MID PENN BANCORP INC
For the period ended Jun 30, 2025. Filed Aug 7, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 7, 2025
MPB$34.46+0.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-08.
0000879635-25-000109
Item 2. – Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-07.
0000879635-25-000158
Item 2. – Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 133 previous paragraphs and 160 current paragraphs.
95 unchanged; 30 reworded; 33 added; 8 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 15 previous and 19 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (33)
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
•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.
Current report
•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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
(2)Annualized ratios
Current report
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.
Current report
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.
Current report
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 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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
(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.
Removed paragraphs (8)
Previous report
•Mid Penn’s ability to efficiently integrate acquisitions, including as a result of the Merger, into its business and operations, which may take longer than anticipated, may be more costly than anticipated and may have unanticipated adverse results relating to Mid Penn’s existing business and operations;
Previous report
•the possibility that the anticipated benefits of the Merger, including anticipated cost savings and other synergies of the Merger may take longer to be realized or may not be achieved in their entirety, and attrition in key client, partner and other relationships relating to the Merger may be greater than expected;
Previous report
•other risks and uncertainties contained in this prospectus supplement or incorporated by reference into this prospectus supplement from the other reports and filings with the SEC.
Previous report
•Noninterest Expense - Noninterest expense totaled $30.6 million for the three months ended March 31, 2025, an increase of $2.1 million, or 7.4%, compared to noninterest expense of $28.5 million for the same period of 2024. The increase was primarily driven by a $847 thousand increase in salaries and employee benefits, a $454 thousand increase in software licensing, a $314 thousand increase in merger and acquisition expenses, and a $292 thousand increase in occupancy expenses, partially offset by a $172 thousand decrease in legal and professional fees.
Previous report
The yield on interest-earning assets increased to 5.65% for the quarter ended March 31, 2025, from 5.51% for the quarter ended March 31, 2024. These increases were due to assets continuing to reprice at higher rates during 2024 and the first quarter of 2025, continued discipline on new loan pricing, and an increase in Fed Funds Sold.
Previous report
The provision for credit losses on loans was $321 thousand for the three months ended March 31, 2025 compared to a benefit of $619 thousand for the three months ended March 31, 2024. The increase in provision was driven by an increase in loss factors across certain portfolios.
Previous report
Noninterest Income
Previous report
For the three months ended March 31, 2025, noninterest expense totaled $30.6 million, an increase of $2.1 million, or 7.4%, compared to noninterest expense of $28.5 million for the same period in 2024. The increase was primarily driven by a $847 thousand increase in salaries and employee benefits, a $454 thousand increase in software licensing, a $314 thousand increase in merger and acquisition expenses, and a $292 thousand increase in occupancy expenses, partially offset by a $172 thousand decrease in legal and professional fees.
Reworded paragraphs (30)
Previous wording
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.
Current wording
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.
Previous wording
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, including after giving effect to the Merger, 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. These forward-looking statements include the expectations of Mid Penn relating to the anticipated opportunities and financial and other benefits of the Merger, and the projections of, or guidance on, Mid Penn’s or the combined company’s future financial performance, asset quality, liquidity, capital levels, expected levels of future expenses, including future credit losses, anticipated growth strategies, descriptions of new business initiatives and anticipated trends in Mid Penn’s business or financial results. 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.
Current wording
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.
Previous wording
•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; and
Current wording
•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.
Previous wording
•Net Income Per Share - Mid Penn’s net income available to common shareholders ("earnings") for the three months ended March 31, 2025 was $13.7 million, or $0.71 per both common share basic and diluted, compared to earnings of $12.1 million, or $0.73 per both common share basic and diluted for the three months ended March 31, 2024.
Current wording
•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.
Previous wording
◦Net Interest Margin - For the first quarter of 2025, Mid Penn’s net interest margin was 3.37% versus 2.97% for the same period of 2024. The yield on interest-earning assets for the first quarter of 2025 increased 14 basis points from the same period of 2024. The rate on interest-bearing liabilities decreased 30 basis points from the same period of 2024.
Current wording
◦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.
