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Acquisition and Divestiture Activity | 9 Months Ended
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Sep. 30, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] |
Acquisition and Divestiture Activity | ACQUISITION AND DIVESTITURE ACTIVITY Acquisition CapStar Financial Holdings, Inc. On April 1, 2024, Old National completed its acquisition of CapStar Financial Holdings, Inc. (“CapStar”) and its wholly-owned subsidiary, CapStar Bank, in an all-stock transaction. This partnership strengthens Old National’s Nashville, Tennessee presence and adds several new high-growth markets. Pursuant to the terms of the merger agreement, each outstanding share of CapStar common stock was converted into the right to receive 1.155 shares of Old National common stock plus cash in lieu of fractional shares. All system conversions related to the transaction were completed in early July 2024. The assets acquired and liabilities assumed, both intangible and tangible, were recorded at their estimated fair values as of the merger date and have been accounted for under the acquisition method of accounting. The following table presents the preliminary valuation of the assets acquired and liabilities assumed and the fair value of consideration as of the merger date:
(dollars and shares in thousands) | April 1, 2024
Assets |
Cash and cash equivalents | $ | 177,791 |
Investment securities | 342,490 |
FHLB/Federal Reserve Bank stock | 14,426 |
Loans held-for-sale | 21,159 |
Loans, net of allowance for credit losses | 2,120,627 |
Premises and equipment | 22,481 |
Goodwill | 178,283 |
Other intangible assets | 46,125 |
Company-owned life insurance | 91,475 |
Other assets | 94,312 |
Total assets | $ | 3,109,169 |
Liabilities |
Deposits | $ | 2,560,124 |
Federal Home Loan Bank advances | 75,000 |
Other borrowings | 30,000 |
Accrued expenses and other liabilities | 26,447 |
Total liabilities | $ | 2,691,571 |
Fair value of consideration |
Common stock (24,014 shares issued at $17.41 per share) | $ | 417,598 |
Total consideration | $ | 417,598 |
Goodwill related to this merger will not be deductible for tax purposes. Other intangible assets acquired included core deposit intangibles. The estimated fair value of the core deposit intangible was $46.1 million and is being amortized over an estimated useful life of 10 years. The fair value of PCD assets was $610.7 million on the date of merger. The gross contractual amounts receivable relating to the PCD assets was $679.3 million. Old National estimates, on the date of the merger, that $26.7 million of the contractual cash flows specific to the PCD assets will not be collected. Transaction and integration costs primarily associated with the CapStar merger have been expensed for the three and nine months ended September 30, 2024 totaling $6.9 million and $29.2 million, respectively, and additional transaction and integration costs will be expensed in future periods as incurred.

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/805/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/205-20/tableOfContent + Details
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