[10-Q] Mid Penn Bancorp, Inc. Quarterly Earnings Report
Filing Impact
Filing Sentiment
Form Type
10-Q
Corning Inc. (GLW) – Form 144 filing
An unidentified insider has notified the SEC of an intent to sell up to 82,103 common shares through J.P. Morgan Securities on or after 08/07/2025. At the stated aggregate market value of $5.25 million, the proposed sale equates to roughly 0.01 % of Corning’s 856.6 million shares outstanding. The stock was acquired via compensation grants received on 04/15/2022 (35,423 sh) and 04/14/2023 (46,680 sh). No sales have been reported by this individual during the past three months.
The filer certifies awareness of no undisclosed adverse information and affirms Rule 144 compliance; a Rule 10b5-1 trading plan may govern the transaction. This notice signals intent only—actual execution could vary in timing or amount.
Corning Inc. (GLW) – Comunicazione Form 144
Un insider non identificato ha notificato alla SEC l'intenzione di vendere fino a 82.103 azioni ordinarie tramite J.P. Morgan Securities a partire dal 07/08/2025. Al valore di mercato aggregato indicato di 5,25 milioni di dollari, la vendita proposta corrisponde a circa lo 0,01% delle 856,6 milioni di azioni in circolazione di Corning. Le azioni sono state acquisite tramite assegnazioni di compensi ricevute il 15/04/2022 (35.423 azioni) e il 14/04/2023 (46.680 azioni). Negli ultimi tre mesi non sono state segnalate vendite da parte di questa persona.
Il dichiarante certifica di non essere a conoscenza di informazioni negative non divulgate e conferma la conformità alla Regola 144; la transazione potrebbe essere regolata da un piano di trading secondo la Regola 10b5-1. Questa comunicazione rappresenta solo un'intenzione — l'effettiva esecuzione potrebbe variare in termini di tempistiche o quantità.
Corning Inc. (GLW) – Presentación Formulario 144
Un insider no identificado ha notificado a la SEC su intención de vender hasta 82,103 acciones ordinarias a través de J.P. Morgan Securities a partir del 07/08/2025. Al valor de mercado agregado declarado de 5,25 millones de dólares, la venta propuesta equivale aproximadamente al 0,01% de las 856,6 millones de acciones en circulación de Corning. Las acciones fueron adquiridas mediante asignaciones de compensación recibidas el 15/04/2022 (35,423 acciones) y el 14/04/2023 (46,680 acciones). No se han reportado ventas de esta persona en los últimos tres meses.
El declarante certifica que no tiene conocimiento de información adversa no divulgada y afirma el cumplimiento de la Regla 144; la transacción podría estar regulada por un plan de negociación bajo la Regla 10b5-1. Este aviso solo indica intención — la ejecución real podría variar en tiempo o cantidad.
Corning Inc. (GLW) – Form 144 제출
익명의 내부자가 2025년 8월 7일 또는 그 이후에 J.P. Morgan Securities를 통해 최대 82,103주의 보통주를 매도할 의사를 SEC에 통보했습니다. 명시된 총 시장 가치는 525만 달러로, 제안된 매도는 Corning의 총 발행 주식 8억 5,660만 주의 약 0.01%에 해당합니다. 해당 주식은 2022년 4월 15일(35,423주)과 2023년 4월 14일(46,680주)에 보상으로 취득되었습니다. 지난 3개월간 이 개인에 의한 매도 보고는 없습니다.
신고자는 미공개 부정적 정보가 없음을 확인하며, Rule 144 준수를 선언합니다; 거래는 Rule 10b5-1 거래 계획에 따라 이루어질 수 있습니다. 이 통지는 단지 의사 표시일 뿐이며 실제 거래 시점이나 수량은 달라질 수 있습니다.
Corning Inc. (GLW) – Dépôt du Formulaire 144
Un initié non identifié a informé la SEC de son intention de vendre jusqu'à 82 103 actions ordinaires via J.P. Morgan Securities à partir du 07/08/2025. À la valeur de marché agrégée indiquée de 5,25 millions de dollars, la vente proposée représente environ 0,01% des 856,6 millions d'actions en circulation de Corning. Les actions ont été acquises via des attributions de rémunération reçues le 15/04/2022 (35 423 actions) et le 14/04/2023 (46 680 actions). Aucun vente n’a été signalée par cette personne au cours des trois derniers mois.
Le déclarant certifie ne pas avoir connaissance d’informations défavorables non divulguées et affirme sa conformité à la Règle 144 ; la transaction pourrait être régie par un plan de négociation selon la Règle 10b5-1. Cet avis indique uniquement une intention – l’exécution réelle pourrait varier en termes de timing ou de quantité.
Corning Inc. (GLW) – Form 144 Einreichung
Ein nicht identifizierter Insider hat der SEC die Absicht mitgeteilt, bis zu 82.103 Stammaktien über J.P. Morgan Securities ab dem 07.08.2025 zu verkaufen. Zum angegebenen Gesamtmarktwert von 5,25 Millionen US-Dollar entspricht der geplante Verkauf etwa 0,01% der 856,6 Millionen ausstehenden Corning-Aktien. Die Aktien wurden durch Vergütungszuteilungen am 15.04.2022 (35.423 Aktien) und 14.04.2023 (46.680 Aktien) erworben. In den letzten drei Monaten wurden keine Verkäufe durch diese Person gemeldet.
Der Melder bestätigt, keine nicht offengelegte negative Information zu kennen, und bekräftigt die Einhaltung von Regel 144; die Transaktion könnte durch einen Handelsplan gemäß Regel 10b5-1 gesteuert werden. Diese Mitteilung signalisiert lediglich die Absicht – die tatsächliche Ausführung kann zeitlich oder mengenmäßig abweichen.
Positive
- None.
Negative
- None.
Insights
TL;DR: Small insider sale (~0.01 % of float) worth $5.3 M; unlikely to move GLW price materially.
The filing discloses a modest disposal relative to Corning’s market capitalization and share count. Because the shares stem from routine stock-based compensation and the filer has had no recent sales, the transaction appears to be ordinary liquidity management rather than a strategic shift. Volume is immaterial versus GLW’s average daily trading volume, so market impact should be negligible. Investors typically monitor clusters or unusually large insider sales; this single filing does not meet that threshold.
TL;DR: Routine Form 144; no red flags in governance or disclosure practices.
The filer followed disclosure rules, identifying acquisition dates, grant nature, and broker. Certification that no material non-public information is held, plus possible use of a Rule 10b5-1 plan, reduces governance risk. Absence of aggregate sales in the prior three months supports the view that insider trading windows are respected. Overall, governance implications are neutral.
Corning Inc. (GLW) – Comunicazione Form 144
Un insider non identificato ha notificato alla SEC l'intenzione di vendere fino a 82.103 azioni ordinarie tramite J.P. Morgan Securities a partire dal 07/08/2025. Al valore di mercato aggregato indicato di 5,25 milioni di dollari, la vendita proposta corrisponde a circa lo 0,01% delle 856,6 milioni di azioni in circolazione di Corning. Le azioni sono state acquisite tramite assegnazioni di compensi ricevute il 15/04/2022 (35.423 azioni) e il 14/04/2023 (46.680 azioni). Negli ultimi tre mesi non sono state segnalate vendite da parte di questa persona.
Il dichiarante certifica di non essere a conoscenza di informazioni negative non divulgate e conferma la conformità alla Regola 144; la transazione potrebbe essere regolata da un piano di trading secondo la Regola 10b5-1. Questa comunicazione rappresenta solo un'intenzione — l'effettiva esecuzione potrebbe variare in termini di tempistiche o quantità.
Corning Inc. (GLW) – Presentación Formulario 144
Un insider no identificado ha notificado a la SEC su intención de vender hasta 82,103 acciones ordinarias a través de J.P. Morgan Securities a partir del 07/08/2025. Al valor de mercado agregado declarado de 5,25 millones de dólares, la venta propuesta equivale aproximadamente al 0,01% de las 856,6 millones de acciones en circulación de Corning. Las acciones fueron adquiridas mediante asignaciones de compensación recibidas el 15/04/2022 (35,423 acciones) y el 14/04/2023 (46,680 acciones). No se han reportado ventas de esta persona en los últimos tres meses.
El declarante certifica que no tiene conocimiento de información adversa no divulgada y afirma el cumplimiento de la Regla 144; la transacción podría estar regulada por un plan de negociación bajo la Regla 10b5-1. Este aviso solo indica intención — la ejecución real podría variar en tiempo o cantidad.
Corning Inc. (GLW) – Form 144 제출
익명의 내부자가 2025년 8월 7일 또는 그 이후에 J.P. Morgan Securities를 통해 최대 82,103주의 보통주를 매도할 의사를 SEC에 통보했습니다. 명시된 총 시장 가치는 525만 달러로, 제안된 매도는 Corning의 총 발행 주식 8억 5,660만 주의 약 0.01%에 해당합니다. 해당 주식은 2022년 4월 15일(35,423주)과 2023년 4월 14일(46,680주)에 보상으로 취득되었습니다. 지난 3개월간 이 개인에 의한 매도 보고는 없습니다.
신고자는 미공개 부정적 정보가 없음을 확인하며, Rule 144 준수를 선언합니다; 거래는 Rule 10b5-1 거래 계획에 따라 이루어질 수 있습니다. 이 통지는 단지 의사 표시일 뿐이며 실제 거래 시점이나 수량은 달라질 수 있습니다.
Corning Inc. (GLW) – Dépôt du Formulaire 144
Un initié non identifié a informé la SEC de son intention de vendre jusqu'à 82 103 actions ordinaires via J.P. Morgan Securities à partir du 07/08/2025. À la valeur de marché agrégée indiquée de 5,25 millions de dollars, la vente proposée représente environ 0,01% des 856,6 millions d'actions en circulation de Corning. Les actions ont été acquises via des attributions de rémunération reçues le 15/04/2022 (35 423 actions) et le 14/04/2023 (46 680 actions). Aucun vente n’a été signalée par cette personne au cours des trois derniers mois.
Le déclarant certifie ne pas avoir connaissance d’informations défavorables non divulguées et affirme sa conformité à la Règle 144 ; la transaction pourrait être régie par un plan de négociation selon la Règle 10b5-1. Cet avis indique uniquement une intention – l’exécution réelle pourrait varier en termes de timing ou de quantité.
Corning Inc. (GLW) – Form 144 Einreichung
Ein nicht identifizierter Insider hat der SEC die Absicht mitgeteilt, bis zu 82.103 Stammaktien über J.P. Morgan Securities ab dem 07.08.2025 zu verkaufen. Zum angegebenen Gesamtmarktwert von 5,25 Millionen US-Dollar entspricht der geplante Verkauf etwa 0,01% der 856,6 Millionen ausstehenden Corning-Aktien. Die Aktien wurden durch Vergütungszuteilungen am 15.04.2022 (35.423 Aktien) und 14.04.2023 (46.680 Aktien) erworben. In den letzten drei Monaten wurden keine Verkäufe durch diese Person gemeldet.
Der Melder bestätigt, keine nicht offengelegte negative Information zu kennen, und bekräftigt die Einhaltung von Regel 144; die Transaktion könnte durch einen Handelsplan gemäß Regel 10b5-1 gesteuert werden. Diese Mitteilung signalisiert lediglich die Absicht – die tatsächliche Ausführung kann zeitlich oder mengenmäßig abweichen.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended June 30, 2025
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from ________ to ________
Commission file number 1-13677
(Exact Name of Registrant as Specified in its Charter)
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification Number) | |||||||
(Address of Principal Executive Offices) | (Zip Code) | |||||||
Registrant’s telephone number, including area code 1.866 .642.7736
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of "large accelerated filer", "accelerated filer", "smaller reporting company", and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | o | x | Emerging Growth Company | ||||||||||||||||||||
| Non-accelerated Filer | o | Smaller Reporting Company | |||||||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x
As of July 31, 2025, the registrant had 22,998,832 shares of common stock outstanding, par value $1.00 per share.
1
Table of Contents
FORM 10-Q
TABLE OF CONTENTS
PART 1 – FINANCIAL INFORMATION | |||||
Item 1 – Financial Statements | 4 | ||||
Consolidated Balance Sheets as of June 30, 2025 and December 31, 2024 (Unaudited) | 4 | ||||
Consolidated Statements of Income for the Three and Six Months Ended June 30, 2025 and 2024 (Unaudited) | 5 | ||||
Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2025 and 2024 (Unaudited) | 6 | ||||
Consolidated Statements of Changes in Shareholders’ Equity for the Three and Six Months Ended June 30, 2025 and 2024 (Unaudited) | 7 | ||||
Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2025 and 2024 (Unaudited) | 9 | ||||
Notes to Consolidated Financial Statements (Unaudited) | 11 | ||||
Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations | 51 | ||||
Item 3 – Quantitative and Qualitative Disclosures about Market Risk | 75 | ||||
Item 4 – Controls and Procedures | 76 | ||||
PART II – OTHER INFORMATION | 77 | ||||
Item 1 – Legal Proceedings | 77 | ||||
Item 1A – Risk Factors | 77 | ||||
Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds | 78 | ||||
Item 3 – Defaults upon Senior Securities | 79 | ||||
Item 4 – Mine Safety Disclosures | 79 | ||||
Item 5 – Other Information | 79 | ||||
Item 6 – Exhibits | 80 | ||||
Signatures | 81 | ||||
Unless the context otherwise requires, the terms "Mid Penn", "Corporation" "we", "us", and "our" refer to Mid Penn Bancorp, Inc. and its consolidated wholly-owned banking subsidiary and nonbank subsidiaries.
2
Table of Contents
GLOSSARY OF DEFINED ACRONYMS AND TERMS
| 2023 Plan | 2023 Stock Incentive Plan | ||||
| ACL | Allowance for Credit Losses | ||||
| AFS | Available for Sale | ||||
| AOCI | Accumulated Other Comprehensive Income/(Loss) | ||||
| ASC | Accounting Standards Codification | ||||
| ASU | Accounting Standards Update | ||||
| the Bank | Mid Penn Bank | ||||
| BOLI | Bank Owned Life Insurance | ||||
| bp or bps | basis point(s) | ||||
| CCL | Provision for Credit Losses - Credit Commitments | ||||
| CD | Certificate of Deposit | ||||
| CECL | Current Expected Credit Losses as defined by FASB ASC Topic 326 | ||||
| CRE | Commercial Real Estate | ||||
| DCF | Discounted Cash Flow | ||||
| DIF | FDIC’s Deposit Insurance Fund | ||||
| DRIP | Dividend Reinvestment Plan | ||||
| EPS | Earnings per share | ||||
| FASB | Financial Accounting Standards Board | ||||
| FDIC | Federal Deposit Insurance Corporation | ||||
| FHLB | Federal Home Loan Bank of Pittsburgh | ||||
| FICO | Fair Isaac Corporation credit scoring model | ||||
| FOMC | Federal Open Market Committee | ||||
| FTE | Fully taxable-equivalent | ||||
| HELOC | Home Equity Line of Credit | ||||
| HFS | Held for Sale | ||||
| HTM | Held to Maturity | ||||
| GAAP | Accounting principles generally accepted in the United States of America | ||||
| GDP | Gross domestic product | ||||
| LGD | Loss Given Default | ||||
| LHFI | Loans held for investment | ||||
| Loans | Loans, net of unearned income | ||||
| Management Discussion | Management's Discussion and Analysis of Financial Condition and Results of Operations | ||||
| Merger | Merger acquisition of William Penn | ||||
| Mid Penn or the Corporation | Mid Penn Bancorp, Inc. | ||||
| NASDAQ | Major stock exchange where the Corporation's shares are traded | ||||
| OBS | Off-Balance Sheet | ||||
| OCI | Other Comprehensive Income | ||||
| OREO | Other Real Estate Owned | ||||
| PCD | Purchased Credit Deteriorated | ||||
| PCL | Provision for Credit Losses - Loans | ||||
| PD | Probability of Default | ||||
| Public Offering | Underwritten public offering of 2,375,000 shares of the Corporation’s common stock | ||||
| Riverview | Riverview Financial Corporation | ||||
| Riverview Acquisition | Merger acquisition of Riverview | ||||
| ROA | Return on Assets | ||||
| ROE | Return on Equity | ||||
| SBA | Small Business Association | ||||
| SEC | Securities Exchange Commission | ||||
| SOFR | Secured Overnight Financing Rate | ||||
| William Penn | William Penn Bancorporation | ||||
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Table of Contents
MID PENN BANCORP, INC.
PART 1 – FINANCIAL INFORMATION
ITEM 1 – FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
| (In thousands, except per share data) | June 30, 2025 | December 31, 2024 | |||||||||
| ASSETS | |||||||||||
| Cash and due from banks | $ | $ | |||||||||
| Interest-bearing balances with other financial institutions | |||||||||||
| Federal funds sold | |||||||||||
| Total cash and cash equivalents | |||||||||||
| Investment securities: | |||||||||||
HTM, at amortized cost (fair value $ | |||||||||||
AFS, at fair value (amortized cost $ | |||||||||||
| Equity securities, at fair value | |||||||||||
| Loans held for sale, at fair value | |||||||||||
| Loans, net of unearned income | |||||||||||
| Less: ACL - Loans | ( | ( | |||||||||
| Net loans | |||||||||||
| Premises and equipment, net | |||||||||||
| Operating lease right of use asset | |||||||||||
| Finance lease right of use asset | |||||||||||
| Cash surrender value of life insurance | |||||||||||
| Restricted investment in bank stocks | |||||||||||
| Accrued interest receivable | |||||||||||
| Deferred income taxes | |||||||||||
| Goodwill | |||||||||||
| Core deposit and other intangibles, net | |||||||||||
| Foreclosed assets held for sale | |||||||||||
| Other assets | |||||||||||
| Total Assets | $ | $ | |||||||||
| LIABILITIES & SHAREHOLDERS’ EQUITY | |||||||||||
| Deposits: | |||||||||||
| Noninterest-bearing demand | $ | $ | |||||||||
| Interest-bearing transaction accounts | |||||||||||
| Time | |||||||||||
| Total Deposits | |||||||||||
| Short-term borrowings | |||||||||||
| Long-term debt | |||||||||||
| Subordinated debt | |||||||||||
| Operating lease liability | |||||||||||
| Accrued interest payable | |||||||||||
| Other liabilities | |||||||||||
| Total Liabilities | |||||||||||
| Shareholders' Equity: | |||||||||||
Common stock, par value $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Retained earnings | |||||||||||
| Accumulated other comprehensive loss | ( | ( | |||||||||
Treasury stock, at cost; | ( | ( | |||||||||
| Total Shareholders’ Equity | |||||||||||
| Total Liabilities and Shareholders' Equity | $ | $ | |||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
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Table of Contents
MID PENN BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| (In thousands, except per share data) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| INTEREST INCOME | |||||||||||||||||||||||
| Loans, including fees | $ | $ | $ | $ | |||||||||||||||||||
| Investment securities: | |||||||||||||||||||||||
| Taxable | |||||||||||||||||||||||
| Tax-exempt | |||||||||||||||||||||||
| Other interest-bearing balances | |||||||||||||||||||||||
| Federal funds sold | |||||||||||||||||||||||
| Total Interest Income | |||||||||||||||||||||||
| INTEREST EXPENSE | |||||||||||||||||||||||
| Deposits | |||||||||||||||||||||||
| Short-term borrowings | |||||||||||||||||||||||
| Long-term and subordinated debt | |||||||||||||||||||||||
| Total Interest Expense | |||||||||||||||||||||||
| Net Interest Income | |||||||||||||||||||||||
| Provision for credit losses - loans | |||||||||||||||||||||||
| Provision/(Benefit) for credit losses - credit commitments | ( | ( | |||||||||||||||||||||
| Net provision for credit losses | |||||||||||||||||||||||
| Net Interest Income After Provision/Benefit for Credit Losses | |||||||||||||||||||||||
| NONINTEREST INCOME | |||||||||||||||||||||||
| Fiduciary and wealth management | |||||||||||||||||||||||
| ATM debit card interchange | |||||||||||||||||||||||
| Service charges on deposits | |||||||||||||||||||||||
| Mortgage banking | |||||||||||||||||||||||
| Mortgage hedging | ( | ( | |||||||||||||||||||||
| Net gain on sales of SBA loans | |||||||||||||||||||||||
| Earnings from cash surrender value of life insurance | |||||||||||||||||||||||
| Other | |||||||||||||||||||||||
| Total Noninterest Income | |||||||||||||||||||||||
| NONINTEREST EXPENSE | |||||||||||||||||||||||
| Salaries and employee benefits | |||||||||||||||||||||||
| Software licensing and utilization | |||||||||||||||||||||||
| Occupancy, net | |||||||||||||||||||||||
| Equipment | |||||||||||||||||||||||
| Shares tax | |||||||||||||||||||||||
| Legal and professional fees | |||||||||||||||||||||||
| ATM/card processing | |||||||||||||||||||||||
| Intangible amortization | |||||||||||||||||||||||
| FDIC Assessment | |||||||||||||||||||||||
| Gain/(Loss) on sale of foreclosed assets, net | ( | ||||||||||||||||||||||
| Merger and acquisition | |||||||||||||||||||||||
| Other | |||||||||||||||||||||||
| Total Noninterest Expense | |||||||||||||||||||||||
| INCOME BEFORE PROVISION FOR INCOME TAXES | |||||||||||||||||||||||
| (Benefit)/Provision for income taxes | ( | ||||||||||||||||||||||
| NET INCOME AVAILABLE TO COMMON SHAREHOLDERS | $ | $ | $ | $ | |||||||||||||||||||
| PER COMMON SHARE DATA: | |||||||||||||||||||||||
| Basic Earnings Per Common Share | $ | $ | $ | $ | |||||||||||||||||||
| Diluted Earnings Per Common Share | $ | $ | $ | $ | |||||||||||||||||||
| Weighted-average basic shares outstanding | |||||||||||||||||||||||
| Weighted-average diluted shares outstanding | |||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
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Table of Contents
MID PENN BANCORP, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| (In Thousands) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
| Other comprehensive income/(loss): | |||||||||||||||||||||||
Unrealized gains/(losses) arising during the period on available for sale securities, net of income tax. | ( | ( | |||||||||||||||||||||
Unrealized holding (losses)/gains arising during the period on interest rate derivatives used in cash flow hedges, net of income tax. | ( | ( | |||||||||||||||||||||
Change in defined benefit plans, net of income tax.(1) | ( | ( | |||||||||||||||||||||
Reclassification adjustment for settlement gains and activity related to benefit plans, net of income tax.(2) | ( | ( | |||||||||||||||||||||
| Total other comprehensive income/(loss) | ( | ( | |||||||||||||||||||||
| Total comprehensive income | $ | $ | $ | $ | |||||||||||||||||||
(1)The change in defined benefit plans consists primarily of unrecognized actuarial gains on defined benefit plans during the period.
(2)The reclassification adjustment for benefit plans includes settlement gains, amortization of prior service costs, and amortization of net gain or loss. Amounts are included in other income on the Consolidated Statements of Income within total noninterest income.
The accompanying notes are an integral part of these unaudited consolidated financial statements.
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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (UNAUDITED)
| Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive (Loss) Income | Treasury Stock | Total Shareholders' Equity | ||||||||||||||||||||||||||||||||||||
| (In thousands, except per share data) | Shares | Amount | |||||||||||||||||||||||||||||||||||||||
| Balance, January 1, 2025 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Total other comprehensive income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Common stock cash dividends declared, $ | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
| Repurchased stock | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Employee Stock Purchase Plan | — | — | — | ||||||||||||||||||||||||||||||||||||||
| Director Stock Purchase Plan | — | — | — | ||||||||||||||||||||||||||||||||||||||
| Restricted stock activity | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2025 | ( | ( | |||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Total other comprehensive income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Common stock cash dividends declared, $ | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Common stock issued in business combination (1) | — | — | — | ||||||||||||||||||||||||||||||||||||||
| Stock options exercised | — | — | — | ||||||||||||||||||||||||||||||||||||||
| Repurchased stock | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
| Employee Stock Purchase Plan | — | — | — | ||||||||||||||||||||||||||||||||||||||
| Director Stock Purchase Plan | — | — | — | ||||||||||||||||||||||||||||||||||||||
| Restricted stock activity | — | — | — | ||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||
(1) Shares issued on April 30, 2025 as a result of the William Penn acquisition. See "Note 2 - Business Combinations" to the Consolidated Financial Statements for more information .
