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Business Combinations and Asset Acquisitions | 9 Months Ended
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Sep. 30, 2025
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract] |
Business Combination | Acquisition On April 30, 2025, the Company completed its acquisition of CenterGroup Financial, Inc. (“Center”) and its banking subsidiary, CenterBank, for consideration of 3,016,009 shares of the Company's common stock. Through the acquisition, the Company obtained three full-service banking offices, a loan production office and a mortgage office, all located in the Cincinnati, Ohio market. The table below summarizes the net assets acquired (at fair value) and consideration transferred in connection with the Center acquisition (dollars in thousands):
Consideration paid |  |
Cash paid to shareholders - fractional shares | $ | 1 |  |
Shares issued to shareholders (3,016,009 shares) | 46,205 |  |
Total consideration paid |  | $ | 46,206 |
Fair value of assets acquired |  |
Cash and due from banks | 4,672 |  |
Investment securities | 21,396 |  |
FHLB stock | 3,144 |  |
Loans, including loans held for sale | 291,852 |  |
Premises and equipment | 4,276 |  |
Core deposit intangible | 5,355 |  |
Bank owned life insurance | 430 |  |
Other assets | 5,039 |  |
Total assets acquired |  | 336,164 |
Fair value of liabilities assumed |  |
Deposits | 277,980 |  |
Borrowings | 22,785 |  |
Other liabilities | 3,692 |  |
Total liabilities assumed |  | 304,457 |
Total fair value of identifiable net assets |  | $ | 31,707 |
Goodwill |  | $ | 14,499 |
The Company determined that this acquisition constitutes a business combination and therefore was accounted for using the acquisition method of accounting. Accordingly, as of the date of the acquisition, the Company recorded the assets acquired, liabilities assumed and consideration paid at fair value. The $14.5 million excess of the consideration paid over the fair value of assets acquired was recorded as goodwill and is not amortizable or deductible for tax purposes. The amount of goodwill arising from the acquisition consists largely of the synergies and economies of scale expected from combining the operations of the Company with Center. The fair value of the 3,016,009 common shares issued was determined based on the $15.32 closing market price of the Company's common shares on the acquisition date, April 30, 2025. While the valuation of the acquired assets and liabilities is substantially complete, fair value estimates are subject to adjustment during the provisional period, which may last up to twelve months subsequent to the acquisition date. During this period, the Company may obtain additional information to refine the valuations and adjust the recorded fair value, although such adjustments are not expected to be significant. During the three-months ended September 30, 2025, valuations were finalized for provisional amounts for credit marks related to four PCD loans which were considered provisional until collateral valuations were complete. After receiving the collateral valuations a $0.6 million increase in fair value and decrease in the allowance for credit losses was recognized. Valuations still subject to adjustments include deferred and accrued income taxes due to Center's tax returns being open for the period ended April 30, 2025. The following is a description of the valuation methodologies used to estimate the fair values of major categories of assets acquired and liabilities assumed. The Company used an independent valuation specialist to assist with the determination of fair values for certain acquired assets and assumed liabilities. Cash and due from banks - The estimated fair value was determined to approximate the carrying amount of these assets. Investment securities - The estimated fair value of the investment portfolio was based on quoted market prices. Loans - The estimated fair value of loans was based on a discounted cash flow methodology applied on a pooled basis for non- purchased credit-deteriorated ("non-PCD") loans and on an individual basis for purchased credit-deteriorated ("PCD") loans. The valuation considered underlying characteristics including loan type, term, rate, payment schedule and credit rating. Other factors included assumptions related to prepayments, the probability of default and loss given default. The discount rates applied were based on a build-up approach considering the funding mix, servicing costs, liquidity premium and factors related to performance risk. Acquired loans are classified into two categories: PCD loans and non-PCD loans. PCD loans are defined as a loan or group of loans that have experienced more than insignificant credit deterioration since origination. Non-PCD loans will have an allowance established on acquisition date, which is recognized as an expense through provision for credit losses. For PCD loans, an allowance is recognized on day 1 by adding it to the fair value of the loan, which is the “Day 1 amortized cost”. There is no provision for credit loss expense recognized on PCD loans because the initial allowance is established by grossing-up the amortized cost of the PCD loan. A day 1 allowance for credit losses of $3.4 million related to non-PCD loans and $0.4 million related to the off-balance sheet commitment liability was recorded through the provision for credit losses within the Consolidated Statements of Income. At the date of acquisition, of the $303.7 million of portfolio loans acquired from Center, $29.2 million, or 9.6%, of Center's loan portfolio, was accounted for as PCD loans as of May 1, 2025. Premise and equipment - The estimated fair value of land and buildings were determined by independent market-based appraisals. Core deposit intangible - The core deposit intangible was valued utilizing the cost savings method approach, which recognizes the cost savings represented by the expense of maintaining the core deposit base versus the cost of an alternative funding source. The valuation incorporates assumptions related to account retention, discount rates, deposit interest rates, deposit maintenance costs and alternative funding rates. Time deposits - The estimated fair value of time deposits was determined using a discounted cash flow approach incorporating a discount rate equal to current market interest rates offered on time deposits with similar terms and maturities. Borrowings - The estimated fair value of short-term borrowings was determined to approximate stated value. Long-term debt with the Federal Home Loan Bank of Cincinnati was valued using the prepayment penalty for payoff on April 30, 2025. The following table provides details related to the fair value of acquired PCD loans as of April 30, 2025.