Previous wording
◦Loan Growth - Total loans, net of unearned income, as of March 31, 2025 were $4.5 billion compared to $4.4 billion as of December 31, 2024, anincrease of $48.1 million, or 1.1%. The growth was primarily driven by an increase in owner occupied commercial real estate of$30.3 million, an increase in nonowner occupied commercial real estate of$21.1 million, and an increase in commercial and industrial loans of$15.3 million, partially offset by an $11.2 million decrease in residential construction loans.
Current wording
◦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, anincrease of $389.8 million, or 8.8%. The growth was primarily 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.
Previous wording
◦Deposit Growth - Total deposits increased $42.3 million, or 0.9%, from $4.7 billion at December 31, 2024, to $4.7 billion at March 31, 2025. The growth was driven by an increase of $55.5 million in interest-bearing transaction accounts, a $29.1 million increase in non-interest bearing accounts, offset by a decrease of $42.3 million in time deposits.
Current wording
◦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.
Previous wording
•Asset Quality - ACL-loans at March 31, 2025 was $35.8 million, or 0.80% of total loans, as compared to $35.5 million, or 0.80% of total loans at December 31, 2024.
Current wording
•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.
Previous wording
◦Net Charge-offs/Recoveries - Mid Penn had net recoveries of $3 thousand and net charge-offs of $44 thousand for the three months ended March 31, 2025 and 2024, respectively.
Current wording
◦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.
Previous wording
◦Non-performing assets - Total non-performing assets were $25.4 million at March 31, 2025, an increase compared to non-performing assets of $22.7 million at December 31, 2024. The increase during the first quarter of 2025 is primarily related to the addition of three commercial loans with a combined balance of $7.0 million, partially offset by the payoff of two commercial loans with a combined balance of $3.0 million. Delinquency, measured as loans past due 30 days or more, as a percentage of total loans was 0.50% at March 31, 2025, compared to 0.52% as of December 31, 2024.
Current wording
◦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.
Previous wording
◦Provision/Benefit for credit losses - loans - The provision for credit losses - loans was $321 thousand for the three months ended March 31, 2025 compared to a benefit of $619 thousand for the same period of 2024. The benefit for credit losses on off-balance sheet credit exposures was $20 thousand for the three months ended March 31, 2025, compared to a benefit of $318 thousand for the same period of 2024. The increase in provision for the three months ended March 31, 2025, is primarily due to an increase in loss factors across certain portfolios.
Current wording
◦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.
Previous wording
•Noninterest Income - Noninterest income totaled $5.2 million for the three months ended March 31, 2025 compared to $5.8 million for the same period of 2024. The decrease is primarily due to a $731 thousand decrease in other miscellaneous noninterest income, driven by a $1.4 million decrease in Bank-owned life insurance benefits received, partially offset by a $357 thousand increase in loan level swap fees, a $113 thousand increase in other letter of credit income, and a $167 thousand increase in Mortgage Banking income.
Current wording
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.
Previous wording
•Liquidity - Current liquidity, including borrowing capacity, decreased to $1.6 billion or 104.2% of uninsured and uncollateralized deposits, or approximately 33.0% of total deposits.
Current wording
•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.
Previous wording
Management of the Corporation considers the accounting judgments relating to the allowance for credit losses and goodwill impairment to be the accounting area that requires the most subjective and complex judgments.
Current wording
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.
Previous wording
For the three months ended March 31, 2025, net interest income was $42.5 million compared to net interest income of $36.5 million for the three months ended March 31, 2024. The tax-equivalent net interest margin for the three months ended March 31, 2025 was 3.37% compared to 2.97% for the first quarter of 2024, representing a 40 bp increase compared to the same period in 2024.
Current wording
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.
Previous wording
Average investment securities increased $23.9 million and the yield on those investment securities increased 23 bps during the first quarter of 2025 compared to the first quarter of 2024, increasing interest income due to volume by $179 thousand, and increasing interest income due to rates by $302 thousand. Average loans increased $165.9 million, and the yield on those loans increased 13 bps, contributing $2.4 million and $879 thousand, respectively, to the increase in interest income.
Current wording
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.
Previous wording
Interest expense decreased $2.5 million during the first quarter of 2025 compared to the first quarter of 2024. The rate of interest-bearing liabilities decreased from 3.24% for the first quarter of 2024 to 2.95% for the first 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.
Current wording
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.
