Merger (Tables)

9 Months Ended

Sep. 30, 2015

Merger [Abstract]

Allocation of the Purchase Price

The allocation of the purchase price is as follows:

(Dollars in thousands)
Purchase price assigned to Phoenix common shares exchanged for 723,851 Mid Penn common shares	$	11,292
Purchase price assigned to Phoenix common shares exchanged for cash		2,949
Total purchase price		14,241
Phoenix net assets acquired:
Tangible Common Equity		12,292
Estimated adjustments to reflect assets acquired and liabilities assumed at fair value:
Total fair value adjustments		(1,456)
Associated deferred income taxes		503
Fair value adjustment to net assets acquired, net of tax		(953)
Total Phoenix net assets acquired		11,339
Goodwill resulting from the merger	$	2,902

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

Adjustments to certain amounts associated with the merger were made during the current quarter and were not considered significant.  The following table summarizes the estimated fair value of the assets acquired and liabilities and equity assumed.

(Dollars in thousands)
Total purchase price	$	14,241
Net assets acquired:
Cash and cash equivalents		11,044
Investment securities		11,331
Restricted stock		509
Loans		110,363
Bank owned life insurance		3,673
Premises and equipment		1,792
Accrued interest receivable		388
Core deposit and other intangibles		578
Other assets		1,127
Deposits		(123,238)
FHLB borrowings		(3,570)
Accrued interest payable		(32)
Other liabilities		(876)
Preferred stock		(1,750)
		11,339
Goodwill	$	2,902

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 March 1, 2015	$	112,816
Market rate adjustment		270
Credit fair value adjustment on pools of homogeneous loans		(1,461)
Credit fair value adjustment on impaired loans		(1,262)
Fair value of purchased loans at March 1, 2015	$	110,363

Fair Value of the Loans Acquired

The information about the acquired Phoenix impaired loan portfolio as of March 1, 2015 is as follows:

(Dollars in thousands)
Contractually required principal and interest at acquisition	$	3,548
Contractual cash flows not expected to be collected (nonaccretable discount)		(804)
Expected cash flows at acquisition		2,744
Interest component of expected cash flows (accretable discount)		(458)
Fair value of acquired loans	$	2,286

Pro Forma Information

(Dollars in thousands, except per share data)	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Net interest income after loan loss provision	$	7,924	$	7,439	$	23,484	$	22,257
Noninterest income		1,085		980		3,192		3,057
Noninterest expense		7,353		7,318		20,934		18,982
Net income available to common shareholders		1,251		1,568		4,403		4,812
Net income per common share		0.30		0.37		1.04		1.14

Schedule of Balance Sheet relate to Business Combination

Assets, Liabilities, and Equity in Connection with Merger:
(Dollars in thousands)
Assets Acquired:
Securities	$	11,331	$	-
Loans		110,363		-
Restricted stock		509		-
Property and equipment		1,792		-
Accrued interest receivable		388		-
Core deposit and other intangible assets		578		-
Bank-owned life insurance		3,673		-
Other assets		1,127		-
	$	129,761	$	-
Liabilities Assumed:
Deposits	$	123,238	$	-
Accrued interest payable		32		-
Long-term debt		3,570		-
Other liabilities		876		-
	$	127,716	$	-
Equity Acquired:
Preferred stock	$	1,750	$	-