Note 2 Merger with Affinity Bancorp, Inc. On February 28, 2013, First Priority and Affinity Bancorp, Inc. completed a merger, pursuant to a definitive merger agreement dated May 23, 2012, whereby the companies agreed to merge their respective holding companies and bank subsidiaries. Under the terms of the merger agreement, shareholders of Affinity received 0.9813 newly issued shares of First Priority in exchange for each Affinity share. A total of 1,933,665 shares of First Priority common stock were issued in connection with the merger. The merger was accounted for using acquisition accounting, which required the Company to allocate the total consideration transferred to the assets acquired and liabilities assumed, based on their respective fair values at the merger date, with any remaining excess consideration being recorded as goodwill. The fair value of total assets acquired as a result of the merger totaled $174.4 million, as displayed in the table below. The transaction also resulted in a core deposit intangible asset of $582 thousand and goodwill of $1.5 million. The transaction added $10.1 million to First Priority s equity based on the fair value of stock issued in the acquisition. The results of Affinity s operations have been included in the Company s consolidated financial statements prospectively from the date of the merger. (In thousands, except share and per share data) February 28, 2013 Purchase Price Consideration in Common Stock 1,970,706 Affinity common shares settled for stock Exchange ratio 0.9813 First Priority shares issued 1,933,665 Fair value assigned to First Priority s common shares $ 5.22 Acquisition cost of Affinity common shares exchanged for First Priority Stock Total Acquisition cost $ 10,094 Acquisition cost of Consideration fair value of Affinity Options Rolled over to First Priority Options 44 Total Acquisition cost $ 10,138 Identifiable assets: Cash and due from banks $ 24,419 Securities available for sale 33,253 Loans and leases 77,359 Intangible assets 582 Other assets 38,738