(4) Balance sheet adjustment to reflect the fair value discount for acquired purchased credit deteriorated (“PCD”) loans and non-PCD loans of $28.8 million and other loan adjustments. The accruing loan fair value adjustments will be substantially recognized over the expected life of the loans of 7 years. Balance sheet and income statement interest rate adjustment to reflect the reversal of existing deferred net loan fees and the existing loan purchase accounting discounts from prior William Penn mergers. Balance Sheet Statements of Income September 30, 2024 Nine Months Ended September 30, 2024 Twelve Months Ended December 31, 2023 Fair value adjustments on loans acquired Non-PCD loans interest rate fair value . . . . . . . . . . . . . . . . . . . . . . . $(25,048) $2,684 $3,578 Non-PCD loans general credit fair value . . . . . . . . . . . . . . . . . . . . . . (3,718) 398 531 Total fair value adjustment assigned to Non-PCD loans . . . . . . . (28,766) 3,082 4,109 PCDloansfairvalue ..................................... (929) — — Total fair value adjustment assigned to PCD loans . . . . . . . . . . . . (929) — — PCDloanACL.......................................... 929 — — Total fair value of PCD loans assigned to allowance for credit losses ............................................. 929 — — Total loan fair value adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . (28,766) 3,082 4,109 Reversal of existing deferred loan fees, net . . . . . . . . . . . . . . . . . . . 494 (53) (70) Reversal of existing loan premium and discounts . . . . . . . . . . . . . . . 2,112 (218) (291) Total fair value adjustments for loans .................... $(26,160) $2,811 $3,748 (5) Balance sheet adjustment for the reversal of William Penn’s existing allowance for loan losses of $2.5 million. Balance sheet adjustment of $929 thousand of PCD loan fair value assigned to the allowance for credit losses. Balance sheet and retained earnings adjustment for the allowance for credit losses of $3.7 million for acquired non-PCD loans. The pro forma statements of income does include a one-time provision expense of $3.7 million related to allowance for credit losses for non-PCD loans. Balance Sheet Statements of Income September 30, 2024 Nine Months Ended September 30, 2024 Twelve Months Ended December 31, 2023 Allowance for credit losses Reversal of existing allowance for credit losses . . . . . . . . . . . . . . . . $ 2,522 $— $ — Fair value of PCD loans assigned to allowance for credit losses . . . (929) — — Subtotal allowance for credit losses excluding ACL for non-PCD loans ................................................ 1,593 — — ACLfornon-PCDloans .................................. (3,718) — 3,718 Total adjustments to allowance for credit losses . . . . . . . . . . . . . . . . $(2,125) $— $3,718 35
RkJQdWJsaXNoZXIy NTYwMjI1