Merger and Acquisitions (Tables)

3 Months Ended

Mar. 31, 2016

Merger and Acquisitions [Abstract]

Allocation of the Purchase Price

The allocation of the purchase price is as follows:

(Dollars in thousands)
Assets acquired:
Cash and cash equivalents	$	11,044
Investment securities		11,331
Loans		110,363
Goodwill		2,902
Core deposit and other intangibles		578
Other assets		7,489
Total assets acquired		143,707
Liabilities assumed:
Deposits		123,238
FHLB borrowings		3,570
Other liabilities		908
Total liabilities assumed		127,716
Equity acquired:
Preferred stock		1,750
Total equity acquired and liabilities assumed		129,466
Consideration paid	$	14,241
Cash paid	$	2,949
Fair value of common stock issued, including replacement equity awards		11,292

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

The following table summarizes the fair value of the assets acquired, and liabilities and equity assumed by Mid Penn through the Phoenix merger.

(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
Deferred income taxes		503
Accrued interest receivable		388
Core deposit and other intangibles		578
Other assets		624
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

The following table presents pro forma information as if the merger between Mid Penn and Phoenix had been completed on January 1, 2014.  The pro forma information does not necessarily reflect the results of operations that would have occurred had Mid Penn merged with Phoenix at the beginning of 2014.  Supplemental pro forma earnings for 2015 were adjusted to exclude $762,000 of merger related costs incurred for the three months ended March 31, 2015.  The pro forma financial information does not include the impact of possible business model changes, nor does it consider any potential impacts of current market conditions or revenues, expense efficiencies, or other factors.  The pro forma data is intended for informational purposes and is not indicative of the future results of operations.

(Dollars in thousands)	March 31, 2015
Net interest income after loan loss provision	$	7,374
Noninterest income		1,014
Noninterest expense		6,815
Net income available to common shareholders		1,276
Net income per common share		0.30