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| Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Total Shareholders' Equity | ||||||||||||||||||||||||||||||||||||
| (In thousands, except per share data) | Shares | Amount | |||||||||||||||||||||||||||||||||||||||
| Balance, January 1, 2024 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Total other comprehensive income | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Common stock cash dividends declared, $ | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
| Repurchased stock | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
| Employee Stock Purchase Plan | — | — | — | ||||||||||||||||||||||||||||||||||||||
| Director Stock Purchase Plan | — | — | — | ||||||||||||||||||||||||||||||||||||||
| Restricted stock activity | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2024 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Total other comprehensive loss | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Common stock cash dividends declared, $ | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
| Employee Stock Purchase Plan | — | — | — | ||||||||||||||||||||||||||||||||||||||
| Director Stock Purchase Plan | — | — | — | ||||||||||||||||||||||||||||||||||||||
| Restricted stock activity | — | — | — | ||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2024 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
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MID PENN BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
| Six Months Ended June 30, | |||||||||||
| (In thousands) | 2025 | 2024 | |||||||||
| Operating Activities: | |||||||||||
| Net Income | $ | $ | |||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Provision for credit losses | |||||||||||
| Depreciation | |||||||||||
| Amortization of intangibles | |||||||||||
| Net amortization of security discounts/premiums | |||||||||||
| Noncash operating lease expense | |||||||||||
| Amortization of finance lease right of use asset | |||||||||||
| Loss on sales of investment securities | |||||||||||
| Earnings on cash surrender value of life insurance | ( | ( | |||||||||
| Mortgage loans originated for sale | ( | ( | |||||||||
| Proceeds from sales of mortgage loans originated for sale | |||||||||||
| Gain on sale of mortgage loans | ( | ( | |||||||||
| SBA loans originated for sale | ( | ( | |||||||||
| Proceeds from sales of SBA loans originated for sale | |||||||||||
| Gain on sale of SBA loans | ( | ( | |||||||||
| Gain on sale of property, plant, and equipment | ( | ( | |||||||||
| (Gain)/loss on sale or write-down of foreclosed assets | ( | ||||||||||
| Discount on subordinated debt | ( | ( | |||||||||
| Stock compensation expense | |||||||||||
| Change in deferred income taxes | ( | ||||||||||
| Decrease/(Increase) in accrued interest receivable | ( | ||||||||||
| Decrease/(Increase) in other assets | ( | ||||||||||
| (Decrease)/Increase in accrued interest payable | ( | ||||||||||
| Increase/(Decrease) in operating lease liability | ( | ||||||||||
| Increase in other liabilities | |||||||||||
| Net Cash Provided By Operating Activities | |||||||||||
| Investing Activities: | |||||||||||
| Proceeds from the maturity or call of available-for-sale securities | |||||||||||
| Purchases of available-for-sale securities | ( | ||||||||||
| Proceeds from the maturity or call of held-to-maturity securities | |||||||||||
| Stock dividends received on FHLB and other bank stock | |||||||||||
| Reduction of restricted investment in bank stock | |||||||||||
| Net cash received from acquisitions | |||||||||||
| Net decrease/(increase) in loans | ( | ||||||||||
| Purchases of bank premises and equipment | ( | ( | |||||||||
| Proceeds from the sale of premises and equipment | |||||||||||
| Proceeds from the sale of foreclosed assets | |||||||||||
| Proceeds from bank-owned life insurance | |||||||||||
| Net change in investments in tax credits and other partnerships | ( | ||||||||||
| Net Cash Provided by (Used in) Investing Activities | ( | ||||||||||
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MID PENN BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)(CONTINUED)
| Financing Activities: | |||||||||||
| Net increase in deposits | |||||||||||
| Common stock dividends paid | ( | ( | |||||||||
| Proceeds from Employee and Director Stock Purchase Plan stock issuance | |||||||||||
| Treasury stock purchased | ( | ( | |||||||||
| Net change in finance lease liability | ( | ( | |||||||||
| Net change in short-term borrowings | ( | ( | |||||||||
| Long-term debt repayment | ( | ( | |||||||||
| Subordinated debt redemption | ( | ||||||||||
| Cash paid in lieu of fractional shares | ( | ||||||||||
| Exercise of stock options | |||||||||||
| Net Cash Provided by Financing Activities | |||||||||||
| Net increase in cash and cash equivalents | |||||||||||
| Cash and cash equivalents, beginning of period | |||||||||||
| Cash and cash equivalents, end of period | $ | $ | |||||||||
| Supplemental Disclosures of Cash Flow Information: | |||||||||||
| Cash paid for interest | $ | $ | |||||||||
| Cash paid for income taxes | |||||||||||
| Supplemental Noncash Disclosures: | |||||||||||
| Recognition of operating lease right of use assets | $ | $ | |||||||||
| Recognition of operating lease liabilities | |||||||||||
| Loans transferred to foreclosed assets held for sale | |||||||||||
Fair value of assets acquired in business combination, excluding cash (1) | $ | $ | |||||||||
Goodwill recorded (1) | |||||||||||
Fair value of liabilities assumed in business combination (1) | |||||||||||
Fair value of shares issued in business combination (2) | |||||||||||
(1) Includes the impact of the William Penn acquisition on April 30, 2025 and the Charis Insurance Group acquisition on May 12, 2025 . See "Note 2 - Business Combinations" to the Consolidated Financial Statements for more information.
(2) Includes the impact of the William Penn acquisition on April 30, 2025.
The accompanying notes are an integral part of these unaudited consolidated financial statements.
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MID PENN BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Note 1 - Summary of Significant Accounting Policies
Nature of Operations
Mid Penn Bancorp, Inc. ("Mid Penn" or the "Corporation"), through operations conducted by Mid Penn Bank (the "Bank") and its nonbank subsidiaries, engages in a full-service commercial banking and trust business, making available to the community a wide range of financial services, including, but not limited to, mortgage and home equity loans, secured and unsecured commercial and consumer loans, lines of credit, construction financing, farm loans, community development loans, loans to non-profit entities and local government loans, and various types of time and demand deposits including but not limited to, checking accounts, savings accounts, clubs, money market deposit accounts, certificates of deposit, and Individual Retirement Accounts. In addition, the Bank provides a full range of trust and wealth management services through its Trust Department. Deposits are insured by the Federal Deposit Insurance Corporation ("FDIC") to the extent provided by law.
Mid Penn also fulfills the insurance needs of both existing and potential customers through MPB Risk Services, LLC, doing business as MPB Insurance and Risk Management.
The financial services are provided to individuals, partnerships, non-profit organizations, and corporations through its retail banking offices located throughout Pennsylvania and five counties in New Jersey.
Basis of Presentation
For all periods presented, the accompanying consolidated financial statements include the accounts of Mid Penn Bancorp, Inc., its wholly-owned subsidiary, Mid Penn Bank, and five wholly-owned nonbank subsidiaries, MPB Realty, LLC, MPB Financial Services, LLC, which includes MPB Wealth Management, LLC (which ceased operating during the first quarter
of 2024), MPB Risk Services, LLC, and MPB Launchpad Fund I, LLC. As of June 30, 2025, the accounts and activities of these nonbank subsidiaries were not material to warrant separate disclosure or segment reporting. As a result, Mid Penn has only one reportable segment for financial reporting purposes. All material intercompany accounts and transactions have been eliminated in consolidation.
Certain information and disclosures normally included in consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. Mid Penn believes the information presented is not misleading, and the disclosures are adequate. For comparative purposes, the June 30, 2024 and December 31, 2024 balances have been reclassified, when necessary, to conform to the 2025 presentation. Such reclassifications had no impact on net income or total shareholders’ equity. In the opinion of management, all adjustments necessary for fair presentation of the periods presented have been reflected in the accompanying consolidated financial statements. All such adjustments are of a normal, recurring nature. These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the 2024 Annual Report.
Subsequent Events
Mid Penn has evaluated events and transactions occurring subsequent to the balance sheet date of June 30, 2025 for items that should potentially be recognized or disclosed in these consolidated financial statements. The evaluation was conducted through the issuance date of these consolidated financial statements. There were no events or transactions that occurred subsequent to the balance sheet date that would require adjustment or disclosure to the financial statements.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates.
Material estimates subject to significant change include the allowance for credit losses, the expected cash flows and collateral values associated with loans that are individually evaluated for credit losses, the carrying value of other real estate owned ("OREO"), the fair value of financial instruments, business combination fair value computations, the valuation of goodwill and other intangible assets, stock-based compensation and deferred income tax assets.
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MID PENN BANCORP, INC.
Accounting Standards adopted and Updated Significant Accounting Policy
Accounting Standards Pending Adoption
ASU 2023-06: The FASB issued ASU 2023-06, Disclosure Improvements - Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative.
ASU 2023-06 amends the ASC to incorporate certain disclosure requirements from SEC Release No. 33-10532 - Disclosure Update and Simplification that was issued in 2018. The effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. ASU 2023-06 is not expected to have a significant impact on the Corporation's financial statements.
ASU 2023-09: The FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures.
ASU 2023-09 amends the ASC to enhance income tax disclosures by requiring entities to disclose income taxes paid (net of refunds received) disaggregated by federal, state and foreign taxes. Additionally, entities are required to disclose amounts greater than 5% of the total income taxes paid to an individual jurisdiction The amendments are effective for annual periods beginning after December 15, 2024. ASU 2023-09 is not expected to have a significant impact on the Corporation's financial statements.
ASU 2024-01—The FASB issued ASU 2024-01, Compensation - Stock Compensation (Topic 718): Scope application of profits interest and similar awards.
The amendments in the ASU apply to all reporting entities that account for profits interest awards as compensation to employees or nonemployees in return for goods or services. The amendments are effective for annual periods beginning after December 15, 2025, and interim periods within those annual periods. ASU 2024-01 is not expected to have a significant impact on the Corporation's financial statements.
ASU 2024-02: The FASB issued ASU 2024-02, Codification Improvements—Amendments to Remove References to the Concepts Statements.
This ASU contains amendments to the Codification that remove references to various FASB Concepts Statements. The amendments are effective for fiscal years beginning after December 15, 2025. Early adoption is permitted. ASU 2024-02 is not expected to have a significant impact on the Corporation's financial statements.
ASU 2024-03: The FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses
The amendments in the ASU improve financial reporting by requiring that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. The amendments are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. ASU 2024-03 is not expected to have a significant impact on the Corporation's financial statements.
ASU 2024-04: The FASB issued ASU 2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments
The amendments in the ASU clarify the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. The amendments in the ASU are effective for all entities for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted for all entities that have adopted the amendments in ASU 2020-06. ASU 2024-04 is not expected to have a significant impact on the Corporation's financial statements.
ASU 2025-01 - The FASB issued ASU 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date
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The amendments in the ASU clarify the effective date of ASU 2024-03 which requires public business entities to disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. The amendments in the ASU are effective for the first annual reporting period beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. ASU 2025-01 is not expected to have a significant impact on the Corporation's financial statements.
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Note 2 - Business Combinations
Commonwealth Benefits Group Acquisition
On July 31, 2024, Mid Penn acquired the insurance business and related accounts of a full-service employee benefits firm that serves mid to large employers across central and eastern Pennsylvania, northern Maryland, and northern Virginia, for a purchase price of $2.0 million at closing and an additional $800 thousand potentially payable pursuant to a three year earnout.
Mid Penn has recognized total goodwill of $1.1 million, which is calculated as the excess of both the consideration exchanged and liabilities assumed compared to the fair value of identifiable assets acquired.
Mid Penn incurred expenses related to the Commonwealth Benefits Group acquisition of $545 thousand for the year ended December 31, 2024, which is included in noninterest expense in the Consolidated Statements of Income.
Charis Insurance Group, Inc. Acquisition
On May 12, 2025, Mid Penn acquired the insurance business and related accounts of Charis Insurance Group, Inc. (Charis Insurance Group), which provides business, home and auto insurance throughout central and southern Pennsylvania, for a cash purchase price of $4.0 million.
Mid Penn has recognized total goodwill of $1.6 million, which is calculated as the excess of both the consideration exchanged and liabilities assumed compared to the fair value of identifiable assets acquired.
Mid Penn incurred expenses related to the Charis Insurance Group acquisition of $164 thousand for the six months ended June 30, 2025, which is included in noninterest expense in the Consolidated Statements of Income.
William Penn Acquisition
On April 30, 2025, Mid Penn completed its acquisition of 100 % of the outstanding shares of William Penn through the merger of William Penn with and into Mid Penn.
This transaction included the acquisition of 12 branches, further expanding Mid Penn's presence in the Philadelphia region and surrounding counties in Pennsylvania and New Jersey.
The merger was an all-stock transaction valued at approximately $103.2 million, based on the company's common stock closing price of $29.05 on April 30, 2025. Each share of William Penn common stock issued and outstanding as of April 30, 2025, was converted into 0.426 shares of Mid Penn common stock. As a result of the acquisition, Mid Penn issued 3,506,795 shares of Mid Penn common stock as consideration for the $103.2 million purchase price. The Company also granted replacement awards for 538,447 stock options, with a fair value of $3.1 million to continuing employees of William Penn. Of this amount, $1.3 million related to pre-combination vesting and was included in purchase price consideration, and $1.8 million related to post-combination vesting and will be recognized as expense of the combined company over the remaining vesting period.
Mid Penn has recognized total Goodwill of $5.7 million, and a core deposit intangible asset of $9.0 million as a result of this acquisition. This is calculated as the excess of both the consideration exchanged and liabilities assumed compared to the fair value of identifiable assets acquired. Goodwill is primarily comprised of expected synergies and an assembled workforce. Goodwill is not deductible for income tax purposes.
Mid Penn incurred expenses related to the William Penn acquisition of $10.8 million and $11.2 million for the three and six months ended June 30, 2025, respectively, which is included in noninterest expense in the Consolidated Statements of Income.
Purchased loans and leases that reflect a more-than-insignificant deterioration of credit from origination are considered PCD. Mid Penn considers various factors in connection with the identification of more-than-insignificant deterioration in credit, including but not limited to nonperforming status, delinquency, risk ratings, FICO scores and other qualitative factors that indicate deterioration in credit quality since origination. For PCD loans and leases, the initial estimate of expected credit losses is recognized in the ACL on the date of acquisition using the same methodology as other loans and leases held-for-investment. As part of the William Penn Acquisition, Mid Penn acquired PCD loans and leases of $358
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thousand. The non-credit discount on the PCD loans and leases was $15 thousand and the Day 1 fair value was $343 thousand. The initial provision expense for non-PCD loans associated with the William Penn Acquisition was $2.3 million.
Estimated fair values of the assets acquired and liabilities assumed in the William Penn Acquisition as of the closing date are as follows:
| (In thousands) | |||||
| Assets acquired: | |||||
| Cash and cash equivalents | $ | ||||
| Federal funds sold | |||||
| Investment securities | |||||
| Loans | |||||
| Core deposit intangible | |||||
| Premises and equipment | |||||
| Operating lease right of use asset | |||||
| Cash surrender value of life insurance | |||||
| Deferred income taxes | |||||
| Accrued interest receivable | |||||
| Other assets | |||||
| Total assets acquired | $ | ||||
| Liabilities assumed: | |||||
| Deposits: | |||||
| Noninterest-bearing demand | $ | ||||
| Interest-bearing demand | |||||
| Money Market | |||||
| Savings | |||||
| Time | |||||
| Operating lease liability | |||||
| Accrued interest payable | |||||
| Other liabilities | |||||
| Total liabilities assumed | $ | ||||
| Consideration transferred | $ | ||||
| Fair value of common stock issued | |||||
| Cash paid in lieu of fractional shares | |||||
| Total | $ | ||||
| Reconciliation to Consideration Transferred: | |||||
| Total assets acquired | $ | ||||
| Total liabilities assumed | |||||
| Net assets acquired | |||||
| Goodwill | |||||
| Consideration transferred | $ | ||||
The fair values of assets acquired and liabilities assumed are based on preliminary estimates and, as permitted under GAAP, Mid Penn has up to twelve months following the date of the Merger to finalize the fair values of the acquired assets and assumed liabilities related to the merger. During this measurement period, Mid Penn may record subsequent
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adjustments to goodwill for provisional amounts recorded at the merger date, with provisional merger-related tax adjustments.
From the acquisition date of April 30, 2025 through June 30, 2025, William Penn contributed approximately $4.4 million of total revenue and $693 thousand of net income to Mid Penn's consolidated results for the three months ended June 30, 2025.
The following supplemental pro forma information presents certain financial results for the three and six months ended June 30, 2025 and 2024 as if the merger of William Penn was effective as of January 1, 2024. The supplemental unaudited pro forma financial information included in the table below is based on various estimates and is presented for informational purposes only and does not indicate the results of operations of the combined company that would have been achieved for the periods presented had the transaction been completed as of the date indicated or that may be achieved in the future.
| (In thousands) | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Net interest income after provision for credit losses - loans | $ | $ | $ | $ | |||||||||||||||||||
| Noninterest income | |||||||||||||||||||||||
| Noninterest expense | |||||||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
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Note 3 - Investment Securities
AFS Securities
At June 30, 2025, the fair value of AFS securities totaled $404.7 million. At June 30, 2025, no securities were identified that violated credit loss triggers; therefore, no DCF analysis was performed, and no credit loss was recognized on any of the securities available for sale.
Accrued interest receivable is excluded from the estimate of credit losses for AFS securities. At June 30, 2025, accrued interest receivable totaled $1.8 million for AFS securities, and was reported in accrued interest receivable on the accompanying Consolidated Balance Sheet.
HTM Securities
At June 30, 2025, Mid Penn had no HTM securities that were past due 30 days or more as to principal or interest payments. Mid Penn had no HTM securities classified as nonaccrual at June 30, 2025. Therefore, no allowance for credit losses was recorded as of June 30, 2025.
Accrued interest receivable is excluded from the estimate of credit losses for HTM securities. At June 30, 2025, accrued interest receivable totaled $1.6 million for HTM securities and was reported in accrued interest receivable on the accompanying Consolidated Balance Sheet.
The following tables set forth the amortized cost and estimated fair value of investment securities for the periods presented:
| June 30, 2025 | |||||||||||||||||||||||
| (In thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||||||||||||||||
| Available-for-sale | |||||||||||||||||||||||
| U.S. Treasury and U.S. government agencies | $ | $ | $ | $ | |||||||||||||||||||
| Mortgage-backed U.S. government agencies | |||||||||||||||||||||||
| State and political subdivision obligations | |||||||||||||||||||||||
| Corporate debt securities | |||||||||||||||||||||||
| Total available-for-sale debt securities | |||||||||||||||||||||||
| Held-to-maturity | |||||||||||||||||||||||
| U.S. Treasury and U.S. government agencies | $ | $ | $ | $ | |||||||||||||||||||
| Mortgage-backed U.S. government agencies | |||||||||||||||||||||||
| State and political subdivision obligations | |||||||||||||||||||||||
| Corporate debt securities | |||||||||||||||||||||||
| Total held-to-maturity debt securities | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
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| December 31, 2024 | |||||||||||||||||||||||
| (In thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||||||||||||||||
| Available-for-sale | |||||||||||||||||||||||
| U.S. Treasury and U.S. government agencies | $ | $ | $ | $ | |||||||||||||||||||
| Mortgage-backed U.S. government agencies | |||||||||||||||||||||||
| State and political subdivision obligations | |||||||||||||||||||||||
| Corporate debt securities | |||||||||||||||||||||||
| Total available-for-sale debt securities | $ | $ | $ | $ | |||||||||||||||||||
| Held-to-maturity | |||||||||||||||||||||||
| U.S. Treasury and U.S. government agencies | $ | $ | $ | $ | |||||||||||||||||||
| Mortgage-backed U.S. government agencies | |||||||||||||||||||||||
| State and political subdivision obligations | |||||||||||||||||||||||
| Corporate debt securities | |||||||||||||||||||||||
| Total held-to-maturity debt securities | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
Estimated fair values of debt securities are based on quoted market prices, where applicable. If quoted market prices are not available, fair values are based on quoted market prices of instruments of a similar type, credit quality and structure, adjusted for differences between the quoted instruments and the instruments being valued. See "Note 8 - Fair Value Measurement," for additional information.
Investment securities having a fair value of $490.7 million at June 30, 2025 and $440.0 million at December 31, 2024 were pledged primarily to secure public deposits, some Trust department deposit accounts, and certain other borrowings. In accordance with legal provisions for alternatives other than pledging of investments, Mid Penn also obtains letters of credit from the FHLB to secure certain public deposits. These FHLB letter of credit commitments totaled $158.6 million as of June 30, 2025 and $156.0 million as of December 31, 2024.
The following tables present gross unrealized losses and fair value of debt investment securities aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position for the periods presented:
| (Dollars in thousands) | Less Than 12 Months | 12 Months or More | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
| June 30, 2025 | Number of Securities | Estimated Fair Value | Gross Unrealized Losses | Number of Securities | Estimated Fair Value | Gross Unrealized Losses | Number of Securities | Estimated Fair Value | Gross Unrealized Losses | ||||||||||||||||||||||||||||||||||||||||||||
| Available-for-sale debt securities: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| U.S. Treasury and U.S. government agencies | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Mortgage-backed U.S. government agencies | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| State and political subdivision obligations | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Corporate debt securities | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total available-for-sale debt securities | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Held-to-maturity debt securities: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| U.S. Treasury and U.S. government agencies | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mortgage-backed U.S. government agencies | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| State and political subdivision obligations | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Corporate debt securities | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total held-to-maturity debt securities | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
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MID PENN BANCORP, INC.
| (Dollars in thousands) | Less Than 12 Months | 12 Months or More | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
| December 31, 2024 | Number of Securities | Estimated Fair Value | Gross Unrealized Losses | Number of Securities | Estimated Fair Value | Gross Unrealized Losses | Number of Securities | Estimated Fair Value | Gross Unrealized Losses | ||||||||||||||||||||||||||||||||||||||||||||
| Available-for-sale securities: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| U.S. Treasury and U.S. government agencies | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Mortgage-backed U.S. government agencies | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| State and political subdivision obligations | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Corporate debt securities | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total available-for-sale securities | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Held-to-maturity securities: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| U.S. Treasury and U.S. government agencies | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Mortgage-backed U.S. government agencies | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| State and political subdivision obligations | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Corporate debt securities | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total held to maturity securities | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
At June 30, 2025 and 2024, the majority of the unrealized losses on securities in an unrealized loss position were attributable to U.S. Treasury and U.S. government agencies, and mortgage-backed U.S. government agencies.
Mid Penn had no securities considered by management to be credit related losses as of June 30, 2025 and 2024, and did not record any securities losses in the respective periods ended on these dates. Mid Penn does not consider the securities with unrealized losses on the respective dates to be credit related losses as the unrealized losses were deemed to be temporary changes in value related to market movements in interest yields at various periods similar to the maturity dates of holdings in the investment portfolio, and not reflective of an erosion of credit quality.
There were no
The table below illustrates the contractual maturity of debt investment securities at amortized cost and estimated fair value. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay with or without call or prepayment penalties.
| (In thousands) | Available-for-sale | Held-to-maturity | |||||||||||||||||||||
| June 30, 2025 | Amortized Cost | Fair Value | Amortized Cost | Fair Value | |||||||||||||||||||
| Due in 1 year or less | $ | $ | $ | $ | |||||||||||||||||||
| Due after 1 year but within 5 years | |||||||||||||||||||||||
| Due after 5 years but within 10 years | |||||||||||||||||||||||
| Due after 10 years | |||||||||||||||||||||||
| Mortgage-backed securities | |||||||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||
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MID PENN BANCORP, INC.
Note 4 - Loans and Allowance for Credit Losses - Loans
Loans, net of unearned income, are summarized as follows by portfolio segment:
| (In thousands) | June 30, 2025 | December 31, 2024 | |||||||||
| Commercial real estate | |||||||||||
| CRE Nonowner Occupied | $ | $ | |||||||||
| CRE Owner Occupied | |||||||||||
| Multifamily | |||||||||||
| Farmland | |||||||||||
| Total Commercial real estate | |||||||||||
Commercial and industrial | |||||||||||
Construction | |||||||||||
| Residential Construction | |||||||||||
| Other Construction | |||||||||||
| Total Construction | |||||||||||
| Residential mortgage | |||||||||||
| 1-4 Family 1st Lien | |||||||||||
| 1-4 Family Rental | |||||||||||
| HELOC and Junior Liens | |||||||||||
| Total Residential Mortgage | |||||||||||
| Consumer | |||||||||||
| Total loans | $ | $ | |||||||||
Total loans are stated at the amount of unpaid principal, adjusted for net deferred fees and costs. Net deferred loan fees were $3.6 million and $3.8 million as of June 30, 2025 and December 31, 2024, respectively.
Accrued interest receivable is not included in the amortized cost basis of Mid Penn's loans. Accrued interest receivable for loans totaled $24.7 million and $22.9 million as of June 30, 2025 and December 31, 2024, respectively, with no related ACL and was reported in other assets on the accompanying Consolidated Balance Sheet.
