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Note 8 - Business Combination

6 Months Ended

Jun. 30, 2020

Notes to Financial Statements

Business Combination Disclosure [Text Block]

NOTE 8 – BUSINESS COMBINATION

Community Shores Bank Corporation - Subsequent Event

On January 6, 2020, ChoiceOne entered into an Agreement and Plan of Merger with Community Shores Bank Corporation (“Community Shores”), the holding company for Community Shores Bank.  Under the terms of the merger agreement, Community Shores was merged with and into ChoiceOne, with ChoiceOne as the surviving corporation effective on July 1, 2020.  As of June 30, 2020, Community Shores had total assets of approximately $249 million, total loans of approximately $177 million, and total deposits of approximately $227 million.

County Bank Corp

ChoiceOne completed the merger of County Bank Corp (“County”) with and into ChoiceOne effective on October 1, 2019. County had 14 branch offices and one loan production office as of the date of the merger. Total assets of County as of October 1, 2019 were $673 million, including total loans of $424 million. Deposits acquired in the merger, the majority of which were core deposits, totaled $574 million. The impact of the merger has been included in ChoiceOne’s results of operations since the effective date of the merger. As consideration in the merger, ChoiceOne issued 3,603,872 shares of ChoiceOne common stock, which was net of 299 fractional shares not issued, with an approximate value of $108 million.

The table below presents the allocation of purchase price for the merger with County (dollars in thousands):

Purchase Price
Consideration		$	107,945
Net assets acquired:
Cash and cash equivalents			20,638
Equity securities at fair value			474
Securities available for sale			187,230
Federal Home Loan Bank and Federal Reserve Bank stock			2,915
Loans to other financial institutions			33,481
Originated loans			390,116
Premises and equipment			9,271
Other real estate owned			1,364
Deposit based intangible			6,359
Bank owned life insurance			16,912
Other assets			4,002
Total assets			672,762
Non-interest bearing deposits			124,113
Interest bearing deposits			449,488
Total deposits			573,601
Federal funds purchased			3,800
Advances from Federal Home Loan Bank			23,000
Other liabilities			3,282
Total liabilities			603,683
Net assets acquired			69,079
Goodwill		$	38,866

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- Definition

The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable).

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-URI http://asc.fasb.org/topic&trid=2303972

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