination as defined by the ASC Topic 805. Accordingly, the assets acquired and liabilities assumed are presented at their fair values as required. Fair values were determined based on the requirements of ASC Topic 820. In many cases, the determination of these fair values required management to make estimates about discount rates, future expected cash flows, market conditions and other future events that are highly subjective in nature and subject to change. The following schedule is a preliminary breakdown of the assets acquired and liabilities assumed as of the acquisition date:
Mountain Commerce Bancorp, Inc.
Acquired
from MCBI		Purchase Accounting AdjustmentsAs Recorded by HBI
(Dollars in thousands)
Assets
Cash and due from banks$14,303 $(226)$14,077 
Interest-bearing deposits with other banks74,097 — 74,097 
Cash and cash equivalents88,400 (226)88,174 
Investment securities - available-for-sale, net of allowance for credit losses103,819 (523)103,296 
Total investment securities103,819 (523)103,296 
Loans receivable1,499,676 (30,777)1,468,899 
Allowance for credit losses— (31,333)(31,333)
Loans receivable, net1,499,676 (62,110)1,437,566 
Bank premises and equipment, net59,584 7,211 66,795 
Foreclosed assets held for sale6,013 206 6,219 
Cash value of life insurance10,470 — 10,470 
Accrued interest receivable5,342 — 5,342 
Deferred tax asset, net7,330 2,176 9,506 
Core deposit and other intangibles— 38,075 38,075 
Other assets3,282 414 3,696 
Total assets acquired$1,783,916 $(14,777)$1,769,139 
Liabilities
Deposits
Demand and non-interest-bearing$240,546 $— $240,546 
Savings and interest-bearing transaction accounts700,142 — 700,142 
Time deposits594,727 6,918 601,645 
Total deposits1,535,415 6,918 1,542,333 
FHLB and other borrowed funds85,000 — 85,000 
Accrued interest payable and other liabilities8,900 (1,139)7,761 
Subordinated debentures— — — 
Total liabilities assumed$1,629,315 $5,779 $1,635,094 
Equity
Total equity assumed154,601 (154,601)— 
Total liabilities and equity assumed$1,783,916 $(148,822)$1,635,094 
Net assets acquired134,045 
Purchase price146,003 
Goodwill$11,958 
The following is a description of the methods used to determine the fair values of significant assets and liabilities presented above:
Cash and due from banks, interest-bearing deposits with other banks and federal funds sold – The carrying amount of these assets was deemed a reasonable estimate of fair value based on the short-term nature of these assets.
Investment securities – Investment securities were acquired from MCBI with an approximately $523,000 adjustment to fair value based upon quoted market prices. Otherwise, the book value was deemed to approximate fair value.
Loans – Fair values for loans were based on a discounted cash flow methodology that considered factors including the type of loan and related collateral, classification status, fixed or variable interest rate, term of loan, whether or not the loan was amortizing and current discount rates. The discount rates used for loans are based on current market rates for new originations of comparable loans and include adjustments for liquidity concerns. The discount rate does not include a factor for credit losses as that has been included in the estimated cash flows. Loans were grouped together according to similar characteristics and were treated in the aggregate when applying various valuation techniques. See Note 5 to the Condensed Notes to Consolidated Financial Statements, for additional information related to purchased financial assets with credit deterioration.
Bank premises and equipment – Bank premises and equipment were acquired from MCBI with a $7.2 million adjustment to fair value. This represents the difference between current appraisals completed in connection with the acquisition and book value acquired.
Foreclosed assets held for sale – These assets are presented at the estimated fair values that management expects to receive when the properties are sold, net of related costs of disposal.
Cash value of life insurance – Bank owned life insurance is carried at its current cash surrender value, which is the most reasonable estimate of fair value.
Accrued interest receivable – The carrying amount of these assets was deemed a reasonable estimate of the fair value.
Deferred tax asset, net – The current and deferred income tax assets and liabilities are recorded to reflect the differences in the carrying values of the acquired assets and assumed liabilities for financial reporting purposes and the cost basis for federal income tax purposes, at the Company’s statutory federal and state income tax rate of 24.359%.
Core deposit intangible and other intangibles – This core deposit intangible asset represents the value of the relationships that MCBI had with its deposit customers. The fair value of this intangible asset was estimated based on a discounted cash flow methodology that gave appropriate consideration to expected customer attrition rates, cost of the deposit base, and the net maintenance cost attributable to customer deposits.
Deposits – The fair values used for the demand and savings deposits that comprise the transaction accounts acquired, by definition, equal the amount payable on demand at the acquisition date. The $6.9 million fair value adjustment applied for time deposits was because the weighted-average interest rate of MCBI’s certificates of deposits were estimated to be below the current market rates.
FHLB borrowed funds – The fair value of FHLB borrowed funds is estimated based on borrowing rates currently available to the Company for borrowings with similar terms and maturities.
Accrued interest payable and other liabilities – The fair value adjustment results from certain liabilities whose value was estimated to be more or less than book value, such as certain accounts payable and other miscellaneous liabilities. The carrying amount of accrued interest and the remainder of other liabilities was deemed to be a reasonable estimate of fair value.
Purchased loans and leases that reflect a more-than-insignificant deterioration of credit from origination are considered PCD. For PCD loans, the initial estimate of expected credit losses is recognized in the allowance for credit losses on the date of acquisition using the same methodology as other loans and leases held-for-investment. The following table provides a summary of loans purchased as part of the MCBI acquisition with credit deterioration at acquisition:
April 1, 2026
(In thousands)
Purchased Loans with Credit Deterioration:
Par value$47,279 
Allowance for credit losses at acquisition(7,627)
Discount on acquired loans(987)
Purchase price$38,665