2. Bank Acquisition On September 14, 2018, First National Bank (FNB) completed the purchase and merger of Clarke County State Bank (CCSB) located in Osceola and Murray, Iowa (the Acquisition). The Acquisition was consistent with the Banks strategy to strengthen and expand its Iowa market share. The acquired assets and liabilities are recorded at fair value at the date of acquisition and were reflected in the September 30, 2018 financial statements as such. 100% of the stock of CCSB was purchased for cash consideration of $14.8 million. As a result of this acquisition, the Company recorded a core deposit intangible asset of $2.0 million and goodwill of $3.0 million. The results of operations for this acquisition have been included since the transaction date of September 14, 2018. The fair value of purchased credit deteriorated loans related to the Acquisition is $386,000. These purchased loans are included in the impaired loan category in the financial statements. The following table summarizes the fair value of the total consideration transferred as a part of the Acquisition as well as the fair value of identifiable assets acquired and liabilities assumed as of the effective date of the transaction. Cash consideration transferred $ 14,806,981 Recognized amounts of identifiable assets acquired and liabilities assumed: Cash and due from banks $ 1,363,762 Federal funds sold 1,154,000 Interest bearing deposits in financial institutions 1,475,000 Securities available-for-sale 17,196,715 Federal Home Loan Bank stock 129,600 Loans receivable 76,041,470 Accrued interest receivable 862,895 Bank premises and equipment 924,400 Other real estate owned 120,000 Deferred income taxes 49,150 Bank owned life insurance 2,754,798 Core deposit intangible asset 2,002,000 Other assets 13,996 Deposits (83,169,311 ) Federal funds purchased (9,000,000 ) Accrued interest payable and other liabilities (123,749 ) Total identifiable net assets 11,794,726 Goodwill $ 3,012,255 On September 14, 2018, the contractual balance of loans receivable acquired was $77.2 million and the contractual balance of deposits assumed was $83.1 million. Loans receivable acquired include commercial real estate, 1 - 4 family real estate agricultural real estate, commercial operating, agricultural operating and consumer loans. The acquired loans at contractual values as of September 14, 2018 were determined to be risk rated as follows: Pass $ 63,220,130 Watch 9,430,540 Special Mention 2,733,940 Substandard 1,426,137 Deteriorated credit 385,884 Total loans acquired at book value $ 77,196,631 Loans acquired as deteriorated credit loans will be included with impaired loans. The core deposit intangible asset is amortized to expense on a declining basis over a period of ten years. The loan market valuation is accreted to income on the effective yield method over a ten year period. The time deposits market valuation is amortized to expense on a declining basis over a two year period.