Past Due and Nonaccrual Loans
The performance and credit quality of the loan portfolio is monitored by analyzing the age of the loans receivable as determined by the length of time a recorded payment is past due. The classes of the loan portfolio summarized by the past due status as of June 30, 2025 and December 31, 2024, are summarized as follows:
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MID PENN BANCORP, INC.
| (In thousands) | 30-59 Days Past Due | 60-89 Days Past Due | Greater than 90 Days | Total Past Due | Current | Total Loans | Loans Receivable > 90 Days and Accruing | ||||||||||||||||||||||||||||||||||
| June 30, 2025 | |||||||||||||||||||||||||||||||||||||||||
| Commercial real estate | |||||||||||||||||||||||||||||||||||||||||
| CRE Nonowner Occupied | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| CRE Owner Occupied | |||||||||||||||||||||||||||||||||||||||||
| Multifamily | |||||||||||||||||||||||||||||||||||||||||
| Farmland | |||||||||||||||||||||||||||||||||||||||||
| Total Commercial real estate | |||||||||||||||||||||||||||||||||||||||||
| Commercial and industrial | |||||||||||||||||||||||||||||||||||||||||
| Construction | |||||||||||||||||||||||||||||||||||||||||
| Residential Construction | |||||||||||||||||||||||||||||||||||||||||
| Other Construction | |||||||||||||||||||||||||||||||||||||||||
| Total Construction | |||||||||||||||||||||||||||||||||||||||||
| Residential mortgage | |||||||||||||||||||||||||||||||||||||||||
| 1-4 Family 1st Lien | |||||||||||||||||||||||||||||||||||||||||
| 1-4 Family Rental | |||||||||||||||||||||||||||||||||||||||||
| HELOC and Junior Liens | |||||||||||||||||||||||||||||||||||||||||
| Total Residential Mortgage | |||||||||||||||||||||||||||||||||||||||||
| Consumer | |||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
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MID PENN BANCORP, INC.
| (In thousands) | 30-59 Days Past Due | 60-89 Days Past Due | Greater than 90 Days | Total Past Due | Current | Total Loans | Loans Receivable > 90 Days and Accruing | ||||||||||||||||||||||||||||||||||
| December 31, 2024 | |||||||||||||||||||||||||||||||||||||||||
| Commercial real estate | |||||||||||||||||||||||||||||||||||||||||
| CRE Nonowner Occupied | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| CRE Owner Occupied | |||||||||||||||||||||||||||||||||||||||||
| Multifamily | |||||||||||||||||||||||||||||||||||||||||
| Farmland | |||||||||||||||||||||||||||||||||||||||||
| Total Commercial real estate | |||||||||||||||||||||||||||||||||||||||||
| Commercial and industrial | |||||||||||||||||||||||||||||||||||||||||
| Construction | |||||||||||||||||||||||||||||||||||||||||
| Residential Construction | |||||||||||||||||||||||||||||||||||||||||
| Other Construction | |||||||||||||||||||||||||||||||||||||||||
| Total Construction | |||||||||||||||||||||||||||||||||||||||||
| Residential mortgage | |||||||||||||||||||||||||||||||||||||||||
| 1-4 Family 1st Lien | |||||||||||||||||||||||||||||||||||||||||
| 1-4 Family Rental | |||||||||||||||||||||||||||||||||||||||||
| HELOC and Junior Liens | |||||||||||||||||||||||||||||||||||||||||
| Total Residential Mortgage | |||||||||||||||||||||||||||||||||||||||||
| Consumer | |||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Loans are placed on nonaccrual status when management determines that the full repayment of principal and collection of interest according to contractual terms is no longer likely, generally when the loan becomes 90 days or more past due. Nonaccrual loans by loan portfolio class, including loans acquired with credit deterioration, as of June 30, 2025 and December 31, 2024 are summarized as follows:
| June 30, 2025 | December 31, 2024 | |||||||||||||||||||||||||||||||||||||
| (In thousands) | With a Related Allowance | Without a Related Allowance | Total | With a Related Allowance | Without a Related Allowance | Total | ||||||||||||||||||||||||||||||||
| Commercial real estate | ||||||||||||||||||||||||||||||||||||||
| CRE Nonowner Occupied | ||||||||||||||||||||||||||||||||||||||
| CRE Owner Occupied | ||||||||||||||||||||||||||||||||||||||
| Multifamily | ||||||||||||||||||||||||||||||||||||||
| Total Commercial real estate | ||||||||||||||||||||||||||||||||||||||
| Commercial and industrial | ||||||||||||||||||||||||||||||||||||||
| Construction | ||||||||||||||||||||||||||||||||||||||
| Residential Construction | ||||||||||||||||||||||||||||||||||||||
| Other Construction | ||||||||||||||||||||||||||||||||||||||
| Total Construction | ||||||||||||||||||||||||||||||||||||||
| Residential mortgage | ||||||||||||||||||||||||||||||||||||||
| 1-4 Family 1st Lien | ||||||||||||||||||||||||||||||||||||||
| 1-4 Family Rental | ||||||||||||||||||||||||||||||||||||||
| HELOC and Junior Liens | ||||||||||||||||||||||||||||||||||||||
| Total Residential Mortgage | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| Consumer | ||||||||||||||||||||||||||||||||||||||
| Total loans | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
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MID PENN BANCORP, INC.
The amount of interest income recognized on nonaccrual loans was approximately $674 thousand and $132 thousand during the three months ended June 30, 2025 and 2024, respectively. During the six months ended June 30, 2025 and 2024, the amount of interest income recognized on nonaccrual loans was approximately $801 thousand and $291 thousand, respectively.
Credit Quality Indicators
Mid Penn categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt, such as current financial information, historical payment experience, credit documentation, public information and current economic trends, among other factors. On a minimum of a quarterly basis, Mid Penn analyzes loans individually to classify the loans according to their credit risk. The following table presents risk ratings by loan portfolio segment and origination year, which is the year of origination or renewal.
PASS - This type of classification consists of 6 subcategories:
Nominal Risk / Pass - This loan classification is a credit extension of the highest quality.
Moderate Risk / Pass - This type of classification has strong financial ratios, substantial debt capacity, and low leverage with a very favorable comparison to industry peers or better than average improving trends.
Good Acceptable Risk / Pass - This type of classification is a reasonable credit risk having financial ratios on par with its peers and demonstrates slightly improving trends over time; the Borrower lists good quality assets with relatively low leverage and ample debt capacity.
Average Acceptable Risk / Pass - This type of classification has financial ratios and assets that are of above average quality; however, the leverage is worse than average compared to industry standards; the Borrower should have a good repayment history and possess consistent earnings with some growth.
Marginally Acceptable Risk / Pass - This type of classification has financial ratios consistent with industry averages, assets of average quality with ascertainable values, acceptable leverage, moderate capital assets and an acceptable reliance on trade debt; however, the Borrower demonstrates marginally adequate earnings, cash flow and debt service plus positive trends.
Weak/Monitor Risk (Watch list) / Pass - This type of classification has financial ratios that are slightly below standard industry averages and assets are below average quality with unstable values; fixed assets could be near or at the end of their useful life and liabilities may not match the asset structure.
SPECIAL MENTION - These credits have developing weaknesses deserving extra attention from the lender and lending management. They are currently protected, but potentially weak. The weakness may be, cash flow, leverage, liquidity, management, industry or other factors which may, if not checked or corrected, weaken the asset or inadequately protect the Bank’s credit position at some future date.
SUBSTANDARD - These credit extensions also have well defined weaknesses, which are inadequately protected by the current worth and debt service capacity of the Borrowers or the collateral pledged, if any. The repayment of principal and interest as originally intended can be jeopardized by defined weaknesses related to adverse financial, managerial, economic, market or political conditions.
DOUBTFUL - These credits have definite weaknesses inherent in Substandard loans with added characteristics that are severe enough to make further collection in full highly questionable and improbable based on the current trends.
LOSS - These loans are considered uncollectible and no longer a viable asset of the Bank. They lack an identifiable source of repayment based on an inability to generate sufficient cash flow to service their debt. All trends are negative and the damage to the financial condition of the Borrower can’t be reversed now or in the near future.
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MID PENN BANCORP, INC.
The following table presents risk ratings by loan portfolio segment and origination year, which is the year of origination or renewal.
| June 30, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||
| Term Loans Amortized Cost Basis by Origination Year | Revolving Loans Amortized Cost Basis | ||||||||||||||||||||||||||||||||||||||||||||||
| (In thousands) | 2025 | 2024 | 2023 | 2022 | 2021 | Prior | Total | ||||||||||||||||||||||||||||||||||||||||
| CRE Nonowner Occupied | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Special mention | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard or lower | |||||||||||||||||||||||||||||||||||||||||||||||
| Total CRE Nonowner Occupied | |||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge offs | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Current period recoveries | |||||||||||||||||||||||||||||||||||||||||||||||
| Net charge offs | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| CRE Owner Occupied | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||
| Special mention | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard or lower | |||||||||||||||||||||||||||||||||||||||||||||||
| Total CRE Owner Occupied | |||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Current period recoveries | |||||||||||||||||||||||||||||||||||||||||||||||
| Net recoveries | |||||||||||||||||||||||||||||||||||||||||||||||
| Multifamily | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||
| Special mention | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard or lower | |||||||||||||||||||||||||||||||||||||||||||||||
| Total Multifamily | |||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Current period recoveries | |||||||||||||||||||||||||||||||||||||||||||||||
| Net charge offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Farmland | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||
| Special mention | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard or lower | |||||||||||||||||||||||||||||||||||||||||||||||
| Total Farmland | |||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Current period recoveries | |||||||||||||||||||||||||||||||||||||||||||||||
| Net charge offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Commercial and industrial | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||
| Special mention | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard or lower | |||||||||||||||||||||||||||||||||||||||||||||||
| Total commercial and industrial | |||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge offs | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Current period recoveries | |||||||||||||||||||||||||||||||||||||||||||||||
| Net charge offs | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
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MID PENN BANCORP, INC.
| Residential Construction | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||
| Special mention | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard or lower | |||||||||||||||||||||||||||||||||||||||||||||||
| Total Residential Construction | |||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Current period recoveries | |||||||||||||||||||||||||||||||||||||||||||||||
| Net recoveries | |||||||||||||||||||||||||||||||||||||||||||||||
| Other Construction | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||
| Special mention | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard or lower | |||||||||||||||||||||||||||||||||||||||||||||||
| Total Other Construction | |||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Current period recoveries | |||||||||||||||||||||||||||||||||||||||||||||||
| Net recoveries | |||||||||||||||||||||||||||||||||||||||||||||||
| 1-4 Family 1st Lien | |||||||||||||||||||||||||||||||||||||||||||||||
| Performing | |||||||||||||||||||||||||||||||||||||||||||||||
| Non-performing | |||||||||||||||||||||||||||||||||||||||||||||||
| Total 1-4 Family 1st Lien | |||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Current period recoveries | |||||||||||||||||||||||||||||||||||||||||||||||
| Net recoveries | |||||||||||||||||||||||||||||||||||||||||||||||
| 1-4 Family Rental | |||||||||||||||||||||||||||||||||||||||||||||||
| Performing | |||||||||||||||||||||||||||||||||||||||||||||||
| Non-performing | |||||||||||||||||||||||||||||||||||||||||||||||
| Total 1-4 Family Rental | |||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Current period recoveries | |||||||||||||||||||||||||||||||||||||||||||||||
| Net recoveries | |||||||||||||||||||||||||||||||||||||||||||||||
| HELOC and Junior Liens | |||||||||||||||||||||||||||||||||||||||||||||||
| Performing | |||||||||||||||||||||||||||||||||||||||||||||||
| Non-performing | |||||||||||||||||||||||||||||||||||||||||||||||
| Total HELOC and Junior Liens | |||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Current period recoveries | |||||||||||||||||||||||||||||||||||||||||||||||
| Net charge offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Consumer | |||||||||||||||||||||||||||||||||||||||||||||||
| Performing | |||||||||||||||||||||||||||||||||||||||||||||||
| Non-performing | |||||||||||||||||||||||||||||||||||||||||||||||
| Total consumer | |||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge offs | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Current period recoveries | |||||||||||||||||||||||||||||||||||||||||||||||
| Net charge offs | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Total | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Special mention | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard or lower | |||||||||||||||||||||||||||||||||||||||||||||||
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| Performing | |||||||||||||||||||||||||||||||||||||||||||||||
| Nonperforming | |||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
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MID PENN BANCORP, INC.
| December 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||
| Term Loans Amortized Cost Basis by Origination Year | Revolving Loans Amortized Cost Basis | ||||||||||||||||||||||||||||||||||||||||||||||
| (In thousands) | 2024 | 2023 | 2022 | 2021 | 2020 | Prior | Total | ||||||||||||||||||||||||||||||||||||||||
| CRE Nonowner Occupied | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Special mention | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard or lower | |||||||||||||||||||||||||||||||||||||||||||||||
| Total CRE Nonowner Occupied | |||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Current period recoveries | |||||||||||||||||||||||||||||||||||||||||||||||
| Net recoveries | |||||||||||||||||||||||||||||||||||||||||||||||
| CRE Owner Occupied | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||
| Special mention | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard or lower | |||||||||||||||||||||||||||||||||||||||||||||||
| Total CRE Owner Occupied | |||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Current period recoveries | |||||||||||||||||||||||||||||||||||||||||||||||
| Net recoveries | |||||||||||||||||||||||||||||||||||||||||||||||
| Multifamily | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||
| Special mention | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard or lower | |||||||||||||||||||||||||||||||||||||||||||||||
| Total Multifamily | |||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Current period recoveries | |||||||||||||||||||||||||||||||||||||||||||||||
| Net charge offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Farmland | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||
| Special mention | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard or lower | |||||||||||||||||||||||||||||||||||||||||||||||
| Total Farmland | |||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Current period recoveries | |||||||||||||||||||||||||||||||||||||||||||||||
| Net charge offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Commercial and industrial | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||
| Special mention | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard or lower | |||||||||||||||||||||||||||||||||||||||||||||||
| Total commercial and industrial | |||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge offs | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||
| Current period recoveries | |||||||||||||||||||||||||||||||||||||||||||||||
| Net charge offs | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||
| Residential construction | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||
| Special mention | |||||||||||||||||||||||||||||||||||||||||||||||
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MID PENN BANCORP, INC.
| Substandard or lower | |||||||||||||||||||||||||||||||||||||||||||||||
| Total Residential construction | |||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Current period recoveries | |||||||||||||||||||||||||||||||||||||||||||||||
| Net recoveries | |||||||||||||||||||||||||||||||||||||||||||||||
| Other construction | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||
| Special mention | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard or lower | |||||||||||||||||||||||||||||||||||||||||||||||
| Total Other construction | |||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Current period recoveries | |||||||||||||||||||||||||||||||||||||||||||||||
| Net recoveries | |||||||||||||||||||||||||||||||||||||||||||||||
| 1-4 Family 1st Lien | |||||||||||||||||||||||||||||||||||||||||||||||
| Performing | |||||||||||||||||||||||||||||||||||||||||||||||
| Non-performing | |||||||||||||||||||||||||||||||||||||||||||||||
| Total 1-4 Family 1st Lien | |||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge offs | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Current period recoveries | |||||||||||||||||||||||||||||||||||||||||||||||
| Net recoveries | |||||||||||||||||||||||||||||||||||||||||||||||
| 1-4 Family Rental | |||||||||||||||||||||||||||||||||||||||||||||||
| Performing | |||||||||||||||||||||||||||||||||||||||||||||||
| Non-performing | |||||||||||||||||||||||||||||||||||||||||||||||
| Total 1-4 Family Rental | |||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge offs | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Current period recoveries | |||||||||||||||||||||||||||||||||||||||||||||||
| Net recoveries | |||||||||||||||||||||||||||||||||||||||||||||||
| HELOC and Junior Liens | |||||||||||||||||||||||||||||||||||||||||||||||
| Performing | |||||||||||||||||||||||||||||||||||||||||||||||
| Non-performing | |||||||||||||||||||||||||||||||||||||||||||||||
| Total HELOC and Junior Liens | |||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge offs | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Current period recoveries | |||||||||||||||||||||||||||||||||||||||||||||||
| Net charge offs | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Consumer | |||||||||||||||||||||||||||||||||||||||||||||||
| Performing | |||||||||||||||||||||||||||||||||||||||||||||||
| Non-performing | |||||||||||||||||||||||||||||||||||||||||||||||
| Total consumer | |||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge offs | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Current period recoveries | |||||||||||||||||||||||||||||||||||||||||||||||
| Net charge offs | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Total | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Special mention | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard or lower | |||||||||||||||||||||||||||||||||||||||||||||||
| Performing | |||||||||||||||||||||||||||||||||||||||||||||||
| Nonperforming | |||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
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MID PENN BANCORP, INC.
Mid Penn had no loans classified as "doubtful" as of June 30, 2025 and December 31, 2024. There was $11 thousand and $861 thousand in loans for which formal foreclosure proceedings were in process at June 30, 2025 and December 31, 2024, respectively.
Collateral-Dependent Loans
A financial asset is considered to be collateral-dependent when the debtor is experiencing financial difficulty and repayment is expected to be provided substantially through the sale or operation of the collateral. For all classes of financial assets deemed collateral-dependent, Mid Penn elected the practical expedient to estimate expected credit losses based on the collateral’s fair value less cost to sell. In most cases, Mid Penn records a partial charge-off to reduce the loan’s carrying value to the collateral’s fair value less cost to sell. Substantially all of the collateral supporting collateral-dependent financial assets consists of various types of real estate, including residential properties; commercial properties such as retail centers, office buildings, and lodging; agriculture land; and vacant land. Total collateral-dependent loans as of June 30, 2025 were $18.2 million.
Allowance for Credit Losses
Mid Penn’s ACL - loans methodology follows guidance within FASB ASC Subtopic 326-20. The ACL - loans is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Credit quality within the loan portfolio is continuously monitored by management and is reflected within the ACL - loans. The ACL - loans is an estimate of expected losses inherent within Mid Penn’s existing loan portfolio. The ACL - loans is adjusted through the PCL and reduced by the charge off of loan amounts, net of recoveries.
The loan loss estimation process involves procedures to appropriately consider the unique characteristics of Mid Penn’s loan portfolio segments. When computing allowance levels, credit loss assumptions are estimated using a model that categorizes loan pools based on loss history and other credit trends and risk characteristics, including current conditions and reasonable and supportable forecasts about the future. Evaluations of the portfolio and individual credits are inherently subjective, as they require estimates, assumptions and judgments as to the facts and circumstances of particular situations. Determining the appropriateness of the allowance is complex and requires judgement by management about the effect of matters that are inherently uncertain. In future periods, evaluations of the overall loan portfolio, in light of the factors and forecasts then prevailing, may result in significant changes in the ACL and credit loss expense.
Mid Penn estimates the ACL using relevant available information, from internal and external sources, relating to past events, current conditions and reasonable and supportable forecasts. Mid Penn uses a third-party software application to calculate the quantitative portion of the ACL using a methodology and assumptions specific to each loan pool. The qualitative portion of the allowance is based on general economic conditions and other internal and external factors affecting Mid Penn as a whole, as well as specific loans. Factors considered include the following: lending process, concentrations of credit, and peer group divergence. The quantitative and qualitative portions of the allowance are added together to determine the total ACL, which reflects management’s expectations of future conditions based on reasonable and supportable forecasts.
The methodology for estimating the amount of expected credit losses reported in the ACL has two basic components: a collective, or pooled, component for estimated expected credit losses for pools of loans that share similar risk characteristics, and an asset-specific component involving individual loans that do not share risk characteristics with other loans and the measurement of expected credit losses for such individual loans. In estimating the ACL for the collective component, loans are segregated into loan pools based on loan purpose codes and similar risk characteristics.
The commercial real estate and residential mortgage loan portfolio segments include loans for both commercial and residential properties that are secured by real estate. The underwriting process for these loans includes analysis of the financial position and strength of both the borrower and, if applicable, guarantor, experience with similar projects in the past, market demand and prospects for successful completion of the proposed project within the established budget and schedule, values of underlying collateral, availability of permanent financing, maximum loan-to-value ratios, minimum equity requirements, acceptable amortization periods and minimum debt service coverage requirements, based on property type. The borrower’s financial strength and capacity to repay their obligations remain the primary focus of underwriting. Financial strength is evaluated based upon analytical tools that consider historical and projected cash flows and performance, in addition to analysis of the proposed project for income-producing properties. Additional support offered by guarantors is also considered when applicable. Ultimate repayment of these loans is sensitive to interest rate changes, general economic conditions, liquidity and availability of long-term financing.
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MID PENN BANCORP, INC.
The commercial and industrial loan portfolio segment includes commercial loans made to many types of businesses for various purposes, such as short-term working capital loans that are usually secured by accounts receivable and inventory, equipment and fixed asset purchases that are secured by those assets, and term financing for those within Mid Penn’s geographic markets. Mid Penn’s credit underwriting process for commercial and industrial loans includes analysis of historical and projected cash flows and performance, evaluation of financial strength of both borrowers and guarantors as reflected in current and detailed financial information, and evaluation of underlying collateral to support the credit.
The consumer loan portfolio segment is comprised of loans which are underwritten after evaluating a borrower’s capacity, credit and collateral. Several factors are considered when assessing a borrower’s capacity, including the borrower’s employment, income, current debt, assets and level of equity in the property. Credit is assessed using a credit report that provides credit scores and the borrower’s current and past information about their credit history. Loan-to-value and debt-to-income ratios, loan amount and lien position are also considered in assessing whether to originate a loan. These borrowers are particularly susceptible to downturns in economic trends, such as conditions that negatively affect housing prices and demand and levels of unemployment.
Mid Penn utilizes a DCF method to estimate the quantitative portion of the allowance for credit losses for loan pools. The DCF is based off of historical losses, including peer data, which is correlated to national unemployment and GDP.
The PD and LGD measures are used in conjunction with prepayment data as inputs into the DCF model to calculate the cash flows at the individual loan level. Contractual cash flows based on loan terms are adjusted for PD, LGD and prepayments to derive loss cash flows. These loss cash flows are discounted by the loan’s coupon rate to arrive at the discounted cash flow based quantitative loss. The prepayment studies are updated quarterly by a third-party for each applicable pool.
Mid Penn determined that reasonable and supportable forecasts could be made for a twelve-month period for all of its loan pools. To the extent the lives of the loans in the Loans held for investment (LHFI) portfolio extend beyond this forecast period, Mid Penn uses a reversion period of four quarters and reverts to the historical mean on a straight-line basis over the remaining life of the loans.
Qualitative factors used in the ACL methodology include the following:
•Lending process
•Concentrations of credit
•Peer Group Divergence
The ACL for individual loans, such as non-accrual and PCD, that do not share risk characteristics with other loans is measured as the difference between the discounted value of expected future cash flows, based on the effective interest rate at origination, and the amortized cost basis of the loan, or the net realizable value. The ACL is the difference between the loan’s net realizable value and its amortized cost basis (net of previous charge-offs and deferred loan fees and costs), except for collateral-dependent loans. A loan is collateral dependent when the borrower is experiencing financial difficulty and repayment of the loan is expected to be provided substantially through the sale of the collateral. The expected credit loss for collateral-dependent loans is measured as the difference between the amortized cost basis of the loan and the fair value of the collateral, adjusted for the estimated cost to sell. Fair value estimates for collateral-dependent loans are derived from appraised values based on the current market value or the "as is" value of the collateral, normally from recently received and reviewed appraisals. Current appraisals are ordered on a regular basis based on the inspection date or more often if market conditions necessitate. Appraisals are obtained from state-certified appraisers and are based on certain assumptions, which may include construction or development status and the highest and best use of the property. These appraisals are reviewed by Mid Penn’s Appraisal Review Department to ensure they are acceptable, and values are adjusted down for costs associated with asset disposal. If the calculated expected credit loss is determined to be permanent or not recoverable, the amount of the expected credit loss is charged off.
Mid Penn may also purchase loans or acquire loans through a business combination. At the purchase or acquisition date, loans are evaluated to determine whether there has been more than insignificant credit deterioration since origination. Loans that have experienced more than insignificant credit deterioration since origination are referred to as PCD loans. In its evaluation of whether a loan has experienced more than insignificant deterioration in credit quality since origination, Mid Penn takes into consideration loan grades, past due and nonaccrual status. Mid Penn may also consider external credit rating agency ratings for borrowers and for non-commercial loans, FICO score or band, probability of default levels, and number of times past due. At the purchase or acquisition date, the amortized cost basis of PCD loans is equal to the
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MID PENN BANCORP, INC.
purchase price and an initial estimate of credit losses. The initial recognition of expected credit losses on PCD loans has no impact on net income. When the initial measurement of expected credit losses on PCD loans is calculated on a pooled loan basis, the expected credit losses are allocated to each loan within the pool. Any difference between the initial amortized cost basis and the unpaid principal balance of the loan represents a noncredit discount or premium, which is accreted (or amortized) into interest income over the life of the loan. Subsequent changes to the ACL on PCD loans are recorded through the PCL. For purchased loans that are not deemed to have experienced more than insignificant credit deterioration since origination and are therefore not deemed PCD, any discounts or premiums included in the purchase price are accreted (or amortized) over the contractual life of the individual loan.
Loans are charged off against the ACL-loans, with any subsequent recoveries credited back to the ACL-loans account. Expected recoveries may not exceed the aggregate of amounts previously charged off and expected to be charged off.
