NOTE 2 – ACQUISITION OF FIRST BANK OF CHARLESTON, INC.

Effective at the close of business on October 12, 2018, Premier completed its purchase of First Bank of Charleston, Inc. (“First Bank”) a $189.0 million community bank headquartered in Charleston, West Virginia. Under terms of an agreement of merger dated April 18, 2018, each share of First Bank common stock was entitled to merger consideration of 1.199 shares of Premier common stock and $5.00 cash from Premier. Premier issued approximately 1.249 million shares of its common stock, valued at $22.358 million, and paid approximately $5.213 million in cash to the shareholders of First Bank. In addition to the cash and shares of common stock from Premier, First Bank shareholders also received a regulatorily approved special dividend of $5.00 per share from the equity of First Bank as part of the acquisition transaction. Based on the final valuation of the fair value of tangible and intangible assets acquired and liabilities assumed the purchase price resulted in $12.27 million in goodwill, none of which is deductible for tax purposes. The resulting merger expands Premier’s footprint into West Virginia’s state capital connecting its footprint between southern West Virginia and central West Virginia branch locations. The core deposit intangible asset totaled $2.67 million, none of which is deductible for tax purposes. The core deposit intangible will be amortized using an accelerated method over an estimated 10 year life. The following table presents estimated amortization of the First Bank core deposit intangible as of the acquisition date for 2018 and each of the next five calendar years and thereafter.

2018	$	67
2019		390
2020		332
2021		282
2022		244
2023		232
Thereafter		1,123
Total core deposit intangible acquired	$	2,670

The valuations of loans, premises and equipment and core deposit intangible are still preliminary and subject to change. United States generally accepted accounting principles (“U.S. GAAP”) provide up to twelve months following the date of acquisition in which management can finalize the fair values of acquired assets and assumed liabilities. Material events that occur during the measurement period will be analyzed to determine if the new information reflected facts and circumstances that existed on the acquisition date. The measurement period ends as soon as the Company receives the information it was seeking about facts and circumstances that existed as of the acquisition date or learns more information is unobtainable. The measurement period is limited to one year from the acquisition date. Once management has finalized the fair values of acquired assets and assumed liabilities within this twelve month period, management considers such values to be the “Day One Fair Values.” Based on management’s preliminary valuation of the fair value of tangible and intangible assets acquired and liabilities assumed, the purchase price for the First Bank acquisition is allocated in the table below.

Net assets acquired via the acquisition are shown in the table below.

	First Bank of Charleston
Cash and due from banks, net of cash paid	$	543
Federal funds sold		2,048
Securities available for sale		45,218
Loans, net		114,771
Premises and equipment		3,832
Goodwill and other intangible assets		14,939
Other assets		2,453
Total assets acquired, net of cash paid		183,804

Deposits		(132,111	)
Repurchase agreements		(361	)
FHLB borrowings		(28,305	)
Other liabilities		(669	)
Total liabilities assumed		(161,446	)
Net assets acquired	$	22,358

The fair value of net assets acquired includes fair value adjustments to certain receivables that were not considered impaired as of the acquisition date. The fair value adjustments were determined using discounted contractual cash flows. However, the Company believes that all contractual cash flows related to these non-impaired financial instruments will be collected. As such, these receivables were not considered impaired at the acquisition date and were not subject to the accounting guidance relating to purchase credit impaired loans, which have shown evidence of credit deterioration since origination. The non-impaired loans excluded from the purchase credit impairment guidance were recorded at an estimated fair value of $107,130 and had gross contractual amounts receivable of $109,522 on the date of acquisition.