Acquisitions |
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| Acquisitions | 12. Acquisitions On March 1, 2026, the Corporation completed its acquisition of CedarStone Financial, Inc. Therefore, the results of CedarStone have been included in the results of operations beginning on March 1, 2026. Upon the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the Interim Merger (the “Effective Time”), the Corporation paid $19.12 per share in cash for each share of CedarStone’s common stock outstanding. The aggregate value of the transaction was approximately $25.0 million. Acquisition-related costs of $1.5 million were recognized in the Corporation’s income statement for the year ended December 31, 2025. Additionally, the Corporation recognized acquisition-related costs of $1.5 million in the Corporation’s income statement for the nine months ending September 30, 2026. The following table summarizes the consideration paid and the amounts of the assets acquired and liabilities assumed recognized at the acquisition date, which resulted in a bargain purchase gain of $33 thousand.
The fair value of net assets acquired includes fair value adjustments to certain receivables that were not considered impaired as of the acquisition date. The fair value adjustments were determined using discounted contractual cash flows. However, the Corporation believes that all contractual cash flows related to these financial instruments will be collected. As such, these receivables were not considered impaired at the acquisition date and were not subject to guidance relating to purchase credit deteriorated loans, which have shown evidence of credit deterioration since origination. Adjustments made above were within the allowable one year measurement period. The fair value of purchased financial assets with credit deterioration was $3.0 million on the date of acquisition. The gross contractual amounts receivable relating to the purchased financial assets with credit deterioration was $3.7 million. The Corporation estimates, on the date of acquisition, that $695 thousand of the contractual cash flows specific to the purchased financial assets with credit deterioration will not be collected. The following table presents supplemental pro forma information as if the acquisition had occurred as of January 1, 2025. The unaudited pro forma information includes adjustments for interest income on loans and securities acquired, interest expense on deposits acquired, and the related income tax effects. The pro forma financial information is not necessarily indicative of the results of operations that would have occurred had the transactions been effected on the assumed dates.
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