Note

– Acquisition

December 29, 2020,

the Bank entered into a Branch Purchase and Assumption Agreement (P&A Agreement) with CFBank National Association (CFBank) to acquire

two

branches of CFBank in Columbiana County, Ohio. The P&A Agreement provides for the sale and transfer by CFBank to the Bank the land, buildings and other associated assets of CFBank's drive-up branch location in Wellsville, Ohio and CFBank's branch location in Calcutta, Ohio (the Branches); approximately

$100

million in deposits attributable to the Branches;

$15

million in aggregate principal amount of subordinated debt securities issued by unrelated financial institutions; all performing loans attributable to the Branches which are outstanding at closing (totaling approximately

$3.1

million in aggregate principal amount as of

November 30, 2020);

and up to

$13.5

million in aggregate principal amount of single family residential mortgage loans and home equity lines of credit to be identified by the parties prior to the closing principally from CFBank's Northeast Ohio loan portfolio. In addition, CFBank will provide the opportunity for the Corporation to purchase at par at least

$15

million in aggregate principal amount of participation interests in commercial and commercial real estate loans originated by and held in CFBank's portfolio. In exchange, Consumers will pay to CFBank the net book value of the land, building and associated assets of the Branches, a deposit premium equal to

1.75%

of the average daily deposits of the Branches for the

days preceding the closing, and the par value of the subordinated debt securities and loans acquired by Consumers.

The closing of the transactions contemplated by the P&A Agreement is subject to regulatory approval and satisfaction of other customary closing conditions. The parties expect the closing of the transactions to occur early in the

third

calendar quarter of

2021.

June 14, 2019,

the Corporation entered into an Agreement and Plan of Merger with Peoples Bancorp of Mt. Pleasant, Inc. (Peoples) and its wholly owned subsidiary, The Peoples National Bank of Mount Pleasant (Peoples Bank). On

January 1, 2020,

Consumers completed the acquisition by merger of Peoples in a stock and cash transaction for an aggregate consideration of approximately

$10,405.

In connection with the acquisition, the Corporation issued

269,920

shares of common stock and paid

$5,128

in cash to the former shareholders of Peoples. Immediately following the merger, Peoples Bank, was merged into the Corporation's banking subsidiary, Consumers National Bank.

December 31, 2019,

Peoples had approximately

$72,016

in total assets,

$55,273

in loans and

$60,826

in deposits at its

three

banking centers located in Mt. Pleasant, Adena, and Dillonvale, Ohio. The assets and liabilities of Peoples were recorded on the Corporation's Balance Sheet at their estimated fair values as of

January 1, 2020,

the acquisition date, and Peoples' results of operations are included in the Corporation's Consolidated Statements of Income beginning on that date.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition of Peoples. The core deposit intangible will be amortized over

ten

years on a straight-line basis. Goodwill will

not

be amortized, but instead will be evaluated for impairment.

Consideration Paid				$	10,405
Net assets acquired:
Cash and cash equivalents	$	833
Certificates of deposit in other financial institutions		11,839
Securities, available-for-sale		4,051
Federal bank and other restricted stocks, at cost		154
Loans, net		55,320
Premises and equipment		818
Core deposit intangible		270
Accrued interest receivable and other assets		140
Noninterest-bearing deposits		(11,979	)
Interest-bearing deposits		(48,872	)
Federal funds purchased		(2,348	)
Federal Home Loan Bank advances		(491	)
Other liabilities		(166	)
Total net assets acquired					9,569
Goodwill				$	836

The acquired assets and liabilities were measured at estimated fair values. Management made certain estimates and exercised judgement in accounting for the acquisition. The fair value of loans was estimated using discounted contractual cash flows. The book balance of the loans at the time of the acquisition was

$55,273

before considering Peoples' allowance for loan losses, which was

not

carried over. The fair value disclosed above reflects a credit-related adjustment of $(

890

) and an adjustment for other factors of

$937.

Loans evidencing credit deterioration since origination, purchased credit impaired loans, included in loans receivable, were immaterial. Acquisition costs of

$827

pre-tax, or

$680

after-tax, were recorded during the

twelve

-month period ended

June 30, 2020.