Note 2Business Combinations Merger with FNB Bancorp On July 6, 2018, the Company completed the acquisition of FNB Bancorp (FNBB) for an aggregate transaction value of $291,132,000. FNBB was merged into the Company, and the Company issued 7,405,277 shares of common stock to the former shareholders of FNBB. FNBBs subsidiary, First National Bank of Northern California, merged into the Bank on the same day. The Company also paid $6.7 million to settle and retire all FNBB stock options outstanding as of the acquisition date. Upon the consummation of the merger, the Company added 12 branches within San Mateo, San Francisco, and Santa Clara counties. In accordance with accounting for business combinations, the Company recorded $156,661,000 of goodwill and $27,605,000 of core deposit intangibles on the acquisition date. The core deposit intangibles will be amortized over the weighted average remaining life of 6.2 years with no significant residual value. For tax purposes, purchase prices accounting adjustments including goodwill are all non-taxable and /or non-deductible. Acquisition related costs of $476,000 are included in the consolidated statements of income for the three months ended March 31, 2018. There have been no acquisition costs incurred during the three months ended March 31, 2019. The acquisition was consistent with the Companys strategy to expand into the Bay Area market. The acquisition offers the Company the opportunity to increase profitability by introducing existing products and services to the acquired customer base as well as add new customers in the expanded region. Goodwill arising from the acquisition consisted largely of the estimated cost savings resulting from the combined operations. The following table summarizes the consideration paid for FNBB and the amounts of assets acquired and liabilities assumed that were recorded at the acquisition date (in thousands). FNB Bancorp July 6, 2018 Fair value of consideration transferred: Fair value of shares issued $ 284,437 Cash consideration 6,695 Total fair value of consideration transferred 291,132 Assets acquired: Cash and cash equivalents 37,308 Securities available for sale 335,667 Restricted equity securities 7,723 Loans 834,683 Premises and equipment 30,522 Cash value of life insurance 16,817 Core deposit intangible 27,605 Other assets 16,214 Total assets acquired 1,306,539 Liabilities assumed: Deposits 991,935 Other liabilities 15,133 Short-term borrowingsFederal Home Loan Bank 165,000 Total liabilities assumed 1,172,068 Total net assets acquired 134,471 Goodwill recognized $ 156,661 A summary of the estimated fair value adjustments resulting in the goodwill recorded in the FNB Bancorp acquisition are presented below (in thousands): FNB Bancorp July 6, 2018 Value of stock consideration paid to FNB Bancorp Shareholders $ 284,437 Cash consideration 6,695 Less: Cost basis net assets acquired 114,030 Fair value adjustments: Investments (1,081 ) Loans (22,390 ) Premises and Equipment 21,590 Core deposit intangible 27,327 Deferred income taxes (6,394 ) Other 1,389 Goodwill $ 156,661 The fair value of net assets acquired includes fair value adjustments to certain loans that were not considered impaired (PNCI loans) as of the acquisition date. The fair value adjustments were determined using discounted contractual cash flows. As such, these loans were not considered impaired at the acquisition date and were not subject to the guidance relating to purchased credit impaired loans (PCI loans), which have shown evidence of credit deterioration since origination. The gross contractual amounts receivable and fair value for PNCI loans as of the acquisition date was $866,189,000 and $833,381,000, respectively. The gross contractual amounts receivable and fair value for PCI loans as of the acquisition date was $1,683,000 and $1,302,000, respectively. At the acquisition date, the Company was unable to estimate the expected contractual cash flows to be collected from the purchased credit impaired loans.