NOTE 6 – SBM ACQUISITION

On October 16, 2015, the Company completed its acquisition of SBM, as previously reported. For the nine months ended September 30, 2016, the Company made certain measurement-period adjustments to its initial purchase accounting that decreased goodwill reported at December 31, 2015 by $960,000. These measurement-period adjustments increased the previously reported loan balance by $137,000, increased acquired interest receivable and other assets by $157,000, and increased acquired deferred tax assets $666,000. The measurement-period adjustments will not have a material effect on current or future years' net income and were presented and disclosed prospectively in accordance with ASU No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments.

The Company completed its purchase accounting for the SBM acquisition in the second quarter of 2016. The following table summarizes the fair value of the assets acquired and liabilities assumed:



	As Acquired		Fair Value Adjustments (Previously Reported)			Measurement-Period Adjustments		As Recorded at Acquisition
Consideration Paid:
Cash								$	26,125
Company common stock (4,124,643 shares at $26.32 per share)⁽¹⁾								108,561
Non-qualified stock options								1,990
Total consideration paid								136,676
Recognized identifiable assets acquired and liabilities assumed, at fair value:
Loans and loans held for sale	$	639,390	$	(11,497	)	$	137	628,030
Cash and due from banks	86,042		—			—		86,042
Investments	39,716		26			—		39,742
Deferred tax assets	26,293		(1,177		)	666		25,782
Premises and equipment	16,851		7,093			—		23,944
OREO	2,530		(1,801		)	—		729
Core deposit intangible assets	—		6,608			—		6,608
Other assets	5,421		(170		)	157		5,408
Deposits and borrowings	719,640		1,546			—		721,186
Other liabilities	8,512		(198		)	—		8,314
Total identified assets acquired and liabilities assumed, at fair value	$	88,091	$	(2,266	)	$	960	86,785
Goodwill								$	49,891

(1) The number of shares and price per share have been adjusted to reflect the three-for-two stock split effective September 30, 2016.