FALSE000087963500008796352023-07-272023-07-27

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):  July 27, 2023
MID PENN BANCORP, INC.
(Exact Name of Registrant as Specified in its Charter)
Pennsylvania1-1367725-1666413
(State or Other Jurisdiction of
Incorporation or Organization)
(Commission File Number)
(I.R.S. Employer
Identification Number)
2407 Park Drive
Harrisburg, Pennsylvania
1.866.642.7736
17110
(Address of Principal Executive Offices)
(Registrant’s telephone number, including area code)
(Zip Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading
Symbol(s)
Name of each exchange on which registered
Common Stock, $1.00 par value per shareMPB
The NASDAQ Stock Market LLC
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b) )
oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4( c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company o
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


MID PENN BANCORP, INC.
CURRENT REPORT ON FORM 8-K
ITEM 2.02    RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On July 27, 2023, Mid Penn Bancorp, Inc. (the "Corporation") issued a press release discussing its financial results for the quarter ended June 30, 2023.  A copy of the Corporation’s press release dated July 27, 2023 is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.
ITEM 8.01    OTHER EVENTS
Additionally, on July 26, 2023, the Corporation announced that its Board of Directors declared a quarterly cash dividend of $0.20 per common share payable on August 28, 2023 to shareholders of record as of August 10, 2023.
ITEM 9.01    FINANCIAL STATEMENTS AND EXHIBITS
(d)Exhibits.
99.1
104Cover Page Interactive Data File (embedded within the Inline XBRL document).


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 hereunto duly authorized.
MID PENN BANCORP, INC.
(Registrant)
Date: July 27, 2023
By:/s/ Rory G. Ritrievi
Rory G. Ritrievi
President and Chief Executive Officer


Exhibit 99.1
PRESS RELEASE
Mid Penn Bancorp, Inc.
2407 Park Drive
Harrisburg, PA 17110
1-866-642-7736
CONTACTS
Rory G. Ritrievi
Chair, President & Chief Executive Officer
Allison S. Johnson
Chief Financial Officer
MID PENN BANCORP, INC. REPORTS SECOND QUARTER EARNINGS
AND DECLARES DIVIDEND

July 27, 2023 – Harrisburg, PA – Mid Penn Bancorp, Inc. (NASDAQ: MPB) ("Mid Penn"), the parent company of Mid Penn Bank (the "Bank") and MPB Financial Services, LLC, today reported net income available to common shareholders ("earnings") for the quarter ended June 30, 2023, of $4.8 million, or $0.29 per diluted common share. Adjusted net income excluding non-recurring expenses(1) for the second quarter 2023 was $11.1 million and adjusted earnings per share common share excluding non-recurring expenses was $0.68, which excluded $6.3 million of after-tax merger-related expenses.

Key Highlights of the Second Quarter of 2023

•Completed the acquisition of Brunswick Bancorp ("Brunswick"), which added total assets of $391.9 million comprised primarily of $324.8 million of loans.

•Organic deposit growth for the quarter was $126.0 million, or 13% (annualized), from the first quarter of 2023.

•Organic loan growth for the quarter was $98.3 million, or 10.9% (annualized), from the first quarter of 2023.

•Repurchased 204,379 shares of common stock at an average price of $22.41.

•Total accumulated other comprehensive loss was 4.5% of tangible shareholders' equity(1) at June 30, 2023.

•Book value per common share was $32.05 for the second quarter, compared to $32.15 for the first quarter of 2023. Tangible book value per share(1) was $23.79 at June 30, 2023, compared to $24.52, at March 31, 2023.

“During the second quarter, while completing the acquisition of Brunswick Bancorp, Mid Penn achieved 13% annualized organic deposit growth and 10.9% annualized organic loan growth, demonstrating our resilience in the face of recent turbulence in the banking industry. The Brunswick acquisition added $325 million in quality loans and $283 million in core deposits while giving Mid Penn entry into the dynamic central New Jersey market. We look forward to complementing Brunswick’s talented team of bankers with the resources of a $5+ billion balance sheet to help them compete effectively in a market with very attractive demographics,” Chair, President, and CEO Rory G. Ritrievi said.

Ritrievi added, “As a result of the interest rate yield curve being inverted throughout the quarter, our net interest margin remained under pressure, as is the case for most community banks that compete in the spread business. Notwithstanding the rate increase announced this week, we feel we are nearing an end of that margin compression with the expectation that we will now begin to build that margin back to the level we saw in FY2021 and 2022. As we do that, we will remain diligent in controlling noninterest expenses so that our final FY2023 operating results will meet the expectations of our shareholders and analysts.”

For the second quarter, the Board is pleased to announce a quarterly cash dividend of $0.20 per share of common stock, which was declared at its meeting on July 26, 2023, payable on August 28, 2023, to shareholders of record as of August 10, 2023.

