ACQUISITIONS

Pending Acquisitions

The National Bank & Trust Company of Sycamore

On November 12, 2015, the Company entered into a definitive agreement to acquire NI Bancshares Corporation ("NI Bancshares"), the holding company for The National Bank & Trust Company of Sycamore. As part of the acquisition, the Company will acquire ten banking offices in northern Illinois, $415 million in loans, $600 million in deposits, and over $700 million in trust assets under management. The merger consideration will be a combination of Company common stock and cash, with an overall transaction value of $70 million. The Company received approval for this acquisition from the Federal Reserve on January 5, 2016 and the Illinois Department of Financial and Professional Regulation on January 15, 2016. The acquisition is expected to close and operating systems converted late in the first quarter of 2016, subject to approval by the stockholders of NI Bancshares and customary closing conditions.

Completed Acquisitions

The Peoples' Bank of Arlington Heights

On December 3, 2015, the Company completed the acquisition of Peoples Bancorp, Inc. ("Peoples") and its wholly owned banking subsidiary, The Peoples' Bank of Arlington Heights. With the acquisition, the Company acquired all assets and assumed all liabilities of Peoples, which included two banking offices in Arlington Heights, Illinois, at a purchase price of $16.8 million paid in cash. The Company recorded goodwill of $7.5 million associated with the acquisition. The Company is finalizing the fair values of the assets and liabilities acquired. As a result, the fair value adjustments associated with these accounts and goodwill are preliminary and may change.

Popular Community Bank

On August 8, 2014, the Bank completed the acquisition of the Chicago area banking operations of Banco Popular North America ("Popular"), doing business as Popular Community Bank, which is a subsidiary of Popular, Inc. The acquisition included Popular's twelve full-service retail banking offices and its small business and middle market commercial lending activities in the Chicago metropolitan area at a purchase price of $19.0 million paid in cash. The Company recorded goodwill of $32.2 million associated with the acquisition. The fair value adjustments associated with this transaction were finalized during the second quarter of 2015 and there were no measurement period adjustments during 2015.

Great Lakes Financial Resources, Inc.

On December 2, 2014, the Company completed the acquisition of the south suburban Chicago-based Great Lakes Financial Resources, Inc. ("Great Lakes"), the holding company for Great Lakes Bank, National Association. The Company acquired all assets and assumed all liabilities of Great Lakes, which included seven full-service retail banking offices and one drive-up location, at a purchase price of $55.8 million. Consideration consisted of $38.3 million in Company common stock and $17.5 million in cash. The Company recorded goodwill of $10.3 million associated with the acquisition.

During the fourth quarter of 2015, the Company finalized the fair value adjustments associated with the Great Lakes transaction, which required a measurement period adjustment of $933,000 and $523,000 to decrease loans and premises, furniture, and equipment, respectively, $582,000 to increase accrued interest receivable and other assets for the related deferred tax asset, and $874,000 to increase goodwill. These adjustments were recognized in the current period in accordance with the early adoption of revised accounting guidance applicable to business combinations.

The following table presents the assets acquired and liabilities assumed, net of the fair value adjustments, in the Peoples, Popular, and Great Lakes transactions as of the acquisition date. The assets acquired and liabilities assumed, both intangible and tangible, were recorded at their estimated fair values as of the acquisition date and have been accounted for under the acquisition method of accounting.

Acquisition Activity

(Dollar amounts in thousands)



	Peoples		Popular		Great Lakes
	December 3, 2015		August 8, 2014		December 2, 2014
Assets
Cash and due from banks and interest-bearing deposits in other banks	$	781	$	161,276	$	78,609
Securities available-for-sale	41,492		—		219,279
FHLB and FRB stock	558		—		1,970
Loans	53,917		549,386		223,169
OREO	515		—		1,244
Investment in BOLI	—		—		10,373
Goodwill	7,544		32,181		10,339
Other intangible assets	580		8,003		6,192
Premises, furniture, and equipment	2,215		4,647		5,011
Accrued interest receivable and other assets	2,911		6,574		10,059
Total assets	$	110,513	$	762,067	$	566,245
Liabilities
Noninterest-bearing deposits	$	15,869	$	163,299	$	110,885
Interest-bearing deposits	75,944		568,573		353,424
Total deposits	91,813		731,872		464,309
Intangible liabilities	—		10,631		—
Borrowed funds	1,200		—		29,490
Senior and subordinated debt	—		—		9,809
Accrued interest payable and other liabilities	672		564		6,887
Total liabilities	93,685		743,067		510,495
Consideration Paid
Common stock (2014 - 2,440,754 shares issued at $15.737 per share), net of $110,000 in issuance costs	—		—		38,300
Cash paid	16,828		19,000		17,450
Total consideration paid	16,828		19,000		55,750
	$	110,513	$	762,067	$	566,245

National Machine Tool Financial Corporation

On September 26, 2014, the Bank completed the acquisition of National Machine Tool Financial Corporation, now known as First Midwest Equipment Finance Co. ("FMEF"), which provides equipment leasing and commercial financing alternatives to traditional bank financing. On the date of acquisition, the Bank acquired approximately $5.9 million in assets, excluding goodwill, which primarily consisted of direct financing leases, lease loans, and other assets, at a purchase price of $3.1 million paid in cash. Goodwill recorded as a result of the acquisition totaled $4.0 million.

The assets acquired and liabilities assumed, both intangible and tangible, were recorded at their estimated fair values as of the September 26, 2014 acquisition date and have been accounted for under the acquisition method of accounting. The fair value adjustments associated with this transaction were finalized during the third quarter of 2015 and required no measurement period adjustments during 2015.

Expenses related to the acquisition and integration of the transactions above totaled $1.4 million and $13.9 million during the years ended December 31, 2015 and 2014, respectively, and are reported as a separate component within noninterest expense in the Consolidated Statements of Income.