Acquisition (Tables)
|
3 Months Ended |
Mar. 31, 2019 |
|---|
| 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 |
|
|
39,744 |
|
|
Core deposit intangible |
|
|
2,832 |
|
|
Trade name intangible |
|
|
205 |
|
|
Premises and equipment |
|
|
1,147 |
|
|
Foreclosed assets |
|
|
125 |
|
|
Deferred income taxes |
|
|
3,140 |
|
|
Accrued interest receivable |
|
|
2,293 |
|
|
Other assets |
|
|
4,197 |
|
|
Total assets acquired |
|
|
641,918 |
|
|
Liabilities assumed: |
|
|
|
|
|
Deposits |
|
|
504,946 |
|
|
Borrowings |
|
|
49,939 |
|
|
Accrued interest payable |
|
|
1,073 |
|
|
Other liabilities |
|
|
2,627 |
|
|
Total liabilities assumed |
|
|
558,585 |
|
|
Equity acquired: |
|
|
|
|
|
Preferred stock |
|
|
3,404 |
|
|
Total equity acquired and liabilities assumed |
|
|
561,989 |
|
|
|
|
|
|
|
|
Consideration paid |
|
$ |
79,929 |
|
|
|
|
|
|
|
|
Cash paid |
|
$ |
3,807 |
|
|
Fair value of common stock issued |
|
|
76,122 |
|
|
| Summary of the Final Estimated Fair Value of the Assets Acquired and Liabilities and Equity Assumed |
The following table summarizes the estimated fair value of the assets acquired and liabilities and equity assumed in the First Priority transaction that management believes are final; however, these values could be adjusted under ASC 805 until July 31, 2019.
|
(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 |
|
|
3,140 |
|
|
Accrued interest receivable |
|
|
2,293 |
|
|
Other assets |
|
|
4,197 |
|
|
Deposits |
|
|
(504,946 |
) |
|
Borrowings |
|
|
(49,939 |
) |
|
Accrued interest payable |
|
|
(1,073 |
) |
|
Other liabilities |
|
|
(2,627 |
) |
|
Preferred stock |
|
|
(3,404 |
) |
|
|
|
|
40,185 |
|
|
Goodwill |
|
$ |
39,744 |
|
|
| 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 July 31, 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 July 31, 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, 2018.
|
(Dollars in thousands, except per share data) |
|
|
|
|
|
|
|
March 31, |
|
|
|
|
2018 |
|
|
Net interest income after loan loss provision |
|
$ |
15,420 |
|
|
Noninterest income |
|
|
1,811 |
|
|
Noninterest expense |
|
|
14,530 |
|
|
Net income |
|
|
2,278 |
|
|
Net income per common share |
|
|
0.27 |
|
|
| 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 |
|
|
19,178 |
|
|
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 |
|
|
280,652 |
|
|
Liabilities assumed: |
|
|
|
|
|
Deposits |
|
|
209,981 |
|
|
Accrued interest payable |
|
|
16 |
|
|
Other liabilities |
|
|
3,682 |
|
|
Total liabilities assumed |
|
|
213,679 |
|
|
|
|
|
|
|
|
Consideration paid |
|
$ |
66,973 |
|
|
|
|
|
|
|
|
Cash paid |
|
$ |
2,792 |
|
|
Fair value of common stock issued |
|
|
64,181 |
|
|
| Summary of the Final Estimated Fair Value of the Assets Acquired and Liabilities and Equity Assumed |
The following table summarizes the final 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 |
|
|
(3,682 |
) |
|
|
|
|
47,795 |
|
|
Goodwill |
|
$ |
19,178 |
|
|
| 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 measures as if the merger between Mid Penn Bank and Scottdale had been completed on January 1, 2018.
|
(Dollars in thousands, except per share data) |
|
|
|
|
|
|
|
March 31, |
|
|
|
|
2018 |
|
|
Net interest income after loan loss provision |
|
$ |
10,753 |
|
|
Noninterest income |
|
|
1,647 |
|
|
Noninterest expense |
|
|
9,910 |
|
|
Net income |
|
|
2,054 |
|
|
Net income per common share |
|
|
0.34 |
|
|