(1)Non-GAAP financial measure. Refer to the calculation on the section titled “Reconciliation of Non-GAAP Measures” at the end of this document.
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Net Interest Income
For the three months ended June 30, 2023, net interest income was $36.4 million compared to net interest income of $36.0 million for the three months ended March 31, 2023, and $35.4 million for the three months ended June 30, 2022. The tax-equivalent net interest margin for the three months ended June 30, 2023, was 3.29% compared to 3.49% for the first quarter of 2023, and 3.45% for the second quarter of 2022, a 20 and 16 basis point ("bp") decrease, respectively, compared to the prior quarter and the same period in 2022.

The yield on interest-earning assets increased to 5.10% for the quarter ended June 30, 2023, from 4.86% for the quarter ended March 31, 2023, and 3.73% for the quarter ended June 30, 2022. The increase was due to assets continuing to reprice at higher rates during the quarter. Increased yields on interest-earning assets were more than offset by increases in funding costs for the quarter with overall cost of interest-bearing liabilities increasing to 2.35% during the second quarter of 2023, compared to 1.81% at March 31, 2023, and 0.36% at June 30, 2022.
For the six months ended June 30, 2023, net interest income increased $2.6 million to $72.5 million compared to net interest income of $69.8 million for the same period of 2022.

Both interest-earning assets and interest-bearing liabilities associated with the Brunswick acquisition had substantially similar yields to the corresponding Mid Penn portfolios. We do not anticipate a material change in net interest margin resulting from the acquisition.

Average Balances

Average balances were significantly impacted by the Brunswick acquisition given that the acquisition closed on May 19, 2023. Day one increases in loans, total assets, deposits, borrowings, and total liabilities were $324.8 million, $391.9 million, $282.6 million, $60.1 million, and $346.3 million, respectively.

Average loans increased $253.3 million to $3.8 billion at June 30, 2023, compared to $3.6 billion at March 31, 2023, and $3.1 billion at June 30, 2022. Average deposits were $4.1 billion for the second quarter of 2023, reflecting an increase of $274.6 million, or 7.3%, compared to total average deposits in the first quarter of 2023, and $220.5 million, or 5.8%, compared to total average deposits of $3.8 billion for the second quarter of 2022. The average cost of deposits was 1.77% for the second quarter of 2023, representing a 48 bp and 156 bp increase from the first quarter of 2023 and the second quarter of 2022, respectively. We continue to face headwinds with respect to deposit pricing as customers in many product types have become increasingly rate sensitive. Our primary focus with respect to deposit strategy is stability, ensuring that our rates are competitive and our product mix satisfies the needs of our customers. Additionally, Mid Penn also maintains interest rate swaps designated as cash flow hedges to hedge the cash flows associated with existing brokered CDs to mitigate the impact of rising deposit costs.

As a result of the Brunswick acquisition and organic movement, the mix of deposits has shifted from the prior quarter. Time deposits represented 22.8% of total deposits at March 31, 2023, and increased to 29.8% at June 30, 2023. Nearly all of this increase corresponds to movement out of interest-bearing transaction accounts. The mix of non-interest bearing deposits remained stable, representing approximately 20% of total deposits for both March 31 and June 30, 2023. The average duration of the non-hedged time deposit portfolio is 12 months at June 30, 2023. We believe this positions us well to reprice the portfolio at lower rates in the future.
Asset Quality
On January 1, 2023, Mid Penn adopted ASU 2016-13, Financial Instruments - Credit Losses (ASC Topic 326): Measurement of Credit Losses on Financial Instruments, which replaces the incurred loss methodology, and is referred to as CECL. Results for reporting periods beginning after January 1, 2023, are presented under CECL, while prior period results are reported in accordance with the previously applicable incurred loss methodology.

The provision for credit losses on loans was $1.2 million for the three months ended June 30, 2023, an increase of $667 thousand compared to the provision for credit losses of $490 thousand for the three months ended March 31, 2023. The increase in provision was primarily due to reserving for the loans acquired through the Brunswick acquisition which was $2.0 million for non-PCD loans. The provision for credit losses on loans was $1.6 million for the six months ended June 30, 2023, a decrease of $578 thousand compared to the provision for credit losses of $2.2 million for the six months ended
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June 30, 2022. The ratio of allowance for credit losses to total loans declined to 0.81% at June 30, 2023, from 0.87% at March 31, 2023, primarily due to improved economic forecasts.

Total nonperforming assets were $16.3 million at June 30, 2023, compared to nonperforming assets of $14.2 million and $8.0 million at March 31, 2023, and June 30, 2022, respectively. The increase during the second quarter primarily related to $3.9 million of non-accrual loans acquired from Brunswick, partially offset by reductions to other non-accrual loans. Delinquency as a percentage of total loans was 0.47% at June 30, 2023.
Capital
Shareholders’ equity increased $18.9 million, or 3.68%, from $512.1 million as of December 31, 2022, to $531.0 million as of June 30, 2023. The increase was primarily due to the Brunswick acquisition. Regulatory capital ratios for both Mid Penn and its banking subsidiary indicate regulatory capital levels in excess of both the regulatory minimums and the levels necessary for the Bank to be considered "well capitalized" at June 30, 2023. Additionally, Mid Penn declared $3.2 million in dividends during the second quarter of 2023.
On May 11, 2023, Mid Penn’s Board of Directors reauthorized its treasury stock repurchase program ("Program") effective through May 11, 2024. The Program authorizes the repurchase of up to $15.0 million of Mid Penn’s outstanding common stock. During the six months ended June 30, 2023, Mid Penn repurchased 204,379 shares of common stock at an average price of $22.41. As of June 30, 2023, Mid Penn repurchased 412,722 shares of common stock at an average price of $22.92 per share under the Program. The Program had $5.5 million remaining available for repurchase as of June 30, 2023.
Noninterest Income

