XML 29 R10.htm IDEA: XBRL DOCUMENT
v3.24.1

Recent Events, Including Mergers and Acquisitions | 12 Months Ended
--- | ---
Dec. 31, 2023
Recent Events, Including Mergers and Acquisitions [Abstract] |
Recent Events, Including Mergers and Acquisitions |
Note 2: | Recent Events, Including Mergers and Acquisitions
On December 9, 2021, the Company’s largest shareholder sold approximately 1.1 million shares of stock pursuant to an S-3 registered secondary offering. The Company incurred $423,000 in non-recurring expenses associated with the offering, which are included in noninterest expenses. The effect of this purchase and related expenses was included in the consolidated financial statement of the Company as of December 31, 2021. Business Combinations On December 9, 2021, the Company acquired 100% of the outstanding equity of Watonga Bancshares, Inc. (“Watonga”), the bank holding company for Cornerstone Bank, for $29.3 million in cash. Immediately following the acquisition, Watonga was dissolved and Cornerstone Bank merged with and into Bank7. A summary of the fair value of assets acquired and liabilities assumed from Watonga are as follows:
|  | Estimated Fair Value |
(in thousands) |  |  |
Assets Acquired |  |  |
Cash and cash equivalents |  | $ | 41,747 |
Available-for-sale debt securities |  |  | 86,166 |
Federal funds sold |  |  | 7,941 |
Loans |  |  | 117,335 |
Premises and equipment |  |  | 8,669 |
Core deposit intangible |  |  | 1,254 |
Prepaid expenses and other assets |  |  | 4,512 |
Total assets acquiried |  | $ | 267,624 |
Liabilities Assumed |  |  |  |
Deposits |  | $ | 243,487 |
Accounts payable and accrued expenses |  |  | 2,086 |
Total liabilities assumed |  | $ | 245,573 |
Net assets acquired |  | $ | 22,051 |
Consideration transferred |  |  | 29,498 |
Goodwill |  | $ | 7,447 |
Goodwill decreased $146,000 for the year ended December 31, 2023 related to tax provision adjustments. As of the acquisition date, the Company evaluated $117.3 million of net loans ($118.5 million gross loans less $1.2 million discount) purchased in conjunction with the acquisition of Watonga Bancshares, Inc. in accordance with the provisions of FASB ASC Topic 310-20, Nonrefundable Fees and Other Costs. As of December 31, 2023, the net loan balance of the ASC Topic 310-20 purchased loans is $48.4 million. Upon acquisition, the fair values of assets acquired and liabilities assumed were preliminary and based on valuation estimates and assumptions. The accounting for business combinations require estimates and judgments regarding expectations of future cash flows of the acquired business, and the allocations of those cash flows to identifiable tangible and intangible assets. The estimates and assumptions underlying the preliminary valuations were subject to collection of information necessary to complete the valuations (specifically related to projected financial information) within the measurement periods, which are up to one year from the acquisition date. Adjustments to our estimates of purchase price allocation were made in the periods in which the adjustments were determined, and the cumulative effect of such adjustments were calculated as if the adjustments had been completed as of the acquisition date. As we are now outside of the measurement periods, no further adjustments will be made. Summary of Unaudited Pro Forma Information The following table presents unaudited pro-forma information as if the acquisition of Watonga had occurred on January 1, 2020. This pro-forma information gives effect to certain adjustments, including purchase accounting fair value adjustments, amortization of core deposit and other intangibles and related income tax effects and is based on our historical results for the periods presented. Transaction-related costs related to each acquisition are not reflected in the pro-forma amounts. The pro-forma information does not necessarily reflect the results of operations that would have occurred had the Company acquired Watonga at the beginning of fiscal year 2020. Cost savings are also not reflected in the unaudited pro-forma amounts.
|  | Actual from Acquisition |  |  | Pro-Forma for Year Ended December 31, |
|  | Date through December 31, 2021 |  |  | 2021 |  |  | 2020 |
Net interest income |  | $ | 411 |  |  | $ | 60,420 |  |  | $ | 54,690 |
Non-interest income |  |  | 67 |  |  |  | 3,261 |  |  |  | 3,721 |
Net income |  |  | 124 |  |  |  | 21,935 |  |  |  | 17,433 |
Pro-forma earnings per share: |  |  |  |  |  |  |  |  |  |  |  |
Basic |  |  |  |  |  | $ | 2.42 |  |  | $ | 1.86 |
Diluted |  |  |  |  |  | $ | 2.41 |  |  | $ | 1.86 |
Acquisition On October 31, 2023, the Company entered into an asset purchase and sale agreement, effective September 1, 2023, to acquire proven oil and natural gas properties from HB2 Origination, LLC, which consisted of nine wells in formations in four counties in Texas for $15.4 million in cash. On November 17, 2023, the transaction closed for a total purchase price of $15.1 million, after closing adjustments. As a part of the purchase, the Company assumed asset retirement obligations of $0.4 million that were included in “interest payable and other liabilities” on the consolidated balance sheets as of December 31, 2023. The acquisition was considered an asset acquisition and did not meet the definition of a business under ASC 805, Business Combinations. Additionally, transaction costs of $1.4 million were capitalized into oil and gas properties related to this acquisition. The purchase price and related asset retirement obligations were allocated based on the relative fair values of the assets acquired and $1.7 million was allocated to proved leasehold costs while the remaining $15.4 million was allocated to “interest receivable and other assets” on the consolidated balance sheets. As of December 31, 2023, the Company had oil and gas assets and related receivables of $16.8 million included in “interest receivable and other assets” on the consolidated balance sheets, assets retirement obligations and oil and gas related liabilities of $1.3 million included in “interest payable and other liabilities” on the consolidated balance sheets, oil and gas related revenues of $6.0 million included in “Other” noninterest income on the consolidated statements of comprehensive income, and oil and gas related expenses of $4.8 million included in “Other” noninterest expense on the consolidated statements of comprehensive income.

X
- References No definition available. + Details
Name: | us-gaap_BusinessCombinationAndAssetAcquisitionAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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
Name: | us-gaap_MergersAcquisitionsAndDispositionsDisclosuresTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration