On January 1, 2019, the Company acquired Limberlost Bancshares, Inc. (“Limberlost”), the bank holding company for Bank of Geneva, a community bank based in Geneva, Indiana. Bank of Geneva operated six full-service offices in the northeast Indiana communities of Geneva, Berne, Decatur, Monroe, Portland and Monroeville. Shareholders of Limberlost received 1,830 shares of FMAO common stock and $8,465.00 in cash for each share. Limberlost had 1,000 shares outstanding on January 1, 2019. The share price of Farmers & Merchants Bancorp, Inc. (FMAO) stock on January 1, 2019 was $38.49. Total consideration for the acquisition was approximately $78.9 million consisting of $8.5 million in cash and $70.4 million in stock. As a result of the acquisition, the Company has had an opportunity to increase its deposit base and reduce transaction costs. The Company has also reduced costs through economies of scale.

Under the acquisition method of accounting, the total purchase was allocated to net tangible and intangible assets based on their current estimated fair values on the date of acquisition. Of the total purchase price of $78.9 million, $3.9 million has been allocated to core deposit intangible included in other assets and is being amortized over seven years on a straight line basis. Goodwill of $43.3 million resulting from the acquisition consists largely of the synergies and economies of scale expected from combining the operations of the Company and Bank of Geneva. Of that total amount, none of the purchase price is deductible for tax purposes. The following table summarizes the consideration paid for Bank of Geneva and the amounts of the assets acquired and liabilities assumed recognized at the acquisition date.

Changes in accretable yield, or income expected to be collected, for the three months ended are as follows:

	Three Months Ended March 31, 2021			Three Months Ended March 31, 2020
	(In Thousands)			(In Thousands)
Beginning Balance	$	1,653		$	2,021
Additions		1			1
Accretion		(108	)		(106	)
Reclassification from nonaccretable difference		-			62
Disposals		(4	)		-
Ending Balance	$	1,542		$	1,978

As mentioned previously, the acquisition of Bank of Geneva resulted in the recognition of $3.9 million in core deposit intangible assets which are being amortized over its remaining life of 7 years on a straight line basis.

The amortization expense for the three months ended March 31, 2020 was $182 thousand of which $42 thousand was related to the purchase of the Custar office in December of 2013. Of the $560 thousand to be expensed in 2021, $140 thousand has been expensed for the three months ended March 31, 2021. Annual amortization of core deposit intangible assets is as follows:

	(In Thousands)
	Geneva
2021	$	560
2022		560
2023		560
2024		560
2025		560
Thereafter		-
	$	2,800

On November 16, 2020, FM Investment Services, a division of the Bank, purchased the assets and clients of Adams County Financial Resources (ACFR), a full-service registered investment advisory firm located in Geneva, Indiana.

ACFR was founded in 1994 by R. Lee Flueckiger and provides clients and their families with financial confidence through personalized investment planning and services. As of November 30, 2020, ACFR had approximately $83 million of assets under management and over 450 clients.

Total consideration for the purchase was $825 thousand which consisted of 40,049 shares of stock. As a result of this purchase, the Company expects an increase to noninterest income of approximately $500 thousand in 2021.

Under the acquisition method of accounting, the total purchase is allocated to net tangible and intangible assets based on their current estimated fair values on the date of acquisition. Of the total purchase price of $825 thousand, $800 thousand has been allocated to customer list intangible, included in other assets, to be amortized over 6.5 years on a straight line basis.

The following table summarizes the consideration paid for ACFR and the amounts of the assets acquired:

Fair Value of Consideration Transferred
	(In Thousands)
Common Shares (40,049 shares)	$	825
Total	$	825

Recognized amounts of identifiable assets acquired

Assets
Premises and equipment	$	25
Customer list intangible		800
Total Assets Purchased	$	825

Of the $123 thousand to be expensed in 2021, $31 thousand has been expensed for the three months ended March 31, 2021. Future amortization expense of customer list intangible is as follows:

	(In Thousands)
	Adams County Financial Resources
2021	$	123
2022		123
2023		123
2024		123
2025		123
Thereafter		169
	$	784