v3.26.3
Note 2 - Business Combination
 9 Months Ended
Sep. 30, 2026
Notes to Financial Statements  
Business Combination [Text Block]

Note 2. Business Combination 

 

On June 1, 2025 (the “Acquisition Date”), the Company completed the acquisition of FLIC, the parent company of FNBLI, in accordance with the definitive Agreement and Plan of Merger dated as of September 4, 2024 (the “Merger Agreement”). Pursuant to the Merger Agreement, on the Acquisition Date, FLIC merged with and into the Company, with the Company continuing as the surviving corporation, and FNBLI merged with and into the Bank, with the Bank as the surviving bank (collectively, the “merger”). As part of this merger, the Company acquired 36 branch offices located in Nassau and Suffolk Counties of Long Island, and the boroughs of New York City.

 

Former FLIC shareholders received 0.5175 shares of the Company’s common stock for each share of FLIC common stock they held. Total transaction consideration was approximately $270.8 million, consisting primarily of 11,790,116 shares of the Company’s common stock valued at $22.97 per share. Additional information regarding the merger is included in Note 2 of the Company's Annual Report on Form 10-K for the year ended December 31, 2025.

 

The acquisition of FLIC was accounted for as a business combination using the acquisition method of accounting. The post-closing measurement period ended on June 1, 2026, and the purchase price allocation is final. Measurement period adjustments, primarily related to the finalization of deferred tax assets and the Section 382 valuation allowance, increased goodwill by $4.6 million from the $7.2 million originally reported as June 30, 2025, resulting in total goodwill of $11.9 million. This goodwill is not amortizable or deductible for tax purposes. There were no adjustments to the purchase price allocation during the three and nine months ended September 30, 2026.

 

 

 

 

 

                In connection with the acquisition, the consideration paid, and the fair value of identifiable assets acquired and liabilities assumed as of the Acquisition Date are summarized in the following tables:

 

 

 

As of

 

 

Measurement

 

 

As Adjusted

 

 

 

June 1, 2025

 

 

Period Adjustments

 

 

June 1, 2025

 

 

 

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total purchase price consideration

 

$270,828

 

 

$-

 

 

$270,828

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value of Assets Acquired:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

54,869

 

 

 

-

 

 

 

54,869

 

Available-for-sale securities

 

 

596,702

 

 

 

-

 

 

 

596,702

 

Loans receivable, net

 

 

2,882,951

 

 

 

-

 

 

 

2,882,951

 

Restricted stock, at cost

 

 

24,276

 

 

 

-

 

 

 

24,276

 

Premises and equipment, net

 

 

45,895

 

 

 

-

 

 

 

45,895

 

Bank-owned life insurance

 

 

118,098

 

 

 

-

 

 

 

118,098

 

Pension plan assets

 

 

11,617

 

 

 

-

 

 

 

11,617

 

Core deposit intangible

 

 

63,206

 

 

 

-

 

 

 

63,206

 

Other assets

 

 

107,480

 

 

 

(4,624)

 

 

102,856

 

Total assets acquired

 

$3,905,094

 

 

$(4,624)

 

$3,900,470

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value of Liabilities Assumed:

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

3,251,147

 

 

 

-

 

 

 

3,251,147

 

Borrowings

 

 

360,405

 

 

 

-

 

 

 

360,405

 

Other liabilities

 

 

29,953

 

 

 

-

 

 

 

29,953

 

Total liabilities assumed

 

$3,641,505

 

 

$-

 

 

$3,641,505

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net assets acquired

 

$263,589

 

 

$(4,624)

 

$258,965

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill recorded in acquisition

 

$7,239

 

 

$4,624

 

 

$11,863

 

 

 

            The core deposit intangible of $63.2 million is being amortized over an estimated useful life of 10 years. Purchased credit deteriorated ("PCD") loans had an unpaid principal balance of $271.9 million and a fair value of $194.2 million at the Acquisition Date, with an allowance for credit losses of $43.3 million established through a gross-up of the amortized cost basis. 

 

There were no material changes in acquisition-related contingencies during the three and nine months ended September 30, 2026.

 

No merger expenses and restructuring charges associated with the merger were recognized during the three months ended September 30, 2026, and such charges totaled $2.2 million for the nine months ended September 30, 2026. This compares to $1.9 million and $34.0 million for the three and nine months ended September 30, 2025, respectively. All such costs were expensed as incurred and are included in “Merger expenses and restructuring charges” in the Consolidated Statements of Income.