Mid Penn Bancorp, Inc. (NasdaqGM:MPB) entered into an agreement and plan of merger to acquire First Priority Financial Corp. (OTCPK:FPBK) for $86.6 million on January 16, 2018. Under the terms of the agreement, shareholders of First Priority will receive 0.3481 shares of Mid Penn common stock for each share of First Priority common stock. Each First Priority option will be converted into the right to receive an amount in cash equal to the product obtained by multiplying the aggregate number of First Priority options and $11.07, less the per share exercise price of such options. Each share of First Priority preferred stock issued and outstanding at the closing that has not been called for redemption, if any, shall be converted into one share of a respective series of preferred stock of Mid Penn. The parties entered into confidentiality agreement on September 12, 2017. The shareholders of First Priority Financial will own 27.4% and Mid Penn Bancorp will own 72.6% of combined company. Post-closing, First Priority Financial Corp. will merge with and into Mid Penn Bancorp, Inc. First Priority Bank, a wholly-owned subsidiary of First Priority Financial Corp. will be merged with and into Mid Penn Bank, a wholly-owned subsidiary of Mid Penn Bancorp. Following the merger, the former offices of First Priority Bank will be operated as First Priority Bank, a Division of Mid Penn Bank. In case of termination, First Priority may be obligated to pay Mid Penn a termination fee of $3.5 million. Post transaction, the Boards of Directors of Mid Penn Bancorp and Mid Penn Bank will be increased by four Directors and David E. Sparks, Chairman and Chief Executive Officer of First Priority, and three of the other current Directors of First Priority selected by the Boards of Directors of First Priority, with the approval of Mid Penn Bancorp’s Boards of Directors, will be added to the Boards of Directors of Mid Penn Bancorp and Mid Penn Bank. Additionally, David E. Sparks will be appointed as Chief Strategic Advisor to the Chief Executive Officer of Mid Penn Bancorp, Inc. and Mid Penn Bank, and Market President of First Priority Bank, a Division of Mid Penn Bank. The transaction is subject to a number of customary conditions, including, among others, the approval of the shareholders of each of First Priority and Mid Penn, the effectiveness of the registration statement to be filed by Mid Penn with the SEC relating, approval of the listing on The Nasdaq Stock Market of the shares of Mid Penn common stock to be issued in the merger, receipt of required regulatory approvals, not more than 10% of the outstanding shares of First Priority common stock having properly effected their dissenters’ rights, and the receipt by each party of an opinion from its counsel to the effect that the merger will qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended. The special meeting of Mid Penn Bancorp shareholders to approve the transaction will be held on July 25, 2017. The transaction was unanimously approved by the Boards of Directors of Mid Penn and First Priority. Concurrently with the execution of agreement, each of the Directors and Executive Officers of First Priority have entered into separate affiliate letters with Mid Penn pursuant to which such individuals have agreed to vote their shares of First Priority common stock, representing 20.2% of the issued and outstanding shares of First Priority common stock. In addition, concurrently with the execution of the merger agreement, the Directors, Executive Officers and 10% shareholders of Mid Penn entered into separate affiliate letters with First Priority pursuant to which such persons have agreed to vote for the merger. Such affiliate letters represent approximately 23.6% of the issued and outstanding shares of Mid Penn common stock. As of May 31, 2018, Mid Penn Bancorp receives regulatory approvals for First Priority merger. On July 24, 2018, shareholders of First Priority approved the transaction. On July 25, 2018, shareholders of Mid Penn approved the transaction. The transaction is expected to close in the third quarter of 2018. The transaction is expected to be accretive to earnings per share at 8% in 2018 and 19% in 2019 with a tangible book value dilution earn back in under 3 years. Frank Blanco III, John J Regan Jr. and Nate Mittag of Sandler O’Neill + Partners, L.P. acted as financial advisor and Kenneth J. Rollins of Pillar+Aught acted as legal advisor for Mid Penn Bancorp. Joseph M. Harenza and Alan K. Grover of Griffin Financial Group LLC acted as financial advisor and David W. Swartz of Stevens & Lee, P.C. acted as legal advisor for First Priority Financial Corp. First Priority agreed to pay Griffin Financial a fee of $0.75 million contingent on the completion of the merger. Mid Penn will pay Sandler O’Neill a fee for it services in an amount equal to $0.65 million a portion of which are significant on consummation of merger. Sandler received $0.195 million upon the signing of the merger agreement and a $0.15 million upon rendering its fairness opinion. Computershare will be the exchange agent in the merger and will receive forms of election, exchange certificates for the merger consideration.