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Integra Acquisition | 12 Months Ended
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Dec. 31, 2021
Business Combinations [Abstract] |
Business Combination Disclosure [Text Block] | Note 18. Integra Acquisition On July 1, 2021, we, through our wholly-owned subsidiary T Bancshares, acquired Integra through the merger of Integra with and into T Bancshares, with T Bancshares surviving the merger. Integra’s activity will be reported within our Banking segment. Integra is a factoring company that provides financing to smaller transportation companies across the United States principally by purchasing their accounts receivable at a discount and then collecting such receivables at face value. We believe that the addition of this small business lending vertical will provide the Bank with additional breadth in its lending platform and enable the Bank to continue to prudently grow its balance sheet and generate relatively attractive returns on its assets. Pursuant to the terms of and subject to the conditions set forth in the Agreement and Plan of Merger by and between the Company and Integra (the “Merger Agreement”), the transaction provided for the payment to the members of Integra of (a) an amount of cash equal to (i) approximately $2.5 million, subject to certain adjustments described in the Merger Agreement which totaled $726,721, and (b) 453,203 shares of the Company’s common stock. In addition, the Company incurred $115,726 of expenses related to the acquisition of Integra, which is reported in non-interest expense on our consolidated statements of income. A summary of the fair values of assets acquired, liabilities assumed, consideration transferred, and the resulting goodwill, which represents the expected synergies from the Integra merger, and is not deductible for tax purposes, is as follows:
(In thousands) |  |  |  |
Assets acquired: |  |  |  |
Factored receivables |  | $ | 33,442 |
Other assets |  |  | 270 |
Premises and equipment |  |  | 24 |
Loans receivable |  |  | 1,103 |
|  |  | 34,839 |
Liabilities assumed: |  |  |  |
Deposits |  |  | 2,535 |
Other liabilities |  |  | 253 |
Borrowings |  |  | 28,927 |
|  |  | 31,715 |
Fair value of net assets acquired |  |  | 3,124 |
Consideration: |  |  |  |
Cash paid |  |  | 3,185 |
Common stock |  |  | 10,650 |
Total consideration |  |  | 13,835 |
Goodwill |  | $ | 10,711 |
The contractual value of the factored receivables acquired was $34.3 million. The amount above represents the contractual value of the receivables less the purchased deferred discount of $397,000 and the fair value adjustment of $492,000. The value for the common stock was based on an earnings based multiple plus a control premium. Supplemental Pro Forma Information (unaudited) The following table presents financial information regarding the former Integra operations for the years ended December 31, 2020 and the six months ended June 30, 2021. In addition, the tables present unaudited condensed pro forma financial information assuming that the Integra acquisition was completed as of January 1, 2020. The financial information for the Company for the year ended December 31, 2021 includes Integra operations from July 1, 2021 through December 31, 2021. Integra was a subchapter S corporation and as such, income tax on its earnings was paid by its shareholders. The results shown below for the period prior to the acquisition include an estimate for income tax at the Company’s statutory rate. The tables have been prepared for comparative purposes only and are not necessarily indicative of the actual results that would have been obtained had the acquisition occurred on January 1, 2020, nor is it indicative of future results.
(In thousands) |  | Actual Integra results of operations for the Period January 1, 2021 through June 30, 2021 |  |  | Actual for the Year Ended December 31, 2021 |  |  | Pro Forma for the Year Ended December 31, 2021 |
Net interest income |  | $ | 2,373 |  |  | $ | 23,543 |  |  | $ | 25,916 |
Noninterest income |  |  | 248 |  |  |  | 36,624 |  |  |  | 36,872 |
Noninterest expense |  |  | 1,377 |  |  |  | 38,330 |  |  |  | 39,707 |
Net income after income taxes |  |  | 983 |  |  |  | 17,034 |  |  |  | 18,017 |
(In thousands) |  | Actual Integra results of operations for the Year Ended December 31, 2020 |  |  | Actual for the Year Ended December 31, 2020 |  |  | Pro Forma for the Year Ended December 31, 2020 |
Net interest income |  | $ | 2,706 |  |  | $ | 13,900 |  |  | $ | 16,606 |
Noninterest income |  |  | 401 |  |  |  | 33,721 |  |  |  | 34,122 |
Noninterest expense |  |  | 1,652 |  |  |  | 33,699 |  |  |  | 35,351 |
Net income after income taxes |  |  | 1,149 |  |  |  | 10,925 |  |  |  | 12,074 |

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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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