For the three months ended June 30, 2023, noninterest income totaled $5.2 million, an increase of $895 thousand, compared to noninterest income of $4.3 million for the first quarter of 2023. The primary driver of the increase was a death benefit claim related to BOLI and increased insurance revenues from the MPB Insurance division, which are included in other income. The Brunswick acquisition provides a market with an attractive demographic in which to create new wealth management and insurance customer relationships, which would help bolster noninterest income.

For the six months ended June 30, 2023, noninterest income totaled $9.5 million, a decrease of $1.4 million, compared to noninterest income of $11.0 million for the six months ended June 30, 2022. The decrease in noninterest income is primarily due to mortgage banking hedging activities. Given the rising interest rate environment and lower demand for mortgages, hedging the mortgage pipeline becomes more difficult and adds volatility to earnings.
Noninterest Expense

Noninterest expense totaled $35.5 million, an increase of $9.5 million, or 36.3%, for the three months ended June 30, 2023, compared to noninterest expense of $26.1 million for the first quarter of 2023. Noninterest expense for the three months ended June 30, 2023, includes $7.9 million of merger related expenses. Excluding merger related expenses, overall noninterest expense remained relatively flat for the second quarter of 2023. For the six months ended June 30, 2023, noninterest expense totaled $61.6 million, an increase of $11.9 million, or 24.0%, compared to noninterest expense of $49.7 million for the six months ended June 30, 2022. Noninterest expense for the six months ended June 30, 2023, includes $8.2 million of merger-related expenses.

The efficiency ratio(1) was 65.40% in the second quarter of 2023, compared to 63.16% in the first quarter of 2023, and 57.57% in the second quarter of 2022. Mid Penn is currently evaluating levels of noninterest expense for opportunities to reduce operating costs throughout the organization.
Brunswick Acquisition

On May 19, 2023, Mid Penn completed its acquisition of Brunswick through the merger of Brunswick with and into Mid Penn, with Mid Penn being the surviving corporation. In connection with this acquisition, Brunswick Bank and Trust Company, a wholly-owned subsidiary of Brunswick, merged with and into Mid Penn Bank, a wholly-owned subsidiary of Mid Penn.
Pursuant to the terms of the Merger Agreement, each share of Brunswick common stock issued and outstanding as of May 19, 2023, was converted into the right to receive, at the election of the holder, either 0.598 shares of Mid Penn common stock or $18.00 cash, subject to adjustment and proration procedures described in the Merger Agreement
3

requiring that fifty percent (50%) of the outstanding shares of Brunswick common stock be converted into the right to receive cash and the balance converted into the right to receive Mid Penn common stock. Cash was paid to Brunswick shareholders in lieu of any fractional shares. As a result of the merger, Mid Penn paid holders of Brunswick common stock approximately $25.6 million in cash and issued approximately 849,510 shares of Mid Penn common stock.

Subsequent Events
Management considers subsequent events occurring after the balance sheet date for matters which may require adjustment to, or disclosure in, the consolidated financial statements. The review period for subsequent events extends up to and including the filing date of a public company’s consolidated financial statements when filed with the Securities and Exchange Commission ("SEC"). Accordingly, the financial information in this announcement is subject to change. The statements are valid only as of the date hereof and Mid Penn disclaims any obligation to update this information.

(1)Non-GAAP financial measure. Refer to the calculation on the section titled “Reconciliation of Non-GAAP Measures” at the end of this document.
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SPECIAL CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS

