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Acquisition (Tables) | 9 Months Ended
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Sep. 30, 2018
First Priority Financial Corp. [Member] |
Allocation of the Purchase Price | The allocation of the purchase price is as follows:
(Dollars in thousands) |  |
Assets acquired: |  |  |  |
Cash and cash equivalents |  | $ | 11,398 |
Investment securities |  |  | 62,977 |
Restricted stock |  |  | 2,237 |
Loans |  |  | 511,623 |
Goodwill |  |  | 39,659 |
Core deposit intangible |  |  | 2,832 |
Trade name intangible |  |  | 205 |
Premises and equipment |  |  | 1,147 |
Foreclosed assets |  |  | 125 |
Deferred income taxes |  |  | 3,118 |
Accrued interest receivable |  |  | 2,293 |
Other assets |  |  | 4,197 |
Total assets acquired |  |  | 641,811 |
Liabilities assumed: |  |  |  |
Deposits |  |  | 504,946 |
Borrowings |  |  | 49,939 |
Accrued interest payable |  |  | 1,073 |
Other liabilities |  |  | 2,520 |
Total liabilities assumed |  |  | 558,478 |
Equity acquired: |  |  |  |
Preferred stock |  |  | 3,404 |
Total equity acquired and liabilities assumed |  |  | 561,882 |
Consideration paid |  | $ | 79,929 |
Cash paid |  | $ | 3,807 |
Fair value of common stock issued |  |  | 76,122 |
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 in the First Priority transaction.
(Dollars in thousands) |  |
Total purchase price (consideration paid) |  | $ | 79,929 |
Net assets acquired: |  |  |  |
Cash and cash equivalents |  |  | 11,398 |
Investment securities |  |  | 62,977 |
Restricted stock |  |  | 2,237 |
Loans |  |  | 511,623 |
Core deposit intangible |  |  | 2,832 |
Trade name intangible |  |  | 205 |
Premises and equipment |  |  | 1,147 |
Foreclosed assets |  |  | 125 |
Deferred income taxes |  |  | 3,118 |
Accrued interest receivable |  |  | 2,293 |
Other assets |  |  | 4,197 |
Deposits |  |  | (504,946 | )
Borrowings |  |  | (49,939 | )
Accrued interest payable |  |  | (1,073 | )
Other liabilities |  |  | (2,520 | )
Preferred stock |  |  | (3,404 | )
|  |  | 40,270 |
Goodwill |  | $ | 39,659 |
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 |  | $ | 521,644 |
Market rate adjustment |  |  | (3,023 | )
Credit fair value adjustment on pools of homogeneous loans |  |  | (6,742 | )
Credit fair value adjustment on impaired loans |  |  | (256 | )
Fair value of purchased loans at January 8, 2018 |  | $ | 511,623 |
Fair Value of the Loans Acquired | The information about the acquired First Priority impaired loan portfolio as of July 31, 2018 is as follows:
(Dollars in thousands) |  |
Contractually required principal and interest at acquisition |  | $ | 1,855 |
Contractual cash flows not expected to be collected (nonaccretable discount) |  |  | (858 | )
Expected cash flows at acquisition |  |  | 997 |
Interest component of expected cash flows (accretable discount) |  |  | (125 | )
Fair value of acquired loans |  | $ | 872 |
Pro Forma Information | The following table presents pro forma information as if the merger between Mid Penn and First Priority had been completed on January 1, 2017.
(Dollars in thousands, except per share data) |  | Three Months Ended |  |  | Nine Months Ended |
|  | September 30, |  |  | September 30, |
|  | 2018 |  |  | 2017 |  |  | 2018 |  |  | 2017 |
Net interest income after loan loss provision |  | $ | 17,373 |  |  | $ | 11,089 |  |  | $ | 48,914 |  |  | $ | 41,480 |
Noninterest income |  |  | 2,220 |  |  |  | 1,688 |  |  |  | 5,754 |  |  |  | 5,000 |
Noninterest expense |  |  | 13,543 |  |  |  | 10,677 |  |  |  | 41,532 |  |  |  | 37,757 |
Net income |  |  | 5,502 |  |  |  | 1,533 |  |  |  | 10,995 |  |  |  | 6,368 |
Net income per common share |  |  | 0.70 |  |  |  | 0.25 |  |  |  | 1.49 |  |  |  | 0.97 |
Scottdale Bank and Trust Company [Member] |
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 |  |  | 70,769 |
Goodwill |  |  | 19,189 |
Core deposit intangible |  |  | 4,940 |
Premises and equipment |  |  | 1,496 |
Foreclosed assets |  |  | 11 |
Deferred income taxes |  |  | 1,050 |
Accrued interest receivable |  |  | 989 |
Other assets |  |  | 266 |
Total assets acquired |  |  | 280,663 |
Liabilities assumed: |  |  |  |
Deposits |  |  | 209,981 |
Accrued interest payable |  |  | 16 |
Other liabilities |  |  | 3,693 |
Total liabilities assumed |  |  | 213,690 |
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 in the Scottdale transaction.
(Dollars in thousands) |  |
Total purchase price (consideration paid) |  | $ | 66,973 |
Net assets acquired: |  |  |  |
Cash and cash equivalents |  |  | 67,817 |
Investment securities |  |  | 114,039 |
Restricted stock |  |  | 97 |
Loans |  |  | 70,769 |
Core deposit intangible |  |  | 4,940 |
Premises and equipment |  |  | 1,496 |
Foreclosed assets |  |  | 11 |
Deferred income taxes |  |  | 1,050 |
Accrued interest receivable |  |  | 989 |
Other assets |  |  | 266 |
Deposits |  |  | (209,981 | )
Accrued interest payable |  |  | (16 | )
Other liabilities |  |  | (3,693 | )
|  |  | 47,784 |
Goodwill |  | $ | 19,189 |
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 |  |  | (995 | )
Credit fair value adjustment on impaired loans |  |  | (646 | )
Fair value of purchased loans at January 8, 2018 |  | $ | 70,769 |
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 |  | $ | 2,586 |
Contractual cash flows not expected to be collected (nonaccretable discount) |  |  | (1,010 | )
Expected cash flows at acquisition |  |  | 1,576 |
Interest component of expected cash flows (accretable discount) |  |  | (305 | )
Fair value of acquired loans |  | $ | 1,271 |
Pro Forma Information | The following table presents pro forma information as if the merger between Mid Penn Bank and Scottdale had been completed on January 1, 2017.
(Dollars in thousands, except per share data) |  | Three Months Ended |  |  | Nine Months Ended |
|  | September 30, |  |  | September 30, |
|  | 2018 |  |  | 2017 |  |  | 2018 |  |  | 2017 |
Net interest income after loan loss provision |  | $ | 15,811 |  |  | $ | 11,074 |  |  | $ | 37,978 |  |  | $ | 32,455 |
Noninterest income |  |  | 2,165 |  |  |  | 1,658 |  |  |  | 5,371 |  |  |  | 4,729 |
Noninterest expense |  |  | 15,232 |  |  |  | 9,411 |  |  |  | 34,895 |  |  |  | 28,759 |
Net income |  |  | 2,196 |  |  |  | 2,424 |  |  |  | 7,109 |  |  |  | 6,150 |
Net income per common share |  |  | 0.29 |  |  |  | 0.40 |  |  |  | 1.16 |  |  |  | 1.01 |

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