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Merger (Tables)

3 Months Ended

Mar. 31, 2018

Business Combinations [Abstract]

Allocation of the Purchase Price

The allocation of the purchase price is as follows:

(Dollars in thousands)
Assets acquired:
Cash and cash equivalents		$	67,817
Investment securities			114,039
Restricted stock			97
Loans			70,686
Goodwill			18,610
Core deposit intangible			4,940
Premises and equipment			1,496
Foreclosed assets			11
Deferred income taxes			621
Accrued interest receivable			989
Other assets			266
Total assets acquired			279,572
Liabilities assumed:
Deposits			209,981
Accrued interest payable			16
Other liabilities			2,602
Total liabilities assumed			212,599
Consideration paid		$	66,973
Cash paid		$	2,792
Fair value of common stock issued			64,181

Summary of the Preliminary Estimated Fair Value of the Assets Acquired and Liabilities and Equity Assumed

The following table summarizes the preliminary estimated fair value of the assets acquired and liabilities and equity assumed.

(Dollars in thousands)
Total purchase price		$	66,973
Net assets acquired:
Cash and cash equivalents			67,817
Investment securities			114,039
Restricted stock			97
Loans			70,686
Core deposit intangible			4,940
Premises and equipment			1,496
Foreclosed assets			11
Deferred income taxes			621
Accrued interest receivable			989
Other assets			266
Deposits			(209,981	)
Accrued interest payable			(16	)
Other liabilities			(2,602	)
			48,363
Goodwill		$	18,610

Fair Value Adjustments Made to the Amortized Cost Basis, Presented at the Fair Value of Loans Acquired

The table below illustrates the fair value adjustments made to the amortized cost basis in order to present a fair value of the loans acquired.

(Dollars in thousands)
Gross amortized cost basis at January 8, 2018		$	71,809
Market rate adjustment			601
Credit fair value adjustment on pools of homogeneous loans			(1,078	)
Credit fair value adjustment on impaired loans			(646	)
Fair value of purchased loans at January 8, 2018		$	70,686

Fair Value of the Loans Acquired

The information about the acquired Scottdale impaired loan portfolio as of January 8, 2018 is as follows:

(Dollars in thousands)
Contractually required principal and interest at acquisition		$	2,587
Contractual cash flows not expected to be collected (nonaccretable discount)			(1,010	)
Expected cash flows at acquisition			1,577
Interest component of expected cash flows (accretable discount)			(305	)
Fair value of acquired loans		$	1,272

Pro Forma Information

The following table presents pro forma information as if the merger between Mid Penn and Scottdale had been completed on January 1, 2017.

(Dollars in thousands, except per share data)		Three Months Ended March 31,
		2018				2017
Net interest income after loan loss provision		$	10,753			$	10,498
Noninterest income			1,647				1,585
Noninterest expense			9,910				10,346
Net income			2,054				1,268
Net income per common share			0.34				0.21

X

- Definition

Tabular disclosure of the nature and amount of any material, nonrecurring adjustments directly attributable to the business combination(s) included in the reported pro forma revenue and earnings (supplemental pro forma information).

+ References

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-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 2
-Subparagraph (h)(4)
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Tabular disclosure of the amounts recognized as of the acquisition date for each major class of assets acquired and liabilities assumed. May include but not limited to the following: (a) acquired receivables; (b) contingencies recognized at the acquisition date; and (c) the fair value of noncontrolling interests in the acquiree.

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