This press release, and oral statements made regarding the subjects of this release, contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are not historical facts and include expressions about management's confidence and strategies and management's current views and expectations about new and existing programs and products, relationships, opportunities, technology and market conditions. These statements may be identified by such forward-looking terminology as "continues," "expect," "look," "believe," "anticipate," "may," "will," "should," "projects," "strategy" or similar statements. Actual results may differ materially from such forward-looking statements, and no reliance should be placed on any forward-looking statement. Factors that may cause results to differ materially from such forward-looking statements include, but are not limited to, changes in interest rates, spreads on earning assets and interest-bearing liabilities, and interest rate sensitivity; prepayment speeds, loan originations, credit losses and market values on loans, collateral securing loans, and other assets; sources of liquidity; common shares outstanding; common stock price volatility; fair value of and number of stock-based compensation awards to be issued in future periods; the impact of changes in market values on securities held in Mid Penn’s portfolio; legislation affecting the financial services industry as a whole, and Mid Penn and Mid Penn Bank individually or collectively, including tax legislation; results of the regulatory examination and supervision process and oversight, including changes in monetary policy and capital requirements; changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or regulatory agencies; increasing price and product/service competition by competitors, including new entrants; rapid technological developments and changes; the ability to continue to introduce competitive new products and services on a timely, cost-effective basis; the mix of products/services; containing costs and expenses; governmental and public policy changes; protection and validity of intellectual property rights; reliance on large customers; technological, implementation and cost/financial risks in large, multi-year contracts; the outcome of future litigation and governmental proceedings, including tax-related examinations and other matters; continued availability of financing; the availability of financial resources in the amounts, at the times and on the terms required to support Mid Penn and Mid Penn Bank’s future businesses; material differences in the actual financial results of merger, acquisition and investment activities compared with Mid Penn’s initial expectations, including the full realization of anticipated cost savings and revenue enhancements; the possibility that the anticipated benefits of the transaction are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy and competitive factors in legacy Mid Penn and Brunswick markets; diversion of management’s attention from ongoing business operations and opportunities; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the transaction; the ability to complete the integration of Mid Penn and Brunswick successfully; the dilution caused by Mid Penn’s issuance of additional shares of its capital stock in connection with the transaction; and other factors that may affect the future results of Mid Penn.
For a more detailed description of these and other factors which would affect our results, please see Mid Penn’s filings with the SEC, including those risk factors identified in the "Risk Factors" section and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2022 and subsequent filings with the SEC. The statements in this press release are made as of the date of this press release, even if subsequently made available by Mid Penn on its website or otherwise. Mid Penn assumes no obligation for updating any such forward-looking statements at any time, except as required by law.
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SUMMARY FINANCIAL HIGHLIGHTS (Unaudited):
(Dollars in thousands, except per share data)Jun. 30,
2023		Mar. 31,
2023		Dec. 31,
2022		Sep. 30,
2022		Jun. 30,
2022
Ending Balances:
Investment securities$634,038 $633,831 $637,802 $644,766 $618,184 
Loans, net of unearned interest4,001,922 3,580,082 3,495,162 3,303,977 3,163,157 
Total assets5,093,887 4,583,465 4,497,954 4,333,903 4,310,163 
Total deposits4,286,686 3,878,081 3,778,331 3,729,596 3,702,587 
Shareholders' equity530,962 510,793 512,099 499,105 495,835 
Average Balances:
Investment securities630,750 636,151 640,792 626,447 580,406 
Loans, net of unearned interest3,808,717 3,555,375 3,395,308 3,237,587 3,129,334 
Total assets4,827,786 4,520,869 4,381,213 4,339,783 4,465,906 
Total deposits4,057,605 3,782,990 3,727,287 3,726,658 3,837,135 
Shareholders' equity504,535 510,857 505,769 502,082 495,681 
Three Months Ended
Income Statement:Jun. 30,
2023		Mar. 31,
2023		Dec. 31,
2022		Sep. 30,
2022		Jun. 30,
2022
Net interest income$36,444 $36,049 $38,577 $39,409 $35,433 
Provision for credit losses1,157 490 525 1,550 1,725 
Noninterest income5,220 4,325 6,714 5,963 5,230 
Noninterest expense35,529 26,070 25,468 24,715 23,915 
Income before provision for income taxes4,978 13,814 19,298 19,107 15,023 
Provision for income taxes142 2,587 3,579 3,626 2,771 
Net income available to shareholders4,836 11,227 15,719 15,481 12,252 
Net income excluding non-recurring expenses (1)
11,112 11,404 15,951 15,481 12,252 
Per Share:
Basic earnings per common share$0.29 $0.71 $0.99 $0.97 $0.77 
Diluted earnings per common share0.29 0.70 0.99 0.97 0.77 
Cash dividends declared0.20 0.20 0.20 0.20 0.20 
Book value per common share32.05 32.15 32.24 31.42 31.23 
Tangible book value per common share (1)
23.79 24.52 24.59 23.80 23.57 
Asset Quality:
Net charge-offs (recoveries) to average loans (annualized)0.018 %0.013 %0.006 %(0.007 %)(0.001 %)
Non-performing loans to total loans0.39 0.38 0.25 0.23 0.25 
Non-performing asset to total loans and other real estate0.40 0.39 0.25 0.23 0.25 
Non-performing asset to total assets0.32 0.31 0.21 0.18 0.19 
ACL on loans to total loans0.81 0.87 0.54 0.56 0.53 
ACL on loans to nonperforming loans205.65 225.71 220.82 242.23 211.66 
Profitability:
Return on average assets0.40 %1.01 %1.42 %1.42 %1.10 %
Return on average equity3.84 8.91 12.33 12.23 9.91 
  Return on average tangible common equity (1)
5.53 11.97 16.61 16.55 13.59 
Net interest margin3.29 3.49 3.80 3.92 3.45 
Efficiency ratio (1)
65.40 63.16 54.59 53.46 57.57 
Capital Ratios:
Tier 1 Capital (to Average Assets) (2)
9.6 %9.2 %10.7 %9.6 %9.0 %
Common Tier 1 Capital (to Risk Weighted Assets) (2)
10.7 10.8 12.5 11.4 11.5 
Tier 1 Capital (to Risk Weighted Assets) (2)
10.7 10.8 12.5 11.7 11.8 
Total Capital (to Risk Weighted Assets) (2)
11.5 13.1 14.5 13.8 14.1 
(1)Non-GAAP financial measure. Refer to the calculation on the section titled “Reconciliation of Non-GAAP Measures” at the end of this document.
(2)Regulatory capital ratios as of June 30, 2023 are preliminary and prior periods are actual.
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CONSOLIDATED BALANCE SHEETS (Unaudited):
(In thousands, except share data)Jun. 30, 2023Mar. 31, 2023Dec. 31, 2022Sep. 30, 2022Jun. 30, 2022
ASSETS
Cash and due from banks$75,906 $51,158 $53,368 $76,018 $64,440 
Interest-bearing balances with other financial institutions13,332 4,996 4,405 4,520 4,909 
Federal funds sold9,711 6,017 3,108 14,140 167,437 
Total cash and cash equivalents98,949 62,171 60,881 94,678 236,786 
Investment Securities:
Held to maturity, at amortized cost404,831 396,784 399,494 402,142 399,032 
Available for sale, at fair value228,774 236,609 237,878 242,195 218,698 
Equity securities available for sale, at fair value433 438 430 428 454 
Loans held for sale7,258 2,677 2,475 5,997 9,574 
Loans, net of unearned interest4,034,510 3,611,347 3,514,119 3,322,457 3,180,033 
Less: Allowance for credit losses(32,588)(31,265)(18,957)(18,480)(16,876)
Net loans4,001,922 3,580,082 3,495,162 3,303,977 3,163,157 
Premises and equipment, net39,230 34,191 34,471 33,854 33,732 
Operating lease right of use asset9,106 8,414 8,798 8,352 8,326 
Finance lease right of use asset2,817 2,862 2,907 2,952 2,997 
Cash surrender value of life insurance53,931 50,928 50,674 50,419 50,169 
Restricted investment in bank stocks11,646 8,041 8,315 4,595 4,234 
Accrued interest receivable19,626 19,205 18,405 15,861 12,902 
Deferred income taxes24,309 15,548 13,674 16,093 13,780 
Goodwill129,403 114,231 114,231 113,871 113,835 
Core deposit and other intangibles, net7,453 6,916 7,260 7,215 7,729 
Foreclosed assets held for sale489 248 43 49 69 
Other assets53,710 44,120 42,856 31,225 34,689 
Total Assets$5,093,887 $4,583,465 $4,497,954 $4,333,903 $4,310,163 
LIABILITIES & SHAREHOLDERS’ EQUITY
Deposits:
Noninterest-bearing demand$830,479 $797,038 $793,939 $863,037 $850,180 
Interest-bearing transaction accounts2,180,312 2,197,216 2,325,847 2,414,272 2,377,260 
Time1,275,895 883,827 658,545 452,287 475,147 
Total Deposits 4,286,686 3,878,081 3,778,331 3,729,596 3,702,587 
Short-term borrowings112,442 88,000 102,647 — — 
Long-term debt58,982 4,316 4,409 4,501 4,592 
Subordinated debt and trust preferred securities45,929 56,794 56,941 66,357 73,995 
Operating lease liability9,894 9,270 9,725 10,261 10,324 
Accrued interest payable11,834 5,809 2,303 1,841 1,542 
Other liabilities37,158 30,402 31,499 22,242 21,288 
Total Liabilities4,562,925 4,072,672 3,985,855 3,834,798 3,814,328 
Shareholders' Equity:
Common stock, par value $1.00 per share; 40.0 million shares authorized16,980 16,098 16,094 16,091 16,081 
Additional paid-in capital409,976 387,332 386,987 386,452 386,128 
Retained earnings131,271 129,617 133,114 120,572 108,265 
Accumulated other comprehensive loss (17,805)(17,374)(19,216)(19,130)(9,759)
Treasury stock(9,460)(4,880)(4,880)(4,880)(4,880)
Total Shareholders’ Equity530,962 510,793 512,099 499,105 495,835 
Total Liabilities and Shareholders' Equity$5,093,887 $4,583,465 $4,497,954 $4,333,903 $4,310,163 
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CONSOLIDATED STATEMENTS OF INCOME (Unaudited):
Three Months EndedSix Months Ended
(Dollars in thousands, except per share data)Jun. 30, 2023Mar. 31, 2023Dec. 31, 2022Sep. 30, 2022Jun. 30, 2022Jun. 30, 2023Jun. 30, 2022
INTEREST INCOME
Loans, including fees$52,094 $45,865 $42,492 $38,484 $34,264 $97,959 $69,280 
Investment securities:
Taxable3,962 3,874 3,784 3,382 2,833 7,836 4,786 
Tax-exempt391 389 390 392 379 780 715 
Other interest-bearing balances83 53 36 12 8 136 21 
Federal funds sold49 45 40 736 736 94 1,050 
Total Interest Income 56,579 50,226 46,742 43,006 38,220 106,805 75,852 
INTEREST EXPENSE
Deposits17,927 12,001 6,995 2,836 2,019 29,928 4,313 
Short-term borrowings1,507 1,490 441 — — 2,997 — 
Long-term and subordinated debt701 686 729 761 768 1,387 1,692 
Total Interest Expense 20,135 14,177 8,165 3,597 2,787 34,312 6,005 
Net Interest Income 36,444 36,049 38,577 39,409 35,433 72,493 69,847 
PROVISION FOR CREDIT LOSSES1,157 490 525 1,550 1,725 1,647 2,225 
Net Interest Income After Provision for Credit Losses35,287 35,559 38,052 37,859 33,708 70,846 67,622 
NONINTEREST INCOME
Fiduciary and wealth management 1,204 1,236 1,085 1,729 1,205 2,440 2,257 
ATM debit card interchange 998 1,056 1,099 1,078 1,128 2,054 2,185 
Service charges on deposits514 435 461 483 450 949 1,134 
Mortgage banking287 384 237 536 305 671 834 
Mortgage hedging128 20 150 217 538 148 1,104 
Net gain on sales of SBA loans128 — — 152 119 128 110 
Earnings from cash surrender value of life insurance292 254 255 250 262 546 508 
Other 1,669 940 3,427 1,518 1,223 2,609 2,848 
Total Noninterest Income 5,220 4,325 6,714 5,963 5,230 9,545 10,980 
NONINTEREST EXPENSE
Salaries and employee benefits15,027 13,844 13,434 13,583 12,340 28,871 25,584 
Software licensing and utilization2,070 1,946 1,793 1,804 1,821 4,016 3,927 
Occupancy, net1,750 1,886 1,812 1,634 1,655 3,636 3,454 
Equipment1,248 1,251 1,249 1,121 1,112 2,499 2,123 
Shares tax751 899 160 920 480 1,650 1,706 
Legal and professional fees602 800 900 528 694 1,402 1,333 
ATM/card processing532 493 534 518 571 1,025 1,087 
Intangible amortization461 344 496 514 521 805 1,002 
FDIC Assessment684 340 243 254 506 1,024 1,097 
(Gain) loss on sale or write-down of foreclosed assets, net(126)— (45)(57)(15)(126)(31)
Merger and acquisition 4,992 224 294 — — 5,216 — 
Post-acquisition restructuring 2,952 — — — — 2,952 329 
Other 4,586 4,043 4,598 3,896 4,230 8,629 8,049 
Total Noninterest Expense 35,529 26,070 25,468 24,715 23,915 61,599 49,660 
INCOME BEFORE PROVISION FOR INCOME TAXES4,978 13,814 19,298 19,107 15,023 18,792 28,942 
Provision for income taxes142 2,587 3,579 3,626 2,771 2,729 5,336 
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS$4,836 $11,227 $15,719 $15,481 $12,252 $16,063 $23,606 
PER COMMON SHARE DATA:
Basic Earnings Per Common Share$0.29 $0.71 $0.99 $0.97 $0.77 $1.00 $1.48 
Diluted Earnings Per Common Share$0.29 $0.70 $0.99 $0.97 $0.77 $1.00 $1.48 
Cash Dividends Declared$0.20 $0.20 $0.20 $0.20 $0.20 $0.20 $0.40 
8