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The following tables present the activity in the ACL - loans by portfolio segment for the three and six months ended June 30, 2025 and the three and six months ended June 30, 2024:
| (In thousands) | Balance at March 31, 2025 | PCD Loans | Charge offs | Recoveries | Net loans (charged off) recovered | Provision/(Benefit) for credit losses (1) | Three Months Ended June 30, 2025 | |||||||||||||||||||||||||||||||||||||
| Commercial Real Estate | ||||||||||||||||||||||||||||||||||||||||||||
| CRE Nonowner Occupied | $ | $ | $ | ( | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||
| CRE Owner Occupied | ||||||||||||||||||||||||||||||||||||||||||||
| Multifamily | ( | |||||||||||||||||||||||||||||||||||||||||||
| Farmland | ||||||||||||||||||||||||||||||||||||||||||||
| Commercial and industrial | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Construction | ||||||||||||||||||||||||||||||||||||||||||||
| Residential Construction | ||||||||||||||||||||||||||||||||||||||||||||
| Other Construction | ||||||||||||||||||||||||||||||||||||||||||||
| Residential Mortgage | ||||||||||||||||||||||||||||||||||||||||||||
| 1-4 Family 1st Lien | ||||||||||||||||||||||||||||||||||||||||||||
| 1-4 Family Rental | ||||||||||||||||||||||||||||||||||||||||||||
| HELOC and Junior Liens | ||||||||||||||||||||||||||||||||||||||||||||
| Consumer | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | ( | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||
| (In thousands) | Balance at December 31, 2024 | PCD Loans | Charge offs | Recoveries | Net loans (charged off) recovered | Provision/(Benefit) for credit losses (1) | Six Months Ended June 30, 2025 | |||||||||||||||||||||||||||||||||||||
| Commercial Real Estate | ||||||||||||||||||||||||||||||||||||||||||||
| CRE Nonowner Occupied | $ | $ | $ | ( | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||
| CRE Owner Occupied | ||||||||||||||||||||||||||||||||||||||||||||
| Multifamily | ( | |||||||||||||||||||||||||||||||||||||||||||
| Farmland | ||||||||||||||||||||||||||||||||||||||||||||
| Commercial and industrial | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Construction | ||||||||||||||||||||||||||||||||||||||||||||
| Residential Construction | ||||||||||||||||||||||||||||||||||||||||||||
| Other Construction | ||||||||||||||||||||||||||||||||||||||||||||
| Residential Mortgage | ||||||||||||||||||||||||||||||||||||||||||||
| 1-4 Family 1st Lien | ||||||||||||||||||||||||||||||||||||||||||||
| 1-4 Family Rental | ||||||||||||||||||||||||||||||||||||||||||||
| HELOC and Junior Liens | ||||||||||||||||||||||||||||||||||||||||||||
| Consumer | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | ( | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||
(1) Includes a $2.3 million initial provision on non-PCD loans acquired in the William Penn transaction
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| (In thousands) | Balance at March 31, 2024 | Charge offs | Recoveries | Net loans (charged off) recovered | Provision/(Benefit) for credit losses | Three Months Ended June 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||
| Commercial Real Estate | ||||||||||||||||||||||||||||||||||||||||||||||||||
| CRE Nonowner Occupied | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
| CRE Owner Occupied | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Multifamily | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Farmland | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial and industrial | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
| Construction | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Residential Construction | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other Construction | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Residential Mortgage | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 1-4 Family 1st Lien | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 1-4 Family Rental | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| HELOC and Junior Liens | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Consumer | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | ( | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
| (In thousands) | Balance at December 31, 2023 | Charge offs | Recoveries | Net loans (charged off) recovered | Provision/(Benefit) for credit losses | Six Months Ended June 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||
| Commercial Real Estate | ||||||||||||||||||||||||||||||||||||||||||||||||||
| CRE Nonowner Occupied | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
| CRE Owner Occupied | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Multifamily | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Farmland | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial and industrial | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Construction | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Residential Construction | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other Construction | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Residential Mortgage | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 1-4 Family 1st Lien | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| 1-4 Family Rental | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
| HELOC and Junior Liens | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
| Consumer | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | ( | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
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MID PENN BANCORP, INC.
The following table presents the ACL for loans and the amortized cost basis of the loans by the measurement methodology used as of June 30, 2025 and December 31, 2024:
| (In thousands) | ACL - Loans | Loans | |||||||||||||||||||||||||||||||||
| June 30, 2025 | Collectively Evaluated for Credit Loss | Individually Evaluated for Credit Loss | Total ACL - Loans | Collectively Evaluated for Credit Loss | Individually Evaluated for Credit Loss | Total Loans | |||||||||||||||||||||||||||||
| Commercial real estate | |||||||||||||||||||||||||||||||||||
| CRE Nonowner Occupied | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| CRE Owner Occupied | |||||||||||||||||||||||||||||||||||
| Multifamily | |||||||||||||||||||||||||||||||||||
| Farmland | |||||||||||||||||||||||||||||||||||
| Commercial and industrial | |||||||||||||||||||||||||||||||||||
| Construction | |||||||||||||||||||||||||||||||||||
| Residential Construction | |||||||||||||||||||||||||||||||||||
| Other Construction | |||||||||||||||||||||||||||||||||||
| Residential mortgage | |||||||||||||||||||||||||||||||||||
| 1-4 Family 1st Lien | |||||||||||||||||||||||||||||||||||
| 1-4 Family Rental | |||||||||||||||||||||||||||||||||||
| HELOC and Junior Liens | |||||||||||||||||||||||||||||||||||
| Consumer | |||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| (In thousands) | ACL - Loans | Loans | |||||||||||||||||||||||||||||||||
| December 31, 2024 | Collectively Evaluated for Credit Loss | Individually Evaluated for Credit Loss | Total ACL - Loans | Collectively Evaluated for Credit Loss | Individually Evaluated for Credit Loss | Total Loans | |||||||||||||||||||||||||||||
| Commercial real estate | |||||||||||||||||||||||||||||||||||
| CRE Nonowner Occupied | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| CRE Owner Occupied | |||||||||||||||||||||||||||||||||||
| Multifamily | |||||||||||||||||||||||||||||||||||
| Farmland | |||||||||||||||||||||||||||||||||||
| Commercial and industrial | |||||||||||||||||||||||||||||||||||
| Construction | |||||||||||||||||||||||||||||||||||
| Residential Construction | |||||||||||||||||||||||||||||||||||
| Other Construction | |||||||||||||||||||||||||||||||||||
| Residential mortgage | |||||||||||||||||||||||||||||||||||
| 1-4 Family 1st Lien | |||||||||||||||||||||||||||||||||||
| 1-4 Family Rental | |||||||||||||||||||||||||||||||||||
| HELOC and Junior Liens | |||||||||||||||||||||||||||||||||||
| Consumer | |||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
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Modifications to Borrowers Experiencing Financial Difficulty
From time to time, we may modify certain loans to borrowers who are experiencing financial difficulty. In some cases, these modifications may result in new loans. Loan modifications to borrowers experiencing financial difficulty may be in the form of principal forgiveness, an interest rate reduction, an other-than-insignificant payment delay, or a term extension, or a combination thereof, among other things.
There were no
Information related to loans modified (by type of modification) for the three and six months ended June 30, 2024, whereby the borrower was experiencing financial difficulty at the time of modification, is set forth in the following table:
There were no new modifications to borrowers experiencing financial difficulty for the three months ended June 30, 2024.
| (In thousands) | Interest Only | Term Extension | Combination: Interest Only and Term Extension | Total | % of Total Class of Financing Receivable | ||||||||||||||||||||||||
| Six months ended June 30, 2024 | |||||||||||||||||||||||||||||
| HELOC and Junior Liens | $ | $ | $ | $ | % | ||||||||||||||||||||||||
| Total Residential Mortgage | % | ||||||||||||||||||||||||||||
| Total loans | $ | $ | $ | $ | |||||||||||||||||||||||||
The financial effects of the interest-only loan modifications reduced the monthly payment amounts for the borrower and the term extensions in the table above added 2.0 years to the life of the loan, which also reduced the monthly payment amounts for the borrower.
As of June 30, 2025, there were no defaulted modified loans, as all modified loans were current with respect to their associated forbearance agreements. There were also no defaults on modified loans within twelve months of restructure during 2024.
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Note 5 - Deposits
Deposits consisted of the following as of June 30, 2025 and December 31, 2024:
| (Dollars in thousands) | June 30, 2025 | % of Total Deposits | December 31, 2024 | % of Total Deposits | |||||||||||||||||||
| Noninterest-bearing demand deposits | $ | % | $ | % | |||||||||||||||||||
| Interest-bearing demand deposits | % | % | |||||||||||||||||||||
| Money market | % | % | |||||||||||||||||||||
| Savings | % | % | |||||||||||||||||||||
| Total demand and savings | % | % | |||||||||||||||||||||
| Time | % | % | |||||||||||||||||||||
| Total deposits | $ | % | $ | % | |||||||||||||||||||
The scheduled maturities of time deposits at June 30, 2025 were as follows:
| Time Deposits | |||||||||||
| (In thousands) | Less than $250,000 | $250,000 or more | |||||||||
| Maturing in 2025 | $ | $ | |||||||||
| Maturing in 2026 | |||||||||||
| Maturing in 2027 | |||||||||||
| Maturing in 2028 | |||||||||||
| Maturing in 2029 | |||||||||||
| Maturing thereafter | |||||||||||
| $ | $ | ||||||||||
Mid Penn had $299.8 million and $319.8 million in brokered certificates of deposits as of June 30, 2025 and December 31, 2024, respectively. As of June 30, 2025 and December 31, 2024, Mid Penn had $103.7 million and $83.7 million of CDAR (Certificate of Deposit Account Registry) deposits, respectively.
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Note 6 - Derivative Financial Instruments
Mid Penn manages its exposure to certain interest rate risks through the use of derivatives; however, none are entered into for speculative purposes. In 2025, Mid Penn entered into outstanding derivative contracts designated as hedges. Mid Penn’s free-standing derivative financial instruments are required to be carried at their fair value on the Consolidated Balance Sheets.
Loan-level Interest Rate Swaps
Mid Penn enters into loan-level interest rate swaps with certain qualifying commercial loan customers to meet their interest rate risk management needs. Mid Penn simultaneously enters into interest rate swaps with dealer counterparties, with identical notional amounts and terms. The net result of the offsetting customer and dealer counterparty swap agreements is that the customer pays a fixed rate of interest and Mid Penn receives a floating rate. Mid Penn’s loan-level interest rate swaps are considered derivatives but are not accounted for using hedge accounting.
Information related to loan level swaps is set forth in the following table:
| June 30, 2025 | December 31, 2024 | ||||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| Interest rate swaps on loans with customers | |||||||||||||||||||||||
| Notional amount | $ | $ | |||||||||||||||||||||
| Weighted average remaining term (years) | |||||||||||||||||||||||
| Receive fixed rate (weighted average) | % | % | |||||||||||||||||||||
| Pay variable rate (weighted average) | % | % | |||||||||||||||||||||
Estimated fair value (1) | $ | $ | |||||||||||||||||||||
| June 30, 2025 | December 31, 2024 | ||||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| Interest rate swaps on loans with correspondents | |||||||||||||||||||||||
| Notional amount | $ | $ | |||||||||||||||||||||
| Weighted average remaining term (years) | |||||||||||||||||||||||
| Receive variable rate (weighted average) | % | % | |||||||||||||||||||||
| Pay fixed rate (weighted average) | % | % | |||||||||||||||||||||
Estimated fair value (2) | $ | $ | |||||||||||||||||||||
(1) The net amount of the estimated fair value is disclosed in Other Liabilities on the Consolidated Balance Sheet.
(2) The net amount of the estimated fair value is disclosed in Other Assets on the Consolidated Balance Sheet.
Cash Flow Hedges of Interest Rate Risk
Mid Penn’s objectives in using interest rate derivatives are to reduce volatility in net interest income and to manage its exposure to interest rate movements. To accomplish this objective, Mid Penn primarily uses interest rate swaps as part of its interest rate risk management strategy.
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Information related to cash flow hedges is set forth in the following table:
| June 30, 2025 | December 31, 2024 | ||||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| Cash flow hedges | |||||||||||||||||||||||
| Notional amount | $ | $ | |||||||||||||||||||||
| Weighted average remaining term (years) | |||||||||||||||||||||||
| Pay fixed rate (weighted average) | % | % | |||||||||||||||||||||
| Receive variable rate (weighted average) | % | % | |||||||||||||||||||||
Estimated fair value (1) | $ | $ | |||||||||||||||||||||
(1) Estimated fair value, net of accrued interest receivable, is disclosed in Other Assets on the Consolidated Balance Sheet.
For derivatives designated and that qualify as cash flow hedges of interest rate risk, the unrealized gain or loss on the derivative is recorded in AOCI and subsequently reclassified into interest income in the same period during which the hedged transaction affects earnings. Amounts reported in AOCI related to derivatives will be reclassified to interest income as interest payments are made on Mid Penn’s variable-rate liabilities. During the next twelve months, Mid Penn estimates that an additional $633 thousand will be reclassified as a decrease to interest expense.
Note 7 - Accumulated Other Comprehensive (Loss) Income
The changes in each component of accumulated other comprehensive loss, net of taxes, are as follows:
(In thousands) | Unrealized Loss on Securities | Unrealized Holding Losses on Interest Rate Derivatives used in Cash Flow Hedges | Defined Benefit Plans | Total | |||||||||||||||||||
| Balance at March 31, 2025 | $ | ( | $ | $ | $ | ( | |||||||||||||||||
| OCI before reclassifications | ( | ( | |||||||||||||||||||||
| Amounts reclassified from AOCI | |||||||||||||||||||||||
| Balance at June 30, 2025 | $ | ( | $ | $ | ( | ||||||||||||||||||
| Balance at December 31, 2024 | $ | ( | $ | $ | $ | ( | |||||||||||||||||
| OCI before reclassifications | ( | ||||||||||||||||||||||
| Amounts reclassified from AOCI | ( | ( | |||||||||||||||||||||
| Balance at June 30, 2025 | $ | ( | $ | $ | $ | ( | |||||||||||||||||
| Balance at March 31, 2024 | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
| OCI before reclassifications | ( | ( | ( | ||||||||||||||||||||
| Amounts reclassified from AOCI | |||||||||||||||||||||||
| Balance at June 30, 2024 | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
| Balance at December 31, 2023 | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
| OCI before reclassifications | ( | ( | |||||||||||||||||||||
| Amounts reclassified from AOCI | ( | ( | |||||||||||||||||||||
| Balance at June 30, 2024 | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
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Note 8 - Fair Value Measurement
Mid Penn uses estimates of fair value in applying various accounting standards for its consolidated financial statements on either a recurring or non-recurring basis. Fair value is defined as the price to sell an asset or transfer a liability in an orderly transaction between willing and able market participants. Mid Penn groups its assets and liabilities measured at fair value in three hierarchy levels, based on the observability and transparency of the inputs. The fair value hierarchy is as follows:
Level 1 - Inputs that represent quoted prices for identical instruments in active markets.
Level 2 - Inputs that represent quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability.
Level 3 - Inputs that are largely unobservable, as little or no market data exists for the instrument being valued.
A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below.
There were no transfers of assets between fair value Level 1 and Level 2 during the three and six months ended June 30, 2025 or the year ended December 31, 2024.
The following tables illustrate the assets and liabilities measured at fair value on a recurring basis and reported on the Consolidated Balance Sheets.
| June 30, 2025 | ||||||||||||||||||||||||||
| (In thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||
| Available-for-sale securities: | ||||||||||||||||||||||||||
| U.S. Treasury and U.S. government agencies | $ | $ | $ | $ | ||||||||||||||||||||||
| Mortgage-backed U.S. government agencies | ||||||||||||||||||||||||||
| State and political subdivision obligations | ||||||||||||||||||||||||||
| Corporate debt securities | ||||||||||||||||||||||||||
| Equity securities | ||||||||||||||||||||||||||
| Loans held for sale | ||||||||||||||||||||||||||
| Other assets: | ||||||||||||||||||||||||||
| Derivative assets | ||||||||||||||||||||||||||
| Other liabilities: | ||||||||||||||||||||||||||
| Derivative liabilities | ||||||||||||||||||||||||||
| December 31, 2024 | ||||||||||||||||||||||||||
| (In thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||
| Available-for-sale securities: | ||||||||||||||||||||||||||
| U.S. Treasury and U.S. government agencies | $ | $ | $ | $ | ||||||||||||||||||||||
| Mortgage-backed U.S. government agencies | ||||||||||||||||||||||||||
| State and political subdivision obligations | ||||||||||||||||||||||||||
| Corporate debt securities | ||||||||||||||||||||||||||
| Equity securities | ||||||||||||||||||||||||||
| Loans held for sale | ||||||||||||||||||||||||||
| Other assets: | ||||||||||||||||||||||||||
| Derivative assets | ||||||||||||||||||||||||||
| Other liabilities: | ||||||||||||||||||||||||||
| Derivative Liabilities | ||||||||||||||||||||||||||
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The valuation methodologies and assumptions used to estimate the fair value for the items in the preceding tables are as follows:
Available for sale investment securities - The fair value of equity and debt securities classified as available for sale is determined by obtaining quoted market prices on nationally recognized securities exchanges (Level 1), or matrix pricing (Level 2), which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities, but rather, relying on the securities’ relationship to other benchmark quoted prices.
Equity securities - The fair value of equity securities with readily determinable fair values is recorded on the Consolidated Balance Sheet, with realized and unrealized gains and losses reported in other expense on the Consolidated Statements of Income.
Loans held for sale - This category includes mortgage loans held for sale that are measured at fair value. Fair values as of June 30, 2025 were measured as the price that secondary market investors were offering for loans with similar characteristics.
Derivative instruments - Interest rate swaps are measured by alternative pricing sources with reasonable levels of price transparency in markets that are not active. Based on the complex nature of interest rate swap agreements, the markets these instruments trade in are not as efficient and are less liquid than that of the more mature Level 1 markets. These markets do, however, have comparable, observable inputs in which an alternative pricing source values these assets in order to arrive at a fair value. These characteristics classify interest rate swap agreements as Level 2.
Mortgage banking derivatives - represent the fair value of mortgage banking derivatives in the form of interest rate locks and forward commitments with secondary market investors and the fair value of interest rate swaps. The fair values of Mid Penn’s interest rate locks, forward commitments and interest rate swaps represent the amounts that would be required to settle the derivative financial instruments at the balance sheet date. These characteristics classify Mortgage banking derivatives as Level 2. As of June 30, 2025, Mortgage banking derivatives are not considered material.
Certain financial assets and financial liabilities are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis, but are subject to fair value adjustments in certain circumstances (for example, upon their acquisition or when there is evidence of impairment).
The following table illustrates financial instruments measured at fair value on a nonrecurring basis:
| June 30, 2025 | ||||||||||||||||||||||||||
| (In thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||
| Individually evaluated loans, net of ACL | $ | $ | $ | $ | ||||||||||||||||||||||
| Foreclosed assets held for sale | ||||||||||||||||||||||||||
| December 31, 2024 | ||||||||||||||||||||||||||
| (In thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||
| Individually evaluated loans, net of ACL | $ | $ | $ | $ | ||||||||||||||||||||||
| Foreclosed assets held for sale | ||||||||||||||||||||||||||
Net loans - This category consists of loans that were individually evaluated for credit losses, net of the related ACL, and have been classified as Level 3 assets. All of Mid Penn’s individually evaluated loans for 2025 and 2024, whether reporting
a specific allowance allocation or not, are considered collateral-dependent. Mid Penn utilized Level 3 inputs such as independent appraisals of the underlying collateral, which generally includes various Level 3 inputs which are not observable. Appraisals may be adjusted downward by management for qualitative factors such as economic conditions and estimated liquidation expenses.
Foreclosed assets held for sale - Values are based on appraisals that consider the sales prices of property in the proximate vicinity.
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The following table presents additional information about the valuation techniques for level 3 assets measured at fair value on a nonrecurring basis.
| June 30, 2025 | ||||||||||||||||||||||||||||||||||||||
| (In thousands) | Fair Value | Valuation Technique | Significant Unobservable Input | Range of Inputs | Weighted Average | |||||||||||||||||||||||||||||||||
| Individually evaluated loans, net of ACL | $ | Appraisal of collateral | Appraisal adjustments | - | ||||||||||||||||||||||||||||||||||
| Foreclosed assets held for sale | Appraisal of collateral | Appraisal adjustments | - | |||||||||||||||||||||||||||||||||||
| December 31, 2024 | ||||||||||||||||||||||||||||||||||||||
| (In thousands) | Fair Value | Valuation Technique | Significant Unobservable Input | Range of Inputs | Weighted Average | |||||||||||||||||||||||||||||||||
| Individually evaluated loans, net of ACL | $ | Appraisal of collateral | Appraisal adjustments | - | ||||||||||||||||||||||||||||||||||
| Foreclosed assets held for sale | Appraisal of collateral | Appraisal adjustments | - | |||||||||||||||||||||||||||||||||||
The following tables summarize the carrying amount, fair value, and placement in the fair value hierarchy of Mid Penn's financial instruments as of the periods presented:
| June 30, 2025 | ||||||||||||||||||||||||||||||||
| Carrying Amount | Estimated Fair Value | |||||||||||||||||||||||||||||||
| (In thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||||||
| Financial instruments - assets | ||||||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Available-for-sale securities | ||||||||||||||||||||||||||||||||
| Held-to-maturity securities | ||||||||||||||||||||||||||||||||
| Equity securities | ||||||||||||||||||||||||||||||||
| Loans held for sale | ||||||||||||||||||||||||||||||||
| Net loans | ||||||||||||||||||||||||||||||||
| Restricted investment in bank stocks | ||||||||||||||||||||||||||||||||
| Accrued interest receivable | ||||||||||||||||||||||||||||||||
| Derivative assets | ||||||||||||||||||||||||||||||||
| Financial instruments - liabilities | ||||||||||||||||||||||||||||||||
| Deposits | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Short-term borrowings | ||||||||||||||||||||||||||||||||
Long-term debt (1) | ||||||||||||||||||||||||||||||||
| Subordinated debt | ||||||||||||||||||||||||||||||||
| Accrued interest payable | ||||||||||||||||||||||||||||||||
| Derivative liabilities | ||||||||||||||||||||||||||||||||
(1)Long-term debt excludes finance lease obligations.
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| December 31, 2024 | ||||||||||||||||||||||||||||||||
| Estimated Fair Value | ||||||||||||||||||||||||||||||||
| (In thousands) | Carrying Amount | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||||
| Financial instruments - assets | ||||||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Available-for-sale securities | ||||||||||||||||||||||||||||||||
| Held-to-maturity securities | ||||||||||||||||||||||||||||||||
| Equity securities | ||||||||||||||||||||||||||||||||
| Loans held for sale | ||||||||||||||||||||||||||||||||
| Net loans | ||||||||||||||||||||||||||||||||
| Restricted investment in bank stocks | ||||||||||||||||||||||||||||||||
| Accrued interest receivable | ||||||||||||||||||||||||||||||||
| Derivative assets | ||||||||||||||||||||||||||||||||
| Financial instruments - liabilities | ||||||||||||||||||||||||||||||||
| Deposits | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Short-term debt | ||||||||||||||||||||||||||||||||
Long-term debt (1) | ||||||||||||||||||||||||||||||||
| Subordinated debt | ||||||||||||||||||||||||||||||||
| Accrued interest payable | ||||||||||||||||||||||||||||||||
| Derivative liabilities | ||||||||||||||||||||||||||||||||
(1)Long-term debt excludes finance lease obligations.
The Bank’s outstanding and unfunded credit commitments and financial standby letters of credit were deemed to have no significant fair value as of June 30, 2025 and December 31, 2024.
Note 9 - Commitments and Contingencies
Guarantees and commitments to extend credit
Mid Penn is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. The commitments include various guarantees and commitments to extend credit. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Mid Penn evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary upon extension of credit, is based on management’s credit evaluation of the customer. Standby letters of credit and financial guarantees written are conditional commitments to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers. Mid Penn had $65.1 million and $64.3 million of standby letters of credit outstanding as of June 30, 2025 and December 31, 2024, respectively. Mid Penn does not anticipate any losses because of these transactions. The amount of the liability as of June 30, 2025 and December 31, 2024 for payment under standby letters of credit issued was not considered material.
Mid Penn is required to estimate expected credit losses for OBS credit exposures which are not unconditionally cancellable. Mid Penn maintains a separate ACL on OBS credit exposures, including unfunded loan commitments and letters of credit, which is included in other liabilities on the accompanying Consolidated Balance Sheets.
The ACL - OBS is adjusted as a provision for OBS commitments in provision for credit losses. The estimate includes consideration of the likelihood that funding will occur, an estimate of exposure at default that is derived from utilization rate assumptions using a non-modeled approach, and PD and LGD estimates that are derived from the same models and
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approaches for Mid Penn's other loan portfolio segments described in "Note 4 - Loans and Allowance for Credit Losses - Loans" above, as these unfunded commitments share similar risk characteristics with these loan portfolio segments.
The ACL - OBS was $3.2 million and $2.9 million as of June 30, 2025 and December 31, 2024, respectively. A provision for credit losses - credit commitments of $24 thousand and a benefit for credit losses - credit commitments of $178 thousand were recorded for the three months ended June 30, 2025 and June 30, 2024, respectively. A provision for credit losses - credit commitments of $4 thousand and a benefit for credit losses - credit commitments of $496 thousand were recorded for the six months ended June 30, 2025 and June 30, 2024, respectively.
