Merger (Tables)

6 Months Ended

Jun. 30, 2018

Business Combinations [Abstract]

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		19,189
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		280,663
Liabilities assumed:
Deposits		209,981
Accrued interest payable		16
Other liabilities		3,693
Total liabilities assumed		213,690
Consideration paid	$	66,973
Cash paid	$	2,792
Fair value of common stock issued		64,181

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

The following table summarizes the preliminary estimated fair value of the assets acquired and liabilities and equity assumed.

(Dollars in thousands)
Total purchase price	$	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		(3,693	)
		47,784
Goodwill	$	19,189

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 information as if the merger between Mid Penn Bank and Scottdale had been completed on January 1, 2017.

(Dollars in thousands, except per share data)	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Net interest income after loan loss provision	$	11,414	$	10,883	$	22,167	$	1,448
Noninterest income		1,559		1,486		3,206		1,585
Noninterest expense		9,753		10,275		19,663		2,544
Net income		2,768		1,529		4,831		357
Net income per common share		0.45		0.25		0.79		0.06