CONSOLIDATED – AVERAGE BALANCE SHEET AND NET INTEREST INCOME ANALYSIS (Unaudited):
Average Balances, Income and Interest Rates on a Taxable Equivalent Basis
For the Three Months Ended
June 30, 2023March 31, 2023June 30, 2022
(Dollars in thousands)Average Balance
Interest (1)
Yield/
Rate		Average Balance
Interest (1)
Yield/
Rate		Average Balance
Interest (1)
Yield/
Rate
ASSETS:
Interest Bearing Balances$7,777 $83 4.28 %$5,761 $53 3.73 %$5,920 $8 0.54 %
Investment Securities:
Taxable551,832 3,783 2.75 556,901 3,764 2.74 501,631 2,740 2.19 
Tax-Exempt78,918 495 2.52 79,250 493 2.52 78,775 480 2.44 
Total Securities630,750 4,278 2.72 636,151 4,257 2.71 580,406 3,220 2.23 
Federal Funds Sold6,035 49 3.26 3,775 45 4.83 415,405 736 0.71 
Loans, Net of Unearned Interest3,808,717 52,192 5.50 3,555,375 45,961 5.24 3,129,334 34,354 4.40 
Restricted Investment in Bank Stocks10,177 179 7.05 9,542 110 4.68 4,854 94 7.77 
Total Earning Assets4,463,456 56,781 5.10 4,210,604 50,426 4.86 4,135,919 38,412 3.73 
Cash and Due from Banks70,378 51,444 59,822 
Other Assets293,952 258,821 270,165 
Total Assets $4,827,786 $4,520,869 $4,465,906 
LIABILITIES & SHAREHOLDERS' EQUITY:
Interest-bearing Demand$936,687 $3,216 1.38 %$968,951 $2,691 1.13 %$1,030,237 $462 0.18 %
Money Market929,774 5,104 2.20 940,286 4,084 1.76 1,079,900 584 0.22 
Savings319,728 64 0.08 330,773 54 0.07 357,433 43 0.05 
Time1,061,276 9,543 3.61 749,598 5,172 2.80 516,346 930 0.72 
Total Interest-bearing Deposits3,247,465 17,927 2.21 2,989,608 12,001 1.63 2,983,916 2,019 0.27 
Short term borrowings94,067 1,507 6.43121,898 1,490 4.96 — — — 
Long-term debt54,347 194 1.434,350 44 4.10 9,238 107 4.65 
Subordinated debt and trust preferred securities47,782 507 4.2656,875 642 4.58 74,062 661 3.58 
Total Interest-bearing Liabilities3,443,661 20,135 2.353,172,731 14,177 1.81 3,067,216 2,787 0.36 
Noninterest-bearing Demand810,140 793,382 853,219 
Other Liabilities69,451 43,899 49,790 
Shareholders' Equity504,535 510,857 495,681 
Total Liabilities & Shareholders' Equity $4,827,787 $4,520,869 $4,465,906 
Net Interest Income (taxable equivalent basis)$36,646 $36,249 $35,625 
Taxable Equivalent Adjustment(202)(200)(192)
Net Interest Income$36,444 $36,049 $35,433 
Total Yield on Earning Assets5.10 %4.86 %3.73 %
Rate on Supporting Liabilities2.35 1.81 0.36 
Average Interest Spread2.76 3.04 3.37 
Net Interest Margin3.29 3.49 3.45 
(1)Presented on a fully taxable-equivalent basis using a 21% federal tax rate and statutory interest expense disallowance.
9

