NOTE 2. MERGERS AND ACQUISITIONS

On April 5, 2018, WesBanco completed its acquisition of First Sentry Bancshares, Inc. (“FTSB”), a bank holding company headquartered in Huntington, WV. On the acquisition date, FTSB had approximately $706.1 million in assets, excluding goodwill, which included approximately $448.3 million in loans and $142.9 million in securities. The FTSB acquisition was valued at $108.3 million, based on WesBanco’s closing stock price on April 5, 2018, of $42.96, and resulted in WesBanco issuing 2,498,761 shares of its common stock and $1.0 million in cash in exchange for all of the outstanding shares of FTSB common stock including stock options. The assets and liabilities of FTSB were recorded on WesBanco’s Balance Sheet at their preliminary estimated fair values as of April 5, 2018, the acquisition date, and FTSB’s results of operations have been included in WesBanco’s Consolidated Statements of Income since that date. Due to the timing of the acquisition relative to the end of the reporting period, the fair values for certain assets and liabilities acquired from FTSB on April 5, 2018 represent preliminary estimates. Based on a preliminary purchase price allocation, WesBanco recorded $66.2 million in goodwill and $8.2 million in core deposit intangibles in its community banking segment, representing the principal change in goodwill and intangibles from December 31, 2017. None of the goodwill is deductible for income tax purposes, as the acquisition is accounted for as a tax-free exchange for tax purposes. As a result of the full integration of the operations of FTSB, it is not practicable to determine revenue or net income included in WesBanco’s operating results relating to FTSB since the date of acquisition, as FTSB’s results cannot be separately identified.

For the six months ended June 30, 2018, WesBanco recorded merger-related expenses of $5.0 million associated with the FTSB acquisition.

The preliminary purchase price of the FTSB acquisition and resulting goodwill is summarized as follows:


*(unaudited, in thousands)*	April 5, 2018
Purchase Price:
Fair value of WesBanco shares issued	$	107,347
Cash consideration for outstanding FTSB shares		975

Total purchase price	$	108,322
Fair value of:
Tangible assets acquired	$	610,712
Core deposit and other intangible assets acquired		8,237
Liabilities assumed		(663,970	)
Net cash received in the acquisition		87,124

Fair value of net assets acquired		42,103

Goodwill recognized	$	66,219

The following table presents the preliminary allocation of the purchase price of the assets acquired and the liabilities assumed at the date of acquisition, as WesBanco intends to finalize its accounting for the acquisition of FTSB within one year from the date of acquisition:


*(unaudited, in thousands)*	April 5, 2018
Assets acquired
Cash and due from banks	$	87,124
Securities		142,903
Loans		448,339
Goodwill and other intangible assets		74,456
Accrued income and other assets		19,470

Total assets acquired	$	772,292

Liabilities assumed
Deposits	$	590,018
Borrowings		70,710
Accrued expenses and other liabilities		3,242

Total liabilities assumed	$	663,970

Net assets acquired	$	108,322

On April 19, 2018, WesBanco and Farmers Capital Bank Corporation (“FFKT”), a bank holding company headquartered in Frankfort, Kentucky with approximately $1.7 billion in assets, $1.4 billion in deposits, $1.0 billion in loans and 34 branches, jointly announced that a definitive Agreement and Plan of Merger was executed providing for the merger of FFKT with and into WesBanco. On the date of the announcement, the transaction was valued at approximately $378.2 million. Under the terms of the Agreement and Plan of Merger, which has been approved by the board of directors of both companies, WesBanco will exchange a combination of its common stock and cash for FFKT common stock. FFKT’s shareholders will be entitled to receive 1.053 shares of WesBanco common stock and cash in the amount of $5.00 per share for each share of FFKT common stock for a total value of approximately $50.31 per share at the date of announcement. The receipt by FFKT shareholders of shares of WesBanco common stock in exchange for their shares of FFKT’s common stock is anticipated to qualify as a tax-free exchange. The acquisition has been approved by the appropriate banking regulatory authorities and the shareholders of FFKT. It is expected that the transaction will be completed in the third quarter of 2018. For the six months ended June 30, 2018, WesBanco has recorded merger-related expenses of $0.7 million associated with the FFKT acquisition.