Business Combinations Acquisition of First Bank of the Palm Beaches On March 13, 2020, the Company completed its acquisition of First Bank of the Palm Beaches (FBPB). FBPB was merged with and into Seacoast Bank. FBPB operated two branches in the Palm Beach market. As a result of this acquisition, the Company expects to enhance its presence in the Palm Beach market, expand its customer base and leverage operating cost through economies of scale, and positively affect the Companys operating results. The Company acquired 100% of the outstanding common stock of FBPB. Under the terms of the definitive agreement, each share of FBPB common stock was converted into the right to receive 0.2000 shares of Seacoast common stock. (In thousands, except per share data) March 13, 2020 Number of FBPB common shares outstanding 5,213 Per share exchange ratio 0.2000 Number of shares of common stock issued 1,043 Multiplied by common stock price per share on March 13, 2020 $ 20.17 Value of common stock issued 21,031 Cash paid for FBPB vested stock options 866 Total purchase price $ 21,897 The acquisition of FBPB was accounted for under the acquisition method in accordance with ASC Topic 805, Business Combinations . The Company recognized goodwill of $6.9 million for this acquisition that is nondeductible for tax purposes. Determining fair values of assets and liabilities, especially the loan portfolio, core deposit intangibles, and deferred taxes, is a complicated process involving significant judgment regarding methods and assumptions used to calculate estimated fair values. The fair values initially assigned to assets acquired and liabilities assumed are preliminary and could change for up to one year after the closing date of the acquisition as new information and circumstances relative to closing date fair values becomes known. (In thousands) Initially Measured March 13, 2020 Measurement Period Adjustments As Adjusted March 13, 2020 Assets: Cash $ 34,749 $  $ 34,749 Investment securities 447  447 Loans 146,839 (62) 146,777 Bank premises and equipment 6,086  6,086 Core deposit intangibles 819  819 Goodwill 6,799 62 6,861 Other assets 1,285 20 1,305 Total assets $ 197,024 $ 20 $ 197,044 Liabilities: Deposits $ 173,741 $  $ 173,741 Other liabilities 1,386 20 1,406 Total liabilities $ 175,127 $ 20 $ 175,147 The table below presents information with respect to the fair value and unpaid principal balance of acquired loans at the acquisition date. March 13, 2020 (In thousands) Book Balance Fair Value Loans: Construction and land development $ 9,493 $ 9,012 Commercial real estate - owner-occupied 46,221 45,171 Commercial real estate - non owner-occupied 36,268 35,079 Residential real estate 47,569 47,043 Commercial and financial 9,659 9,388 Consumer 1,132 1,084 Total acquired loans $ 150,342 $ 146,777 The table below presents the carrying amount of loans for which, at the date of acquisition, there was evidence of more than insignificant deterioration of credit quality since origination: (In thousands) March 13, 2020 Book balance of loans at acquisition $ 43,682 Allowance for credit losses at acquisition (516) Non-credit related discount (128) Total PCD loans acquired $ 43,038 The Company believes the deposits assumed in the acquisition have an intangible value. In determining the valuation amount, deposits were analyzed based on factors such as type of deposit, deposit retention, interest rates and age of deposit relationships. Pro-Forma Information Pro-forma data for the three and six months ended June 30, 2020 presents information as if the acquisition of FBPB occurred at the beginning of 2019, as follows: Three Months Ended June 30, 2020 Six Months Ended June 30, 2020 (In thousands, except per share amounts) 2020 2019 2020 2019 Net interest income 1 $ 67,272 $ 61,879 $ 131,887 $ 124,417 Net income 25,080 23,966 27,526 45,378 EPS - basic $ 0.47 $ 0.46 $ 0.52 $ 0.87 EPS - diluted 0.47 0.45 0.52 0.86 1 The provision for credit losses of $1.8 million recorded under CECL at the time of acquisition has been excluded from the pro forma information above, which presents information as if the acquisition had occurred on January 1, 2019, prior to the Company's adoption of CECL. Proposed Acquisition of Fourth Street Banking Company On January 23, 2020, the Company announced that it had entered into an agreement and plan of merger with Fourth Street Banking Company ("Fourth Street") and its wholly-owned subsidiary, Freedom Bank. Pursuant to the terms of the merger agreement, Fourth Street, headquartered in St. Petersburg, FL, will be merged with and into Seacoast and Freedom Bank will be merged with and into Seacoast Bank. Freedom Bank operates two branches in the Tampa-St. Petersburg metropolitan statistical area with $359 million in deposits and $312 million in loans as of June 30, 2020. This acquisition is anticipated to close in August 2020, subject to the approval of Fourth Street shareholders and the satisfaction of other customary conditions.