ALLOWANCE FOR CREDIT LOSSES AND ASSET QUALITY (Unaudited):
(Dollars in thousands)Jun. 30,
2023		Mar. 31,
2023		Dec. 31,
2022		Sep. 30,
2022		Jun. 30,
2022
Allowance for Credit Losses on Loans:
Beginning balance$31,265 $18,957 $18,480 $16,876 $15,147 
Impact of adopting CECL— 11,931 — — — 
Purchase credit deteriorated loans336 — — — — 
Loans Charged off
Commercial real estate— (16)(7)— — 
Commercial and industrial(109)(111)— (1)— 
Construction— — — — — 
Residential mortgage— (4)(23)(3)— 
Consumer(65)(19)(20)(11)(9)
Total loans charged off(174)(150)(50)(15)(9)
Recoveries of loans previously charged off
Commercial real estate— — — 63 — 
Commercial and industrial— — — — — 
Construction— — — — — 
Residential mortgage— 30 — — 3 
Consumer4 7 2 6 10 
Total recoveries4 37 2 69 13 
Balance before provision31,431 30,775 18,432 16,930 15,151 
Provision for credit losses1,157 490 525 1,550 1,725 
Balance, end of quarter$32,588 $31,265 $18,957 $18,480 $16,876 
Nonperforming Assets
Total nonperforming loans15,846 13,909 8,585 7,629 7,973 
Foreclosed real estate489 248 43 49 69 
Total nonperforming assets16,335 14,157 8,628 7,678 8,042 
Accruing loans 90 days or more past due9 7 654 633 — 
Total risk elements$16,344 $14,164 $9,282 $8,311 $8,042 
PPP Summary
(Dollars in thousands)Jun. 30,
2023		Mar. 31,
2023		Dec. 31,
2022		Sep. 30,
2022		Jun. 30,
2022
PPP loans, net of deferred fees$1,633 $1,752 $2,600 $2,800 $4,966 
PPP Fees recognized$3 $5 $29 $99 $652 
10

