ACQUISITIONS

On April 29, 2016, we completed the acquisition of Interboro Insurance Company. The purchase price for IIC consisted of $48,450,000 in cash, $8,550,000 in a note payable and an accrued liability for $3,471,000 paid during July 2016.

The business combination has been accounted for using the acquisition method of accounting, which requires, among other things, that most assets acquired, liabilities assumed and earn-out consideration be recognized at their fair values as of the acquisition date.

The purchase price consisted of the following amounts:



Cash	$	48,450
Notes Payable	8,550
Accrued Liability	3,471
Total purchase price	$	60,471

The operations of Interboro and its subsidiaries are included in our Consolidated Statements of Comprehensive Income effective April 29, 2016. We have one year from the acquisition date to finalize the allocation of the purchase price of Interboro and its subsidiaries. The preliminary purchase price allocation is as follows:



Cash and cash equivalents	$	15,610
Investments	66,440
Premium and agents' receivable	2,004
Intangible assets	6,241
Insurance contract asset	8,366
Goodwill	12,131
Other assets	5,194
Unpaid losses and loss adjustment expenses	(24,967		)
Unearned premiums	(26,243		)
Reinsurance receivable	934
Deferred taxes	(352		)
Other liabilities	(4,887		)
Total purchase price	$	60,471

The unaudited pro forma financial information below has been prepared as if the IIC acquisition had taken place on January 1, 2016. The unaudited pro forma information is not necessarily indicative of the results that we would have achieved had the transaction taken place on January 1, 2016, and the unaudited pro forma information does not purport to be indicative of future financial operating results.



	For the six months ended June 30, 2016
			Pro Forma
	As Reported		Adjustments		Pro Forma
Revenues	$	228,482	$	18,963	$	247,445

Net income	$	12,792	$	8,187	$	20,979

Diluted earnings per share	$	0.59	$	0.38	$	0.97

On February 3, 2015, we completed the acquisition of Family Security Holdings, LLC and its two wholly-owned subsidiaries. The total purchase price paid to acquire the companies was $13,507,000 that was paid in shares of our common stock in two installments. The first payment occurred at the closing of the transaction when we issued 503,857 shares of our common stock that had a fair value of $12,994,000 on the date of the closing of the transaction. One year after the closing of the transaction, we issued an additional 32,943 shares of our common stock as payment of $513,000 of contingent consideration that we owed to the former shareholders of Family Security Holdings, LLC pursuant to the terms of the purchase agreement.