CHFC 2017 Annual Report

The Company determined that the merger with Talmer constitutes a business combination as defined by ASC 805. Accordingly, the assets acquired and liabilities assumed were recorded at their fair values on the date of acquisition. Fair values were determined in accordance with the guidance provided in ASC Topic 820, Fair Value Measurements, as of the merger date as presented in the following table. (Dollars in thousands) Consideration paid: Stock $ 1,504,811 Cash 107,638 Total consideration 1,612,449 Fair value of identifiable assets acquired (1) : Cash and cash equivalents 433,352 Investment securities: Available-for-sale 808,894 Held-to-maturity 1,657 Loans held-for-sale 244,916 Loans 4,882,402 Premises and equipment 38,793 Loan servicing rights 42,462 Other intangible assets 19,088 Interest receivable and other assets (2) 395,539 Total identifiable assets acquired 6,867,103 Fair value of liabilities assumed (1) : Noninterest-bearing deposits 1,236,902 Interest-bearing deposits 4,057,716 Interest payable and other liabilities (2) 100,936 Securities sold under agreements to repurchase with customers 19,704 Short-term borrowings 387,500 Long-term borrowings 299,597 Total liabilities assumed 6,102,355 Fair value of net identifiable assets acquired 764,748 Goodwill resulting from acquisition (2) $ 847,701 (1) All amounts were previously reported in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2016, with the exception of interest receivable and other assets and interest payable and other liabilities. (2) Includes adjustments to the fair value as a result of additional valuation information obtained during the third quarter of 2017, including the corresponding tax effects. During the third quarter of 2017, prior to August 31, 2017, additional valuation information was obtained related to the fair value of certain liabilities and deferred tax assets, which resulted in an adjustment to goodwill acquired in theTalmer transaction. The adjustment recorded during the third quarter of 2017 resulted in a $1.0 million increase to the amount of goodwill recorded for the Talmer transaction. Chemical Financial Corporation Notes to Consolidated Financial Statements December 31, 2017 96