RECONCILIATION OF NON-GAAP MEASURES (Unaudited)
Explanatory note: This press release contains financial information determined by methods other than in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"). Mid Penn’s management uses these non-GAAP financial measures in their analysis of Mid Penn’s performance. For tangible book value, the most directly comparable financial measure calculated in accordance with GAAP is book value. We believe that this measure is important to many investors in the marketplace who are interested in changes from period to period in book value per common share exclusive of changes in intangible assets. Goodwill and other intangible assets have the effect of increasing total book value while not increasing tangible book value. Income tax effects of non-GAAP adjustments are calculated using the applicable statutory tax rate for the jurisdictions in which the charges (benefits) are incurred, while taking into consideration any valuation allowances or non-deductible portions of the non-GAAP adjustments. Non-PPP core banking loans are meaningful to investors as they are indicative of portfolio loans and related growth from traditional bank activities and excludes short-term or nonrecurring loans from special programs like the PPP. Adjusted earnings per common share excludes from income available to common shareholders certain expenses related to significant non-core activities, including merger-related expenses, net of income taxes. For return on average tangible common equity, the most directly comparable financial measure calculated in accordance with GAAP is return on average equity. The efficiency ratio is often used by management to measure its noninterest expense as a percentage of its revenue. This non-GAAP disclosure has limitations as an analytical tool, should not be viewed as a substitute for financial measures determined in accordance with GAAP, and should not be considered in isolation or as a substitute for analysis of Mid Penn’s results and financial condition as reported under GAAP, nor is it necessarily comparable to non-GAAP performance measures that may be presented by other companies. Management believes that this non-GAAP supplemental information will be helpful in understanding Mid Penn’s ongoing operating results. This supplemental presentation should not be construed as an inference that Mid Penn’s future results will be unaffected by similar adjustments to be determined in accordance with GAAP. The reconciliation of the non-GAAP to comparable GAAP financial measures can be found in the tables below.
Tangible Book Value Per Share
(Dollars in thousands, except per share data)Jun. 30,
2023		Mar. 31,
2023		Dec. 31,
2022		Sep. 30,
2022		Jun. 30,
2022
Shareholders' Equity$530,962 $510,793 $512,099 $499,105 $495,835 
Less: Goodwill129,403 114,231 114,231 113,871 113,835 
Less: Core Deposit and Other Intangibles7,453 6,916 7,260 7,215 7,729 
Tangible Equity$394,106 $389,646 $390,608 $378,019 $374,271 
Common Shares Outstanding16,567,57815,890,01115,886,14315,882,85315,878,193
Tangible Book Value per Share$23.79 $24.52 $24.59 $23.80 $23.57 
Non-PPP Core Banking Loans
(Dollars in thousands) Jun. 30,
2023		Mar. 31,
2023		Dec. 31,
2022		Sep. 30,
2022		Jun. 30,
2022
Loans, net of unearned interest$4,034,510 $3,611,347 $3,514,119 $3,322,457 $3,180,033 
Less: PPP loans, net of deferred fees1,633 1,752 2,600 2,800 4,966 
Non-PPP core banking loans$4,032,877 $3,609,595 $3,511,519 $3,319,657 $3,175,067 
11

