Acquisition of Frederick County Bancorp, Inc. (Tables)

9 Months Ended

Sep. 30, 2020

Purchase price consideration in common stock

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

Purchase Price Consideration in Common Stock


FCBI shares outstanding	1,601,764
Shares paid in cash for fractional shares	150.88
Cash consideration (per share)	$	36.43
Cash portion of purchase price (cash payout of stock options and cash in lieu of fractional shares)	$	100,798
FCBI shares outstanding	1,601,764
Shares paid stock consideration	1,601,613
Exchange ratio	0.9900
Total ACNB shares issued	1,585,597
ACNB’s share price for purposes of calculation	$	36.34
Equity portion of purchase price	$	57,620,595
Cost of shares owned by buyer	$	187,200
Total consideration paid	$	57,908,593


Allocation of Purchase Price	In thousands
Total Purchase Price		$	57,909

Fair Value of Assets Acquired
Cash and cash equivalents	35,262
Investment securities	22,167
Loans held for sale	4,050
Loans	329,312
Restricted stock	1,141
Premises and equipment	10,959
Core deposit intangible asset	3,560
Other assets	14,446
Total assets	420,897

Fair Value of Liabilities Assumed
Non-interest bearing deposits	103,492
Interest bearing deposits	270,566
Subordinated debt	6,000
Long term borrowings	3,450
Other liabilities	2,008
Total liabilities	385,516

Net Assets Acquired		35,381
Goodwill Recorded in Acquisition		$	22,528

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 January 11, 2020	$	339,577
Interest rate fair value adjustment on pools of homogeneous loans	(2,632)
Credit fair value adjustment on pools of homogeneous loans	(5,931)
Credit fair value adjustment on purchased credit impaired loans	(1,702)
Fair value of acquired loans at January 11, 2020	$	329,312

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	$	4,289
Nonaccretable difference	(2,361)
Expected cash flows at acquisition	1,928
Accretable yield	(354)
Fair value of purchased impaired loans	$	1,574

Pro forma results

The following table presents certain pro forma information as if FCBI had been acquired on September 30, 2019. 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 September 30, 2019. In particular, no adjustments have been made to eliminate the amount of FCBI’s provision for loan losses that would not have been necessary had the acquired loans been recorded at fair value as of September 30, 2019. 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 Nine Months Ended September 30, 2019
Total revenues (net interest income plus non-interest income)	$	72,281
Net Income	22,138