The following table presents the activity in the ACL - OBS by segment for the three and six June 30, 2025 and 2024:
(in thousands) | Balance at March 31, 2025 | (Benefit)/Provision for credit loss | Three months ended June 30, 2025 | |||||||||||||||||
| 1-4 Family Rental | $ | $ | $ | |||||||||||||||||
| C&I | ( | |||||||||||||||||||
| CRE NonOwner Occupied | ||||||||||||||||||||
| CRE Owner Occupied | ||||||||||||||||||||
| Consumer | ||||||||||||||||||||
| Farmland | ( | |||||||||||||||||||
| HELOC & Junior Liens | ||||||||||||||||||||
| Multifamily | ||||||||||||||||||||
| Other Construction & Land | ||||||||||||||||||||
| Residential Construction | ( | |||||||||||||||||||
| Residential First Liens | ||||||||||||||||||||
| $ | $ | $ | ||||||||||||||||||
| in thousands | Balance at December 31, 2024 | (Benefit)/Provision for credit loss | Six months ended June 30, 2025 | |||||||||||||||||
| 1-4 Family Rental | $ | $ | $ | |||||||||||||||||
| C&I | ||||||||||||||||||||
| CRE NonOwner Occupied | ( | |||||||||||||||||||
| CRE Owner Occupied | ||||||||||||||||||||
| Consumer | ||||||||||||||||||||
| Farmland | ||||||||||||||||||||
| HELOC & Junior Liens | ||||||||||||||||||||
| Multifamily | ( | |||||||||||||||||||
| Other Construction & Land | ||||||||||||||||||||
| Residential Construction | ( | |||||||||||||||||||
| Residential First Liens | ||||||||||||||||||||
| $ | $ | $ | ||||||||||||||||||
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(in thousands) | Balance at March 31, 2024 | (Benefit)/Provision for credit loss | Three months ended June 30, 2024 | |||||||||||||||||
| 1-4 Family Rental | $ | $ | $ | |||||||||||||||||
| C&I | ||||||||||||||||||||
| CRE NonOwner Occupied | ||||||||||||||||||||
| CRE Owner Occupied | ||||||||||||||||||||
| Consumer | ||||||||||||||||||||
| Farmland | ||||||||||||||||||||
| HELOC & Junior Liens | ( | |||||||||||||||||||
| Multifamily | ||||||||||||||||||||
| Other Construction & Land | ( | |||||||||||||||||||
| Residential Construction | ( | |||||||||||||||||||
| Residential First Liens | ( | |||||||||||||||||||
| $ | $ | ( | $ | |||||||||||||||||
| in thousands | Balance at December 31, 2023 | (Benefit)/Provision for credit loss | Six months ended June 30, 2024 | |||||||||||||||||
| 1-4 Family Rental | $ | $ | $ | |||||||||||||||||
| C&I | ( | |||||||||||||||||||
| CRE NonOwner Occupied | ( | |||||||||||||||||||
| CRE Owner Occupied | ||||||||||||||||||||
| Consumer | ||||||||||||||||||||
| Farmland | ( | |||||||||||||||||||
| HELOC & Junior Liens | ( | |||||||||||||||||||
| Multifamily | ||||||||||||||||||||
| Other Construction & Land | ( | |||||||||||||||||||
| Residential Construction | ( | |||||||||||||||||||
| Residential First Liens | ( | |||||||||||||||||||
| $ | $ | ( | $ | |||||||||||||||||
Litigation
Mid Penn and its subsidiaries are subject to various pending and threatened legal proceedings or other matters arising out of the normal conduct of business in which claims for monetary damages are asserted. As of the date of this report, management, after consultation with legal counsel, does not anticipate that the aggregate ultimate liability arising out of such pending or threatened matters will be material to Mid Penn’s consolidated financial position. On at least a quarterly basis, Mid Penn assesses its liabilities and contingencies in connection with such matters. For those matters where it is probable that Mid Penn will incur losses and the amounts of the losses can be reasonably estimated, Mid Penn records an expense and corresponding liability in its consolidated financial statements. To the extent such matters could result in exposure in excess of that liability, the amount of such excess is not currently estimable. The range of losses for matters where an exposure is not currently estimable or considered probable is not believed to be material in the aggregate. This is based on information currently available to Mid Penn and involves elements of judgment and significant uncertainties. While Mid Penn does not believe that the outcome of pending or threatened litigation or other matters will be material to Mid Penn’s consolidated financial position, it cannot rule out the possibility that such outcomes will be material to the consolidated results of operations for a particular reporting period in the future. In addition, regardless of the ultimate outcome of any such legal proceeding, inquiry or investigation, any such matter could cause Mid Penn to incur additional expenses, which could be significant, and possibly material, to Mid Penn’s results of operations in any future period.
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Note 10 - Debt
Short-term FHLB and Correspondent Bank Borrowings
Total short-term borrowings were zero and $2.0 million as of June 30, 2025 and December 31, 2024, respectively. Short-term borrowings generally consist of federal funds purchased and advances from the FHLB with an original maturity of less than a year. Federal funds purchased from correspondent banks mature in one business day and reprice daily based on the Federal Funds rate. Advances from the FHLB are collateralized by the Bank’s investment in the common stock of the FHLB and by a blanket lien on selected loan receivables comprised principally of real estate secured loans within the Bank’s portfolio totaling $2.5 billion at June 30, 2025. The Bank had a short-term borrowing capacity from the FHLB as of June 30, 2025 up to the Bank’s unused borrowing capacity of $1.6 billion (equal to $1.7 billion of maximum borrowing capacity, less the aggregate amount of FHLB letter of credits securing public funds deposits, and other FHLB advances and obligations outstanding) upon satisfaction of any stock purchase requirements of the FHLB.
The Bank also has unused overnight lines of credit with other correspondent banks amounting to $35.0 million at June 30, 2025. No
Long-term Debt
The following table presents a summary of long-term debt as of June 30, 2025 and December 31, 2024.
| (Dollars in thousands) | June 30, 2025 | December 31, 2024 | |||||||||
| FHLB fixed rate instruments: | |||||||||||
Due February 2026, | $ | $ | |||||||||
Due August 2026, | |||||||||||
Due February 2027, | |||||||||||
| Total FHLB fixed rate instruments | |||||||||||
| Lease obligations included in long-term debt | |||||||||||
| Total long-term debt | $ | $ | |||||||||
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Note 11 - Subordinated Debt
Subordinated Debt Assumed November 2021 with the Riverview Acquisition
On November 30, 2021, Mid Penn completed its acquisition of Riverview and assumed $25.0 million of subordinated notes (the "Riverview Notes"). In accordance with purchase accounting principles, the Riverview Notes were assigned a fair value premium of $2.3 million. The notes are treated as Tier 2 capital for regulatory reporting purposes.
The Riverview Notes were entered into by Riverview on October 6, 2020 with certain qualified institutional buyers and accredited institutional investors. The Riverview Notes have a maturity date of October 15, 2030 and initially bear interest, payable semi-annually, at a fixed annual rate of 5.75 % per annum until October 15, 2025. Commencing on that date, the interest rate applicable to the outstanding principal amount due will be reset quarterly to an interest rate per annum equal to the then current three-month SOFR plus 563 bps, payable quarterly until maturity. Mid Penn may redeem the Riverview Notes at par, in whole or in part, at its option, anytime beginning on October 15, 2025, subject to any required regulatory approvals.
Subordinated Debt Issued December 2020
On December 22, 2020, Mid Penn entered into agreements for and sold at 100 % of their principal amount, an aggregate of $12.2 million of its subordinated notes due December 2030 (the "December 2020 Notes") on a private placement basis to accredited investors. The December 2020 Notes are treated as Tier 2 capital for regulatory capital purposes.
The December 2020 Notes bear interest at a rate of 4.5 % per year for the first five years and then float at the Wall Street Journal’s Prime Rate plus 50 bp, provided that the interest rate applicable to the outstanding principal balance during the period the December 2020 Notes are floating will at no time be less than 4.5 %. Interest is payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year, beginning on March 31, 2021. The December 2020 Notes will mature on December 31, 2030 and are redeemable, in whole or in part, without premium or penalty, on any interest payment date on or after December 31, 2025 and prior to December 31, 2030, subject to any required regulatory approvals. Additionally, if (i) all or any portion of the December 2020 Notes cease to be deemed Tier 2 Capital, (ii) interest on the December 2020 Notes fails to be deductible for United States federal income tax purposes, or (iii) Mid Penn will be considered an "investment company," Mid Penn may redeem the December 2020 Notes, in whole but not in part, by giving 10 days’ notice to the holders of the December 2020 Notes. In the event of a redemption described in the previous sentence, Mid Penn will redeem the December 2020 Notes at 100 % of the principal amount of the December 2020 Notes, plus accrued and unpaid interest thereon to but excluding the date of redemption.
Holders of the December 2020 Notes may not accelerate the maturity of the December 2020 Notes, except upon the bankruptcy, insolvency, liquidation, receivership or similar event of Mid Penn or Mid Penn Bank, its principal banking subsidiary. Related parties held $750
Subordinated Debt Issued March 2020
On March 20, 2020, Mid Penn entered into agreements with accredited investors who purchased $15.0 million aggregate principal amount of its subordinated notes due March 2030 (the "March 2020 Notes"). The March 2020 Notes were treated as Tier 2 capital for regulatory capital purposes.
The March 2020 Notes bear interest at a rate of 4.0 % per year for the first five years and then float at the Wall Street Journal’s Prime Rate, provided that the interest rate applicable to the outstanding principal balance during the period the March 2020 Notes are floating will at no time be less than 4.25 %. Interest is payable semi-annually in arrears on June 30 and December 30 of each year, beginning on June 30, 2020, for the first five years after issuance and will be payable quarterly in arrears thereafter on March 30, June 30, September 30 and December 30.
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Note 12 - Common Stock and Equity Incentive Plans
Treasury Stock Repurchase Program
Mid Penn adopted a treasury stock repurchase program ("Program") initially effective March 19, 2020, and renewed through April 30, 2026 by Mid Penn’s Board of Directors on April 23, 2025. The Program authorizes the repurchase of up to $15.0 million of Mid Penn’s outstanding common stock. Under the Program, Mid Penn conducts repurchases of its common stock through open market transactions (which may be by means of a trading plan adopted under SEC Rule 10b5-1) or in privately negotiated transactions. Repurchases under the Program are made at the discretion of management and are subject to market conditions and other factors. There is no guarantee as to the exact number of shares that Mid Penn may repurchase. The Program is able to be modified, suspended or terminated at any time, at Mid Penn’s discretion, based upon a number of factors, including liquidity, market conditions, the availability of alternative investment opportunities and other factors Mid Penn deems appropriate. The Program does not obligate Mid Penn to repurchase any shares.
During the six months ended June 30, 2025, Mid Penn repurchased 62,812 shares of common stock at an average price of $28.31 . All 62,812 shares were repurchased in the three months ended June 30, 2025. As of June 30, 2025, Mid Penn had repurchased an aggregate of 503,534 shares of common stock at an average price of $23.47 per share under the Program. The Program had approximately $3.2 million remaining available for repurchase as of June 30, 2025.
Dividend Reinvestment Plan
Under Mid Penn’s amended and restated DRIP, 300,000 shares of Mid Penn’s authorized but unissued common stock are reserved for issuance. The DRIP also allows for voluntary cash payments, within specified limits, to be used for the purchase of additional shares.
Equity Incentive Plans
On May 9, 2023, shareholders approved the 2023 Stock Incentive Plan, which authorizes Mid Penn to grant incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, deferred stock units and performance shares. The 2023 Plan was established for employees and directors of Mid Penn and the Bank, selected by the Compensation Committee of the Board of Directors, to incentivize the further success of the Company, and replaces the 2014 Restricted Stock Plan. The aggregate number of shares of common stock of the Company available for issuance under the Plans is 550,000 shares.
As of June 30, 2025, a total of 310,804 restricted shares were granted under the Plans, of which 114,030 shares were unvested. The Plan's shares granted and vested resulted in $2.4 million and $321 thousand in share-based compensation expense for the three months ended June 30, 2025 and 2024, respectively. For the six months ended June 30, 2025 and 2024, the Plan's shares granted and vested resulted in share-based compensation expense of $2.6 million and $623 thousand, respectively.
Share-based compensation expense relating to restricted stock is calculated using grant date fair value and is recognized on a straight-line basis over the vesting periods of the awards. Restricted shares granted to employees vest in equal amounts on the anniversary of the grant date over the vesting period and the expense is a component of salaries and benefits expense on the Consolidated Statement of Income. The employee grant vesting period is determined by the terms of each respective grant, with vesting periods generally between one and four years . Restricted shares granted to directors have a twelve-month vesting period, and the expense is a component of directors’ fees and benefits within the other expense line item on the Consolidated Statement of Income.
Equity Awards Assumed from William Penn Acquisition
In connection with the acquisition of William Penn on April 30, 2025, the Company issued 3,506,795 shares of common stock as purchase consideration and assumed outstanding equity awards of William Penn, consisting of 538,447 stock options and 215,386 restricted stock units (RSUs). These awards were converted into equivalent awards of the Company's common stock, of which, 273,000 stock options and 109,205 restricted stock units remained unvested as of June 30, 2025.
Compensation expense for stock options was $680 1.1 million. Compensation expense
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for restricted stock awards was $1.4 1.8 million.
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Note 13 - Earnings Per Share
Basic earnings per share ("EPS") is computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted EPS is computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding plus the effect of potentially dilutive common shares, which include stock options and unvested restricted stock awards, using the treasury stock method.
The following data shows the amounts used in computing basic and diluted earnings per common share:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| (In thousands, except per share data) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
| Weighted average common shares outstanding (basic) | |||||||||||||||||||||||
| Effect of dilutive stock based compensation awards (includes unvested restricted stock and stock options) | |||||||||||||||||||||||
| Weighted average common shares outstanding (diluted) | |||||||||||||||||||||||
| Basic earnings per common share | $ | $ | $ | $ | |||||||||||||||||||
| Diluted earnings per common share | |||||||||||||||||||||||
Anti-dilutive shares are common stock equivalents with weighted average exercise prices in excess of the weighted average market value for the periods presented. There were 367,400 and 111,994 stock options that were anti-dilutive for the three and six months ended June 30, 2025, respectively. These stock options were assumed in the William Penn acquisition. There were no
Note 14 - Segment Reporting
Mid Penn operates as a single reportable segment, providing a broad range of banking and financial services to individuals, businesses, and institutional clients. These services include commercial and consumer lending, deposit products, wealth management, insurance, and treasury management solutions. The Chief Executive Officer and the Chief Financial Officer are the Mid Penn Chief Operating Decision Makers ("CODM"). The CODM regularly evaluates financial performance and allocates resources on a consolidated basis.
The following table presents certain information reviewed by management:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||
(in thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||
| Net interest income | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Provision for credit losses | ||||||||||||||||||||||||||||||||
| Noninterest income | ||||||||||||||||||||||||||||||||
| Noninterest expense | ||||||||||||||||||||||||||||||||
| (Benefit)/Provision for Income taxes | ( | |||||||||||||||||||||||||||||||
| Net income | ||||||||||||||||||||||||||||||||
| Total assets | $ | $ | $ | $ | ||||||||||||||||||||||||||||
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Other Segment Information
Revenue Composition: Mid Penn generates revenue primarily from net interest income and non-interest income, including fees from deposit accounts, wealth management, insurance, and treasury services.
Capital Allocation & Performance Metrics: The CODM assesses performance based on key financial metrics, including net interest margin, return on average assets ("ROAA"), return on average equity ("ROAE") and core efficiency ratio.
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ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Management Discussion relates to the Corporation, a financial holding company incorporated in the Commonwealth of Pennsylvania, and its wholly-owned subsidiaries, and should be read in conjunction with the consolidated financial statements and other financial information presented in this report and our Annual Report on Form 10-K for the year ended December 31, 2024.
Caution About Forward-Looking Statements
Forward-looking statements involve risks, uncertainties and assumptions. Although Mid Penn generally does not make forward-looking statements unless Mid Penn’s management believes its management has a reasonable basis for doing so, Mid Penn cannot guarantee the accuracy of any forward-looking statements. Actual results may differ materially from those expressed in any forward-looking statements due to a number of uncertainties and risks, including the risks described in this Quarterly Report on Form 10-Q, the 2024 Annual Report, and other unforeseen risks. You should not put undue reliance on any forward-looking statements. These statements speak only as of the date of this Quarterly Report on Form 10-Q, even if subsequently made available by us on Mid Penn’s website or otherwise, and Mid Penn undertakes no obligation to update or revise these statements to reflect events or circumstances occurring after the date of this Quarterly Report on Form 10-Q.
Certain of the matters discussed in this document or in documents incorporated by reference herein, including matters discussed under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” may constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, or Securities Act, and Section 21E of the Securities Exchange Act of 1934, or Exchange Act. These forward-looking statements represent plans, estimates, objectives, goals, guidelines, expectations, intentions, projections and statements of our beliefs concerning future events, business plans, objectives, expected operating results, and the assumptions upon which those statements are based. Forward looking statements include without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and are typically identified with words such as “may,” “could,” “should,” “will,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan,” or words or phrases of similar meaning. We caution that the forward-looking statements are based largely on our expectations and are subject to a number of known and unknown risks and uncertainties that are subject to change based on factors which are, in many instances, beyond our control. Actual results, performance or achievements could differ materially from those contemplated, expressed, or implied by the forward-looking statements.
The following factors, among others, could cause our financial performance to differ materially from that expressed in such forward-looking statements:
•the effects of future economic conditions on Mid Penn, the Bank, our nonbank subsidiaries, and our markets and customers;
•governmental monetary and fiscal policies, as well as legislative and regulatory changes;
•future actions or inactions of the United States government, including a failure to increase the government debt limit or a prolonged shutdown of the federal government;
•business or economic disruption from national or global epidemic or pandemic events;
•the risks of changes in interest rates on the level and composition of deposits, loan demand, and the values of loan collateral, the value of investment securities, and interest rate protection agreements;
•the effects of competition from other commercial banks, thrifts, mortgage banking firms, consumer finance companies, credit unions, securities brokerage firms, insurance companies, money market and other mutual funds and other financial institutions operating in our market area and elsewhere, including institutions operating locally, regionally, nationally and internationally, together with such competitors offering banking products and services by mail, telephone, computer and the internet;
•an increase in the Pennsylvania Bank Shares Tax to which the Bank’s capital stock is currently subject, or imposition of any additional taxes on the capital stock of Mid Penn or the Bank;
•impacts of the capital and liquidity requirements imposed by bank regulatory agencies;
•the effect of changes in accounting policies and practices, as may be adopted by regulatory agencies, as well as the Public Company Accounting Oversight Board, Financial Accounting Standards Board, the SEC, and other accounting and reporting rule making authorities;
•the costs and effects of litigation and of unexpected or adverse outcomes in such litigation;
•changes in technology;
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•our ability to implement business strategies, including our acquisition strategy;
•our ability to successfully expand our franchise, including through acquisitions or establishing new offices at favorable prices;
•our ability to successfully integrate any banks, companies, offices, assets, liabilities, customers, systems and management personnel we acquire into our operations and our ability to realize related revenue synergies and cost savings within expected time frames;
•potential goodwill impairment charges, or future impairment charges and fluctuations in the fair values of reporting units or of assets in the event projected financial results are not achieved within expected time frames;
•our ability to attract and retain qualified management and personnel;
•results of regulatory examination and supervision processes;
•the possibility of increased scrutiny by, and/or additional regulatory requirements of, governmental authorities as a result of the Merger;
•potential exposure to unknown or contingent risks and liabilities we have acquired, or may acquire, or target for acquisition, including in connection with the Merger;
•the failure of assumptions underlying the establishment of reserves for loan and lease losses, the assessment of potential impairment of investment securities, and estimations of values of collateral and various financial assets and liabilities;
•our ability to maintain compliance with the listing rules of The NASDAQ Stock Market;
•our ability to maintain the value and image of our brand and protect our intellectual property rights;
•volatility in the securities markets;
•disruptions due to flooding, severe weather, or other natural disasters or acts of God;
•acts of war, terrorism, or global military conflict;
•supply chain disruption;
•the risk factors described in Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 and subsequent filings with the SEC.
The above list of factors that may affect future performance is illustrative, but by no means exhaustive. Accordingly, all forward-looking statements should be evaluated with this understanding of inherent uncertainty.
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Overview
Mid Penn is a financial holding company, which generates the majority of its revenues through net interest income, or the difference between interest earned on loans and investments and interest paid on deposits and borrowings. Growth in net interest income is dependent upon balance sheet growth and maintaining or increasing the net interest margin, which is FTE net interest income as a percentage of average interest-earning assets. Mid Penn also generates revenue through fees earned on the various services and products offered to its customers and through gains on sales of assets, such as loans, investments and properties. Offsetting these revenue sources are provisions for credit losses, non-interest expenses and income taxes.
The following table presents a summary of Mid Penn's earnings and selected performance ratios:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Net Income | $ | 4,762 | $ | 11,771 | $ | 18,504 | $ | 23,904 | |||||||||||||||
| Diluted EPS | $ | 0.22 | $ | 0.71 | $ | 0.89 | $ | 1.44 | |||||||||||||||
| Dividends Declared | $ | 0.20 | $ | 0.20 | $ | 0.40 | $ | 0.40 | |||||||||||||||
Return on average assets (2) | 0.32 | % | 0.88 | % | 0.65 | % | 1.79 | % | |||||||||||||||
Return on average equity (2) | 2.85 | % | 8.55 | % | 5.60 | % | 17.44 | % | |||||||||||||||
Net interest margin (1)(2) | 3.44 | % | 3.12 | % | 3.41 | % | 3.04 | % | |||||||||||||||
| Non-performing assets to total assets | 0.44 | % | 0.19 | % | 0.44 | % | 0.19 | % | |||||||||||||||
| Net charge-offs to average loans (annualized) | 0.0688 | % | 0.002 | % | 0.069 | % | 0.006 | % | |||||||||||||||
(1) Presented on a FTE basis using a 21% Federal tax rate and statutory interest expense disallowances. See also the "Net Interest Income" section.
(2) Annualized ratios
On April 30, 2025, Mid Penn completed the acquisition of William Penn, which added total assets of $727.7 million, comprised primarily of $405.3 million of loans. This transaction included the acquisition of 12 branches, further expanding Mid Penn's presence in the Philadelphia region and surrounding counties in Pennsylvania and New Jersey.
Each share of William Penn common stock issued and outstanding as of April 30, 2025, was converted into 0.426 shares of Mid Penn common stock. As a result of the acquisition, Mid Penn issued approximately 3,506,795 shares of Mid Penn common stock, plus up to an additional 538,447 shares of Mid Penn common stock issuable upon the exercise of former William Penn stock options, for a purchase price of $103.2 million. Additionally, on May 12, 2025, Mid Penn acquired the insurance business and related accounts of Charis Insurance Group, which provides business, home and auto insurance throughout central and southern Pennsylvania, for a purchase price of $4.0 million.
Summary of Financial Results
•Net Income Per Share - Mid Penn’s net income available to common shareholders ("earnings") for the three months ended June 30, 2025 was $4.8 million, or $0.22 per both common share basic and diluted, compared to earnings of $11.8 million, or $0.71 per both common share basic and diluted for the three months ended June 30, 2024. Mid Penn's earnings for the six months ended June 30, 2025 was $18.5 million, or $0.90 per common share basic, and $0.89 per diluted common share, compared to earnings of $23.9 million, or $1.44 per both common share basic and diluted for the six months ended June 30, 2024.
◦Net Interest Margin - For the second quarter of 2025, Mid Penn’s net interest margin was 3.44% versus 3.12% for the same period of 2024. For the six months ended June 30, 2025, net interest margin was 3.41% versus 3.04% for the same period of 2024. The yield on interest-earning assets for the three months ended June 30, 2025 decreased 1 basis point from the same period of 2024. The rate on interest-bearing liabilities decreased 39 basis points from the same period of 2024.
◦Loan Growth - Total loans, net of unearned income, as of June 30, 2025 were $4.8 billion compared to $4.4 billion as of December 31, 2024, an increase of $389.8 million, or 8.8%. The growth was primarily
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driven by an increase in residential mortgage loans of $212.3 million, an increase in owner occupied commercial real estate of $84.8 million, an increase in nonowner occupied commercial real estate of $91.5 million, and an increase in commercial and industrial loans of $25.2 million, partially offset by an $20.1 million decrease in multifamily loans. William Penn acquisition loans contributed $405.3 million to this increase.
◦Deposit Growth - Total deposits increased $759.7 million, or 16.2%, from $4.7 billion at December 31, 2024, to $5.4 billion at June 30, 2025. The growth was driven by an increase of $453.0 million in interest-bearing transaction accounts, an increase of $208.8 million in time deposits, and a $97.9 million increase in non-interest bearing accounts. The William Penn acquisition deposits contributed $619.8 million to this increase.
