NOTE 2 – ACQUISITION OF FIRST NATIONAL BANK OF JACKSON

Effective at the close of business on October 25, 2019, Premier completed its purchase of First National Bank of Jackson (“Jackson”), a $100.8 million community bank headquartered in Jackson, Kentucky. Under terms of an agreement of merger dated July 8, 2019, Citizens Deposit Bank and Trust (“Citizens Deposit”), Premier’s wholly owned subsidiary headquartered in Vanceburg, Kentucky, acquired Jackson Bank in a cash purchase valued at approximately $14.6 million. Based on the current valuation of the fair value of tangible and intangible assets acquired and liabilities assumed the purchase price resulted in no goodwill or bargain purchase gain. The resulting merger expands Citizens Deposit’s full service footprint into the Jackson, Kentucky market place. The core deposit intangible asset totaled $994, 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 2019 and each of the next five calendar years and thereafter.

2019	$	-
2020		149
2021		127
2022		108
2023		92
2024		86
Thereafter		432
Total core deposit intangible acquired	$	994

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 Jackson acquisition is allocated in the table below.

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

	First National Bank of Jackson
Cash and due from banks	$	4,589
Federal funds sold		5,108
Securities available for sale		44,747
Loans, net		41,632
Premises and equipment		1,177
Goodwill and other intangible assets		994
Other assets		2,548
Total assets acquired, net of cash paid		100,795

Deposits		(85,606	)
Other liabilities		(629	)
Total liabilities assumed		(86,235	)
Net assets acquired	$	14,560

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 $40,299 and had gross contractual amounts receivable of $40,731 on the date of acquisition.