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Note 8 - Business Combination | 3 Months Ended
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Mar. 31, 2021
Notes to Financial Statements |
Business Combination Disclosure [Text Block] | NOTE 8 – BUSINESS COMBINATION Community Shores Bank Corporation ChoiceOne completed the acquisition of Community Shores Bank Corporation (“Community Shores”) with and into ChoiceOne, with ChoiceOne as the surviving entity, effective on July 1, 2020. Community Shores had 4 branch offices as of the date of the merger. Total assets of Community Shores as of July 1, 2020 were $244.5 million, including total loans of $174.8 million. Deposits acquired in the merger, the majority of which were core deposits, totaled $227.8 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 524,139 shares of ChoiceOne common stock, which was net of 84 fractional shares not issued, and cash in the amount of $5,390,000 with an approximate total value of $20.9 million. The initial accounting for the business combination has been determined provisionally for the fair value of certain assets and liabilities, including loans, core deposit intangible, and deferred taxes. During the quarter ended March 31, 2021 management finalized accounting for certain loans and deferred tax accounts, resulting in measurement period adjustments increasing the acquisition date fair value of loans by $828,000 and decreasing the acquisition date fair value of other assets by $268,000. As a result, goodwill recognized as a result of the acquisition was reduced by $560,000. Management expects to finalize calculations supporting the fair value of these assets and liabilities during the measurement period. The table below presents the allocation of purchase price for the merger with Community Shores (dollars in thousands):
Purchase Price |  |  |  |
Consideration |  | $ | 20,881 |
Net assets acquired: |  |  |  |
Cash and cash equivalents |  |  | 41,023 |
Securities available for sale |  |  | 20,023 |
Federal Home Loan Bank and Federal Reserve Bank stock |  |  | 300 |
Originated loans |  |  | 174,802 |
Premises and equipment |  |  | 6,204 |
Other real estate owned |  |  | 346 |
Deposit based intangible |  |  | 760 |
Other assets |  |  | 1,077 |
Total assets |  |  | 244,535 |
Non-interest bearing deposits |  |  | 65,499 |
Interest bearing deposits |  |  | 162,333 |
Total deposits |  |  | 227,832 |
Trust preferred securities |  |  | 3,039 |
Other liabilities |  |  | 136 |
Total liabilities |  |  | 231,007 |
Net assets acquired |  |  | 13,528 |
Goodwill |  | $ | 7,353 |
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 + Details
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