ACQUISITIONS

Pending Acquisitions

Standard Bancshares, Inc.

On June 28, 2016, the Company entered into a definitive agreement to acquire Standard Bancshares, Inc. ("Standard"), the holding company for Standard Bank and Trust Company. On January 6, 2017, the Company completed its acquisition of Standard. With the acquisition, the Company acquired all assets and assumed all liabilities of Standard including 35 banking offices located primarily in the southwest Chicago suburbs and adjacent markets in northwest Indiana, total assets of $2.6 billion, $2.0 billion in deposits, and $1.8 billion in loans. For additional discussion and disclosure related to the Standard acquisition, see note 25, "Subsequent Events."

Completed Acquisitions

NI Bancshares Corporation

On March 8, 2016, the Company completed its acquisition of NI Bancshares Corporation ("NI Bancshares"), the holding company for The National Bank & Trust Company of Sycamore. As part of the acquisition, the Company acquired all assets and assumed all liabilities of NI Bancshares, which included ten banking offices in northern Illinois and over $700.0 million in trust assets under management. The merger consideration was a combination of Company common stock and cash, at a purchase price of $70.1 million. Goodwill of $21.8 million associated with the acquisition was recorded by the Company.

During 2016, the Company updated the fair value adjustments associated with the NI Bancshares transaction, which required a measurement period adjustment of $1.0 million to increase goodwill. This adjustment was recognized in the current period in accordance with accounting guidance applicable to business combinations. The fair value adjustments associated with these accounts and goodwill remain preliminary and may change as the Company continues to finalize the fair value of the assets and liabilities acquired.

Peoples Bancorp, Inc

On December 3, 2015, the Company completed its 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 $7.7 million associated with the acquisition.

During 2016, the Company finalized the fair value adjustments associated with the Peoples transaction, which required a measurement period adjustment of $121,000 to increase goodwill. These adjustments were recognized in the current period in accordance with accounting guidance applicable to business combinations.

The following table presents the assets acquired and liabilities assumed, net of the fair value adjustments, in the NI Bancshares and Peoples transactions as of the acquisition date, including measurement period adjustments. 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, except share and per share data)



	NI Bancshares		Peoples
	March 8, 2016		December 3, 2015
Assets
Cash and due from banks and interest-bearing deposits in other banks	$	72,533	$	781
Securities available-for-sale	125,843		41,492
Securities held-to-maturity	1,864		—
FHLB and FRB stock	1,549		558
Loans	396,886		53,766
OREO	2,863		515
Investment in BOLI	8,384		—
Goodwill	21,751		7,665
Other intangible assets	10,409		580
Premises, furniture, and equipment	19,636		2,215
Accrued interest receivable and other assets	16,558		2,941
Total assets	$	678,276	$	110,513
Liabilities
Noninterest-bearing deposits	$	130,909	$	15,869
Interest-bearing deposits	464,012		75,944
Total deposits	594,921		91,813
Borrowed funds	2,416		1,200
Intangible liabilities	230		—
Accrued interest payable and other liabilities	10,627		672
Total liabilities	608,194		93,685
Consideration Paid
Common stock (2016 - 3,042,494 shares issued at $18.059 per share), net of $48,000 in issuance costs	54,896		—
Cash paid	15,186		16,828
Total consideration paid	70,082		16,828
	$	678,276	$	110,513

Expenses related to the acquisition and integration of completed and pending transactions totaled $14.4 million, $1.4 million and $13.9 million during the years ended December 31, 2016, 2015 and 2014, respectively, and are reported as a separate component within noninterest expense in the Consolidated Statements of Income. The completed acquisitions were not considered material to the Company's financial statements; therefore, pro forma financial data and related disclosures are not included.