•Asset Quality - ACL-loans at June 30, 2025 was $37.6 million, or 0.78% of total loans, as compared to $35.5 million, or 0.80% of total loans at December 31, 2024.
◦Net Charge-offs/Recoveries - Mid Penn had net charge-offs of $811 thousand and $18 thousand for the three months ended June 30, 2025 and 2024, respectively. For the six months ended June 30, 2025, net charge-offs were $808 thousand compared to $62 thousand for the same period of 2024.
◦Non-performing assets - Total nonperforming assets were $28.0 million at June 30, 2025, an increase compared to nonperforming assets of $22.7 million at December 31, 2024. The increase during the second quarter of 2025 is primarily related to the addition of two commercial real estate loans with a combined balance of $8.8 million being foreclosed in the second quarter of 2025, offset by payoffs and paydowns in the second quarter of 2025. Delinquency, measured as loans past due 30 days or more, as a percentage of total loans was 0.58% at June 30, 2025, compared to 0.52% and 0.57% as of December 31, 2024 and June 30, 2024, respectively.
◦Provision/Benefit for credit losses - loans - The provision for credit losses - loans was $2.2 million for the three months ended June 30, 2025 compared to $1.8 million for the same period of 2024. The provision for credit losses on off-balance sheet credit exposures was $24 thousand for the three months ended June 30, 2025, compared to a benefit of $178 thousand for the same period of 2024.
The provision for credit losses on loans was $2.6 million for the six months ended June 30, 2025, an increase of $1.4 million compared to the provision for credit losses of $1.2 million for the six months ended June 30, 2024. This increase for the six months ended June 30, 2025 was primarily due to a $2.3 million reserve on non-PCD loans acquired through the William Penn acquisition. The provision for credit losses on off-balance sheet credit exposures was $24 thousand and $4 thousand for the three and six months ended June 30, 2025, respectively. The increase was primarily driven by new participations in construction loans originated in the second quarter.
•Noninterest Income - Noninterest income totaled $6.1 million for the three months ended June 30, 2025 compared to $5.3 million for the same period of 2024. The increase is primarily due to a $277 thousand increase in Fiduciary and wealth management, a $190 thousand increase in earnings from the cash surrender value of life insurance as a result of policies assumed during the William Penn acquisition, and a $219 thousand increase in other miscellaneous noninterest income, driven by a $146 thousand increase in insurance commissions and a $63 thousand increase in ATM surcharge fees.
Noninterest income totaled $11.4 million for the six months ended June 30, 2025 compared to $11.2 million for the same period of 2024. The increase in noninterest income is primarily driven by a $285 thousand increase in fiduciary and wealth management, a $215 thousand increase in mortgage banking income, and a $180 thousand increase in earnings from the cash surrender value of life insurance as a result of policies assumed during the William Penn acquisition, offset by a $512 thousand decrease in other miscellaneous noninterest income, driven by a $1.9 million decrease in Bank-owned life insurance benefits received, partially offset by a $568 thousand increase in loan level swap fees.
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•Noninterest Expense - Noninterest expense totaled $47.8 million for the three months ended June 30, 2025, an increase of $19.6 million, or 69.4%, compared to noninterest expense of $28.2 million for the same period of 2024.
Merger and acquisition expenses increased $11.0 million for the three months ended June 30, 2025 compared to the same period in 2024. This includes $10.5 million of merger related expenses related to the William Penn acquisition and $164 thousand related to the Charis Insurance Group acquisition.
Salaries and employee benefits increased $5.2 million for the three months ended June 30, 2025 compared to the same period in 2024. The increase is attributable to (i) equity-based compensation expense for stock options and restricted stock awards totaling $2.0 million that were recognized during the second quarter of 2025. (Future expected compensation expense related to these awards is approximately $753 thousand for the third quarter of 2025 and $2.2 million over the remaining vesting periods); (ii) the retail staff additions at the twelve retail locations added through the William Penn acquisition; and (iii) the retention of various William Penn team members through the completion of systems integration, which occurred on June 20, 2025.
Software licensing and utilization costs increased $1.1 million for the three months ended June 30, 2025 compared to the same period in 2024. The increase reflects additional costs to (i) license the additional William Penn branches; and (ii) upgrades to internal systems, including network storage, cybersecurity, and data security enhancements in response to the Bank's larger size and increased IT complexity. in software licensing, an increase in merger and acquisition expenses, and a $504 thousand increase in occupancy expenses.
Noninterest expense totaled $78.4 million for the six months ended June 30, 2025 compared to $56.7 million for the same period of 2024.
Merger and acquisition expenses increased $11.3 million for the six months ended June 30, 2025, which includes $11.2 million of merger related expenses related to the William Penn acquisition and $164 thousand related to the Charis Insurance Group acquisition.
Salaries and benefits increased $6.1 million for the six months ended June 30, 2025, compared to the same period in 2024, largely driven by the same Q2 items noted above, including $2.0 million in equity compensation, staff additions from the William Penn acquisition, and retention of key personnel through integration.
Software licensing and utilization costs increased $1.5 million for the six months ended June 30, 2025, compared to the same period in 2024, reflecting the same Q2 drivers noted above. These include the onboarding of newly acquired William Penn branches, investments in IT infrastructure and cybersecurity.
Occupancy expenses increased $796 thousand for the six months ended June 30, 2025, compared to the same period in 2024. The increase was driven by the facility operating costs of the additional retail locations added through the William Penn acquisition.
•Liquidity - Current liquidity, including borrowing capacity, increased to $1.6 billion or 99.4% of uninsured and uncollateralized deposits, or approximately 29.3% of total deposits.
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Critical Accounting Estimates
The 2024 Annual Report on Form 10-K includes a summary of critical accounting estimates that Mid Penn considers to be most important to the presentation of its financial condition and results of operations. These estimates require management’s most difficult judgments as a result of the need to make estimates about the effects of matters that are inherently uncertain.
Management of the Corporation considers the accounting judgments relating to the allowance for credit losses, business combinations, and goodwill impairment to be the accounting area that requires the most subjective and complex judgments.
There have been no material changes to Mid Penn's critical accounting estimates as disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024.
Results of Operations
Net Interest Income
Net interest income, Mid Penn’s primary source of revenue, is the amount by which interest income on loans and investments exceeds interest incurred on deposits and borrowings. The amount of net interest income is affected by changes in interest rates and changes in the volume and mix of interest-sensitive assets and liabilities. Net interest income is also shown on a taxable-equivalent basis in total. Income from tax-exempt assets, primarily loans to or securities issued by state and local governments, is adjusted by an amount equivalent to the federal income taxes which would have been paid if the income received on these assets was taxable at the statutory rate of 21% for the periods presented.
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The following table includes average balances, amounts, and yields of interest income and rates of expense, interest rate spread, and net interest margin for the periods presented:
| Average Balances, Income and Interest Rates | |||||||||||||||||||||||||||||||||||
| For the Three Months Ended | |||||||||||||||||||||||||||||||||||
| June 30, 2025 | June 30, 2024 | ||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Average Balance | Interest | Yield/ Rate (2) | Average Balance | Interest | Yield/ Rate (2) | |||||||||||||||||||||||||||||
| ASSETS: | |||||||||||||||||||||||||||||||||||
| Interest Bearing Balances | $ | 23,271 | $ | 142 | 2.45 | % | $ | 35,618 | $ | 347 | 3.92 | % | |||||||||||||||||||||||
| Investment Securities: | |||||||||||||||||||||||||||||||||||
| Taxable | 584,919 | 4,570 | 3.13 | % | 533,748 | 3,701 | 2.79 | % | |||||||||||||||||||||||||||
| Tax-Exempt | 67,186 | 344 | 2.05 | % | 74,425 | 371 | 2.00 | % | |||||||||||||||||||||||||||
| Total Investment Securities | 652,105 | 4,914 | 3.02 | % | 608,173 | 4,072 | 2.69 | % | |||||||||||||||||||||||||||
| Federal Funds Sold | 236,037 | 2,428 | 4.13 | % | 19,432 | 282 | 5.84 | % | |||||||||||||||||||||||||||
| Loans, net of unearned income | 4,724,638 | 72,469 | 6.15 | % | 4,353,360 | 66,096 | 6.11 | % | |||||||||||||||||||||||||||
| Restricted Investment in Bank Stocks | 6,945 | 67 | 3.87 | % | 16,066 | 442 | 11.07 | % | |||||||||||||||||||||||||||
| Total Interest-earning Assets | 5,642,996 | 80,020 | 5.69 | % | 5,032,649 | 71,239 | 5.69 | % | |||||||||||||||||||||||||||
| Cash and Due from Banks | 50,376 | 39,053 | |||||||||||||||||||||||||||||||||
| Other Assets | 342,673 | 307,195 | |||||||||||||||||||||||||||||||||
| Total Assets | $ | 6,036,045 | $ | 5,378,897 | |||||||||||||||||||||||||||||||
| LIABILITIES & SHAREHOLDERS' EQUITY: | |||||||||||||||||||||||||||||||||||
| Interest-bearing Demand | $ | 1,123,130 | $ | 4,954 | 1.77 | % | $ | 972,852 | $ | 4,477 | 1.85 | % | |||||||||||||||||||||||
| Money Market | 1,179,756 | 8,350 | 2.84 | % | 908,807 | 6,632 | 2.94 | % | |||||||||||||||||||||||||||
| Savings | 307,634 | 70 | 0.09 | % | 281,560 | 52 | 0.07 | % | |||||||||||||||||||||||||||
| Time | 1,735,427 | 17,607 | 4.07 | % | 1,510,079 | 17,302 | 4.61 | % | |||||||||||||||||||||||||||
| Total Interest-bearing Deposits | 4,345,947 | 30,981 | 2.86 | % | 3,673,298 | 28,463 | 3.12 | % | |||||||||||||||||||||||||||
| Short-term borrowings | 7,418 | 86 | 4.65 | % | 241,713 | 3,324 | 5.53 | % | |||||||||||||||||||||||||||
| Long-term debt | 23,417 | 252 | 4.32 | % | 23,870 | 262 | 4.41 | % | |||||||||||||||||||||||||||
| Subordinated debt | 45,264 | 495 | 4.39 | % | 46,122 | 424 | 3.70 | % | |||||||||||||||||||||||||||
| Total Interest-bearing Liabilities | 4,422,046 | 31,814 | 2.89 | % | 3,985,003 | 32,473 | 3.28 | % | |||||||||||||||||||||||||||
| Noninterest-bearing Demand | 813,807 | 778,380 | |||||||||||||||||||||||||||||||||
| Other Liabilities | 129,701 | 61,839 | |||||||||||||||||||||||||||||||||
| Shareholders' Equity | 670,491 | 553,675 | |||||||||||||||||||||||||||||||||
| Total Liabilities & Shareholders' Equity | $ | 6,036,045 | $ | 5,378,897 | |||||||||||||||||||||||||||||||
| Net Interest Income | $ | 48,206 | $ | 38,766 | |||||||||||||||||||||||||||||||
Taxable Equivalent Adjustment (1) | 245 | 253 | |||||||||||||||||||||||||||||||||
| Net Interest Income (taxable-equivalent basis) | $ | 48,451 | $ | 39,019 | |||||||||||||||||||||||||||||||
| Total Yield on Earning Assets | 5.69 | % | 5.69 | % | |||||||||||||||||||||||||||||||
| Rate on Supporting Liabilities | 2.89 | % | 3.28 | % | |||||||||||||||||||||||||||||||
| Average Interest Spread | 2.80 | % | 2.41 | % | |||||||||||||||||||||||||||||||
Net Interest Margin (1) | 3.44 | % | 3.12 | % | |||||||||||||||||||||||||||||||
(1)Presented on a fully taxable-equivalent basis using a 21% federal tax rate and statutory interest expense disallowances.
(2)Annualized ratios
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The following table summarizes the changes in interest income and interest expense resulting from changes in average balances, volume, and changes in rates for the three months ended June 30, 2025 in comparison to the same period in 2024:
| Three months ended June 30, 2025 vs. June 30, 2024 | |||||||||||||||||
| Increase (decrease) | |||||||||||||||||
| (Dollars in thousands) | Volume | Rate | Net | ||||||||||||||
| INTEREST INCOME: | |||||||||||||||||
| Interest Bearing Balances | $ | (121) | $ | (84) | $ | (205) | |||||||||||
| Investment Securities: | |||||||||||||||||
| Taxable | 356 | 513 | 869 | ||||||||||||||
| Tax-Exempt | (36) | 9 | (27) | ||||||||||||||
| Total Investment Securities | 320 | 522 | 842 | ||||||||||||||
| Federal Funds Sold | 3,152 | (1,006) | 2,146 | ||||||||||||||
| Loans | 5,652 | 721 | 6,373 | ||||||||||||||
| Restricted Investment Bank Stocks | (252) | (123) | (375) | ||||||||||||||
| Total Interest Income | 8,751 | 30 | 8,781 | ||||||||||||||
| INTEREST EXPENSE: | |||||||||||||||||
| Interest Bearing Deposits: | |||||||||||||||||
| Interest Bearing Demand | 693 | (216) | 477 | ||||||||||||||
| Money Market | 1,983 | (265) | 1,718 | ||||||||||||||
| Savings | 5 | 13 | 18 | ||||||||||||||
| Time | 2,589 | (2,284) | 305 | ||||||||||||||
| Total Interest-Bearing Deposits | 5,270 | (2,752) | 2,518 | ||||||||||||||
| Short-term Borrowings | (3,231) | (7) | (3,238) | ||||||||||||||
| Long-term Debt | (5) | (5) | (10) | ||||||||||||||
| Subordinated Debt | (8) | 79 | 71 | ||||||||||||||
| Total Interest Expense | 2,026 | (2,685) | (659) | ||||||||||||||
| NET INTEREST INCOME | $ | 6,725 | $ | 2,715 | $ | 9,440 | |||||||||||
For the three months ended June 30, 2025, net interest income was $48.2 million compared to net interest income of $38.8 million for the three months ended June 30, 2024. The tax-equivalent net interest margin for the three months ended June 30, 2025 was 3.44% compared to 3.12% for the second quarter of 2024, representing a 32 bp increase compared to the same period in 2024.
The yield on interest-earning assets remained relatively flat at 5.69% for the quarter ended June 30, 2025. However we continue to see increases in interest income on loans and Federal Funds Sold due to higher balances from prior quarters.
Average investment securities increased $43.9 million and the yield on those investment securities increased 33 bps during the second quarter of 2025 compared to the second quarter of 2024, increasing interest income $320 thousand due to volume, and $522 thousand due to rates. Average loans increased $371.3 million, and the yield on those loans increased 5 bps, contributing $5.7 million and $721 thousand, respectively, to the increase in interest income.
Interest expense decreased $659 thousand during the second quarter of 2025 compared to the second quarter of 2024. The rate of interest-bearing liabilities decreased from 3.28% for the second quarter of 2024 to 2.89% for the second quarter of 2025. The decrease in the rate was primarily a result of a decrease in short-term borrowings, a decrease in long term debt, and a decrease in time deposits. Mid Penn continued to offer higher rates over the comparable period to both retain and attract deposits.
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Although the effective interest rate impact on interest-earning assets and funding sources can be reasonably estimated at current interest rate levels, the interest-bearing product and pricing options selected by customers, and the future mix of the loan, investment, and deposit products in the Bank's portfolios, may significantly change the estimates used in Mid Penn’s asset and liability management and related interest rate risk simulation models. In addition, our net interest income may be impacted by further interest rate actions of the Federal Reserve’s FOMC.
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| Average Balances, Income and Interest Rates on a Taxable-Equivalent Basis | |||||||||||||||||||||||||||||||||||
| For the Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Average Balance | Interest | Yield/ Rate | Average Balance | Interest | Yield/ Rate | |||||||||||||||||||||||||||||
| ASSETS: | |||||||||||||||||||||||||||||||||||
| Interest Bearing Balances | $ | 22,039 | $ | 280 | 2.56 | % | $ | 37,809 | $ | 750 | 3.99 | % | |||||||||||||||||||||||
| Investment Securities: | |||||||||||||||||||||||||||||||||||
| Taxable | 577,401 | 8,879 | 3.10 | 536,711 | 7,501 | 2.81 | |||||||||||||||||||||||||||||
| Tax-Exempt | 68,476 | 692 | 2.04 | 75,219 | 747 | 2.00 | |||||||||||||||||||||||||||||
| Total Investment Securities | 645,877 | 9,571 | 2.99 | 611,930 | 8,248 | 2.71 | |||||||||||||||||||||||||||||
| Federal Funds Sold | 130,482 | 2,689 | 4.16 | 14,902 | 418 | 5.64 | |||||||||||||||||||||||||||||
| Loans, net of unearned income | 4,592,890 | 139,006 | 6.10 | 4,323,594 | 129,332 | 6.02 | |||||||||||||||||||||||||||||
| Restricted Investment in Bank Stocks | 7,022 | 218 | 6.26 | 17,752 | 682 | 7.73 | |||||||||||||||||||||||||||||
| Total Interest-earning Assets | 5,398,310 | 151,764 | 5.67 | 5,005,987 | 139,430 | 5.60 | |||||||||||||||||||||||||||||
| Cash and Due from Banks | 45,175 | 38,658 | |||||||||||||||||||||||||||||||||
| Other Assets | 321,923 | 304,644 | |||||||||||||||||||||||||||||||||
| Total Assets | $ | 5,765,408 | $ | 5,349,289 | |||||||||||||||||||||||||||||||
| LIABILITIES & SHAREHOLDERS' EQUITY: | |||||||||||||||||||||||||||||||||||
| Interest-bearing Demand | $ | 1,087,426 | $ | 9,635 | 1.79 | % | $ | 935,596 | $ | 8,361 | 1.80 | % | |||||||||||||||||||||||
| Money Market | 1,102,641 | 15,291 | 2.80 | 892,525 | 12,600 | 2.84 | |||||||||||||||||||||||||||||
| Savings | 284,428 | 124 | 0.09 | 284,662 | 124 | 0.09 | |||||||||||||||||||||||||||||
| Time | 1,663,995 | 34,195 | 4.14 | 1,489,345 | 33,710 | 4.55 | |||||||||||||||||||||||||||||
| Total Interest-bearing Deposits | 4,138,490 | 59,245 | 2.89 | 3,602,128 | 54,795 | 3.06 | |||||||||||||||||||||||||||||
| Short-term borrowings | 16,106 | 376 | 4.71 | 278,869 | 7,770 | 5.60 | |||||||||||||||||||||||||||||
| Long-term debt | 23,475 | 509 | 4.37 | 32,220 | 795 | 4.96 | |||||||||||||||||||||||||||||
| Subordinated debt | 45,462 | 919 | 4.08 | 46,199 | 848 | 3.69 | |||||||||||||||||||||||||||||
| Total Interest-bearing Liabilities | 4,223,533 | 61,049 | 2.91 | 3,959,416 | 64,208 | 3.26 | |||||||||||||||||||||||||||||
| Noninterest-bearing Demand | 783,561 | 779,758 | |||||||||||||||||||||||||||||||||
| Other Liabilities | 92,560 | 60,277 | |||||||||||||||||||||||||||||||||
| Shareholders' Equity | 665,754 | 549,838 | |||||||||||||||||||||||||||||||||
| Total Liabilities & Shareholders' Equity | $ | 5,765,408 | $ | 5,349,289 | |||||||||||||||||||||||||||||||
| Net Interest Income | $ | 90,715 | $ | 75,222 | |||||||||||||||||||||||||||||||
| Taxable Equivalent Adjustment (1) | 487 | 513 | |||||||||||||||||||||||||||||||||
| Net Interest Income (taxable-equivalent basis) | $ | 91,202 | $ | 75,735 | |||||||||||||||||||||||||||||||
| Total Yield on Earning Assets | 5.67 | % | 5.60 | % | |||||||||||||||||||||||||||||||
| Rate on Supporting Liabilities | 2.91 | 3.26 | |||||||||||||||||||||||||||||||||
| Average Interest Spread | 2.75 | 2.34 | |||||||||||||||||||||||||||||||||
| Net Interest Margin (1) | 3.41 | 3.04 | |||||||||||||||||||||||||||||||||
(1)Presented on a fully taxable-equivalent basis using a 21% federal tax rate and statutory interest expense disallowances
(2)Annualized ratios
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The following table summarizes the changes in FTE interest income and interest expense resulting from changes in average balances, volume, and changes in rates for the six months ended June 30, 2025 in comparison to the same period in 2024:
| Six Months Ended June 30, 2025 vs. June 30, 2024 | |||||||||||||||||
| (Dollars in thousands) | Increase (decrease) | ||||||||||||||||
| Volume | Rate | Net | |||||||||||||||
| INTEREST INCOME: | |||||||||||||||||
| Interest Bearing Balances | $ | (312) | $ | (158) | $ | (470) | |||||||||||
| Investment Securities: | |||||||||||||||||
| Taxable | 567 | 811 | 1,378 | ||||||||||||||
| Tax-Exempt | (67) | 12 | (55) | ||||||||||||||
| Total Investment Securities | 500 | 823 | 1,323 | ||||||||||||||
| Federal Funds Sold | 3,233 | (962) | 2,271 | ||||||||||||||
| Loans, net of unearned income | 8,033 | 1,641 | 9,674 | ||||||||||||||
| Restricted Investment Bank Stocks | (411) | (53) | (464) | ||||||||||||||
| Total Interest Income | 11,043 | 1,291 | 12,334 | ||||||||||||||
| INTEREST EXPENSE: | |||||||||||||||||
| Interest Bearing Deposits: | |||||||||||||||||
| Interest Bearing Demand | 1,353 | (79) | 1,274 | ||||||||||||||
| Money Market | 2,958 | (267) | 2,691 | ||||||||||||||
| Savings | — | — | — | ||||||||||||||
| Time | 3,942 | (3,457) | 485 | ||||||||||||||
| Total Interest-Bearing Deposits | 8,253 | (3,803) | 4,450 | ||||||||||||||
| Short-term Borrowings | (6,134) | (1,260) | (7,394) | ||||||||||||||
| Long-term Debt | (215) | (71) | (286) | ||||||||||||||
| Subordinated Debt | (13) | 84 | 71 | ||||||||||||||
| Total Interest Expense | 1,891 | (5,050) | (3,159) | ||||||||||||||
| NET INTEREST INCOME | $ | 9,152 | $ | 6,341 | $ | 15,493 | |||||||||||
For the six months ended June 30, 2025, net interest income was $90.7 million compared to net interest income of $75.2 million for the six months ended June 30, 2024. FTE net interest income was $91.2 million for the six months ended June 30, 2025, an increase of $15.5 million, or 20.4%, compared to the same period of June 30, 2024. Mid Penn’s FTE net interest margin for the six months ended June 30, 2025 was 3.41% compared to 3.04% for the same period of June 30, 2024, representing a 36 bp increase compared to the same period in 2024, primarily a result of a decrease in short-term borrowings, a decrease in long term debt, and a decrease in time deposits.
The higher yields and the growth in interest-earning assets contributed $1.3 million and $11.0 million, respectively, to the increase in interest income. The yield on interest-earning assets increased 7 bps to 5.67% for the six months ended June 30, 2025 compared to 5.60% for the same period of 2024. Average interest-earning assets increased $10.9 million, or 7.8%, during the six months ended June 30, 2025 compared to the same period of 2024.
Average investment securities increased $33.9 million, or 5.5%, and the yield on those investment securities increased 28 bps, contributing $500 thousand and $823 thousand, respectively, to interest income. Average loans increased $269.3
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million, and the yield on those loans increased 9 bps contributing $8.0 million and $1.6 million, respectively, to the increase in interest income.
Interest expense decreased $3.2 million during the first six months of 2025 compared to the same period of 2024. The rate of interest-bearing liabilities decreased from 3.26% for the first six months of 2024 to 2.91% for the first six months of 2025. The decrease in the rate was driven by the Bank lowering rates in response to the Federal Reserve interest rate cuts in the third and fourth quarters of 2024.. The rate on average interest-bearing deposits decreased 35 bps, reducing interest expense by $3.8 million during the six months ended June 30, 2025 compared to the same period in 2024. In addition, average short-term borrowings decreased to $16.1 million, deducting $7.4 million to interest expense during the six months ended June 30, 2025 compared to the same period in 2024.
Provision for Credit Losses - Loans
The provision for credit losses on loans was $2.2 million for the three months ended June 30, 2025 compared to $1.8 million for the three months ended June 30, 2024. The increase in provision was driven by a $2.3 million reserve established for non-PCD (Purchased Credit Deteriorated) loans acquired in the William Penn acquisition, offset by a decrease in concentration risk across the non owner-occupied commercial real estate and multifamily portfolios.
The provision for credit losses on loans was $2.6 million for the six months ended June 30, 2025 compared to a provision of $1.2 million for the same period in 2024. The increase in provision was primarily driven by a $2.3 million reserve established for non-PCD loans acquired in the William Penn acquisition, offset by an $866 thousand decrease in reserve required for individually analyzed loans.