Previous wording
For the three months ended March 31, 2025, noninterest income totaled $5.2 million, a decrease of $598 thousand, or 10.2%, compared to noninterest income of $5.8 million for the three months ended March 31, 2024. The decrease is primarily due to a $731 thousand decrease in other miscellaneous noninterest income, driven by a $1.4 million decrease in Bank-owned life insurance benefits received, partially offset by a $357 thousand increase in loan level swap fees, a $113 thousand increase in other letter of credit income, and a $167 thousand increase in Mortgage Banking income.
Current wording
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.
Previous wording
The provision for income taxes was $3.1 million for the three months ended March 31, 2025 compared to $2.6 million for the same period in 2024. The provision for income taxes for the three months ended March 31, 2025 reflects a combined Federal and State effective tax rate of 18.2% and 17.5%, for the three months ended March 31, 2025 and March 31, 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.
Current wording
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.
Previous wording
Mid Penn’s total assets were $5.5 billion as of March 31, 2025, reflecting an increase of $75.1 million, or 1.4%, compared to total assets of $5.5 billion as of December 31, 2024. The increase was primarily driven by organic loan growth, and an increase in Fed Funds Sold.
Current wording
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.
Previous wording
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 March 31, 2025 were $633.6 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.
Current wording
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.
Previous wording
Total loans, net of unearned income, as of March 31, 2025 were $4.5 billion compared to $4.4 billion as of December 31, 2024. The growth of $48.1 million, or 1.1%, since December 31, 2024 was primarily the result of organic loan growth across the commercial real estate and commercial and industrial portfolios, offset by decreases in residential and other construction loan portfolios.
Current wording
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.
Previous wording
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, Schuylkill and Westmoreland, along with Camden, 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.
Current wording
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.
Previous wording
Total nonperforming assets were $25.4 million at March 31, 2025, an increase compared to nonperforming assets of $22.7 million at December 31, 2024. The increase during the first quarter of 2025 is primarily related to the addition of three commercial loans with a combined balance of $7.0 million being placed on nonaccrual in the first quarter of 2025, offset by the payoff of two commercial loans with a combined balance of $3.0 million in the first quarter of 2025. Delinquency, measured as loans past due 30 days or more, as a percentage of total loans was 0.50% at March 31, 2025, compared to 0.52% and 0.38% as of December 31, 2024 and March 31, 2024.
Current wording
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.
Previous wording
Mid Penn evaluates goodwill annually for impairment unless events occur which indicate that impairment is possible: a triggering event. At March 31, 2025, Mid Penn had goodwill of $128.2 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.
Current wording
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.
Previous wording
Total deposits increased $42.3 million, or 0.9%, from $4.7 billion on December 31, 2024, to $4.7 billion at March 31, 2025. The growth was driven by a $55.5 million increase in interest bearing accounts, and a $29.1 million increase in noninterest bearing accounts, offset by a $42.3 million decrease in time deposits.
Current wording
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
Previous wording
As of March 31, 2025, uninsured deposits were approximately $1.5 billion compared to $1.4 billion as of December 31, 2024. The maturities of the uninsured time deposits as of March 31, 2025 were as follows:
Current wording
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:
Previous wording
Total short-term borrowings increased $23.0 million, or 1150.0%, from December 31, 2024. The increase 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. Short term FHLB borrowings increased $25.0 million, offset by a decrease of $2.0 million in FHLB overnight borrowings. Total long-term borrowings were $23.5 million at March 31, 2025, a decrease of $114 thousand from December 31, 2024.
Current wording
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.
Previous wording
The Consolidated Statements of Cash Flows provide additional information. Mid Penn’s operating activities during the three months ended March 31, 2025 provided $11.5 million of cash, mainly due to net income. Cash used in investing activities during the three months ended March 31, 2025 was $36.3 million, mainly the result of the net increase in loans. Cash provided by financing activities during the three months ended March 31, 2025 totaled $61.5 million, primarily the result of an increase in net deposits.
Current wording
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.
Previous wording
Shareholders’ equity increased by $12.9 million, or 2.0%, from $655.0 million as of December 31, 2024 to $667.9 million as of March 31, 2025, primarily due to earnings of $13.7 million.
Current wording
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.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
(1)Presented on a fully taxable-equivalent basis using a 21% federal tax rate and statutory interest expense disallowances
Current report — wording carried from elsewhere
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: