Acquisitions

3 Months Ended

Mar. 31, 2020

ACQUISITIONS

Completed Acquisitions

Park Bank

On March 9, 2020, the Company completed its acquisition of Bankmanagers Corp. ("Bankmanagers"), the holding company for Park Bank, based in Milwaukee Wisconsin. At closing, the Company acquired $1.2 billion of assets, $1.0 billion of deposits, and $691.7 million of loans, net of fair value adjustments. Under the terms of the merger agreement, on March 9, 2020, each outstanding share of Bankmanagers common stock was exchanged for 29.9675 shares of Company common stock, plus $623.02 of cash (of which $346.00 per share was paid by Bankmanagers to its shareholders by a special cash dividend immediately prior to closing). This resulted in merger consideration of $174.4 million, which consisted of 4.9 million shares of Company common stock and $102.5 million of cash. Goodwill of $57.2 million associated with the acquisition was recorded by the Company. Park Bank will be merged into First Midwest Bank and all operating systems are expected to be converted to the Company's operating platform in the second quarter of 2020. The fair value adjustments, including goodwill, associated with the transaction remain preliminary and may change as the Company continues to finalize the fair value of the assets and liabilities acquired.

Bridgeview Bank Group

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 $710.3 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 of 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 4.7 million shares of Company common stock and $37.1 million of cash. Goodwill of $60.7 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.

During the first quarter of 2020, the Company updated the fair value adjustments associated with the Bridgeview transaction. The adjustments were recognized in the current period in accordance with accounting guidance applicable to business combinations.

Northern Oak Wealth Management, Inc.

On January 16, 2019, the Company completed its acquisition of Northern Oak Wealth Management, Inc., a registered investment adviser based in Milwaukee, Wisconsin with approximately $800.0 million of assets under management at closing. During the first quarter of 2020, the Company finalized the fair value adjustments associated with the Northern Oak transaction, which required a measurement period adjustment to goodwill. This adjustment was 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 Park Bank and Bridgeview 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)


	Park Bank		Bridgeview
	March 9, 2020		May 9, 2019
Assets
Cash and due from banks and interest-bearing deposits in other banks	$	244,781	$	35,097
Equity securities	—		6,966
Securities available-for-sale	136,856		263,090
Securities held-to-maturity	300		13,426
FHLB and FRB stock	—		1,481
Loans	691,667		710,302
OREO	1,868		5,436
Goodwill	57,174		60,729
Other intangible assets	3,068		15,603
Premises, furniture, and equipment	2,759		15,905
Accrued interest receivable and other assets	11,891		37,098
Total assets	$	1,150,364	$	1,165,133
Liabilities
Noninterest-bearing deposits	$	356,050	$	179,267
Interest-bearing deposits	594,026		807,487
Total deposits	950,076		986,754
Borrowed funds	11,532		1,746
Senior and subordinated debt	—		29,360

Accrued interest payable and other liabilities	14,374		11,921
Total liabilities	975,982		1,029,781
Consideration Paid
Common stock (2020 – 4,930,231, shares issued at $14.58 per share, 2019 – 4,728,541, shares issued at $20.77 per share), net of issuance costs	71,883		98,212
Cash paid	102,499		37,140
Total consideration paid	174,382		135,352
	$	1,150,364	$	1,165,133

Expenses related to the acquisition and integration of completed and pending transactions totaled $5.5 million and $3.7 million during the quarters ended March 31, 2020 and 2019, respectively, and are reported as a separate component within noninterest expense in the Condensed Consolidated Statements of Income.