For the three months ended June 30, 2025, noninterest income totaled $6.1 million, an increase of $814 thousand, or 15.3%, compared to noninterest income of $5.3 million for the three months ended June 30, 2024. The increase is primarily due to a $277 thousand increase in fiduciary and wealth management, a $190 thousand increase in earnings from the cash surrender value of life insurance as a result of policies assumed during the William Penn acquisition, and a $219 thousand increase in other miscellaneous noninterest income, driven by a $146 thousand increase in insurance commissions and a $63 thousand increase in ATM surcharge fees.
The following table and explanations that follow provide additional analysis of noninterest income:
| Three Months Ended June 30, | |||||||||||||||||||||||
| (Dollars in Thousands) | 2025 | 2024 | $ Variance | % Variance | |||||||||||||||||||
| Fiduciary and wealth management | $ | 1,406 | $ | 1,129 | $ | 277 | 24.5 | % | |||||||||||||||
| ATM debit card interchange | 958 | 973 | (15) | (1.5) | |||||||||||||||||||
| Service charges on deposits | 652 | 539 | 113 | 21.0 | |||||||||||||||||||
| Mortgage banking | 676 | 628 | 48 | 7.6 | |||||||||||||||||||
| Mortgage hedging | (7) | — | (7) | 100.0 | |||||||||||||||||||
| Net gain on sales of SBA loans | 63 | 74 | (11) | (14.9) | |||||||||||||||||||
| Earnings from cash surrender value of life insurance | 491 | 301 | 190 | 63.1 | |||||||||||||||||||
| Other | 1,904 | 1,685 | 219 | 13.0 | |||||||||||||||||||
| Total | $ | 6,143 | $ | 5,329 | $ | 814 | 15.3 | % | |||||||||||||||
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| Six Months Ended June 30, | |||||||||||||||||||||||
| (Dollars in Thousands) | 2025 | 2024 | $ Variance | % Variance | |||||||||||||||||||
| Fiduciary and wealth management | $ | 2,546 | $ | 2,261 | $ | 285 | 12.6 | % | |||||||||||||||
| ATM debit card interchange | 1,877 | 1,918 | (41) | (2.1) | |||||||||||||||||||
| Service charges on deposits | 1,214 | 1,048 | 166 | 15.8 | |||||||||||||||||||
| Mortgage banking | 1,267 | 1,052 | 215 | 20.4 | |||||||||||||||||||
| Mortgage hedging | (16) | — | (16) | N/M | |||||||||||||||||||
| Net gain on sales of SBA loans | 120 | 181 | (61) | (33.7) | |||||||||||||||||||
| Earnings from cash surrender value of life insurance | 765 | 585 | 180 | 30.8 | |||||||||||||||||||
| Other | 3,609 | 4,121 | (512) | (12.4) | |||||||||||||||||||
| Total | $ | 11,382 | $ | 11,166 | $ | 216 | 1.9 | % | |||||||||||||||
For the six months ended June 30, 2025, noninterest income totaled $11.4 million, an increase of $216 thousand, or 1.9%, compared to noninterest income of $11.2 million for the six months ended June 30, 2024. The increase in noninterest income is primarily driven by a $285 thousand increase in fiduciary and wealth management, a $215 thousand increase in mortgage banking income, and a $180 thousand increase in earnings from the cash surrender value of life insurance as a result of policies assumed during the William Penn acquisition, offset by a $512 thousand decrease in other miscellaneous noninterest income, driven by a $1.9 million decrease in Bank-owned life insurance benefits received, partially offset by a $568 thousand increase in loan level swap fees.
Noninterest Expense
For the three months ended June 30, 2025, noninterest expense totaled $47.8 million, an increase of $19.6 million, or 69.4%, compared to noninterest expense of $28.2 million for the same period in 2024.
Merger and acquisition expenses increased $11.0 million, which includes $10.5 million of merger related expenses related to the William Penn acquisition and $164 thousand related to the Charis Insurance Group acquisition.
Salaries and benefits increased $5.2 million for the three months ended June 30, 2025 compared to the same period in 2024. The increase is attributable to (i) equity-based compensation expense for stock options and restricted stock awards totaling $2.0 million that were recognized during the second quarter of 2025. (Future expected compensation expense related to these awards is approximately $753 thousand for the third quarter of 2025 and $2.2 million over the remaining vesting periods); (ii) the retail staff additions at the twelve retail locations added through the William Penn acquisition; and (iii) the retention of various William Penn team members through the completion of systems integration, which occurred on June 20, 2025.
Software licensing and utilization costs increased $1.1 million compared to the same period in 2024. The increase reflects additional costs to (i) license the additional William Penn branches; and (ii) upgrades to internal systems, including network storage, cybersecurity, and data security enhancements in response to the Bank's larger size and increased IT complexity.
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The following table and explanations that follow provide additional analysis of noninterest expense:
| Three Months Ended June 30, | |||||||||||||||||||||||
| (Dollars in Thousands) | 2025 | 2024 | $ Variance | % Variance | |||||||||||||||||||
| Salaries and employee benefits | $ | 20,753 | $ | 15,533 | $ | 5,220 | 33.6 | % | |||||||||||||||
| Software licensing and utilization | 3,272 | 2,208 | 1,064 | 48.2 | |||||||||||||||||||
| Occupancy expense, net | 2,365 | 1,861 | 504 | 27.1 | |||||||||||||||||||
| Equipment expense | 1,248 | 1,287 | (39) | (3.0) | |||||||||||||||||||
| Shares tax | 606 | 124 | 482 | 388.7 | |||||||||||||||||||
| Legal and professional fees | 993 | 689 | 304 | 44.1 | |||||||||||||||||||
| ATM/card processing | 621 | 510 | 111 | 21.8 | |||||||||||||||||||
| Intangible amortization | 744 | 425 | 319 | 75.1 | |||||||||||||||||||
| FDIC Assessment | 994 | 1,232 | (238) | (19.3) | |||||||||||||||||||
| Gain on sale of foreclosed assets, net | — | 42 | (42) | (100.0) | |||||||||||||||||||
| Merger and acquisition expense | 11,011 | — | 11,011 | 100.0 | |||||||||||||||||||
| Other expenses | 5,191 | 4,313 | 878 | 20.4 | |||||||||||||||||||
| Total Noninterest Expense | $ | 47,798 | $ | 28,224 | $ | 19,574 | 69.4 | % | |||||||||||||||
For the six months ended June 30, 2025, noninterest expense totaled $78.4 million, an increase of $21.7 million, or 38.2%, compared to noninterest expense of $56.7 million for the six months ended June 30, 2024.
Merger and acquisition expenses increased $11.3 million for the six months ended June 30, 2025, which includes $11.2 million of merger related expenses related to the William Penn acquisition and $164 thousand related to the Charis Insurance Group acquisition.
Salaries and benefits increased $6.1 million for the six months ended June 30, 2025, compared to the same period in 2024, largely driven by the same Q2 items noted above, including $2.0 million in equity compensation, staff additions from the William Penn acquisition, and retention of key personnel through integration.
Software licensing and utilization costs increased $1.5 million for the six months ended June 30, 2025, compared to the same period in 2024, reflecting the same Q2 drivers noted above. These include the onboarding of newly acquired William Penn branches, investments in IT infrastructure and cybersecurity.
Occupancy expenses increased $796 thousand for the six months ended June 30, 2025, compared to the same period in 2024. The increase was driven by the facility operating costs of the additional retail locations added through the William Penn acquisition.
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| Six Months Ended June 30, | |||||||||||||||||||||||
| (Dollars in Thousands) | 2025 | 2024 | $ Variance | % Variance | |||||||||||||||||||
| Salaries and employee benefits | $ | 37,062 | $ | 30,995 | $ | 6,067 | 19.6 | % | |||||||||||||||
| Software licensing and utilization | 5,846 | 4,328 | 1,518 | 35.1 | |||||||||||||||||||
| Occupancy expense, net | 4,639 | 3,843 | 796 | 20.7 | |||||||||||||||||||
| Equipment expense | 2,342 | 2,509 | (167) | (6.7) | |||||||||||||||||||
| Shares tax | 1,525 | 1,121 | 404 | 36.0 | |||||||||||||||||||
| Legal and professional fees | 1,819 | 1,687 | 132 | 7.8 | |||||||||||||||||||
| ATM/card processing | 1,354 | 1,044 | 310 | 29.7 | |||||||||||||||||||
| Intangible amortization | 1,172 | 853 | 319 | 37.4 | |||||||||||||||||||
| FDIC Assessment | 1,984 | 2,177 | (193) | (8.9) | |||||||||||||||||||
| Gain on sale of foreclosed assets, net | (28) | 42 | (70) | (166.7) | |||||||||||||||||||
| Merger and acquisition expense | 11,325 | — | 11,325 | N/M | |||||||||||||||||||
| Other expenses | 9,400 | 8,145 | 1,255 | 15.4 | |||||||||||||||||||
| Total Noninterest Expense | $ | 78,440 | $ | 56,744 | $ | 21,696 | 38.2 | % | |||||||||||||||
Income Taxes
The benefit for income taxes was $480 thousand for the three months ended June 30, 2025 compared to a provision of $2.5 million for the same period in 2024. The benefit for income taxes for the six months ended June 30, 2025 reflects a combined Federal and State effective tax rate of 12.2% and 17.5%, for the six months ended June 30, 2025 and June 30, 2024, respectively. Generally, Mid Penn’s effective tax rate is below the federal statutory rate due to earnings on tax-exempt loans, investments, and earnings from the cash surrender value of life insurance, as well as the impact of federal income tax credits, including those awarded from Mid Penn’s low-income housing investments. The realization of Mid Penn’s deferred tax assets is dependent on future earnings. Mid Penn currently anticipates that future earnings will be adequate to fully realize the currently recorded deferred tax assets.
Financial Condition
Mid Penn’s total assets were $6.4 billion as of June 30, 2025, reflecting an increase of $883.6 million, or 16.2%, compared to total assets of $5.5 billion as of December 31, 2024. The increase was primarily driven by an increase in loans as a result of the William Penn acquisition, an increase in available for sale investment securities, and an increase in Fed Funds Sold.
Investment Securities
Mid Penn’s investment portfolio is utilized primarily to support overall liquidity and interest rate risk management, to provide collateral supporting pledging requirements for public funds on deposit, and to generate additional interest income within reasonable risk parameters. The carrying value of total investment securities as of June 30, 2025 were $768.8 million compared to $642.9 million as of December 31, 2024. Mid Penn does not intend to grow the investment portfolio beyond levels necessary to support pledging requirements.
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The following table presents the expected maturities of the investment portfolio and the weighted average yields (calculated based on historical cost):
| Maturing | |||||||||||||||||||||||||||||||||||||||||||||||
| (In Thousands) | One Year and Less | After One Year thru Five Years | After Five Years Thru Ten Years | After Ten Years | |||||||||||||||||||||||||||||||||||||||||||
| As of June 30, 2025 | Amount | Weighted Average Yield | Amount | Weighted Average Yield | Amount | Weighted Average Yield | Amount | Weighted Average Yield | |||||||||||||||||||||||||||||||||||||||
| Available for sale securities, at fair value: | |||||||||||||||||||||||||||||||||||||||||||||||
| U.S. Treasury and U.S. government agencies | $ | 996 | 3.49 | % | $ | 14,509 | 2.39 | % | $ | 1,876 | 3.30 | % | $ | — | — | % | |||||||||||||||||||||||||||||||
| Mortgage-backed U.S. government agencies | — | — | — | — | 5,172 | 2.52 | 338,873 | 3.71 | |||||||||||||||||||||||||||||||||||||||
| State and political subdivision obligations | — | — | — | — | 3,038 | 2.49 | 629 | 2.23 | |||||||||||||||||||||||||||||||||||||||
| Corporate debt securities | 5,947 | 5.15 | 6,480 | 4.31 | 27,225 | 4.42 | — | — | |||||||||||||||||||||||||||||||||||||||
| $ | 6,943 | 4.28 | % | $ | 20,989 | 3.05 | % | $ | 37,311 | 3.84 | % | $ | 339,502 | 3.71 | % | ||||||||||||||||||||||||||||||||
| Held to maturity securities, at amortized cost: | |||||||||||||||||||||||||||||||||||||||||||||||
| U.S. Treasury and U.S. government agencies | $ | 9,095 | 3.10 | % | $ | 103,928 | 1.84 | % | $ | 120,487 | 2.09 | % | $ | — | — | % | |||||||||||||||||||||||||||||||
| Mortgage-backed U.S. government agencies | 17 | 3.98 | 2,229 | 2.96 | 4,302 | 2.76 | 28,360 | 2.00 | |||||||||||||||||||||||||||||||||||||||
| State and political subdivision obligations | 10,407 | 2.44 | 33,398 | 2.41 | 15,764 | 2.36 | 13,596 | 2.54 | |||||||||||||||||||||||||||||||||||||||
| Corporate debt securities | 4,000 | 3.90 | 9,446 | 3.92 | 9,000 | 3.96 | — | — | |||||||||||||||||||||||||||||||||||||||
| $ | 23,519 | 2.79 | % | $ | 149,001 | 2.08 | % | $ | 149,553 | 2.33 | % | $ | 41,956 | 2.18 | % | ||||||||||||||||||||||||||||||||
Loans, net of unearned income
Total loans, net of unearned income, as of June 30, 2025 were $4.8 billion compared to $4.4 billion as of December 31, 2024. The growth of $389.8 million, or 8.8%, since December 31, 2024 was primarily the result of the addition of William Penn acquisition loans of $405.3 million.
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| June 30, 2025 | December 31, 2024 | Change in Balance | |||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Balance | % of Total Loans | Balance | % of Total Loans | $ | % | |||||||||||||||||||||||||||||
| Commercial real estate | |||||||||||||||||||||||||||||||||||
| CRE Nonowner Occupied | $ | 1,342,512 | 27.8 | % | $ | 1,251,010 | 28.1 | % | $ | 91,502 | 7.3 | % | |||||||||||||||||||||||
| CRE Owner Occupied | 708,782 | 14.7 | 624,007 | 14.0 | 84,775 | 13.6 | |||||||||||||||||||||||||||||
| Multifamily | 392,802 | 8.1 | 412,900 | 9.3 | (20,098) | (4.9) | |||||||||||||||||||||||||||||
| Farmland | 227,953 | 4.7 | 224,709 | 5.1 | 3,244 | 1.4 | |||||||||||||||||||||||||||||
| Total Commercial Real Estate | 2,672,049 | 55.3 | 2,512,626 | 56.5 | 159,423 | 6.3 | |||||||||||||||||||||||||||||
Commercial and industrial | 730,560 | 15.1 | 705,392 | 15.9 | 25,168 | 3.6 | |||||||||||||||||||||||||||||
| Construction | |||||||||||||||||||||||||||||||||||
| Residential Construction | 96,503 | 2.0 | 99,399 | 2.2 | (2,896) | (2.9) | |||||||||||||||||||||||||||||
| Other Construction | 322,642 | 6.7 | 326,171 | 7.3 | (3,529) | (1.1) | |||||||||||||||||||||||||||||
| Total Construction | 419,145 | 8.7 | 425,570 | 9.5 | (6,425) | (1.5) | |||||||||||||||||||||||||||||
| Residential mortgage | |||||||||||||||||||||||||||||||||||
| 1-4 Family 1st Lien | 412,000 | 8.5 | 313,592 | 7.1 | 98,408 | 31.4 | |||||||||||||||||||||||||||||
| 1-4 Family Rental | 417,755 | 8.6 | 336,636 | 7.6 | 81,119 | 24.1 | |||||||||||||||||||||||||||||
| HELOC and Junior Liens | 173,123 | 3.6 | 140,392 | 3.2 | 32,731 | 23.3 | |||||||||||||||||||||||||||||
| Total Residential Mortgage | 1,002,878 | 20.7 | 790,620 | 17.9 | 212,258 | 26.8 | |||||||||||||||||||||||||||||
| Consumer | 8,266 | 0.2 | 8,862 | 0.2 | (596) | (6.7) | |||||||||||||||||||||||||||||
| $ | 4,832,898 | 100.0 | % | $ | 4,443,070 | 100.0 | % | $ | 389,828 | 8.8 | % | ||||||||||||||||||||||||
The majority of the Bank's loan portfolio is to businesses and individuals located within the Bank's primary market area of the Pennsylvania counties of Berks, Blair, Bucks, Chester, Clearfield, Cumberland, Dauphin, Delaware, Fayette, Huntingdon, Lancaster, Lehigh, Luzerne, Montgomery, Perry, Philadelphia, Schuylkill and Westmoreland, along with Burlington, Camden, Mercer, Middlesex and Monmouth counties of New Jersey. Commercial real estate, construction, and land development loans are collateralized mainly by mortgages on the income-producing real estate or land involved. Commercial, industrial, and agricultural loans are primarily made to business entities and may be secured by business assets, including commercial real estate, or may be unsecured. Residential real estate loans are secured by liens on the residential property. Consumer loans include installment loans, lines of credit and home equity loans. The Bank has no significant concentration of credit to any one borrower. The Bank’s highest concentration of credit by loan type is in commercial real estate.
Credit risk is managed through portfolio diversification, underwriting policies and procedures, and loan monitoring practices. Lenders are provided with detailed underwriting policies for all types of credit risks accepted by the Bank and must obtain appropriate internal approvals for credit extensions. The Bank also maintains strict documentation requirements and robust credit quality assurance practices in order to identify credit portfolio weaknesses as early as possible, so any exposures that are discovered might be mitigated or potential losses reduced. The Bank generally secures its loans with real estate, with such collateral values dependent and subject to change based on real estate market conditions within its market area.
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The following table presents the commercial real estate portfolio by property type along with the weighted average loan to value:
| (Dollars in thousands) | June 30, 2025 | December 31, 2024 | ||||||||||||||||||||||||||||||||||||
| Commercial Real Estate | Balance | % of portfolio | Weighted Average LTV (2) | Balance | % of portfolio | Weighted Average LTV (2) | ||||||||||||||||||||||||||||||||
| Owner Occupied (1) | $ | 708,782 | 26.5 | % | N/A | $ | 624,007 | 24.8 | % | N/A | ||||||||||||||||||||||||||||
| Farmland (1) | 227,953 | 8.5 | N/A | 224,709 | 8.9 | N/A | ||||||||||||||||||||||||||||||||
| Multifamily | 392,802 | 14.7 | 57.2 | 412,900 | 16.4 | 63.8 | ||||||||||||||||||||||||||||||||
| Non Owner Occupied | ||||||||||||||||||||||||||||||||||||||
| Retail | 424,082 | 15.9 | 53.2 | 426,171 | 17.0 | 60.3 | ||||||||||||||||||||||||||||||||
| Office | 273,019 | 10.2 | 63.2 | 296,468 | 11.8 | 63.2 | ||||||||||||||||||||||||||||||||
| Industrial | 183,670 | 6.9 | 48.3 | 161,683 | 6.4 | 53.2 | ||||||||||||||||||||||||||||||||
| Hospitality | 161,764 | 6.1 | 44.8 | 152,060 | 6.1 | 51.2 | ||||||||||||||||||||||||||||||||
| Flex | 40,442 | 1.5 | 40.8 | 44,187 | 1.8 | 44.2 | ||||||||||||||||||||||||||||||||
| Mobile Home Park | 16,175 | 0.6 | 58.8 | 17,748 | 0.7 | 67.7 | ||||||||||||||||||||||||||||||||
| Health Care | 13,110 | 0.5 | 60.5 | 14,511 | 0.6 | 55.3 | ||||||||||||||||||||||||||||||||
| Other Property Types | 230,250 | 8.6 | 57.3 | 138,182 | 5.5 | 64.1 | ||||||||||||||||||||||||||||||||
| Total Commercial Real Estate | $ | 2,672,049 | 100.0 | % | 54.7 | % | $ | 2,512,626 | 100.0 | % | 59.9 | % | ||||||||||||||||||||||||||
(1) LTV not available for Owner Occupied and Farmland properties.
(2) Weighted average Loan to Value is calculated based on estimated current market values of the properties.
Maturity distribution by contractual maturity date and rate sensitivity information related to the loan portfolio is reflected in the table below:
| (In Thousands) | |||||||||||||||||||||||||||||
| As of June 30, 2025 | One Year and Less | One to Five Years | Five to Fifteen Years | Over Fifteen Years | Total | ||||||||||||||||||||||||
| Commercial real estate | |||||||||||||||||||||||||||||
| CRE Nonowner Occupied | $ | 70,507 | $ | 482,504 | $ | 499,459 | $ | 290,042 | $ | 1,342,512 | |||||||||||||||||||
| CRE Owner Occupied | 21,956 | 109,515 | 295,103 | 282,208 | 708,782 | ||||||||||||||||||||||||
| Multifamily | 48,722 | 136,316 | 100,484 | 107,280 | 392,802 | ||||||||||||||||||||||||
| Farmland | 545 | 8,819 | 66,559 | 152,030 | 227,953 | ||||||||||||||||||||||||
| Total Commercial real estate | 141,730 | 737,154 | 961,605 | 831,560 | 2,672,049 | ||||||||||||||||||||||||
| Commercial and industrial | 28,051 | 339,962 | 118,852 | 243,695 | 730,560 | ||||||||||||||||||||||||
| Construction | |||||||||||||||||||||||||||||
| Residential Construction | 45,081 | 39,882 | 10,732 | 808 | 96,503 | ||||||||||||||||||||||||
| Other Construction | 130,623 | 158,860 | 19,545 | 13,614 | 322,642 | ||||||||||||||||||||||||
| Total Construction | 175,704 | 198,742 | 30,277 | 14,422 | 419,145 | ||||||||||||||||||||||||
| Residential mortgage | |||||||||||||||||||||||||||||
| 1-4 Family 1st Lien | 5,292 | 32,875 | 94,413 | 279,420 | 412,000 | ||||||||||||||||||||||||
| 1-4 Family Rental | 39,754 | 31,431 | 146,643 | 199,927 | 417,755 | ||||||||||||||||||||||||
| HELOC and Junior Liens | 12,923 | 15,668 | 44,169 | 100,363 | 173,123 | ||||||||||||||||||||||||
| Total Residential Mortgage | 57,969 | 79,974 | 285,225 | 579,710 | 1,002,878 | ||||||||||||||||||||||||
| Consumer | 2,169 | 1,613 | 1,530 | 2,954 | 8,266 | ||||||||||||||||||||||||
| Total loans held in portfolio | $ | 405,623 | $ | 1,357,445 | $ | 1,397,489 | $ | 1,672,341 | $ | 4,832,898 | |||||||||||||||||||
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| Fixed interest rates: | |||||||||||||||||||||||||||||
| Commercial real estate | |||||||||||||||||||||||||||||
| CRE Nonowner Occupied | $ | 50,357 | $ | 230,641 | $ | 55,451 | $ | 9,245 | $ | 345,694 | |||||||||||||||||||
| CRE Owner Occupied | 14,458 | 69,889 | 31,008 | 3,366 | 118,721 | ||||||||||||||||||||||||
| Multifamily | 39,733 | 80,167 | 8,398 | 1,314 | 129,612 | ||||||||||||||||||||||||
| Farmland | 532 | 7,065 | 7,444 | 56 | 15,097 | ||||||||||||||||||||||||
| Total Commercial real estate | 105,080 | 387,762 | 102,301 | 13,981 | 609,124 | ||||||||||||||||||||||||
| Commercial and industrial | 7,005 | 195,207 | 22,025 | 7,748 | 231,985 | ||||||||||||||||||||||||
| Construction | |||||||||||||||||||||||||||||
| Residential Construction | 16,203 | 10,646 | 3 | 193 | 27,045 | ||||||||||||||||||||||||
| Other Construction | 21,197 | 23,272 | 751 | 792 | 46,012 | ||||||||||||||||||||||||
| Total Construction | 37,400 | 33,918 | 754 | 985 | 73,057 | ||||||||||||||||||||||||
| Residential mortgage | |||||||||||||||||||||||||||||
| 1-4 Family 1st Lien | 5,073 | 22,548 | 70,095 | 203,277 | 300,993 | ||||||||||||||||||||||||
| 1-4 Family Rental | 34,633 | 21,185 | 15,020 | 7,419 | 78,257 | ||||||||||||||||||||||||
| HELOC and Junior Liens | 1,139 | 7,148 | 28,615 | 3,194 | 40,096 | ||||||||||||||||||||||||
| Total Residential Mortgage | 40,845 | 50,881 | 113,730 | 213,890 | 419,346 | ||||||||||||||||||||||||
| Consumer | 1,359 | 1,606 | 1,390 | 988 | 5,343 | ||||||||||||||||||||||||
| Total fixed interest rates | $ | 191,689 | $ | 669,374 | $ | 240,200 | $ | 237,592 | $ | 1,338,855 | |||||||||||||||||||
| Floating interest rates: | |||||||||||||||||||||||||||||
| Commercial real estate | |||||||||||||||||||||||||||||
| CRE Nonowner Occupied | $ | 20,152 | $ | 251,862 | $ | 444,007 | $ | 280,797 | $ | 996,818 | |||||||||||||||||||
| CRE Owner Occupied | 7,498 | 39,626 | 264,095 | 278,842 | 590,061 | ||||||||||||||||||||||||
| Multifamily | 8,989 | 56,149 | 92,086 | 105,966 | 263,190 | ||||||||||||||||||||||||
| Farmland | 13 | 1,754 | 59,115 | 151,974 | 212,856 | ||||||||||||||||||||||||
| Total Commercial real estate | 36,652 | 349,391 | 859,303 | 817,579 | 2,062,925 | ||||||||||||||||||||||||
| Commercial and industrial | 21,046 | 144,755 | 96,827 | 235,947 | 498,575 | ||||||||||||||||||||||||
| Construction | |||||||||||||||||||||||||||||
| Residential Construction | 28,877 | 29,238 | 10,729 | 614 | 69,458 | ||||||||||||||||||||||||
| Other Construction | 109,426 | 135,588 | 18,794 | 12,822 | 276,630 | ||||||||||||||||||||||||
| Total Construction | 138,303 | 164,826 | 29,523 | 13,436 | 346,088 | ||||||||||||||||||||||||
| Residential mortgage | |||||||||||||||||||||||||||||
| 1-4 Family 1st Lien | 219 | 10,327 | 24,318 | 76,143 | 111,007 | ||||||||||||||||||||||||
| 1-4 Family Rental | 5,120 | 10,245 | 131,624 | 192,509 | 339,498 | ||||||||||||||||||||||||
| HELOC and Junior Liens | 11,784 | 8,520 | 15,554 | 97,169 | 133,027 | ||||||||||||||||||||||||
| Total Residential Mortgage | 17,123 | 29,092 | 171,496 | 365,821 | 583,532 | ||||||||||||||||||||||||
| Consumer | 810 | 7 | 140 | 1,966 | 2,923 | ||||||||||||||||||||||||
| Total floating interest rates | 213,934 | 688,071 | 1,157,289 | 1,434,749 | 3,494,043 | ||||||||||||||||||||||||
| Total fixed and floating interest rates | $ | 405,623 | $ | 1,357,445 | $ | 1,397,489 | $ | 1,672,341 | $ | 4,832,898 | |||||||||||||||||||
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Credit Quality, Credit Risk, and Allowance for Credit Losses
Mid Penn’s ACL methodology for loans is based upon guidance within FASB ASC Subtopic 326-20, "Financial Instruments – Credit Losses – Measured at Amortized Cost," as well as regulatory guidance from the FDIC, the Bank's primary federal regulator. The ACL is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Credit quality within the loan portfolio is continuously monitored by management and is reflected within the ACL for loans. The ACL is an estimate of expected losses inherent within Mid Penn’s existing loan portfolio. The ACL is adjusted through the provision for credit losses and reduced by the charge off of loan amounts, net of recoveries.
