Acquisition of Riverview Financial Corporation (Tables)

12 Months Ended

Dec. 31, 2021

The allocation of the purchase price is as follows:

(Dollars in thousands)

Assets acquired:
Cash and cash equivalents	$	316,079
Investment securities		226
Restricted stock		2,209
Loans		837,505
Goodwill		50,995
Core deposit intangible		4,096
Customer list intangible		2,160
Bank owned life insurance		32,120
Premises and equipment		11,819
Deferred income taxes		7,110
Accrued interest receivable		1,919
Other assets		6,683
Total assets acquired		1,272,921
Liabilities assumed:
Deposits:
Noninterest-bearing demand		182,291
Interest-bearing demand		371,283
Money Market		152,365
Savings		176,294
Time		199,414
Long-term debt		6,500
Subordinated debt and trust preferred securities		36,308
Accrued interest payable		439
Other liabilities		5,043
Total liabilities assumed		1,129,937

Consideration paid	$	142,984

Cash paid	$	792
Fair value of common stock issued		142,192

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

Accounting Standards Codification (“ASC”) Topic 805, Business Combinations, allows for adjustments to goodwill for a period of up to one year after the merger date for information that becomes available that reflects circumstances at the merger date. The following table summarizes the final estimated fair value of the assets acquired and liabilities and equity assumed in the Riverview transaction.

(Dollars in thousands)

Total purchase price (consideration paid)	$	142,984

Net assets acquired:
Cash and cash equivalents		316,079
Investment securities		226
Restricted stock		2,209
Loans		837,505
Core deposit intangible		4,096
Customer list intangible		2,160
Bank owned life insurance		32,120
Premises and equipment		11,819
Deferred income taxes		7,110
Accrued interest receivable		1,919
Other assets		6,683
Deposits:
Noninterest-bearing demand		(182,291	)
Interest-bearing demand		(371,283	)
Money Market		(152,365	)
Savings		(176,294	)
Time		(199,414	)
Long-term debt		(6,500	)
Subordinated debt and trust preferred securities		(36,308	)
Accrued interest payable		(439	)
Other liabilities		(5,043	)
		91,989
Goodwill	$	50,995

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.


Gross amortized cost basis at November 30, 2021	$	850,920
Market rate adjustment		529
Credit fair value adjustment on pools of homogeneous loans		(13,117	)
Credit fair value adjustment on impaired loans		(827	)
Fair value of purchased loans at November 30, 2021	$	837,505

Fair Value of the Loans Acquired

The information about the acquired Riverview impaired loan portfolio as of November 30, 2021 is as follows:

(Dollars in thousands)

Contractually required principal and interest at acquisition	$	5,591
Contractual cash flows not expected to be collected (nonaccretable discount)		(1,739	)
Expected cash flows at acquisition		3,852
Interest component of expected cash flows (accretable discount)		(541	)
Fair value of acquired loans	$	3,311

Pro Forma Information

The following table presents pro forma information as if the merger between Mid Penn and Riverview had been completed on January 1, 2020.

(Dollars in thousands, except per share data)	For the Year Ended
	December 31,
	2021		2020
Net interest income after loan loss provision	$	147,987	$	116,989
Noninterest income		32,638		26,681
Noninterest expense		123,475		108,531
Net income		57,150		35,139
Net income per common share		3.73		2.72