CASH 2018 Special Proxy Statement

CRESTMARK BANCORP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 2 – ACQUISITION (Continued) Under the terms of the purchase agreement, the aggregate purchase price for the purchased assets was $2,200,000. The Corporation acquired assets with approximate fair values of $1,200,000, resulting in $1,000,000 of goodwill. The Corporation established a “Holdback” from the purchase price totaling $220,000 to indemnify the Corporation for losses incurred due to breaches or inaccuracies in any representation, warranty or covenant offered by the Seller. To date no claims have been made against the Holdback account. The balance remaining in the Holdback account will be paid to the Seller on the one year anniversary of the purchase agreement. The Corporation has included the financial results of Allstate in its consolidated financial statements subsequent to the acquisition date. The Allstate transaction has been accounted for under the acquisition method of accounting. The assets and liabilities, both tangible and intangible, were recorded at their estimated fair values as of the transaction date. The Corporation recognized goodwill of $1,000,000 as of May 11, 2017, which is calculated as the excess of both the consideration exchanged and the liabilities assumed, which were negligible, as compared to the fair value of identifiable assets acquired. Goodwill resulted due to Allstate’s recognized market presence in the small ticket leasing market and expected operating efficiencies in the future and expected to be deductible for tax purposes. NOTE 3 – SECURITIES AVAILABLE FOR SALE The following table summarizes the amortized cost and fair value of securities available for sale at December 31, 2017 and 2016 and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive loss: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value 2017 U.S. Treasury and federal agency . . . . . . . . . . . . . . . . . $24,888,843 $(310,311) $24,578,532 Municipal bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 385,568 4,748 (2,481) 387,835 Mortgage-backed securities: residential . . . . . . . . . . . . 1,110,779 16,595 (7,073) 1,120,301 Other securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000,000 — (122,861) 1,877,139 Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $28,385,190 $21,343 $(442,726) $27,963,807 2016 U.S. Treasury and federal agency . . . . . . . . . . . . . . . . . $16,840,616 $10,105 $(187,247) $16,663,474 Municipal bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 478,479 10,091 (8,622) 479,948 Mortgage-backed securities: residential . . . . . . . . . . . . 1,309,136 23,391 (6,483) 1,326,044 Other securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000,000 — (122,861) 1,877,139 Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $20,628,231 $43,587 $(325,213) $20,346,605 Other securities consist of an investment in a qualified community reinvestment act (CRA) investment mutual fund. F-15