The loan loss estimation process involves procedures to appropriately consider the unique characteristics of Mid Penn’s loan portfolio segments. When computing allowance levels, credit loss assumptions are estimated using a model that categorizes loan pools based on loss history, delinquency status and other credit trends and risk characteristics, including current conditions and reasonable and supportable forecasts about the future. Evaluations of the portfolio and individual credits are inherently subjective, as they require estimates, assumptions and judgments as to the facts and circumstances of particular situations. Determining the appropriateness of the allowance is complex and requires judgement by management about the effect of matters that are inherently uncertain. In future periods, evaluations of the overall loan portfolio, in light of the factors and forecasts then prevailing, may result in significant changes in the allowance and credit loss expense.
For a complete description of Mid Penn’s ACL-loans methodology and the quantitative and qualitative factors included in the calculation, please see "Note 4 – Loans and Allowance for Credit Losses – Loans" included in Part I. Item 1. – Financial Statements of this report.
Changes in the ACL-loans are summarized as follows:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| (Dollars in thousands) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Balance, beginning of period | $ | 35,838 | $ | 33,524 | $ | 35,514 | $ | 34,187 | |||||||||||||||
| Purchase credit deteriorated loans | 343 | — | 343 | — | |||||||||||||||||||
| Loans charged off during period | (909) | (62) | (924) | (112) | |||||||||||||||||||
| Recoveries of loans previously charged off | 98 | 44 | 116 | 50 | |||||||||||||||||||
| Net recoveries/(charge-offs) | (811) | (18) | (808) | (62) | |||||||||||||||||||
Provision/(benefit) for credit losses - loans (1) | 2,245 | 1,782 | 2,566 | 1,163 | |||||||||||||||||||
| Balance, end of period | $ | 37,615 | $ | 35,288 | $ | 37,615 | $ | 35,288 | |||||||||||||||
| Ratio of net (recoveries)/charge-offs to average loans outstanding (annualized) | 0.069 | % | 0.002 | % | 0.035 | % | 0.003 | % | |||||||||||||||
| Ratio of ACL - loans to net loans at end of period | 0.78 | % | 0.81 | % | 0.78 | % | 0.81 | % | |||||||||||||||
(1) Includes a $2.3 million initial provision related to non-PCD loans acquired in the William Penn acquisition in the second quarter of 2025.
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The following table presents the change in nonperforming asset categories as of June 30, 2025, December 31, 2024, and June 30, 2024.
| (Dollars in thousands) | June 30, 2025 | December 31, 2024 | June 30, 2024 | ||||||||||||||
| Non-performing Assets: | |||||||||||||||||
| Total non-accrual loans | $ | 18,216 | $ | 22,610 | $ | 9,999 | |||||||||||
| Foreclosed real estate | 9,816 | 44 | 441 | ||||||||||||||
| Total non-performing assets | 28,032 | 22,654 | 10,440 | ||||||||||||||
| Accruing loans 90 days or more past due | — | — | — | ||||||||||||||
| Total risk elements | $ | 28,032 | $ | 22,654 | $ | 10,440 | |||||||||||
| Non-accrual loans as a percentage of total loans outstanding | 0.38 | % | 0.51 | % | 0.23 | % | |||||||||||
| Non-performing assets as a percentage of total loans outstanding and foreclosed real estate | 0.58 | % | 0.51 | % | 0.24 | % | |||||||||||
| Ratio of ACL-loans to non-performing loans | 206.49 | % | 157.07 | % | 352.92 | % | |||||||||||
Total nonperforming assets were $28.0 million at June 30, 2025, an increase compared to nonperforming assets of $22.7 million at December 31, 2024. The increase during the second quarter of 2025 is primarily related to the addition of two commercial real estate loans with a combined balance of $8.8 million being foreclosed in the second quarter of 2025, offset by payoffs and paydowns in the second quarter of 2025. Delinquency, measured as loans past due 30 days or more, as a percentage of total loans was 0.58% at June 30, 2025, compared to 0.52% and 0.57% as of December 31, 2024 and June 30, 2024, respectively.
Goodwill
Mid Penn evaluates goodwill annually for impairment unless events occur which indicate that impairment is possible: a triggering event. At June 30, 2025, Mid Penn had goodwill of $135.5 million and Mid Penn's stock continues to trade below book value, warranting additional analysis. Management has reviewed actual earnings in relation to forecasted earnings, liquidity levels, changes in deposit balances, and credit quality, among others. Management has not noted any factors which would indicate that an additional impairment test is necessary. Management will continue to monitor internal metrics and macroeconomic trends to determine if there is likelihood of goodwill impairment. Mid Penn's annual impairment test is scheduled to be conducted as of October 31, 2025.
Deposits
Total deposits increased $759.7 million, or 16.2%, from $4.7 billion on December 31, 2024, to $5.4 billion at June 30, 2025. The growth was driven by a $453.0 million increase in interest bearing accounts, and a $97.9 million increase in noninterest bearing accounts, offset by a $208.8 million increase in time deposits. These increases were partially driven by William Penn acquisition deposits of $619.8 million
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Average balances and average interest rates applicable to deposits by major classification:
| June 30, 2025 | December 31, 2024 | Change | |||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Balance | Rate | Balance | Rate | $ | % | |||||||||||||||||||||||||||||
| Noninterest-bearing demand deposits | $ | 783,561 | 0.00 | % | $ | 780,538 | 0.00 | % | $ | 3,023 | 0.39 | % | |||||||||||||||||||||||
| Interest-bearing demand deposits | 1,087,426 | 1.79 | 1,001,813 | 1.90 | 85,613 | 8.55 | |||||||||||||||||||||||||||||
| Money market | 1,102,641 | 2.80 | 913,311 | 2.91 | 189,330 | 20.73 | |||||||||||||||||||||||||||||
| Savings | 284,428 | 0.09 | 275,692 | 0.09 | 8,736 | 3.17 | |||||||||||||||||||||||||||||
| Time | 1,663,995 | 4.14 | 1,541,654 | 4.57 | 122,341 | 7.94 | |||||||||||||||||||||||||||||
| $ | 4,922,051 | 2.43 | % | $ | 4,513,008 | 2.58 | % | $ | 409,043 | 9.06 | % | ||||||||||||||||||||||||
As of June 30, 2025, uninsured deposits were approximately $1.6 billion compared to $1.4 billion as of December 31, 2024. The maturities of the uninsured time deposits as of June 30, 2025 were as follows:
| (In thousands) | 2025 | ||||||||||
| Three months or less | $ | 134,904 | |||||||||
| Over three months to six months | 230,912 | ||||||||||
| Over six months to twelve months | 26,988 | ||||||||||
| Over twelve months | 847 | ||||||||||
| $ | 393,651 | ||||||||||
Borrowings
Total short-term borrowings decreased $2.0 million, or 100.0%, from December 31, 2024. The decrease in short-term borrowings was driven by our objective to maintain a strong unencumbered liquid assets ratio, ensuring the availability of high-quality liquidity to meet potential near-term obligations. Total long-term borrowings were $23.4 million at June 30, 2025, a decrease of $229 thousand from December 31, 2024.
Liquidity
Mid Penn’s objective is to maintain adequate liquidity to meet funding needs at a reasonable cost and to provide contingency plans to meet unanticipated funding needs or a loss of funding sources, while minimizing interest rate risk. Adequate liquidity provides resources for credit needs of borrowers, for depositor withdrawals, and for funding corporate operations. Sources of liquidity are as follows:
•a growing core deposit base;
•proceeds from the sale or maturity of investment securities;
•payments received on loans and mortgage-backed securities;
•overnight correspondent bank borrowings on various credit lines; and
•borrowing capacity available from the FHLB and the Federal Reserve Discount Window available to Mid Penn.
Mid Penn believes its core deposits are generally stable even in periods of changing interest rates. Liquidity is measured and monitored daily, allowing management to better understand and react to balance sheet trends. These measurements indicate that liquidity generally remains stable and exceeds our minimum defined levels of adequacy. Other than the trends of continued competitive pressures and volatile interest rates, and the uncertain impact of the current inflationary environment, there are no known demands, commitments, events, or uncertainties that will result in, or that are reasonably likely to result in, liquidity increasing or decreasing in any material way.
On at least a quarterly basis, a comprehensive liquidity analysis is reviewed by the Asset Liability Committee and Board of Directors. The analysis provides a summary of the current liquidity measurements, projections, and future liquidity positions given various levels of liquidity stress. Management also maintains a detailed Contingency Funding Plan designed to respond to overall stress in the financial condition of the banking industry or a prospective liquidity problem specific to Mid Penn.
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The Consolidated Statements of Cash Flows provide additional information. Mid Penn’s operating activities during the six months ended June 30, 2025 provided $40.5 million of cash, mainly due to net income. Cash used in investing activities during the six months ended June 30, 2025 was $102.8 million, mainly the result of the net increase in loans. Cash provided by financing activities during the six months ended June 30, 2025 totaled $123.0 million, primarily the result of an increase in net deposits.
Regulatory Capital
Mid Penn and the Bank are subject to regulatory capital requirements administered by banking regulators. Failure to meet minimum capital requirements can trigger certain mandatory, and possibly additional discretionary, actions by the regulators that if, undertaken, could have a direct material effect on Mid Penn's financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of its assets, liabilities, and certain off-balance sheet items as calculated under regulatory account practices. The Bank's capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.
Minimum regulatory capital requirements established by Basel III rules require Mid Penn and the Bank to:
•Meet a minimum Common Equity Tier I capital ratio of 4.5% of risk-weighted assets;
•Meet a minimum Tier I capital ratio of 6.0% of risk-weighted assets;
•Meet a minimum Total capital ratio of 8.0% of risk-weighted assets;
•Meet a minimum Tier I leverage capital ratio of 4.0% of average assets;
•Maintain a "capital conservation buffer" of 2.5% above the minimum risk-based capital requirements, which must be maintained to avoid restrictions on capital distributions and certain discretionary bonuses; and
•Comply with the definition of capital to improve the ability of regulatory capital instruments to absorb losses.
The Basel III Rules use a standardized approach for risk weightings that expands the risk-weighting for assets and off-balance sheet exposures from the previous 0%, 20%, 50% and 100% categories to a much larger and more risk-sensitive number of categories, depending on the nature of the assets and off-balance sheet exposures and resulting in higher risk weightings for a variety of asset categories.
Banks are evaluated for capital adequacy by regulatory supervisory agencies based on the ratio of capital to risk-weighted assets and total assets. The minimum capital to risk-weighted assets requirements, including the capital conservation buffers, which became effective for Mid Penn and the Bank on January 1, 2016, are illustrated below. At June 30, 2025, regulatory capital ratios for both Mid Penn and the Bank met the definition of a "well-capitalized" institution under the regulatory framework for prompt corrective action and exceeded the minimum capital requirements under Basel III.
Mid Penn maintained the following regulatory capital ratios in comparison to regulatory requirements:
| June 30, 2025 | December 31, 2024 | Regulatory Minimum for Capital Adequacy | Fully Phased-In, with Capital Conversation Buffers | |||||||||||||||||||||||
| Total Risk-Based Capital (to Risk-Weighted Assets) | 14.40 | % | 13.98 | % | 10.50 | % | 4.00 | % | ||||||||||||||||||
| Tier I Risk-Based Capital (to Risk-Weighted Assets) | 12.82 | 12.09 | 8.50 | 7.00 | ||||||||||||||||||||||
| Common Equity Tier I (to Risk-Weighted Assets) | 12.82 | 12.09 | 7.00 | 8.50 | ||||||||||||||||||||||
| Tier I Leverage Capital (to Average Assets) | 10.63 | 9.98 | 4.00 | 10.50 | ||||||||||||||||||||||
As of June 30, 2025 and December 31, 2024, Mid Penn and the Bank met all capital adequacy requirements and the Bank was considered "well-capitalized". However, future changes in regulations could increase capital requirements and may have an adverse effect on capital resources.
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Shareholders' Equity
Shareholders' equity, or capital, is evaluated in relation to total assets and the risk associated with those assets, and the desire to collectively maintain and enhance shareholders’ value, and satisfactorily address regulatory capital requirements. Accordingly, capital management practices have been, and will continue to be, of paramount importance to Mid Penn.
Shareholders’ equity increased by $120.7 million, or 18.4%, from $655.0 million as of December 31, 2024 to $775.7 million as of June 30, 2025, primarily due to common stock issued to William Penn shareholders in the amount of $99.7 million and year to date earnings of $18.5 million.
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ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a financial institution, Mid Penn’s primary source of market risk is interest rate risk. Interest rate risk is the exposure to fluctuations in Mid Penn’s future earnings, earnings at risk, resulting from changes in interest rates. This exposure or sensitivity is a function of the repricing characteristics of Mid Penn's portfolio of assets and liabilities. Each asset and liability reprices either at maturity or during the life of the instrument. Interest rate sensitivity is measured as the difference between the volume of assets and liabilities that are subject to repricing in a future period of time.
The principal purpose of asset-liability management is to maximize current and future net interest income within acceptable levels of interest rate risk while satisfying liquidity and capital requirements. Net interest income is increased by increasing the net interest margin and by volume growth. Thus, the goal of interest rate risk management is to maintain a balance between risk and reward such that net interest income is maximized while risk is maintained at an acceptable level.
Mid Penn utilizes an asset-liability management model to measure the impact of interest rate movements on its interest rate sensitivity position. Mid Penn’s management also reviews the traditional maturity gap analysis regularly. Mid Penn does not always attempt to achieve an exact match between interest sensitive assets and liabilities because it believes that an actively managed amount of interest rate risk is inherent and appropriate in the management of Mid Penn’s profitability.
Modeling techniques and simulation analysis involve assumptions and estimates that inherently cannot be measured with complete precision. Key assumptions in the analyses include maturity and repricing characteristics of assets and liabilities, prepayments on amortizing assets, non-maturing deposit sensitivity, and loan and deposit pricing. These assumptions are inherently uncertain due to the timing, magnitude and frequency of rate changes and changes in market conditions and management strategies, among other factors. However, the analyses are useful in quantifying risk and provide a relative gauge of Mid Penn’s interest rate risk position over time.
Management reviews interest rate risk on a quarterly basis. This analysis includes earnings scenarios whereby interest rates are increased by 100, 200, 300 and 400 bps or decreased by 100, 200, 300, and 400 bps. These scenarios, detailed in the table below, indicate that Mid Penn would experience enhanced net interest income over a one-year time frame due to upward interest rate changes, while a reduction in interest rates would result in a decline in net interest income over a one-year time frame; however, actual results could vary significantly from the calculations prepared by management. At June 30, 2025, all interest rate risk levels according to the model were within the tolerance limits of the Board-approved policy.
| Change in Basis Points | % Change in Net Interest Income | Policy Risk Limit | ||||||||||||||||||
| June 30, 2025 | December 31, 2024 | |||||||||||||||||||
| 400 | 12.8% | 9.0% | ≥ -25% | |||||||||||||||||
| 300 | 9.7% | 6.8% | ≥ -20% | |||||||||||||||||
| 200 | 6.5% | 4.6% | ≥ -15% | |||||||||||||||||
| 100 | 3.3% | 2.4% | ≥ -10% | |||||||||||||||||
| (100) | (3.3)% | (2.3)% | ≥ -10% | |||||||||||||||||
| (200) | (6.5)% | (4.7)% | ≥ -15% | |||||||||||||||||
| (300) | (9.2)% | (7.2)% | ≥ -20% | |||||||||||||||||
| (400) | (11.3)% | (8.2)% | ≥ -25% | |||||||||||||||||
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ITEM 4 – CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Mid Penn maintains controls and procedures designed to ensure that information required to be disclosed in the reports that Mid Penn files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. Based upon their evaluation of those controls and procedures as of June 30, 2025, Mid Penn’s management, with the participation of the Principal Executive Officer and Principal Financial Officer, concluded that the disclosure controls and procedures were effective as of such date.
Changes in Internal Controls
There were no changes in Mid Penn’s internal control over financial reporting that have materially affected, or are reasonable likely to materially affect, Mid Penn’s internal control over financial reporting during the six months ended June 30, 2025.
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PART II – OTHER INFORMATION
ITEM 1 – LEGAL PROCEEDINGS
Mid Penn and its subsidiaries are subject to various pending and threatened legal proceedings or other matters arising out of the normal conduct of business in which claims for monetary damages are asserted. As of the date of this report, management, after consultation with legal counsel, does not anticipate that the aggregate ultimate liability arising out of such pending or threatened matters will be material to Mid Penn’s consolidated financial position. On at least a quarterly basis, Mid Penn assesses its liabilities and contingencies in connection with such matters. For those matters where it is probable that Mid Penn will incur losses and the amounts of the losses can be reasonably estimated, Mid Penn records an expense and corresponding liability in its consolidated financial statements. To the extent such matters could result in exposure in excess of that liability, the amount of such excess is not currently estimable. The range of losses for matters where an exposure is not currently estimable or considered probable is not believed to be material in the aggregate. This is based on information currently available to Mid Penn and involves elements of judgment and significant uncertainties. While Mid Penn does not believe that the outcome of pending or threatened litigation or other matters will be material to Mid Penn’s consolidated financial position, it cannot rule out the possibility that such outcomes will be material to the consolidated results of operations for a particular reporting period in the future. In addition, regardless of the ultimate outcome of any such legal proceeding, inquiry or investigation, any such matter could cause Mid Penn to incur additional expenses, which could be significant, and possibly material, to Mid Penn’s results of operations in any future period.
In addition, management does not know of any material proceedings contemplated by governmental authorities against Mid Penn or any of its properties.
ITEM 1A – RISK FACTORS
Management has reviewed the risk factors that were previously disclosed in the 2024 Annual Report and subsequent reports filed with the SEC to determine if there were material changes applicable to the six months ended June 30, 2025. Aside from the following risk factor, there have been no material changes to the risk factors that were previously disclosed in the 2024 Annual Report.
Changes in financial regulations and economic policies under the current U.S. administration may impact our business operations, compliance costs, and profitability.
The current administration's policies have introduced both opportunities and uncertainties that could materially affect our operations:
•Deregulation Efforts: The administration has signaled intentions to ease financial regulations, including potential modifications to capital requirements and stress testing procedures. While this may reduce compliance costs, it may also lead to increased competition and pressure on profit margins.
•Trade Policies: Recent shifts in trade policies, such as the implementation of tariffs on imports from key trading partners, have created volatility in financial markets. This uncertainty could impact our customers' business operations, potentially affecting their creditworthiness and demand for financing.
•Tax Reforms: Proposed changes to corporate tax structures may alter the financial landscape in which we operate. While lower taxes could enhance profitability, the long-term effects on the broader economy remain uncertain.
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ITEM 2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
(1)None.
(2)None.
| Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar amount of Shares That May Yet Be Purchased | ||||||||||||||||||||||
| April 1 - April 30, 2025 | — | $ | — | 440,722 | $ | 4,958,391 | ||||||||||||||||||||
| May 1 - May 31, 2025 | 62,812 | 28.31 | 503,534 | 3,180,183 | ||||||||||||||||||||||
| June 1 - June 30, 2025 | — | — | 503,534 | 3,180,183 | ||||||||||||||||||||||
Mid Penn adopted a treasury stock repurchase program ("Program") initially effective March 19, 2020, and renewed through April 30, 2026 by Mid Penn’s Board of Directors on April 23, 2025. The Program authorizes the repurchase of up to $15.0 million of Mid Penn’s outstanding common stock. Under the Program, Mid Penn conducts repurchases of its common stock through open market transactions (which may be by means of a trading plan adopted under SEC Rule 10b5-1) or in privately negotiated transactions. Repurchases under the Program are made at the discretion of management and are subject to market conditions and other factors. There is no guarantee as to the exact number of shares that Mid Penn may repurchase. The Program is able to be modified, suspended or terminated at any time, at Mid Penn’s discretion, based upon a number of factors, including liquidity, market conditions, the availability of alternative investment opportunities and other factors Mid Penn deems appropriate. The Program does not obligate Mid Penn to repurchase any shares. During the three months ended June 30, 2025, Mid Penn repurchased 62,812 shares of common stock at an average price of $28.31. As of June 30, 2025, Mid Penn repurchased 503,534 shares of common stock under the Program.
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ITEM 3 – DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4 – MINE SAFETY DISCLOSURES
Not Applicable
ITEM 5 – OTHER INFORMATION
During the three months ended June 30, 2025, none of Mid Penn’s directors or executive officers adopted terminated
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ITEM 6 – EXHIBITS
| 2.1 | Completion of Acquisition, dated as of April 30, 2025, by and between Mid Penn Bancorp, Inc. and William Penn Bancorporation (Incorporated by reference to Registrant's Current Report on Form 8-K filed on April 30, 2025) | |||||||
| 3.1 | The Registrant’s Articles of Incorporation. (Incorporated by reference to Exhibit 3.1 to Registrant's Quarterly Report on form 10-Q with the SEC on May 9, 2023.) | |||||||
| 3.2 | The Registrant’s By-laws. (Incorporated by reference to Exhibit 3.1 to Registrant’s Annual Report on Form 10-K filed with the SEC on March 28, 2024.) | |||||||
| 10.1 | William Penn Bancorporation 2022 Equity Incentive Plan, incorporated by reference to Exhibit 10.1 to the Registrant's Registration Statement on Form S-8 filed May 1, 2025 (File No. 333-286886) | |||||||
| 10.2 | The William Penn Bank 401(K) Retirement Savings Plan, incorporated by reference to Exhibit 10.2 to William Penn's Form S-1 Registration Statement, as amended, initially filed with the SEC on October 15, 2020 (File No. 333-249492) | |||||||
| 31.1 | Certification of Principal Executive Officer Pursuant to Exchange Act Rules 13a-14(a)/15d-14(a) as added by Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||
| 31.2 | Certification of Principal Financial Officer Pursuant to Exchange Act Rules 13a-14(a)/15d-14(a) as added by Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||
| 32 | Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350 as added by Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document. | |||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | |||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |||||||
| 104 | Cover Page Interactive Data File (formatted in inline XBRL and contained in Exhibit 101). | |||||||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Mid Penn Bancorp, Inc. (Registrant) | ||||||||
| By: | /s/ Rory G. Ritrievi | |||||||
| Rory G. Ritrievi President and CEO (Principal Executive Officer) | ||||||||
| Date: | August 7, 2025 | |||||||
| By: | /s/ Justin T. Webb | |||||||
Justin T. Webb Chief Financial Officer (Principal Financial Officer) | ||||||||
| Date: | August 7, 2025 | |||||||
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