Acquisition (Tables)

9 Months Ended

Sep. 30, 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 final estimated fair value of the assets acquired and liabilities and equity assumed in the First Priority transaction.

(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)
	Three Months Ended		Nine Months Ended
	September 30, 2018		September 30, 2018
Net interest income after loan loss provision	$	17,373	$	48,914
Noninterest income		2,220		5,754
Noninterest expense		13,543		41,352
Net income		5,502		10,995
Net income per common share		0.70		1.49

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)	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2018		2018
Net interest income after loan loss provision	$	15,811	$	37,978
Noninterest income		2,165		5,371
Noninterest expense		15,232		34,895
Net income		2,196		7,109
Net income per common share		0.29		1.16