| Unpaid Principal Balance |  | PCD Allowance for Credit Loss at Acquisition |  | (Discount) Premium on Acquired Loans |  | Fair Value of PCD Loans at Acquisition
| (dollars in thousands)
Commercial, financial, agricultural and other | $ | 13,302 |  |  | $ | (1,616) |  |  | $ | (487) |  |  | $ | 11,199 |
Time and demand | 13,302 |  |  | (1,616) |  |  | (487) |  |  | 11,199 |
Time and demand other | — |  |  | — |  |  | — |  |  | — |
Real estate construction | 2,442 |  |  | (810) |  |  | (54) |  |  | 1,578 |
Construction other | 557 |  |  | (182) |  |  | (17) |  |  | 358 |
Construction residential | 1,885 |  |  | (628) |  |  | (37) |  |  | 1,220 |
Residential real estate | 3,845 |  |  | (45) |  |  | (138) |  |  | 3,662 |
Residential first lien | 3,372 |  |  | (38) |  |  | (137) |  |  | 3,197 |
Residential junior lien/home equity | 473 |  |  | (7) |  |  | (1) |  |  | 465 |
Commercial real estate | 9,604 |  |  | (1,087) |  |  | (330) |  |  | 8,187 |
Multifamily | 1,210 |  |  | (120) |  |  | (78) |  |  | 1,012 |
Non-owner occupied | 5,330 |  |  | (943) |  |  | (184) |  |  | 4,203 |
Owner occupied | 3,064 |  |  | (24) |  |  | (68) |  |  | 2,972 |
Loans to individuals | 30 |  |  | (2) |  |  | — |  |  | 28 |
Automobile and recreational vehicles | 14 |  |  | (1) |  |  | — |  |  | 13 |
Consumer other | 16 |  |  | (1) |  |  | — |  |  | 15 |
Total loans and leases | $ | 29,223 |  |  | $ | (3,560) |  |  | $ | (1,009) |  |  | $ | 24,654 |
The following table provides details related to the fair value and Day 1 provision related to the acquired non-PCD loans as of April 30, 2025.
| Unpaid Principal Balance |  | (Discount) Premium on Acquired Loans |  | Fair Value of Non-PCD Loans at Acquisition |  | Day 1 Provision for Credit Losses - Non-PCD Loans
| (dollars in thousands)
Commercial, financial, agricultural and other | $ | 50,555 |  |  | $ | (2,137) |  |  | $ | 48,418 |  |  | $ | 630 |
Time and demand | 50,535 |  |  | (2,137) |  |  | 48,398 |  |  | 630 |
Time and demand other | 20 |  |  | — |  |  | 20 |  |  | — |
Real estate construction | 32,074 |  |  | (941) |  |  | 31,133 |  |  | 691 |
Construction other | 18,829 |  |  | (472) |  |  | 18,357 |  |  | 445 |
Construction residential | 13,245 |  |  | (469) |  |  | 12,776 |  |  | 246 |
Residential real estate | 82,609 |  |  | (3,396) |  |  | 79,213 |  |  | 665 |
Residential first lien | 67,906 |  |  | (3,145) |  |  | 64,761 |  |  | 556 |
Residential junior lien/home equity | 14,703 |  |  | (251) |  |  | 14,452 |  |  | 109 |
Commercial real estate | 108,843 |  |  | (3,550) |  |  | 105,293 |  |  | 1,389 |
Multifamily | 17,405 |  |  | (481) |  |  | 16,924 |  |  | 180 |
Non-owner occupied | 43,927 |  |  | (1,763) |  |  | 42,164 |  |  | 512 |
Owner occupied | 47,511 |  |  | (1,306) |  |  | 46,205 |  |  | 697 |
Loans to individuals | 357 |  |  | (10) |  |  | 347 |  |  | 4 |
Automobile and recreational vehicles | 337 |  |  | (9) |  |  | 328 |  |  | 4 |
Consumer other | 20 |  |  | (1) |  |  | 19 |  |  | — |
Total loans and leases | $ | 274,438 |  |  | $ | (10,034) |  |  | $ | 264,404 |  |  | $ | 3,379 |
The following table presents the change in goodwill during the period (dollars in thousands):
|  | For the Nine Months Ended September 30, 2025
Goodwill at December 31, 2024 |  | $ | 363,715 |
Goodwill from Center acquisition |  | 14,499 |
Goodwill at September 30, 2025 |  | $ | 378,214 |
Costs related to the acquisition totaled $4.2 million. These amounts were expensed as incurred and are recorded as a merger and acquisition related expense in the Consolidated Statements of Income. As a result of the full integration of the operations of Center, it is not practicable to determine revenue or net income included in the Company's operating results relating to Center since the date of acquisition as Center's results cannot be separately identified.

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