NEW WINDSOR ACQUISITION (Tables)

12 Months Ended

Dec. 31, 2017

Purchase Price Consideration in Common Stock

The following table summarizes the consideration paid for New Windsor and the fair value of assets acquired and liabilities assumed as of the acquisition date:

Purchase Price Consideration in Common Stock



New Windsor shares outstanding	1,003,703
Shares paid cash consideration	150,555
Cash consideration (per New Windsor share)	$	30.00
Cash portion of purchase price	$	4,519,995
New Windsor shares outstanding	1,003,703
Shares paid stock consideration	853,148
Exchange ratio	1.10
Total ACNB shares issued	938,360
ACNB’s share price for purposes of calculation	$	30.50
Equity portion of purchase price	$	28,619,980
Cost of shares owned by buyer	$	150,000
Total consideration paid	$	33,289,975



Allocation of Purchase Price	In thousands
Total Purchase Price		$	33,290

Fair Value of Assets Acquired
Cash and cash equivalents	10,964
Investment securities	21,624
Loans held for sale	1,463
Loans	263,450
Restricted stock	486
Premises and equipment	8,624
Core deposit intangible asset	2,418
Other assets	10,792
Total assets	319,821

Fair Value of Liabilities Assumed
Non-interest bearing deposits	80,006
Interest bearing deposits	213,327
Subordinated debt	4,688
Other liabilities	1,782
Total liabilities	299,803

Net Assets Acquired		20,018
Goodwill Recorded in Acquisition		$	13,272

Fair Value Adjustments

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. The credit adjustment on purchased credit impaired loans is derived in accordance with ASC 310-30 and represents the portion of the loan balances that has been deemed uncollectible based on the Corporation’s expectations of future cash flows for each respective loan.



In thousands
Gross amortized cost basis at July 1, 2017	$	272,646
Interest rate fair value adjustment on pools of homogeneous loans	(731		)
Credit fair value adjustment on pools of homogeneous loans	(4,501		)
Credit fair value adjustment on purchased credit impaired loans	(3,964		)
Fair value of acquired loans at July 1, 2017	$	263,450

Acquired Purchased Credit Impaired Loans Receivable

The following table presents the acquired purchased credit impaired loans receivable at the Acquisition Date:



In thousands
Contractual principal and interest at acquisition	$	13,439
Nonaccretable difference	(5,651		)
Expected cash flows at acquisition	7,788
Accretable yield	(1,458		)
Fair value of purchased impaired loans	$	6,330

Pro Forma Information

The following table presents certain pro forma information as if New Windsor had been acquired on December 31, 2016. These results combine the historical results of the Corporation in the Corporation’s Consolidated Statements of Income and, while certain adjustments were made for the estimated impact of certain fair value adjustments and other acquisition-related activity, they are not indicative of what would have occurred had the acquisition taken place on December 31, 2016. In particular, no adjustments have been made to eliminate the amount of New Windor’s provision for loan losses that would not have been necessary had the acquired loans been recorded at fair value as of December 31, 2016. The Corporation expects to achieve further operating cost savings and other business synergies as a result of the acquisition which are not reflected in the pro forma amounts below:



In thousands	For the Year Ended December 31, 2016
Total revenues (net interest income plus noninterest income)	$	102,891
Net Income	13,591