Adjusted Earnings Per Common Share Excluding Non-Recurring Expenses
Three Months Ended
(Dollars in thousands, except per share data)Jun. 30,
2023		Mar. 31,
2023		Dec. 31,
2022		Sep. 30,
2022		Jun. 30,
2022
Net Income Available to Common Shareholders$4,836 $11,227 $15,719 $15,481 $12,252 
Plus: Merger and Acquisition Expenses7,944 224 294 — — 
Less: Tax Effect of Merger and Acquisition Expenses1,668 47 62 — — 
Net Income Excluding Non-Recurring Expenses$11,112 $11,404 $15,951 $15,481 $12,252 
Weighted Average Shares Outstanding16,235,10615,886,18615,883,00315,877,59215,934,083
Adjusted Earnings Per Common Share Excluding Non-Recurring Expenses$0.68 $0.72 $0.99 $0.97 $0.77 
Return on Average Tangible Common Equity
Three Months Ended
(Dollars in thousands)Jun. 30,
2023		Mar. 31,
2023		Dec. 31,
2022		Sep. 30,
2022		Jun. 30,
2022
Net income available to common shareholders$4,836 $11,227 $15,719 $15,481 $12,252 
Plus: Intangible amortization, net of tax364 272 392 406 412 
$5,200 $11,499 $16,111 $15,887 $12,664 
Average shareholders' equity$504,535 $510,857 $505,769 $502,082 $495,681 
Less: Average goodwill120,284 114,231 113,879 113,835 113,835 
Less: Average core deposit and other intangibles7,016 7,129 6,966 7,465 7,983 
Average tangible shareholders' equity$377,235 $389,497 $384,924 $380,782 $373,863 
Return on average tangible common equity5.53 %11.97 %16.61 %16.55 %13.59 %
Efficiency Ratio
Three Months Ended
(Dollars in thousands) Jun. 30,
2023		Mar. 31,
2023		Dec. 31,
2022		Sep. 30,
2022		Jun. 30,
2022
Noninterest expense$35,529 $26,070 $25,468 $24,715 $23,915 
Less: Merger and acquisition expenses7,944 224 294 — — 
Less: Intangible amortization461 344 496 514 521 
Less: (Gain) loss on sale or write-down of foreclosed assets, net(126)— (45)(57)(15)
Efficiency ratio numerator$27,250 $25,502 $24,723 $24,258 $23,409 
Net interest income36,444 36,049 38,577 39,409 35,433 
Noninterest income5,220 4,325 6,714 5,963 5,230 
Efficiency ratio denominator$41,664 $40,374 $45,291 $45,372 $40,663 
Efficiency ratio65.40 %63.16 %54.59 %53.46 %57.57 %
12
v3.23.2
Cover
Jul. 27, 2023
Cover [Abstract]  
Document Type 8-K
Document Period End Date Jul. 27, 2023
Entity Registrant Name MID PENN BANCORP, INC.
Entity Incorporation, State or Country Code PA
Entity File Number 1-13677
Entity Tax Identification Number 25-1666413
Entity Address, Postal Zip Code 17110
Local Phone Number 642.7736
City Area Code 866
Entity Address, State or Province PA
Entity Address, City or Town Harrisburg
Entity Address, Address Line One 2407 Park Drive
Title of 12(b) Security Common Stock, $1.00 par value per share
Trading Symbol MPB
Security Exchange Name NASDAQ
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Amendment Flag false
Entity Central Index Key 0000879635
Mid Penn Bancorp (NASDAQ:MPB)
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