Note 3 - Acquisition Activity On July 26, 2018, the Bancorp completed its acquisition of First Personal Financial Corp., a Delaware corporation (First Personal), pursuant to an Agreement and Plan of Merger dated February 20, 2018 between the Bancorp and First Personal (the First Personal Merger Agreement). Pursuant to the terms of the First Personal Merger Agreement, First Personal merged with and into the Bancorp, with the Bancorp as the surviving corporation. Simultaneous with the First Personal Merger, First Personal Bank, an Illinois state chartered commercial bank and wholly-owned subsidiary of First Personal, merged with and into the Bank, with the Bank as the surviving institution. In connection with the First Personal Merger, each First Personal stockholder holding 100 or more shares of First Personal common stock received fixed consideration of (i) 0.1246 shares of Bancorp common stock, and (ii) $6.67 per share in cash for each outstanding share of First Personal common stock. Stockholders holding less than 100 shares of First Personal common stock received $12.12 in cash and no stock consideration for each outstanding share of First Personal common stock. Any fractional shares of Bancorp common stock that a First Personal stockholder would have otherwise received in the First Personal Merger were cashed out in the amount of such fraction multiplied by $42.95. The Bancorp issued a total of approximately 161,875 shares of Bancorp common stock to the former First Personal stockholders, and paid cash consideration of approximately $8.7 million. Based upon the closing price of Bancorps common stock on July 25, 2018, the transaction had an implied valuation of approximately $15.6 million. The acquisition costs related to the First Personal Merger equaled approximately $1.8 million. The acquisition represented the Banks first expansion into the South Suburban Chicagoland market, and expanded the Banks full-service retail banking network to 19 banking centers. Additionally, upon the closing of the merger the three former First Personal Bank branches in Cook County, Illinois became branches of Peoples Bank, thereby expanding the Peoples Bank branch network into Illinois. Under the acquisition method of accounting, the total purchase price is allocated to net tangible and intangible assets based on their current estimated fair values on the date of the acquisition. Based on the valuations of the fair value of tangible and intangible assets acquired and liabilities assumed, which are based on estimates and assumptions that are subject to change, the final purchase price for the First Personal acquisition is allocated as follows: ASSETS Cash and due from banks $ 30,178 Investment securities, available for sale 2 Commercial 53,026 Residential mortgage 32,542 Consumer 9,004 Total Loans 94,572 Premises and equipment, net 5,799 FHLB stock 219 Goodwill 5,437 Core deposit intangible 3,044 Interest receivable 274 Other assets 6,405 Total assets purchased $ 145,930 Common shares issued 6,928 Cash paid 8,689 Total purchase price $ 15,617 LIABILITIES Deposits Non-interest bearing $ 14,517 NOW accounts 22,177 Savings and money market 41,852 Certificates of deposits 46,355 Total Deposits 124,901 Borrowings 4,124 Interest payable 32 Other liabilities 1,256 Total liabilities assumed $ 130,313 As part of the First Personal merger, the Bancorp acquired First Personal Statutory Trust I. NWIN guaranteed the payment of distributions on the trust preferred securities issued by First Personal Statutory Trust I. First Personal Statutory Trust I issued $4.124 million in trust preferred securities in May 2004. The trust preferred securities carried a variable rate of interest priced at the three -month LIBOR plus 275 basis points, payable quarterly and due to mature on June 17, 2034. Management of the Bancorp determined that the continued maintenance of the trust preferred securities issued by First Personal Statutory Trust I and the corresponding junior subordinated debentures was unnecessary to the Bancorps ongoing operations. As a result, the Bancorps board of directors approved the redemption of the junior subordinated debentures, which resulted in the trustee of the First Personal Statutory Trust I redeeming all $4.124 million of the trust preferred securities as of December 17, 2018. On January 24, 2019, the Bancorp completed its previously announced acquisition of AJS Bancorp, Inc., a Maryland corporation (AJSB), pursuant to an Agreement and Plan of Merger dated July 30, 2018 between the Bancorp and AJSB (the AJSB Merger Agreement). Pursuant to the terms of the AJSB Merger Agreement, AJSB merged with and into NWIN, with NWIN as the surviving corporation. Simultaneously with the AJSB Merger, A.J. Smith Federal Savings Bank, a federally chartered savings bank and wholly-owned subsidiary of AJSB, merged with and into Peoples Bank SB, with Peoples Bank as the surviving bank. In connection with the AJSB Merger, each AJSB stockholder holding 100 or more shares of AJSB common stock received fixed consideration of (i) 0.2030 shares of NWIN common stock, and (ii) $7.20 per share in cash for each outstanding share of AJSBs common stock. Stockholders holding less than 100 shares of AJSB common stock received $16.00 in cash and no stock consideration for each outstanding share of AJSB common stock. Any fractional shares of NWIN common stock that an AJSB stockholder would have otherwise received in the AJSB Merger were cashed out in the amount of such fraction multiplied by $43.01. The Bancorp issued 416,478 shares of Bancorp common stock to the former AJSB stockholders, and paid cash consideration of approximately $15.7 million. Based upon the closing price of NWINs common stock on January 23, 2019, the transaction had an implied valuation of approximately $33.2 million, which includes unallocated shares held by the AJSB Employee Stock Ownership Plan (ESOP), some of which were cancelled in connection with the closing to satisfy the ESOPs outstanding loan balance. As of September 30, 2019, acquisition costs related to the AJSB Merger were approximately $2.1 million. The acquisition further expanded the Banks banking center network in Cook County, Illinois, expanding the Banks full-service retail banking network to 22 banking centers. Under the acquisition method of accounting, the total purchase price is allocated to net tangible and intangible assets based on their current estimated fair values on the date of the acquisition. Based on preliminary valuations of the fair value of tangible and intangible assets acquired and liabilities assumed, which are based on estimates and assumptions that are subject to change, the final purchase price for the AJSB acquisition is allocated as follows: ASSETS Cash and due from banks $ 68,303 Investment securities, available for sale 3,432 Commercial 712 Residential mortgage 85,635 Multifamily 1,442 Consumer 57 Total Loans 87,846 Premises and equipment, net 3,542 FHLB stock 512 Goodwill 2,939 Core deposit intangible 2,917 Interest receivable 351 Other assets 8,939 Total assets purchased $ 178,781 Common shares issued 17,492 Cash paid 15,743 Total purchase price $ 33,235 LIABILITIES Deposits Non-interest bearing $ 24,502 NOW accounts 10,712 Savings and money market 68,875 Certificates of deposits 40,137 Total Deposits 144,226 Interest payable 50 Other liabilities 1,270 Total liabilities assumed $ 145,546 Final estimates of fair value on the date of acquisition have not been finalized yet. Prior to the end of the one year measurement period for finalizing the purchase price allocation, if information becomes available which would indicate adjustments are required to the purchase price allocation, such adjustments will be included in the purchase price allocation prospectively. If any adjustments are made to the preliminary assumptions (provisional amounts), disclosures will be made in the notes to the financial statements of the amounts recorded in the current period earnings by line item that have been recorded in previous reporting periods if the adjustments to the provisional amounts had been recognized as of the acquisition date.