Note 10. Acquisitions

As of the close of business on March 6, 2015, Peoples completed its acquisition of NB&T for total consideration of $102.7 million which reflected the conversion of each of the 3,442,329 outstanding NB&T common shares into $7.75 in cash and 0.9319 in Peoples' common shares. NB&T merged into Peoples and NB&T's wholly-owned subsidiary, The National Bank and Trust Company, which operates 22 full-service branches in southwest Ohio, merged into Peoples Bank. The acquisition was accounted for as a business combination under the acquisition method of accounting under US GAAP. The assets purchased, liabilities assumed, and related identifiable intangible assets were recorded at their acquisition date fair values. Per the applicable accounting guidance for business combinations, these fair values are preliminary and subject to refinement for up to one year after the closing date of the acquisition as additional information relative to closing date fair values becomes available. The goodwill recognized will not be deductible for income tax purposes.

As a result of the NB&T acquisition, Peoples acquired loans of $390.0 million and deposits of $629.5 million after preliminary acquisition accounting adjustments. The balances and operations related to the acquisition are included in Peoples' Unaudited Consolidated Financial Statements from the date of the acquisition.

The following table provides the preliminary purchase price calculation as of the date of acquisition for NB&T, and the assets acquired and liabilities assumed at their estimated fair values.



(Dollars in thousands, except per share data)	NB&T
Purchase Price
Common shares outstanding of acquired company at acquisition date	3,442,329
Cash purchase price per share	$	7.75
Cash consideration	26,678
Number of common shares of Peoples issued for each common share of acquired company	0.9319
Price per Peoples common share, based on closing stock price on acquisition date	$	23.70
Common share consideration	76,027
Total purchase price	$	102,705

Net Assets at Fair Value
Assets
Cash and cash equivalents	$	130,275
Investment securities	156,392
Loans, including loans held for sale, net of deferred fees and costs	389,985
Bank premises and equipment, net	10,702
Other intangible assets	8,868
Other assets	24,070
Total assets	720,292
Liabilities
Deposits	629,512
Borrowings	6,570
Accrued expenses and other liabilities	7,603
Total liabilities	643,685
Net assets	$	76,607
Goodwill	$	26,098

Acquired loans are reported net of the unamortized fair value adjustment. The following table details the preliminary fair value adjustment for acquired loans as of the acquisition date:



(Dollars in thousands, except per share data)	NB&T
Nonimpaired Loans
Contractual cash flows	$	541,292
Nonaccretable difference	76,853
Expected cash flows	464,439
Accretable yield	99,678
Fair value	$	364,761

Purchase Credit Impaired Loans
Contractual cash flows	$	44,936
Nonaccretable difference	14,929
Expected cash flows	30,007
Accretable yield	4,783
Fair value	$	25,224

Peoples recorded non-interest expenses related to acquisitions, mainly the NB&T acquisition, of $9.0 million and net losses on asset disposals related to the NB&T acquisition of $0.6 million in the Consolidated Statement of Operations for the three months ended March 31, 2015.

The following table is a preliminary summary of the changes in goodwill and intangible assets during the period ended March 31, 2015:



(Dollars in thousands)	Goodwill		Gross Core Deposits		Gross Customer Relationships
Balance, December 31, 2014	$	98,562	$	13,546	$	8,859
Acquired intangible assets	26,098		8,623		—
Balance, March 31, 2015	$	124,660	$	22,169	$	8,859



(Dollars in thousands)	Gross Intangible Assets		Accumulated Amortization			Net Intangible Assets
March 31, 2015
Core deposits	$	22,169	$	(8,232	)	$	13,937
Customer relationships	8,859		(6,488		)	2,371
Total acquired intangible assets	$	31,028	$	(14,720	)	$	16,308
Servicing rights						2,469
Total other intangible assets						$	18,777