NOTE 2 - ACQUISITIONS/DISPOSITIONS

During the three months ended March 31, 2017 and 2016, the Company had no material acquisitions or dispositions.

Acquisition of Pillar

On December 15, 2016, the Company completed the acquisition of substantially all of the assets of the operating subsidiaries of Pillar Financial, LLC, a multi-family agency lending and servicing company with an originate-to-distribute focus that holds licenses with Fannie Mae, Freddie Mac, and the FHA. The acquired assets include Pillar's multi-family lending business, which is comprised of multi-family affordable housing, health care properties, senior housing, and manufactured housing specialty teams. Additionally, the transaction includes Cohen Financial's commercial real estate investor services business, which provides loan administration, advisory, and commercial mortgage brokerage services.

The Company agreed to pay $197 million in cash and incurred an immaterial amount of acquisition-related costs for the acquisition. The acquisition of Pillar was accounted for using the acquisition method of accounting. The Company performed a preliminary allocation of the purchase price to the underlying assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. Refer to the Company's 2016 Annual Report on Form 10-K for additional information.

During the three months ended March 31, 2017, the Company finalized its valuation of assets acquired and liabilities assumed at the date of acquisition, and revised the preliminary purchase price allocation accordingly. The following table presents the revised purchase price allocation at March 31, 2017, which included a $1 million reduction to other intangible assets, resulting in the recognition of $1 million of goodwill.



(Dollars in millions)	March 31, 2017
Consideration		$197
Revised Pillar purchase price allocation to:
Cash and cash equivalents		$9
LHFI	38
LHFS	182
Commercial mortgage servicing rights	62
Other intangible assets	13
Other assets	8
Other short-term borrowings	(100		)
Other liabilities	(16		)
Identified net assets acquired at fair value		$196

Goodwill		$1

At the date of acquisition, the UPB of LHFI and LHFS acquired were $38 million and $180 million, respectively, and the related contractual cash flows not expected to be collected were immaterial. Additionally, intangible assets acquired included $62 million of commercial mortgage servicing rights and $13 million related mainly to agency licenses. See Note 8, "Goodwill and Other Intangible Assets," for additional information regarding the identified intangible assets acquired.

During the second quarter of 2017, the final settlement amount associated with working capital adjustments was reached and the purchase consideration of $197 million was finalized.