Acquisitions

6 Months Ended

Jun. 30, 2019

ACQUISITIONS

Completed Acquisitions

Bridgeview Bancorp, Inc.

On May 9, 2019, the Company completed its acquisition of Bridgeview Bancorp, Inc. ("Bridgeview"), the holding company for Bridgeview Bank Group. At closing, the Company acquired $1.2 billion of assets, $1.0 billion of deposits, and $709.9 million of loans, net of fair value adjustments. Under the terms of the merger agreement, on May 9, 2019, each outstanding share of Bridgeview common stock was exchanged for 0.2767 shares of Company common stock, plus $1.66 in cash. In addition, each outstanding Bridgeview stock option was exchanged for the right to receive cash. This resulted in merger consideration of $135.4 million, which consisted of 4,728,541 shares of Company stock and $37.1 million of cash. Goodwill of $57.4 million associated with the acquisition was recorded by the Company. All Bridgeview operating systems were converted to the Company's operating platform during the second quarter of 2019. The fair value adjustments, including goodwill, associated with this transaction remain preliminary and may change as the Company continues to finalize the fair value of the assets and liabilities acquired.

Northern Oak Wealth Management, Inc.

On January 16, 2019, the Company completed its acquisition of Northern Oak Wealth Management, Inc. ("Northern Oak"), a registered investment adviser based in Milwaukee, Wisconsin with approximately $800.0 million of assets under management at closing. The fair value adjustments, including goodwill, associated with this transaction remain preliminary and may change as the Company continues to finalize the fair value of the assets and liabilities acquired.

Northern States Financial Corporation

On October 12, 2018, the Company completed its acquisition of Northern States Financial Corporation ("Northern States"), the holding company for NorStates Bank, based in Waukegan, Illinois. At closing, the Company acquired $578.7 million of assets, $463.2 million of deposits, and $284.9 million of loans, net of fair value adjustments. Under the terms of the merger agreement, on October 12, 2018, each outstanding share of Northern States common stock was exchanged for 0.0363 shares of Company common stock. This resulted in merger consideration of $83.3 million, which consisted of 3,310,912 shares of Company common stock. Goodwill of $30.1 million associated with the acquisition was recorded by the Company. All Northern States operating systems were converted to the Company's operating platform during the fourth quarter of 2018.

During the second quarter of 2019, the Company updated the fair value adjustments associated with the Northern States transaction. The adjustments were recognized in the current period in accordance with accounting guidance applicable to business combinations. The fair value adjustments, including goodwill, associated with this transaction remain preliminary and may change as the Company continues to finalize the fair value of the assets and liabilities acquired.

The following table presents the assets acquired and liabilities assumed, net of the fair value adjustments, in the Bridgeview and Northern States 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, except share and per share data)



	Bridgeview		Northern States
	May 9, 2019		October 12, 2018
Assets
Cash and due from banks and interest-bearing deposits in other banks	$	35,097	$	160,145
Equity securities	6,966		3,915
Securities available-for-sale	263,695		47,149
Securities held-to-maturity	13,426		—
FHLB and FRB stock	1,481		554
Loans	709,889		284,924
OREO	6,237		2,549
Investment in BOLI	—		11,104
Goodwill	57,377		30,123
Other intangible assets	15,603		12,230
Premises, furniture, and equipment	18,145		5,964
Accrued interest receivable and other assets	33,724		20,015
Total assets	$	1,161,640	$	578,672
Liabilities
Noninterest-bearing deposits	$	179,267	$	346,714
Interest-bearing deposits	807,487		116,446
Total deposits	986,754		463,160
Borrowed funds	1,746		18,218
Senior and subordinated debt	29,360		8,038
Accrued interest payable and other liabilities	8,428		5,953
Total liabilities	1,026,288		495,369
Consideration Paid
Common stock (2019 – 4,728,541, shares issued at $28.61 per share, 2018 – 3,310,912, shares issued at $25.16 per share), net of issuance costs	98,212		83,303
Cash paid	37,140		—
Total consideration paid	135,352		83,303
	$	1,161,640	$	578,672

Expenses related to the acquisition and integration of completed and pending transactions totaled $9.5 million and $13.2 million during the quarter and six months ended June 30, 2019, respectively, and are reported as a separate component within noninterest expense in the Condensed Consolidated Statements of Income.