Note 3 - Acquisition of The Victory Bancorp, Inc. (Tables)
|
6 Months Ended |
Jun. 30, 2026 |
|---|
| Business Combination [Abstract] |
|
| Summary of Identifiable Assets and Liabilities Assumed |
The following table reflects total consideration transferred for Victory’s net assets and the amounts of acquired identifiable assets and liabilities assumed at their preliminary estimated fair values as of the acquisition date:
|
|
|
|
|
( $ in thousands) |
|
|
|
Purchase price |
|
$ |
47,106 |
|
Recognized amounts of identifiable assets acquired and liabilities assumed: |
|
|
|
Cash and equivalents |
|
$ |
20,553 |
|
Investment securities available-for-sale |
|
|
15,605 |
|
Restricted investment in stocks |
|
|
1,452 |
|
Loans receivable |
|
|
408,379 |
|
Allowance for credit losses on loans |
|
|
(3,020 |
) |
Loans receivable, net |
|
|
405,359 |
|
Premises and equipment |
|
|
3,580 |
|
Bank-owned life insurance |
|
|
6,128 |
|
Core deposit intangible |
|
|
7,302 |
|
Accrued interest receivable |
|
|
1,591 |
|
Other assets |
|
|
2,322 |
|
Total assets acquired |
|
|
463,892 |
|
Liabilities: |
|
|
|
Deposits |
|
|
409,165 |
|
Subordinated debt |
|
|
17,650 |
|
Other liabilities |
|
|
1,135 |
|
Total liabilities assumed |
|
$ |
427,950 |
|
Net identifiable assets acquired |
|
$ |
35,942 |
|
Goodwill |
|
$ |
11,164 |
|
|
| Unpaid Principal Balance, Fair Value and Initial Amortized Cost Basis |
The following table reflects the unpaid principal balance, fair value and initial amortized cost basis of acquired loans as of April 1, 2026:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in thousands) |
|
PCD |
|
|
PSLs |
|
|
Other |
|
|
Total |
|
Fair Value of acquired loans |
|
$ |
33,114 |
|
|
$ |
372,207 |
|
|
$ |
38 |
|
|
$ |
405,359 |
|
Adjustments for credit losses |
|
|
178 |
|
|
|
2,842 |
|
|
|
— |
|
|
|
3,020 |
|
Initial amortized cost basis of acquired loans |
|
|
33,292 |
|
|
|
375,049 |
|
|
|
38 |
|
|
|
408,379 |
|
Unpaid principal balance of acquired loans |
|
|
33,356 |
|
|
|
376,749 |
|
|
|
38 |
|
|
|
410,143 |
|
Noncredit discount, net. |
|
$ |
(64 |
) |
|
$ |
(1,700 |
) |
|
$ |
— |
|
|
$ |
(1,764 |
) |
|
| Summary of Pro Forma Information |
The unaudited pro forma information does not necessarily reflect the results of operations that would have occurred had QNB acquired Victory on January 1, 2025. Furthermore, cost savings and other synergies related the merger are not reflected in the unaudited amounts for the six months ended June 30, 2026.
|
|
|
|
|
Unaudited Pro Forma Information |
|
For the Six Months Ended June 30, 2026 |
|
( $ in thousands) |
|
Net interest income |
|
$ |
35,503 |
|
Non-interest income (loss) |
|
|
3,470 |
|
Net income |
|
|
2,218 |
|
|
| Summary of Direct Merger-Related Charges |
The table below summarizes the direct merger-related charges recorded in the Condensed Consolidated Statements of Income:
|
|
|
|
|
|
|
|
|
( $ in thousands) |
|
For the Three Months Ended June 30, 2026 |
|
|
For the Six Months Ended June 30, 2026 |
|
Legal and consultant expenses |
|
$ |
131 |
|
|
$ |
346 |
|
Compensation and benefits |
|
|
1,033 |
|
|
|
1,055 |
|
Contract termination fees |
|
|
654 |
|
|
|
654 |
|
Regulatory filings and special shareholder meeting costs |
|
|
146 |
|
|
|
235 |
|
Success Fee |
|
|
117 |
|
|
|
117 |
|
System Conversion/Technology Costs |
|
|
884 |
|
|
|
1,444 |
|
Communications |
|
|
119 |
|
|
|
121 |
|
|
|
$ |
3,084 |
|
|
$ |
3,972 |
|
|